As filed with the Securities and Exchange Commission on May 13, 1997
Registration Nos. 333- and 333-
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------------------------
FORM S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------------------------
<TABLE>
<S> <C>
IMPERIAL
IMPERIAL BANCORP CAPITAL TRUST I
(Exact name of registrant as specified in its charter) (Exact name of registrant as specified in its Trust Agreement)
California Delaware
(State or other jurisdiction of incorporation or organization) (State or other jurisdiction of incorporation or organization)
6712
(Primary standard industrial classification code number) (Primary standard industrial classification code number)
95-2575576 APPLIED FOR
(l.R.S. Employer Identification No.) (I.R.S. Employer Identification No.)
C/O IMPERIAL BANCORP
9920 SOUTH LA CIENEGA BOULEVARD 9920 SOUTH LA CIENEGA BOULEVARD
INGLEWOOD, CALIFORNIA 90301 INGLEWOOD, CALIFORNIA 90301
(310) 417-5600 (310) 417-5600
(Address, including zip code, and telephone number, (Address, including zip code, and telephone
including area code of registrant's number, including area code, of registrant's
principal executive offices) principal executive offices)
</TABLE>
Richard M. Baker
Senior Vice President, General Counsel and Secretary
Imperial Bancorp
9920 South La Cienega Boulevard
Inglewood, California 90301
(310) 417-5600
(Name and Address, Including Zip Code,
and Telephone Number, Including Area Code, of Agent For Service)
Copies to:
Dennis J. Block, Esq.
Weil, Gotshal & Manges LLP
767 Fifth Avenue
New York, New York 10153
(212) 310-8000
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE OF
THE SECURITIES TO THE PUBLIC: As soon as practicable
after the effective date of this Registration
Statement.
If the securities being registered on this Form are being offered in connection
with the formation of a holding company and there is compliance with General
Instruction G, please check the following box. [__]
<PAGE>
(continued from cover page)
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
====================================================================================================================================
Proposed Maximum Proposed Maximum
Title of Each Class of Amount to be Offering Price Per Aggregate Offering Amount of
Securities to be Registered Registered Unit (1) Price (1) Registration Fee
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
9.98% Series B Capital
Securities of Imperial Capital $75,000,000 100% $75,000,000 $22,727
Trust I...........................
- ------------------------------------------------------------------------------------------------------------------------------------
Series B Junior Subordinated
Deferrable Interest Debentures N/A N/A N/A N/A
of Imperial Bancorp (2)
- ------------------------------------------------------------------------------------------------------------------------------------
Imperial Bancorp Series B
Guarantee with respect to the N/A N/A N/A N/A
Capital Securities (3)............
- ------------------------------------------------------------------------------------------------------------------------------------
Total (4)......................... $75,000,000 100% $75,000,000(5) $22,727
====================================================================================================================================
<FN>
(1) Estimated solely for the purpose of computing the registration fee
pursuant to Rule 457(f)(2).
(2) The Junior Subordinated Deferrable Interest Debentures were purchased
by Imperial Capital Trust I with the proceeds of the sale of the
Capital Securities. No separate consideration will be received for
the Junior Subordinated Deferrable Interest Debentures distributed
upon any liquidation of Imperial Capital Trust I.
(3) No separate consideration will be received for the Imperial Bancorp
Guarantee.
(4) This Registration Statement is deemed to cover the Junior
Subordinated Deferrable Interest Debentures of Imperial Bancorp, the
rights of holders of Junior Subordinated Deferrable Interest
Debentures of Imperial Bancorp under the Indenture, the rights of
holders of Capital Securities of Imperial Capital Trust I under the
Declaration and the rights of holders of the Capital Securities under
the Guarantee of Imperial Bancorp, which together fully and
unconditionally guarantee the obligations of Imperial Capital Trust I
under the Capital Securities.
(5) Such amount represents the aggregate liquidation amount of the
Capital Securities to be issued and exchanged hereunder and the
principal amount of Junior Subordinated Debentures that may be
distributed upon any liquidation of Imperial Capital Trust I.
</FN>
</TABLE>
-------------------
THE REGISTRANTS HEREBY AMEND THIS REGISTRATION STATEMENT ON SUCH DATE
OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE OR UNTIL THE
REGISTRANTS SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS
REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH
SECTION 8(A) OF THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT
SHALL BECOME EFFECTIVE ON SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION,
ACTING PURSUANT TO SAID SECTION 8(A), MAY DETERMINE.
2
<PAGE>
Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor may
offers to buy be accepted prior to the time the registration statement becomes
effective. This prospectus shall not constitute an offer to sell or the
solicitation of an offer to buy nor shall there be any sale of these securities
in any state in which such offer, solicitation or sale would be unlawful prior
to registration or qualification under the securities laws of any such state.
SUBJECT TO COMPLETION, DATED MAY 13, 1997
PROSPECTUS
$75,000,000
IMPERIAL CAPITAL TRUST I
OFFER TO EXCHANGE ITS 9.98% SERIES B CAPITAL SECURITIES
WHICH HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933
FOR ANY AND ALL OF ITS OUTSTANDING 9.98% SERIES A
CAPITAL SECURITIES
(LIQUIDATION AMOUNT $1,000 PER CAPITAL SECURITY)
FULLY AND UNCONDITIONALLY GUARANTEED, TO THE EXTENT DESCRIBED HEREIN, BY
IMPERIAL BANCORP
The Exchange Offer and Withdrawal
Rights will expire at 5:00 p.m., New
York City time, on _____ __, 1997,
unless extended.
Imperial Capital Trust I, a statutory business trust created under the
laws of the State of Delaware (the "ISSUER" or the "TRUST"), hereby offers, upon
the terms and subject to the conditions set forth in this Prospectus (as the
same may be amended or supplemented from time to time, the "PROSPECTUS") and in
the accompanying Letter of Transmittal (which together constitute the "EXCHANGE
OFFER"), to exchange up to $75,000,000 aggregate Liquidation Amount (as defined
herein) of its 9.98% Series B Capital Securities (Liquidation Amount $1,000 per
Capital Security) (the "NEW CAPITAL SECURITIES"), which have been registered
under the Securities Act of 1933, as amended (the "SECURITIES ACT"), pursuant to
a Registration Statement (as defined herein) of which this Prospectus
constitutes a part, for a like Liquidation Amount of its outstanding 9.98%
Series A Capital Securities (Liquidation Amount $1,000 per Capital Security)
(the "OLD CAPITAL SECURITIES"), of which $75,000,000 aggregate Liquidation
Amount is outstanding. Pursuant to the Exchange Offer, Imperial Bancorp, a
California corporation (the "COMPANY"), is also exchanging (i) its guarantee
with respect to the payment of Distributions (as defined herein) and other
payments on liquidation or redemption of the Old Capital Securities (the "OLD
GUARANTEE") for a like guarantee with respect to the New Capital Securities (the
"NEW GUARANTEE"), and (ii) all of its outstanding 9.98% Series A Junior
Subordinated Deferrable Interest Debentures due December 31, 2026 (the "OLD
JUNIOR SUBORDINATED DEBENTURES"), of which $77,320,000 aggregate principal
amount is outstanding, for a like aggregate principal amount of its 9.98% Series
B Junior Subordinated Deferrable Interest Debentures due December 31, 2026 (the
"NEW JUNIOR SUBORDINATED DEBENTURES"), which New Guarantee and New Junior
Subordinated Debentures also have been registered under the Securities Act. The
Old Capital Securities, the Old Guarantee and the Old Junior Subordinated
Debentures are collectively referred to herein as the "OLD SECURITIES" and
(i)
<PAGE>
(continued from cover page)
the New Capital Securities, the New Guarantee and the New Junior Subordinated
Debentures are collectively referred to herein as the "NEW SECURITIES."
The terms of the New Securities are identical in all material respects
to the respective terms of the Old Securities, except that (i) the New
Securities have been registered under the Securities Act and therefore will not
be subject to certain restrictions on transfer applicable to the Old Securities,
(ii) the New Capital Securities will not provide for any increase in the
Distribution rate thereon, and (iii) the New Junior Subordinated Debentures will
not provide for any increase in the interest rate thereon. See "Description of
Capital Securities" and "Description of Junior Subordinated Debentures." The New
Capital Securities are being offered for exchange in order to satisfy certain
obligations of the Company and the Issuer under the Registration Rights
Agreement, dated as of April 23, 1997 (the "REGISTRATION RIGHTS AGREEMENT"),
among the Company, the Issuer and the Initial Purchasers (as defined herein) of
the Old Capital Securities. If the Exchange Offer is consummated, any Old
Capital Securities which remain outstanding after consummation of the Exchange
Offer and the New Capital Securities issued in the Exchange Offer will vote
together as a single class for purposes of determining whether holders of the
requisite percentage in outstanding Liquidation Amount thereof have taken
certain actions or exercised certain rights under the Declaration (as defined
herein).
SEE "RISK FACTORS" BEGINNING ON PAGE 11 FOR CERTAIN INFORMATION
RELEVANT TO AN INVESTMENT IN THE NEW CAPITAL SECURITIES, INCLUDING THE PERIOD
AND CIRCUMSTANCES DURING AND UNDER WHICH PAYMENT OF DISTRIBUTIONS ON THE NEW
JUNIOR SUBORDINATED DEBENTURES AND THE NEW CAPITAL SECURITIES MAY BE DEFERRED
AND CERTAIN RELATED UNITED STATES FEDERAL INCOME TAX CONSEQUENCES.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION NOR HAS THE SECURITIES AND EXCHANGE
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
The date of this Prospectus is ________ __, 1997.
(ii)
<PAGE>
(continued from cover page)
The Old Capital Securities and the New Capital Securities are referred
to as the "CAPITAL SECURITIES." The Old Capital Securities represent, and when
issued the New Capital Securities will represent, undivided preferred beneficial
interests in the assets of the Issuer. The Company owns all of the beneficial
interests represented by common securities of the Issuer (the "COMMON
SECURITIES" and, collectively with the Capital Securities, the "TRUST
SECURITIES"). The Issuer exists for the sole purpose of issuing the Trust
Securities and investing the proceeds thereof in the Junior Subordinated
Debentures (as defined herein) and engaging in certain other limited activities
described herein. The Junior Subordinated Debentures will mature on December 31,
2026 (the "STATED MATURITY DATE"). The Capital Securities will have a preference
over the Common Securities under certain circumstances with respect to
Distributions and amounts payable on liquidation, redemption or otherwise over
the Common Securities. See "Description of Capital Securities."
As used herein, (i) the "INDENTURE" means the Indenture, dated as of
April 23, 1997, relating to the Junior Subordinated Debentures, as amended and
supplemented from time to time, between the Company and The Chase Manhattan
Bank, as trustee (the "DEBENTURE TRUSTEE"), (ii) the "DECLARATION" means the
Amended and Restated Declaration of Trust, dated as of April 23, 1997, relating
to the Issuer among the Company, as Sponsor, The Chase Manhattan Bank, as
Property Trustee (the "PROPERTY TRUSTEE"), Chase Manhattan Bank Delaware, as
Delaware Trustee (the "DELAWARE TRUSTEE") and the administrative trustees named
therein (collectively, with the Property Trustee and the Delaware Trustee, the
"ISSUER TRUSTEES") and the holders from time to time of the Trust Securities,
(iii) the "GUARANTEE AGREEMENTS" mean the Guarantee Agreement, dated as of April
23, 1997, between the Company and The Chase Manhattan Bank, as trustee (the
"GUARANTEE TRUSTEE"), and the Series B Guarantee Agreement to be entered into
between the Company and the Guarantee Trustee in connection with the
consummation of the Exchange Offer, in both cases providing a guarantee, on the
terms and conditions described herein, for the benefit of holders of the Capital
Securities and (iv) the "COMMON GUARANTEE" means the Guarantee Agreement, dated
as of April 23, 1997, relating to the Common Securities by the Company. In
addition, as the context may require, unless expressly stated otherwise, (i) the
"JUNIOR SUBORDINATED DEBENTURES" means the Old Junior Subordinated Debentures
and the New Junior Subordinated Debentures and (ii) the "GUARANTEE" means the
Old Guarantee and the New Guarantee.
Except as described herein, the New Capital Securities will be
represented by a global certificate in fully registered form, deposited with a
custodian for and registered in the name of Cede & Co., as nominee for The
Depository Trust Company ("DTC"). Beneficial interests in the New Capital
Securities will be shown on, and transfers thereof will be effected through,
records maintained by DTC and its participants. The New Capital Securities will
be issued, and may be transferred, only in blocks having a Liquidation Amount of
not less than $100,000 (100 New Capital Securities). See "Description of Capital
Securities-Form, Denomination, Book-Entry Procedures and Transfer."
Holders of the Capital Securities are entitled to receive cumulative
cash distributions, arising from the payment of interest on the Junior
Subordinated Debentures, accumulating from April 23, 1997, the date of original
issuance of the Old Capital Securities, and payable semi-annually in arrears on
June 30 and December 31 of each year, commencing June 30, 1997
("DISTRIBUTIONS"), at the annual rate of 9.98% of the Liquidation Amount of
$1,000 per Capital Security (the "LIQUIDATION
(iii)
<PAGE>
(continued from cover page)
AMOUNT"). So long as no Debenture Event of Default (as defined herein) has
occurred and is continuing, the Company will have the right to defer payments of
interest on the Junior Subordinated Debentures at any time and from time to time
for a period not exceeding 10 consecutive semi-annual periods with respect to
each deferral period (each, an "EXTENSION PERIOD"), provided that no Extension
Period may end on a day other than an Interest Payment Date (as defined herein)
or extend beyond the Stated Maturity Date. Upon the termination of any such
Extension Period and the payment of all amounts then due, the Company may elect
to begin a new Extension Period, subject to the requirements set forth herein.
If and for so long as interest payments on the Junior Subordinated Debentures
are so deferred, Distributions on the Trust Securities will also be deferred and
the Company will not be permitted, subject to certain exceptions described
herein, to declare or pay any cash distributions with respect to the Company's
capital stock (which includes common and preferred stock) or to make any payment
with respect to debt securities of the Company that rank pari passu with or
junior to the Junior Subordinated Debentures. During an Extension Period,
interest on the Junior Subordinated Debentures will continue to accrue (and the
amount of Distributions to which holders of the Trust Securities are entitled
will continue to accumulate) at the rate of 9.98% per annum, compounded
semi-annually, and holders of Trust Securities will be required to accrue
original issue discount income for United States federal income tax purposes
prior to receipt of cash payments attributable to such income. See "Description
of Junior Subordinated Debentures -- Option to Extend Interest Payment Date" and
"Certain Federal Income Tax Considerations -- Interest, Original Issue Discount,
Premium and Market Discount."
The Company has, through the Guarantee, the Common Guarantee, the
Declaration, the Junior Subordinated Debentures and the Indenture, taken
together, fully, irrevocably and unconditionally guaranteed all of the Trust's
obligations under the Trust Securities. See "Relationship Among the Capital
Securities, the Junior Subordinated Debentures and the Guarantee -- Full and
Unconditional Guarantee." The Guarantee and the Common Guarantee guarantee
payments of Distributions and payments on liquidation or redemption of the Trust
Securities, but in each case only to the extent that the Trust holds funds on
hand legally available therefor and has failed to make such payments, as
described herein. See "Description of the Guarantee." If the Company fails to
make a required payment on the Junior Subordinated Debentures, the Trust will
not have sufficient funds to make the related payments, including Distributions,
on the Trust Securities. The Guarantee and the Common Guarantee will not cover
any such payment when the Trust does not have sufficient funds on hand legally
available therefor. In such event, a holder of Capital Securities may institute
a legal proceeding directly against the Company to enforce payment to such
holder of accrued but unpaid interest on Junior Subordinated Debentures with a
principal amount equal to the Liquidation Amount of the Capital Securities held
by such holder. See "Description of Junior Subordinated Debentures --
Enforcement of Certain Rights by Holders of Capital Securities." The obligations
of the Company under the Guarantee, the Common Guarantee and the Junior
Subordinated Debentures are unsecured and subordinate and rank junior in right
of payment to all Senior Indebtedness (as defined herein) of the Company to the
extent and in the manner set forth in the Indenture and in the Guarantee and the
Common Guarantee.
The Trust Securities are subject to mandatory redemption in a Like
Amount (as defined herein), (i) in whole but not in part, on the Stated Maturity
Date upon repayment of the Junior
(iv)
<PAGE>
(continued from cover page)
Subordinated Debentures at a redemption price equal to the principal amount of,
plus accrued and unpaid interest on, the Junior Subordinated Debentures (the
"MATURITY REDEMPTION PRICE"), (ii) in whole but not in part, at any time before
June 30, 2007 (the "INITIAL OPTIONAL PREPAYMENT DATE"), contemporaneously with
the optional prepayment of the Junior Subordinated Debentures, upon the
occurrence and continuation of a Special Event (as defined herein) at a
redemption price equal to the Special Event Prepayment Price (as defined herein)
(the "SPECIAL EVENT REDEMPTION PRICE"), and (iii) in whole or in part, on or
after the Initial Optional Prepayment Date, contemporaneously with the optional
prepayment by the Company of the Junior Subordinated Debentures, at a redemption
price equal to the Optional Prepayment Price (as defined herein) (the "OPTIONAL
REDEMPTION PRICE"). Any of the Maturity Redemption Price, the Special Event
Redemption Price and the Optional Redemption Price may be referred to herein as
the "REDEMPTION PRICE." See "Description of Capital Securities -- Redemption."
Subject to the Company having received prior approval of the Board of
Governors of the Federal Reserve System (the "FEDERAL RESERVE"), if then
required under applicable capital guidelines or policies of the Federal Reserve,
the Junior Subordinated Debentures will be prepayable prior to the Stated
Maturity Date at the option of the Company (i) on or after the Initial Optional
Prepayment Date, in whole or in part, at a prepayment price (the "OPTIONAL
PREPAYMENT PRICE") equal to 105.113% of the principal amount thereof on the
Initial Optional Prepayment Date, declining ratably on each June 30 thereafter
to 100% on or after June 30, 2017, plus accrued and unpaid interest thereon to
the date of prepayment, or (ii) at any time before the Initial Optional
Prepayment Date, in whole but not in part, upon the occurrence and continuation
of a Special Event, at a prepayment price (the "SPECIAL EVENT PREPAYMENT PRICE")
equal to the greater of (a) 100% of the principal amount thereof or (b) the sum,
as determined by a Quotation Agent (as defined herein), of the present values of
the principal amount and premium payable as part of the Optional Prepayment
Price with respect to an optional redemption of such Junior Subordinated
Debentures on the Initial Optional Prepayment Date, together with scheduled
payments of interest from the prepayment date to the Initial Optional Prepayment
Date, in each case discounted to the prepayment date on a semi-annual basis
(assuming a 360-day year consisting of twelve 30-day months) at the Adjusted
Treasury Rate (as defined herein) plus, in either case, accrued and unpaid
interest thereon to the date of prepayment. Either of the Optional Prepayment
Price or the Special Event Prepayment Price may be referred to herein as the
"PREPAYMENT PRICE." See "Description of Junior Subordinated Debentures --
Optional Prepayment" and "-- Special Event Prepayment."
The Company, as the holder of the outstanding Common Securities, has
the right at any time to dissolve the Trust and, after satisfaction of
liabilities to creditors of the Trust as required by applicable law, cause a
Like Amount of the Junior Subordinated Debentures to be distributed to the
holders of the Trust Securities in liquidation of the Trust, subject to (i) the
Company having received an opinion of counsel to the effect that such
distribution will not be a taxable event to holders of the Capital Securities
and (ii) the prior approval of the Federal Reserve, if then required under
applicable capital guidelines or policies of the Federal Reserve. Unless the
Junior Subordinated Debentures are distributed to the holders of the Trust
Securities, in the event of a liquidation of the Trust as described herein,
after satisfaction of liabilities to creditors of the Trust as required by
applicable law, the holders of the Capital Securities generally will be entitled
to receive a Liquidation Amount of $1,000 per
(v)
<PAGE>
(continued from cover page)
Capital Security plus accumulated and unpaid Distributions thereon to the date
of payment. See "Description of Capital Securities -- Liquidation of the Trust
and Distribution of Junior Subordinated Debentures" and "Certain Federal Income
Tax Considerations -- Receipt of Junior Subordinated Debentures Upon Liquidation
of the Trust."
Based on interpretations by the staff of the Commission, as set forth
in several no-action letters to third parties, and subject to the immediately
following sentence, the Company and the Trust believe that New Securities issued
pursuant to the Exchange Offer in exchange for Old Securities may be offered for
resale, resold and otherwise transferred by a holder thereof without further
compliance with the registration and prospectus delivery requirements of the
Securities Act, provided that such New Securities are acquired in the ordinary
course of such holder's business and that such holder is not participating, and
has no arrangement or understanding with any person to participate, in a
distribution (within the meaning of the Securities Act) of such New Securities.
However, any holder of Old Capital Securities who is an "affiliate" of either
the Company or the Trust, a broker-dealer that acquires the Old Capital
Securities in a transaction other than as a part of its market-making or other
trading activities or other holder who intends to participate in the Exchange
Offer for the purpose of distributing New Capital Securities (i) will not be
able to rely on the interpretations by the staff of the Commission set forth in
the above-mentioned interpretive letters, (ii) will not be able to tender such
Old Capital Securities in the Exchange Offer and (iii) must comply with the
registration and prospectus delivery requirements of the Securities Act in
connection with any sale or other transfer of such Old Capital Securities unless
such sale is made pursuant to an exemption from such requirements. Any
broker-dealer who holds Old Securities acquired for its own account as a result
of market-making activities or other trading activities, and who receives New
Securities in exchange for such Old Securities pursuant to the Exchange Offer
(an "Exchanging Dealer"), may be a statutory underwriter and must deliver a
prospectus meeting the requirements of the Securities Act, which may be the
prospectus prepared for the Exchange Offer so long as it contains a plan of
distribution with respect to such resale transactions, in connection with any
resales of such New Securities. Neither the Company nor the Trust sought its own
no-action letter and there can be no assurance that the staff of the Commission
would make a similar determination with respect to the Exchange Offer as it has
in such no-action letters to third parties.
Each holder of Old Capital Securities (other than a broker-dealer) who
wishes to exchange Old Capital Securities for New Capital Securities in the
Exchange Offer will be required to represent that (i) it is not an "affiliate"
of the Company or the Trust, (ii) any New Capital Securities to be received by
it are being acquired in the ordinary course of its business and (iii) it has no
arrangement or understanding with any person to participate in a distribution
(within the meaning of the Securities Act) of such New Capital Securities. The
Letter of Transmittal accompanying this Prospectus (the "LETTER OF TRANSMITTAL")
contains the foregoing representations. In addition, the Company and the Trust
may require such holder, as a condition to such holder's eligibility to
participate in the Exchange Offer, to furnish to the Company and the Trust (or
an agent thereof) in writing information as to the number of "beneficial owners"
(within the meaning of Rule 13d-3 under the Exchange Act) on behalf of whom such
holder holds the Old Capital Securities to be exchanged in the Exchange Offer.
Each Exchanging Dealer will be deemed to have acknowledged by execution of the
Letter of Transmittal or delivery of an Agent's Message (as defined herein) that
it acquired the Old Capital Securities for its
(vi)
<PAGE>
(continued from cover page)
own account as the result of market-making activities or other trading
activities and must agree that it will deliver a prospectus meeting the
requirements of the Securities Act in connection with any resale of such New
Capital Securities. The Letter of Transmittal states that by so acknowledging
and by delivering a prospectus, an Exchanging Dealer will not be deemed to admit
that it is an "underwriter" within the meaning of the Securities Act. Based on
the position taken by the staff of the Commission in the no-action letters
referred to above, the Company and the Trust believe that Exchanging Dealers may
fulfill their prospectus delivery requirements with respect to the New Capital
Securities received upon exchange of such Old Capital Securities (other than Old
Capital Securities which represent an unsold allotment from the original sale of
the Old Capital Securities) with a prospectus meeting the requirements of the
Securities Act, which may be the prospectus prepared for an exchange offer so
long as it contains a description of the plan of distribution with respect to
the resale of such New Capital Securities. Subject to certain provisions set
forth in the Registration Rights Agreement and to the limitations set out
herein, the Company and the Trust have agreed that this Prospectus, as it may be
amended or supplemented from time to time, may be used by an Exchanging Dealer
in connection with resales of such New Capital Securities for a period ending 90
days after the Expiration Date (as defined herein), or longer, if required by
the Registration Rights Agreement. See "Plan of Distribution." Any person,
including any Exchanging Dealer, who is an "affiliate" of the Company or the
Trust may not rely on such no-action letters and must comply with the
registration and prospectus delivery requirements of the Securities Act in
connection with any resale transaction.
Each broker-dealer that receives New Capital Securities for its own
account pursuant to the Exchange Offer must acknowledge that it will deliver a
prospectus in connection with any resale of such New Capital Securities. The
Letter of Transmittal states that by so acknowledging and by delivering a
prospectus, a broker-dealer will not be deemed to admit that it is an
"underwriter" within the meaning of the Securities Act. This Prospectus, as it
may be amended or supplemented from time to time, may be used by a broker-dealer
in connection with resales of New Capital Securities received in exchange for
Old Capital Securities where such Old Capital Securities were acquired by such
broker-dealer as a result of market-making activities or other trading
activities. The Company and the Trust have agreed that, starting on the date on
which the Exchange Offer is consummated and ending on the close of business 90
days after such date, they will make this Prospectus available to any
broker-dealer for use in connection with any such resale. See "Plan of
Distribution."
In that regard, each Exchanging Dealer who surrenders Old Capital
Securities pursuant to the Exchange Offer will be deemed to have agreed, by
execution of the Letter of Transmittal or by delivery of an Agent's Message in
lieu thereof, that, upon receipt of notice from the Company or the Trust of the
occurrence of any event or the discovery of any fact which makes any statement
contained or incorporated by reference in this Prospectus untrue in any material
respect or which causes this Prospectus to omit to state a material fact
necessary in order to make the statements contained or incorporated by reference
herein, in the light of the circumstances under which they were made, not
misleading, or of the occurrence of certain other events specified in the
Registration Rights Agreement, such Exchanging Dealer will suspend the sale of
New Securities pursuant to this Prospectus until the Company or the Trust has
amended or supplemented this Prospectus to correct such misstatement or omission
and has furnished copies of the amended or supplemented Prospectus to such
Exchanging
(vii)
<PAGE>
(continued from cover page)
Dealer, or the Company or the Trust has given notice that the sale of the New
Securities may be resumed, as the case may be.
Prior to the Exchange Offer, there has been only a limited secondary
market and no public market for the Old Capital Securities. The New Capital
Securities will be a new issue of securities for which there currently is no
market. The New Capital Securities will not be listed on a securities exchange.
Although Keefe, Bruyette & Woods, Inc., Lehman Brothers Inc. and UBS Securities
LLC, the initial purchasers of the Old Capital Securities (the "INITIAL
PURCHASERS"), informed the Company and the Trust in connection with the offering
of the Old Capital Securities that they each intended to make a market in the
Old Capital Securities, they are not obligated to make a market in the Old
Capital Securities or the New Capital Securities, and any such market-making may
be discontinued at any time without notice in the sole discretion of the Initial
Purchasers. Accordingly, there can be no assurance as to the development or
liquidity of any market for the New Capital Securities.
Any Old Capital Securities not tendered and accepted in the Exchange
Offer will remain outstanding and will be entitled to all the same rights and
will be subject to the same limitations applicable thereto under the Declaration
(except for those rights which terminate upon consummation of the Exchange
Offer). Following consummation of the Exchange Offer, the holders of Old Capital
Securities will continue to be subject to all of the existing restrictions upon
transfer thereof and neither the Company nor the Issuer will have any further
obligation to such holders (other than under certain limited circumstances) to
provide for registration under the Securities Act of the Old Capital Securities
held by them. To the extent that Old Capital Securities are tendered and
accepted in the Exchange Offer, a holder's ability to sell untendered Old
Capital Securities could be adversely affected. See "Risk Factors-Consequences
of Failure to Exchange Old Capital Securities."
THIS PROSPECTUS AND THE RELATED LETTER OF TRANSMITTAL CONTAIN
IMPORTANT INFORMATION. HOLDERS OF OLD CAPITAL SECURITIES ARE URGED TO READ THIS
PROSPECTUS AND THE RELATED LETTER OF TRANSMITTAL CAREFULLY BEFORE DECIDING
WHETHER TO TENDER THEIR OLD CAPITAL SECURITIES PURSUANT TO THE EXCHANGE OFFER.
Old Capital Securities may be tendered for exchange on or prior to
5:00 p.m., New York City time, on _______ __, 1997 (such time on such date being
hereinafter called the "EXPIRATION DATE"), unless the Exchange Offer is extended
by the Company and the Issuer (in which case the term "EXPIRATION DATE" shall
mean the latest date and time to which the Exchange Offer is extended). Tenders
of Old Capital Securities may be withdrawn at any time on or prior to the
Expiration Date. The Exchange Offer is not conditioned upon any minimum
Liquidation Amount of Old Capital Securities being tendered for exchange.
However, the Exchange Offer is subject to certain events and conditions which
may be waived by the Company or the Issuer and to the terms and provisions of
the Registration Rights Agreement. Old Capital Securities may be tendered in
whole or in part having a Liquidation Amount of not less than $100,000 (100 Old
Capital Securities) and or any integral multiple of $1,000 Liquidation Amount
(one Old Capital Security) in excess thereof. The Company has agreed to pay all
expenses of the Exchange Offer, except as otherwise specified herein. See "The
Exchange Offer- Fees and Expenses." Each New Capital Security will pay
cumulative Distributions from the
(viii)
<PAGE>
(continued from cover page)
most recent Distribution Date (as defined herein) on the Old Capital Securities
surrendered in exchange for such New Capital Securities or, if no Distributions
have been paid on such Old Capital Securities, from April 23, 1997. Holders of
the Old Capital Securities whose Old Capital Securities are accepted for
exchange will not receive accumulated Distributions on such Old Capital
Securities for any period from and after the last Distribution Date on such Old
Capital Securities prior to the original issue date of the New Capital
Securities or, if no such Distributions have been paid, will not receive any
accumulated Distributions on such Old Capital Securities, and will be deemed to
have waived the right to receive any Distributions on such Old Capital
Securities accumulated from and after such Distribution Date or, if no such
interest has been paid or duly provided for, from and after April 23, 1997.
Neither the Company nor the Issuer will receive any proceeds from the
issuance of the New Capital Securities offered hereby. No dealer-manager is
being used in connection with this Exchange Offer. See "Use of Proceeds" and
"Plan of Distribution."
THE NEW CAPITAL SECURITIES WILL BE ISSUED, AND CAPITAL SECURITIES MAY
BE TRANSFERRED, ONLY IN BLOCKS HAVING A LIQUIDATION AMOUNT OF NOT LESS THAN
$100,000. ANY TRANSFER, SALE OR OTHER DISPOSITION OF CAPITAL SECURITIES IN A
BLOCK HAVING A LIQUIDATION AMOUNT OF LESS THAN $100,000 SHALL BE DEEMED TO BE
VOID AND OF NO LEGAL EFFECT WHATSOEVER. ANY SUCH TRANSFEREE SHALL BE DEEMED NOT
TO BE THE HOLDER OF SUCH CAPITAL SECURITIES FOR ANY PURPOSE, INCLUDING BUT NOT
LIMITED TO THE RECEIPT OF DISTRIBUTIONS ON SUCH CAPITAL SECURITIES, AND SUCH
TRANSFEREE SHALL BE DEEMED TO HAVE NO INTEREST WHATSOEVER IN SUCH CAPITAL
SECURITIES.
NO EMPLOYEE BENEFIT OR OTHER PLAN SUBJECT TO TITLE I OF THE EMPLOYEE
RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED, 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 THE CAPITAL SECURITIES OR ANY INTEREST THEREIN, 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 THE CAPITAL SECURITIES OR ANY INTEREST THEREIN WILL BE
DEEMED TO HAVE REPRESENTED BY ITS PURCHASE AND HOLDING THEREOF 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.
(ix)
<PAGE>
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "EXCHANGE ACT"), and in
accordance therewith, files reports, proxy statements and other information with
the Commission. Reports, proxy statements and other information concerning the
Company can be inspected and copied at prescribed rates at the Commission's
Public Reference Room, Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C.
20549, as well as the following Regional Offices of the Commission: 7 World
Trade Center, 13th Floor, New York, New York 10048; and 500 West Madison Street,
Suite 1400, Chicago, Illinois 60661. Copies of such material may be obtained by
mail from the Commission's Public Reference Section, 450 Fifth Street, N.W.,
Washington, D.C. 20549, at prescribed rates. If available, such reports and
other information may also be accessed through the Commission's electronic data
gathering, analysis and retrieval system ("EDGAR") via electronic means,
including the Commission's web site on the Internet (http://www.sec.gov). Such
reports, proxy statements and other information may also be inspected at the
offices of the New York Stock Exchange, 20 Broad Street, New York, New York
10005.
The Company and the Issuer have filed with the Commission a
Registration Statement on Form S-4 (together with all amendments and exhibits
thereto, the "REGISTRATION STATEMENT") under the Securities Act of 1933, as
amended (the "SECURITIES ACT"), with respect to the securities offered hereby.
This Prospectus does not contain all the information set forth in the
Registration Statement, certain portions of which have been omitted as permitted
by the rules and regulations of the Commission. For further information with
respect to the Company and the securities offered hereby, reference is made to
the Registration Statement and the exhibits and the consolidated financial
statements, notes and schedules filed as part thereof or incorporated by
reference therein, which may be inspected at the public reference facilities of
the Commission, at the addresses set forth above. Statements made in this
Prospectus concerning the contents of any documents referred to herein are not
necessarily complete, and in each instance are qualified in all respects by
reference to the copy of such document filed as an exhibit to the Registration
Statement.
No separate financial statements of the Issuer have been included
herein. Neither the Company nor the Issuer consider that such financial
statements would be material to holders of the Capital Securities because (i)
all of the voting securities of the Issuer are owned by the Company, a reporting
company under the Exchange Act, (ii) the Issuer has no independent operations,
but exists for the sole purpose of issuing the Trust Securities, holding as
trust assets the Junior Subordinated Debentures and certain other limited
purposes, including engaging in the Exchange Offer, and (iii) the Company's
obligations described herein to provide certain indemnities in respect of, and
be responsible for, certain costs, expenses, debts and liabilities of the Issuer
under the Indenture and any supplemental indenture thereto and pursuant to the
Declaration, the Guarantee and the Junior Subordinated Debentures, taken
together, constitute a full and unconditional guarantee of payments due on the
Capital Securities. See "Description of Junior Subordinated Debentures" and
"Description of the Guarantee." In addition, the Company does not expect that
the Issuer will file reports, proxy statements and other information under the
Exchange Act with the Commission.
1
<PAGE>
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed with the Commission by the Company
pursuant to Sections 13 and 14 of the Exchange Act are incorporated herein by
reference:
(1) Annual Report on Form 10-K for the fiscal year ended
December 31, 1996; and
(2) Proxy Statement dated April 4, 1997 (other than the
information included therein under the captions "Report of
the Compensation Committee" and "Shareholder Return
Performance Presentation").
All documents filed by the Company pursuant to Sections 13(a), 13(c),
14 or 15(d) of the Exchange Act subsequent to the date of this Prospectus and
prior to the termination of the offering of the New Capital Securities shall be
deemed to be incorporated by reference in this Prospectus and to be a part
hereof from the date of filing of such documents. Any statement contained in
this Prospectus or in a document incorporated or deemed to be incorporated by
reference herein shall be deemed to be modified or superseded for purposes of
this Prospectus or any supplement thereto to the extent that a statement
contained herein or therein (or in any subsequently filed document that also is
or is deemed to be incorporated by reference herein or therein) modifies or
supersedes such statement. Any statement so modified or superseded shall not be
deemed, except as so modified or superseded, to constitute a part of this
Prospectus.
As used herein, the terms "Prospectus" and "herein" mean this
Prospectus, including the documents incorporated or deemed to be incorporated
herein by reference, as the same may be amended, supplemented or otherwise
modified from time to time. Statements contained in this Prospectus as to the
contents of any contract or other document referred to herein do not purport to
be complete, and where reference is made to the particular provisions of such
contract or other document, such provisions are qualified in all respects by
reference to all of the provisions of such contract or other document.
THE COMPANY WILL PROVIDE WITHOUT CHARGE TO EACH PERSON TO WHOM A COPY
OF THIS PROSPECTUS HAS BEEN DELIVERED, UPON THE WRITTEN OR ORAL REQUEST OF SUCH
PERSON, A COPY OF ANY OR ALL OF THE DOCUMENTS REFERRED TO ABOVE WHICH HAVE BEEN
OR MAY BE INCORPORATED BY REFERENCE HEREIN (OTHER THAN EXHIBITS TO SUCH
DOCUMENTS UNLESS SUCH EXHIBITS ARE SPECIFICALLY INCORPORATED BY REFERENCE IN
SUCH DOCUMENTS). REQUESTS FOR SUCH COPIES SHOULD BE DIRECTED TO IMPERIAL
BANCORP, 9920 SOUTH LA CIENEGA BOULEVARD, INGLEWOOD, CALIFORNIA 90301.
ATTENTION: GENERAL COUNSEL, TELEPHONE (310) 417-5600.
2
<PAGE>
SUMMARY
The following summary is qualified in its entirety by the more
detailed information appearing elsewhere in this Prospectus.
IMPERIAL BANCORP
GENERAL
Imperial Bancorp (the "Company") is a registered bank holding company
whose principal operating subsidiary is Imperial Bank, a California chartered
commercial bank (the "BANK"). The Bank, the eighth largest commercial bank in
California based on deposits as of December 31, 1996, is engaged in general
commercial banking through its 11 branches in California and maintains three
additional loan production offices in Boston, Massachusetts, Austin, Texas and
Phoenix, Arizona. As of December 31, 1996, the Company had total assets of $3.4
billion and deposits of $3.0 billion and, for the year ended December 31, 1996,
the Company had net income of $54.1 million.
The Company offers a wide range of financial services tailored to
corporate customers, entrepreneurs and professionals. The Bank's business
strategy has been to develop specialty financial products and services for
industries such as health care, emerging growth technology, entertainment,
manufacturing and distribution, garment, and title and escrow, in addition to
merchant card transaction processing, trust and custodial services. The Company
competes for the banking business of middle market companies (between $10
million and $150 million in annual sales) through the development of special
products and services, including employing lending and deposit specialists in
the targeted industry groups.
For additional information regarding the Company, see "Available
Information," "Incorporation of Certain Documents by Reference," "Imperial
Bancorp," and "Selected Consolidated Financial Data of Imperial Bancorp." See
also the discussion herein under "Imperial Bancorp -- The Spin Off Transactions"
and "Pro Forma Financial Information" regarding the Company's possible spin off
of its specialty lending and finance businesses that focus on motion picture and
television production, as well as certain other operations.
IMPERIAL CAPITAL TRUST I
The Trust is a statutory business trust created under Delaware law
pursuant to (i) a Declaration executed by the Company, as Sponsor, The Chase
Manhattan Bank, as Property Trustee and Chase Manhattan Bank Delaware, as
Delaware Trustee, and (ii) the filing of a certificate of trust with the
Delaware Secretary of State on April 8, 1997. The Trust's affairs are conducted
by the Issuer Trustees: the Property Trustee, the Delaware Trustee and the two
individual Administrative Trustees who are employees or officers of or
affiliated with the Company. The Trust exists for the exclusive purposes of (i)
issuing and selling the Trust Securities, (ii) using the proceeds from the sale
of the Old Capital Securities and the Common Securities to acquire the Junior
Subordinated Debentures and (iii) engaging in only those other activities
necessary, advisable or incidental thereto, including engaging in the
3
<PAGE>
Exchange Offer. Accordingly, the Old Junior Subordinated Debentures are, and the
New Junior Subordinated Debentures will be, the sole assets of the Trust, and
payments under the Junior Subordinated Debentures will be the sole revenue of
the Trust. All of the Common Securities are owned by the Company.
THE EXCHANGE OFFER
The Exchange Offer............. Up to $75,000,000 aggregate liquidation amount
of New Capital Securities are being offered in
exchange for a like aggregate liquidation
amount of Old Capital Securities. Old Capital
Securities may be tendered for exchange in
whole or in part in a liquidation amount of
$100,000 (100 Old Capital Securities) or any
integral multiple of $1,000 in excess thereof
provided that if any Old Capital Securities are
tendered in exchange for part, the untendered
liquidation amount must be $100,000 or any
integral multiple of $1,000 in excess thereof.
The Company and the Trust are making the
Exchange Offer in order to satisfy their
obligations under the Registration Rights
Agreement relating to the Old Capital
Securities. For a description of the procedures
for tendering Old Capital Securities, see "The
Exchange Offer-- Procedures for Tendering Old
Capital Securities."
Expiration Date................. The Expiration Date of the Exchange Offer will
be 5:00 p.m., New York City time, on
___________, 1997, unless the Exchange Offer is
extended by the Company and the Trust. See "The
Exchange Offer -- Expiration Date; Extensions;
Amendments."
Conditions to
Exchange Offer.................. The Exchange Offer is subject to certain
conditions, including the absence of a Tax
Event (as defined herein), which may be waived
by the Company and the Trust in their sole
discretion. The Exchange Offer is not
conditioned upon any minimum liquidation amount
of Old Capital Securities being tendered. See
"The Exchange Offer-- Conditions to the
Exchange Offer."
The Company and the Trust reserve the right in
their sole discretion, subject to applicable
law, at any time and from time to time, (i) to
delay the acceptance of the Old Capital
Securities for exchange, (ii) to terminate the
Exchange Offer if certain specified conditions
have not been
4
<PAGE>
satisfied, (iii) to extend the Expiration Date
of the Exchange Offer and retain all Old
Capital Securities tendered pursuant to the
Exchange Offer, subject, however, to the right
of holders of Old Capital Securities to
withdraw their tendered Old Capital Securities,
or (iv) to waive any condition or otherwise
amend the terms of the Exchange Offer in any
respect. See "The Exchange Offer -- Expiration
Date; Extensions; Amendments."
Withdrawal Rights............... Tenders of Old Capital Securities may be
withdrawn at any time on or prior to the
Expiration Date by delivering a written notice
of such withdrawal to The Chase Manhattan Bank,
as Exchange Agent (the "EXCHANGE AGENT"), in
conformity with certain procedures set forth
below under "The Exchange Offer-- Withdrawal
Rights."
Procedures for Tendering
Old Capital Securities.......... Tendering holders of Old Capital Securities
must complete and sign a Letter of Transmittal
in accordance with the instructions contained
therein and forward the same by mail, facsimile
or hand delivery, together with any other
required documents (including the Old Capital
Securities to be tendered) to the Exchange
Agent, or must comply with the specified
procedures for guaranteed delivery of Letters
of Transmittal and Old Capital Securities.
Certain brokers, dealers, commercial banks,
trust companies and other nominees may also
effect tenders by book-entry transfer,
including an Agent's Message in lieu of the
Letter of Transmittal. Holders of Old Capital
Securities registered in the name of a broker,
dealer, commercial bank, trust company or other
nominee are urged to contact such person
promptly if they wish to tender Old Capital
Securities pursuant to the Exchange Offer. See
"The Exchange Offer-- Procedures for Tendering
Old Capital Securities."
Letters of Transmittal and certificates
representing Old Capital Securities should not
be sent to the Company or the Trust. Such
documents should only be sent to the Exchange
Agent. Questions regarding how to tender and
requests for information should be directed to
the Exchange Agent. See "The Exchange Offer--
Exchange Agent."
5
<PAGE>
Resales of New
Capital Securities.............. Based on interpretations by the staff of the
Commission as set forth in no-action letters
issued to third parties, the Company and the
Trust believe that the New Securities issued
pursuant to the Exchange Offer may be offered
for resale, resold or otherwise transferred by
holders thereof (other than any holder that is
an "affiliate" of the Company or the Trust as
defined under Rule 405 of the Securities Act)
without compliance with the registration and
prospectus delivery provisions of the
Securities Act; provided that such New
Securities are acquired in the ordinary course
of such holders' business and such holders are
not engaged in, and do not intend to engage in,
a distribution of such New Securities and have
no arrangement or understanding with any person
to participate in the distribution of such New
Securities. However, the staff of the
Commission has not considered the Exchange
Offer in the context of a no-action letter, and
there can be no assurance that the staff of the
Commission would make a similar determination
with respect to the Exchange Offer as in such
other circumstances. By tendering the Old
Capital Securities in exchange for New Capital
Securities, each holder, other than a
broker-dealer, will represent to the Company
and the Trust that: (i) it is not an affiliate
of the Company or the Trust (as defined under
Rule 405 of the Securities Act); (ii) any New
Capital Securities to be received by it were
acquired in the course of its ordinary
business; and (iii) it is not engaged in, and
does not intend to engage in, a distribution of
the New Capital Securities and has no
arrangement or understanding with any person to
participate in a distribution (within the
meaning of the Securities Act) of the New
Capital Securities.
Each broker-dealer that receives New Capital
Securities for its own account pursuant to the
Exchange Offer must acknowledge that it will
deliver a prospectus in connection with any
resale of such New Capital Securities. The
Letter of Transmittal states that by so
acknowledging and by delivering a prospectus, a
broker-dealer will not be deemed to admit that
it is an "underwriter" within the meaning of
the Securities Act. This Prospectus, as it may
be amended or supplemented from time to time,
may be used by a broker-dealer in connection
with resales of New
6
<PAGE>
Capital Securities received in exchange for Old
Capital Securities where such Old Capital
Securities were acquired by such broker-dealer
as a result of market-making activities or
other trading activities. The Company and the
Trust have agreed that, starting on the date on
which the Exchange Offer is consummated and
ending on the close of business 90 days after
such date, they will make this Prospectus, as
amended or supplemented, available to any
broker-dealer for use in connection with any
such resale. See "Plan of Distribution."
In that regard, each Exchanging Dealer who
surrenders Old Capital Securities pursuant to
the Exchange Offer will be deemed to have
agreed, by execution of the Letter of
Transmittal or delivery of an Agent's Message,
that, upon receipt of notice from the Company
or the Trust of the occurrence of any event or
the discovery of any fact which makes any
statement contained or incorporated by
reference in this Prospectus untrue in any
material respect or which causes this
Prospectus to omit to state a material fact
necessary in order to make the statements
contained or incorporated by reference herein,
in the light of the circumstances under which
they were made, not misleading, or of the
occurrence of certain other events specified in
the Registration Rights Agreement, such
Exchanging Dealer will suspend the sale of New
Securities pursuant to this Prospectus until
the Company or the Trust has amended or
supplemented this Prospectus to correct such
misstatement or omission and has furnished
copies of the amended or supplemented
Prospectus to such Exchanging Dealer, or the
Company or the Trust has given notice that the
sale of the New Securities may be resumed, as
the case may be.
Exchange Agent.................. The Exchange Agent is The Chase Manhattan Bank.
The address and telephone and facsimile numbers
of the Exchange Agent are set forth under "The
Exchange Offer -- Exchange Agent" and in the
Letter of Transmittal.
Use of Proceeds................. Neither the Company nor the Trust will receive
any cash proceeds from the issuance of the New
Capital Securities offered hereby. See "Use of
Proceeds."
7
<PAGE>
Certain Federal Income
Tax Consequences; ERISA
Considerations.................. Holders of Old Capital Securities should review
the information set forth under "Certain
Federal Income Tax Consequences" and "ERISA
Considerations" prior to tendering Old Capital
Securities in the Exchange Offer.
THE CAPITAL SECURITIES
The Exchange Offer applies to the Old Securities. The terms of the New
Securities are identical in all material respects to the respective terms of the
Old Securities, except that (i) the New Securities have been registered under
the Securities Act and therefore will not be subject to certain restrictions on
transfer applicable to the Old Securities, (ii) the New Capital Securities will
not provide for any increase in the Distribution rate thereon, and (iii) the New
Junior Subordinated Debt Securities will not provide for any increase in the
interest rate thereon. In the event that the Exchange Offer is consummated, any
Old Capital Securities which remain outstanding after consummation of the
Exchange Offer and the New Capital Securities issued in the Exchange Offer will
vote together as a single class for purposes of determining whether holders of
the requisite percentage in outstanding liquidation amount thereof have taken
certain actions or exercised certain rights under the Declaration.
General......................... The Capital Securities represent undivided
preferred beneficial interests in the Trust's
assets, which consist solely of the Junior
Subordinated Debentures. The Junior
Subordinated Debentures, in which the proceeds
of the Trust Securities are invested, mature on
December 31, 2026, unless the Junior
Subordinated Debentures are redeemed by the
Company prior to such maturity as described
under "Description of the Capital
Securities-Redemption."
Distributions................... The distributions payable on the Capital
Securities are fixed at a rate per annum of
9.98% of the stated liquidation amount of
$1,000 per Capital Security and will be
cumulative, will accrue from April 23, 1997,
the date of original issuance of the Old
Capital Securities, and (subject to the
extensions of distribution payment periods
described below) are payable semiannually, in
arrears, on June 30 and December 31 of each
year, commencing June 30, 1997. See
"Description of the Capital
Securities-Distributions."
Extension Periods............... So long as no Debenture Event of Default (as
defined herein) has occurred and is continuing,
Distributions on Capital Securities may be
deferred for the duration of any
8
<PAGE>
Extension Period elected by the Company with
respect to the payment of interest on the
Junior Subordinated Debentures. No Extension
Period will exceed 10 consecutive semi-annual
periods or extend beyond the Stated Maturity
Date. See "Description of Junior Subordinated
Debentures -- Option to Extend Interest Payment
Date" and "Certain Federal Income Tax
Considerations -- Interest, Original Issue
Discount, Premium and Market Discount."
Ranking......................... The Capital Securities rank pari passu, and
payments thereon will be made pro rata, with
the Common Securities except as described under
"Description of Capital Securities--
Subordination of Common Securities." The Junior
Subordinated Debentures rank pari passu with
all other junior subordinated debentures issued
by the Company ("OTHER DEBENTURES"), which will
be issued and sold (if at all) to other trusts
established by the Company (if any), in each
case similar to the Trust ("OTHER TRUSTS"), and
will be unsecured and subordinate and rank
junior in right of payment to all Senior
Indebtedness to the extent and in the manner
set forth in the Indenture. See "Description of
Junior Subordinated Debentures." There are not
currently any securities which would constitute
Other Debentures. The Guarantee will constitute
an unsecured obligation of the Company and will
be subordinate and rank junior in right of
payment to all Senior Indebtedness to the
extent and in the manner set forth in the
Guarantee Agreements. In addition, because the
Company is a holding company, the Company's
obligations under the Junior Subordinated
Debentures and the Guarantee will be
effectively subordinated to all existing and
future liabilities, including indebtedness, of
the Company's subsidiaries, including the Bank.
See "Description of the Guarantee" and "Risk
Factors-- Ranking of Subordinate Obligations
Under the Guarantee and Junior Subordinated
Debentures."
Redemption...................... The Trust Securities are subject to mandatory
redemption in a Like Amount, (i) in whole but
not in part, on the Stated Maturity Date upon
repayment of the Junior Subordinated
Debentures, (ii) in whole but not in part, at
any time before the Initial Optional Prepayment
Date contemporaneously with the optional
prepayment of the
9
<PAGE>
Junior Subordinated Debentures by the Company
upon the occurrence and continuation of a
Special Event and (iii) in whole or in part, on
or after the Initial Optional Prepayment Date
contemporaneously with the optional prepayment
by the Company of the Junior Subordinated
Debentures, in each case at the applicable
Redemption Price. See "Description of Capital
Securities -- Redemption."
Transfer........................ The Old Capital Securities were issued, and the
New Capital Securities will be issued, and may
be transferred only in blocks having a
Liquidation Amount of not less than $100,000
(100 Capital Securities). See "Description of
Capital Securities-- Restrictions on Transfer."
Any such transfer of Capital Securities in a
block having a Liquidation Amount of less than
$100,000 shall be deemed to be void and of no
legal effect whatsoever.
Absence of Market for the
Capital Securities.............. The New Capital Securities will be a new issue
of securities for which there currently is no
market. Although the Initial Purchasers have
informed the Trust and the Company in
connection with the issuance of the Old Capital
Securities that they each currently intend to
make a market in the Old Capital Securities,
the Initial Purchasers are not obligated to
make a market in the Old Securities or the New
Securities, and any such market making may be
discontinued at any time without notice.
Accordingly, there can be no assurance as to
the development or liquidity of any market for
the Capital Securities. The Trust and the
Company will not apply for listing of the New
Capital Securities on any securities exchange
or automated quotation system. See "Plan of
Distribution."
Risk Factors.................... Prospective investors should carefully consider
the matters set forth under "Risk Factors."
10
<PAGE>
RISK FACTORS
Holders of the Old Capital Securities should carefully review the
information contained elsewhere in this Prospectus and should particularly
consider the following matters prior to tendering Old Capital Securities in the
Exchange Offer.
RANKING OF SUBORDINATE OBLIGATIONS UNDER THE GUARANTEE AND JUNIOR SUBORDINATED
DEBENTURES
The obligations of the Company under the Guarantee and under the
Junior Subordinated Debentures are unsecured and subordinate and rank junior in
right of payment to all present and future Senior Indebtedness of the Company to
the extent and in the manner set forth in the Guarantee and the Indenture,
respectively. No payment may be made of the principal of, or premium, if any, or
interest on the Junior Subordinated Debentures, or in respect of any redemption,
retirement, purchase or other acquisition of any of the Junior Subordinated
Debentures, at any time when (i) there shall have occurred and be continuing a
default in any payment in respect of any Senior Indebtedness, or there has been
an acceleration of the maturity thereof because of a default or (ii) in the
event of the acceleration of the maturity of the Junior Subordinated Debentures
until payment has been made on all Allocable Amounts (as defined herein) of
Senior Indebtedness. At December 31, 1996, the aggregate principal amount of
outstanding Senior Indebtedness of the Company was approximately $4.5 million.
The Company is a holding company that conducts its operations primarily through
its subsidiaries. The right of the Company to participate in any distribution of
assets of any subsidiary upon such subsidiary's liquidation or reorganization or
otherwise (and thus the ability of holders of the Capital Securities to benefit
indirectly from such distribution) is subject to the prior claims of creditors
of that subsidiary, except to the extent that the Company may itself be
recognized as a creditor of that subsidiary. In addition, the Bank is subject to
certain restrictions imposed by federal law on any extensions of credit to, and
certain other transactions with, the Company and certain other affiliates, and
on investments in stock or other securities thereof. Such restrictions prevent
the Company and such other affiliates from borrowing from the Bank unless the
loans are secured by various types of collateral. Further, such secured loans,
other transactions and investments by the Bank are generally limited in amount
as to the Company and as to each of such other affiliates to 10% of the Bank's
capital and surplus and as to the Company and all of such other affiliates to an
aggregate of 20% of the Bank's capital and surplus. In addition, payment of
dividends to the Company by the Bank is subject to ongoing review by banking
regulators and is subject to various statutory limitations and in certain
circumstances requires approval by banking regulatory authorities. None of the
Indenture, the Guarantee, the Common Guarantee or the Declaration places any
limitation on the amount of secured or unsecured debt, including Senior
Indebtedness, that may be incurred by the Company or any of its subsidiaries.
See "Description of the Guarantee -- Status" and "Description of the Junior
Subordinated Debentures -- Subordination."
The ability of the Trust to pay amounts due on the Capital Securities
is dependent upon the Company making payments on the Junior Subordinated
Debentures as and when required.
11
<PAGE>
OPTION TO EXTEND INTEREST PAYMENT PERIOD; TAX CONSIDERATIONS
So long as no Debenture Event of Default shall have occurred and be
continuing, the Company has the right under the Indenture to defer payments of
interest on the Junior Subordinated Debentures at any time or from time to time
for a period not exceeding 10 consecutive semi-annual periods with respect to
each Extension Period, provided that no Extension Period may extend beyond the
Stated Maturity Date. Upon any such deferral, semi-annual Distributions on the
Capital Securities by the Trust will be deferred (and the amount of
Distributions to which holders of the Capital Securities are entitled will
accumulate additional Distributions thereon at the rate of 9.98% per annum,
compounded semi-annually) from the relevant payment date for such Distributions
during any such Extension Period.
The Company may extend any existing Extension Period, provided that
such extension does not cause such Extension Period to exceed 10 consecutive
semi-annual periods or to extend beyond the Stated Maturity Date. Upon the
expiration of any Extension Period and the payment of all interest then accrued
and unpaid on the Junior Subordinated Debentures (together with interest thereon
at the annual rate of 9.98%, compounded semi-annually, to the extent permitted
by applicable law), the Company may elect to begin a new Extension Period,
subject to the above requirements. There is no limitation on the number of times
that the Company may elect to begin an Extension Period. See "Description of
Capital Securities -- Distributions" and "Description of Junior Subordinated
Debentures -- Option to Extend Interest Payment Period."
Should the Company exercise its rights to defer payments of interest
by extending the interest payment period, each holder of Capital Securities will
continue to accrue original issue discount ("OID") for United States federal
income tax purposes in respect of the deferred interest allocable to its Capital
Securities. As a result, holders of Capital Securities will recognize income for
United States federal income tax purposes in advance of the receipt of cash and
will not receive the cash from the Trust related to such income if such holder
disposes of its Capital Securities prior to the record date for the date on
which distributions of such amounts are made. The Company has no current
intention of exercising its right to defer payments of interest by extending the
interest payment period on the Junior Subordinated Debentures. However, should
the Company determine to exercise such right in the future, the market price of
the Capital Securities is likely to be affected. A holder that disposes of its
Capital Securities during an Extension Period, therefore, might not receive the
same return on its investment as a holder that continues to hold its Capital
Securities. In addition, as a result of the existence of the Company's rights to
defer interest payments, the market price of the Capital Securities (which
represents an undivided beneficial interest in the Junior Subordinated
Debentures) may be more volatile than other securities on which OID accrues that
do not have such rights. See "Certain Federal Income Tax Considerations --
Interest, Original Issue Discount, Premium and Market Discount" and "-- Sale or
Redemption of Capital Securities."
12
<PAGE>
REDEMPTION OR DISTRIBUTION
Upon the occurrence and continuation of a Special Event (including a
Tax Event or a Regulatory Capital Event, in each case, as defined under
"Description of Junior Subordinated Debentures -- Special Event Prepayment"),
the Company will have the right to prepay the Junior Subordinated Debentures,
before the Initial Optional Prepayment Date, in whole (but not in part) at the
Special Event Prepayment Price within 90 days following the occurrence of such
Special Event and therefore cause a mandatory redemption of the Capital
Securities at the Special Event Redemption Price. On or after the Initial
Optional Prepayment Date, the Company may prepay the Junior Subordinated
Debentures in whole or in part for any reason and thereby cause an optional
redemption of the Capital Securities, in whole or in part, at the Optional
Redemption Price. Any such redemption is subject to the Company having received
prior approval of the Federal Reserve to do so if then required under applicable
guidelines or policies of the Federal Reserve. See "Description of Capital
Securities -- Redemption" and "-- Liquidation of the Trust and Distribution of
the Junior Subordinated Debentures."
The Company has the right at any time to dissolve the Trust and,
after satisfaction of liabilities to creditors of the Trust as required by
applicable law, cause the Junior Subordinated Debentures to be distributed to
the holders of the Trust Securities in liquidation of the Trust. Such right is
subject to (i) the Company having received an opinion of counsel to the effect
that such distribution will not be a taxable event to holders of Capital
Securities and (ii) prior approval of the Federal Reserve if then required.
Under current United States federal income tax law, a distribution of Junior
Subordinated Debentures upon the dissolution of the Trust would not be a taxable
event to holders of the Capital Securities. If, however, the Trust is
characterized for United States federal income tax purposes as an association
taxable as a corporation at the time of dissolution of the Trust, the
distribution of the Junior Subordinated Debentures may constitute a taxable
event to holders of Capital Securities. Moreover, upon the occurrence of a
Special Event, a dissolution of the Trust in which holders of the Capital
Securities receive cash would be a taxable event to such holders. See "Certain
Federal Income Tax Considerations -- Receipt of Junior Subordinated Debentures
Upon Liquidation of the Trust."
On February 6, 1997, President Clinton submitted to Congress a
proposal to implement certain tax legislation (the "PROPOSAL"). As explained in
the Joint Committee on Taxation Description and Analysis of Certain Revenue
Provisions contained in the President's Fiscal 1998 Budget Proposals, issued
March 11, 1997 (the "JOINT COMMITTEE DESCRIPTION"), the Proposal contains a
provision which generally would deny a deduction for interest on an instrument
which (a) is issued by a corporation, (b) has a maximum term of more than 15
years and (c) is not shown as indebtedness on the separate balance sheet of the
issuer (or, if the instrument is issued to a related party other than a
corporation and the holder or some other related party issues a related
instrument, such instrument is not shown as indebtedness on the issuer's
consolidated balance sheet). If such provision were to apply to the Junior
Subordinated Debentures, the Company would be unable to deduct interest on the
Junior Subordinated Debentures, which under current law, the Company believes it
will be able to do. As explained in the Joint Committee Description, such
provision generally would be effective for instruments issued on or after the
date of first congressional committee action. To date there has been no
congressional committee action on the Proposal. There can be no assurance that
the Proposal will not result in legislation having a retroactive effect which
would apply to the Junior Subordinated Debentures.
13
<PAGE>
Furthermore, there can be no assurance that other legislation enacted after the
date hereof will not otherwise adversely affect the ability of the Company to
deduct the interest payable on the Junior Subordinated Debentures. Accordingly,
there can be no assurance that the Proposal or any other such legislation will
not result in a Tax Event, which would permit the Company to cause a redemption
of the Capital Securities before, or after, June 30, 2007. See "Description of
Capital Securities -- Redemption," "Description of Junior Subordinated
Debentures -- Special Event Prepayment" and "Certain Federal Income Tax
Considerations -- Proposed Tax Legislation."
POSSIBLE ADVERSE EFFECT ON MARKET PRICES
There can be no assurance as to the market prices for Capital
Securities or Junior Subordinated Debentures distributed to the holders of
Capital Securities if a termination of the Trust were to occur. Accordingly, the
Capital Securities or the Junior Subordinated Debentures may trade at a discount
from the price that the investor paid to purchase the Old Capital Securities.
Because holders of Capital Securities may receive Junior Subordinated Debentures
in liquidation of the Trust and because Distributions are otherwise limited to
payments on the Junior Subordinated Debentures, prospective holders of New
Capital Securities are also making an investment decision with regard to the
Junior Subordinated Debentures and should carefully review all the information
regarding the Junior Subordinated Debentures contained herein prior to tendering
the Old Capital Securities. See "Description of Junior Subordinated Debentures."
RIGHTS UNDER THE GUARANTEE
The Chase Manhattan Bank is the Guarantee Trustee and will hold the
Guarantee for the benefit of the holders of the Capital Securities. The Chase
Manhattan Bank also acts as Property Trustee and as Debenture Trustee under the
Indenture. Chase Manhattan Bank Delaware acts as Delaware Trustee under the
Declaration. The Guarantee guarantees to the holders of the Capital Securities
the following payments, to the extent not paid by the Trust: (i) any accumulated
and unpaid Distributions required to be paid on the Capital Securities, to the
extent that the Trust has funds on hand legally available therefor; (ii) the
applicable Redemption Price with respect to any Capital Securities called for
redemption, to the extent that the Trust has funds on hand legally available
therefor; and (iii) upon a voluntary or involuntary dissolution, winding up or
liquidation of the Trust (unless the Junior Subordinated Debentures are
distributed to holders of the Capital Securities), the lesser of (a) the
aggregate of the Liquidation Amount and all accumulated and unpaid Distributions
to the date of payment, to the extent that the Trust has funds on hand legally
available therefor on such date and (b) the amount of assets of the Trust
remaining available for distribution to holders of the Capital Securities on
such date. The holders of a majority in Liquidation Amount of the Capital
Securities have the right to direct the time, method and place of conducting any
proceeding for any remedy available to the Guarantee Trustee in respect of the
Guarantee or to direct the exercise of any trust power conferred upon the
Guarantee Trustee. Any holder of the Capital Securities may institute a legal
proceeding directly against the Company to enforce its rights under the
Guarantee without first instituting a legal proceeding against the Trust, the
Guarantee Trustee or any other person or entity. If the Company defaults on its
obligation to pay amounts payable under the Junior Subordinated Debentures, the
Trust will not have sufficient funds for the payment of Distributions or amounts
payable on redemption of the
14
<PAGE>
Capital Securities or otherwise, and, in such event, holders of the Capital
Securities will not be able to rely upon the Guarantee for payment of such
amounts. Instead, in the event a Debenture Event of Default shall have occurred
and be continuing and such event is attributable to the failure of the Company
to pay principal of or premium, if any, or interest on the Junior Subordinated
Debentures on the payment date on which such payment is due and payable, then a
holder of Capital Securities may institute a legal proceeding directly against
the Company for enforcement of payment to such holder of the principal of or
premium, if any, or interest on such Junior Subordinated Debentures having a
principal amount equal to the Liquidation Amount of the Capital Securities of
such holder (a "DIRECT ACTION"). Notwithstanding any payments made to a holder
of Capital Securities by the Company in connection with a Direct Action, the
Company shall remain obligated to pay the principal of and premium, if any, and
interest on the Junior Subordinated Debentures, and the Company shall be
subrogated to the rights of the holder of such Capital Securities with respect
to payments on the Capital Securities to the extent of any payments made by the
Company to such holder in any Direct Action. Except as described herein, holders
of Capital Securities will not be able to exercise directly any other remedy
available to the holders of the Junior Subordinated Debentures or to assert
directly any other rights in respect of the Junior Subordinated Debentures. See
"Description of Junior Subordinated Debentures -- Enforcement of Certain Rights
by Holders of Capital Securities" and "-- Debenture Events of Default" and
"Description of the Guarantee." The Declaration provides that each holder of
Capital Securities by acceptance thereof agrees to the provisions of the
Indenture.
LIMITED VOTING RIGHTS
Holders of Capital Securities generally have voting rights relating
only to the modification of the terms of the Capital Securities and the exercise
of the Trust's rights as holder of the Junior Subordinated Debentures. Holders
of Capital Securities are not entitled to vote to appoint, remove or replace, or
to increase or decrease the number of, the Issuer Trustees, which voting rights
are vested exclusively in the holder of the Common Securities, except as
described under "Description of Capital Securities -- Removal of Issuer
Trustees." See "Description of Capital Securities -- Voting Rights; Amendment of
the Declaration."
TRADING PRICE
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 Debentures. A holder who disposes of its Capital Securities
between record dates for payments of distributions thereon will be required to
include accrued but unpaid interest on the Junior Subordinated Debentures
through the date of disposition in income as ordinary income (i.e., OID), and to
add such amount to its adjusted tax basis in its share of the underlying Junior
Subordinated Debentures deemed disposed of. To the extent the selling price is
less than the holder's adjusted tax basis, a holder will recognize a capital
loss. Subject to certain limited exceptions, capital losses cannot be applied to
offset ordinary income for United States federal income tax purposes. See
"Certain Federal Income Tax Considerations -- Interest, Original Issue Discount,
Premium and Market Discount" and "-- Sale or Redemption of Capital Securities."
15
<PAGE>
ABSENCE OF PUBLIC MARKET AND TRANSFER RESTRICTIONS
The Capital Securities may only be transferred in blocks having a
Liquidation Amount of not less than $100,000 (100 Capital Securities). 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 as the
case may be. Future trading prices of the Capital Securities will depend on many
factors including, among other things, prevailing interest rates, the Company's
operating results, and the market for similar securities. The Initial Purchasers
have informed the Trust and the Company that the Initial Purchasers intend to
make a market in the Capital Securities. However, the Initial Purchasers are 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. In addition, such
market making activity will be subject to the limits of the Securities Act and
may be limited during the pendency of the Exchange Offer. Notwithstanding the
registration of the New Capital Securities in the Exchange Offer, holders who
are "affiliates" of the Company or the Trust as defined under Rule 405 of the
Securities Act may publicly offer for sale or resell the New Capital Securities
only in compliance with the provisions of Rule 144 under the Securities Act.
Each tendering holder of the Old Capital Securities will be deemed to have made
certain acknowledgments, representations and agreements. In addition, each
broker-dealer that receives New Capital Securities for its own account pursuant
to the Exchange Offer must acknowledge that it will deliver a prospectus in
connection with any resale of such New Capital Securities. See "Plan of
Distribution."
CONDITIONS TO COMPLETION OF THE SPIN OFF
As set forth herein under "Imperial Bancorp -- The Spin Off
Transactions," on February 21, 1997, the Company announced its intention to spin
off to its stockholders a portion of its specialty lending and finance
businesses that focus on the entertainment industry, as well as certain other
operations. The completion of the spin off is subject to receipt of a private
letter ruling from the Internal Revenue Service (the "IRS") to the effect that
the transaction will not be taxable to the Company, its stockholders or the
Bank. In addition, the spin off may require regulatory approval. It is currently
anticipated that the spin off will be effected in late 1997 or early 1998. No
assurance can be given as to whether the private letter ruling will be received
in satisfactory form or whether the spin off will be completed, if at all, on a
basis consistent with current timing expectations. See "Pro Forma Financial
Information." On April 17, 1997, tax legislation was introduced in Congress
relating to the tax-free nature of certain spin off transactions. It is
uncertain whether such legislation will impede the Company's ability to effect
the spin off on a basis that is not taxable to the Company, its stockholders or
the Bank. Changes to the proposed legislation are expected which will clarify
whether such proposals, if enacted in their current form or as modified, will
apply in such a manner. The Company intends to seek to complete the spin off and
is hopeful that any tax legislation would not prevent the Company from effecting
the spin off on a tax-free basis, although there can be no assurance thereof.
16
<PAGE>
CONSEQUENCES OF FAILURE TO EXCHANGE OLD CAPITAL SECURITIES
The Old Capital Securities have not been registered under the
Securities Act or any state securities laws and, therefore, may not be offered,
sold or otherwise transferred except in compliance with the registration
requirements of the Securities Act and any other applicable securities laws, or
pursuant to an exemption therefrom or in a transaction not subject thereto, and
in each case in compliance with certain other conditions and restrictions. Old
Capital Securities which remain outstanding after consummation of the Exchange
Offer will continue to bear a legend reflecting such restrictions on transfer.
In addition, upon consummation of the Exchange Offer, holders of Old Capital
Securities which remain outstanding will not be entitled to any rights to have
such Old Capital Securities registered under the Securities Act or to any
similar rights under the Registration Rights Agreement (subject to certain
limited exceptions). The Company and the Trust do not intend to register under
the Securities Act any Old Capital Securities which remain outstanding after
consummation of the Exchange Offer (subject to such limited exceptions, if
applicable).
To the extent that Old Capital Securities are tendered and accepted
in the Exchange Offer, a holder's ability to sell untendered Old Capital
Securities could be adversely affected. In addition, any trading market for Old
Capital Securities which remain outstanding after the Exchange Offer could be
adversely affected.
The New Capital Securities and any Old Capital Securities which
remain outstanding after consummation of the Exchange Offer will constitute a
single series of Capital Securities under the Declaration and, accordingly, will
vote together as a single class for purposes of determining whether holders of
the requisite percentage in outstanding liquidation amount thereof have taken
certain actions or exercised certain rights under the Declaration. See
"Description of Capital Securities -- Voting Rights; Amendment of the
Declaration."
The Old Capital Securities provide that, if the Exchange Offer is not
consummated by November 19, 1997 (subject to extension in certain
circumstances), the distribution rate borne by the Old Capital Securities will
increase by 0.25% per annum until the Exchange Offer is consummated. See
"Description of Capital Securities." Following consummation of the Exchange
Offer, the Old Capital Securities will not be entitled to any increase in the
distribution rate thereon. The New Capital Securities will not be entitled to
any such increase in the distribution rate thereon.
EXCHANGE OFFER PROCEDURES
Issuance of the New Capital Securities in exchange for Old Capital
Securities pursuant to the Exchange Offer will be made only after a timely
receipt by the Exchange Agent of such Old Capital Securities, a properly
completed and duly executed Letter of Transmittal or Agent's Message in lieu
thereof and all other required documents. Therefore, holders of the Old Capital
Securities desiring to tender such Old Capital Securities in exchange for New
Capital Securities should allow sufficient time to ensure timely delivery.
Neither the Company, the Trust nor the Exchange Agent is under any duty to give
notification of defects or irregularities with respect to the tenders of Old
Capital Securities for exchange.
17
<PAGE>
IMPERIAL BANCORP
GENERAL
Imperial Bancorp (the "Company") is a registered bank holding company
whose principal operating subsidiary is Imperial Bank, a California chartered
commercial bank (the "Bank"). The Bank, the eighth largest commercial bank in
California based on deposits as of December 31, 1996, is engaged in general
commercial banking through its 11 branches in California and maintains three
additional loan production offices in Boston, Massachusetts, Austin, Texas and
Phoenix, Arizona. As of December 31, 1996, the Company had total assets of $3.4
billion and deposits of $3.0 billion, and for the year ended December 31, 1996,
the Company had net income of $54.1 million.
The Company offers a wide range of financial services tailored to
corporate customers, entrepreneurs and professionals. The Bank's business
strategy has been to develop specialty financial products and services for
industries such as health care, emerging growth technology, entertainment,
manufacturing and distribution, garment, and title and escrow, in addition to
merchant card transaction processing, trust and custodial services. The Company
competes for the banking business of middle market companies (between $10
million and $150 million in annual sales) through the development of special
products and services, including employing lending and deposit specialists in
the targeted industry groups.
The Company is incorporated in California and its principal executive
offices are located at 9920 South La Cienega Boulevard, Inglewood, California
90301. Its telephone number is (310) 417- 5600.
THE SPIN OFF TRANSACTIONS
Subject to satisfaction of the conditions described below, the
Company expects to spin off to its stockholders in a tax-free distribution the
capital stock of Imperial Financial Group, Inc., a newly formed Delaware
corporation ("IFG"), the assets of which will consist of a portion of the
Company's specialty lending and finance businesses that focus on the
entertainment industry, as well as certain other operations (the transactions
being collectively referred to herein as the "SPIN OFF TRANSACTIONS").
See "Risk Factors -- Conditions to Completion of the Spin Off."
The Bank will contribute to IFG (i) the assets and liabilities
relating to The Lewis Horwitz Organization, a division of the Bank that
specializes in motion picture and television finance, (ii) all of the common
stock of Imperial Trust Company, a California licensed trust company that offers
a wide range of trust and investment management services, (iii) all of the
common stock of a newly formed thrift and loan company that will hold the assets
and liabilities relating to the Bank's Small Business Administration lending
group, a division of the Bank that provides loans to small businesses, a portion
of which is guaranteed as to repayment by the U.S. Government, and (iv) the
common stock owned by the Bank (representing approximately 25% of all
outstanding common stock as of December 31, 1996) in Imperial Credit Industries,
Inc. ("ICII"), a publicly traded, diversified specialty finance company.
The Company intends to effect the spin off in late 1997 or early 1998.
18
<PAGE>
The Spin Off Transactions are subject to receipt of a favorable
ruling from the IRS to the effect that the Spin Off Transactions will not be
taxable to the Company, its stockholders or the Bank. The Spin Off Transactions
may also be subject to regulatory approval.
On a pro forma basis assuming the Spin Off Transactions were
consummated on January 1, 1996, the Company would have reported at December 31,
1996 total assets of approximately $3.3 billion, deposits of approximately $3.0
billion, and stockholders' equity of approximately $236.7 million. For the year
ended December 31, 1996, the Company would have reported income from continuing
operations of approximately $22.3 million.
FIRST QUARTER 1997 EARNINGS
On April 18, 1997, the Company reported earnings for the first
quarter of 1997. Net income for the first quarter of 1997 rose 17% to $8.0
million, or $0.30 per share, compared to net income of $6.8 million, or $0.26
per share, for the first quarter of 1996.
For the 1997 first quarter, net interest income was $40.2 million,
compared with $32.2 million for the same period last year, while the net
interest margin was 5.7%, compared with 5.8% in the first quarter of 1996.
Noninterest income totaled $16.1 million, up 31% from $12.3 million for the
first quarter last year. Increases in noninterest income were primarily due to
fees generated from item processing services and warrant income. The Company
also recorded stronger income from other fee-based activities, including higher
international and merchant card servicing fees and service charges on deposits.
Noninterest expenses amounted to $39.7 million for the quarter ended
March 31, 1997, versus $30.2 million for the same period in 1996. This increase
reflects the addition of personnel and the opening of one regional and several
loan production offices since the first quarter of last year. Also contributing
to higher noninterest expenses were increases in customer service and data
processing related expenses. These factors were offset by reductions in real
estate owned ("REO") costs and lawsuit settlements.
At quarter-end 1997, REO was $2.2 million, down from $9.7 million at
March 31, 1996 and up slightly from $2.1 million at December 31, 1996.
At March 31, 1997, the Company's total assets were $3.7 billion, up
from $3.4 billion at December 31, 1996 and $2.8 billion for the corresponding
quarter last year. Total loans for the quarter were $2.2 billion, an increase
from $2.1 billion at year-end 1996 and $1.7 billion at March 31, 1996. At the
end of the first quarter 1997, stockholders' equity and allowance for loan
losses totaled $337 million, compared with $322 million at December 31, 1996 and
$274 million at March 31, 1996.
Total deposits at March 31, 1997 amounted to $3.3 billion, 49% of
which represented noninterest bearing demand deposit, versus total deposits of
$2.5 billion, 48% of which were noninterest bearing demand deposits, at March
31, 1996. At December 31, 1996, total deposits were $3.0 billion.
19
<PAGE>
Average demand deposits and average stockholders' equity funded 46% of
average total assets for the quarter ended March 31, 1997, compared with 46%
for the quarter ended March 31, 1996.
The allowance for loan losses at March 31, 1997 equaled $38.6
million, or 1.8% of total loans, compared with $39.2 million, or 2.2% of total
loans, at March 31, 1996. The provision for loan losses totaled $3.3 million for
the first quarter 1997, versus $2.7 million reported for the quarter ended March
31, 1996. Net charge-offs for the 1997 first quarter were $0.7 million, or 0.14%
of average loans, compared with net charge-offs of $0.9 million, or 0.21% of
average loans, for the corresponding period in 1996.
Nonaccrual loans of $17.0 million at March 31, 1997 decreased $3.4
million from December 31, 1996 and $13.8 million from March 31, 1996. The
allowance for loan losses coverage of nonaccrual loans at March 31, 1997
approximated 227%, up from 127% at March 31, 1996. Restructured loans at March
31, 1997 totaled $25.4 million, down $3.3 million from December 31, 1996 and
$10.6 million from March 31. 1996. All restructured loans at March 31, 1997 were
performing in accordance with their modified terms.
As defined by Bank Regulatory Agencies, institutions whose leverage,
Tier I, and total capital ratios meet or exceed 5%, 6%, and 10%, respectively,
are considered to be "well capitalized." Imperial Bank is classified as "well
capitalized" with leverage, Tier I, and total capital ratios of 8.7%, 9.5%, and
10.8%, respectively, at March 31, 1997, compared with 8.5%, 9.3%, and 10.5%,
respectively, the year earlier.
20
<PAGE>
USE OF PROCEEDS
Neither the Company nor the Trust will receive any cash proceeds from
the issuance of the New Capital Securities offered hereby. In consideration for
issuing the New Capital Securities in exchange for Old Capital Securities as
described in this Prospectus, the Trust will receive Old Capital Securities in
like liquidation amount. The Old Capital Securities surrendered in exchange for
the New Capital Securities will be retired and cancelled.
All of the proceeds from the sale of the Old Capital Securities and
the Common Securities were invested by the Trust in the Old Junior Subordinated
Debentures. The Company applied the net proceeds from the sale of the Old Junior
Subordinated Debentures of approximately $71,892,250 to its general funds to be
used for general corporate purposes (which may include additional investments in
the Bank and/or acquisition opportunities which may arise from time to time).
The precise amount and timing of the application of such net proceeds used for
such corporate purposes cannot be determined at this time. Pending such
application by the Company, such net proceeds may be temporarily invested in
short-term interest bearing securities. The Old Capital Securities are, and the
New Capital Securities will be, eligible to qualify as Tier 1 capital under the
capital guidelines of the Federal Reserve, provided that under current Federal
Reserve guidelines no more than 25% of the Company's Tier 1 Capital may comprise
Capital Securities and other capital securities and cumulative preferred stock
of the Company.
21
<PAGE>
RATIOS OF EARNINGS TO FIXED CHARGES
The following table sets forth for the respective periods indicated
the ratios of earnings to fixed charges and the ratio of earnings to fixed
charges on a pro forma basis to reflect the Spin Off Transactions as if they had
occurred on January 1, 1996. See "Risk Factors -- Conditions to Completion of
the Spin Off."
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-------------------------------------------------------------
1996 1995 1994 1993 1992
---------- ---------- ---------- ---------- ---------
<S> <C> <C> <C> <C> <C>
Ratio of Earnings to Fixed Charges
Excluding interest on deposits................................ 13.64x 4.87x 2.04x -- (1) 3.21x
Including interest on deposits................................ 2.04x 1.43x 1.18x -- (1) 1.23x
Post Spin Off Pro Forma Ratio of Earnings to Fixed
Excluding interest on deposits................................ 7.96x
Including interest on deposits................................ 1.55x
- --------------------
</TABLE>
(1) Earnings were inadequate to cover fixed charges in 1993 by $6.9 million.
For purposes of computing the ratio of earnings to fixed charges,
earnings represent pretax income from continuing operations less undistributed
earnings from ICII, plus fixed charges. Fixed charges, excluding interest on
deposits, include interest expense (other than on deposits) and the proportion
deemed representative of the interest factor of rent expense, net of income from
subleases. Fixed charges, including interest on deposits, include all interest
expense and the proportion deemed representative of the interest factor of rent
expense, net of income from subleases.
22
<PAGE>
CAPITALIZATION
The following table sets forth, at December 31, 1996, the
capitalization of the Company, the capitalization as adjusted to give effect to
the consummation of the offering of the Capital Securities and the
capitalization as further adjusted to give effect to the Spin Off Transactions.
See "Risk Factors -- Conditions to Completion of the Spin Off" and "Use of
Proceeds." The table should be read in conjunction with the Company's pro forma
financial information included elsewhere in this Prospectus and the Company's
consolidated financial statements and notes thereto included in the documents
incorporated by reference herein. See "Incorporation of Certain Documents by
Reference" and "Pro Forma Financial Information."
<TABLE>
<CAPTION>
AS OF DECEMBER 31, 1996
---------------------------------------------------------------------------------
AS FURTHER
ACTUAL AS ADJUSTED(1) ADJUSTED(2)
------ -------------- -----------
(IN MILLIONS)
<S> <C> <C> <C>
Floating Rate Notes and Debentures
due 1999 $4,455 $4,455 $4,455
------ ------
Total long-term debt 4,455 4,455 4,455
----- ----- -----
Company obligated, mandatorily redeemable
preferred securities of subsidiary
trust holding solely subordinated
debentures of the Company -- 75,000 75,000
Stockholders' equity:
Common stock, no par value,
authorized 50,000,000 shares;
issued 23,079,715 shares 163,748 163,748 163,748
Retained earnings 121,397 121,397 71,701
Unrealized gain on securities available
for sale, net of tax 1,206 1,206 1,206
------- ------- -------
Total stockholders' equity 286,351 286,351 236,655
------- ------- -------
Total capitalization $290,806 $365,806 $316,110
======== ========
<FN>
(1) Reflects the issuance of the Capital Securities. The Trust is a
subsidiary of the Company and holds the Junior Subordinated
Debentures as its sole asset.
(2) Reflects the issuance of the Capital Securities and the consummation
of the Spin Off Transactions. See "Pro Forma Financial Information."
</FN>
</TABLE>
23
<PAGE>
SELECTED CONSOLIDATED FINANCIAL DATA OF IMPERIAL BANCORP
The selected data below are derived from the consolidated financial
statements of Imperial Bancorp, which consolidated financial statements have
been audited by KPMG Peat Marwick LLP, independent auditors. The consolidated
financial statements as of December 31, 1996 and 1995, and for each of the years
for the three-year period ended December 31, 1996, and the report thereon, are
incorporated herein by reference. See "Available Information."
<TABLE>
<CAPTION>
AS OF AND FOR THE YEARS ENDED DECEMBER 31,
--------------------------------------------------------------------------------
1996 1995 1994 1993 1992
---- ---- ---- ---- ----
(DOLLARS IN THOUSANDS, EXCEPT FOR PER SHARE AMOUNTS)
<S> <C> <C> <C> <C> <C>
Earnings Summary:
Interest income $209,156 $174,779 $135,772 $139,704 $220,619
Interest expense 68,054 60,154 37,415 36,280 101,683
------
Net interest income 141,102 114,625 98,357 103,424 118,936
Provision for loan losses 6,881 16,122 12,174 41,977 20,859
-----
Net interest income after provision
for loan losses 134,221 98,503 86,183 61,447 98,077
Noninterest income 41,636 38,354 31,083 30,117 60,023
Equity in net income of ICII 21,444 5,192 3,489 7,898 --
Gains - sale of ICII stock 36,411 -- -- 14,538 5,033
Other noninterest expenses 128,132 110,324 110,165 113,040 139,463
-------
Income before income taxes and
minority interest 105,580 31,725 10,590 960 23,670
Income tax provision (benefit) 43,278 10,071 3,968 (345) 12,756
Minority interest in income of consolidated
subsidiary -- -- -- -- 2,974
------
Income from continuing operations 62,302 21,654 6,622 1,305 7,940
(Loss) income from operations of
discontinued operation, net of tax (8,168) 1,523 21 (251) --
--------- --------- --------- --------- --------
Net income $ 54,134 $ 23,177 $ 6,643 $ 1,054 $ 7,940
========
PER SHARE DATA:
Weighted average shares outstanding 26,116,767 25,168,985 24,200,733 23,431,464 23,304,714
Net income per share from continuing
operations $2.39 $0.86 $0.27 $0.06 $0.34
Net income per share 2.07 0.92 0.27 0.05 0.34
24
<PAGE>
BALANCE SHEET SUMMARY:
Securities available for sale $426,336 $295,312 $388,249 $417,216 $495,414
Net loans 2,026,997 1,661,945 1,335,074 1,431,959 1,615,641
Total assets 3,350,170 2,788,374 2,378,709 2,794,517 3,405,971
Deposits 2,950,277 2,363,616 1,959,710 2,387,759 3,027,493
Stockholders' equity 286,351 228,236 197,776 185,205 184,048
</TABLE>
25
<PAGE>
<TABLE>
<CAPTION>
AS OF AND FOR THE YEARS ENDED DECEMBER 31,
---------------------------------------------------------------------------------
1996 1995 1994 1993 1992
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
PERFORMANCE RATIOS:
Return on average equity from continuing
operations 23.98% 10.30% 3.45% 0.70% 4.35%
Return on average equity 20.83 11.03 3.48 0.57 4.35
Return on average assets from continuing
operations 2.24 0.93 0.30 0.05 0.22
Return on average assets 1.94 1.00 0.30 0.04 0.22
Net interest margin 5.76 5.73 5.21 4.69 3.73
CAPITAL RATIOS:
Equity to assets 8.55% 8.19% 8.31% 6.63% 5.40%
Average equity to average assets 9.33 9.04 8.64 7.02 5.11
Tangible equity to total assets 8.52 8.11 8.31 6.63 5.38
Tier I leverage (1) 8.66 8.58 8.96 6.87 6.11
Tier I capital (1) 9.21 9.31 10.61 9.61 8.99
Total capital (1) 10.46 10.57 11.87 10.87 10.25
ASSET QUALITY RATIOS:
Allowance for loan losses
to total loans (2) 1.75% 2.20% 2.91% 2.90% 2.37%
Allowance for loan losses
to non-performing loans 176.81 129.30 220.71 120.50 84.04
Non-performing loans to total loans (2) 0.99 1.70 1.32 2.41 2.82
Non-performing assets to total loans,
plus real estate owned, net (2) 1.09 2.30 3.36 5.93 6.70
Net charge-offs to average loans 0.45 1.22 1.09 2.46 1.02
<FN>
(1) Ratio is for the Bank and not the Company.
(2) Total loans are net of unearned income and deferred loan fees.
</FN>
</TABLE>
26
<PAGE>
COMPOSITION OF LOAN PORTFOLIO
The following table sets forth the amounts of loans outstanding by
type at the end of each of the past five years, net of unearned discounts and
deferred loan fees.
<TABLE>
<CAPTION>
As of December 31,
----------------------------------------------------------------------------------------------
1996 1995 1994 1993 1992
---- ---- ---- ---- ----
(In millions)
<S> <C> <C> <C> <C> <C>
Commercial loans $1,595 $1,238 $ 920 $1,002 $1,025
Loans secured by real estate:
Real estate term loans 362 389 337 347 403
Interim construction loans 86 65 117 123 216
Consumer loans 20 7 1 3 11
------ ------ ------ ------ ------
Total loans $2,063 $1,699 $1,375 $1,475 $1,655
------ ------ ------ ------ ------
</TABLE>
COMPOSITION OF NONACCRUAL LOAN PORTFOLIO, REAL ESTATE OWNED AND
RESTRUCTURED LOANS
The following table sets forth the amount of nonaccrual loans
outstanding by type, real estate owned, and restructured loans as of December 31
for each of the past five years.
<TABLE>
<CAPTION>
As of December 31,
---------------------------------------------------------------------------------------
1996 1995 1994 1993 1992
---- ---- ---- ---- ----
(In thousands)
<S> <C> <C> <C> <C> <C>
Nonaccrual loans
Commercial loans $9,382 $11,714 $10,884 $23,489 $20,174
Real estate 10,760 17,212 7,272 12,029 26,429
Consumer loans 248 -- -- -- 65
------- ------- ------- ------- --------
Total nonaccrual loans 20,390 28,926 18,156 35,518 46,668
Real estate owned ("REO"), net 2,126 10,329 28,971 55,250 68,820
------- ------- ------- ------- -------
Total non-performing 22,516 39,255 47,127 90,768 115,488
------- ------- ------- ------- -------
Restructured loans 28,681 33,608 5,948 4,662 65,003
------- ------- ------- ------- -------
Total non-performing and
restructured $51,197 $72,863 $53,075 $95,430 $180,491
======= ======= ======= ======= ========
</TABLE>
(1) For all periods presented, restructured loans were performing in
accordance with their modified terms. The average yield on
restructured loans was 8.4% at December 31, 1996.
27
<PAGE>
PRO FORMA FINANCIAL INFORMATION
The pro forma financial information is presented to reflect the
historical operations of the Company as if IFG, together with all of its assets
and liabilities, had been spun off at the commencement of each of the periods
and at the dates indicated below. The historical operations of IFG as a part of
the Company were adjusted to reflect IFG as a stand-alone company. The pro forma
adjustments represent IFG's unaudited financial information adjusted to reflect
the borrowings, equity, taxes, and various overhead costs related to IFG and
necessary deconsolidating entries.
Prior to distributing the common stock of IFG to the Company's
stockholders, the Company will contribute to IFG the following: (i) the assets
and liabilities relating to The Lewis Horwitz Organization, a division of the
Bank that specializes in motion picture and television finance, (ii) all of the
common stock of Imperial Trust Company, a California licensed trust company that
offers a wide range of trust and investment management services, (iii) all of
the common stock of a newly formed thrift and loan company that will hold the
assets and liabilities relating to the Bank's Small Business Administration
lending group, a division of the Bank that provides loans to small businesses, a
portion of which is guaranteed as to repayment by the U.S. Government, and (iv)
the common stock owned by the Bank (representing approximately 25% of all
outstanding common stock as of December 31, 1996) in ICII. The Company intends
to effect the spin off in late 1997 or early 1998. See "Risk Factors --
Conditions to Completion of the Spin Off."
This pro forma information should be read in conjunction with the
Company's Annual Report on Form 10-K for the fiscal year ended December 31,
1996, which is incorporated by reference in this Prospectus.
28
<PAGE>
<TABLE>
<CAPTION>
PRO FORMA FINANCIAL INFORMATION OF IMPERIAL BANCORP
(UNAUDITED)
--------------------------------------------------------------------------------------
YEAR ENDED DECEMBER 31, 1996 YEAR ENDED DECEMBER 31, 1995
---------------------------- ----------------------------
ADJUST- ADJUST-
ACTUAL MENTS PRO FORMA ACTUAL MENTS PRO FORMA
------ ----- --------- ------ ----- ---------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C>
PRO FORMA EARNINGS
SUMMARY:
Interest income $209,156 ($8,833) $200,323(1) $174,779 ($5,601) $169,178(1)
Interest expense 68,054 -- 68,054 60,154 -- 60,154
-------- ------- ------- ------- ------ -------
Net interest income 141,102 (8,833) 132,269 114,625 (5,601) 109,024
Provision for loan losses 6,881 ( 344) 6,537 16,122 (1,492) 14,630
-------- --------- ------- ------- ------ -------
Net interest income after
provision for loan
losses 134,221 (8,489) 125,732 98,503 (4,109) 94,394
Noninterest income 41,636 (17,129) 24,507 38,354 (10,596) 27,758
Equity in net income of
ICII 21,444(2) (21,444) -- 5,192 (5,192) --
Gains - sale of ICII stock 36,411 (36,411) -- -- -- --
Other noninterest
expenses 128,132 (16,386)(3) 111,746 110,324 (10,108)(3) 100,216
------- ------------ ------- ------- ----------- -------
Pre tax income from
continuing operations 105,580 (67,087) 38,493 31,725 (9,789) 21,936
Income tax provision 43,278 (27,118)(4) 16,160 10,071 (4,154)(4) 5,917
------- ------------ ------- ------- ----------- -------
Income from continuing
operations $62,302 ($39,969) $22,333 $21,654 ($5,635) $16,019
======= ========= ======= ======= ======== =======
</TABLE>
See accompanying notes to pro forma financial information.
29
<PAGE>
<TABLE>
<CAPTION>
PRO FORMA FINANCIAL INFORMATION OF IMPERIAL BANCORP
(UNAUDITED)
---------------------------------------------------------------------------------------
AS OF DECEMBER 31, 1996 AS OF DECEMBER 31, 1995
----------------------- -----------------------
ADJUST- ADJUST-
ACTUAL MENTS PRO FORMA ACTUAL MENTS PRO FORMA
------ ----- --------- ------ ----- ---------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C>
PRO FORMA BALANCE
SHEET:
Cash $325,014 $26 $325,040 $242,018 $251 $242,269
Investments 852,416 (3,304) 849,112 765,637 (3,154) 762,483
Net loans 2,026,997 (75,262) 1,951,735 1,661,945 (76,279) 1,585,666
Investment in ICII 57,736 (57,736) -- 36,126 (36,126) --
Other assets 88,007 83,948(5) 171,955(1)(5) 82,648 55,470 138,118(1)
---------- --------- -------------- ---------- -------- ----------
Total assets $3,350,170 ($52,328) $3,297,842 $2,788,374 ($59,838) $2,728,536
========== ========= ============== ========== ======== ==========
Deposits $2,950,277 $2,657 $2,952,934 $2,363,616 $448 $2,364,064
Short term borrowings 44,897 -- 44,897 159,636 -- 159,636
Long term borrowings 4,455 -- 4,455 5,906 -- 5,906
Other liabilities 64,190 (5,289) 58,901 30,980 (2,085) 28,895
---------- --------- -------------- ---------- -------- ----------
Total liabilities 3,063,819 (2,632) 3,061,187 2,560,138 (1,637) 2,558,501
---------- --------- -------------- ---------- -------- ----------
Stockholders' equity
Common stock 163,748 -- 163,748 130,780 -- 130,780
Unrealized gain, net of
tax 1,206 -- 1,206 2,747 -- 2,747
Retained earnings 121,397 (49,696)(5,6) 71,701(5) 94,709 (58,201)(6) 36,508
---------- --------- -------------- ---------- -------- ----------
Total stockholders' equity 286,351 (49,696) 236,655 228,236 (58,201) 170,035
Total liabilities &
stockholders' equity $3,350,170 ($52,328) $3,297,842 $2,788,374 ($59,838) $2,728,536
========== ============ ========== =========== ========== ============
</TABLE>
See accompanying notes to pro forma financial information.
30
<PAGE>
PRO FORMA FINANCIAL INFORMATION OF IMPERIAL BANCORP
(UNAUDITED)
NOTES TO PRO FORMA FINANCIAL INFORMATION
(1) Borrowings from Imperial Bank and receivable from IFG
Historical operations of IFG have been adjusted to reflect the
funding of net assets by the Company. The 1996 and 1995 interest
charges are based upon estimated average borrowings and the Company's
estimated cost of funds plus 1%. For the years ended December 31,
1996 and 1995, the average receivables were $28.8 million and $17.2
million, respectively, and related interest income was $2.0 million
and $1.3 million, respectively. As of December 31, 1996 and 1995, the
receivable from IFG was $7.6 million and $50.8 million, respectively.
(2) Equity in net income of ICII
Equity in net income of ICII of $21.4 million includes a pre-tax gain
of approximately $11.8 million which represents the Company's share
of ICII's total gains associated with the sale of a portion of the
common stock of SPFC held by ICII.
(3) Allocation of certain overhead costs
As divisions of the Bank, The Lewis Horwitz Organization and the
Bank's Small Business Administration lending group were not allocated
certain administrative overhead costs during 1996 and 1995.
Therefore, the pro forma statements of operations include various
costs approximating $365,000 and $257,000 which were allocated to IFG
based upon management's estimates of appropriate allocations of costs
for the years ended December 31, 1996 and 1995, respectively.
(4) Income taxes
IFG did not record income taxes in its historical operations. The pro
forma financial information set forth above reflects income taxes for
IFG as if it had been a separate entity for all years presented. The
provision for income taxes was calculated based on pretax income and
current effective tax rates.
(5) Assumed dividend on the effective date of the IFG spin off
Retained earnings and other assets reflect a $48.5 million assumed
dividend in conjunction with the spin off of IFG.
(6) Equity
Since inception, The Lewis Horwitz Organization and the Bank's Small
Business Administration lending group have operated as divisions of
the Bank and have had no paid-in capital or retained earnings
recorded in their respective accounts. To properly reflect the
historical financial operations of IFG, retained earnings were
recorded as a result of income from these operations on an adjusted
historical basis.
31
<PAGE>
PRO FORMA FINANCIAL INFORMATION OF IMPERIAL BANCORP
(UNAUDITED)
SELECTED PRO FORMA FINANCIAL RATIOS
<TABLE>
<CAPTION>
AS OF AND FOR THE YEARS ENDED DECEMBER 31,
1996 1995
-----------------------------------
<S> <C> <C>
PRO FORMA PERFORMANCE RATIOS:
Return on average equity from continuing operations 12.29% 10.48%
Return on average assets from continuing operations 0.83 0.71
Net interest margin 5.60 5.51
PRO FORMA CAPITAL RATIOS:
Equity to assets 7.18% 6.23%
Average equity to average assets 6.79 6.78
Tangible equity to total assets 7.16 6.16
Tier I leverage (1) 7.99 7.09
Tier I capital (1) 8.50 7.61
Total capital (1) 9.75 8.86
PRO FORMA ASSET QUALITY RATIOS:
Allowance for loan losses to total loans (2) 1.75% 2.21%
Allowance for loan losses to non-performing loans 190.10 126.12
Non-performing loans to total loans (2) 0.92 1.75
Non-performing assets to total loans, plus real
estate owned, net (2) 1.02 2.32
Net charge-offs to average loans 0.45 1.25
- --------------
<FN>
(1) Ratio is for the Bank and not the Company.
(2) Total loans are net of unearned income and deferred loan fees.
</FN>
</TABLE>
32
<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following sets forth certain beneficial ownership information as
of March 1, 1997 pertaining to the Company's common stock (the "Common Stock")
by persons known to the Company to own 5% or more of the Common Stock, current
directors of the Company and named executive officers. The information contained
herein has been obtained from the Company's records, from various filings made
by the named individuals with the Commission or from information furnished
directly by the individuals or entity to the Company.
The table should be read with the understanding that more than one
person may be the beneficial owner or possess certain attributes of beneficial
ownership with respect to the Common Stock. In addition, options with respect to
shares exercisable or shares issuable within 60 days of the date of this
information are deemed to be outstanding and have been utilized in calculating
the percentage ownership of those individuals possessing such interest. Thus,
the total number of shares of Common Stock considered to be outstanding for the
purposes of this table may vary depending upon the stockholder's particular
circumstance. For more information relating to share ownership, see the
Company's Proxy Statement dated April 4, 1997, a portion of which is
incorporated by reference herein.
<TABLE>
<CAPTION>
Number of
Shares Beneficially
Name of Beneficial Owner(1) Owned % of Shares
--------------------------- ----- -----------
<S> <C> <C>
1. George L. Graziadio, Jr.--Chairman of the
Board 2,970,111 (1)(2)(3)(6) 11.59%
2. Norman P. Creighton--Director 834,214 (1) 3.25%
3. Imperial Trust Company, Trustee for Imperial
Bancorp Profit Sharing, Employee Stock
Ownership and 401K Plans 1,939,833 7.57%
4. Bernard G. LeBeau--Director 19,287 (2)(3) *
5. G. Louis Graziadio, III--Director 347,411 (3)(4)(5)(6) 1.35%
6. Dr. M. Norvel Young--Director 26,321 (2)(3) *
7. Richard K. Eamer--Director 26,321 (2)(3) *
8. H. Wayne Snavely--Director 1,366 (1) *
9. Lee E. Mikles--Director 68,186 (1)(2) *
10. Eldon K. Lloyd-Exec. VP of the Bank 55,909 (2)(3) *
11. Robert M. Franko--Exec. VP of the Bank 18,047 (2)(3) *
12. Robert Muehlenbeck--Exec. VP of the Bank 23,771 (2)(3) *
13. All Current Officers and Directors as a Group
(19 persons) 4,678,639 (7) 18.26%
33
<PAGE>
14. Graziadio Family Trust (Phillip M. Bardack,
Steven Calvillo, William R. Lang, Trustees)
--Beneficial Owner of More than Five Percent 1,401,354 5.47%
15. Novelly Investment Group
--Beneficial Owner of More than Five Percent 1,340,435 5.23%
* Represents less than 1%
- ----------------------
<FN>
(1) The address of each of the beneficial owners other than Novelly
Investment Group is c/o the Company, 9920 South La Cienega Boulevard,
Inglewood, California 90301. The address for the Novelly Investment
Group is 8182 Maryland Avenue, 15th Floor, Clayton, Missouri 63105.
(2) George L. Graziadio, Jr., Norman P. Creighton and H. Wayne Snavely
serve as members of the Imperial Bancorp Salary Investment, Profit
Sharing and Employee Stock Ownership Plans Administrative Committee
(the "COMMITTEE"), which is a committee of the Board of Directors of
the Company. The Committee has the power, pursuant to the Imperial
Bancorp Salary Investment, Profit Sharing and Employee Stock
Ownership Plans, to direct the Plan Trustee as to the manner in which
it shall vote the shares of common stock held by the Trustee, other
than allocated shares held in the Employee Stock Ownership Plan. The
Committee acts by a majority vote. The Board also has the right to
act as a committee of the entirety. The shares held by the Trustee
for others are not included in the number of shares shown to be
beneficially held by each of Messrs. George L. Graziadio, Jr., Norman
P. Creighton and H. Wayne Snavely as each of them disclaims
beneficial ownership of the shares so held.
(3) Pursuant to California law, personal property held in the name of a
married person may be community property as to which either spouse
has the power and ability to manage and control in its entirety. The
Company has no information pertaining to whether these shares are or
are not community property or whether any arrangement exists between
the spouses pertaining to voting or disposing of these shares and has
thus assumed that, in the absence of information to the contrary,
married persons share investment and voting power with their spouse.
(4) Holdings attributable to multiple parties have been adjusted to avoid
duplications.
(5) Includes 69,094 shares held by G. Louis Graziadio, III as
custodian/trustee for his minor children, which are reported in his
total, as to which Mr. Graziadio disclaims beneficial ownership.
(6) The Graziadio Investment Co. ("GIC") is a limited partnership of
which the Graziadio Investment Corp. ("GI CORP.") is the General
Partner. George L. Graziadio is the controlling shareholder of GI
Corp. and a Class A Limited Partner of GIC. The limited partners
include the George L. & Reva M. Graziadio Grandchildren's Trust No. 1
("TRUST NO. 1") and George & Reva Graziadio Trust ("TRUST"). G. Louis
Graziadio, III is a trustee of Trust No. 1 and trustee and
beneficiary of the Trust and disclaims beneficial ownership except as
to his beneficial interest, 4.0581% of GIC.
(7) Includes 1,413,455 shares underlying outstanding options exercisable
by current officers and directors within 60 days of the date of this
table.
</FN>
</TABLE>
34
<PAGE>
THE EXCHANGE OFFER
PURPOSE AND EFFECT OF EXCHANGE OFFER
In connection with the sale of the Old Capital Securities, the
Company and the Trust entered into the Registration Rights Agreement with the
Initial Purchasers, pursuant to which the Company and the Trust agreed, among
other things, to file and to use their best efforts to cause to be declared
effective by the Commission a registration statement with respect to the
exchange of the Old Capital Securities for capital securities with terms
identical in all material respects to the terms of the Old Capital Securities
(except as described below). A copy of the Registration Rights Agreement has
been filed as an exhibit to the Registration Statement of which this Prospectus
is a part.
The Exchange Offer is being made to satisfy the contractual
obligations of the Company and the Trust under the Registration Rights
Agreement. The form and terms of the New Capital Securities are the same as the
form and terms of the Old Capital Securities, except that the New Capital
Securities (i) have been registered under the Securities Act and therefore will
not be subject to certain restrictions on transfer applicable to the Old Capital
Securities and (ii) will not provide for any increase in the distribution rate
thereon. In that regard, the Old Capital Securities provide, among other things,
that, if the Exchange Offer is not consummated by November 19, 1997 (subject to
extension in certain circumstances), the distribution rate borne by the Old
Capital Securities will increase by 0.25% per annum until the Exchange Offer is
consummated. Upon consummation of the Exchange Offer, holders of Old Capital
Securities will not be entitled to any increase in the distribution rate thereon
or any further registration rights under the Registration Rights Agreement,
except under limited circumstances. See "Risk Factors -- Consequences of a
Failure to Exchange Old Capital Securities" and "Description of the Capital
Securities."
The Exchange Offer is not being made to, nor will the Trust or the
Company accept tenders for exchange from, holders of Old Capital Securities in
any jurisdiction in which the Exchange Offer or the acceptance thereof would not
be in compliance with the securities or blue sky laws of such jurisdiction.
Unless the context requires otherwise, the term "holder" with respect
to the Exchange Offer means any person in whose name the Old Capital Securities
are registered on the books of the Trust or any other person who has obtained a
properly completed bond power from the registered holder, or any participant in
The Depository Trust Company ("DTC") system whose name appears on a security
position listing as the holder of such Old Capital Securities and who desires to
deliver such Old Capital Securities by book-entry transfer at DTC.
Pursuant to the Exchange Offer, the Company will exchange as soon as
practicable after the date hereof, the Old Guarantee for the New Guarantee and
all of the Old Junior Subordinated Debentures, of which $77,320,000 aggregate
principal amount is outstanding, for a like aggregate principal amount of the
New Junior Subordinated Debentures. The New Guarantee has been registered, and
New Junior Subordinated Debentures have been registered to the extent required
to be registered, under the Securities Act.
35
<PAGE>
TERMS OF EXCHANGE
The Trust hereby offers, upon the terms and subject to the conditions
set forth in this Prospectus and in the accompanying Letter of Transmittal, to
exchange up to $75,000,000 aggregate liquidation amount of New Capital
Securities for a like aggregate liquidation amount of Old Capital Securities
properly tendered on or prior to the Expiration Date and not properly withdrawn
in accordance with the procedures described below. The Trust will issue,
promptly after the Expiration Date, an aggregate liquidation amount of up to
$75,000,000 of New Capital Securities in exchange for a like aggregate
liquidation amount of outstanding Old Capital Securities tendered and accepted
in connection with the Exchange Offer. Holders may tender their Old Capital
Securities in whole or in part in a liquidation amount of not less than $100,000
or any integral multiple of $1,000 in excess thereof, provided that if any Old
Capital Securities are tendered in exchange in part, the untendered Liquidation
Amount must be $100,000 or any integral multiple of $l,000 in excess thereof.
The Exchange Offer is not conditioned upon any minimum liquidation
amount of Old Capital Securities being tendered. As of the date of this
Prospectus, $75,000,000 aggregate liquidation amount of the Old Capital
Securities is outstanding.
Holders of Old Capital Securities do not have any appraisal or
dissenters' rights in connection with the Exchange Offer. Old Capital Securities
which are not tendered for or are tendered but not accepted in connection with
the Exchange Offer will remain outstanding and be entitled to the benefits of
the Declaration, but will not be entitled to any further registration rights
under the Registration Rights Agreement, except under limited circumstances. See
"Risk Factors -- Consequences of a Failure to Exchange Old Capital Securities"
and "Description of the Capital Securities."
If any tendered Old Capital Securities are not accepted for exchange
because of an invalid tender, the occurrence of certain other events set forth
herein or otherwise, certificates for any such unaccepted Old Capital Securities
will be returned, without expense, to the tendering holder thereof promptly
after the Expiration Date.
Holders who tender Old Capital Securities in connection with the
Exchange Offer will not be required to pay brokerage commissions or fees or,
subject to the instructions in the Letter of Transmittal, transfer taxes with
respect to the exchange of Old Capital Securities in connection with the
Exchange Offer. The Company will pay all charges and expenses, other than
certain applicable taxes described below, in connection with the Exchange Offer.
See " -- Fees and Expenses."
NEITHER THE BOARD OF DIRECTORS OF THE COMPANY NOR ANY ISSUER TRUSTEE
OF THE TRUST MAKES ANY RECOMMENDATION TO HOLDERS OF OLD CAPITAL SECURITIES AS TO
WHETHER TO TENDER OR REFRAIN FROM TENDERING ALL OR ANY PORTION OF THEIR OLD
CAPITAL SECURITIES PURSUANT TO THE EXCHANGE OFFER. IN ADDITION, NO ONE HAS BEEN
AUTHORIZED TO MAKE ANY SUCH RECOMMENDATION. HOLDERS OF OLD CAPITAL SECURITIES
MUST MAKE THEIR OWN DECISION WHETHER TO TENDER PURSUANT TO THE EXCHANGE OFFER
AND, IF SO, THE AGGREGATE AMOUNT OF OLD CAPITAL SECURITIES TO TENDER AFTER
READING THIS PROSPECTUS AND THE LETTER OF TRANSMITTAL AND CONSULTING WITH THEIR
ADVISERS, IF ANY, BASED ON THEIR OWN FINANCIAL POSITION AND REQUIREMENTS.
36
<PAGE>
EXPIRATION DATE; EXTENSIONS; AMENDMENTS
The term "Expiration Date" means 5:00 p.m., New York City time, on
___________, 1997, unless the Exchange Offer is extended by the Company and the
Trust (in which case the term "Expiration Date" shall mean the latest date and
time to which the Exchange Offer is extended).
The Company and the Trust expressly reserve the right in their sole
discretion, subject to applicable law, at any time and from time to time, (i) to
delay the acceptance of the Old Capital Securities for exchange, (ii) to
terminate the Exchange Offer (whether or not any Old Capital Securities have
theretofore been accepted for exchange) if the Company and the Trust determine,
in their sole discretion, that any of the events or conditions referred to under
"-- Conditions to the Exchange Offer" have occurred or exist or have not been
satisfied, (iii) to extend the Expiration Date of the Exchange Offer and retain
all Old Capital Securities tendered pursuant to the Exchange Offer, subject,
however, to the right of holders of Old Capital Securities to withdraw their
tendered Old Capital Securities as described under "-- Withdrawal Rights," and
(iv) to waive any condition or otherwise amend the terms of the Exchange Offer
in any respect. If the Exchange Offer is amended in a manner determined by the
Company and the Trust to constitute a material change, or if the Company and the
Trust waive a material condition of the Exchange Offer, the Company and the
Trust will promptly disclose such amendment by means of an amended or
supplemented Prospectus that will be distributed to the registered holders of
the Old Capital Securities, and the Company and the Trust will extend the
Exchange Offer to the extent required by Rule 14e-l under the Exchange Act.
Any such delay in acceptance, extension, termination or amendment
will be followed promptly by oral (promptly confirmed in writing) or written
notice thereof to the Exchange Agent and by making a public announcement
thereof, and such announcement in the case of an extension will be made no later
than 9:00 a.m., New York City time, on the next business day after the
previously scheduled Expiration Date. Without limiting the manner in which the
Company and the Trust may choose to make any public announcement and subject to
applicable law, the Company and the Trust shall have no obligation to publish,
advertise or otherwise communicate any such public announcement other than by
issuing a release to an appropriate news agency.
ACCEPTANCE FOR EXCHANGE AND ISSUANCE OF NEW CAPITAL SECURITIES
Upon the terms and subject to the conditions of the Exchange Offer,
the Trust will exchange, and will issue to the Exchange Agent, New Capital
Securities for Old Capital Securities validly tendered and not withdrawn
(pursuant to the withdrawal rights described under "-- Withdrawal Rights")
promptly after the Expiration Date.
In all cases, delivery of New Capital Securities in exchange for Old
Capital Securities tendered and accepted for exchange pursuant to the Exchange
Offer will be made only after timely receipt by the Exchange Agent of (i) Old
Capital Securities or a book-entry confirmation of a book-entry transfer of Old
Capital Securities into the Exchange Agent's account at DTC, including an
Agent's Message if the tendering holder has not delivered a Letter of
Transmittal, (ii) the Letter of Transmittal (or facsimile thereof), properly
completed and duly executed, with any required signature guarantees or (in the
case of a book-entry transfer) an Agent's Message in lieu of the Letter of
Transmittal and (iii) any other documents required by the Letter of Transmittal.
37
<PAGE>
The term "book-entry confirmation" means a timely confirmation of a
book-entry transfer of Old Capital Securities into the Exchange Agent's account
at DTC. The term "Agent's Message" means a message, transmitted by DTC to and
received by the Exchange Agent and forming a part of a book-entry confirmation,
which states that DTC has received an express acknowledgement from the tendering
Participant (as defined herein), which acknowledgement states that such
Participant has received and agrees to be bound by, and make the representations
and warranties contained in, the Letter of Transmittal and that the Trust and
the Company may enforce such Letter of Transmittal against such Participant.
Subject to the terms and conditions of the Exchange Offer, the
Company and the Trust will be deemed to have accepted for exchange, and thereby
exchanged, Old Capital Securities validly tendered and not withdrawn as, if and
when the Trust gives oral (promptly confirmed in writing) or written notice to
the Exchange Agent of the Company's and the Trust's acceptance of such Old
Capital Securities for exchange pursuant to the Exchange Offer. The Exchange
Agent will act as agent for the Company and the Trust for the purpose of
receiving tenders of Old Capital Securities, Letters of Transmittal and related
documents, and as agent for tendering holders for the purpose of receiving Old
Capital Securities, Letters of Transmittal and related documents and
transmitting New Capital Securities to validly tendering holders. Such exchange
will be made promptly after the Expiration Date. If for any reason whatsoever,
acceptance for exchange or the exchange of any Old Capital Securities tendered
pursuant to the Exchange Offer is delayed (whether before or after the Company's
and the Trust's acceptance for exchange of Old Capital Securities) or the
Company and the Trust extend the Exchange Offer or are unable to accept for
exchange or exchange Old Capital Securities tendered pursuant to the Exchange
Offer, then, without prejudice to the Company's and the Trust's rights set forth
herein, the Exchange Agent may, nevertheless, on behalf of the Company and the
Trust and subject to Rule 14e-1(c) under the Exchange Act, retain tendered Old
Capital Securities and such Old Capital Securities may not be withdrawn except
to the extent tendering holders are entitled to withdrawal rights as described
under "-- Withdrawal Rights."
Pursuant to the Letter of Transmittal or Agent's Message in lieu
thereof, a holder of Old Capital Securities will warrant and agree in the Letter
of Transmittal that it has full power and authority to tender, exchange, sell,
assign and transfer Old Capital Securities, that the Trust will acquire good,
marketable and unencumbered title to the tendered Old Capital Securities, free
and clear of all liens, restrictions, charges and encumbrances, and the Old
Capital Securities tendered for exchange are not subject to any adverse claims
or proxies. The holder also will warrant and agree that it will, upon request,
execute and deliver any additional documents deemed by the Company, the Trust or
the Exchange Agent to be necessary or desirable to complete the exchange, sale,
assignment, and transfer of the Old Capital Securities tendered pursuant to the
Exchange Offer.
PROCEDURES FOR TENDERING OLD CAPITAL SECURITIES
Valid Tender. Except as set forth below, in order for Old Capital
Securities to be validly tendered pursuant to the Exchange Offer, a properly
completed and duly executed Letter of Transmittal (or facsimile thereof), with
any required signature guarantees or (in the case of a book-entry tender) an
Agent's Message in lieu of the Letter of Transmittal and any other required
documents, must be received by the Exchange Agent at its address set forth under
"-- Exchange Agent," on or prior to the Expiration Date and (i) tendered Old
Capital Securities must be received by the Exchange Agent, or (ii) such Old
Capital Securities must be tendered
38
<PAGE>
pursuant to the procedures for book-entry transfer set forth below and a
book-entry confirmation, including an Agent's Message if the tendering holder
has not delivered a Letter of Transmittal, must be received by the Exchange
Agent, in each case on or prior to the Expiration Date, or (iii) the guaranteed
delivery procedures set forth below must be complied with.
If less than all of the Old Capital Securities are tendered, a
tendering holder should fill in the amount of Old Capital Securities being
tendered in the appropriate box on the Letter of Transmittal or so indicate in
an Agent's Message in lieu of the Letter of Transmittal. The entire amount of
Old Capital Securities delivered to the Exchange Agent will be deemed to have
been tendered unless otherwise indicated.
THE METHOD OF DELIVERY OF CERTIFICATES, THE LETTER OF TRANSMITTAL AND
ALL OTHER REQUIRED DOCUMENTS, IS AT THE OPTION AND SOLE RISK OF THE TENDERING
HOLDER, AND DELIVERY WILL BE DEEMED MADE ONLY WHEN ACTUALLY RECEIVED BY THE
EXCHANGE AGENT. IF DELIVERY IS BY MAIL, REGISTERED MAIL, RETURN RECEIPT
REQUESTED, PROPERLY INSURED, OR AN OVERNIGHT DELIVERY SERVICE IS RECOMMENDED. IN
ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO ENSURE TIMELY DELIVERY.
Book Entry Transfer. The Exchange Agent will establish an account
with respect to the Old Capital Securities at DTC for purposes of the Exchange
Offer within two business days after the date of this Prospectus. Any financial
institution that is a participant in DTC's book-entry transfer facility system
may make a book entry delivery of the Old Capital Securities by causing DTC to
transfer such Old Capital Securities into the Exchange Agent's account at DTC in
accordance with DTC's procedures for transfers. However, although delivery of
Old Capital Securities may be effected through book entry transfer into the
Exchange Agent's account at DTC, the Letter of Transmittal (or facsimile
thereof), properly completed and duly executed, with any required signature
guarantees, or an Agent's Message in lieu of a Letter of Transmittal, and any
other required documents, must in any case be delivered to and received by the
Exchange Agent at its address set forth under "-- Exchange Agent" on or prior to
the Expiration Date, or the guaranteed delivery procedure set forth below must
be complied with.
DELIVERY OF DOCUMENTS TO DTC IN ACCORDANCE WITH DTC'S PROCEDURES DOES
NOT CONSTITUTE DELIVERY TO THE EXCHANGE AGENT.
Signature Guarantees. Certificates for the Old Capital Securities
need not be endorsed and signature guarantees on the Letter of Transmittal are
unnecessary unless (i) a certificate for the Old Capital Securities is
registered in a name other than that of the person surrendering the certificate
or (ii) such registered holder completes the box entitled "Special Issuance
Instructions" or "Special Delivery Instructions" in the Letter of Transmittal.
In the case of (i) or (ii) above, such certificates for Old Capital Securities
must be duly endorsed or accompanied by a properly executed bond power, with the
endorsement or signature on the bond power and on the Letter of Transmittal
guaranteed by a financial institution (including most banks, savings and loan
associations and brokerage houses) that is a participant in the Securities
Transfer Agents Medallion Program, the New York Stock Exchange Medallion Program
or the Stock Exchange Medallion Program (each, an "Eligible Institution"),
unless surrendered on behalf of such Eligible Institution. See Instruction 1 to
the Letter of Transmittal.
39
<PAGE>
Guaranteed Delivery. If a holder desires to tender Old Capital
Securities pursuant to the Exchange Offer and the certificates for such Old
Capital Securities are not immediately available or time will not permit all
required documents to reach the Exchange Agent on or before the Expiration Date,
or the procedures for book-entry transfer cannot be completed on a timely basis,
such Old Capital Securities may nevertheless be tendered, provided that all of
the following guaranteed delivery procedures are complied with:
(i) such tenders are made by or through an Eligible
Institution;
(ii) a properly completed and duly executed Notice of
Guaranteed Delivery, substantially in the form accompanying the
Letter of Transmittal, is received by the Exchange Agent, as provided
below, on or prior to Expiration Date; and
(iii) the certificates (or a book-entry confirmation)
representing all tendered Old Capital Securities, in proper form for
transfer, together with a properly completed and duly executed Letter
of Transmittal (or facsimile thereof or Agent's Message in lieu
thereof), with any required signature guarantees and any other
documents required by the Letter of Transmittal are received by the
Exchange Agent within three New York Stock Exchange trading days
after the date of execution of such Notice of Guaranteed Delivery.
The Notice of Guaranteed Delivery may be delivered by hand, or
transmitted by facsimile or mail to the Exchange Agent and must include a
guarantee by an Eligible Institution in the form set forth in such notice.
Notwithstanding any other provision hereof, the delivery of New
Capital Securities in exchange for Old Capital Securities tendered and accepted
for exchange pursuant to the Exchange Offer will in all cases be made only after
timely receipt by the Exchange Agent of Old Capital Securities, or of a
book-entry confirmation with respect to such Old Capital Securities, and a
properly completed and duly executed Letter of Transmittal (or facsimile thereof
or an Agent's Message in lieu thereof), together with any required signature
guarantees and any other documents required by the Letter of Transmittal.
Accordingly, the delivery of New Capital Securities might not be made to all
tendering holders at the same time, and will depend upon when Old Capital
Securities, book-entry confirmations or an Agent's Message in lieu thereof with
respect to Old Capital Securities and other required documents are received by
the Exchange Agent.
The Company and the Trust's acceptance for exchange of Old Capital
Securities tendered pursuant to any of the procedures described above will
constitute a binding agreement among the tendering holder, the Company and the
Trust upon the terms and subject to the conditions of the Exchange Offer.
Determination Of Validity. All questions as to the form of documents,
validity, eligibility (including time of receipt) and acceptance for exchange of
any tendered Old Capital Securities will be determined by the Company and the
Trust, in their sole discretion, whose determination shall be final and binding
on all parties. The Company and the Trust reserve the absolute right, in their
sole discretion, to reject any and all tenders determined by them not to be in
proper form or the acceptance of which, or exchange for, may, in the view of
counsel to the Company or the Trust, be unlawful. The Company and the Trust also
reserve the absolute right, subject to applicable law, to waive any of the
conditions of the Exchange Offer as set forth under "-- Conditions to the
Exchange Offer" or any condition or irregularity in any tender of Old Capital
Securities
40
<PAGE>
of any particular holder whether or not similar conditions or irregularities are
waived in the case of other holders.
The Company's and the Trust's interpretation of the terms and
conditions of the Exchange Offer (including the Letter of Transmittal and the
instructions thereto) will be final and binding. No tender of Old Capital
Securities will be deemed to have been validly made until all irregularities
with respect to such tender have been cured or waived. Neither the Company, the
Trust, any affiliates or assigns of the Company or the Trust, the Exchange Agent
nor any other person shall be under any duty to give any notification of any
irregularities in tenders or incur any liability for failure to give any such
notification.
If any Letter of Transmittal, endorsement, bond power, power of
attorney or any other document required by the Letter of Transmittal is signed
by a trustee, executor, administrator, guardian, attorney-in-fact, officer of a
corporation or other person acting in a fiduciary or representative capacity,
such person should so indicate when signing, and unless waived by the Trust,
proper evidence satisfactory to the Company and the Trust, in their sole
discretion, of such person's authority to so act must be submitted.
A beneficial owner of Old Capital Securities that are held by or
registered in the name of a broker, dealer, commercial bank, trust company or
other nominee or custodian is urged to contact such entity promptly if such
beneficial holder wishes to participate in the Exchange Offer.
RESALES OF NEW CAPITAL SECURITIES
Based on existing interpretations by the staff of the Commission set
forth in several no-action letters to third parties, and subject to the
immediately following sentence, the Company and the Trust believe that New
Securities issued pursuant to the Exchange Offer in exchange for Old Securities
may be offered for resale, resold and otherwise transferred by a holder thereof
without further compliance with the registration and prospectus delivery
requirements of the Securities Act, provided that such New Securities are
acquired in the ordinary course of such holder's business and that such holder
is not participating, and has no arrangement or understanding with any person to
participate, in a distribution (within the meaning of the Securities Act) of
such New Securities. However, any holder of Old Capital Securities who is an
"affiliate" of either the Company or the Trust, a broker-dealer that acquires
the Old Capital Securities in a transaction other than a part of its
market-making or other trading activities or other holder who intends to
participate in the Exchange Offer for the purpose of distributing New Capital
Securities (i) will not be able to rely on the interpretations by the staff of
the Commission set forth in the above-mentioned interpretive letters, (ii) will
not be able to tender such Old Capital Securities in the Exchange Offer, and
(iii) must comply with the registration and prospectus delivery requirements of
the Securities Act in connection with any sale or other transfer of such Old
Capital Securities unless such sale is made pursuant to an exemption from such
requirements. Neither the Company nor the Trust sought its own no-action letter
and there can be no assurance that the staff of the Commission would make a
similar determination with respect to the Exchange Offer as it has in such
no-action letters to third parties.
Each holder of Old Capital Securities (other than a broker-dealer)
who wishes to exchange Old Capital Securities for New Capital Securities in the
Exchange Offer will be required to represent that (i) it is not an "affiliate"
of the Company or the Trust, (ii) any New Capital Securities to be received by
it are being acquired in the ordinary course of its business and (iii) it has no
arrangement or understanding with any person to
41
<PAGE>
participate in a distribution (within the meaning of the Securities Act) of such
New Capital Securities. The Letter of Transmittal contains the foregoing
representations. In addition, the Company and the Trust may require such holder,
as a condition to such holder's eligibility to participate in the Exchange
Offer, to furnish to the Company and the Trust (or an agent thereof) in writing
information as to the number of "beneficial owners" (within the meaning of Rule
13d-3 under the Exchange Act) on behalf of whom such holder holds the Old
Capital Securities to be exchanged in the Exchange Offer. Each Exchanging Dealer
will be deemed to have acknowledged by execution of the Letter of Transmittal or
delivery of an Agent's Message that it acquired the Old Capital Securities for
its own account as the result of market-making activities or other trading
activities and must agree that it will deliver a prospectus meeting the
requirements of the Securities Act in connection with any resale of such New
Capital Securities. The Letter of Transmittal states that by so acknowledging
and by delivering a prospectus, an Exchanging Dealer will not be deemed to admit
that it is an "underwriter" within the meaning of the Securities Act. Based on
the position taken by the staff of the Commission in the no-action letters
referred to above, the Company and the Trust believe that Exchanging Dealers may
fulfill their prospectus delivery requirements with respect to the New Capital
Securities received upon exchange of such Old Capital Securities (other than Old
Capital Securities which represent an unsold allotment from the original sale of
the Old Capital Securities) with a prospectus meeting the requirements of the
Securities Act, which may be the prospectus prepared for an exchange offer so
long as it contains a description of the plan of distribution with respect to
the resale of such New Capital Securities. Subject to certain provisions set
forth in the Registration Rights Agreement and to the limitations set out
herein, the Company and the Trust have agreed that this Prospectus, as it may be
amended or supplemented from time to time, may be used by an Exchanging Dealer
in connection with resales of such New Capital Securities for a period ending
one year after the Expiration Date (or longer, if required by the Registration
Rights Agreement). See "Plan of Distribution." Any person, including any
Exchanging Dealer, who is an "affiliate" of the Company or the Trust may not
rely on such no- action letters and must comply with the registration and
prospectus delivery requirements of the Securities Act in connection with any
resale transaction.
In that regard, each Exchanging Dealer who surrenders Old Capital
Securities pursuant to the Exchange Offer will be deemed to have agreed, by
execution of the Letter of Transmittal or delivery of an Agent's Message in lieu
thereof, that, upon receipt of notice from the Company or the Trust of the
occurrence of any event or the discovery of any fact which makes any statement
contained or incorporated by reference in this Prospectus untrue in any material
respect or which causes this Prospectus to omit to state a material fact
necessary in order to make the statements contained or incorporated by reference
herein, in light of the circumstances under which they were made, not misleading
or of the occurrence of certain other events specified in the Registration
Rights Agreement, such Exchanging Dealer will suspend the sale of New Securities
pursuant to this Prospectus until the Company or the Trust has amended or
supplemented this Prospectus to correct such misstatement or omission and has
furnished copies of the amended or supplemented Prospectus to such Exchanging
Dealer or the Company or the Trust has given notice that the sale of the New
Securities may be resumed, as the case may be.
WITHDRAWAL RIGHTS
Except as otherwise provided herein, tenders of Old Capital
Securities may be withdrawn at any time on or prior to the Expiration Date.
42
<PAGE>
In order for a withdrawal to be effective a written or facsimile
transmission of such notice of withdrawal must be timely received by the
Exchange Agent at its address set forth under "-- Exchange Agent" on or prior to
the Expiration Date. Any such notice of withdrawal must specify the name of the
person who tendered the Old Capital Securities to be withdrawn, the aggregate
principal amount of Old Capital Securities to be withdrawn, and (if certificates
for such Old Capital Securities have been tendered) the name of the registered
holder of the Old Capital Securities as set forth on the Old Capital Securities,
if different from that of the person who tendered such Old Capital Securities.
If Old Capital Securities have been delivered or otherwise identified to the
Exchange Agent, then prior to the physical release of such Old Capital
Securities, the tendering holder must submit the certificate numbers shown on
the particular Old Capital Securities to be withdrawn and the signature on the
notice of withdrawal must be guaranteed by an Eligible Institution, except in
the case of Old Capital Securities tendered for the account of an Eligible
Institution. If Old Capital Securities have been tendered pursuant to the
procedures for book-entry transfer set forth in "-- Procedures for Tendering Old
Capital Securities," the notice of withdrawal must specify the name and number
of the account at DTC to be credited with the withdrawal of Old Capital
Securities, in which case a notice of withdrawal will be effective if delivered
to the Exchange Agent by written or facsimile transmission. Withdrawals of
tenders of Old Capital Securities may not be rescinded. Old Capital Securities
properly withdrawn will not be deemed validly tendered for purposes of the
Exchange Offer, but may be retendered at any subsequent time on or prior to the
Expiration Date by following any of the procedures described above under "--
Procedures for Tendering Old Capital Securities."
All questions as to the validity, form and eligibility (including
time of receipt) of such withdrawal notices will be determined by the Company
and the Trust, in their sole discretion, whose determination shall be final and
binding on all parties. Neither the Company, the Trust, any affiliates or
assigns of the Company or the Trust, the Exchange Agent nor any other person
shall be under any duty to give any notification of any irregularities in any
notice of withdrawal or incur any liability for failure to give any such
notification. Any Old Capital Securities which have been tendered but which are
withdrawn will be returned to the holder thereof promptly after withdrawal.
DISTRIBUTIONS ON NEW CAPITAL SECURITIES
Holders of Old Capital Securities whose Old Capital Securities are
accepted for exchange will not receive accumulated distributions on such Old
Capital Securities for any period from and after the last Distribution Date with
respect to such Old Capital Securities prior to the original issue date of the
New Capital Securities or, if no such distributions have been made, will not
receive any accumulated distributions on such Old Capital Securities, and will
be deemed to have waived the right to receive any distributions on such Old
Capital Securities accumulated from and after such Distribution Date or, if no
such distributions have been made, from and after April 23, 1997.
CONDITIONS TO THE EXCHANGE OFFER
Notwithstanding any other provisions of the Exchange Offer, or any
extension of the Exchange Offer, the Company and the Trust will not be required
to accept for exchange, or to exchange, any Old Capital Securities for any New
Capital Securities, and, as described below, may terminate the Exchange Offer
(whether or not any Old Capital Securities have theretofore been accepted for
exchange) or may waive any conditions to
43
<PAGE>
or amend the Exchange Offer, if any of the following conditions have occurred or
exists or have not been satisfied:
(a) there shall occur a change in the current
interpretation by the staff of the Commission which permits the New
Capital Securities issued pursuant to the Exchange Offer in exchange
for Old Capital Securities to be offered for resale, resold and
otherwise transferred by holders thereof (other than broker-dealers
and any such holder which is an "affiliate" of the Company or the
Trust within the meaning of Rule 405 under the Securities Act)
without compliance with the registration and prospectus delivery
provisions of the Securities Act, provided that such New Capital
Securities are acquired in the ordinary course of such holders'
business and such holders have no arrangement or understanding with
any person to participate in the distribution of such New Capital
Securities;
(b) any action or proceeding shall have been instituted or
threatened in any court or by or before any governmental agency or
body with respect to the Exchange Offer which, in the Company's and
the Trust's judgment, would reasonably be expected to impair the
ability of the Trust or the Company to proceed with the Exchange
Offer;
(c) any law, statute, rule or regulation shall have been
adopted or enacted which, in the Company's and the Trust's judgment,
would reasonably be expected to impair the ability of the Trust or
the Company to proceed with the Exchange Offer;
(d) a Tax Event shall have occurred that, in the Company's
and the Trust's judgment, could have an adverse effect on the Company
or the Trust if the New Securities were issued to the holders of Old
Securities; or
(e) a stop order shall have been issued by the Commission
or any state securities authority suspending the effectiveness of the
Registration Statement or proceedings shall have been initiated or,
to the knowledge of the Company or the Trust, threatened for that
purpose or that any governmental approval has not been obtained,
which approval the Company and the Trust shall, in their sole
discretion, deem necessary for the consummation of the Exchange Offer
as contemplated hereby.
If the Company and the Trust determine in their sole discretion that
any of the foregoing events or conditions has occurred or exists or has not been
satisfied, the Company and the Trust may, subject to applicable law, terminate
the Exchange Offer (whether or not any Old Capital Securities have theretofore
been accepted for exchange) or may waive any such condition or otherwise amend
the terms of the Exchange Offer in any respect. If such waiver or amendment
constitutes a material change to the Exchange Offer, the Company and the Trust
will promptly disclose such waiver by means of an amended or supplemented
Prospectus that will be distributed to the registered holders of the Old Capital
Securities, and the Company and the Trust will extend the Exchange Offer to the
extent required by Rule 14e-1 under the Exchange Act.
The Exchange Offer is not conditioned on any minimum amount of Old
Capital Securities being tendered for exchange.
44
<PAGE>
EXCHANGE AGENT
The Chase Manhattan Bank has been appointed as Exchange Agent for the
Exchange Offer. Delivery of the Letters of Transmittal and any other required
documents, questions, requests for assistance, and requests for additional
copies of this Prospectus or of the Letter of Transmittal should be directed to
the Exchange Agent as follows:
The Chase Manhattan Bank
55 Water Street
Room 234, North Building
New York, New York 10041
Attention: Carlos Esteves
Confirm by Telephone:
Carlos Esteves (212) 638-0828
Facsimile Transmissions:
Carlos Esteves (212) 638-7375
(212) 344-9367
Delivery to other than the above address or facsimile
number will not constitute a valid delivery.
FEES AND EXPENSES
The Company has agreed to pay the Exchange Agent reasonable and
customary fees for its services and will reimburse it for its reasonable
out-of-pocket expenses in connection therewith. The Company will also pay
brokerage houses and other custodians, nominees and fiduciaries the reasonable
out-of-pocket expenses incurred by them in forwarding copies of this Prospectus
and related documents to the beneficial owners of Old Capital Securities, and in
handling or tendering for their customers.
Holders who tender their Old Capital Securities for exchange will not
be obligated to pay any transfer taxes in connection therewith. If, however, New
Capital Securities are to be delivered to, or are to be issued in the name of,
any person other than the registered holder of the Old Capital Securities
tendered, or if a transfer tax is imposed for any reason other than the exchange
of Old Capital Securities in connection with the Exchange Offer, then the amount
of any such transfer taxes (whether imposed on the registered holder or any
other persons) will be payable by the tendering holder. If satisfactory evidence
of payment of such taxes or exemption therefrom is not submitted with the Letter
of Transmittal, the amount of such transfer taxes will be billed directly to
such tendering holder.
Neither the Company nor the Trust will make any payment to brokers,
dealers or others soliciting acceptances of the Exchange Offer.
45
<PAGE>
THE TRUST
The Trust is a statutory business trust created under Delaware law
pursuant to (i) a declaration of trust, dated as of April 8, 1997 executed by
the Company, as Sponsor, the Delaware Trustee and the Property Trustee named
therein (the "INITIAL DECLARATION"), and (ii) the filing of a certificate of
trust with the Secretary of State of the State of Delaware on April 8, 1997. The
Initial Declaration was replaced by an amended and restated declaration of trust
entered into on April 23, 1997 by the Company, as Sponsor, the Issuer Trustees
(as defined herein) and the holders, from time to time, of undivided beneficial
interests in the assets of the Trust (the "DECLARATION"). The Trust exists for
the exclusive purposes of (i) issuing and selling the Trust Securities, which
represent undivided beneficial interests in the assets of the Trust, (ii)
investing the gross proceeds from the sale of the Trust Securities in the Junior
Subordinated Debentures and (iii) engaging in only those other activities
necessary, advisable or incidental thereto, including engaging in the Exchange
Offer. Accordingly, the Junior Subordinated Debentures are the sole assets of
the Trust and payments under the Junior Subordinated Debentures will be the sole
revenues of the Trust. All of the Common Securities are owned directly by the
Company. The Common Securities will rank pari passu, and payments will be made
thereon pro rata, with the Capital Securities, except that upon the occurrence
and during the continuance of an Event of Default, the rights of the Company as
holder of the Common Securities to payments in respect of Distributions and
payments upon liquidation, redemption or otherwise will be subordinated and rank
junior to the rights of the holders of the Capital Securities. See "Description
of Capital Securities -- Subordination of Common Securities." The Company will
acquire Common Securities in a Liquidation Amount equal to at least 3% of the
total capital of the Trust. The Trust has a term of 31 years, but may dissolve
earlier as provided in the Declaration. The Trust's business and affairs will be
conducted by trustees (the "ISSUER TRUSTEES") appointed by the Company as the
direct holder of the Common Securities. The Issuer Trustees are The Chase
Manhattan Bank as the Property Trustee (the "PROPERTY TRUSTEE"), Chase Manhattan
Bank Delaware as the Delaware Trustee (the "DELAWARE TRUSTEE"), and two
individual trustees (the "ADMINISTRATIVE TRUSTEES"). The Chase Manhattan Bank,
as Property Trustee, acts as sole indenture trustee under the Declaration. The
Chase Manhattan Bank also acts as indenture trustee under the Guarantee and the
Indenture. See "Description of the Guarantee" and "Description of Junior
Subordinated Debentures." The holder of the Common Securities or, if an Event of
Default under the Declaration has occurred and is continuing, the holders of a
majority in Liquidation Amount of the Capital Securities, will be entitled to
appoint, remove or replace the Property Trustee and/or the Delaware Trustee. In
no event will the holders of the Capital Securities have the right to vote to
appoint, remove or replace the Administrative Trustees; such voting rights will
be vested exclusively in the holder of the Common Securities. The duties and
obligations of each Issuer Trustee are governed by the Declaration. The Company
will pay directly all fees, expenses, debts and obligations (other than the
Trust Securities) related to the Trust and the offering of the Capital
Securities, including all ongoing costs, expenses and liabilities of the Trust.
The principal executive office of the Trust is Imperial Capital Trust I, c/o
Imperial Bancorp, 9920 South La Cienega Boulevard, Inglewood, California 90301
Attention: Chief Executive Officer. Under the Declaration, all parties to the
Declaration have agreed, and the Holders of the Capital Securities upon purchase
of their Capital Securities will be deemed to have agreed, for United States
income tax purposes, to treat the Trust as a grantor trust, the Junior
Subordinated Debentures as indebtedness and the Capital Securities as evidence
of indirect beneficial ownership in the Junior Subordinated Debentures.
46
<PAGE>
DESCRIPTION OF CAPITAL SECURITIES
The Capital Securities represent preferred undivided beneficial
interests in the assets of the Trust and the holders thereof will be entitled to
a preference over the Common Securities in certain circumstances with respect to
Distributions and amounts payable on redemption of the Trust Securities or
liquidation of the Trust. See "-- Subordination of Common Securities" below. The
Declaration has been qualified under the Trust Indenture Act of 1939, as amended
(the "TRUST INDENTURE ACT"). The Declaration incorporates certain provisions of
the Trust Indenture Act and is subject to and governed by the Trust Indenture
Act. The following description does not purport to be complete and is subject
to, and is qualified in its entirety by reference to, the Trust Indenture Act
and the Declaration (a copy of which has been filed as an exhibit to the
Registration Statement of which this Prospectus is a part). Certain capitalized
terms used herein are defined in the Declaration.
GENERAL
The Old Capital Securities and the New Capital Securities are limited
to $75,000,000 aggregate Liquidation Amount at any one time outstanding. The
Capital Securities rank pari passu, and payments will be made thereon pro rata,
with the Common Securities except as described under "-- Subordination of Common
Securities" below. Legal title to the Junior Subordinated Debentures is held by
the Property Trustee in trust for the benefit of the holders of the Capital
Securities and the Common Securities. The Guarantee does not guarantee payment
of Distributions or amounts payable on redemption of the Capital Securities or
liquidation of the Trust when the Trust does not have funds on hand legally
available for such payments. See "Description of the Guarantee."
DISTRIBUTIONS
Distributions on the Capital Securities are cumulative from April 23,
1997, the date of original issuance of the Old Capital Securities (the "ISSUE
DATE"), and will be payable semi-annually in arrears on June 30 and December 31
of each year, commencing June 30, 1997, at the annual rate of 9.98% of the
Liquidation Amount to the holders of the Capital Securities on the relevant
record dates. The record dates are the fifteenth day of the month preceding the
month in which the relevant Distribution Date (as defined herein) falls. The
amount of Distributions payable for any period will be computed on the basis of
a 360-day year of twelve 30-day months and, for any period of less than a full
calendar month, the number of days elapsed in such month. In the event that any
date on which Distributions are payable on the Capital Securities is not a
Business Day (as defined herein), payment of the Distributions payable on such
date will be made on the next succeeding day that is a Business Day (and without
any interest or other payment 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"). A "BUSINESS DAY" shall mean any day other than a Saturday
or a Sunday, or a day on which banking institutions in New York, New York are
authorized or required by law or executive order to close.
So long as no Debenture Event of Default shall have occurred and be
continuing, the Company has the right under the Indenture to elect to defer the
payment of interest on the Junior Subordinated Debentures at any time and from
time to time for a period not exceeding 10 consecutive semi-annual periods with
respect to each
47
<PAGE>
Extension Period, provided that no Extension Period may end on a day other than
an interest payment date for the Junior Subordinated Debentures or extend beyond
the Stated Maturity Date. Upon any such election, semi-annual Distributions on
the Capital Securities will be deferred by the Trust during such Extension
Period. Distributions to which holders of the Capital Securities are entitled
during any such Extension Period will accumulate additional Distributions
thereon at the rate per annum of 9.98% thereof, compounded semi-annually from
the relevant Distribution Date. The term "DISTRIBUTIONS," as used herein, shall
include any such additional Distributions.
During any such Extension Period, the Company may extend such
Extension Period, provided that such extension does not cause such Extension
Period to exceed 10 consecutive semi-annual periods or to extend beyond the
Stated Maturity Date. Upon the termination of any such Extension Period and the
payment of all amounts then due, and subject to the foregoing limitations, the
Company may elect to begin a new Extension Period. The Company must give the
Property Trustee, the Administrative Trustees and the Debenture Trustee notice
of its election of any Extension Period or any extension thereof at least five
Business Days prior to the earlier of (i) the date the Distributions on the
Capital Securities would have been payable except for the election to begin or
extend such Extension Period and (ii) the date the Administrative Trustees are
required to give notice to any securities exchange or to holders of the Capital
Securities of the record date or the date such Distributions are payable, but in
any event not less than five Business Days prior to such record date. There is
no limitation on the number of times that the Company may elect to begin an
Extension Period. See "Description of Junior Subordinated Debentures -- Option
to Extend Interest Payment Period" and "Certain Federal Income Tax
Considerations -- Interest, Original Issue Discount, Premium and Market
Discount."
During any such Extension Period, the Company may not (i) declare or
pay any dividends or distributions on, or redeem, purchase, acquire, or make a
liquidation payment with respect to, any of the Company's capital stock (which
includes common and preferred stock) or (ii) make any payment of principal of or
premium, if any, or interest on or repay, repurchase or redeem any debt
securities of the Company (including Other Debentures) that rank pari passu with
or junior in right of payment to the Junior Subordinated Debentures or (iii)
make any guarantee payments with respect to any guarantee by the Company of any
securities of any subsidiary of the Company (including Other Guarantees) if such
guarantee ranks pari passu with or junior in right of payment to the Junior
Subordinated Debentures (other than (a) dividends or distributions in shares of,
or options, warrants or rights to subscribe for or purchase shares of, common
stock of the Company, (b) any declaration of a dividend in connection with the
implementation of a stockholders' rights plan, or the issuance of stock under
any such plan in the future, or the redemption or repurchase of any such rights
pursuant thereto, (c) payments under the Guarantee, (d) as a direct result of,
and only to the extent required in order to avoid the issuance of fractional
shares of capital stock following, a reclassification of the Company's capital
stock or the exchange or conversion of one class, or series of the Company's
capital stock for another class or series of the Company's capital stock, (e)
the purchase of fractional interests in shares of the Company's capital stock
pursuant to the conversion or exchange provisions of such capital stock or the
security being converted or exchanged, and (f) purchases of common stock related
to the issuance of common stock or rights under any of the Company's benefit
plans for its directors, officers or employees or any of the Company's dividend
reinvestment plans).
48
<PAGE>
Although the Company may in the future exercise its option to defer
payments of interest on the Junior Subordinated Debentures, the Company has no
such current intention. See "Risk Factors -- Option to Extend Interest Payment
Period; Tax Considerations."
The revenue of the Trust available for distribution to holders of the
Capital Securities will be limited to payments under the Junior Subordinated
Debentures. See "Description of Junior Subordinated Debentures -- General." If
the Company does not make interest payments on the Junior Subordinated
Debentures, 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 on hand legally available for the payment of such
Distributions) will be guaranteed by the Company on a limited basis as set forth
herein under "Description of the Guarantee."
REDEMPTION
Upon the repayment on the Stated Maturity Date or prepayment prior to
the Stated Maturity Date of the Junior Subordinated Debentures, the proceeds
from such repayment or prepayment shall be applied by the Property Trustee to
redeem a Like Amount (as defined herein) of the Trust Securities, upon not less
than 30 nor more than 60 days' notice of a date of redemption (the "REDEMPTION
DATE") at the applicable Redemption Price, which shall be equal to (i) in the
case of the repayment of the Junior Subordinated Debentures on the Stated
Maturity Date, the Maturity Redemption Price (equal to the principal of and
accrued and unpaid interest on the Junior Subordinated Debentures), (ii) in the
case of the optional prepayment of the Junior Subordinated Debentures before the
Initial Optional Prepayment Date upon the occurrence and continuation of a
Special Event, the Special Event Redemption Price (equal to the Special Event
Prepayment Price in respect of the Junior Subordinated Debentures) and (iii) in
the case of the optional prepayment of the Junior Subordinated Debentures other
than as contemplated in clause (ii) above, the Optional Redemption Price (equal
to the Optional Prepayment Price in respect of the Junior Subordinated
Debentures). See "Description of Junior Subordinated Debentures -- Optional
Prepayment" and "-- Special Event Prepayment," and "Certain Federal Income Tax
Considerations -- Sale or Redemption of Capital Securities."
"LIKE AMOUNT" means (i) with respect to a redemption of the Trust
Securities, Trust Securities having a Liquidation Amount equal to the principal
amount of Junior Subordinated Debentures to be paid in accordance with their
terms and (ii) with respect to a distribution of Junior Subordinated Debentures
upon the liquidation of the Trust, Junior Subordinated Debentures having a
principal amount equal to the Liquidation Amount of the Trust Securities of the
holder to whom such Junior Subordinated Debentures are distributed.
The Company has the option to prepay the Junior Subordinated
Debentures, (i) in whole or in part, on or after the Initial Optional Prepayment
Date, at the applicable Optional Prepayment Price and (ii) in whole but not in
part, at any time before the Initial Optional Prepayment Date, upon the
occurrence of a Special Event, at the Special Event Prepayment Price, in each
case subject to receipt of prior approval by the Federal Reserve if then
required under applicable capital guidelines or policies of the Federal Reserve.
49
<PAGE>
LIQUIDATION OF THE TRUST AND DISTRIBUTION OF JUNIOR SUBORDINATED DEBENTURES
The Company has the right at any time to dissolve the Trust and cause
the Junior Subordinated Debentures to be distributed to the holders of the Trust
Securities in liquidation of the Trust, subject to satisfaction of liabilities
to creditors of the Trust as provided by applicable law. Such right is subject
to (i) the Company having received an opinion of counsel to the effect that such
distribution will not be a taxable event to holders of Capital Securities and
(ii) the prior approval of the Federal Reserve if then required under applicable
capital guidelines or policies of the Federal Reserve.
The Trust shall automatically dissolve upon the first to occur of:
(i) certain events of bankruptcy, dissolution or liquidation of the Company or
the Trust; (ii) the distribution of a Like Amount of the Junior Subordinated
Debentures to the holders of the Trust Securities, if the Company, as Sponsor,
has given written direction to the Property Trustee to dissolve the Trust (which
direction is optional and, except as described above, wholly within the
discretion of the Company, as Sponsor); (iii) redemption of all of the Trust
Securities as described under "-- Redemption" above; (iv) expiration of the term
of the Trust; and (v) the entry of an order for the dissolution of the Trust by
a court of competent jurisdiction.
If a dissolution occurs as described in clause (i), (ii), (iv), or
(v) of the preceding paragraph, the Trust shall be liquidated by the
Administrative Trustees as expeditiously as the Administrative Trustees
determine to be possible by distributing, after satisfaction of liabilities to
creditors of the Trust as provided by applicable law, to the holders of the
Trust Securities a Like Amount of the Junior Subordinated Debentures, in which
event such holders will be entitled to receive out of the assets of the Trust
legally available for distribution to holders, after satisfaction of liabilities
to creditors of the Trust as provided by applicable law, an amount equal to the
aggregate of the Liquidation Amount plus accumulated and unpaid Distributions
thereon to the date of payment (such amount being the "LIQUIDATION
DISTRIBUTION"). If the Liquidation Distribution can be paid only in part because
the Trust has insufficient assets on hand legally available to pay in full the
aggregate Liquidation Distribution, then the amounts payable directly by the
Trust on the Capital Securities and the Common Securities shall be paid on a pro
rata basis, except that if a Debenture Event of Default has occurred and is
continuing, the Capital Securities shall have a priority over the Common
Securities. See "-- Subordination of Common Securities" below.
After the liquidation date is fixed for any distribution of Junior
Subordinated Debentures to holders of the Trust Securities, (i) the Trust
Securities will no longer be deemed to be outstanding, (ii) each registered
global certificate, if any, representing Trust Securities and held by DTC or its
nominee will receive a registered global certificate or certificates
representing the Junior Subordinated Debentures to be delivered upon such
distribution and (iii) any certificates representing Trust Securities not held
by DTC or its nominee will be deemed to represent Junior Subordinated Debentures
having a principal amount equal to the Liquidation Amount of such Trust
Securities, and bearing accrued and unpaid interest in an amount equal to the
accumulated and unpaid Distributions on such Trust Securities until such
certificates are presented to the Administrative Trustees or their agent for
cancellation, whereupon the Company will issue to such holder, and the Debenture
Trustee will authenticate, a certificate representing such Junior Subordinated
Debentures.
There can be no assurance as to the market prices for the Capital
Securities or the Junior Subordinated Debentures that may be distributed in
exchange for the Trust Securities if a dissolution and liquidation of the
50
<PAGE>
Trust were to occur. Accordingly, the Capital Securities that an investor may
hold, or the Junior Subordinated Debentures that the investor may receive on
dissolution and liquidation of the Trust, may trade at a discount to the price
that the investor paid to purchase the Capital Securities.
REDEMPTION PROCEDURES
If applicable, Trust Securities shall be redeemed at the applicable
Redemption Price with the proceeds from the contemporaneous repayment or
prepayment of the Junior Subordinated Debentures. Any redemption of Trust
Securities shall be made and the applicable Redemption Price shall be payable on
the Redemption Date only to the extent that the Trust has funds legally
available for the payment of such applicable Redemption Price. See also "--
Subordination of Common Securities" below.
If the Trust gives a notice of redemption in respect of the Capital
Securities, then, by 12:00 noon, New York City time, on the Redemption Date, to
the extent funds are legally available, with respect to the Capital Securities
held by DTC or its nominees, the Property Trustee will pay or cause the Paying
Agent (as defined herein) to pay the Redemption Price to DTC. See "-- Form,
Denomination, Book-Entry Procedures and Transfer" below. With respect to the
Capital Securities held in certificated form, the Property Trustee, to the
extent funds are legally available, will give irrevocable instructions and
authority to the Paying Agent and will irrevocably deposit with the Paying Agent
for the Capital Securities funds sufficient to pay or cause the Paying Agent to
pay the applicable Redemption Price to the holders thereof upon surrender of
their certificates evidencing the Capital Securities. See "-- Payment and Paying
Agency" below. Distributions payable on or prior to the Redemption Date shall be
payable to the holders of such Capital Securities on the relevant record dates
for the related Distribution Dates. If notice of redemption shall have been
given and funds deposited with the Property Trustee to pay the Redemption Price
for the Capital Securities called for redemption, then all rights of the holders
of such Capital Securities will cease, except the right of the holders of such
Capital Securities to receive the applicable Redemption Price, but without
interest on such Redemption Price, and such Capital Securities will cease to be
outstanding. In the event that any Redemption Date is not a Business Day, then
the applicable Redemption Price payable on such date will be paid on the next
succeeding day that is a Business Day (and without any interest or other payment
in respect of any such delay). In the event that payment of the applicable
Redemption Price is improperly withheld or refused and not paid either by the
Trust or by the Company pursuant to the Guarantee as described under
"Description of the Guarantee," (i) Distributions on Capital Securities called
for redemption will accumulate on the Redemption Price at the then applicable
rate, from the Redemption Date originally established by the Trust to the date
such applicable Redemption. Price is actually paid, and (ii) the actual payment
date will be the Redemption Date for purposes of calculating the applicable
Redemption Price.
Subject to applicable law (including, without limitation, United
States federal securities law and the regulations of the Federal Reserve) the
Company or its subsidiaries may at any time and from time to time purchase
outstanding Capital Securities by tender, in the open market or by private
agreement.
Notice of any redemption will be mailed at least 30 days but not more
than 60 days prior to the Redemption Date to each holder of Trust Securities at
its registered address. Unless the Company defaults in payment of the applicable
Prepayment Price on, or in the repayment of, the Junior Subordinated Debentures,
on and after the Redemption Date Distributions will cease to accrue on the Trust
Securities called for redemption.
51
<PAGE>
SUBORDINATION OF COMMON SECURITIES
Payment of Distributions on, and the Redemption Price of, the Capital
Securities and the Common Securities, as applicable, shall be made pro rata
based on the Liquidation Amount of the Capital Securities and Common Securities;
provided, however, that if on any Distribution Date or Redemption Date a
Debenture Event of Default shall have occurred and be continuing, no payment of
any Distribution on, or applicable Redemption Price of, any of the Common
Securities, and no other payment on account of the redemption, liquidation or
other acquisition of the Common Securities, shall be made unless payment in full
in cash of all accumulated and unpaid Distributions on all of the outstanding
Capital Securities for all Distribution periods terminating on or prior thereto
or, in the case of Capital Securities called for redemption on a Redemption Date
on or prior thereto, the full amount of the Redemption Price therefor, shall
have been made or provided for, and all funds available to the Property Trustee
shall first be applied to the payment in full in cash of all Distributions on,
or Redemption Price of, the Capital Securities then due and payable.
In the case of any Event of Default, the Company as holder of the
Common Securities will be deemed to have waived any right to act with respect to
such Event of Default until the effect of such Event of Default shall have been
cured, waived or otherwise eliminated. Until any such Event of Default has been
so cured, waived or otherwise eliminated, the Property Trustee shall act solely
on behalf of the holders of the Capital Securities and not on behalf of the
Company as holder of the Common Securities, and only the holders of the Capital
Securities will have the right to direct the Property Trustee to act on their
behalf.
EVENTS OF DEFAULT; NOTICE
The occurrence of a Debenture Event of Default (see "Description of
Junior Subordinated Debentures -- Debenture Events of Default") constitutes an
"EVENT OF DEFAULT" under the Declaration.
Within 10 business days after the occurrence of any Event of Default
actually known to the Company, the Company shall transmit notice of such Event
of Default to the holders of the Capital Securities, the Administrative Trustees
and the Property Trustee, unless such Event of Default shall have been cured or
waived. The Company, as Sponsor, and the Administrative Trustees are required to
file annually with the Property Trustee a certificate as to whether or not they
are in compliance with all the conditions and covenants applicable to them under
the Declaration.
If a Debenture Event of Default has occurred and is continuing, the
Capital Securities shall have a preference over the Common Securities as
described under "-- Liquidation of the Trust and Distribution of Junior
Subordinated Debentures" and "-- Subordination of Common Securities" above.
REMOVAL OF ISSUER TRUSTEES
Unless a Debenture Event of Default shall have occurred and be
continuing, any Issuer Trustee may be removed at any time by the holder of the
Common Securities. If a Debenture Event of Default has occurred and is
continuing, the Property Trustee and the Delaware Trustee may be removed at such
time by the holders of a majority in Liquidation Amount of the outstanding
Capital Securities. In no event will the holders of the Capital Securities have
the right to vote to appoint, remove or replace the Administrative Trustees,
which voting
52
<PAGE>
rights are vested exclusively in the Company as the holder of the Common
Securities. No resignation or removal of an Issuer Trustee and no appointment of
a successor trustee shall be effective until the acceptance of appointment by
the successor Trustee in accordance with the provisions of the Declaration.
MERGER OR CONSOLIDATION OF ISSUER TRUSTEES
Any entity into which the Property Trustee, the Delaware Trustee or
any Administrative Trustee that is not a natural person may be merged or
converted or with which it may be consolidated, or any entity resulting from any
merger, conversion or consolidation to which such Issuer Trustee shall be a
party, or any entity succeeding to all or substantially all the corporate trust
business of such Issuer Trustee, shall be the successor of such Issuer Trustee
under the Declaration, provided such entity shall be otherwise qualified and
eligible.
MERGERS, CONVERSIONS, CONSOLIDATIONS, AMALGAMATIONS OR REPLACEMENTS OF THE TRUST
The Trust may not merge or convert with or into, consolidate,
amalgamate, or be replaced by, or convey, transfer or lease its properties and
assets as an entirety or substantially as an entirety to any corporation or
other Person, except as described below or as otherwise described in "--
Liquidation of the Trust and Distribution of Junior Subordinated Debentures."
The Trust may, at the request of the Company, as Sponsor, with the consent of
the Administrative Trustees but without the consent of the holders of the
Capital Securities, merge or convert with or into, consolidate, amalgamate, or
be replaced by or convey, transfer or lease its properties and assets as an
entirety or substantially as an entirety to a trust organized as such under the
laws of any State; provided, that (i) such successor entity either (a) expressly
assumes all of the obligations of the Trust with respect to the Capital
Securities or (b) substitutes for the Capital Securities other securities having
substantially the same terms as the Capital Securities (the "SUCCESSOR
SECURITIES") so long as the Successor Securities rank the same as the Capital
Securities rank in priority with respect to distributions and payments upon
liquidation, redemption and otherwise, (ii) the Company expressly appoints a
trustee of such successor entity possessing the same powers and duties as the
Property Trustee with respect to the Junior Subordinated Debentures, (iii) the
Successor Securities are listed, or any Successor Securities will be listed upon
notification of issuance, on any national securities exchange or other
organization on which the Capital Securities are then listed or quoted, if any,
(iv) such merger, conversion, 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, conversion, consolidation,
amalgamation, replacement, conveyance, transfer or lease does not adversely
affect the rights, preferences and privileges of the holders of the Capital
Securities (including any Successor Securities) in any material respect (other
than any dilution of such holders' interests in the new entity), (vi) such
successor entity has a purpose substantially identical to that of the Trust,
(vii) prior to such merger, conversion, consolidation, amalgamation,
replacement, conveyance, transfer or lease, the Company has received an opinion
from independent counsel to the Trust experienced in such matters to the effect
that (a) such merger, conversion, consolidation, amalgamation, replacement,
conveyance, transfer or lease does not adversely affect the rights, preferences
and privileges of the holders of the Capital Securities (including any Successor
Securities) in any material respect (other than any dilution of such holders'
interests in the new entity), and (b) following such merger, conversion,
consolidation, amalgamation, replacement, conveyance, transfer or lease, neither
the Trust nor such successor entity will be required to register as an
investment company under the Investment Company Act of 1940, as amended (the
"INVESTMENT COMPANY ACT"), and (viii) the Company or any permitted successor or
assignee
53
<PAGE>
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 or convert with or into, or
be replaced by or convey, transfer or lease its properties and assets as an
entirety or substantially as an entirety to any other entity or permit any other
entity to consolidate, amalgamate, merge or convert with or into, or replace it
if such consolidation, amalgamation, merger, conversion, replacement,
conveyance, transfer or lease would cause the Trust or the successor entity not
to be classified as a grantor trust for United States federal income tax
purposes. The Property Trustee is required pursuant to the terms of the
Indenture to exchange, as a part of the Exchange Offer, the Old Junior
Subordinated Debentures for the New Junior Subordinated Debentures, which will
have terms identical to the Old Junior Subordinated Debentures except for the
transfer restrictions under the Securities Act and the provision for an increase
in the interest rate thereon under certain circumstances. See "Exchange Offer."
VOTING RIGHTS; AMENDMENT OF THE DECLARATION
Except as provided below and under "-- Mergers, Conversions,
Consolidations, Amalgamations or Replacements of the Trust" above and
"Description of the Guarantee -- Amendments and Assignment" and as otherwise
required by law and the Declaration, the holders of the Capital Securities have
no voting rights.
The Declaration may be amended from time to time by the Company, the
Property Trustee and the Administrative Trustees, without the consent of the
holders of the Trust Securities (i) to cure any ambiguity, correct or supplement
any provisions in the 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, (ii) to modify, eliminate or add to any
provisions of the Declaration to such extent as shall be necessary to ensure
that the Trust will be classified for United States federal income tax purposes
as a grantor trust at all times that any Trust Securities are outstanding or to
ensure that the Trust will not be required to register as an "investment
company" under the Investment Company Act, or (iii) to modify, eliminate or add
to any provision of the Declaration to such extent as shall be necessary to
enable the Trust and the Company to conduct an Exchange Offer in the manner
contemplated by the Registration Rights Agreement; provided, however, that in
the case of clause (i), such action shall not adversely affect in any material
respect the interests of the holders of the Trust Securities. Any amendments of
the Declaration pursuant to the foregoing shall become effective when notice
thereof is given to the holders of the Trust Securities. The Declaration may be
amended by the Issuer Trustees and the Company (i) with the consent of holders
representing a majority (based upon Liquidation Amount) of the outstanding Trust
Securities, and (ii) upon receipt by the Issuer Trustees of an opinion of
counsel to the effect that such amendment or the exercise of any power granted
to the Issuer Trustees in accordance with such amendment will not affect the
Trust's status as a grantor trust for United States federal income tax purposes
or the Trust's exemption from status as an "investment company" under the
Investment Company Act, provided that, without the consent of each holder of
Trust Securities, the Declaration may not be amended to (i) change the amount or
timing of any Distribution or other payment on the Trust Securities or otherwise
adversely affect the amount of any Distribution or other payment 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.
54
<PAGE>
So long as any Junior Subordinated Debentures are held by the
Property Trustee, the Property Trustee 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 Debenture Trustee with
respect to the Junior Subordinated Debentures, (ii) waive certain past defaults
under the Indenture, (iii) exercise any right to rescind or annul a declaration
of acceleration of the maturity of the principal of the Junior Subordinated
Debentures or (iv) consent to any amendment, modification or termination of the
Indenture or the Junior Subordinated Debentures, where such consent shall be
required, without, in each case, obtaining the prior approval of the holders of
a majority in Liquidation Amount of all outstanding Capital Securities;
provided, however, that where a consent under the Indenture would require the
consent of each holder of Junior Subordinated Debentures affected thereby, no
such consent shall be given by the Property Trustee without the prior approval
of each holder of the Capital Securities. The Property Trustee shall not revoke
any action previously authorized or approved by a vote of the holders of the
Capital Securities except by subsequent vote of such holders. The Property
Trustee shall notify each holder of Capital Securities of any notice of default
with respect to the Junior Subordinated Debentures. In addition to obtaining the
foregoing approvals of such holders of the Capital Securities, prior to taking
any of the foregoing actions, the Issuer Trustees shall obtain an opinion of
counsel experienced in such matters to the effect that the Trust will not be
classified as an association taxable as a corporation for United States federal
income tax purposes on account of such action.
Any required approval of holders of Capital Securities may be given
at a meeting of such holders convened for such purpose or pursuant to written
consent. The Property Trustee will cause a notice of any meeting at which
holders of Capital Securities are entitled to vote, or of any matter upon which
action by written consent of such holders is to be taken, to be given to each
holder of record of Capital Securities in the manner set forth in the
Declaration.
No vote or consent of the holders of Capital Securities will be
required for the Trust to redeem and cancel the Capital Securities in accordance
with the Declaration.
Notwithstanding that holders of the Capital Securities are entitled
to vote or consent under any of the circumstances described above, any of the
Capital Securities that are owned by the Company or any affiliate of the Company
shall, for purposes of such vote or consent, be treated as if they were not
outstanding.
FORM, DENOMINATION, BOOK-ENTRY PROCEDURES AND TRANSFER
The description of book-entry procedures in this Prospectus includes
summaries of certain rules and operating procedures of DTC that affect transfers
of interests in the global certificate or certificates issued in connection with
sales of Capital Securities. Except as described in the next paragraph, the
Capital Securities will be issued only as fully registered securities registered
in the name of Cede & Co. (as nominee for DTC). One or more fully registered
global Capital Security certificates (the "GLOBAL CAPITAL SECURITIES") will be
issued, representing, in the aggregate, the New Capital Securities, and will be
deposited with DTC.
The laws of some jurisdictions require that certain purchasers of
securities take physical delivery of securities in definitive form. Such laws
may impair the ability to transfer beneficial interests in the Global Capital
Securities.
55
<PAGE>
The New Capital Securities will be in blocks having a Liquidation
Amount of not less than $100,000 (100 New Capital Securities) and may be
transferred or exchanged in the manner and at the offices described below.
Depositary Procedures
DTC has advised the Trust and the Company that DTC is a
limited-purpose trust company 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 in accounts of its Participants. The Participants
include securities brokers and dealers (including the Initial Purchasers),
banks, trust companies, clearing corporations and certain other organizations.
Access to DTC's system is also available to other entities such as banks,
brokers, dealers and trust companies that clear through or maintain a custodial
relationship with a Participant, either directly or indirectly (collectively,
the "INDIRECT PARTICIPANTS"). Persons who are not Participants may beneficially
own securities held by or on behalf of DTC only through the Participants or the
Indirect Participants. The ownership interest and transfer of ownership interest
of each actual purchaser of each security held by or on behalf of DTC are
recorded on the records of the Participants and Indirect Participants.
DTC has also advised the Trust and the Company that, pursuant to
procedures established by it, (i) upon deposit of the Global Capital Securities,
DTC will credit the accounts of Participants designated by the Initial
Purchasers with portions of the Liquidation Amount of the Global Capital
Securities and (ii) ownership of such interests in the Global Capital Securities
will be shown on, and the transfer of ownership thereof will be effected only
through, records maintained by DTC (with respect to the Participants) or by the
Participants and the Indirect Participants (with respect to other owners of
beneficial interests in the Global Capital Securities).
Investors in the Global Capital Securities may hold their interests
therein directly through DTC if they are Participants in such system, or
indirectly through organizations which are Participants in such system. All
interests in a Global Capital Security may be subject to the procedures and
requirements of DTC. The laws of some states require that certain persons take
physical delivery in certificated form of securities that they own.
Consequently, the ability to transfer beneficial interests in a Global Capital
Security to such persons will be limited to that extent. Because DTC can act
only on behalf of Participants, which in turn act on behalf of Indirect
Participants and certain banks, the ability of a person having beneficial
interests in a Global Capital Security to pledge such interests to persons or
entities that do not participate in the DTC system, or otherwise take actions in
respect of such interests, may be affected by the lack of a physical certificate
evidencing such interests.
Except as described below, owners of interests in the Global Capital
Securities will not have New Capital Securities registered in their name, will
not receive physical delivery of New Capital Securities in certificated form and
will not be considered the registered owners or holders thereof under the
Declaration for any purpose.
Payments in respect of the Global Capital Security registered in the
name of DTC or its nominee will be payable by the Property Trustee to DTC in its
capacity as the registered holder under the Declaration. Under the terms of the
Declaration, the Property Trustee treats the persons in whose names the Capital
Securities,
56
<PAGE>
including the Global Capital Securities, are registered as the owners thereof
for the purpose of receiving such payments and for any and all other purposes
whatsoever. Consequently, neither the Property Trustee nor any agent thereof has
or will have any responsibility or liability for (i) any aspect of DTC's records
or any Participant's or Indirect Participant's records relating to or payments
made on account of beneficial ownership interests in the Global Capital
Securities, or for maintaining, supervising or reviewing any of DTC's records or
any Participant's or Indirect Participant's records relating to the beneficial
ownership interests in the Global Capital Securities or (ii) any other matter
relating to the actions and practices of DTC or any of its Participants or
Indirect Participants. DTC has advised the Trust and the Company that its
current practice, upon receipt of any payment in respect of securities such as
the New Capital Securities, is to credit the accounts of the relevant
Participants with the payment on the payment date, in amounts proportionate to
their respective holdings in Liquidation Amount of beneficial interests in the
relevant security as shown on the records of DTC unless DTC has reason to
believe it will not receive payment on such payment date. Payments by the
Participants and the Indirect Participants to the beneficial owners of New
Capital Securities will be governed by standing instructions and customary
practices and will be the responsibility of the Participants or the Indirect
Participants and will not be the responsibility of DTC, the Property Trustee,
the Trust or the Company. Neither the Trust nor the Company or the Property
Trustee will be liable for any delay by DTC or any of its Participants in
identifying the beneficial owners of the New Capital Securities, and the Trust
or the Company and the Property Trustee may conclusively rely on and will be
protected in relying on instructions from DTC or its nominee for all purposes.
DTC has advised the Trust and the Company that it will take any
action permitted to be taken by a holder of New Capital Securities only at the
direction of one or more Participants to whose account with DTC interests in the
Global Capital Securities are credited and only in respect of such portion of
the Liquidation Amount of the New 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 New Capital Securities in certificated form
and to distribute such New Capital Securities to its Participants.
The information in this section concerning DTC and book-entry systems
has been obtained from sources that the Trust and the Company believe to be
reliable, but neither the Trust nor the Company takes responsibility for the
accuracy thereof.
PAYMENT AND PAYING AGENCY
Payments in respect of the New Capital Securities held in global form
shall be made to the Depositary, which shall credit the relevant accounts at the
Depositary on the applicable Distribution Dates or in respect of the Capital
Securities that are not held by the Depositary, such payments shall be made by
check mailed to the address of the holder entitled thereto as such address shall
appear on the register. The paying agent (the "PAYING AGENT") shall initially be
the Property Trustee and any co-paying agent chosen by the Property Trustee and
acceptable to the Administrative Trustees and the Company. The Paying Agent
shall be permitted to resign as Paying Agent upon 30 days' written notice to the
Property Trustee and the Company. In the event that the Property Trustee shall
no longer be the Paying Agent, the Administrative Trustees shall appoint a
successor (which shall be a bank or trust company acceptable to the
Administrative Trustees and the Company) to act as Paying Agent.
57
<PAGE>
RESTRICTIONS ON TRANSFER
The Old Capital Securities were issued, and the New Capital
Securities will be issued, and may be transferred only in blocks having a
Liquidation Amount of not less than $100,000 (100 Capital Securities). Any such
transfer of Capital Securities in a block having a Liquidation Amount of less
than $100,000 shall be deemed to be void and of no legal effect whatsoever. Any
such transferee shall be deemed not to be the holder of such Capital Securities
for any purpose, including but not limited to the receipt of Distributions on
such Capital Securities, and such transferee shall be deemed to have no interest
whatsoever in such Capital Securities.
REGISTRAR AND TRANSFER AGENT
The Property Trustee is the 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 of any Capital Securities (i) during the period starting 15 days
before the mailing of a notice of redemption and ending on the date of such
mailing and (ii) after they have been called for redemption.
INFORMATION CONCERNING THE PROPERTY TRUSTEE
The Property Trustee is under no obligation to exercise any of the
powers vested in it by the Declaration at the request of any holder of Trust
Securities unless it is offered reasonable indemnity against the costs, expenses
and liabilities that might be incurred thereby. If no Event of Default has
occurred and is continuing and the Property Trustee is required to decide
between alternative causes of action, construe ambiguous provisions in the
Declaration or is unsure of the application of any provision of the Declaration,
and the matter is not one on which holders of the Capital Securities or the
Common Securities are entitled under the Declaration to vote, then the Property
Trustee shall take such action as is directed by the Company and, if not so
directed, shall take such action as it deems advisable and in the best interests
of the holders of the Trust Securities and will have no liability except for its
own bad faith, negligence or willful misconduct.
MISCELLANEOUS
The Administrative Trustees are authorized and directed to conduct
the affairs of and to operate the Trust in such a way that the Trust will not be
deemed to be an "investment company" required to be registered under the
Investment Company Act or classified as an association taxable as a corporation
for United States federal income tax purposes and so that the Junior
Subordinated Debentures will be treated as indebtedness of the Company for
United States federal income tax purposes. In this connection, the Company and
the Administrative Trustees are authorized to take any action, not inconsistent
with applicable law, the certificate of trust of the Trust or the Declaration,
that the Company and the Administrative Trustees determine in their discretion
to be necessary or desirable for such purposes, as long as such action does not
materially adversely affect the interests of the holders of the Trust
Securities.
58
<PAGE>
Holders of the Trust Securities have no preemptive or similar rights.
The Trust may not borrow money, issue debt, execute mortgages or
pledge any of its assets.
59
<PAGE>
DESCRIPTION OF JUNIOR SUBORDINATED DEBENTURES
The Old Junior Subordinated Debentures were issued, and the New
Junior Subordinated Debentures will be issued, under an Indenture dated as of
April 23, 1997 (the "INDENTURE"), between the Company and The Chase Manhattan
Bank, as trustee (the "DEBENTURE TRUSTEE"). The Indenture has been qualified
under the Trust Indenture Act. The Indenture incorporates certain provisions of
the Trust Indenture Act, and is subject to and governed by the Trust Indenture
Act. This summary of certain terms and provisions of the Junior Subordinated
Debentures and the Indenture does not purport to be complete and, where
reference is made to particular provisions of the Indenture, such provisions,
including the definitions of certain terms, some of which are not otherwise
defined herein, are qualified in their entirety by reference to all of the
provisions of the Indenture (a copy of which is filed herewith as an exhibit to
the Registration Statement, of which this Prospectus is a part) and the Trust
Indenture Act.
GENERAL
Concurrently with the issuance of the Old Capital Securities, the
Trust invested the proceeds thereof, together with the consideration paid by the
Company for the Common Securities, in the Old Junior Subordinated Debentures
issued by the Company. The Junior Subordinated Debentures bear interest at the
annual rate of 9.98% of the principal amount thereof, payable semi-annually in
arrears on June 30 and December 31 of each year (each, an "INTEREST PAYMENT
DATE"), commencing June 30, 1997, to the person in whose name each Junior
Subordinated Debenture is registered, subject to certain exceptions, at the
close of business on the fifteenth day of the month preceding the month in which
the relevant payment date falls. It is anticipated that, until the liquidation,
if any, of the Trust, each Junior Subordinated Debenture will be held in the
name of the Property Trustee in trust for the benefit of the holders of Trust
Securities. The amount of interest payable for any period will be computed on
the basis of a 360-day year of twelve 30-day months and, for any period of less
than a full calendar month, the number of days elapsed in such month. In the
event that any date on which interest is payable on the Junior Subordinated
Debentures is not a Business Day, then payment of the interest payable 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
the rate per annum of 9.98% thereof, compounded semi-annually. The term
"interest", as used herein, shall include semi-annual interest payments,
interest on semi-annual interest payments not paid on the applicable Interest
Payment Date and Additional Sums (as defined herein), as applicable.
The Junior Subordinated Debentures will be issued in denominations of
$100,000 and integral multiples of $1,000 in excess thereof. The Junior
Subordinated Debentures will mature on December 31, 2026 (the "STATED MATURITY
DATE").
The Junior Subordinated Debentures will rank pari passu with all
Other Debentures and will be unsecured and subordinate and rank junior in right
of payment to the extent and in the manner set forth in the Indenture to all
Senior Indebtedness of the Company. See "-- Subordination" below. The Company is
a non-operating holding company and almost all of the operating assets of the
Company and its consolidated subsidiaries are owned by such subsidiaries. The
Company relies primarily on dividends from such subsidiaries
60
<PAGE>
to meet its obligations. The Company is a legal entity separate and distinct
from its banking and non-banking affiliates. The principal sources of the
Company's income are dividends, interest and fees from its banking and
non-banking affiliates. The Bank is subject to certain restrictions imposed by
federal law on any extensions of credit to, and certain other transactions with,
the Company and certain other affiliates, and on investments in stock or other
securities thereof. Such restrictions prevent the Company and such other
affiliates from borrowing from the Bank unless the loans are secured by various
types of collateral. Further, such secured loans, other transactions and
investments by the Bank are generally limited in amount as to the Company and as
to each of such other affiliates to 10% of the Bank's capital and surplus and as
to the Company and all of such other affiliates to an aggregate of 20% of the
Bank's capital and surplus. In addition, payment of dividends to the Company by
the Bank is subject to ongoing review by banking regulators and is subject to
various statutory limitations and in certain circumstances requires approval by
banking regulatory authorities. Because the Company is a holding company, the
right of the Company to participate in any distribution of assets of any
subsidiary upon such subsidiary's liquidation or reorganization or otherwise, is
subject to the prior claims of creditors of the subsidiary, except to the extent
the Company may itself be recognized as a creditor of that subsidiary.
Accordingly, the Junior Subordinated Debentures are effectively subordinated to
all existing and future liabilities of the Company's subsidiaries, and holders
of Junior Subordinated Debentures should look only to the assets of the Company
for payments on the Junior Subordinated Debentures. The Indenture does not limit
the incurrence or issuance of other secured or unsecured debt of the Company,
including Senior Indebtedness. See "-- Subordination" below.
FORM, REGISTRATION AND TRANSFER
If the Junior Subordinated Debentures are distributed to the holders
of the Trust Securities, the Junior Subordinated Debentures may be represented
by one or more global certificates registered in the name of Cede & Co. as the
nominee of DTC. The depositary arrangements for such Junior Subordinated
Debentures are expected to be substantially similar to those in effect for the
Capital Securities. 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."
PAYMENT AND PAYING AGENTS
Payment of principal of and premium, if any, and any interest on
Junior Subordinated Debentures will be made at the office of the Debenture
Trustee in The City of New York or at the office of such Paying Agent or Paying
Agents as the Company may designate from time to time, except that at the option
of the Company payment of any interest may be made (i) by check mailed to the
address of the Person entitled thereto as such address shall appear in the
register for Junior Subordinated Debentures or (ii) by transfer to an account
maintained by the Person entitled thereto as specified in such register,
provided that proper transfer instructions have been received by the relevant
Record Date. Payment of any interest on any Junior Subordinated Debenture will
be made to the Person in whose name such Junior Subordinated Debenture is
registered at the close of business on the Record Date for such interest, except
in the case of defaulted interest. The Company may at any time designate
additional Paying Agents or rescind the designation of any Paying Agent; however
the Company will at all times be required to maintain a Paying Agent in each
place of payment for the Junior Subordinated Debentures.
61
<PAGE>
Any moneys deposited with the Debenture Trustee or any Paying Agent,
or then held by the Company in trust, for the payment of the principal of and
premium, if any, or interest on any Junior Subordinated Debenture and remaining
unclaimed for two years after such principal and premium, if any, or interest
has become due and payable shall, at the request of the Company, be repaid to
the Company and the holder of such Junior Subordinated Debenture shall
thereafter look, as a general unsecured creditor, only to the Company for
payment thereof.
OPTION TO EXTEND INTEREST PAYMENT DATE
So long as no Debenture Event of Default has occurred and is
continuing, the Company will have the right under the Indenture at any time
during the term of the Junior Subordinated Debentures to defer the payment of
interest at any time or from time to time for a period not exceeding 10
consecutive semi-annual periods with respect to each Extension Period, provided
that no Extension Period will end on a day other than an interest payment date
for the Junior Subordinated Debentures or extend beyond the Stated Maturity
Date. At the end of an Extension Period, the Company must pay all interest then
accrued and unpaid (together with interest thereon accrued at the annual rate of
9.98%, compounded semi-annually, to the extent permitted by applicable law).
During an Extension Period, interest will continue to accrue and, if the Junior
Subordinated Debentures have been distributed to holders of the Trust
Securities, holders of Junior Subordinated Debentures (or holders of the Trust
Securities while Trust Securities are outstanding) will be required to accrue
original issue discount income for United States federal income tax purposes
prior to the receipt of cash attributable to such income. See "Certain Federal
Income Tax Considerations -- Interest, Original Issue Discount, Premium and
Market Discount."
During any such Extension Period, the Company may not (i) declare or
pay any dividends or distributions on, or redeem, purchase, acquire, or make a
liquidation payment with respect to, any of the Company's capital stock (which
includes common and preferred stock), (ii) make any payment of principal,
interest or premium, if any, on or repay, repurchase or redeem any debt
securities of the Company (including any Other Debentures) that rank pari passu
with or junior in right of payment to the Junior Subordinated Debentures or
(iii) make any guarantee payments with respect to any guarantee by the Company
of any securities of any subsidiary of the Company (including Other Guarantees)
if such guarantee ranks pari passu with or junior in right of payment to the
Junior Subordinated Debentures (other than (a) dividends or distributions in
shares of or options, warrants or rights to subscribe for or purchase shares of,
common stock of the Company, (b) any declaration of a dividend in connection
with the implementation of a stockholders' rights plan, or the issuance of stock
under any such plan in the future, or the redemption or repurchase of any such
rights pursuant thereto, (c) payments under the Guarantee, (d) as a direct
result of, and only to the extent required in order to avoid the issuance of
fractional shares of capital stock following, a reclassification of the
Company's capital stock or the exchange or conversion of one class or series of
the Company's capital stock for another class or series of the Company's capital
stock, (e) the purchase of fractional interests in shares of the Company's
capital stock pursuant to the conversion or exchange provisions of such capital
stock or the security being converted or exchanged, and (f) purchases of common
stock related to the issuance of common stock or rights under any of the
Company's benefit plans for its directors, officers or employees or any of the
Company's dividend reinvestment plans).
62
<PAGE>
Prior to the termination of any such Extension Period, the Company
may further extend such Extension Period, provided that such extension does not
cause such Extension Period to exceed 10 consecutive semi-annual periods or to
extend beyond the Stated Maturity Date. Upon the termination of any such
Extension Period and the payment of all amounts then due on any Interest Payment
Date, the Company may elect to begin a new Extension Period, subject to the
above requirements. No interest shall be due and payable during an Extension
Period, except at the end thereof. The Company must give the Property Trustee,
the Administrative Trustees and the Debenture Trustee notice of its election of
any Extension Period (or an extension thereof) at least five Business Days prior
to the earlier of (i) the date the Distributions on the Trust Securities would
have been payable except for the election to begin or extend such Extension
Period or (ii) the date the Administrative Trustees are required to give notice
to any securities exchange or to holders of Capital Securities of the record
date or the date such Distributions are payable, but in any event not less than
five Business Days prior to such record date. The Debenture Trustee shall give
notice of the Company's election to begin or extend a new Extension Period to
the holders of the Capital Securities. There is no limitation on the number of
times that the Company may elect to begin an Extension Period.
OPTIONAL PREPAYMENT
The Junior Subordinated Debentures are prepayable, in whole or in
part, at the option of the Company, on or after the Initial Optional Prepayment
Date, 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, at a prepayment price (the "OPTIONAL PREPAYMENT PRICE") equal
to the percentage of the outstanding principal amount of the Junior Subordinated
Debentures specified below, plus, in each case, accrued interest thereon to the
date of prepayment if redeemed during the 12-month period beginning June 30 of
the years indicated below:
YEAR PERCENTAGE
---- ----------
2007 105.113
2008 104.601
2009 104.090
2010 103.579
2011 103.068
2012 102.556
2013 102.045
2014 101.534
2015 101.023
2016 100.511
2017 and thereafter 100.00%
SPECIAL EVENT PREPAYMENT
If a Special Event shall occur and be continuing, the Company may, at
any time prior to the Initial Optional Prepayment Date, within 90 days after the
occurrence of the Special Event, at its option and subject to receipt of prior
approval of the Federal Reserve if then required under applicable capital
guidelines or policies of the Federal Reserve, prepay the Junior Subordinated
Debentures in whole (but not in part), at a prepayment
63
<PAGE>
price (the "SPECIAL EVENT PREPAYMENT PRICE") equal to the greater of (i) 100% of
the principal amount of such Junior Subordinated Debentures or (ii) the sum, as
determined by a Quotation Agent, of the present values of the principal amount
and premium payable as part of the Optional Prepayment Price with respect to an
optional redemption of such Junior Subordinated Debentures on the Initial
Optional Prepayment Date, together with scheduled payments of interest from the
prepayment date to the Initial Optional Prepayment Date, in each case discounted
to the prepayment date on a semi-annual basis (assuming a 360-day year
consisting of twelve 30-day months) at the Adjusted Treasury Rate, plus, in
either case, accrued and unpaid interest thereon to the date of prepayment.
A "SPECIAL EVENT" means a Tax Event or a Regulatory Capital Event, as
the case may be.
A "TAX EVENT" means the receipt by the Company and the Trust of an
opinion of Weil, Gotshal & Manges LLP, or any other nationally recognized tax
counsel experienced in such matters to the effect that, as a result of any
amendment to, or change (including any announced prospective change) in, the
laws or any regulations thereunder of the United States or any political
subdivision or taxing authority thereof or therein, or as a result of any
official administrative pronouncement or judicial decision interpreting or
applying such laws or regulations, which amendment or change is effective or
such pronouncement or decision is announced on or after the Issue Date, there is
more than an insubstantial risk that (i) the Trust is, or will be within 90 days
of the date of such opinion, subject to United States federal income tax with
respect to income received or accrued on the Junior Subordinated Debentures,
(ii) interest payable by the Company on the Junior Subordinated Debentures is
not, or within 90 days of the date of such opinion will not be, deductible by
the Company, in whole or in part, for United States federal income tax purposes,
or (iii) the Trust is, or will be within 90 days of the date of such opinion,
subject to more than a de minimis amount of other taxes, duties or other
governmental charges.
A "REGULATORY CAPITAL EVENT" shall occur at any time following the
date (the "Election Date") on which the Company shall effectively elect to treat
the Capital Securities as Tier I Capital (or its equivalent), that the Company
shall have received an opinion of independent bank regulatory counsel
experienced in such matters to the effect that, as a result of (a) any amendment
to, or change (including any announced prospective change) in, the laws (or any
regulations thereunder) of the United States or any rules, guidelines or
policies of the Federal Reserve or (b) any official administrative pronouncement
or judicial decision interpreting or applying such laws or regulations, which
amendment or change is effective or such pronouncement or decision is announced
on or after the Election Date, the Capital Securities do not constitute, or
within 90 days of the date of such opinion, will not constitute, Tier 1 Capital
(or its then equivalent); provided, however, that a Regulatory Capital Event
shall not occur by reason of the use of the proceeds of the Junior Subordinated
Debentures by the Company contemplated herein.
"ADJUSTED TREASURY RATE" means, with respect to any prepayment date,
the rate per annum equal to (i) the yield, under the heading which represents
the average for the immediately prior week, appearing in the most recently
published statistical release designated "H.15(519)" or any successor
publication which is published weekly by the 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 date corresponding to the Initial Optional Prepayment Date (if no
maturity date is within three months before or after the Initial Optional
Prepayment Date, yields for the two published maturities most closely
corresponding to the
64
<PAGE>
Initial Optional Prepayment Date shall be interpolated, and the Adjusted
Treasury Rate shall be interpolated or extrapolated from such yields on a
straight-line basis, rounding to the nearest month) or (ii) if such release (or
any successor release) is not published during the week preceding the
calculation date or does not contain such yields, the rate per annum equal to
the semi-annual equivalent yield to maturity of the Comparable Treasury Issue,
assuming a price for the Comparable Treasury Issue (expressed as a percentage of
its principal amount) equal to the Comparable Treasury Price for such prepayment
date plus, in either case (A) 2.625% if such prepayment date occurs on or prior
to April 23, 1998 and (B) 1.875% in all other cases.
"COMPARABLE TREASURY ISSUE" means the United States Treasury security
selected by the Quotation Agent as having a maturity date corresponding to the
Initial Optional Prepayment Date that would be utilized, at the time of
selection and in accordance with customary financial practice, in pricing new
issues of corporate debt securities with a maturity date corresponding to the
Initial Optional Prepayment Date. If no United States Treasury security has a
maturity date which is within three months before or after the Initial Optional
Prepayment Date, the two most closely corresponding United States Treasury
securities shall be used as the Comparable Treasury Issue, and the calculation
of the Adjusted Treasury Rate pursuant to clause (ii) of the definition thereof
shall be interpolated or extrapolated on a straight-line basis, rounding to the
nearest month.
"QUOTATION AGENT" means the Reference Treasury Dealer appointed by
the Company. "REFERENCE TREASURY DEALER" means any primary U.S. Government
securities dealer in New York City selected by the Company.
"COMPARABLE TREASURY PRICE" means, with respect to any prepayment
date, (i) the average of the bid and asked prices for the Comparable Treasury
Issue (expressed in each case as a percentage of its principal amount) on the
third Business Day preceding such prepayment date, as set forth in the daily
statistical release (or any successor release) published by the Federal Reserve
Bank of New York and designated "Composite 3:30 p.m. Quotations for U.S.
Government Securities" or (ii) if such release (or any successor release) is not
published or does not contain such prices on such Business Day, (A) the average
of five Reference Treasury Dealer Quotations for such prepayment date, after
excluding the highest and lowest 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.
"REFERENCE TREASURY DEALER QUOTATIONS" means, with respect to each
Reference Treasury Dealer and any prepayment date, the average, as determined by
the Debenture Trustee, of the bid and asked prices for the Comparable Treasury
Issue (expressed in each case as a percentage of its principal amount) quoted in
writing to the Debenture Trustee by such Reference Treasury Dealer at 5:00 p.m.,
New York City time, on the third Business Day preceding such prepayment date.
"ADDITIONAL SUMS" means such additional amounts as may be necessary
in order that the amount of Distributions then due and payable by the Trust on
the outstanding Capital Securities and Common Securities shall not be reduced as
a result of any additional taxes, duties or other governmental charges to which
the Trust has become subject as a result of a Tax Event.
Notice of any prepayment will be mailed at least 30 days but not more
than 60 days before the redemption date to each holder of Junior Subordinated
Debentures to be prepaid at its registered address.
65
<PAGE>
Unless the Company defaults in payment of the prepayment price, on and after the
prepayment date interest ceases to accrue on such Junior Subordinated Debentures
called for prepayment.
If the Trust is required to pay any additional taxes, duties or other
governmental charges as a result of a Tax Event, the Company will pay as
additional amounts on the Junior Subordinated Debentures the Additional Sums.
CERTAIN COVENANTS OF THE COMPANY
If (1) a Debenture Event of Default occurs (other than solely a
default as described in paragraph (iii) under "- Debenture Events of Default"),
(2) there shall have occurred any event of which the Company has actual
knowledge that (a) with the giving of notice or the lapse of time, or both,
would be, a Debenture Event of Default (other than solely a default as described
in paragraph (iii) under "- Debenture Events of Default") and (b) in respect of
which the Company shall not have taken reasonable steps to cure, (3) the Company
shall be in default with respect to its payment of any obligations under the
Guarantee or (4) the Company shall have given notice of its election of an
Extension Period, or any extension thereof, as provided in the Indenture and
shall not have rescinded such notice, and such Extension Period, or any
extension thereof, shall have commenced, then the Company will not (i) declare
or pay any dividends or distributions on, or redeem, purchase, acquire, or make
a liquidation payment with respect to, any of the Company's capital stock (which
includes common and preferred stock) or (ii) make any payment of principal,
interest or premium, if any, on or repay or repurchase or redeem any debt
securities of the Company (including Other Debentures) that rank pari passu with
or junior in right of payment to the Junior Subordinated Debentures or (iii)
make any guarantee payments with respect to any guarantee by the Company of any
securities of any subsidiary of the Company (including Other Guarantees) if such
guarantee ranks pari passu or junior in right of payment to the Junior
Subordinated Debentures (other than (a) dividends or distributions in shares of,
or options, warrants or rights to subscribe for or purchase shares of, common
stock of the Company, (b) any declaration of a dividend in connection with the
implementation of a stockholder's rights plan, or the issuance of stock under
any such plan in the future, or the redemption or repurchase of any such rights
pursuant thereto, (c) payments under the Guarantee, (d) as a direct result of,
and only to the extent required in order to avoid the issuance of fractional
shares of capital stock following a reclassification of the Company's capital
stock or the exchange or conversion of one class or series of the Company's
capital stock for another class or series of the Company's capital stock, (e)
the purchase of fractional interests in shares of the Company's capital stock
pursuant to the conversion or exchange provisions of such capital stock or the
security being converted or exchanged, and (f) purchases of common stock related
to the issuance of common stock or rights under any of the Company's benefit
plans for its directors, officers or employees or any of the Company's dividend
reinvestment plans).
The Company has agreed in the Indenture (i) to maintain 100 percent
ownership of the Common Securities; provided, however, that any permitted
successor of the Company under the Indenture may succeed to the Company's
ownership of the Common Securities, (ii) to use its reasonable efforts to cause
the Trust (a) to remain a statutory business trust, except in connection with
the distribution of Junior Subordinated Debentures to the holders of Trust
Securities in liquidation of the Trust, the redemption of all of the Trust
Securities of the Trust, or certain mergers, consolidations or amalgamations,
each as permitted by the Declaration of the Trust, and (b) to continue not to be
classified as an association taxable as a corporation or a partnership for
United States federal income tax purposes and (iii) to use its reasonable
efforts to cause each
66
<PAGE>
holder of Trust Securities to be treated as owning an undivided beneficial
interest in the Junior Subordinated Debentures.
DEBENTURE EVENTS OF DEFAULT
The Indenture provides that any one or more of the following
described events with respect to the Junior Subordinated Debentures constitutes
a "DEBENTURE EVENT OF DEFAULT" (whatever the reason for such Debenture Event of
Default and whether it shall be voluntary or involuntary or be effected by
operation of law or pursuant to any judgment, decree or order of any court or
any order, rule or regulation of any administrative or governmental body):
(i) failure for 30 days to pay any interest on the Junior
Subordinated Debentures or any Other Debentures, when due (subject to
the deferral of any due date in the case of an Extension Period); or
(ii) failure to pay any principal or premium, if any, on the
Junior Subordinated Debentures or any Other Debentures when due
whether at maturity, upon redemption, by declaration of acceleration
of maturity or otherwise; or
(iii) failure to observe or perform in any material respect
certain other covenants contained in the Indenture for 90 days after
written notice to the Company from the Debenture Trustee or the
holders of at least 25% in aggregate outstanding principal amount of
Junior Subordinated Debentures; or
(iv) certain events in bankruptcy, insolvency or reorganization
of the Company.
The holders of a majority in aggregate outstanding principal amount
of the Junior Subordinated Debentures have the right to direct the time, method
and place of conducting any proceeding for any remedy available to the Debenture
Trustee. The Debenture Trustee or the holders of not less than 25% in aggregate
outstanding principal amount of the Junior Subordinated Debentures may declare
the principal due and payable immediately upon a Debenture Event of Default. The
holders of a majority in aggregate outstanding principal amount of the Junior
Subordinated Debentures may annul such declaration and waive the default if the
default (other than the nonpayment of the principal of the Junior Subordinated
Debentures which has become due solely by such acceleration) has been cured and
a sum sufficient to pay all matured installments of interest and principal due
otherwise than by acceleration has been deposited with the Debenture Trustee.
The holders of a majority in aggregate outstanding principal amount
of the Junior Subordinated Debentures affected thereby may, on behalf of the
holders of all the Junior Subordinated Debentures, waive any past default except
a default in the payment of principal of or premium, if any, on or interest
(unless such default has been cured and a sum sufficient to pay all matured
installments of interest and premium, if any, and principal due otherwise than
by acceleration has been deposited with the Debenture Trustee) or a default in
respect of a covenant or provision which under the Indenture cannot be modified
or amended without the consent of the holder of each outstanding Junior
Subordinated Debenture.
The Indenture requires the annual filing by the Company with the
Debenture Trustee of a certificate as to the absence of certain defaults under
the Indenture.
67
<PAGE>
The Indenture provides that the Debenture Trustee may withhold notice
of a Debenture Event of Default from the holders of the Junior Subordinated
Debentures (except a Debenture Event of Default in payment of principal of, or
of interest or premium on, the Junior Subordinated Debentures) if the Debenture
Trustee considers it in the interest of such holders to do so.
ENFORCEMENT OF CERTAIN RIGHTS BY HOLDERS OF CAPITAL SECURITIES
If a Debenture Event of Default shall have occurred and be continuing
and shall be attributable to the failure of the Company to pay interest or
premium, if any, on or principal of the Junior Subordinated Debentures on the
due date, a holder of Capital Securities may institute a Direct Action. A holder
of Capital Securities may also institute a Direct Action to enforce the rights
of the Property Trustee if the Property Trustee fails to enforce its rights as
the holder of the Junior Subordinated Debentures. The Company may not amend the
Indenture to remove the foregoing right to bring a Direct Action without the
prior written consent of the holders of all of the Capital Securities.
Notwithstanding any payments made to a holder of Capital Securities by the
Company in connection with a Direct Action, the Company shall remain obligated
to pay the principal of or premium, if any, or interest on the Junior
Subordinated Debentures, and the Company shall be subrogated to the rights of
the holder of such Capital Securities with respect to payments on the Capital
Securities to the extent of any payments made by the Company 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 Debentures. See "Description
of Capital Securities -- Events of Default; Notice."
CONSOLIDATION, MERGER, SALE OF ASSETS AND OTHER TRANSACTIONS
The Indenture provides that the Company shall not consolidate with or
merge into any other Person or convey, transfer or lease its properties and
assets as an entirety or substantially as an entirety to any Person, and no
Person shall consolidate with or merge into the Company or convey, transfer or
lease its properties and assets as an entirety or substantially as an entirety
to the Company, unless: (i) in case the Company consolidates with or merges into
another Person or conveys or transfers its properties and assets substantially
as an entirety to any Person, the successor Person is organized under the laws
of the United States or any State or the District of Columbia, and such
successor Person expressly assumes the Company's obligations on the Junior
Subordinated Debentures; (ii) immediately after giving effect thereto, no
Debenture Event of Default, and no event which, after notice or lapse of time or
both, would become a Debenture Event of Default, shall have occurred and be
continuing; and (iii) certain other conditions as prescribed in the Indenture
are met.
The general provisions of the Indenture do not afford holders of the
Junior Subordinated Debentures protection in the event of a highly leveraged or
other transaction involving the Company that may adversely affect holders of the
Junior Subordinated Debentures.
MODIFICATION OF THE INDENTURE
From time to time the Company and the Debenture Trustee may, without
the consent of the holders of Junior Subordinated Debentures, amend, waive or
supplement the Indenture for specified purposes, including,
68
<PAGE>
among other things, curing ambiguities, defects or inconsistencies or enabling
the Company and the Trust to conduct the Exchange Offer as contemplated by the
Registration Rights Agreement; provided that, in any such case, such action does
not materially adversely affect the interest of the holders of Junior
Subordinated Debentures. The Indenture contains provisions permitting the
Company and the Debenture Trustee, with the consent of the holders of a majority
in principal amount of the Junior Subordinated Debentures, to modify the
Indenture in a manner affecting the rights of the holders of Junior Subordinated
Debentures; provided that no such modification may, without the consent of the
holders of each outstanding Junior Subordinated Debenture so affected, (i)
change the Stated Maturity Date, or reduce the principal amount of the Junior
Subordinated Debentures or reduce the rate or extend the time of payment of
interest thereon or (ii) reduce the percentage of principal amount of Junior
Subordinated Debentures the holders of which are required to consent to any such
modification of the Indenture.
SATISFACTION AND DISCHARGE
The Indenture provides that when, among other things, all Junior
Subordinated Debentures not previously delivered to the Debenture Trustee for
cancellation (i) have become due and payable or (ii) will become due and payable
at maturity within one year, and the Company deposits or causes to be deposited
with the Debenture Trustee funds, in trust, for the purpose and in an amount
sufficient to pay and discharge the entire indebtedness on the Junior
Subordinated Debentures not previously delivered to the Debenture Trustee for
cancellation, for the principal and premium, if any, and interest to the date of
the deposit or to the Stated Maturity Date, as the case may be, then the
Indenture will cease to be of further effect (except as to the Company's
obligations to pay all other sums due pursuant to the Indenture and to provide
the officers' certificates and opinions of counsel described therein), and the
Company will be deemed to have satisfied and discharged the Indenture.
SUBORDINATION
In the Indenture, the Company has agreed that any Junior Subordinated
Debentures issued thereunder will be subordinate and junior in right of payment
to all Senior Indebtedness to the extent provided in the Indenture. Upon any
payment or distribution of assets to creditors upon any liquidation,
dissolution, winding up, reorganization, assignment for the benefit of
creditors, marshaling of assets or any bankruptcy, insolvency, debt
restructuring or similar proceedings in connection with any insolvency or
bankruptcy proceeding of the Company, the holders of Senior Indebtedness will
first be entitled to receive payment in full of all Allocable Amounts in respect
of such Senior Indebtedness before the holders of Junior Subordinated Debentures
will be entitled to receive or retain any payment in respect thereof.
In the event of the acceleration of the maturity of Junior
Subordinated Debentures, the holders of all Senior Indebtedness outstanding at
the time of such acceleration will first be entitled to receive payment in full
of all Allocable Amounts due in respect of such Senior Indebtedness before the
holders of Junior Subordinated Debentures will be entitled to receive or retain
any payment in respect of the Junior Subordinated Debentures.
No payments on account of principal or premium, if any, or interest,
if any, in respect of the Junior Subordinated Debentures may be made if there
shall have occurred and be continuing a default in any payment with respect to
Senior Indebtedness, or an event of default with respect to any Senior
Indebtedness resulting in
69
<PAGE>
the acceleration of the maturity thereof, or if any judicial proceeding shall be
pending with respect to any such default.
"ALLOCABLE AMOUNTS," when used with respect to any Senior
Indebtedness, means all amounts due or to become due on such Senior Indebtedness
less, if applicable, any amount which would have been paid to, and retained by,
the holders of such Senior Indebtedness (whether as a result of the receipt of
payments by the holders of such Senior Indebtedness from the Company or any
other obligor thereon or from any holders of, or trustee in respect of, other
indebtedness that is subordinate and junior in right of payment to such Senior
Indebtedness pursuant to any provision of such indebtedness for the payment over
of amounts received on account of such indebtedness to the holders of such
Senior Indebtedness or otherwise) but for the fact that such Senior Indebtedness
is subordinate or junior in right of payment to (or subject to a requirement
that amounts received on such Senior Indebtedness be paid over to obligees on)
trade accounts payable or accrued liabilities arising in the ordinary course of
business.
"INDEBTEDNESS" means (i) any obligation of, or any obligation
guaranteed by, the Company for the repayment of borrowed money, whether or not
evidenced by bonds, debentures, notes or other written instruments and any
deferred obligation for the payment of the purchase price of property or assets
acquired other than in the ordinary course of business and (ii) all indebtedness
of the Company for claims in respect of derivative products such as interest and
foreign exchange rate contracts, commodity contracts and similar arrangements,
whether outstanding on the date of execution of the Indenture or thereafter
created, assumed or incurred. For purposes of this definition "claim" has the
meaning assigned in Section 101(5) of the Bankruptcy Code of 1978, as amended
and in effect on the date of the execution of the Indenture.
"INDEBTEDNESS RANKING ON A PARITY WITH THE JUNIOR SUBORDINATED
DEBENTURES" means Indebtedness, whether outstanding on the date of execution of
the Indenture or thereafter created, assumed or incurred, which specifically by
its terms ranks equally with and not prior to the Junior Subordinated Debentures
in the right of payment upon the happening of the dissolution or winding-up or
liquidation or reorganization of the Company. The securing of any Indebtedness,
otherwise constituting Indebtedness Ranking on a Parity with the Junior
Subordinated Debentures, shall not be deemed to prevent such Indebtedness from
constituting Indebtedness Ranking on a Parity with the Junior Subordinated
Debentures.
"INDEBTEDNESS RANKING JUNIOR TO THE JUNIOR SUBORDINATED DEBENTURES"
means any Indebtedness, whether outstanding on the date of execution of the
Indenture or thereafter created, assumed or incurred, which specifically by its
terms ranks junior to and not equally with or prior to the Junior Subordinated
Debentures (and any other Indebtedness Ranking on a Parity with the Junior
Subordinated Debentures) in right of payment upon the happening of the
dissolution or winding-up or liquidation or reorganization of the Company. The
securing of any Indebtedness, otherwise constituting Indebtedness Ranking Junior
to the Junior Subordinated Debentures, shall not be deemed to prevent such
Indebtedness from constituting Indebtedness Ranking Junior to the Junior
Subordinated Debentures.
"SENIOR INDEBTEDNESS" means all Indebtedness, whether outstanding on
the date of execution of the Indenture or thereafter created, assumed or
incurred, except Indebtedness Ranking on a Parity with the Junior Subordinated
Debentures or Indebtedness Ranking Junior to the Junior Subordinated Debentures,
and any deferrals, renewals or extensions of such Senior Indebtedness.
70
<PAGE>
The Company is a non-operating holding company and almost all of the
operating assets of the Company are owned by the Company's subsidiaries. The
Company relies primarily on dividends from such subsidiaries to meet its
obligations for payment of principal and interest on its outstanding debt
obligations and corporate expenses. The Company is a legal entity separate and
distinct from its banking and non-banking affiliates. The principal sources of
the Company's income are dividends, interest and fees from its banking and
non-banking affiliates. The Bank is subject to certain restrictions imposed by
federal law on any extensions of credit to, and certain other transactions with,
the Company and certain other affiliates, and on investments in stock or other
securities thereof. Such restrictions prevent the Company and such other
affiliates from borrowing from the Bank unless the loans are secured by various
types of collateral. Further, such secured loans, other transactions and
investments by the Bank are generally limited in amount as to the Company and as
to each of such other affiliates to 10% of the Bank's capital and surplus and as
to the Company and all of such other affiliates to an aggregate of 20% of the
Bank's capital and surplus. In addition, payment of dividends to the Company by
the subsidiary banks is subject to ongoing review by banking regulators and is
subject to various statutory limitations and in certain circumstances requires
approval by banking regulatory authorities. Accordingly, the Junior Subordinated
Debentures are effectively subordinated to all existing and future liabilities
of the Company's subsidiaries. Holders of Junior Subordinated Debentures should
look only to the assets of the Company for payments of interest and principal
and premium, if any.
The Indenture places no limitation on the amount of additional Senior
Indebtedness that may be incurred by the Company. The Company expects from time
to time to incur additional indebtedness constituting Senior Indebtedness.
RESTRICTIONS ON TRANSFER
The Junior Subordinated Debentures will be issued and may be
transferred only in blocks having an aggregate principal amount of not less than
$100,000. Any such transfer of Junior Subordinated Debentures in a block having
an aggregate principal amount of less than $100,000 shall be deemed to be void
and of no legal effect whatsoever. Any such transferee shall be deemed not to be
holder of such Junior Subordinated Debentures for any purpose, including but not
limited to the receipt of payments on such Junior Subordinated Debentures, and
such transferee shall be deemed to have no interest whatsoever in such Junior
Subordinated Debentures.
GOVERNING LAW
The Indenture and the Junior Subordinated Debentures are governed by
and will be construed in accordance with the laws of the State of New York.
71
<PAGE>
INFORMATION CONCERNING THE DEBENTURE TRUSTEE
The Debenture Trustee is 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 Debentures, unless offered
reasonable indemnity by such holder against the costs, expenses and liabilities
which might be incurred thereby. The Debenture Trustee is not required to expend
or risk its own funds or otherwise incur personal financial liability in the
performance of its duties if the Debenture Trustee reasonably believes that
repayment or adequate indemnity is not reasonably assured to it.
DESCRIPTION OF THE GUARANTEE
The Old Guarantee was executed and delivered by the Company
concurrently with the issuance by the Trust of the Old Capital Securities for
the benefit of the holders from time to time of the Capital Securities. The
Chase Manhattan Bank acts under the Old Guarantee, and will act under the New
Guarantee, as indenture trustee ("GUARANTEE TRUSTEE"). The New Guarantee has
been 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 Capital Securities.
GENERAL
The Company has agreed 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 Capital Securities, as and when due, regardless of any defense,
right of set-off or counterclaim that the Trust may have or assert other than
the defense of payment. The following payments with respect to the Capital
Securities, to the extent not paid by or on behalf of the Trust (the "GUARANTEE
PAYMENTS"), will be subject to the Guarantee: (i) any accumulated and unpaid
Distributions required to be paid on Capital Securities, to the extent the Trust
has funds on hand legally available therefor, (ii) the Redemption Price with
respect to any Capital Securities called for redemption, to the extent that the
Trust has funds on hand legally available therefor, or (iii) upon a voluntary or
involuntary dissolution and liquidation of the Trust (unless the Junior
Subordinated Debentures are distributed to holders of the Capital Securities),
the lesser of (a) the Liquidation Distribution and (b) the amount of assets of
the Trust remaining available for distribution to holders of Capital Securities.
The Company's obligation to make a Guarantee Payment may be satisfied by direct
payment of the required amounts by the Company to the holders of the Capital
Securities or by causing the Trust to pay such amounts to such holders.
The Guarantee ranks subordinate and junior in right of payment to all
Senior Indebtedness to the extent provided therein. See "-- Status" below.
Because the Company is a holding company, the right of the Company to
participate in any distribution of assets of any subsidiary upon such
subsidiary's liquidation or reorganization or otherwise is subject to the prior
claims of creditors of that subsidiary, except to the extent the Company may
itself be recognized as a creditor of that subsidiary. Accordingly, the
Company's obligations under the Guarantee will be effectively subordinated to
all existing and future liabilities of the Company's subsidiaries, and claimants
should look only to the assets of the Company for payments thereunder. See
72
<PAGE>
"Description of Junior Subordinated Debentures -- General." The Guarantee does
not limit the incurrence or issuance of other secured or unsecured debt of the
Company, including Senior Indebtedness, whether under the Indenture, any other
indenture that the Company may enter into in the future or otherwise.
The Company has, through the Guarantee, the Declaration, the Junior
Subordinated Debentures and the Indenture, taken together, fully, irrevocably
and unconditionally guaranteed 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 Debentures and the Guarantee."
STATUS
The Guarantee constitutes an unsecured obligation of the Company and
ranks subordinate and junior in right of payment to all Senior Indebtedness in
the same manner as the Junior Subordinated Debentures.
The Guarantee ranks pari passu with the Junior Subordinated
Debentures and with all other guarantees (if any) issued by the Company after
the Issue Date with respect to capital securities (if any) issued by Other
Trusts. The Guarantee constitutes a guarantee of payment and not of collection
(i.e., the guaranteed party may institute a legal proceeding directly against
the Company to enforce its rights under the 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 Capital 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
Capital Securities of the Junior Subordinated Debentures. The Guarantee does not
place a limitation on the amount of additional Senior Indebtedness that may be
incurred by the Company. The Company expects from time to time to incur
additional indebtedness constituting Senior Indebtedness.
EVENTS OF DEFAULT
An event of default under the Guarantee will occur upon the failure
of the Company to perform any of its payment or other obligations thereunder.
The holders of a majority in Liquidation Amount of the Capital Securities will
have the right to direct the time, method and place of conducting any proceeding
for any remedy available to the Guarantee Trustee in respect of the 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 Company 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 Company, as guarantor, will be required to file annually with the
Guarantee Trustee a certificate as to whether or not the Company is in
compliance with all the conditions and covenants applicable to it under the
Guarantee.
73
<PAGE>
CERTAIN COVENANTS OF THE COMPANY
The Guarantee provides that, so long as any Capital Securities remain
outstanding, if there shall have occurred any event that would constitute an
event of default under the Guarantee or the Declaration (other than solely a
default as described in paragraph (iii) under "Description of Junior
Subordinated Debentures -- Debenture Events of Default"), then the Company will
not (i) declare or pay any dividends or distributions on, or redeem, purchase,
acquire, or make a liquidation payment with respect to, any of the Company's
capital stock (which includes common and preferred stock), (ii) make any payment
of principal, interest or premium, if any, on or repay, repurchase or redeem any
debt securities of the Company (including any Other Debentures) that rank pari
passu with or junior in right of payment to the Junior Subordinated Debentures
or (iii) make any guarantee payments with respect to any guarantee by the
Company of any securities of any subsidiary of the (including Other Guarantees)
Company if such guarantee ranks pari passu with or junior in right of payment to
the Junior Subordinated Debentures (other than (a) dividends or distributions in
shares of or options, warrants or rights to subscribe for or purchase shares of,
common stock of the Company, (b) any declaration of a dividend in connection
with the implementation of a stockholders' rights plan, or the issuance of stock
under any such plan in the future, or the redemption or repurchase of any such
rights pursuant thereto, (c) payments under the Guarantee, (d) as a direct
result of, and only to the extent required in order to avoid the issuance of
fractional shares of capital stock following a reclassification of the Company's
capital stock or the exchange or conversion of one class or series of the
Company's capital stock for another class or series of the Company's capital
stock, (e) the purchase of fractional interests in shares of the Company's
capital stock pursuant to the conversion or exchange provisions of such capital
stock or the security being converted or exchanged, and (f) purchases of common
stock related to the issuance of common stock or rights under any of the
Company's benefit plans for its directors, officers or employees or any of the
Company's dividend reinvestment plans).
AMENDMENTS AND ASSIGNMENT
Except with respect to any changes that do not materially adversely
affect the rights of holders of the Capital Securities (in which case no vote
will be required), the Guarantee may not be amended without the prior approval
of the holders of a majority of the 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
Agreements shall bind the successors, assigns, receivers, trustees and
representatives of the Company and shall inure to the benefit of the holders of
the Capital Securities then outstanding.
TERMINATION
The Guarantee will terminate and be of no further force and effect
upon full payment of the applicable Redemption Price of the Capital Securities,
upon full payment of the Liquidation Amount payable upon liquidation of the
Trust or upon distribution of the Junior Subordinated Debentures to the holders
of the Capital 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 Capital
Securities must restore payment of any sums paid under the Capital Securities or
the Guarantee.
74
<PAGE>
INFORMATION CONCERNING THE GUARANTEE TRUSTEE
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 Capital
Securities, unless offered reasonable indemnity against the costs, expenses and
liabilities which might be incurred thereby. The Guarantee Trustee is not
required to expend or risk its own funds or otherwise incur personal financial
liability in the performance of its duties if it reasonably believes that
repayment or adequate indemnity is not reasonably assured to it.
The Company or its affiliates maintain certain accounts and other
banking relationships with the Guarantee Trustee and its affiliates in the
ordinary course of business.
GOVERNING LAW
The Guarantee is governed by, and construed in accordance with, the
internal laws of the State of New York.
RELATIONSHIP AMONG THE CAPITAL SECURITIES, THE
JUNIOR SUBORDINATED DEBENTURES 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 on hand legally available for the
payment of such Distributions) are irrevocably guaranteed by the Company as and
to the extent set forth under "Description of the Guarantee." Taken together,
the Company's obligations under the Junior Subordinated Debentures, 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
Company does not make the required payments on the Junior Subordinated
Debentures, the Trust will not have sufficient funds to make the related
payments, including Distributions, on the Capital Securities. The Guarantee will
not cover any such payment when the Trust does not have sufficient funds on hand
legally available therefor. In such event, the remedy of a holder of Capital
Securities is to institute a Direct Action. The obligations of the Company under
the Guarantee are subordinate and junior in right of payment to all Senior
Indebtedness.
SUFFICIENCY OF PAYMENTS
As long as payments of interest and other payments are made when due
on the Junior Subordinated Debentures, such payments will be sufficient to cover
Distributions and other payments due on the Capital Securities, primarily
because: (i) the aggregate principal amount or Prepayment Price of the Junior
Subordinated Debentures will be equal to the sum of the Liquidation Amount or
Redemption Price, as applicable, of the Capital Securities and Common
Securities; (ii) the interest rate and interest and other payment dates on the
75
<PAGE>
Junior Subordinated Debentures will match the Distribution rate and Distribution
and other payment dates for the Trust Securities; (iii) the Company shall pay
for all and any costs, expenses and liabilities of the Trust except the Trust's
obligations to holders of Trust Securities under such Trust Securities; and (iv)
the Declaration will provide that the Trust is not authorized to engage in any
activity that is not consistent with the limited purposes thereof.
ENFORCEMENT OF RIGHTS OF HOLDERS OF CAPITAL SECURITIES
A holder of any Capital Security may institute a legal proceeding
directly against the Company 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 Indebtedness would not
constitute a default or Event of Default under the Declaration. However, in the
event of payment defaults under, or acceleration of, Senior Indebtedness, the
subordination provisions of the Indenture provide that no payments may be made
in respect of the Junior Subordinated Debentures until such Senior Indebtedness
has been paid in full or any payment default thereunder has been cured or
waived. Failure to make required payments on Junior Subordinated Debentures
would constitute an Event of Default under the Declaration.
LIMITED PURPOSE OF THE TRUST
The Capital Securities represent preferred beneficial interests in
the Trust, and the Trust exists for the sole purpose of issuing and selling the
Trust Securities, using the proceeds from the sale of the Trust Securities to
acquire the Junior Subordinated Debentures and engaging in only those other
activities necessary, advisable or incidental thereto, including engaging in the
Exchange Offer.
RIGHTS UPON DISSOLUTION
Unless the Junior Subordinated Debentures are distributed to holders
of the Trust Securities, upon any voluntary or involuntary dissolution and
liquidation of the Trust, after satisfaction of liabilities to 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 Debentures." Upon any
voluntary or involuntary liquidation or bankruptcy of the Company, the Property
Trustee, as holder of the Junior Subordinated Debentures, would be a
subordinated creditor of the Company, subordinated in right of payment to all
Senior Indebtedness as set forth in the Indenture, but entitled to receive
payment in full of principal (and premium, if any) and interest, before any
stockholders of the Company receive payments or distributions. Since the Company
is the guarantor under the Guarantee and will agree to pay for all costs,
expenses and liabilities of the Trust (other than the Trust's obligations to the
holders of its Trust Securities), the positions of a holder of Capital
Securities and a holder of Junior Subordinated Debentures relative to other
creditors and to stockholders of the Company in the event of liquidation or
bankruptcy of the Company are expected to be substantially the same.
76
<PAGE>
CERTAIN FEDERAL INCOME TAX CONSIDERATIONS
The following is a summary of certain of the principal United States
Federal income tax consequences of the purchase, ownership and disposition of
the Capital Securities to a holder that is a citizen or resident of the United
States, a corporation, partnership or other entity created or organized under
the laws of the United States or any state thereof or the District of Columbia
or an estate or trust the income of which is subject to United States Federal
income taxation regardless of source (a "U.S. Holder"). This summary does not
address the United States Federal income tax consequences to persons other than
U.S. Holders or to persons other than purchasers of Capital Securities upon
their initial issuance.
This summary is based on the United States Federal income tax laws,
regulations and rulings and decisions now in effect, all of which are subject to
change, possibly on a retroactive basis. This summary does not address the tax
consequences applicable to investors that may be subject to special tax rules
such as banks, thrifts, real estate investment trusts, regulated investment
companies, insurance companies, dealers in securities or currencies, tax-exempt
investors or persons that will hold the Capital Securities as a position in a
"straddle," as part of a "synthetic security", "hedge," "conversion transaction"
or other integrated investment or as other than a capital asset. This summary
also does not address the tax consequences to persons that have a functional
currency other than the U.S. dollar or the tax consequences to shareholders,
partners or beneficiaries of a holder of Capital Securities. Further, it does
not include any description of any alternative minimum tax or estate and gift
tax consequences or the tax laws of any state or local government or of any
foreign government that may be applicable to the Capital Securities.
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 CAPITAL SECURITIES,
AS WELL AS THE EFFECT OF ANY STATE, LOCAL OR FOREIGN TAX LAWS.
EXCHANGE OF CAPITAL SECURITIES
The exchange of Old Capital Securities for New Capital Securities
pursuant to the Exchange Offer should not constitute an "exchange" for United
States Federal income tax purposes. Accordingly, there should be no United
States Federal income tax consequences to U.S. Holders as a result of the
consummation of the Exchange Offer.
CLASSIFICATION OF THE TRUST
Upon the issuance of the Old Capital Securities, Weil, Gotshal &
Manges LLP (a limited liability partnership including professional corporations)
issued its opinion (the "Tax Opinion") to the effect that, under then current
law and assuming full compliance with the terms of the Trust Agreement (and
certain other documents), and based on certain facts and assumptions contained
in such opinion, the Trust will be classified, for United States Federal income
tax purposes, as a grantor trust and not as an association taxable as a
corporation. As a result, each holder of Capital Securities will be treated as
owning an undivided beneficial interest in the Junior Subordinated Debentures
and each holder will be required to include in its gross income the items of
income realized with respect to its allocable share of those Junior Subordinated
Debentures.
77
<PAGE>
Investors should be aware that the Tax Opinion does not address any other issue
and is not binding on the IRS or the courts.
INTEREST, ORIGINAL ISSUE DISCOUNT, PREMIUM AND MARKET DISCOUNT
The Old Junior Subordinated Debentures were issued with original
issue discount ("OID"). The amount of OID is equal to the excess of the stated
redemption price at maturity of the Junior Subordinated Debentures over their
"issue price" (i.e., generally, the initial offering price to the public,
excluding bond houses or brokers). For the reasons stated below, the stated
interest on the Junior Subordinated Debentures will not be treated as "qualified
stated interest," and, therefore, will be included in the stated redemption
price at maturity of the Junior Subordinated Debentures.
Final Treasury Regulations issued on June 16, 1996 generally provide
that stated interest on a debt instrument is not "qualified stated interest"
and, therefore, will give rise to OID unless such interest is unconditionally
payable in cash or in property (other than debt instruments of the issuer) at
least annually at a single fixed rate. Interest is considered to be
unconditionally payable only if reasonable legal remedies exist to compel timely
payment or the debt instrument otherwise provides terms and conditions that make
the likelihood of late payment (other than late payment that occurs within a
reasonable grace period) or non-payment a "remote contingency."
The Company has the right, at any time and from time to time during
the term of the Junior Subordinated Debentures, to defer payments of interest by
extending the interest payment period for a period not exceeding 10 consecutive
semi-annual periods, provided that no Extension Period may extend beyond the
Stated Maturity of the Junior Subordinated Debentures. Because of this option,
all of the stated interest payments on those Junior Subordinated Debentures will
be treated as OID. Holders of debt instruments issued with OID must include that
discount in income on an economic accrual basis before the receipt of cash
attributable to the interest, regardless of their regular method of tax
accounting. The amount of OID includable in income is the sum of the "daily
portions" of OID with respect to each day during the taxable year or portion of
the taxable year in which the obligation was held ("accrued OID"). The daily
portion is determined by allocating to each day in any "accrual period" a pro
rata portion of the OID allocable to the accrual period. Under the Treasury
Regulations, the "accrual period" for each obligation may be of any length and
may vary in length over the term of the obligation, provided that each accrual
period is no longer than one year and each scheduled payment occurs on either
the first or last day of an accrual period. The amount of OID allocable to any
accrual period is an amount equal to the product of each obligation's adjusted
issue price at the beginning of such accrual period and its yield to maturity
(determined on the basis of compounding at the close of each accrual period and
properly adjusted for the length of the accrual period). If all accrual periods
are of equal length except for either an initial short period or an initial and
final short period, the amount of OID allocable to the initial short accrual
period may be computed under any reasonable method. The "adjusted issue price"
of an interest in a Junior Subordinated Debenture at the start of any accrual
period is equal to its purchase price (generally, the purchase price of the
Capital Security, less any purchased accrued interest) increased by the accrued
OID for each prior accrual period and reduced by the amount of any cash
payments. In the event that the interest payment period is extended, holders
will continue to accrue OID on an economic accrual basis over the length of the
extended interest period.
78
<PAGE>
To the extent a holder acquires its Capital Securities in the
secondary market at a price that is greater or less than the adjusted issue
price of such holder's share of the Junior Subordinated Debentures, the holder
may be deemed to have acquired its interest in the Junior Subordinated
Debentures with acquisition premium or with market discount, as the case may be.
A holder who purchases Capital Securities at a premium will be permitted to
reduce the amount of OID required to be included in income to reflect the
acquisition premium. A holder who purchases Capital Securities at a market
discount will also include the amount of such discount in income in accordance
with the market discount rules described below.
A holder that acquires its undivided beneficial interest in the
Junior Subordinated Debentures at a market discount generally will be required
to recognize ordinary income to the extent of accrued market discount on the
Junior Subordinated Debentures upon the retirement of the underlying Junior
Subordinated Debentures or, to the extent of any gain, upon the disposition of
the Capital Securities. Such market discount would accrue ratably, or, at the
election of the holder, under a constant yield method over the remaining term of
the Junior Subordinated debentures. A holder will also be required to defer the
deduction of a portion of the interest paid or accrued on indebtedness incurred
to purchase or carry Capital Securities that represent Junior Subordinated
Debentures acquired with market discount. In lieu of the foregoing, a holder may
elect to include market discount in income currently as it accrues on all market
discount instruments acquired by such holder in the taxable year of the election
or thereafter, in which case the interest deferral rule will not apply.
A holder may elect, in lieu of applying the market discount or
premium rules described above, to account for all income under the Junior
Subordinated Debentures as if it were OID. A holder that makes this election and
that is considered to have acquired its undivided beneficial interest in the
Junior Subordinated Debentures with market discount will be considered to have
made the election described in the immediately preceding paragraph.
Holders of Capital Securities will not be entitled to a
dividends-received deduction with respect to any income earned on the Capital
Securities.
RECEIPT OF JUNIOR SUBORDINATED DEBENTURES UPON LIQUIDATION OF THE TRUST
As described under "Description of Capital Securities-Liquidation of
the Trust and Distribution of Junior Subordinated Debentures," Junior
Subordinated Debentures may be distributed to holders in exchange for the
Capital Securities and in liquidation of the Trust. Under current law, such a
distribution would be treated as a non-taxable event to each holder and each
holder's aggregate tax basis in the Junior Subordinated Debentures would be
equal to such holder's aggregate tax basis in its Capital Securities. A holder's
holding period in the Junior Subordinated Debentures so received in liquidation
of the Trust would include the period for which the Capital Securities were held
by such holder. If, however, the liquidation of the Trust were to occur because
the Trust is subject to United States Federal income tax with respect to income
accrued or received on the Junior Subordinated Debentures, the distribution of
Junior Subordinated Debentures to the holders of Capital Securities by the Trust
would be a taxable event to the Trust and a holder of Capital Securities would
recognize gain or loss as if such holder had exchanged its Capital Securities
for the Junior Subordinated Debentures it received upon the liquidation of the
Trust. A holder will be taxable on OID in respect of Junior Subordinated
Debentures received from the Trust in the manner described above under
"-Interest, Original Issue Discount, Premium and Market Discount."
79
<PAGE>
SALE OR REDEMPTION OF CAPITAL SECURITIES
A holder that sells Capital Securities (including a redemption for
cash) will recognize gain or loss equal to the difference between the amount
realized on the sale and its adjusted tax basis in the securities sold or
redeemed. A holder's adjusted tax basis in the Capital Securities generally will
be its initial purchase price increased by OID previously includable in such
holder's gross income to the date of disposition (and the accrual of market
discount, if any, if an election to accrue market discount in income currently
is made) and decreased by payments received on the Capital Securities. Except to
the extent noted above and subject to the market discount rules of the Code, any
such gain or loss generally will be long-term capital gain or loss if the
Capital Securities were held for more than one year.
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 Debentures. A holder who disposes of its Capital Securities
between record dates for payments of distributions thereon will be required to
include accrued but unpaid interest on the Junior Subordinated Debentures
through the date of disposition in income as ordinary income (i.e., OID), and to
add such amount to its adjusted tax basis in its Capital Securities disposed of.
To the extent the selling price (which may not fully reflect the value of
accrued but unpaid interest) is less than such holder's adjusted tax basis
(which will include accrued OID, including all accrued but unpaid interest), a
holder will recognize a capital loss. Subject to certain limited exceptions,
capital losses cannot be applied to offset ordinary income for United States
Federal income tax purposes.
BACKUP WITHHOLDING TAX AND INFORMATION REPORTING
Subject to the qualifications discussed below, income on the Capital
Securities will be reported to holders on Forms 1099, which forms are expected
to be mailed to holders of Capital Securities by January 31 following each
calendar year.
The Trust will be obligated to report annually to Cede & Co., as
holder of record of the Capital Securities, the interest (or OID) related to the
Junior Subordinated Debentures for that year. The Trust currently intends to
report such information on Form 1099 prior to January 31 following each calendar
year even though the Trust is not legally required to report to record holders
until April 15 following each calendar year. The Initial Purchasers have
indicated to the Trust that, to the extent that they hold Capital Securities as
nominees for beneficial holders, they currently expect to report to such
beneficial holders on Forms 1099 by January 31 following each calendar year.
Under current law, holders of Capital Securities who hold as nominees for
beneficial holders will not have any obligation to report information regarding
the beneficial holders to the Trust. The Trust, moreover, will not have any
obligation to report to beneficial holders who are not also record holders.
Thus, beneficial holders of Capital Securities who hold their Capital Securities
through the Initial Purchasers will receive Forms 1099 reflecting the income on
their Capital Securities from such nominee holders rather than the Trust.
Payments made on, and proceeds from the sale of, the Capital
Securities may be subject to a "backup" withholding tax of 31% unless the holder
complies with certain identification requirements. Any withheld amounts will be
allowed as a credit against the holder's Federal income tax liability, provided
the required information is provided to the IRS.
80
<PAGE>
PROPOSED TAX LEGISLATION
On February 6, 1997, President Clinton submitted to Congress the
Proposal to implement certain tax legislation that would, as explained in the
Joint Committee Description, generally deny interest deductions for interest on
an instrument which (a) is issued by a corporation, (b) has a maximum term of
more than 15 years and (c) is not shown as indebtedness on the separate balance
sheet of the issuer (or, if the instrument is issued to a related party other
than a corporation and the holder or some other related party issues a related
instrument, such instrument is not shown as indebtedness on the issuer's
consolidated balance sheet). If such provision were to apply to the Junior
Subordinated Debentures, the Company would be unable to deduct interest on the
Junior Subordinated Debentures, which under current law, the Company believes it
will be able to deduct. However, as explained in the Joint Committee
Description, legislation enacted under the Proposal would be effective generally
for instruments issued on or after the date of first congressional committee
action on the Proposal. There can be no assurance that the Proposal will not
result in legislation having a retroactive effect and applicable to the Junior
Subordinated Debentures. Furthermore, there can be no assurance that other
legislation enacted after the date hereof will not otherwise adversely affect
the ability of the Company to deduct the interest payable on the Junior
Subordinated Debentures. Accordingly, there can be no assurance that the
Proposal or any other such legislation will not result in a Tax Event, which
would permit the Company to cause a redemption of the Capital Securities before,
as well as after, June 30, 2007. See "Description of Capital Securities --
Redemption" and "Description of Junior Subordinated Debentures -- Special Event
Prepayment."
THE UNITED STATES FEDERAL INCOME TAX DISCUSSION SET FORTH ABOVE IS
INCLUDED FOR GENERAL INFORMATION ONLY AND MAY NOT BE APPLICABLE DEPENDING UPON A
HOLDER'S PARTICULAR SITUATION. HOLDERS SHOULD CONSULT THEIR TAX ADVISORS WITH
RESPECT TO THE TAX CONSEQUENCES TO THEM OF THE PURCHASE, OWNERSHIP AND
DISPOSITION OF THE CAPITAL SECURITIES, INCLUDING THE TAX CONSEQUENCES UNDER
STATE, LOCAL, FOREIGN AND OTHER TAX LAWS AND THE POSSIBLE EFFECTS OF CHANGES IN
UNITED STATES FEDERAL OR OTHER TAX LAWS.
ERISA CONSIDERATIONS
The Company, the obligor with respect to the Junior Subordinated
Debentures held by the Trust, and the Property Trustee may be considered a
"PARTY IN INTEREST" (within the meaning of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA")) or a "DISQUALIFIED PERSON" (within
the meaning of Section 4975 of the Code) with respect to many Plans and Plan
Asset Entities. Any purchaser proposing to acquire Capital Securities with
assets of any Plan or Plan Asset Entity should consult with its counsel,
particularly with respect to the applicability of the prohibited transaction
provisions of ERISA and Section 4975 of the Code. The purchase and/or holding of
Capital Securities by a Plan or Plan Asset Entity that is subject to the
fiduciary responsibility provisions of ERISA or the prohibited transaction
provisions of Section 4975 of the Code (including individual retirement
arrangements and other plans described in Section 4975(e)(1) of the Code) and
with respect to which the Company or the Property Trustee is a service provider
(or otherwise is a party in interest or a disqualified person) may constitute or
result in a prohibited transaction under ERISA or Section 4975 of the Code,
unless such Capital Securities are acquired pursuant to and in accordance with
an
81
<PAGE>
applicable exemption, such as Prohibited Transaction Class Exemption ("PTCE")
84-14 (an exemption for certain transactions determined by an independent
qualified professional asset manager), PTCE 91-38 (an exemption for certain
transactions involving bank collective investment funds), PTCE 90-1 (an
exemption for certain transactions involving insurance company pooled separate
accounts), PTCE 95-60 (an exemption for transactions involving certain insurance
company general accounts) or PTCE 96-23 (an exception for certain transactions
determined by an in-house asset manager). In addition, a Plan fiduciary
considering the purchase of Capital Securities should be aware that the assets
of the Trust may be considered "plan assets" for ERISA purposes. In such event,
service providers with respect to the assets of the Trust may become parties in
interest or disqualified persons with respect to investing Plans or Plan Asset
Entities, and any discretionary authority exercised with respect to the Junior
Subordinated Debentures by such persons could be deemed to constitute a
prohibited transaction under ERISA or the Code. In order to avoid such
prohibited transactions, each investing Plan or Plan Asset Entity, by purchasing
the Capital Securities, will be deemed to have directed the Trust to invest in
the Junior Subordinated Debentures and to have appointed the Property Trustee.
A Plan fiduciary should consider whether the purchase of Capital
Securities could result in a delegation of fiduciary authority to the Property
Trustee, and, if so, whether such a delegation of authority is permissible under
the Plan's governing instrument or any investment management agreement with the
Plan. In making such determination, a Plan fiduciary should note that the
Property Trustee is a U.S. bank qualified to be an investment manager (within
the meaning of section 3(38) of ERISA) to which such delegation of authority
generally would be permissible under ERISA. Further, prior to an Event of
Default with respect to the Junior Subordinated Debentures, the Property Trustee
will have only limited custodial and ministerial authority with respect to Trust
assets.
PLAN OF DISTRIBUTION
Each broker-dealer that receives New Capital Securities for its own
account pursuant to the Exchange Offer must acknowledge that it will deliver a
prospectus in connection with any resale of such New Capital Securities. This
Prospectus, as it may be amended or supplemented from time to time, may be used
by a broker-dealer in connection with resales of New Capital Securities received
in exchange for Old Capital Securities where such Old Capital Securities were
acquired as a result of market-making activities or other trading activities.
The Company and the Trust have agreed that, starting on the date on which the
Exchange Offer is consummated and ending on the close of business 90 days after
such date, they will make this Prospectus, as amended or supplemented, available
to any broker-dealer for use in connection with any such resale. In addition,
until ________, 1997, all dealers effecting transactions in the New Capital
Securities may be required to deliver a prospectus.
The Company and the Trust will not receive any proceeds from any sale
of New Capital Securities by broker-dealers. New Capital Securities received by
broker-dealers for their own account pursuant to the Exchange Offer may be sold
from time to time in one or more transactions in the over-the-counter market, in
negotiated transactions, through the writing of options on the New Capital
Securities or a combination of such methods of resale, at market prices
prevailing at the time of resale, at prices related to such prevailing market
prices or negotiated prices. Any such resale may be made directly to purchasers
or to or through brokers or dealers who may receive compensation in the form of
commissions or concessions from any such broker-dealer
82
<PAGE>
and/or the purchasers of any such New Capital Securities. Any broker-dealer that
resells New Capital Securities that were received by it for its own account
pursuant to the Exchange Offer and any broker or dealer that participates in a
distribution of such New Capital Securities may be deemed to be an "underwriter"
within the meaning of the Securities Act and any profit on any such resale of
New Capital Securities and any commissions or concessions received by an such
persons may be deemed to be underwriting compensation under the Securities Act.
The Letter of Transmittal states that by acknowledging that it will deliver and
by delivering a prospectus, a broker-dealer will not be deemed to admit that it
is an "underwriter" within the meaning of the Securities Act.
For a period of 90 days after the date on which the Exchange Offer is
consummated, the Company and the Trust will promptly send additional copies of
this Prospectus and any amendment or supplement to this Prospectus to any
broker-dealer that requests such documents in the Letter of Transmittal. The
Company has agreed to pay all expenses incident to the Exchange Offer (including
the expenses of one counsel for the holders of the Old Capital Securities) other
than commissions or concessions of any brokers or dealers and will indemnify the
holders of the Old Capital Securities (including any broker-dealers) against
certain liabilities, including liabilities under the Securities Act.
LEGAL MATTERS
Certain matters of Delaware law relating to the validity of the New
Capital Securities and the creation of the Trust will be passed upon on behalf
of the Company and the Trust by Richards, Layton & Finger P.A., special Delaware
counsel to the Company and the Trust. The validity under New York law of the New
Junior Subordinated Debentures and the New Guarantee will be passed upon for the
Company and the Trust by Weil, Gotshal & Manges LLP (a limited liability
partnership including professional corporations), New York, New York. Certain
United States federal income tax matters have been, and will be in connection
with the Exchange Offer, passed upon for the Company and the Trust by Weil,
Gotshal & Manges LLP.
EXPERTS
The consolidated financial statements of the Company as of December
31, 1996 and 1995 and for each of the years in the three-year period ended
December 31, 1996, incorporated by reference herein, have been audited by KPMG
Peat Marwick LLP, independent auditors, as indicated in their report with
respect thereto, and are incorporated by reference herein in reliance upon the
authority of said firm as experts in accounting and auditing.
83
<PAGE>
<TABLE>
<S> <C>
================================================================ ==========================================================
NO DEALER, SALESPERSON OR OTHER INDIVIDUAL HAS BEEN
AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN CONTAINED OR IMPERIAL CAPITAL TRUST I
INCORPORATED BY REFERENCE IN THIS PROSPECTUS OR THE
ACCOMPANYING LETTER OF TRANSMITTAL, AND, IF GIVEN
OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST
NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY $75,000,000
IMPERIAL BANCORP OR IMPERIAL CAPITAL TRUST I.
NEITHER THE DELIVERY OF THIS PROSPECTUS OR THE
ACCOMPANYING LETTER OF TRANSMITTAL NOR ANY SALE
MADE HEREUNDER AND THEREUNDER SHALL UNDER ANY 9.98% CAPITAL SECURITIES
CIRCUMSTANCE CREATE AN IMPLICATION THAT THERE HAS
NOT BEEN ANY CHANGE IN THE AFFAIRS OF IMPERIAL
BANCORP OR IMPERIAL CAPITAL TRUST I SINCE THE DATE
HEREOF. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR FULLY AND UNCONDITIONALLY GUARANTEED,
THE ACCOMPANYING LETTER OF TRANSMITTAL CONSTITUTES TO THE EXTENT DESCRIBED HEREIN, BY
AN OFFER OR SOLICITATION BY ANYONE IN ANY STATE IN
WHICH SUCH OFFER OR SOLICITATION IS NOT AUTHORIZED OR
IN WHICH THE PERSON MAKING SUCH OFFER IS NOT
QUALIFIED TO DO SO OR TO ANYONE TO WHOM IT IS
UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION. IMPERIAL BANCORP
TABLE OF CONTENTS
PAGE -----------------
Available Information...................................1 PROSPECTUS
Incorporation of Certain Documents by
Reference.............................................2 -----------------
Summary.................................................3
Risk Factors...........................................11
Imperial Bancorp.......................................18
Use of Proceeds........................................21
Ratios of Earnings to Fixed Charges....................22
Capitalization.........................................23
Selected Consolidated Financial Data
of Imperial Bancorp..................................24
Pro Forma Financial Information........................28
Security Ownership of Certain Beneficial
Owners and Management................................33
The Exchange Offer.....................................35
The Trust..............................................46 ________ __, 1997
Description of Capital Securities......................47
Description of Junior Subordinated
Debentures...........................................60
Description of the Guarantee...........................72
Relationship Among the Capital Securities,
the Junior Subordinated Debentures
and the Guarantee....................................75
Certain Federal Income Tax Considerations..............77
ERISA Considerations...................................81
Plan of Distribution...................................82
Legal Matters..........................................83
Experts................................................83
================================================================ ==========================================================
</TABLE>
<PAGE>
PART II - INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Article V of the Articles of Incorporation of the Company provides
that the liability of directors of the Company for monetary damages shall be
eliminated to the fullest extent permissible under California law. Article V
also provides that the Company is authorized to provide indemnification of
agents (as defined in Section 317 of the California Corporations Code) through
bylaw provisions, agreements with agents, vote of shareholders or disinterested
directors, or otherwise, in excess of the indemnification otherwise permitted by
Section 317 of the California Corporations Code, subject only to the applicable
limits set forth in Section 204 of the California Corporations Code.
Article III, Section 16 of the Bylaws of the Company provides
generally that the board of directors may authorize the Company to indemnify
officers, directors, agents and employees of the Company to the fullest extent
permitted by the California Corporations Code.
Pursuant to Section 317 of the California Corporations Code, a
corporation generally has the power to indemnify its present and former
directors, officers, employees and agents against expenses incurred by them in
connection with any suit to which they are, or are threatened to be made, a
party by reason of their serving in such positions so long as they acted in good
faith and in a manner they reasonably believed to be in, or not opposed to, the
best interests of a corporations, and with respect to any criminal action, they
had no reasonable cause to believe their conduct was unlawful. With respect to
suits by or in the right of a corporation, however, indemnification is not
available if such person is adjudged to be liable to the corporation in the
performance of his duty to the corporation or its shareholders unless the court
determines that indemnification is appropriate. In addition, a corporation has
the power to purchase and maintain insurance for such persons. The statute also
expressly provides that the power to indemnify authorized thereby is not
exclusive of any rights granted under any bylaw, agreement, vote of stockholders
or disinterested directors, or otherwise.
The Company also currently maintains an insurance policy that insures
its directors and officers against liability for certain acts and omissions
while acting in their official capacities.
ITEM 21. EXHIBITS.
EXHIBIT NO. DESCRIPTION OF EXHIBIT
4.1 Indenture, dated as of April 23, 1997, between the Company and The
Chase Manhattan Bank, as Trustee.
4.2 Form of Junior Subordinated Deferrable Interest Debenture (included
in the Indenture filed as Exhibit 4.1 to this Registration
Statement).
II-1
<PAGE>
4.3 Certificate of Trust of Imperial Capital Trust I dated April 8, 1997.
4.4 Amended and Restated Declaration of Trust of Imperial Capital Trust I
(the "Trust"), dated as of April 23, 1997, among the Company, as
sponsor, the Administrative Trustees party thereto, Chase Manhattan
Bank Delaware, as Delaware Trustee, The Chase Manhattan Bank, as
Property Trustee and the holders from time to time of undivided
interests in the assets of the Trust.
4.5 Form of Capital Security Certificate for the Trust (included in the
Declaration filed as Exhibit 4.4 to this Registration Statement).
4.6 Capital Securities Guarantee Agreement, dated as of April 23, 1997,
between the Company and The Chase Manhattan Bank, as Guarantee
Trustee.
4.7 Registration Rights Agreement, dated April 23, 1997, among the
Company, the Trust and Keefe, Bruyette & Woods, Inc., as
Representative of the Initial Purchasers.
5.1 Opinion of Richards, Layton & Finger as to validity of the New
Capital Securities.**
5.2 Opinion of Weil, Gotshal & Manges LLP as to validity of the New
Junior Subordinated Debentures and the New Guarantee to be issued by
the Company.**
8 Opinion of Weil, Gotshal & Manges LLP as to certain federal income
tax matters.**
12 Statement of Computation of Ratios of Earnings to Fixed Charges.
23.1 Consent of KPMG Peat Marwick LLP.
23.2 Consent of Richards, Layton & Finger (included in the opinion filed
as Exhibit 5.1 to this Registration Statement).**
23.3 Consent of Weil, Gotshal & Manges LLP (included in the opinion filed
as Exhibit 5.2 to this Registration Statement).**
23.4 Consent of Weil, Gotshal & Manges LLP (included in the opinion filed
as Exhibit 8 to this Registration Statement).**
24 Powers of Attorney (included on signature page of this Part II).
25.1 Form T-1 Statement of Eligibility of The Chase Manhattan Bank to act
as trustee under the Indenture.**
25.2 Form T-1 Statement of Eligibility of The Chase Manhattan Bank to act
as trustee under the Declaration.**
- ----------------------
** To be filed by amendment
II-2
<PAGE>
25.3 Form T-1 Statement of Eligibility of The Chase Manhattan Bank to act
as trustee under the Guarantee.**
99.1 Form of Letter of Transmittal.**
99.2 Form of Notice of Guaranteed Delivery.**
99.3 Form of Exchange Agent Agreement.**
ITEM 22. UNDERTAKINGS.
Each of the undersigned registrants hereby undertakes that,
for purposes of determining any liability under the Securities Act of 1933, as
amended, each filing of a Registrant's annual report pursuant to Section 13 (a)
or Section 15(d) of the Securities Exchange Act of 1934 that is incorporated by
reference in this Registration Statement shall be deemed to be a new
registration statement relating to the securities offered herein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
Insofar as indemnification for liabilities arising under
the Securities Act of 1933 may be permitted to directors, officers and
controlling persons of a registrant pursuant to the foregoing provisions, or
otherwise each of the undersigned registrants has been advised that in the
opinion of the Securities and Exchange Commission such indemnification is
against public policy as expressed in the Act and is, therefore, unenforceable.
In the event that a claim for indemnification against such liabilities (other
than the payment by a registrant of expenses incurred 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, each of the undersigned
registrants will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate jurisdiction
the question whether such indemnification by it is against public policy as
expressed in the Act and will be governed by the final adjudication of such
issue.
Each of the undersigned registrants hereby undertakes to
respond to requests for information that is incorporated by reference into the
prospectus pursuant to Items 4, 10(b), 11 or 13 of this Form within one business
day of receipt of such request, and to send the incorporated documents by first
class mail or other equally prompt means. This includes information contained in
documents filed subsequent to the effective date of the registration statement
through the date of responding to the request.
Each of the undersigned registrants hereby undertake to
supply by means of a post-effective amendment all information concerning a
transaction, and the company being acquired involved therein, that was not the
subject of and included in the registration statement when it became effective.
II-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933,
the registrant has duly caused this Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Inglewood,
State of California, on this 12th day of May 1997.
IMPERIAL BANCORP
By: /s/ George L. Graziadio
---------------------------------
George L. Graziadio, Jr.
Chief Executive Officer
KNOW ALL MEN BY THESE PRESENTS, that each person whose
signature appears below constitutes and appoints Robert M. Franko and Richard M.
Baker, each of them, with full power to act without the other, such person's
true and lawful attorney-in-fact and agent, with full power of substitution and
resubstitution, for such person and in such person's name, place and stead, in
any and all capacities, to sign any or all amendments to this Registration
Statement, and to file the same, with all exhibits thereto and other documents
in connection therewith, with the Securities and Exchange Commission, granting
unto said attorneys-in-fact and agents, and each of them, full power and
authority to do and perform each and every act and thing requisite and necessary
to be done in and about the premises, as fully to all intents and purposes as he
or she might or could do in person, hereby ratifying and confirming all that
said attorneys-in-fact and agents, or either of them, or their or such person's
substitute or substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons on behalf
of the registrant and in the capacities indicated, on the date set forth above.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/s/ George L. Graziadio Chairman of the Board, President and Chief May 12, 1997
- -------------------------------------- Executive Officer (Principal Executive Officer)
George L. Graziadio, Jr.
/s/ Christine M. McCarthy Executive Vice President and Chief Financial May 12, 1997
- -------------------------------------- Officer
Christine M. McCarthy (Principal Financial Officer)
/s/ Karen C. Abajian Senior Vice President and Controller May 12, 1997
- -------------------------------------- (Principal Accounting Officer)
Karen C. Abajian
II-4
<PAGE>
/s/ Norman P. Creighton Director May 12, 1997
- --------------------------------------
Norman P. Creighton
/s/ Richard K. Eamer Director May 12, 1997
- --------------------------------------
Richard K. Eamer
/s/ M. Norvel Young Director May 12, 1997
- --------------------------------------
M. Norvel Young
/s/ Lee E. Mikles Director May 12, 1997
- --------------------------------------
Lee E. Mikles
</TABLE>
II-5
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933,
Imperial Capital Trust I has duly caused this Registration Statement to be
signed on its behalf by the undersigned, thereunto duly authorized, in the City
of Inglewood, State of California on this 12th day of May 1997.
IMPERIAL CAPITAL TRUST I
By: /s/ Robert M. Franko
-----------------------------------
Robert M. Franko
Administrative Trustee
By: /s/ Richard M. Baker
-----------------------------------
Richard M. Baker
Administrative Trustee
II-6
<PAGE>
EXHIBIT INDEX
-------------
EXHIBIT NO. DESCRIPTION OF EXHIBIT
- ----------- ----------------------
4.1 Indenture, dated as of April 23, 1997, between the Company and The
Chase Manhattan Bank, as Trustee.
4.2 Form of Junior Subordinated Deferrable Interest Debenture (included
in the Indenture filed as Exhibit 4.1 to this Registration
Statement).
4.3 Certificate of Trust of Imperial Capital Trust I dated April 8, 1997.
4.4 Amended and Restated Declaration of Trust of Imperial Capital Trust I
(the "Trust"), dated as of April 23, 1997, among the Company, as
sponsor, the Administrative Trustees party thereto, Chase Manhattan
Bank Delaware, as Delaware Trustee, The Chase Manhattan Bank, as
Property Trustee and the holders from time to time of undivided
interests in the assets of the Trust.
4.5 Form of Capital Security Certificate for the Trust (included in the
Declaration filed as Exhibit 4.4 to this Registration Statement).
4.6 Capital Securities Guarantee Agreement, dated as of April 23, 1997,
between the Company and The Chase Manhattan Bank, as Guarantee
Trustee.
4.7 Registration Rights Agreement, dated April 23, 1997, among the
Company, the Trust and Keefe, Bruyette & Woods, Inc., as
Representative of the Initial Purchasers.
5.1 Opinion of Richards, Layton & Finger as to validity of the New
Capital Securities.**
5.2 Opinion of Weil, Gotshal & Manges LLP as to validity of the New
Junior Subordinated Debentures and the New Guarantee to be issued by
the Company.**
8 Opinion of Weil, Gotshal & Manges LLP as to certain federal income
tax matters.**
12 Statement of Computation of Ratios of Earnings to Fixed Charges.
23.1 Consent of KPMG Peat Marwick LLP.
23.2 Consent of Richards, Layton & Finger (included in the opinion filed
as Exhibit 5.1 to this Registration Statement).**
23.3 Consent of Weil, Gotshal & Manges LLP (included in the opinion filed
as Exhibit 5.2 to this Registration Statement).**
23.4 Consent of Weil, Gotshal & Manges LLP (included in the opinion filed
as Exhibit 8 to this Registration Statement).**
24 Powers of Attorney (included on signature page of this Part II).
25.1 Form T-1 Statement of Eligibility of The Chase Manhattan Bank to act
as trustee under the Indenture.**
25.2 Form T-1 Statement of Eligibility of The Chase Manhattan Bank to act
as trustee under the Declaration.**
- ----------------------
** To be filed by amendment
<PAGE>
25.3 Form T-1 Statement of Eligibility of The Chase Manhattan Bank to act
as trustee under the Guarantee.**
99.1 Form of Letter of Transmittal.**
99.2 Form of Notice of Guaranteed Delivery.**
99.3 Form of Exchange Agent Agreement.**
- ----------------------
** To be filed by amendment
EXECUTION COPY
================================================================================
IMPERIAL BANCORP
------------------------------
------------------------------
INDENTURE
DATED AS OF APRIL 23, 1997
------------------------------
THE CHASE MANHATTAN BANK
AS TRUSTEE
------------------------------
JUNIOR SUBORDINATED DEFERRABLE INTEREST DEBENTURES
================================================================================
<PAGE>
TIE-SHEET
of provisions of Trust Indenture Act of 1939 with Indenture dated as of April
23, 1997 between Imperial Bancorp and The Chase Manhattan Bank, as Trustee:
ACT SECTION INDENTURE SECTION
310(a)(1)..................................................................6.9
(a)(2) .................................................................6.9
310(a)(3)..................................................................N/A
(a)(4)..................................................................N/A
310(a)(5)...........................................................6.10, 6.11
310(b).....................................................................N/A
310(c)....................................................................6.13
311(a) and (b).............................................................N/A
311(c).............................................................4.1, 4.2(a)
312(a).....................................................................4.2
312(b) and (c).............................................................4.4
313(a).....................................................................4.4
313(b)(1)..................................................................4.4
313(b)(2)..................................................................4.4
313(c).....................................................................4.4
313(d).....................................................................4.4
314(a).....................................................................4.3
314(b).....................................................................N/A
314(c)(1) and (2)..........................................................6.7
314(c)(3)..................................................................N/A
314(d) ....................................................................N/A
314(e).....................................................................6.7
314(f) ....................................................................N/A
315(a)(c) and (d)..........................................................6.1
315(b) ....................................................................5.8
315(e) ....................................................................5.9
316(a)(1) .................................................................5.7
316(a)(2) .................................................................N/A
316(a) last sentence ......................................................2.9
316(b) ....................................................................9.2
317(a) ....................................................................5.5
317(b) ....................................................................6.5
318(a) ...................................................................13.8
- -------------------
THIS TIE-SHEET IS NOT PART OF THE INDENTURE AS EXECUTED.
i
<PAGE>
TABLE OF CONTENTS
ARTICLE I
DEFINITIONS.................................................................. 1
SECTION 1.1. Definitions............................................ 1
ARTICLE II
SECURITIES................................................................... 12
SECTION 2.1. Forms Generally........................................ 12
SECTION 2.2. Execution and Authentication........................... 12
SECTION 2.3. Form and Payment....................................... 12
SECTION 2.4. Legends................................................ 13
SECTION 2.5. Global Security........................................ 13
SECTION 2.6. Interest............................................... 15
SECTION 2.7. Transfer and Exchange.................................. 15
SECTION 2.8. Replacement Securities................................. 17
SECTION 2.9. [Intentionally Omitted]................................ 18
SECTION 2.10. Temporary Securities.................................. 18
SECTION 2.11. Cancellation.......................................... 18
SECTION 2.12. Defaulted Interest.................................... 19
SECTION 2.13. CUSIP Numbers......................................... 19
ARTICLE III
PARTICULAR COVENANTS OF THE COMPANY.......................................... 20
SECTION 3.1. Payment of Principal, Premium and Interest............. 20
SECTION 3.2. Offices for Notices and Payments, Etc.................. 20
SECTION 3.3. Appointments to Fill Vacancies in Trustee's Offi....... 21
SECTION 3.4. Provision as to Paying Agent........................... 21
SECTION 3.5. Certificate to Trustee................................. 22
SECTION 3.6. Compliance with Consolidation Provisions............... 22
SECTION 3.7. Limitation on Dividends................................ 22
SECTION 3.8. Covenants as to Imperial Capital Trust................. 23
SECTION 3.9. Payment of Expenses.................................... 23
SECTION 3.10. Payment Upon Resignation or Removal................... 24
ARTICLE IV
SECURITYHOLDERS' LISTS AND REPORTS BY THE
COMPANY AND THE TRUSTEE...................................................... 25
SECTION 4.1. Securityholders' Lists................................. 25
ii
<PAGE>
SECTION 4.2. Preservation and Disclosure of Lists.................. 25
SECTION 4.3. Reports by Company.................................... 26
SECTION 4.4. Reports by the Trustee................................ 27
ARTICLE V
REMEDIES OF THE TRUSTEE AND SECURITYHOLDERS
ON EVENT OF DEFAULT......................................................... 28
SECTION 5.1. Events of Default..................................... 28
SECTION 5.2. Payment of Securities on Default; Suit Therefor....... 30
SECTION 5.3. Application of Moneys Collected by Trustee............ 31
SECTION 5.4. Proceedings by Securityholders........................ 32
SECTION 5.5. Proceedings by Trustee................................ 33
SECTION 5.6. Remedies Cumulative and Continuing.................... 33
SECTION 5.7. Direction of Proceedings and Waiver of Defaults by
Majority of Securityholders..................................... 34
SECTION 5.8. Notice of Defaults.................................... 34
SECTION 5.9. Undertaking to Pay Costs.............................. 35
ARTICLE VI
CONCERNING THE TRUSTEE...................................................... 35
SECTION 6.1. Duties and Responsibilities of Trustee................ 35
SECTION 6.2. Reliance on Documents, Opinions, Etc.................. 36
SECTION 6.3. No Responsibility for Recitals, Etc................... 38
SECTION 6.4. Trustee, Authenticating Agent, Paying Agents,
Transfer Agents or Registrar May Own Securities................. 38
SECTION 6.5. Moneys to be Held in Trust............................ 38
SECTION 6.6. Compensation and Expenses of Trustee.................. 38
SECTION 6.7. Officers' Certificate as Evidence..................... 39
SECTION 6.8. Conflicting Interest of Trustee....................... 39
SECTION 6.9. Eligibility of Trustee................................ 40
SECTION 6.10. Resignation or Removal of Trustee.................... 40
SECTION 6.11. Acceptance by Successor Trustee...................... 41
SECTION 6.12. Succession by Merger, Etc............................ 42
SECTION 6.13. Limitation on Rights of Trustee as a Creditor........ 42
SECTION 6.14. Authenticating Agents................................ 43
ARTICLE VII
CONCERNING THE SECURITYHOLDERS.............. 44
SECTION 7.1. Action by Securityholders............................. 44
SECTION 7.2. Proof of Execution by Securityholders................. 45
iii
<PAGE>
SECTION 7.3. Who Are Deemed Absolute Owners......................... 45
SECTION 7.4. Securities Owned by Company Deemed Not Outstanding..... 45
SECTION 7.5. Revocation of Consents; Future Holders Bound........... 46
ARTICLE VIII
SECURITYHOLDERS' MEETINGS................. 46
SECTION 8.1. Purposes of Meetings................................... 46
SECTION 8.2. Call of Meetings by Trustee............................ 47
SECTION 8.3. Call of Meetings by Company or Securityholders......... 47
SECTION 8.4. Qualifications for Voting.............................. 47
SECTION 8.5. Regulations............................................ 47
SECTION 8.6. Voting................................................. 49
ARTICLE IX
AMENDMENTS................................................................... 49
SECTION 9.1. Without Consent of Securityholders..................... 49
SECTION 9.2. With Consent of Securityholders........................ 51
SECTION 9.3. Compliance with Trust Indenture Act; Effect of
Supplemental Indentures.......................................... 52
SECTION 9.4. Notation on Securities................................. 52
SECTION 9.5. Evidence of Compliance of Supplemental Indenture
to be Furnished to the Trustee................................... 52
ARTICLE X
CONSOLIDATION, MERGER, SALE, CONVEYANCE AND LEASE............................ 53
SECTION 10.1. Company May Consolidate, Etc., on Certain Terms....... 53
SECTION 10.2. Successor Corporation to be Substituted for Company... 53
SECTION 10.3. Opinion of Counsel to be Given Trustee................ 54
ARTICLE XI
SATISFACTION AND DISCHARGE OF INDENTURE...................................... 54
SECTION 11.1. Discharge of Indenture................................ 54
SECTION 11.2. Deposited Moneys and U.S. Government Obligations to be
Held in Trust by Trustee......................................... 55
SECTION 11.3. Paying Agent to Repay Moneys Held..................... 55
SECTION 11.4. Return of Unclaimed Moneys............................ 55
SECTION 11.5. Defeasance Upon Deposit of Moneys or U.S. Government
Obligations...................................................... 56
iv
<PAGE>
ARTICLE XII
IMMUNITY OF INCORPORATORS, STOCKHOLDERS,
OFFICERS AND DIRECTORS....................................................... 57
SECTION 12.1. Indenture and Securities Solely Corporate Obligations. 57
ARTICLE XIII
MISCELLANEOUS PROVISIONS..................................................... 58
SECTION 13.1. Successors............................................ 58
SECTION 13.2. Official Acts by Successor Corporation................ 58
SECTION 13.3. Surrender of Company Powers........................... 58
SECTION 13.4. Addresses for Notices, Etc............................ 58
SECTION 13.5. Governing Law......................................... 59
SECTION 13.6. Evidence of Compliance with Conditions Precedent...... 59
SECTION 13.7. Business Days......................................... 59
SECTION 13.8. Trust Indenture Act to Control........................ 59
SECTION 13.9. Table of Contents, Headings, Etc...................... 60
SECTION 13.10. Execution in Counterparts............................ 60
SECTION 13.11. Separability......................................... 60
SECTION 13.12. Assignment........................................... 60
SECTION 13.13. Acknowledgment of Rights............................. 60
ARTICLE XIV
REDEMPTION OF SECURITIES -- MANDATORY AND
OPTIONAL SINKING FUND........................................................ 61
SECTION 14.1. Special Event Redemption.............................. 61
SECTION 14.2. Optional Redemption by Company........................ 61
SECTION 14.3. No Sinking Fund....................................... 62
SECTION 14.4. Notice of Redemption; Selection of Securities......... 63
SECTION 14.5. Payment of Securities Called for Redemption........... 64
ARTICLE XV
SUBORDINATION OF SECURITIES................ 64
SECTION 15.1. Agreement to Subordinate.............................. 64
SECTION 15.2. Default on Senior Indebtedness........................ 65
SECTION 15.3. Liquidation; Dissolution; Bankruptcy.................. 65
SECTION 15.4. Subrogation........................................... 66
SECTION 15.5. Trustee to Effectuate Subordination................... 67
SECTION 15.6. Notice by the Company................................. 67
SECTION 15.7. Rights of the Trustee; Holders of Senior Indebtedness. 69
v
<PAGE>
SECTION 15.8. Subordination May Not Be Impaired.................... 69
ARTICLE XVI
EXTENSION OF INTEREST PAYMENT PERIOD........... 70
SECTION 16.1. Extension of Interest Payment Period................. 70
SECTION 16.2. Notice of Extension.................................. 70
vi
<PAGE>
THIS INDENTURE, dated as of April 23, 1997, between Imperial Bancorp, a
California corporation (hereinafter sometimes called the "Company"), and The
Chase Manhattan Bank, a New York banking corporation, as trustee (hereinafter
sometimes called the "Trustee"),
W I T N E S S E T H :
In consideration of the premises, and the purchase of the Securities by
the holders thereof, the Company covenants and agrees with the Trustee for the
equal and proportionate benefit of the respective holders from time to time of
the Securities, as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1. Definitions.
The terms defined in this Section 1.1 (except as herein otherwise
expressly provided or unless the context otherwise requires) for all purposes of
this Indenture shall have the respective meanings specified in this Section 1.1.
All other terms used in this Indenture which are defined in the Trust Indenture
Act of 1939, as amended (the "Trust Indenture Act"), or which are by reference
therein defined in the Securities Act, shall (except as herein otherwise
expressly provided or unless the context otherwise requires) have the meanings
assigned to such terms in said Trust Indenture Act and in said Securities Act as
in force at the date of this Indenture as originally executed. The following
terms have the meanings given to them in the Declaration: (i) Clearing Agency;
(ii) Delaware Trustee; (iii) Property Trustee; (iv) Administrative Trustees; (v)
Direct Action; (vi) Purchase Agreement; (vii) Distributions; (viii) Series A
Capital Securities; (ix) Series B Capital Securities and (x) the Private
Exchange Capital Securities. All accounting terms used herein and not expressly
defined shall have the meanings assigned to such terms in accordance with
generally accepted accounting principles and the term "generally accepted
accounting principles" means such accounting principles as are generally
accepted at the time of any computation. The words "herein", "hereof" and
"hereunder" and other words of similar import refer to this Indenture as a whole
and not to any particular Article, Section or other subdivision. Headings are
used for convenience of reference only and do not affect interpretation. The
singular includes the plural and vice versa.
"Additional Interest" shall have the meaning set forth in Section
2.6(c).
"Adjusted Treasury Rate" means, with respect to any redemption date, the
rate per annum equal to (i) the yield, under the heading which represents the
average for the immediately prior week, appearing in the most recently published
statistical release designated "H.15 (519)" or any successor publication which
is published weekly by the Federal Reserve
1
<PAGE>
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 Initial Optional Redemption
Date (if no maturity is within three months before or after the Initial Optional
Redemption Date, yields for the two published maturities most closely
corresponding to the Initial Optional Redemption Date shall be interpolated, and
the Adjusted Treasury Rate shall be interpolated or extrapolated from such
yields on a straight-line basis, rounding to the nearest month) or (ii) if such
release (or any successor release) is not published during the week preceding
the calculation date or does not contain such yields, the rate per annum equal
to the semi-annual equivalent yield to maturity of the Comparable Treasury
Issue, assuming a price for the Comparable Treasury Issue (expressed as a
percentage of its principal amount) equal to the Comparable Treasury Price for
such redemption date plus, in each case, (a) 2.625% if such redemption date
occurs on or prior to April 23, 1998, and (b) 1.875% in all other cases.
"Affiliate" means, with respect to a specified Person, (a) any Person
directly or indirectly owning, controlling or holding the power to vote 10% or
more of the outstanding voting securities or other ownership interests of the
specified Person, (b) any Person 10% or more of whose outstanding voting
securities or other ownership interests are directly or indirectly owned,
controlled or held with power to vote by the specified Person, (c) any Person
directly or indirectly controlling, controlled by, or under common control with
the specified Person, (d) a partnership in which the specified Person is a
general partner, (e) any officer or director of the specified Person, and (f) if
the specified Person is an individual, any entity of which the specified Person
is an officer, director or general partner.
"Allocable Amounts," when used with respect to any Senior Indebtedness,
means all amounts due or to become due on such Senior Indebtedness less, if
applicable, any amount which would have been paid to, and retained by, the
holders of such Senior Indebtedness (whether as a result of the receipt of
payments by the holders of such Senior Indebtedness from the Company or any
other obligor thereon or from any holders of, or trustee in respect of, other
indebtedness that is subordinate and junior in right of payment to such Senior
Indebtedness pursuant to any provision of such indebtedness for the payment over
of amounts received on account of such indebtedness to the holders of such
Senior Indebtedness or otherwise) but for the fact that such Senior Indebtedness
is subordinate or junior in right of payment to (or subject to a requirement
that amounts received on such Senior Indebtedness be paid over to obligees on)
trade accounts payable or accrued liabilities arising in the ordinary course of
business.
"Authenticating Agent" shall mean any agent or agents of the Trustee
which at the time shall be appointed and acting pursuant to Section 6.14.
"Bankruptcy Law" shall mean Title 11, U.S. Code, or any similar federal
or state law for the relief of debtors.
2
<PAGE>
"Board of Directors" shall mean either the Board of Directors of the
Company or any duly authorized committee of that board.
"Board Resolution" shall mean a copy of a resolution certified by the
Secretary or an Assistant Secretary of the Company to have been duly adopted by
the Board of Directors and to be in full force and effect on the date of such
certification, and delivered to the Trustee.
"Business Day" shall mean, with respect to any series of Securities, any
day other than a Saturday or a Sunday or a day on which banking institutions in
The City of New York are authorized or required by law or executive order to
close.
"Capital Securities" shall mean preferred undivided beneficial interests
in the assets of Imperial Capital Trust which rank pari passu with the Common
Securities issued by Imperial Capital Trust; provided, however, that if an Event
of Default has occurred and is continuing, no payments in respect of
Distributions on, or payments upon liquidation, redemption or otherwise with
respect to, the Common Securities shall be made until the holders of the Capital
Securities shall be paid in full the Distributions and the liquidation,
redemption and other payments to which they are entitled. References to "Capital
Securities" shall include collectively any Series A Capital Securities, Series B
Capital Securities and Private Exchange Capital Securities.
"Capital Securities Guarantee" shall mean any guarantee that the Company
may enter into with The Chase Manhattan Bank or other Persons that operates
directly or indirectly for the benefit of holders of Capital Securities and
shall include a Series A Capital Securities Guarantee and a Series B Capital
Securities Guarantee with respect to the Series A Capital Securities and the
Series B Capital Securities, respectively.
"Commission" shall mean the Securities and Exchange Commission, as from
time to time constituted, created under the Exchange Act, or if at any time
after the execution of this Indenture such Commission is not existing and
performing the duties now assigned to it under the Trust Indenture Act, then the
body performing such duties at such time.
"Common Securities" shall mean undivided beneficial interests in the
assets of Imperial Capital Trust which rank pari passu with Capital Securities
issued by Imperial Capital Trust; provided, however, that if an Event of Default
has occurred and is continuing, no payments in respect of Distributions on, or
payments upon liquidation, redemption or otherwise with respect to, the Common
Securities shall be made until the holders of the Capital Securities shall be
paid in full the Distributions and the liquidation, redemption and other
payments to which they are entitled.
"Common Securities Guarantee" shall mean any guarantee of the Company
that operates directly or indirectly for the benefit of holders of Common
Securities.
3
<PAGE>
"Common Stock" shall mean the Common Stock, no par value, of the Company
or any other class of stock resulting from changes or reclassifications of such
Common Stock consisting solely of changes in par value, or from par value to no
par value, or from no par value to par value.
"Company" shall mean Imperial Bancorp, a California corporation, and,
subject to the provisions of Article X, shall include its successors and
assigns.
"Company Request" or "Company Order" shall mean a written request or
order signed in the name of the Company by the Chairman, the Chief Executive
Officer, the President, a Vice Chairman, a Vice President, the Comptroller, the
Secretary or an Assistant Secretary of the Company, and delivered to the
Trustee.
"Comparable Treasury Issue" means the United States Treasury security
selected by the Quotation Agent as having a maturity date corresponding to the
Initial Optional Redemption Date that would be utilized, at the time of
selection and in accordance with customary financial practice, in pricing new
issues of corporate debt securities with a maturity date corresponding to the
Initial Optional Redemption Date. If no United States Treasury security has a
maturity date which is within three months before or after the Initial Optional
Redemption Date, the two most closely corresponding United States Treasury
securities shall be used as the Comparable Treasury Issue, and the Adjusted
Treasury Rate shall be interpolated or extrapolated on a straight-line basis,
rounding to the nearest month.
"Comparable Treasury Price" means, with respect to any redemption date
pursuant to Section 14.1, (i) the average of the bid and asked prices for the
Comparable Treasury Issue (expressed in each case as a percentage of its
principal amount) on the third Business Day preceding such redemption date, as
set forth in the daily statistical release (or any successor release) published
by the Federal Reserve Bank of New York and designated "Composite 3:30 p.m.
Quotations for U.S. Government Securities" or (ii) if such release (or any
successor release) is not published or does not contain such prices on such
Business Day, (A) the average of five Reference Treasury Dealer Quotations for
such redemption date, after excluding the highest and lowest such Reference
Treasury Dealer Quotations, or (B) if the Trustee obtains fewer than five such
Reference Treasury Dealer Quotations, the average of all such Quotations.
"Compounded Interest" shall have the meaning set forth in Section 16.1.
"Custodian" shall mean any receiver, trustee, assignee, liquidator, or
similar official under any Bankruptcy Law.
"Declaration" means the Amended and Restated Declaration of Trust of
Imperial Capital Trust, dated as of the Issue Date.
4
<PAGE>
"Default" means any event, act or condition that with notice or lapse of
time, or both, would constitute an Event of Default.
"Deferred Interest" shall have the meaning set forth in Section 16.1.
"Definitive Securities" shall mean those securities issued in fully
registered certificated form not otherwise in global form.
"Depositary" shall mean, with respect to Securities of any series, for
which the Company shall determine that such Securities will be issued as a
Global Security, The Depository Trust Company, New York, New York, another
clearing agency, or any successor registered as a clearing agency under the
Exchange Act or other applicable statute or regulation, which, in each case,
shall be designated by the Company pursuant to Section 2.5(d).
"Dissolution Event" means the liquidation of the Imperial Capital Trust
pursuant to the Declaration, and the distribution of the Securities held by the
Property Trustee to the holders of the Trust Securities issued by the Imperial
Capital Trust pro rata in accordance with the Declaration.
"Event of Default" shall mean any event specified in Section 5.1,
continued for the period of time, if any, and after the giving of the notice, if
any, therein designated.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
"Exchange Offer" means the offer that may be made pursuant to the
Registration Rights Agreement (i) by the Company to exchange Series B Securities
for Series A Securities and to exchange a Series B Capital Securities Guarantee
for a Series A Capital Securities Guarantee and (ii) by Imperial Capital Trust
to exchange Series B Capital Securities for Series A Capital Securities.
"Extended Interest Payment Period" shall have the meaning set forth in
Section 16.1.
"Federal Reserve" shall mean the Board of Governors of the Federal
Reserve System.
"Imperial Capital Trust" shall mean Imperial Capital Trust I, a Delaware
business trust created for the purpose of issuing its undivided beneficial
interests in connection with the issuance of Securities under this Indenture.
"Global Security" means, with respect to the Securities, a Security
executed by the Company and delivered by the Trustee to the Depositary or
pursuant to the Depositary's instruction, all in accordance with the Indenture,
which shall be registered in the name of the Depositary or its nominee.
5
<PAGE>
"Indebtedness for Money Borrowed" shall mean (i) any obligation of, or
any obligation guaranteed by, the Company for the repayment of borrowed money,
whether or not evidenced by bonds, debentures, notes or other written
instruments and any deferred obligation for the payment of the purchase price of
property or assets acquired other than in the ordinary course of business, and
(ii) all indebtedness of the Company for claims in respect of derivative
products such as interest and foreign exchange rate contracts, commodity
contracts and similar arrangements, whether outstanding on the date of execution
of the Indenture or thereafter created, assumed or incurred. For purposes of
this definition, "claim" shall have the meaning assigned in Section 101(5) of
the Bankruptcy Code of 1978, as amended and in effect on the date of the
execution of this Indenture.
"Indebtedness Ranking Junior to the Securities" shall mean any
Indebtedness for Money Borrowed, whether outstanding on the date of execution of
this Indenture or hereafter created, assumed or incurred, which specifically by
its terms ranks junior to and not equally with or prior to the Securities (and
any other Indebtedness Ranking on a Parity with the Securities) in right of
payment upon the happening of any dissolution or winding up or liquidation or
reorganization of the Company. The securing of any Indebtedness for Money
Borrowed of the Company, otherwise constituting Indebtedness Ranking Junior to
the Securities, shall not be deemed to prevent such Indebtedness for Money
Borrowed from constituting Indebtedness Ranking Junior to the Securities.
"Indebtedness Ranking on a Parity with the Securities" shall mean
Indebtedness for Money Borrowed, whether outstanding on the date of execution of
this Indenture or hereafter created, assumed or incurred, which specifically by
its terms ranks equally with and not prior to the Securities in the right of
payment upon the happening of any dissolution or winding up or liquidation or
reorganization of the Company. The securing of any Indebtedness for Money
Borrowed of the Company, otherwise constituting Indebtedness Ranking on a Parity
with the Securities, shall not be deemed to prevent such Indebtedness for Money
Borrowed from constituting Indebtedness Ranking on a Parity with the Securities.
"Indenture" shall mean this instrument as originally executed or, if
amended or supplemented as herein provided, as so amended or supplemented.
"Initial Optional Redemption Date" means June 30, 2007.
"Interest Payment Date" shall have the meaning set forth in Section 2.6.
"Issue Date" means April 23, 1997.
"Liquidated Damages" shall have the meaning set forth in the
Registration Rights Agreement.
6
<PAGE>
"Maturity Date" shall mean December 31, 2026.
"Non Book-Entry Capital Securities" shall have the meaning set forth in
Section 2.5.
"Officers" shall mean any of the Chairman, the Co-Chairman, a Vice
Chairman, the Chief Executive Officer, the President, a Vice President, the
Comptroller, the Secretary or an Assistant Secretary of the Company.
"Officers' Certificate" shall mean a certificate signed by two Officers
and delivered to the Trustee.
"Opinion of Counsel" shall mean a written opinion of counsel, who may be
an employee of the Company, and who shall be acceptable to the Trustee.
"Optional Redemption Price" shall have the meaning set forth in Section
14.2.
"Other Debentures" means all junior subordinated debentures issued by
the Company from time to time and sold to trusts to be established by the
Company (if any), in each case similar to the Trust.
"Other Guarantees" means all guarantees issued by the Company with
respect to capital securities (if any) and issued to other trusts established by
the Company (if any), in each case similar to the Trust.
The term "outstanding" when used with reference to Securities, shall,
subject to the provisions of Section 7.4, mean, as of any particular time, all
Securities authenticated and delivered by the Trustee or the Authenticating
Agent under this Indenture, except
(a) Securities theretofore cancelled by the Trustee or the
Authenticating Agent or delivered to the Trustee for cancellation;
(b) Securities, or portions thereof, for the payment or redemption of
which moneys in the necessary amount shall have been deposited in trust with the
Trustee or with any paying agent (other than the Company) or shall have been set
aside and segregated in trust by the Company (if the Company shall act as its
own paying agent); provided that, if such Securities, or portions thereof, are
to be redeemed prior to maturity thereof, notice of such redemption shall have
been given as in Article XIV provided or provision satisfactory to the Trustee
shall have been made for giving such notice; and
(c) Securities in lieu of or in substitution for which other Securities
shall have been authenticated and delivered pursuant to the terms of Section 2.8
unless proof satisfactory to the Company and the Trustee is presented that any
such Securities are held by bona fide holders in due course.
7
<PAGE>
"Person" shall mean any individual, corporation, estate, partnership,
joint venture, association, joint-stock company, limited liability company,
trust, unincorporated organization or government or any agency or political
subdivision thereof.
"Predecessor Security" of any particular Security means every previous
Security evidencing all or a portion of the same debt and as that evidenced by
such particular Security; and, for the purposes of this definition, any Security
authenticated and delivered under Section 2.8 in lieu of a lost, destroyed or
stolen Security shall be deemed to evidence the same debt as the lost, destroyed
or stolen Security.
"Principal Office of the Trustee", or other similar term, shall mean the
office of the Trustee, at which at any particular time its corporate trust
business shall be principally administered.
"Private Exchange" has the meaning set forth in the Registration Rights
Agreement.
"Private Exchange Debentures" means the junior subordinated deferrable
interest debentures issued in a Private Exchange.
"Purchase Agreement" shall mean the Purchase Agreement dated April 18,
1997 among the Company, Imperial Capital Trust and the initial purchasers named
therein.
"Property Trustee" shall have the same meaning as set forth in the
Declaration.
"Quotation Agent" means the Reference Treasury Dealer appointed by the
Company.
"Redemption Price" means the Special Event Redemption Price or the
Optional Redemption Price, as the context requires.
"Reference Treasury Dealer" means any U.S. Government securities dealer
in New York City selected by the Company.
"Reference Treasury Dealer Quotations" means, with respect to each
Reference Treasury Dealer and any redemption date pursuant to Section 14.1, the
average, as determined by the Trustee, of the bid and asked prices for the
Comparable Treasury Issue (expressed in each case as a percentage of its
principal amount) quoted in writing to the Trustee by such Reference Treasury
Dealer at 5:00 p.m. New York City time on the third Business Day preceding such
redemption date.
"Registration Rights Agreement" means the Registration Rights Agreement,
dated as of the Issue Date, by and among the Company, the Trust and the Initial
Purchasers named therein as such agreement may be amended, modified or
supplemented from time to time.
8
<PAGE>
"Regulatory Capital Event" shall occur at any time, following the date
(the "Election Date") on which the Company shall effectively elect to treat the
Capital Securities as Tier 1 Capital (or its equivalent), that the Company shall
have received an opinion of independent bank regulatory counsel experienced in
such matters to the effect that, as a result of (a) any amendment to, or change
(including any announced prospective change) in, the laws (or any regulations
thereunder) of the United States or any rules, guidelines or policies of the
Federal Reserve or (b) any official administrative pronouncement or judicial
decision interpreting or applying such laws or regulations, which amendment or
change is effective or such pronouncement or decision is announced on or after
the Election Date, the Capital Securities do not constitute, or within 90 days
of the date thereof, will not constitute, Tier I Capital (or its then
equivalent); provided, however, that a Regulatory Capital Event shall not occur
by reason of the use of the proceeds of the Securities in the manner
contemplated by the Offering Memorandum dated April 18, 1997 relating to the
Capital Securities.
"Responsible Officer", when used with respect to the Trustee, shall mean
any vice president, any assistant secretary, any assistant treasurer or senior
trust officer, any trust officer or assistant trust officer, or any other
officer or assistant officer of the Principal Office of the Trustee customarily
performing functions similar to those performed by any of the above designated
officers and also means, with respect to a particular corporate trust matter,
any other officer to whom such matter is referred because of his knowledge of
and familiarity with the particular subject.
"Restricted Security" shall mean Securities that bear or are required to
bear the Securities Act legends set forth in Exhibit A hereto.
"Rule 144A" means Rule 144A under the Securities Act, as such Rule may
be amended from time to time, or under any similar rule or regulation hereafter
adopted by the Commission.
"Securities" means, collectively, the Series A Securities, the Series B
Securities and the Private Exchange Debentures.
"Securities Act" shall mean the Securities Act of 1933, as amended.
"Securityholder", "holder of Securities", or other similar terms, shall
mean any person in whose name at the time a particular Security is registered on
the register kept by the Company or the Trustee for that purpose in accordance
with the terms hereof.
"Security Register" shall mean (i) prior to a Dissolution Event, the
list of holders provided to the Trustee pursuant to Section 4.1, and (ii)
following a Dissolution Event, any security register maintained by a security
registrar for the Securities appointed by the Company following the execution of
a supplemental indenture providing for transfer procedures as provided for in
Section 2.7(a).
9
<PAGE>
"Senior Indebtedness" shall mean all Indebtedness for Money Borrowed,
whether outstanding on the date of execution of this Indenture or thereafter
created, assumed or incurred, except Indebtedness Ranking on a Parity with the
Securities or Indebtedness Ranking Junior to the Securities, and any deferrals,
renewals or extensions of such Senior Indebtedness.
"Series A Securities" means the Company's 9.98% Series A Junior
Subordinated Deferrable Interest Debentures due December 31, 2026, as
authenticated and issued under this Indenture.
"Series B Securities" means the Company's 9.98% Series B Junior
Subordinated Deferrable Interest Debentures due December 31, 2026, as
authenticated and issued under this Indenture.
"Special Event" means a Tax Event or a Regulatory Capital Event, as the
case may be.
"Special Event Redemption Price" shall mean, with respect to any
redemption of the Securities pursuant to Section 14.1 hereof, an amount in cash
equal to the greater of (i) 100% of the principal amount to be redeemed or (ii)
the sum, as determined by a Quotation Agent, of the present values of the
principal amount and premium payable with respect to an optional redemption
pursuant to Section 14.2 on the Initial Optional Redemption Date, together with
scheduled payments of interest on the Securities from the redemption date to and
including the Initial Optional Redemption Date, discounted to the redemption
date on a semi-annual basis (assuming a 360-day year consisting of twelve 30-day
months) at the Adjusted Treasury Rate, plus, in each case, any accrued and
unpaid interest thereon, including Compounded Interest and Additional Interest,
if any, to the date of such redemption.
"Subsidiary" shall mean with respect to any Person, (i) any corporation
at least a majority of whose outstanding voting stock is owned, directly or
indirectly, by such Person or by one or more of its Subsidiaries, or by such
Person and one or more of its Subsidiaries, (ii) any general partnership, joint
venture or similar entity, at least a majority of whose outstanding partnership
or similar interests shall at the time be owned by such Person, or by one or
more of its Subsidiaries, or by such Person and one or more of its Subsidiaries
and (iii) any limited partnership of which such Person or any of its
Subsidiaries is a general partner. For the purposes of this definition, "voting
stock" means shares, interests, participations or other equivalents in the
equity interest (however designated) in such Person having ordinary voting power
for the election of a majority of the directors (or the equivalent) of such
Person, other than shares, interests, participations or other equivalents having
such power only by reason of the occurrence of a contingency.
"Tax Event" shall mean the receipt by Imperial Capital Trust and the
Company of an opinion of Weil, Gotshal & Manges LLP, or any other nationally
recognized tax counsel experienced in such matters to the effect that, as a
result of any amendment to, or change (including any announced prospective
change) in, the laws or any regulations thereunder of the
10
<PAGE>
United States or any political subdivision or taxing authority thereof or
therein, or as a result of any official administrative pronouncement or judicial
decision interpreting or applying such laws or regulations, which amendment or
change is effective or which pronouncement or decision is announced on or after
the Issue Date, there is more than an insubstantial risk that (i) Imperial
Capital Trust is, or will be within 90 days of the date of such opinion, subject
to United States Federal income tax with respect to income received or accrued
on the Securities, (ii) interest payable by the Company on the Securities is
not, or within 90 days of the date of such opinion, will not be, deductible by
the Company, in whole or in part, for United States federal income tax purposes,
or (iii) Imperial Capital Trust is, or will be within 90 days of the date of
such opinion, subject to more than a de minimis amount of other taxes, duties or
other governmental charges.
"Trustee" shall mean the Person identified as "Trustee" in the first
paragraph hereof, and, subject to the provisions of Article VI hereof, shall
also include its successors and assigns as Trustee hereunder. The term "Trustee"
as used with respect to a particular series of the Securities shall mean the
trustee with respect to that series.
"Trust Indenture Act of 1939" shall mean the Trust Indenture Act of 1939
as in force at the date of execution of this Indenture, except as provided in
Section 9.3.
"Trust Securities" shall mean the Capital Securities and the Common
Securities, collectively.
"U.S. Government Obligations" shall mean securities that are (i) direct
obligations of the United States of America for the payment of which its full
faith and credit is pledged or (ii) obligations of a Person controlled or
supervised by and acting as an agency or instrumentality of the United States of
America the payment of which is unconditionally guaranteed as a full faith and
credit obligation by the United States of America, which, in either case under
clauses (i) or (ii) are not callable or redeemable at the option of the issuer
thereof, and shall also include a depository receipt issued by a bank or trust
company as custodian with respect to any such U.S. Government Obligation or a
specific payment of interest on or principal of any such U.S. Government
Obligation held by such custodian for the account of the holder of a depository
receipt, provided that (except as required by law) such custodian is not
authorized to make any deduction from the amount payable to the holder of such
depository receipt from any amount received by the custodian in respect of the
U.S. Government Obligation or the specific payment of interest on or principal
of the U.S. Government Obligation evidenced by such depository receipt.
11
<PAGE>
ARTICLE II
SECURITIES
SECTION 2.1. Forms Generally.
The Securities and the Trustee's certificate of authentication shall be
substantially in the form of Exhibit A, the terms of which are incorporated in
and made a part of this Indenture. The Securities may have notations, legends or
endorsements required by law, stock exchange rule, agreements to which the
Company is subject or usage. Each Security shall be dated the date of its
authentication. The Securities shall be issued in minimum denominations of
$100,000 and integral multiples of $1,000 in excess thereof.
SECTION 2.2. Execution and Authentication.
Two Officers shall sign the Securities for the Company by manual or
facsimile signature in the manner set forth in Exhibit A. If an Officer whose
signature is on a Security no longer holds that office at the time the Security
is authenticated, the Security shall nevertheless be valid.
A Security shall not be valid until authenticated by the manual
signature of an authorized officer of the Trustee. The signature of the Trustee
shall be conclusive evidence that the Security has been authenticated under this
Indenture. The form of Trustee's certificate of authentication to be borne by
the Securities shall be substantially as set forth in Exhibit A hereto.
The Trustee shall, upon a Company Order, authenticate for original issue
up to, and the aggregate principal amount of Securities outstanding at any time
may not exceed, $77,320,000 aggregate principal amount of the Securities, except
as provided in Sections 2.7, 2.8, 2.10 and 14.5. The series of Securities to be
initially issued hereunder shall be the Series A Securities.
SECTION 2.3. Form and Payment.
Except as provided in Section 2.5, the Securities shall be issued in
fully registered certificated form without interest coupons. Principal of,
premium, if any, and interest on the Securities issued in certificated form will
be payable, the transfer of such Securities will be registrable and such
Securities will be exchangeable for Securities bearing identical terms and
provisions at the office or agency of the Company maintained for such purpose
under Section 3.2; provided, however, that payment of interest with respect to
the Securities may be made at the option of the Company (i) by check mailed to
the holder entitled thereto at such address as shall appear in the Security
Register or (ii) by wire transfer to an account maintained by the Person
entitled thereto, provided that proper wire transfer instructions have been
received in writing by the paying agent by the relevant record date.
Notwithstanding the foregoing, so
12
<PAGE>
long as the holder of any Securities is the Property Trustee, the payment of the
principal of, premium, if any, and interest (including Compounded Interest and
Additional Interest, if any) on such Securities held by the Property Trustee
will be made at such place and to such account as may be designated by the
Property Trustee.
SECTION 2.4. Legends.
(a) Except as permitted by subsection (b) of this Section 2.4 or as
otherwise determined by the Company in accordance with applicable law, each
Security shall bear the applicable legends relating to restrictions on transfer
pursuant to the securities laws in substantially the form set forth on Exhibit A
hereto.
(b) The Company shall issue and the Trustee shall authenticate Series B
Securities in exchange for Series A Securities accepted for exchange in the
Exchange Offer (and, if required pursuant to the Registration Rights Agreement,
the Private Exchange Debentures), which Series B Securities shall not bear the
legends required by subsection (a) above, in each case unless the holder of such
Series A Securities is either (A) a broker-dealer who purchased such Series A
Securities directly from the Company for resale pursuant to Rule 144A or any
other available exemption under the Securities Act, (B) a Person participating
in the distribution of the Series A Securities or (C) a Person who is an
affiliate (as defined in Rule 144 under the Securities Act) of the Company.
SECTION 2.5. Global Security.
(a) In connection with a Dissolution Event,
(i) if any Capital Securities are held in book-entry form, the
related Definitive Securities shall be presented to the Trustee (if an
arrangement with the Depositary has been maintained) by the Property
Trustee in exchange for one or more Global Securities (as may be
required pursuant to Section 2.7) in an aggregate principal amount equal
to the aggregate principal amount of all outstanding Securities, to be
registered in the name of the Depositary, or its nominee, and delivered
by the Trustee to the Depositary for crediting to the accounts of its
participants pursuant to the instructions of the Administrative
Trustees; the Company upon any such presentation shall execute one or
more Global Securities in such aggregate principal amount and deliver
the same to the Trustee for authentication and delivery in accordance
with this Indenture; and payments on the Securities issued as a Global
Security will be made to the Depositary; and
(ii) if any Capital Securities are held in certificated form, the
related Definitive Securities may be presented to the Trustee by the
Property Trustee and any Capital Security certificate which represents
Capital Securities other than Capital Securities in book-entry form
("Non Book-Entry Capital Securities") will be deemed to
13
<PAGE>
represent beneficial interests in Securities presented to the Trustee by
the Property Trustee having an aggregate principal amount equal to the
aggregate liquidation amount of the Non Book-Entry Capital Securities
until such Capital Security certificates are presented to the Security
Registrar for transfer or reissuance, at which time such Capital
Security certificates will be cancelled and a Security, registered in
the name of the holder of the Capital Security certificate or the
transferee of the holder of such Capital Security certificate, as the
case may be, with an aggregate principal amount equal to the aggregate
liquidation amount of the Capital Security certificate cancelled, will
be executed by the Company and delivered to the Trustee for
authentication and delivery in accordance with the Indenture. Upon the
issuance of such Securities, Securities with an equivalent aggregate
principal amount that were presented by the Property Trustee to the
Trustee will be deemed to have been cancelled.
(b) The Global Securities shall represent the aggregate amount of
outstanding Securities from time to time endorsed thereon; provided, that the
aggregate amount of outstanding Securities represented thereby may from time to
time be reduced or increased, as appropriate, to reflect exchanges and
redemptions. Any endorsement of a Global Security to reflect the amount of any
increase or decrease in the amount of outstanding Securities represented thereby
shall be made by the Trustee, in accordance with instructions given by the
Company as required by this Section 2.5.
(c) The Global Securities may be transferred, in whole but not in part,
only to the Depositary, another nominee of the Depositary, or to a successor
Depositary selected or approved by the Company or to a nominee of such successor
Depositary.
(d) If at any time the Depositary notifies the Company that it is
unwilling or unable to continue as Depositary or the Depositary has ceased to be
a clearing agency registered under the Exchange Act, and a successor Depositary
is not appointed by the Company within 90 days after the Company receives such
notice or becomes aware of such condition, as the case may be, the Company will
execute, and the Trustee, upon written notice from the Company, will
authenticate and make available for delivery the Definitive Securities, in
authorized denominations, and in an aggregate principal amount equal to the
principal amount of the Global Security in exchange for such Global Security. If
there is an Event of Default, the Depositary shall have the right to exchange
the Global Securities for Definitive Securities. In addition, the Company may at
any time determine that the Securities shall no longer be represented by a
Global Security. In the event of such an Event of Default or such a
determination, the Company shall execute, and subject to Section 2.7, the
Trustee, upon receipt of an Officers' Certificate evidencing such determination
by the Company, will authenticate and make available for delivery the Definitive
Securities, in authorized denominations, and in an aggregate principal amount
equal to the principal amount of the Global Security in exchange for such Global
Security. Upon the exchange of the Global Security for such Definitive
Securities, in authorized denominations, the Global Security shall be cancelled
by the Trustee. Such Definitive Securities issued in exchange for the Global
14
<PAGE>
Security shall be registered in such names and in such authorized denominations
as the Depositary, pursuant to instructions from its direct or indirect
participants or otherwise, shall instruct the Trustee. The Trustee shall deliver
such Definitive Securities to the Depositary for delivery to the Persons in
whose names such Definitive Securities are so registered.
SECTION 2.6. Interest.
(a) Each Security will bear interest at the rate of 9.98% per annum (the
"Coupon Rate") from the most recent date to which interest has been paid or duly
provided for or, if no interest has been paid or duly provided for, from the
Issue Date, until the principal thereof becomes due and payable, and at the
Coupon Rate on any overdue principal (and premium, if any) and (to the extent
that payment of such interest is enforceable under applicable law) on any
overdue installment of interest, compounded semi-annually, payable (subject to
the provisions of Article XVI) semi-annually in arrears on June 30 and December
31 of each year (each, an "Interest Payment Date") commencing on June 30, 1997,
to the Person in whose name such Security or any predecessor Security is
registered, at the close of business on the regular record date for such
interest installment, which shall be the fifteenth day of the month preceding
the month in which the relevant Interest Payment Date falls.
(b) Interest will be computed on the basis of a 360-day year consisting
of twelve 30- day months and, for any period of less than a full calendar month,
the number of days lapsed in such month. In the event that any Interest Payment
Date falls on a day that is not a Business Day, then payment of interest payable
on such date will be made on the next succeeding day which is a Business Day
(and without any interest or other payment in respect of any such delay), with
the same force and effect as if made on such date.
(c) During such time as the Property Trustee is the holder of any
Securities, the Company shall pay any additional amounts on the Securities as
may be necessary in order that the amount of Distributions then due and payable
by the Imperial Capital Trust shall not be reduced as a result of any additional
taxes, duties and other governmental charges to which the Imperial Capital Trust
has become subject as a result of a Tax Event ("Additional Interest").
SECTION 2.7. Transfer and Exchange.
(a) Transfer Restrictions. The Securities may not be transferred except
in amounts of $100,000 and integral multiples of $1,000 in excess thereof and
those Series B Securities with respect to which any Person described in Section
2.4(b) (A) (B) or (C) is the beneficial owner, may not be transferred except in
compliance with the legend contained in Exhibit A unless otherwise determined by
the Company in accordance with applicable law. Upon any distribution of the
Securities following a Dissolution Event, the Company and the Trustee shall
enter into a supplemental indenture pursuant to Section 9.1 to provide for the
transfer restrictions and procedures with respect to the Securities
substantially similar to those contained in the Declaration to the extent
applicable in the circumstances existing at such time.
15
<PAGE>
(b) General Provisions Relating to Transfers and Exchanges. Upon
surrender for registration of transfer of any Security at the office or agency
of the Company maintained for the purpose pursuant to Section 3.2, 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 and of a like
aggregate principal amount.
At the option of the holder, Securities of any series may be exchanged
for other Securities of the same series of any authorized denominations and of a
like aggregate principal amount, upon surrender of the Securities to be
exchanged at the office or agency identified above. Whenever any Securities are
so surrendered for exchange, the Company shall execute, and the Trustee shall
authenticate and make available for delivery, the Securities which the holder
making the exchange is entitled to receive.
Every Security presented or surrendered for registration of transfer or
exchange (if so required by the Company or the Trustee) shall be duly endorsed,
or be accompanied by a written instrument of transfer in form satisfactory to
the Company and the Security registrar duly executed by the holder thereof or
such holder's attorney duly authorized in writing.
All Definitive Securities and Global Securities issued upon any
registration of transfer or exchange of Definitive Securities or Global
Securities shall be the valid obligations of the Company, evidencing the same
debt, and entitled to the same benefits under this Indenture, as the Definitive
Securities or Global Securities surrendered upon such registration of transfer
or exchange.
No service charge shall be made to a holder for any registration of
transfer or exchange, but the Company may require payment of a sum sufficient to
cover any transfer tax or similar governmental charge payable in connection
therewith.
The Company shall not be required to (i) issue, register the transfer of
or exchange Securities during a period beginning at the opening of business 15
days before the day of mailing of a notice of redemption or any notice of
selection of Securities for redemption under Article XIV hereof and ending at
the close of business on the day of such mailing; or (ii) register the transfer
of or exchange any Security so selected for redemption in whole or in part,
except the unredeemed portion of any Security being redeemed in part.
(c) Exchange of Series A Securities for Series B Securities or Private
Exchange Debentures. The Series A Securities may be exchanged for Series B
Securities pursuant to the terms of the Exchange Offer. In addition, the
Securities A Securities may by exchanged in a Private Exchange for Private
Exchange Debentures under the circumstances described in the Registration Rights
Agreement. The Trustee shall make such exchange as follows:
16
<PAGE>
The Company shall present the Trustee with an Officers' Certificate
certifying the following:
(A) upon issuance of the Series B Securities or the Private Exchange
Debentures, as the case may be, the transactions contemplated by the Exchange
Offer or the Private Exchange have been consummated; and
(B) the principal amount of Series A Securities properly tendered in the
Exchange Offer and the Private Exchange that are represented by a Global
Security and the principal amount of Series A Securities properly tendered in
the Exchange Offer and the Private Exchange that are represented by Definitive
Securities, the name of each holder of such Definitive Securities, the principal
amount properly tendered in the Exchange Offer or Private Exchange, as the case
may be, by each such holder and the name and address to which Definitive
Securities for Series B Securities or Private Exchange Debentures, as the case
may be, shall be registered and sent for each such holder.
The Trustee, upon receipt of such Officers' Certificate shall
authenticate a Global Security for Series B Securities or Private Exchange
Debentures, as the case may be, in aggregate principal amount equal to the
aggregate principal amount of Series A Securities represented by a Global
Security and the Definitive Securities indicated in such Officers' Certificate
as having been properly tendered.
If the principal amount of the Global Security for the Series B
Securities and the Private Exchange Debentures is less than the principal amount
of the Global Security for the Series A Securities, the Trustee shall make an
endorsement on such Global Security for Series A Securities indicating a
reduction in the principal amount represented thereby.
SECTION 2.8. Replacement Securities.
If any mutilated Security is surrendered to the Trustee, or the Company
and the Trustee receive evidence to their satisfaction of the destruction, loss
or theft of any Security, the Company shall issue and the Trustee shall
authenticate a replacement Security if the Trustee's requirements for
replacements of Securities are met. At the request of the Trustee or the
Company, an indemnity bond may be required from the holder that is sufficient in
the judgment of the Trustee and the Company to protect the Company, the Trustee,
any agent thereof or any Authenticating Agent from any loss that any of them may
suffer if a Security is replaced. The Company or the Trustee may charge for its
expenses in replacing a Security.
Every replacement Security is an obligation of the Company and shall be
entitled to all of the benefits of this Indenture equally and proportionately
with all other Securities duly issued hereunder.
17
<PAGE>
The provisions of this Section are exclusive and shall preclude (to the
extent lawful) all other rights and remedies with respect to the replacement of
mutilated, destroyed, lost or stolen Securities.
SECTION 2.9. [Intentionally Omitted]
SECTION 2.10. Temporary Securities.
Pending the preparation of definitive Securities, the Company may
execute, and upon Company Order the Trustee shall authenticate and make
available for delivery, temporary Securities that are printed, lithographed,
typewritten, mimeographed or otherwise reproduced, in any authorized
denomination, substantially of the tenor of the definitive Securities in lieu of
which they are issued and with such appropriate insertions, omissions,
substitutions and other variations as the officers executing such Securities may
determine, as conclusively evidenced by their execution of such Securities.
If temporary Securities are issued, the Company shall cause definitive
Securities to be prepared without unreasonable delay. The definitive Securities
shall be printed, lithographed or engraved, or provided by any combination
thereof, or in any other manner permitted by the rules and regulations of any
applicable securities exchange, all as determined by the officers executing such
definitive Securities. After the preparation of definitive Securities, the
temporary Securities shall be exchangeable for definitive Securities upon
surrender of the temporary Securities at the office or agency maintained by the
Company for such purpose pursuant to Section 3.2 hereof, without charge to the
Holder. Upon surrender for cancellation of any one or more temporary Securities,
the Company shall execute, and the Trustee shall authenticate and make available
for delivery, in exchange therefor the same aggregate principal amount of
definitive Securities of authorized denominations. Until so exchanged, the
temporary Securities shall in all respects be entitled to the same benefits
under this Indenture as definitive Securities.
SECTION 2.11. Cancellation.
The Company at any time may deliver Securities to the Trustee for
cancellation. The Trustee and no one else shall cancel all Securities
surrendered for registration of transfer, exchange, payment, replacement or
cancellation and shall retain or dispose of cancelled Securities in accordance
with its normal practices (subject to the record retention requirement of the
Exchange Act) unless the Company directs them to be returned to it. Subject to
the other provisions of the Indenture, the Company may not issue new Securities
to replace Securities that have been redeemed or paid or that have been
delivered to the Trustee for cancellation.
18
<PAGE>
SECTION 2.12. Defaulted Interest.
Any interest on any Security that is payable, but is not punctually paid
or duly provided for, on any Interest Payment Date (herein called "Defaulted
Interest") shall forthwith cease to be payable to the holder on the relevant
regular record date by virtue of having been such holder; and such Defaulted
Interest shall be paid by the Company, at its election, as provided in clause
(a) or clause (b) below:
(a) The Company may make payment of any Defaulted Interest on Securities
to the Persons in whose names such Securities (or their respective Predecessor
Securities) are registered at the close of business on a special record date for
the payment of such Defaulted Interest, which shall be fixed in the following
manner: the Company shall notify the Trustee in writing of the amount of
Defaulted Interest proposed to be paid on each such Security and the date of the
proposed payment, and at the same time the Company shall deposit with the
Trustee an amount of money equal to the aggregate amount proposed to be paid in
respect of such Defaulted Interest or shall make arrangements satisfactory to
the Trustee for such deposit prior to the date of the proposed payment, such
money when deposited to be held in trust for the benefit of the Persons entitled
to such Defaulted Interest as in this clause provided. Thereupon the Trustee
shall fix a special record date for the payment of such Defaulted Interest which
shall not be more than 15 nor less than 10 days prior to the date of the
proposed payment and not less than 10 days after the receipt by the Trustee of
the notice of the proposed payment. The Trustee shall promptly notify the
Company of such special record date and, in the name and at the expense of the
Company, shall cause notice of the proposed payment of such Defaulted Interest
and the special record date therefor to be mailed, first class postage prepaid,
to each Securityholder at his or her address as it appears in the Security
Register, not less than 10 days prior to such special record date. Notice of the
proposed payment of such Defaulted Interest and the special record date therefor
having been mailed as aforesaid, such Defaulted Interest shall be paid to the
Persons in whose names such Securities (or their respective Predecessor
Securities) are registered on such special record date and shall be no longer
payable pursuant to the following clause (b).
(b) The Company may make payment of any Defaulted Interest on any
Securities in any other lawful manner not inconsistent with the requirements of
any securities exchange on which such Securities may be listed, and upon such
notice as may be required by such exchange, if, after notice given by the
Company to the Trustee of the proposed payment pursuant to this clause, such
manner of payment shall be deemed practicable by the Trustee.
SECTION 2.13. 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 as a convenience to Securityholders; provided that any such notice
may state that no representation is made as to the correctness of such numbers
either as printed on the Securities or as
19
<PAGE>
contained in any notice of a redemption and that reliance may be placed only on
the other identification numbers printed on the Securities, and any such
redemption shall not be affected by any defect in or omission of such numbers.
The Company will promptly notify the Trustee of any change in the CUSIP numbers.
ARTICLE III
PARTICULAR COVENANTS OF THE COMPANY
SECTION 3.1. Payment of Principal, Premium and Interest.
The Company covenants and agrees for the benefit of the holders of the
Securities that it will duly and punctually pay or cause to be paid the
principal of and premium, if any, and interest on the Securities at the place,
at the respective times and in the manner provided herein. Except as provided in
Section 2.3, each installment of interest on the Securities may be paid by
mailing checks for such interest payable to the order of the holder of Security
entitled thereto as they appear in the Security Register. The Company further
covenants to pay any and all amounts including, without limitation, Liquidated
Damages, if any, on the dates and in the manner required under the Registration
Rights Agreement.
SECTION 3.2. Offices for Notices and Payments, Etc.
So long as any of the Securities remain outstanding, the Company will
maintain in the Borough of Manhattan, The City of New York, an office or agency
where the Securities may be presented for payment, an office or agency where the
Securities may be presented for registration of transfer and for exchange as in
this Indenture provided and an office or agency where notices and demands to or
upon the Company in respect of the Securities or of this Indenture may be
served. The Company will give to the Trustee written notice of the location of
any such office or agency and of any change of location thereof. Until otherwise
designated from time to time by the Company in a notice to the Trustee, any such
office or agency for all of the above purposes shall be the Principal Office of
the Trustee. In case the Company shall fail to maintain any such office or
agency in the Borough of Manhattan, The City of New York, or shall fail to give
such notice of the location or of any change in the location thereof,
presentations and demands may be made and notices may be served at the Principal
Office of the Trustee.
In addition to any such office or agency, the Company may from time to
time designate one or more offices or agencies outside the Borough of Manhattan,
The City of New York, where the Securities may be presented for payment,
registration of transfer and for exchange in the manner provided in this
Indenture, and the Company may from time to time rescind such designation, as
the Company may deem desirable or expedient; provided, however, that no such
designation or rescission shall in any manner relieve the Company of its
obligation to maintain any such office or agency in the Borough of Manhattan,
The City of New York, for
20
<PAGE>
the purposes above mentioned. The Company will give to the Trustee prompt
written notice of any such designation or rescission thereof.
SECTION 3.3. Appointments to Fill Vacancies in Trustee's Office.
The Company, whenever necessary to avoid or fill a vacancy in the office
of Trustee, will appoint, in the manner provided in Section 6.10, a Trustee, so
that at all times there shall be a Trustee hereunder.
SECTION 3.4. Provision as to Paying Agent.
(a) If the Company shall appoint a paying agent other than the Trustee
with respect to the Securities, it will cause such paying agent to execute and
deliver to the Trustee an instrument in which such agent shall agree with the
Trustee, subject to the provision of this Section 3.4,
(1) that it will hold all sums held by it as such agent for the
payment of the principal of and premium, if any, or interest on the Securities
(whether such sums have been paid to it by the Company or by any other obligor
on the Securities of such series) in trust for the benefit of the holders of the
Securities;
(2) that it will give the Trustee notice of any failure by the
Company (or by any other obligor on the Securities) to make any payment of the
principal of and premium or interest on the Securities when the same shall be
due and payable; and
(3) that it will at any time during the continuance of any such
failure, upon the written request of the Trustee, forthwith pay to the Trustee
all sums so held in trust by it as such paying agent.
(b) If the Company shall act as its own paying agent, it will, on or
before each due date of the principal of and premium, if any, or interest on the
Securities, set aside, segregate and hold in trust for the benefit of the
holders of the Securities a sum sufficient to pay such principal, premium or
interest so becoming due and will notify the Trustee of its action or any
failure to take such action and of any failure by the Company (or by any other
obligor under the Securities) to make any payment of the principal of and
premium, if any, or interest on the Securities when the same shall become due
and payable.
Whenever the Company shall have one or more paying agents, it
will, on or prior to each due date of the principal of and premium, if any, or
interest on any Securities, deposit with a paying agent a sum sufficient to pay
the principal of and premium, if any, or interest so becoming due, such sum to
be held in trust for the benefit of the Persons entitled thereto, and (unless
such paying agent is the Trustee) the Company will promptly notify the Trustee
of its action or failure to act.
21
<PAGE>
(c) Anything in this Section 3.4 to the contrary notwithstanding, the
Company may, at any time, for the purpose of obtaining a satisfaction and
discharge with respect to the Securities hereunder, or for any other reason, pay
or cause to be paid to the Trustee all sums held in trust for any such series by
the Trustee or any paying agent hereunder, as required by this Section 3.4, such
sums to be held by the Trustee upon the trusts herein contained.
(d) Anything in this Section 3.4 to the contrary notwithstanding, the
agreement to hold sums in trust as provided in this Section 3.4 is subject to
Sections 11.3 and 11.4.
SECTION 3.5. Certificate to Trustee.
The Company will deliver to the Trustee on or before 120 days after the
end of each fiscal year in each year, commencing with the first fiscal year
ending after the date hereof, so long as Securities are outstanding hereunder,
an Officers' Certificate, one of the signers of which shall be the principal
executive, principal financial or principal accounting officer of the Company
stating that in the course of the performance by the signers of their duties as
officers of the Company they would normally have knowledge of any default by the
Company in the performance of any covenants contained herein, stating whether or
not they have knowledge of any such default and, if so, specifying each such
default of which the signers have knowledge and the nature thereof.
SECTION 3.6. Compliance with Consolidation Provisions.
The Company will not, while any of the Securities remain outstanding,
consolidate with, or merge into, or merge into itself, or sell or convey all or
substantially all of its property to any other Person unless the provisions of
Article X hereof are complied with.
SECTION 3.7. Limitation on Dividends.
If at any time (i) an Event of Default shall have occurred and be
continuing (other than solely an Event of Default under Section 5.1(c) hereof),
(ii) there shall have occurred any event of which the Company has actual
knowledge that (a) is, or with the giving of notice or the lapse of time, or
both, would constitute an Event of Default (other than solely an Event of
Default under Section 5.1(c) hereof) and (b) in respect of which the Company
shall not have taken reasonable steps to cure, (iii) if the Securities are held
by the Property Trustee, the Company shall be in default with respect to its
payment obligations under the Capital Securities Guarantee or (iv) the Company
shall have given notice of its election of the exercise of its right to extend
the interest payment period pursuant to Section 16.1 and any such extension
shall be continuing, then, in each such case, the Company will not (i) declare
or pay any dividends or distributions on, or redeem, purchase, acquire, or make
a liquidation payment with respect to, any of the Company's capital stock (which
includes common and preferred stock) or (ii) make any payment of principal,
interest or premium, if any, on or repay or repurchase or redeem any debt
securities of the Company (including any Other Debentures)
22
<PAGE>
that rank pari passu with or junior in right of payment to the Securities or
(iii) make any guarantee payments with respect to any guarantee by the Company
of any securities of any Subsidiary of the Company (including Other Guarantees)
if such guarantee ranks pari passu or junior in right of payment to the
Securities (other than (a) dividends or distributions in shares of, or options,
warrants or rights to subscribe for or purchase shares of, Common Stock of the
Company; (b) any declaration of a dividend in connection with the implementation
of a stockholder's rights plan, or the issuance of stock under any such plan in
the future, or the redemption or repurchase of any such rights pursuant thereto;
(c) payments under the Capital Securities Guarantee; (d) as a direct result of,
and only to the extent required in order to avoid the issuance of fractional
shares of capital stock following a reclassification of the Company's capital
stock or the exchange or the conversion of one class or series of the Company's
capital stock for another class or series of the Company's capital stock; (e)
the purchase of fractional interests in shares of the Company's capital stock
pursuant to the conversion or exchange provisions of such capital stock or the
security being converted or exchanged; and (f) purchases of Common Stock related
to the issuance of Common Stock or rights under any of the Company's benefit
plans for its directors, officers or employees or any of the Company's dividend
reinvestment plans).
SECTION 3.8. Covenants as to Imperial Capital Trust.
In the event Securities are issued to Imperial Capital Trust or a
trustee of such trust in connection with the issuance of Trust Securities by
Imperial Capital Trust, for so long as such Trust Securities remain outstanding,
the Company will (i) maintain 100% direct ownership of the Common Securities of
Imperial Capital Trust; provided, however, that any successor of the Company,
permitted pursuant to Article X, may succeed to the Company's ownership of such
Common Securities, (ii) use its reasonable efforts to cause Imperial Capital
Trust (a) to remain a business trust, except in connection with a distribution
of Securities, the redemption of all of the Trust Securities of Imperial Capital
Trust or certain mergers, consolidations or amalgamations, each as permitted by
the Declaration of Imperial Capital Trust, and (b) to otherwise continue to be
treated as a grantor trust and not an association taxable as a corporation for
United States federal income tax purposes and (iii) to use its reasonable
efforts to cause each holder of Trust Securities to be treated as owning an
individual beneficial interest in the Securities.
SECTION 3.9. Payment of Expenses.
In connection with the offering, sale and issuance of the Securities to
the Imperial Capital Trust and in connection with the sale of the Trust
Securities by the Imperial Capital Trust, the Company, in its capacity as
borrower with respect to the Securities, shall:
(a) pay all costs and expenses relating to the offering, sale and
issuance of the Securities, including commissions to the initial purchasers
payable pursuant to the Purchase Agreement, fees and expenses in connection with
any exchange offer or other action to be
23
<PAGE>
taken pursuant to the Registration Rights Agreement and compensation of the
Trustee in accordance with the provisions of Section 6.6;
(b) pay all costs and expenses of the Imperial Capital Trust (including,
but not limited to, costs and expenses relating to the organization of the
Imperial Capital Trust, the offering, sale and issuance of the Trust Securities
(including commissions to the initial purchasers in connection therewith), the
fees and expenses of the Property Trustee and the Delaware Trustee, the costs
and expenses relating to the operation of the Imperial Capital Trust, including
without limitation, costs and expenses of accountants, attorneys, statistical or
bookkeeping services, expenses for printing and engraving and computing or
accounting equipment, paying agent(s), registrar(s), transfer agent(s),
duplicating, travel and telephone and other telecommunications expenses and
costs and expenses incurred in connection with the acquisition, financing and
disposition of assets of the Imperial Capital Trust;
(c) be primarily and fully liable for any indemnification obligations
arising with respect to the Declaration;
(d) pay any and all taxes (other than United States withholding taxes
attributable to the Imperial Capital Trust or its assets) and all liabilities,
costs and expenses with respect to such taxes of the Imperial Capital Trust; and
(e) pay all other fees, expenses, debts and obligations (other than
payments of principal of, premium, if any, or interest on the Trust Securities)
related to Imperial Capital Trust.
SECTION 3.10. Payment Upon Resignation or Removal.
Upon termination of this Indenture or the removal or resignation of the
Trustee, unless otherwise stated, the Company shall pay to the Trustee all
amounts accrued and owing to the date of such termination, removal or
resignation. Upon termination of the Declaration or the removal or resignation
of the Delaware Trustee or the Property Trustee, as the case may be, pursuant to
Section 5.7 of the Declaration, the Company shall pay to the Delaware Trustee or
the Property Trustee, as the case may be, all amounts accrued and owing to the
date of such termination, removal or resignation.
24
<PAGE>
ARTICLE IV
SECURITYHOLDERS' LISTS AND REPORTS BY THE
COMPANY AND THE TRUSTEE
SECTION 4.1. Securityholders' Lists.
The Company covenants and agrees that it will furnish or cause to be
furnished to the Trustee:
(a) on a semi-annual basis on each regular record date for the
Securities in connection with the payment of interest thereon, a list, in such
form as the Trustee may reasonably require, of the names and addresses of the
Securityholders as of such record date; and
(b) at such other times as the Trustee may request in writing, within 30
days after the receipt by the Company, of any such request, a list of similar
form and content as of a date not more than 15 days prior to the time such list
is furnished,
except that, no such lists need be furnished so long as the Trustee is
in possession thereof by reason of its acting as Security registrar.
SECTION 4.2. Preservation and Disclosure of Lists.
(a) The Trustee shall preserve, in as current a form as is reasonably
practicable, all information as to the names and addresses of the holders of the
Securities (1) contained in the most recent list furnished to it as provided in
Section 4.1 or (2) received by it in the capacity of Securities registrar (if so
acting) hereunder. The Trustee may destroy any list furnished to it as provided
in Section 4.1 upon receipt of a new list so furnished.
(b) In case three or more holders of Securities (hereinafter referred to
as "applicants") apply in writing to the Trustee and furnish to the Trustee
reasonable proof that each such applicant has owned a Security for a period of
at least six months preceding the date of such application, and such application
states that the applicants desire to communicate with other holders of
Securities or with holders of all Securities with respect to their rights under
this Indenture and is accompanied by a copy of the form of proxy or other
communication which such applicants propose to transmit, then the Trustee shall
within 5 Business Days after the receipt of such application, at its election,
either:
(1) afford such applicants access to the information preserved at
the time by the Trustee in accordance with the provisions of subsection (a) of
this Section 4.2, or
25
<PAGE>
(2) inform such applicants as to the approximate number of
holders of all Securities, whose names and addresses appear in the information
preserved at the time by the Trustee in accordance with the provisions of
subsection (a) of this Section 4.2, and as to the approximate cost of mailing to
such Securityholders the form of proxy or other communication, if any, specified
in such application.
If the Trustee shall elect not to afford such applicants access to such
information, the Trustee, upon the written request of such applicants, shall
mail to each Securityholder whose name and address appear in the information
preserved at the time by the Trustee in accordance with the provisions of
subsection (a) of this Section 4.2 a copy of the form of proxy or other
communication which is specified in such request with reasonable promptness
after a tender to the Trustee of the material to be mailed and of payment, or
provision for the payment, of the reasonable expenses of mailing, unless within
five days after such tender, the Trustee shall mail to such applicants and file
with the Commission, together with a copy of the material to be mailed, a
written statement to the effect that, in the opinion of the Trustee, such
mailing would be contrary to the best interests of the holders of Securities of
such series or all Securities, as the case may be, or would be in violation of
applicable law. Such written statement shall specify the basis of such opinion.
If the Commission, after opportunity for a hearing upon the objections specified
in the written statement so filed, shall enter an order refusing to sustain any
of such objections or if, after the entry of an order sustaining one or more of
such objections, the Commission shall find, after notice and opportunity for
hearing, that all the objections so sustained have been met and shall enter an
order so declaring, the Trustee shall mail copies of such material to all such
Securityholders with reasonable promptness after the entry of such order and the
renewal of such tender; otherwise the Trustee shall be relieved of any
obligation or duty to such applicants respecting their application.
(c) Each and every holder of Securities, by receiving and holding the
same, agrees with the Company and the Trustee that neither the Company nor the
Trustee nor any paying agent shall be held accountable by reason of the
disclosure of any such information as to the names and addresses of the holders
of Securities in accordance with the provisions of subsection (b) of this
Section 4.2, regardless of the source from which such information was derived,
and that the Trustee shall not be held accountable by reason of mailing any
material pursuant to a request made under said subsection (b).
SECTION 4.3. Reports by Company.
(a) The Company covenants and agrees to file with the Trustee, within 15
days after the date on which the Company is required to file the same with the
Commission, copies of the annual reports and of the information, documents and
other reports (or copies of such portions of any of the foregoing as said
Commission may from time to time by rules and regulations prescribe) which the
Company may be required to file with the Commission pursuant to Section 13 or
Section 15(d) of the Exchange Act; or, if the Company is not required to file
information, documents or reports pursuant to either of such sections, then to
file with the
26
<PAGE>
Trustee and the Commission, in accordance with rules and regulations prescribed
from time to time by the Commission, such of the supplementary and periodic
information, documents and reports which may be required pursuant to Section 13
of the Exchange Act in respect of a security listed and registered on a national
securities exchange as may be prescribed from time to time in such rules and
regulations.
(b) The Company covenants and agrees to file with the Trustee and the
Commission, in accordance with the rules and regulations prescribed from time to
time by said Commission, such additional information, documents and reports with
respect to compliance by the Company with the conditions and covenants provided
for in this Indenture as may be required from time to time by such rules and
regulations.
(c) The Company covenants and agrees to transmit by mail to all holders
of Securities, as the names and addresses of such holders appear upon the
Security Register, within 30 days after the filing thereof with the Trustee,
such summaries of any information, documents and reports required to be filed by
the Company pursuant to subsections (a) and (b) of this Section 4.3 as may be
required by rules and regulations prescribed from time to time by the
Commission.
(d) Delivery of such reports, information and documents to the Trustee
is for informational purposes only and the Trustee's receipt of such shall not
constitute constructive notice of any information contained therein or
determinable from information contained therein, including the Company's
compliance with any of its covenants hereunder (as to which the Trustee is
entitled to rely exclusively on Officers' Certificates).
(e) So long as is required for an offer or sale of the Securities to
qualify for an exemption under Rule 144A under the Securities Act, the Company
shall, upon request, provide the information required by clause (d)(4)
thereunder to each Holder and to each beneficial owner and prospective purchaser
of Securities identified by any holder of Restricted Securities, unless such
information is furnished to the Commission pursuant to Section 13 or 15(d) of
the Exchange Act.
SECTION 4.4. Reports by the Trustee.
(a) The Trustee shall transmit to Securityholders such reports
concerning the Trustee and its actions under this Indenture as may be required
pursuant to the Trust Indenture Act at the times and in the manner provided
pursuant thereto. If required by Section 313(a) of the Trust Indenture Act, the
Trustee, within sixty days after each March 15 following the date of this
Indenture, commencing March 15, 1998, shall deliver to Securityholders a brief
report, dated as of such March 15, which complies with the provisions of such
Section 313(a).
(b) A copy of each such report shall, at the time of such transmission
to Securityholders, be filed by the Trustee with each stock exchange, if any,
upon which the
27
<PAGE>
Securities are listed, with the Commission and with the Company. The Company
will promptly notify the Trustee if the Securities are listed on any stock
exchange.
ARTICLE V
REMEDIES OF THE TRUSTEE AND SECURITYHOLDERS
ON EVENT OF DEFAULT
SECTION 5.1. Events of Default.
One or more of the following events of default shall constitute an Event
of Default hereunder (whatever the reason for such Event of Default and whether
it shall be voluntary 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) default in the payment of any interest upon any Security or any
Other Debentures when it becomes due and payable, and continuance of such
default for a period of 30 days; provided, however, that a valid extension of an
interest payment period by the Company in accordance with the terms hereof shall
not constitute a default in the payment of interest for this purpose; or
(b) default in the payment of all or any part of the principal of (or
premium, if any, on) any Security or any Other Debentures as and when the same
shall become due and payable either at maturity, upon redemption, by declaration
or otherwise; or
(c) default in the performance, or breach, of any covenant or warranty
of the Company in this Indenture (other than a covenant or warranty a default in
whose performance or whose breach is elsewhere in this Section specifically
dealt with), and continuance of such default or breach for a period of 90 days
after there has been given, by registered or certified mail, to the Company by
the Trustee or to the Company and the Trustee by the holders of at least 25% in
aggregate principal amount of the outstanding Securities a written notice
specifying such default or breach and requiring it to be remedied and stating
that such notice is a "Notice of Default" hereunder; or
(d) a court having jurisdiction in the premises shall enter a decree or
order for relief in respect of the Company in an involuntary case under any
applicable bankruptcy, insolvency or other similar law now or hereafter in
effect, or appointing a receiver, liquidator, assignee, custodian, trustee,
sequestrator (or similar official) of the Company or for any substantial part of
its property, or ordering the winding-up or liquidation of its affairs and such
decree or order shall remain unstayed and in effect for a period of 90
consecutive days; or
(e) the Company shall commence a voluntary case under any applicable
bankruptcy, insolvency or other similar law now or hereafter in effect, shall
consent to the entry of an
28
<PAGE>
order for relief in an involuntary case under any such law, or shall consent to
the appointment of or taking possession by a receiver, liquidator, assignee,
trustee, custodian, sequestrator (or other similar official) of the Company or
of any substantial part of its property, or shall make any general assignment
for the benefit of creditors, or shall fail generally to pay its debts as they
become due.
If an Event of Default with respect to Securities at the time
outstanding occurs and is continuing, then in every such case the Trustee or the
holders of not less than 25% in aggregate principal amount of the Securities
then outstanding may declare the principal amount of all Securities to be due
and payable immediately, by a notice in writing to the Company (and to the
Trustee if given by the holders of the outstanding Securities), and upon any
such declaration the same shall become immediately due and payable.
The foregoing provisions, however, are subject to the condition that if,
at any time after the principal of the Securities shall have been so declared
due and payable, and before any judgment or decree for the payment of the moneys
due shall have been obtained or entered as hereinafter provided, (i) the Company
shall pay or shall deposit with the Trustee a sum sufficient to pay (A) all
matured installments of interest upon all the Securities and the principal of
and premium, if any, on any and all Securities which shall have become due
otherwise than by acceleration (with interest upon such principal and premium,
if any, and, to the extent that payment of such interest is enforceable under
applicable law, on overdue installments of interest, at the same rate as the
rate of interest specified in the Securities to the date of such payment or
deposit) and (B) such amount as shall be sufficient to cover reasonable
compensation to the Trustee and each predecessor Trustee, their respective
agents, attorneys and counsel, and all other expenses and liabilities incurred,
and all advances made, by the Trustee and each predecessor Trustee except as a
result of negligence or bad faith, and (ii) any and all Events of Default under
the Indenture, other than the non-payment of the principal of the Securities
which shall have become due solely by such declaration of acceleration, shall
have been cured, waived or otherwise remedied as provided herein, then, in every
such case, the holders of a majority in aggregate principal amount of the
Securities then outstanding, by written notice to the Company and to the
Trustee, may rescind and annul such declaration and its consequences, but no
such waiver or rescission and annulment shall extend to or shall affect any
subsequent default or shall impair any right consequent thereon.
In case the Trustee shall have proceeded to enforce any right under this
Indenture and such proceedings shall have been discontinued or abandoned because
of such rescission or annulment or for any other reason or shall have been
determined adversely to the Trustee, then and in every such case the Company,
the Trustee and the holders of the Securities shall be restored respectively to
their several positions and rights hereunder, and all rights, remedies and
powers of the Company, the Trustee and the holders of the Securities shall
continue as though no such proceeding had been taken.
29
<PAGE>
SECTION 5.2. Payment of Securities on Default; Suit Therefor.
The Company covenants that (a) in case default shall be made in the
payment of any installment of interest upon any of the Securities as and when
the same shall become due and payable, and such default shall have continued for
a period of 30 days, or (b) in case default shall be made in the payment of the
principal of or premium, if any, on any of the Securities as and when the same
shall have become due and payable, whether at maturity of the Securities or upon
redemption or by declaration or otherwise, then, upon demand of the Trustee, the
Company will pay to the Trustee, for the benefit of the holders of the
Securities, the whole amount that then shall have become due and payable on all
such Securities for principal and premium, if any, or interest, or both, as the
case may be, with interest upon the overdue principal and premium, if any, and
(to the extent that payment of such interest is enforceable under applicable law
and, if the Securities are held by Imperial Capital Trust or a trustee of such
trust, without duplication of any other amounts paid by Imperial Capital Trust
or a trustee in respect thereof) upon the overdue installments of interest at
the rate borne by the Securities; and, in addition thereto, such further amount
as shall be sufficient to cover the costs and expenses of collection, including
a reasonable compensation to the Trustee, its agents, attorneys and counsel, and
any expenses or liabilities incurred by the Trustee hereunder other than through
its negligence or bad faith.
In case the Company shall fail forthwith to pay such amounts upon such
demand, the Trustee, in its own name and as trustee of an express trust, shall
be entitled and empowered to institute any actions or proceedings at law or in
equity for the collection of the sums so due and unpaid, and may prosecute any
such action or proceeding to judgment or final decree, and may enforce any such
judgment or final decree against the Company or any other obligor on the
Securities and collect in the manner provided by law out of the property of the
Company or any other obligor on the Securities wherever situated the moneys
adjudged or decreed to be payable.
In case there shall be pending proceedings for the bankruptcy or for the
reorganization of the Company or any other obligor on the Securities under Title
11, United States Code, or any other applicable law, or in case a receiver or
trustee shall have been appointed for the property of the Company or such other
obligor, or in the case of any other similar judicial proceedings relative to
the Company or other obligor upon the Securities, or to the creditors or
property of the Company or such other obligor, the Trustee, irrespective of
whether the principal of the Securities shall then be due and payable as therein
expressed or by declaration or otherwise and irrespective of whether the Trustee
shall have made any demand pursuant to the provisions of this Section 5.2, shall
be entitled and empowered, by intervention in such proceedings or otherwise, to
file and prove a claim or claims for the whole amount of principal and interest
owing and unpaid in respect of the Securities and, in case of any judicial
proceedings, to file such proofs of claim and other papers or documents as may
be necessary or advisable in order to have the claims of the Trustee (including
any claim for reasonable compensation to the Trustee and each predecessor
Trustee, and their respective agents,
30
<PAGE>
attorneys and counsel, and for reimbursement of all expenses and liabilities
incurred, and all advances made, by the Trustee and each predecessor Trustee,
except as a result of negligence or bad faith) and of the Securityholders
allowed in such judicial proceedings relative to the Company or any other
obligor on the Securities, or to the creditors or property of the Company or
such other obligor, unless prohibited by applicable law and regulations, to vote
on behalf of the holders of the Securities in any election of a trustee or a
standby trustee in arrangement, reorganization, liquidation or other bankruptcy
or insolvency proceedings or person performing similar functions in comparable
proceedings, and to collect and receive any moneys or other property payable or
deliverable on any such claims, and to distribute the same after the deduction
of its charges and expenses; and any receiver, assignee or trustee in bankruptcy
or reorganization is hereby authorized by each of the Securityholders to make
such payments to the Trustee, and, in the event that the Trustee shall consent
to the making of such payments directly to the Securityholders, to pay to the
Trustee such amounts as shall be sufficient to cover reasonable compensation to
the Trustee, each predecessor Trustee and their respective agents, attorneys and
counsel, and all other expenses and liabilities incurred, and all advances made,
by the Trustee and each predecessor Trustee except as a result of negligence or
bad faith.
Nothing herein contained shall be construed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Securityholder any
plan of reorganization, arrangement, adjustment or composition affecting the
Securities or the rights of any holder thereof or to authorize the Trustee to
vote in respect of the claim of any Securityholder in any such proceeding.
All rights of action and of asserting claims under this Indenture, or
under any of the Securities, may be enforced by the Trustee without the
possession of any of the Securities, or the production thereof on any trial or
other proceeding relative thereto, and any such suit or proceeding instituted by
the Trustee shall be brought in its own name as trustee of an express trust, and
any recovery of judgment shall be for the ratable benefit of the holders of the
Securities.
In any proceedings brought by the Trustee (and also any proceedings
involving the interpretation of any provision of this Indenture to which the
Trustee shall be a party) the Trustee shall be held to represent all the holders
of the Securities, and it shall not be necessary to make any holders of the
Securities parties to any such proceedings.
SECTION 5.3. Application of Moneys Collected by Trustee.
Any moneys collected by the Trustee shall be applied in the order
following, at the date or dates fixed by the Trustee for the distribution of
such moneys, upon presentation of the Securities in respect of which moneys have
been collected, and stamping thereon the payment, if only partially paid, and
upon surrender thereof if fully paid:
31
<PAGE>
First: To the payment of costs and expenses of collection applicable to
the Securities and reasonable compensation to the Trustee, its agents, attorneys
and counsel, and of all other expenses and liabilities incurred, and all
advances made, by the Trustee except as a result of its negligence or bad faith;
Second: To the payment of all Senior Indebtedness of the Company if and
to the extent required by Article XV;
Third: To the payment of the amounts then due and unpaid upon Securities
for principal of (and premium, if any) and interest on the Securities, in
respect of which or for the benefit of which money has been collected, ratably,
without preference of priority of any kind, according to the amounts due on such
Securities for principal (and premium, if any) and interest, respectively; and
Fourth: To the Company.
SECTION 5.4. Proceedings by Securityholders.
No holder of any Security shall have any right by virtue of or by
availing of any provision of this Indenture to institute any suit, action or
proceeding in equity or at law upon or under or with respect to this Indenture
or for the appointment of a receiver or trustee, or for any other remedy
hereunder, unless such holder previously shall have given to the Trustee written
notice of an Event of Default and of the continuance thereof with respect to the
Securities specifying such Event of Default, as hereinbefore provided, and
unless also the holders of not less than 25% in aggregate principal amount of
the Securities then outstanding shall have made written request upon the Trustee
to institute such action, suit or proceeding in its own name as Trustee
hereunder and shall have offered to the Trustee such reasonable indemnity as it
may require against the costs, expenses and liabilities to be incurred therein
or thereby, and the Trustee for 60 days after its receipt of such notice,
request and offer of indemnity shall have failed to institute any such action,
suit or proceeding, it being understood and intended, and being expressly
covenanted by the taker and holder of every Security with every other taker and
holder and the Trustee, that no one or more holders of Securities shall have any
right in any manner whatever by virtue of or by availing of any provision of
this Indenture to affect, disturb or prejudice the rights of any other holder of
Securities, or to obtain or seek to obtain priority over or preference to any
other such holder, or to enforce any right under this Indenture, except in the
manner herein provided and for the equal, ratable and common benefit of all
holders of Securities.
Notwithstanding any other provisions in this Indenture, however, the
right of any holder of any Security to receive payment of the principal of (and
premium, if any) and interest on such Security, on or after the same shall have
become due and payable, or to institute suit for the enforcement of any such
payment, shall not be impaired or affected without the consent of such holder
and by accepting a Security hereunder it is expressly understood, intended and
32
<PAGE>
covenanted by the taker and holder of every Security with every other such taker
and holder and the Trustee, that no one or more holders of Securities shall have
any right in any manner whatsoever by virtue or by availing of any provision of
this Indenture to affect, disturb or prejudice the rights of the holders of any
other Securities, or to obtain or seek to obtain priority over or preference to
any other such holder, or to enforce any right under this Indenture, except in
the manner herein provided and for the equal, ratable and common benefit of all
holders of Securities. For the protection and enforcement of the provisions of
this Section, each and every Securityholder and the Trustee shall be entitled to
such relief as can be given either at law or in equity.
The Company and the Trustee acknowledge that pursuant to the
Declaration, the holders of Capital Securities are entitled, in the
circumstances and subject to the limitations set forth therein, to commence a
Direct Action with respect to any Event of Default under this Indenture and the
Securities.
SECTION 5.5. Proceedings by Trustee.
In case an Event of Default occurs with respect to Securities and is
continuing, the Trustee may in its discretion proceed to protect and enforce the
rights vested in it by this Indenture by such appropriate judicial proceedings
as the Trustee shall deem most effectual to protect and enforce any of such
rights, either by suit in equity or by action at law or by proceeding in
bankruptcy or otherwise, whether for the specific enforcement of any covenant or
agreement contained in this Indenture or in aid of the exercise of any power
granted in this Indenture, or to enforce any other legal or equitable right
vested in the Trustee by this Indenture or by law.
SECTION 5.6. Remedies Cumulative and Continuing.
Except as provided in the last paragraph of Section 2.8, all powers and
remedies given by this Article V to the Trustee or to the Securityholders, to
the extent permitted by law, shall be deemed cumulative and not exclusive of any
other powers and remedies available to the Trustee or the holders of the
Securities, by judicial proceedings or otherwise, to enforce the performance or
observance of the covenants and agreements contained in this Indenture or
otherwise established with respect to the Securities, and no delay or omission
of the Trustee or of any holder of any of the Securities to exercise any right
or power accruing upon any Event of Default occurring and continuing as
aforesaid shall impair any such right or power, or shall be construed to be a
waiver of any such default or an acquiescence therein; and, subject to the
provisions of Section 5.4, every power and remedy given by this Article V or by
law to the Trustee or to the Securityholders may be exercised from time to time,
and as often as shall be deemed expedient, by the Trustee or by the
Securityholders.
33
<PAGE>
SECTION 5.7. Direction of Proceedings and Waiver of Defaults by Majority
of Securityholders.
The holders of a majority in aggregate principal amount of the
Securities at the time outstanding shall have the right to direct the time,
method and place of conducting any proceeding for any remedy available to the
Trustee, or exercising any trust or power conferred on the Trustee; provided,
however, that (subject to the provisions of Section 6.1) the Trustee shall have
the right to decline to follow any such direction if the Trustee, upon the
advice of counsel, shall determine that the action so directed would be unjustly
prejudicial to the holders not taking part in such direction or if the Trustee
being advised by counsel determines that the action or proceeding so directed
may not lawfully be taken or if the Trustee, in good faith, by its board of
directors or trustees, executive committee or a trust committee of directors or
trustees and/or Responsible Officers shall determine that the action or
proceedings so directed would involve the Trustee in personal liability. Prior
to any declaration accelerating the maturity of the Securities, the holders of a
majority in aggregate principal amount of the Securities at the time outstanding
may on behalf of the holders of all of the Securities waive any past default or
Event of Default and its consequences except a default (a) in the payment of
principal of or premium, if any, or interest on any of the Securities or (b) in
respect of covenants or provisions hereof which cannot be modified or amended
without the consent of the holder of each Security affected; provided, however,
that if the Securities are held by the Property Trustee, such waiver or
modification to such waiver shall not be effective until the holders of a
majority in aggregate liquidation amount of Trust Securities shall have
consented to such waiver or modification to such waiver; and provided further,
that if the consent of the holder of each outstanding Security is required, such
waiver shall not be effective until each holder of the Trust Securities shall
have consented to such waiver. Upon any such waiver, the default covered thereby
shall be deemed to be cured for all purposes of this Indenture and the Company,
the Trustee and the holders of the Securities shall be restored to their former
positions and rights hereunder, respectively; but no such waiver shall extend to
any subsequent or other default or impair any right consequent thereon. Whenever
any default or Event of Default hereunder shall have been waived as permitted by
this Section 5.7, said default or Event of Default shall for all purposes of the
Securities and this Indenture be deemed to have been cured and to be not
continuing.
SECTION 5.8. Notice of Defaults.
The Trustee, within 90 days after the occurrence of a default with
respect to the Securities, shall mail to all Securityholders, as the names and
addresses of such holders appear upon the Security register, notice of all
defaults known to the Trustee, unless such defaults shall have been cured before
the giving of such notice (the term "defaults" for the purpose of this Section
5.8 being hereby defined to be the events specified in clauses (a), (b), (c),
(d) and (e) of Section 5.1, not including periods of grace, if any, provided for
therein, and irrespective of the giving of written notice specified in clause
(c) of Section 5.1); and provided that, except in the case of default in the
payment of the principal of or premium, if any, or interest on any
34
<PAGE>
of the Securities, the Trustee shall be protected in withholding such notice if
and so long as the board of directors, the executive committee, or a trust
committee of directors and/or Responsible Officers of the Trustee in good faith
determines that the withholding of such notice is in the interests of the
Securityholders; and provided further, that in the case of any default of the
character specified in Section 5.1(c) no such notice to Securityholders shall be
given until at least 60 days after the occurrence thereof but shall be given
within 90 days after such occurrence.
SECTION 5.9. Undertaking to Pay Costs.
All parties to this Indenture agree, and each holder of any Security by
his acceptance thereof shall be deemed to have agreed, that any court in its
discretion may require, in any suit for the enforcement of any right or remedy
under this Indenture, or in any suit against the Trustee for any action taken or
omitted by it as Trustee, the filing by any party litigant in such suit of an
undertaking to pay the costs of such suit, and that such court may in its
discretion assess reasonable costs, including reasonable attorneys' fees and
expenses, against any party litigant in such suit, having due regard to the
merits and good faith of the claims or defenses made by such party litigant; but
the provisions of this Section 5.9 shall not apply to any suit instituted by the
Trustee, to any suit instituted by any Securityholder, or group of
Securityholders, holding in the aggregate more than 10% in aggregate principal
amount of the Securities outstanding, or to any suit instituted by any
Securityholder for the enforcement of the payment of the principal of (or
premium, if any) or interest on any Security against the Company on or after the
same shall have become due and payable.
ARTICLE VI
CONCERNING THE TRUSTEE
SECTION 6.1. Duties and Responsibilities of Trustee.
With respect to the holders of the Securities issued hereunder, the
Trustee, prior to the occurrence of an Event of Default and after the curing or
waiving of all Events of Default which may have occurred, undertakes to perform
such duties and only such duties as are specifically set forth in this
Indenture. In case an Event of Default has occurred (which has not been cured or
waived) the Trustee shall exercise such of the rights and powers vested in it by
this Indenture, and use the same degree of care and skill in their exercise, as
a prudent man would exercise or use under the circumstances in the conduct of
his own affairs.
No provision of this Indenture shall be construed to relieve the Trustee
from liability for its own negligent action, its own negligent failure to act or
its own willful misconduct, except that
35
<PAGE>
(a) prior to the occurrence of an Event of Default and after the curing
or waiving of all Events of Default which may have occurred
(1) the duties and obligations of the Trustee shall be determined
solely by the express provisions of this Indenture, and the Trustee shall not be
liable except for the performance of such duties and obligations as are
specifically set forth in this Indenture, and no implied covenants or
obligations shall be read into this Indenture against the Trustee; and
(2) in the absence of bad faith on the part of the Trustee, the
Trustee may conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon any certificates or opinions
furnished to the Trustee and conforming to the requirements of this Indenture;
but, in the case of any such certificates or opinions which by any provision
hereof are specifically required to be furnished to the Trustee, the Trustee
shall be under a duty to examine the same to determine whether or not they
conform to the requirements of this Indenture;
(b) the Trustee shall not be liable for any error of judgment made in
good faith by a Responsible Officer or Officers of the Trustee, unless it shall
be proved that the Trustee was negligent in ascertaining the pertinent facts
upon which such judgment was made;
(c) the Trustee shall not be liable with respect to any action taken or
omitted to be taken by it in good faith, in accordance with the direction of the
Securityholders pursuant to Section 5.7, relating to the time, method and place
of conducting any proceeding for any remedy available to the Trustee, or
exercising any trust or power conferred upon the Trustee, under this Indenture;
and
(d) None of the provisions contained in this Indenture shall require the
Trustee to expend or risk its own funds or otherwise incur personal financial
liability in the performance of any of its duties or in the exercise of any of
its rights or powers, if there is reasonable ground for believing that the
repayment of such funds or liability is not reasonably assured to it under the
terms of this Indenture or adequate indemnity against such risk is not
reasonably assured to it.
SECTION 6.2. Reliance on Documents, Opinions, Etc.
Except as otherwise provided in Section 6.1:
(a) the Trustee may rely and shall be protected in acting or refraining
from acting upon any resolution, certificate, statement, instrument, opinion,
report, notice, request, consent, order, bond, note, debenture or other paper or
document believed by it to be genuine and to have been signed or presented by
the proper party or parties;
36
<PAGE>
(b) any request, direction, order or demand of the Company mentioned
herein may be sufficiently evidenced by an Officers' Certificate (unless other
evidence in respect thereof be herein specifically prescribed); and any Board
Resolution may be evidenced to the Trustee by a copy thereof certified by the
Secretary or an Assistant Secretary of the Company;
(c) the Trustee may consult with counsel of its selection and any advice
or Opinion of Counsel shall be full and complete authorization and protection in
respect of any action taken or suffered omitted by it hereunder in good faith
and in accordance with such advice or Opinion of Counsel;
(d) the Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request, order or
direction of any of the Securityholders, pursuant to the provisions of this
Indenture, unless such Securityholders shall have offered to the Trustee
reasonable security or indemnity against the costs, expenses and liabilities
which may be incurred therein or thereby;
(e) the Trustee shall not be liable for any action taken or omitted by
it in good faith and believed by it to be authorized or within the discretion or
rights or powers conferred upon it by this Indenture; nothing contained herein
shall, however, relieve the Trustee of the obligation, upon the occurrence of an
Event of Default (that has not been cured or waived), to exercise such of the
rights and powers vested in it by this Indenture, and to use the same degree of
care and skill in their exercise, as a prudent man would exercise or use under
the circumstances in the conduct of his own affairs;
(f) the Trustee shall not be bound to make any investigation into the
facts or matters stated in any resolution, certificate, statement, instrument,
opinion, report, notice, request, consent, order, approval, bond, debenture,
coupon or other paper or document, unless requested in writing to do so by the
holders of a majority in aggregate principal amount of the outstanding
Securities; provided, however, that if the payment within a reasonable time to
the Trustee of the costs, expenses or liabilities likely to be incurred by it in
the making of such investigation is, in the opinion of the Trustee, not
reasonably assured to the Trustee by the security afforded to it by the terms of
this Indenture, the Trustee may require reasonable indemnity against such
expense or liability as a condition to so proceeding; and
(g) the Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents (including
any Authenticating Agent) or attorneys, and the Trustee shall not be responsible
for any misconduct or negligence on the part of any such agent or attorney
appointed by it with due care.
37
<PAGE>
SECTION 6.3. No Responsibility for Recitals, Etc.
The recitals contained herein and in the Securities (except in the
certificate of authentication of the Trustee or the Authenticating Agent) shall
be taken as the statements of the Company and the Trustee and the Authenticating
Agent assume no responsibility for the correctness of the same. The Trustee and
the Authenticating Agent make no representations as to the validity or
sufficiency of this Indenture or of the Securities. The Trustee and the
Authenticating Agent shall not be accountable for the use or application by the
Company of any Securities or the proceeds of any Securities authenticated and
delivered by the Trustee or the Authenticating Agent in conformity with the
provisions of this Indenture. The Trustee shall not be charged with knowledge of
any default or Event of Default under Section 5.1(a) or (b) relating to Other
Debentures unless (i) a Responsible Officer of the Trustee assigned to its
Principal Office shall have actual knowledge thereof or (ii) the Company, any
Securityholder or the holder of any Other Debenture shall have given the Trustee
written notice thereof in accordance with Section 13.4.
SECTION 6.4. Trustee, Authenticating Agent, Paying Agents, Transfer
Agents or Registrar May Own Securities.
The Trustee or any Authenticating Agent or any paying agent or any
transfer agent or any Security registrar, in its individual or any other
capacity, may become the owner or pledgee of Securities with the same rights it
would have if it were not Trustee, Authenticating Agent, paying agent, transfer
agent or Security registrar.
SECTION 6.5. Moneys to be Held in Trust.
Subject to the provisions of Section 11.4, all moneys received by the
Trustee or any paying agent, until used or applied as herein provided, shall be
held in trust for the purpose for which they were received, but need not be
segregated from other funds except to the extent required by law. The Trustee
and any paying agent shall be under no liability for interest on any money
received by it hereunder except as otherwise agreed in writing with the Company.
So long as no Event of Default shall have occurred and be continuing, all
interest allowed on any such moneys shall be paid from time to time upon the
written order of the Company, signed by the Chairman of the Board of Directors,
the President or a Vice President or the Treasurer or an Assistant Treasurer of
the Company.
SECTION 6.6. Compensation and Expenses of Trustee.
The Company covenants and agrees to pay to the Trustee from time to
time, and the Trustee shall be entitled to, such compensation as shall be agreed
to in writing between the Company and the Trustee (which shall not be limited by
any provision of law in regard to the compensation of a trustee of an express
trust), and the Company will pay or reimburse the Trustee upon its request for
all reasonable expenses, disbursements and advances incurred or
38
<PAGE>
made by the Trustee in accordance with any of the provisions of this Indenture
(including the reasonable compensation and the expenses and disbursements of its
counsel and of all persons not regularly in its employ) except any such expense,
disbursement or advance as may arise from its negligence or bad faith. The
Company also covenants to indemnify each of the Trustee or any predecessor
Trustee (and its officers, agents, directors and employees) for, and to hold it
harmless against, any and all loss, damage, claim, liability or expense
including taxes (other than taxes based on the income of the Trustee) incurred
without negligence or bad faith on the part of the Trustee and arising out of or
in connection with the acceptance or administration of this trust, including the
costs and expenses of defending itself against any claim of liability in the
premises. The obligations of the Company under this Section 6.6 to compensate
and indemnify the Trustee and to pay or reimburse the Trustee for expenses,
disbursements and advances shall constitute additional indebtedness hereunder.
Such additional indebtedness shall be secured by a lien prior to that of the
Securities upon all property and funds held or collected by the Trustee as such,
except funds held in trust for the benefit of the holders of particular
Securities.
Without prejudice to any other rights available to the Trustee under
applicable law, when the Trustee incurs expenses or renders services in
connection with an Event of Default specified in Section 5.1(d) or Section
5.1(e), the expenses (including the reasonable charges and expenses of its
counsel) and the compensation for the services are intended to constitute
expenses of administration under any applicable federal or state bankruptcy,
insolvency or other similar law.
The provisions of this Section shall survive the termination of this
Indenture.
SECTION 6.7. Officers' Certificate as Evidence.
Except as otherwise provided in Sections 6.1 and 6.2, whenever in the
administration of the provisions of this Indenture the Trustee shall deem it
necessary or desirable that a matter be proved or established prior to taking or
omitting any action hereunder, such matter (unless other evidence in respect
thereof is herein specifically prescribed), in the absence of negligence or bad
faith on the part of the Trustee, may be deemed to be conclusively proved and
established by an Officers' Certificate delivered to the Trustee, and such
certificate, in the absence of negligence or bad faith on the part of the
Trustee, shall be full warrant to the Trustee for any action taken or omitted by
it under the provisions of this Indenture upon the faith thereof.
SECTION 6.8. Conflicting Interest of Trustee.
If the Trustee has or shall acquire any "conflicting interest" within
the meaning of Section 310(b) of the Trust Indenture Act, the Trustee and the
Company shall in all respects comply with the provisions of Section 310(b) of
the Trust Indenture Act, subject to the penultimate paragraph thereof.
39
<PAGE>
SECTION 6.9. Eligibility of Trustee.
The Trustee hereunder shall at all times be a corporation organized and
doing business under the laws of the United States of America or any state or
territory thereof or of the District of Columbia or a corporation or other
Person permitted to act as trustee by the Commission authorized under such laws
to exercise corporate trust powers, having a combined capital and surplus of at
least 50 million U.S. dollars ($50,000,000) and subject to supervision or
examination by federal, state, territorial or District of Columbia authority. If
such corporation publishes reports of condition at least annually, pursuant to
law or to the requirements of the aforesaid supervising or examining authority,
then for the purposes of this Section 6.9 the combined capital and surplus of
such corporation shall be deemed to be its combined capital and surplus as set
forth in its most recent report of condition so published.
The Company may not, nor may any Person directly or indirectly
controlling, controlled by, or under common control with the Company, serve as
Trustee.
In case at any time the Trustee shall cease to be eligible in accordance
with the provisions of this Section 6.9, the Trustee shall resign immediately in
the manner and with the effect specified in Section 6.10.
SECTION 6.10. Resignation or Removal of Trustee.
(a) The Trustee, or any trustee or trustees hereafter appointed, may at
any time resign by giving written notice of such resignation to the Company and
by mailing notice thereof to the holders of the Securities at their addresses as
they shall appear on the Security register. Upon receiving such notice of
resignation, the Company shall promptly appoint a successor trustee or trustees
by written instrument, in duplicate, one copy of which instrument shall be
delivered to the resigning Trustee and one copy to the successor trustee. If no
successor trustee shall have been so appointed and have accepted appointment
within 60 days after the mailing of such notice of resignation to the
Securityholders, the resigning Trustee may petition any court of competent
jurisdiction for the appointment of a successor trustee, or any Securityholder
who has been a bona fide holder of a Security for at least six months may,
subject to the provisions of Section 5.9, on behalf of himself and all others
similarly situated, petition any such court for the appointment of a successor
trustee. Such court may thereupon, after such notice, if any, as it may deem
proper and prescribe, appoint a successor trustee.
(b) In case at any time any of the following shall occur,
(1) the Trustee shall fail to comply with the provisions of
Section 6.8 after written request therefor by the Company or by any
Securityholder who has been a bona fide holder of a Security or Securities for
at least six months, or
40
<PAGE>
(2) the Trustee shall cease to be eligible in accordance with the
provisions of Section 6.9 and shall fail to resign after written request
therefor by the Company or by any such Securityholder, or
(3) the Trustee shall become incapable of acting, or shall be
adjudged a bankrupt or insolvent, or a receiver of the Trustee or of its
property shall be appointed, or any public officer shall take charge or control
of the Trustee or of its property or affairs for the purpose of rehabilitation,
conservation or liquidation,
then, in any such case, the Company may remove the Trustee and
appoint a successor trustee by written instrument, in duplicate, one copy of
which instrument shall be delivered to the Trustee so removed and one copy to
the successor trustee, or, subject to the provisions of Section 5.9, any
Securityholder who has been a bona fide holder of a Security for at least six
months may, on behalf of himself and all others similarly situated, petition any
court of competent jurisdiction for the removal of the Trustee and the
appointment of a successor trustee. Such court may thereupon, after such notice,
if any, as it may deem proper and prescribe, remove the Trustee and appoint a
successor trustee.
(c) The holders of a majority in aggregate principal amount of the
Securities at the time outstanding may at any time remove the Trustee and
nominate a successor trustee, which shall be deemed appointed as successor
trustee unless within 10 days after such nomination the Company objects thereto
or if no successor trustee shall have been so appointed and shall have accepted
appointment within 30 days after such removal, in which case the Trustee so
removed or any Securityholder, upon the terms and conditions and otherwise as in
subsection (a) of this Section 6.10 provided, may petition any court of
competent jurisdiction for an appointment of a successor trustee.
(d) Any resignation or removal of the Trustee and appointment of a
successor trustee pursuant to any of the provisions of this Section 6.10 shall
become effective upon acceptance of appointment by the successor trustee as
provided in Section 6.11.
SECTION 6.11. Acceptance by Successor Trustee.
Any successor trustee appointed as provided in Section 6.10 shall
execute, acknowledge and deliver to the Company and to its predecessor trustee
an instrument accepting such appointment hereunder, and thereupon the
resignation or removal of the retiring trustee shall become effective and such
successor trustee, without any further act, deed or conveyance, shall become
vested with all the rights, powers, duties and obligations of its predecessor
hereunder, with like effect as if originally named as trustee herein; but,
nevertheless, on the written request of the Company or of the successor trustee,
the trustee ceasing to act, upon payment of any amounts then due it pursuant to
the provisions of Section 6.6, shall execute and deliver an instrument
transferring to such successor trustee all the rights and powers of the trustee
so ceasing to act and shall duly assign, transfer and deliver to such successor
trustee all property
41
<PAGE>
and money held by such retiring trustee thereunder. Upon request of any such
successor trustee, the Company shall execute any and all instruments in writing
for more fully and certainly vesting in and confirming to such successor trustee
all such rights and powers. Any trustee ceasing to act, nevertheless, shall
retain a lien upon all property or funds held or collected by such trustee to
secure any amounts then due it pursuant to the provisions of Section 6.6.
No successor trustee shall accept appointment as provided in this
Section 6.11 unless at the time of such acceptance such successor trustee shall
be qualified under the provisions of Section 6.8 and eligible under the
provisions of Section 6.9.
Upon acceptance of appointment by a successor trustee as provided in
this Section 6.11, the Company shall mail notice of the succession of such
trustee hereunder to the holders of Securities at their addresses as they shall
appear on the Security register. If the Company fails to mail such notice within
10 days after the acceptance of appointment by the successor trustee, the
successor trustee shall cause such notice to be mailed at the expense of the
Company.
SECTION 6.12. Succession by Merger, Etc.
Any corporation into which the Trustee may be merged or converted or
with which it may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any
corporation succeeding to all or substantially all of the corporate trust
business of the Trustee, shall be the successor of the Trustee hereunder without
the execution or filing of any paper or any further act on the part of any of
the parties hereto.
In case at the time such successor to the Trustee shall succeed to the
trusts created by this Indenture any Securities shall have been authenticated
but not delivered, any such successor to the Trustee may adopt the certificate
of authentication of any predecessor trustee, and deliver such Securities so
authenticated; and in case at that time any of the Securities shall not have
been authenticated, any successor to the Trustee may authenticate such
Securities either in the name of any predecessor hereunder or in the name of the
successor trustee; and in all such cases such certificates shall have the full
force which the Securities or this Indenture elsewhere provides that the
certificate of the Trustee shall have; provided, however, that the right to
adopt the certificate of authentication of any predecessor Trustee or
authenticate Securities in the name of any predecessor Trustee shall apply only
to its successor or successors by merger, conversion or consolidation.
SECTION 6.13. Limitation on Rights of Trustee as a Creditor.
The Trustee shall comply with Section 311(a) of the Trust Indenture Act,
excluding any creditor relationship described in Section 311(b) of the Trust
Indenture Act. A Trustee who
42
<PAGE>
has resigned or been removed shall be subject to Section 311(a) of the Trust
Indenture Act to the extent included therein.
SECTION 6.14. Authenticating Agents.
There may be one or more Authenticating Agents appointed by the Trustee
upon the request of the Company with power to act on its behalf and subject to
its direction in the authentication and delivery of Securities issued upon
exchange or transfer thereof as fully to all intents and purposes as though any
such Authenticating Agent had been expressly authorized to authenticate and
deliver Securities; provided, that the Trustee shall have no liability to the
Company for any acts or omissions of the Authenticating Agent with respect to
the authentication and delivery of Securities. Any such Authenticating Agent
shall at all times be a corporation organized and doing business under the laws
of the United States or of any state or territory thereof or of the District of
Columbia authorized under such laws to act as Authenticating Agent, having a
combined capital and surplus of at least $5,000,000 and being subject to
supervision or examination by federal, state, territorial or District of
Columbia authority. If such corporation publishes reports of condition at least
annually pursuant to law or the requirements of such authority, then for the
purposes of this Section 6.14 the combined capital and surplus of such
corporation shall be deemed to be its combined capital and surplus as set forth
in its most recent report of condition so published. If at any time an
Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section, it shall resign immediately in the manner and with
the effect herein specified in this Section.
Any corporation into which any Authenticating Agent may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, consolidation or conversion to which any Authenticating Agent
shall be a party, or any corporation succeeding to all or substantially all of
the corporate trust business of any Authenticating Agent, shall be the successor
of such Authenticating Agent hereunder, if such successor corporation is
otherwise eligible under this Section 6.14 without the execution or filing of
any paper or any further act on the part of the parties hereto or such
Authenticating Agent.
Any Authenticating Agent may at any time resign by giving written notice
of resignation to the Trustee and to the Company. The Trustee may at any time
terminate the agency of any Authenticating Agent by giving written notice of
termination to such Authenticating Agent and to the Company. Upon receiving such
a notice of resignation or upon such a termination, or in case at any time any
Authenticating Agent shall cease to be eligible under this Section 6.14, the
Trustee may, and upon the request of the Company shall, promptly appoint a
successor Authenticating Agent eligible under this Section 6.14, shall give
written notice of such appointment to the Company and shall mail notice of such
appointment to all Securityholders as the names and addresses of such holders
appear on the Security Register. Any successor Authenticating Agent upon
acceptance of its appointment hereunder
43
<PAGE>
shall become vested with all rights, powers, duties and responsibilities of its
predecessor hereunder, with like effect as if originally named as Authenticating
Agent herein.
The Company agrees to pay to any Authenticating Agent from time to time
reasonable compensation for its services. Any Authenticating Agent shall have no
responsibility or liability for any action taken by it as such in accordance
with the directions of the Trustee.
ARTICLE VII
CONCERNING THE SECURITYHOLDERS
SECTION 7.1. Action by Securityholders.
Whenever in this Indenture it is provided that the holders of a
specified percentage in aggregate principal amount of the Securities may take
any action (including the making of any demand or request, the giving of any
notice, consent or waiver or the taking of any other action) the fact that at
the time of taking any such action the holders of such specified percentage have
joined therein may be evidenced (a) by any instrument or any number of
instruments of similar tenor executed by such Securityholders in person or by
agent or proxy appointed in writing, or (b) by the record of such holders of
Securities voting in favor thereof at any meeting of such Securityholders duly
called and held in accordance with the provisions of Article VIII, or (c) by a
combination of such instrument or instruments and any such record of such a
meeting of such Securityholders.
If the Company shall solicit from the Securityholders any request,
demand, authorization, direction, notice, consent, waiver or other action, the
Company may, at its option, as evidenced by an Officers' Certificate, fix in
advance a record date for the determination of Securityholders entitled to give
such request, demand, authorization, direction, notice, consent, waiver or other
action or to revoke any such action, but the Company shall have no obligation to
do so. If such a record date is fixed, such request, demand, authorization,
direction, notice, consent, waiver or other action or revocation may be given
before or after the record date, but only the Securityholders of record at the
close of business on the record date shall be deemed to be Securityholders for
the purposes of determining whether Securityholders of the requisite proportion
of Outstanding Securities have authorized or agreed or consented to such
request, demand, authorization, direction, notice, consent, waiver or other
action, and for that purpose the Outstanding Securities shall be computed as of
the record date; provided, however, that no such authorization, agreement or
consent by such Securityholders on the record date shall be deemed effective
unless it shall become effective pursuant to the provisions of this Indenture
not later than six months after the record date.
44
<PAGE>
SECTION 7.2. Proof of Execution by Securityholders.
Subject to the provisions of Section 6.1, 6.2 and 8.5, proof of the
execution of any instrument by a Securityholder or his agent or proxy shall be
sufficient if made in accordance with such reasonable rules and regulations as
may be prescribed by the Trustee or in such manner as shall be satisfactory to
the Trustee. The ownership of Securities shall be proved by the Security
Register or by a certificate of the Security registrar. The Trustee may require
such additional proof of any matter referred to in this Section as it shall deem
necessary.
The record of any Securityholders' meeting shall be proved in the manner
provided in Section 8.6.
SECTION 7.3. Who Are Deemed Absolute Owners.
Prior to due presentment for registration of transfer of any Security,
the Company, the Trustee, any Authenticating Agent, any paying agent, any
transfer agent and any Security registrar may deem the person in whose name such
Security shall be registered upon the Security Register to be, and may treat him
as, the owner of such Security (whether or not such Security shall be overdue)
for the purpose of receiving payment of or on account of the principal of and
premium, if any, and (subject to Section 2.6) interest on such Security and for
all other purposes; and neither the Company nor the Trustee nor any
Authenticating Agent nor any paying agent nor any transfer agent nor any
Security registrar shall be affected by any notice to the contrary. All such
payments so made to any holder for the time being or upon his order shall be
valid, and, to the extent of the sum or sums so paid, effectual to satisfy and
discharge the liability for moneys payable upon any such Security.
SECTION 7.4. Securities Owned by Company Deemed Not Outstanding.
In determining whether the holders of the requisite aggregate principal
amount of Securities have concurred in any direction, consent or waiver under
this Indenture, Securities which are owned by the Company or any other obligor
on the Securities or by any person directly or indirectly controlling or
controlled by or under direct or indirect common control with the Company or any
other obligor on the Securities shall be disregarded and deemed not to be
outstanding for the purpose of any such determination; provided that for the
purposes of determining whether the Trustee shall be protected in relying on any
such direction, consent or waiver, only Securities which the Trustee actually
knows are so owned shall be so disregarded. Securities so owned which have been
pledged in good faith may be regarded as outstanding for the purposes of this
Section 7.4 if the pledgee shall establish to the satisfaction of the Trustee
the pledgee's right to vote such Securities and that the pledgee is not the
Company or any such other obligor or person directly or indirectly controlling
or controlled by or under direct or indirect common control with the Company or
any such other obligor. In the case of a dispute as to such right, any decision
by the Trustee taken upon the advice of counsel shall be full protection to the
Trustee.
45
<PAGE>
SECTION 7.5. Revocation of Consents; Future Holders Bound.
At any time prior to (but not after) the evidencing to the Trustee, as
provided in Section 7.1, of the taking of any action by the holders of the
percentage in aggregate principal amount of the Securities specified in this
Indenture in connection with such action, any holder of a Security (or any
Security issued in whole or in part in exchange or substitution therefor),
subject to Section 7.1, the serial number of which is shown by the evidence to
be included in the Securities the holders of which have consented to such action
may, by filing written notice with the Trustee at its Principal Office and upon
proof of holding as provided in Section 7.2, revoke such action so far as
concerns such Security (or so far as concerns the principal amount represented
by any exchanged or substituted Security). Except as aforesaid any such action
taken by the holder of any Security shall be conclusive and binding upon such
holder and upon all future holders and owners of such Security, and of any
Security issued in exchange or substitution therefor, irrespective of whether or
not any notation in regard thereto is made upon such Security or any Security
issued in exchange or substitution therefor.
ARTICLE VIII
SECURITYHOLDERS' MEETINGS
SECTION 8.1. Purposes of Meetings.
A meeting of Securityholders may be called at any time and from time to
time pursuant to the provisions of this Article VIII for any of the following
purposes:
(a) to give any notice to the Company or to the Trustee, or to give any
directions to the Trustee, or to consent to the waiving of any default hereunder
and its consequences, or to take any other action authorized to be taken by
Securityholders pursuant to any of the provisions of Article V;
(b) to remove the Trustee and nominate a successor trustee pursuant to
the provisions of Article VI;
(c) to consent to the execution of an indenture or indentures
supplemental hereto pursuant to the provisions of Section 9.2; or
(d) to take any other action authorized to be taken by or on behalf of
the holders of any specified aggregate principal amount of such Securities under
any other provision of this Indenture or under applicable law.
46
<PAGE>
SECTION 8.2. Call of Meetings by Trustee.
The Trustee may at any time call a meeting of Securityholders to take
any action specified in Section 8.1, to be held at such time and at such place
in the Borough of Manhattan, The City of New York, as the Trustee shall
determine. Notice of every meeting of the Securityholders, setting forth the
time and the place of such meeting and in general terms the action proposed to
be taken at such meeting, shall be mailed to holders of Securities at their
addresses as they shall appear on the Securities Register. Such notice shall be
mailed not less than 20 nor more than 180 days prior to the date fixed for the
meeting.
SECTION 8.3. Call of Meetings by Company or Securityholders.
In case at any time the Company pursuant to a resolution of the Board of
Directors, or the holders of at least 10% in aggregate principal amount of the
Securities then outstanding, shall have requested the Trustee to call a meeting
of Securityholders, by written request setting forth in reasonable detail the
action proposed to be taken at the meeting, and the Trustee shall not have
mailed the notice of such meeting within 20 days after receipt of such request,
then the Company or such Securityholders may determine the time and the place in
said Borough of Manhattan for such meeting and may call such meeting to take any
action authorized in Section 8.1, by mailing notice thereof as provided in
Section 8.2.
SECTION 8.4. Qualifications for Voting.
To be entitled to vote at any meeting of Securityholders a person shall
(a) be a holder of one or more Securities or (b) be a person appointed by an
instrument in writing as proxy by a holder of one or more Securities. The only
persons who shall be entitled to be present or to speak at any meeting of
Securityholders shall be the persons entitled to vote at such meeting and their
counsel and any representatives of the Trustee and its counsel and any
representatives of the Company and its counsel.
SECTION 8.5. Regulations.
Notwithstanding any other provisions of this Indenture, the Trustee may
make such reasonable regulations as it may deem advisable for any meeting of
Securityholders, in regard to proof of the holding of Securities and of the
appointment of proxies, and in regard to the appointment and duties of
inspectors of votes, the submission and examination of proxies, certificates and
other evidence of the right to vote, and such other matters concerning the
conduct of the meeting as it shall think fit.
The Trustee, by an instrument in writing, shall appoint a temporary
chairman of the meeting, unless the meeting shall have been called by the
Company or by Securityholders as provided in Section 8.3, in which case the
Company or the Securityholders calling the meeting, as the case may be, shall in
like manner appoint a temporary chairman. A permanent
47
<PAGE>
chairman and a permanent secretary of the meeting shall be elected by majority
vote of the meeting.
Subject to the provisions of Section 8.4, at any meeting each holder of
Securities or proxy therefor shall be entitled to one vote for each $1,000
principal amount of Securities held or represented by him; provided, however,
that no vote shall be cast or counted at any meeting in respect of any Security
challenged as not outstanding and ruled by the chairman of the meeting to be not
outstanding. The chairman of the meeting shall have no right to vote other than
by virtue of Securities held by him or instruments in writing as aforesaid duly
designating him as the person to vote on behalf of other Securityholders. Any
meeting of Securityholders duly called pursuant to the provisions of Section 8.2
or 8.3 may be adjourned from time to time by a majority of those present,
whether or not constituting a quorum, and the meeting may be held as so
adjourned without further notice.
The Persons entitled to vote a majority in principal amount of the
outstanding Securities shall constitute a quorum for a meeting of holders of
Securities; provided, however, that if any action is to be taken at such meeting
with respect to a consent, waiver, request, demand, notice, authorization,
direction or other action which may be given by the holders of not less than a
specified percentage in principal amount of the outstanding Securities, the
Persons holding or representing such specified percentage in principal amount of
the outstanding Securities will constitute a quorum. In the absence of a quorum
within 30 minutes of the time appointed for any such meeting, the meeting, if
convened at the request of holders of Securities, shall be dissolved. In any
other case the meeting may be adjourned for a period of not less than 10 days as
determined by the chairman of the meeting prior to the adjournment of such
meeting. In the absence of a quorum at any such adjourned meeting, such
adjourned meeting may be further adjourned for a period of not less than 10 days
as determined by the chairman of the meeting prior to the adjournment of such
adjourned meeting. Notice of the reconvening of any adjourned meeting shall be
given as provided in Section 8.2, except that such notice need be given only
once not less than five days prior to the date on which the meeting is scheduled
to be reconvened. Notice of the reconvening of an adjourned meeting shall state
expressly the percentage, as provided above, of the principal amount of the
outstanding Securities which shall constitute a quorum.
Except as limited by the first proviso to the first paragraph of Section
9.2, any resolution presented to a meeting or adjourned meeting duly reconvened
at which a quorum is present as aforesaid may be adopted by the affirmative vote
of the holders of a majority in principal amount of the outstanding Securities;
provided, however, that, except as limited by the first proviso to the first
paragraph of Section 9.2, any resolution with respect to any consent, waiver,
request, demand, notice, authorization, direction or other action which this
Indenture expressly provides may be given by the holders of not less than a
specified percentage in principal amount of the outstanding Securities may be
adopted at a meeting or an adjourned meeting duly reconvened and at which a
quorum is present as aforesaid only by the
48
<PAGE>
affirmative vote of the holders of not less than such specified percentage in
principal amount of the outstanding Securities.
Any resolution passed or decision taken at any meeting of holders of
Securities duly held in accordance with this Section shall be binding on all the
holders of Securities whether or not present or represented at the meeting.
SECTION 8.6. Voting.
The vote upon any resolution submitted to any meeting of holders of
Securities shall be by written ballots on which shall be subscribed the
signatures of such holders or of their representatives by proxy and the serial
number or numbers of the Securities held or represented by them. The permanent
chairman of the meeting shall appoint two inspectors of votes who shall count
all votes cast at the meeting for or against any resolution and who shall make
and file with the secretary of the meeting their verified written reports in
triplicate of all votes cast at the meeting. A record in duplicate of the
proceedings of each meeting of Securityholders shall be prepared by the
secretary of the meeting and there shall be attached to said record the original
reports of the inspectors of votes on any vote by ballot taken thereat and
affidavits by one or more persons having knowledge of the facts setting forth a
copy of the notice of the meeting and showing that said notice was mailed as
provided in Section 8.2. The record shall show the serial numbers of the
Securities voting in favor of or against any resolution. The record shall be
signed and verified by the affidavits of the permanent chairman and secretary of
the meeting and one of the duplicates shall be delivered to the Company and the
other to the Trustee to be preserved by the Trustee, the latter to have attached
thereto the ballots voted at the meeting. The holders of the Series A
Securities, the Series B Securities and the Private Exchange Debentures shall
vote or consent for all purposes as a single class.
Any record so signed and verified shall be conclusive evidence of the
matters therein stated.
ARTICLE IX
AMENDMENTS
SECTION 9.1. Without Consent of Securityholders.
The Company and the Trustee may from time to time and at any time amend
the Indenture, without the consent of the Securityholders, for one or more of
the following purposes:
49
<PAGE>
(a) to evidence the succession of another corporation to the Company, or
successive successions, and the assumption by the successor corporation of the
covenants, agreements and obligations of the Company pursuant to Article X
hereof;
(b) to add to the covenants of the Company such further covenants,
restrictions or conditions for the protection of the Securityholders as the
Board of Directors and the Trustee shall consider to be for the protection of
the Securityholders, and to make the occurrence, or the occurrence and
continuance, of a default in any of such additional covenants, restrictions or
conditions a default or an Event of Default permitting the enforcement of all or
any of the remedies provided in this Indenture as herein set forth; provided,
however, that in respect of any such additional covenant, restriction or
condition such amendment may provide for a particular period of grace after
default (which period may be shorter or longer than that allowed in the case of
other defaults) or may provide for an immediate enforcement upon such default or
may limit the remedies available to the Trustee upon such default;
(c) to provide for the issuance under this Indenture of Securities in
coupon form (including Securities registrable as to principal only) and to
provide for exchangeability of such Securities with the Securities issued
hereunder in fully registered form and to make all appropriate changes for such
purpose;
(d) to cure any ambiguity or to correct or supplement any provision
contained herein or in any supplemental indenture which may be defective or
inconsistent with any other provision contained herein or in any supplemental
indenture, or to enable the Company and Imperial Capital Trust to conduct an
Exchange Offer as contemplated by the Registration Rights Agreement, or to make
such other provisions in regard to matters or questions arising under this
Indenture; provided that any such action shall not materially adversely affect
the interests of the holders of the Securities;
(e) to evidence and provide for the acceptance of appointment hereunder
by a successor trustee with respect to the Securities;
(f) to make provision for transfer procedures, certification, book-entry
provisions, the form of restricted securities legends, if any, to be placed on
Securities, minimum denominations and all other matters required pursuant to
Section 2.7 or otherwise necessary, desirable or appropriate in connection with
the issuance of Securities to holders of Capital Securities in the event of a
distribution of Securities by Imperial Capital Trust following a Dissolution
Event;
(g) to qualify or maintain qualification of this Indenture under the
Trust Indenture Act; or
(h) to make any change that does not adversely affect the rights of any
Securityholder in any material respect.
50
<PAGE>
The Trustee is hereby authorized to join with the Company in the
execution of any supplemental indenture to effect such amendment, to make any
further appropriate agreements and stipulations which may be therein contained
and to accept the conveyance, transfer and assignment of any property
thereunder, but the Trustee shall not be obligated to, but may in its
discretion, enter into any such supplemental indenture which affects the
Trustee's own rights, duties or immunities under this Indenture or otherwise.
Any amendment to the Indenture authorized by the provisions of this
Section 9.1 may be executed by the Company and the Trustee without the consent
of the holders of any of the Securities at the time outstanding, notwithstanding
any of the provisions of Section 9.2.
SECTION 9.2. With Consent of Securityholders.
With the consent (evidenced as provided in Section 7.1) of the holders
of a majority in aggregate principal amount of the Securities at the time
outstanding, the Company, when authorized by a Board Resolution, and the Trustee
may from time to time and at any time amend the Indenture for the purpose of
adding any provisions to or changing in any manner or eliminating any of the
provisions of this Indenture or of modifying in any manner the rights of the
holders of the Securities; provided, however, that no such amendment shall
without the consent of the holders of each Security then outstanding and
affected thereby (i) extend the Maturity Date of any Security, or reduce the
rate or extend the time of payment of interest thereon (except as contemplated
by Article XVI), or reduce the principal amount thereof, or reduce any amount
payable on redemption thereof, or make the principal thereof or any interest or
premium thereon payable in any coin or currency other than that provided in the
Securities, or impair or affect the right of any Securityholder to institute
suit for payment thereof, or (ii) reduce the aforesaid percentage of Securities
the holders of which are required to consent to any such amendment to the
Indenture, provided, however, that if the Securities are held by Imperial
Capital Trust, such amendment shall not be effective until the holders of a
majority in liquidation amount of Trust Securities shall have consented to such
amendment; and provided, further, that if the consent of the holder of each
outstanding Security is required, such amendment shall not be effective until
each holder of the Trust Securities shall have consented to such amendment.
Upon the request of the Company accompanied by a copy of a Board
Resolution authorizing the execution of any supplemental indenture affecting
such amendment, and upon the filing with the Trustee of evidence of the consent
of Securityholders as aforesaid, the Trustee shall join with the Company in the
execution of such supplemental indenture unless such supplemental indenture
affects the Trustee's own rights, duties or immunities under this Indenture or
otherwise, in which case the Trustee may in its discretion, but shall not be
obligated to, enter into such supplemental indenture.
Promptly after the execution by the Company and the Trustee of any
supplemental indenture pursuant to the provisions of this Section, the Trustee
shall transmit by mail, first
51
<PAGE>
class postage prepaid, a notice, prepared by the Company, setting forth in
general terms the substance of such supplemental indenture, to the
Securityholders as their names and addresses appear upon the Security Register.
Any failure of the Trustee to mail such notice, or any defect therein, shall
not, however, in any way impair or affect the validity of any such supplemental
indenture.
It shall not be necessary for the consent of the Securityholders under
this Section 9.2 to approve the particular form of any proposed supplemental
indenture, but it shall be sufficient if such consent shall approve the
substance thereof.
SECTION 9.3. Compliance with Trust Indenture Act; Effect of Supplemental
Indentures.
Any supplemental indenture executed pursuant to the provisions of this
Article IX shall comply with the Trust Indenture Act. Upon the execution of any
supplemental indenture pursuant to the provisions of this Article IX, this
Indenture shall be and be deemed to be modified and amended in accordance
therewith and the respective rights, limitations of rights, obligations, duties
and immunities under this Indenture of the Trustee, the Company and the holders
of Securities shall thereafter be determined, exercised and enforced hereunder
subject in all respects to such modifications and amendments and all the terms
and conditions of any such supplemental indenture shall be and be deemed to be
part of the terms and conditions of this Indenture for any and all purposes.
SECTION 9.4. Notation on Securities.
Securities authenticated and delivered after the execution of any
supplemental indenture affecting such series pursuant to the provisions of this
Article IX may bear a notation in form approved by the Trustee as to any matter
provided for in such supplemental indenture. If the Company or the Trustee shall
so determine, new Securities so modified as to conform, in the opinion of the
Trustee and the Board of Directors, to any modification of this Indenture
contained in any such supplemental indenture may be prepared and executed by the
Company, authenticated by the Trustee or the Authenticating Agent and delivered
in exchange for the Securities then outstanding.
SECTION 9.5. Evidence of Compliance of Supplemental Indenture to be
Furnished to the Trustee.
The Trustee, subject to the provisions of Sections 6.1 and 6.2, may
receive an Officers' Certificate and an Opinion of Counsel as conclusive
evidence that any supplemental indenture executed pursuant hereto complies with
the requirements of this Article IX.
The Trustee may receive an Opinion of Counsel as conclusive evidence
that any supplemental indenture executed pursuant to this Article is authorized
or permitted by, and
52
<PAGE>
conforms to, the terms of this Article and that it is proper for the Trustee
under the provisions of this Article to join in the execution thereof.
ARTICLE X
CONSOLIDATION, MERGER, SALE, CONVEYANCE AND LEASE
SECTION 10.1. Company May Consolidate, Etc., on Certain Terms.
Nothing contained in this Indenture or in any of the Securities shall
prevent any consolidation or merger of the Company with or into any other Person
(whether or not affiliated with the Company, as the case may be), or successive
consolidations or mergers in which the Company, or its successor or successors,
as the case may be, shall be a party or parties, or shall prevent any sale,
conveyance, transfer or lease of the property of the Company, or its successor
or successors, as the case may be, as an entirety, or substantially as an
entirety, to any other Person (whether or not affiliated with the Company, or
its successor or successors, as the case may be) authorized to acquire and
operate the same; provided, that (a) the Company is the surviving Person, or the
Person formed by or surviving any such consolidation or merger (if other than
the Company) or to which such sale, conveyance, transfer or lease of property is
made is a Person organized and existing under the laws of the United States or
any State thereof or the District of Columbia, and (b) upon any such
consolidation or merger in which the Company is not the surviving Person or any
such sale, conveyance, transfer or lease of the property of the Company as an
entirety, or substantially as an entirety, to any other Person, the due and
punctual payment of the principal of (and premium, if any) and interest on the
Securities according to their tenor and the due and punctual performance and
observance of all the covenants and conditions of this Indenture to be kept or
performed by the Company shall be expressly assumed, by supplemental indenture
(which shall conform to the provisions of the Trust Indenture Act, as then in
effect) satisfactory in form to the Trustee executed and delivered to the
Trustee by the Person formed by such consolidation, or into which the Company
shall have been merged, or by the Person which shall have acquired such
property, as the case may be, and (c) after giving effect to such consolidation,
merger, sale, conveyance, transfer or lease, no Default or Event of Default
shall have occurred and be continuing.
SECTION 10.2. Successor Corporation to be Substituted for Company.
In case of any such consolidation, merger, conveyance or transfer and
upon the assumption by the successor corporation, by supplemental indenture,
executed and delivered to the Trustee and satisfactory in form to the Trustee,
of the due and punctual payment of the principal of and premium, if any, and
interest on all of the Securities and the due and punctual performance and
observance of all of the covenants and conditions of this Indenture to be
performed or observed by the Company, such successor Person shall succeed to and
be substituted for the Company, with the same effect as if it had been named
herein as the party
53
<PAGE>
of the first part, and the Company thereupon shall be relieved of any further
liability or obligation hereunder or upon the Securities. Such successor Person
thereupon may cause to be signed, and may issue either in its own name or in the
name of Imperial Bancorp, any or all of the Securities issuable hereunder which
theretofore shall not have been signed by the Company and delivered to the
Trustee or the Authenticating Agent; and, upon the order of such successor
Person instead of the Company and subject to all the terms, conditions and
limitations in this Indenture prescribed, the Trustee or the Authenticating
Agent shall authenticate and deliver any Securities which previously shall have
been signed and delivered by the officers of the Company to the Trustee or the
Authenticating Agent for authentication, and any Securities which such successor
Person thereafter shall cause to be signed and delivered to the Trustee or the
Authenticating Agent for that purpose. All the Securities so issued shall in all
respects have the same legal rank and benefit under this Indenture as the
Securities theretofore or thereafter issued in accordance with the terms of this
Indenture as though all of such Indentures had been issued at the date of the
execution hereof.
SECTION 10.3. Opinion of Counsel to be Given Trustee.
The Trustee, subject to the provisions of Sections 6.1 and 6.2, may
receive an Opinion of Counsel as conclusive evidence that any consolidation,
merger, sale, conveyance, transfer or lease, and any assumption, permitted or
required by the terms of this Article X complies with the provisions of this
Article X. The Trustee is not obligated to receive such an opinion of counsel in
any case.
ARTICLE XI
SATISFACTION AND DISCHARGE OF INDENTURE
SECTION 11.1. Discharge of Indenture.
When (a) the Company shall deliver to the Trustee for cancellation all
Securities theretofore authenticated (other than any Securities which shall have
been destroyed, lost or stolen and which shall have been replaced as provided in
Section 2.8) and not theretofore cancelled, or (b) all the Securities not
theretofore cancelled or delivered to the Trustee for cancellation shall have
become due and payable, or are by their terms to become due and payable within
one year or are to be called for redemption within one year under arrangements
satisfactory to the Trustee for the giving of notice of redemption, and the
Company shall deposit with the Trustee, in trust, funds sufficient to pay on the
Maturity Date or upon redemption all of the Securities (other than any
Securities which shall have been destroyed, lost or stolen and which shall have
been replaced as provided in Section 2.8) not theretofore cancelled or delivered
to the Trustee for cancellation, including principal and premium, if any, and
interest due or to become due to the Maturity Date or redemption date, as the
case may be, but excluding, however, the amount of any moneys for the payment of
principal of or premium, if any, or interest on the Securities (1) theretofore
repaid to the Company in
54
<PAGE>
accordance with the provisions of Section 11.4, or (2) paid to any State or to
the District of Columbia pursuant to its unclaimed property or similar laws, and
if in either case the Company shall also pay or cause to be paid all other sums
payable hereunder by the Company, then this Indenture shall cease to be of
further effect except for the provisions of Sections 2.2, 2.7, 2.8, 3.1, 3.2,
3.4, 6.6, 6.10 and 11.4 hereof, which shall survive until such Securities shall
mature and be paid. Thereafter, Sections 6.6, 6.10 and 11.4 shall survive, and
the Trustee, on demand of the Company accompanied by any Officers' Certificate
and an Opinion of Counsel and at the cost and expense of the Company, shall
execute proper instruments acknowledging satisfaction of and discharging this
Indenture; provided that the Company hereby agrees to reimburse the Trustee for
any costs or expenses thereafter reasonably and properly incurred by the Trustee
in connection with this Indenture or the Securities.
SECTION 11.2. Deposited Moneys and U.S. Government Obligations to be
Held in Trust by Trustee.
Subject to the provisions of Section 11.4, all moneys and U.S.
Government Obligations deposited with the Trustee pursuant to Sections 11.1 or
11.5 shall be held in trust and applied by it to the payment, either directly or
through any paying agent (including the Company if acting as its own paying
agent), to the holders of the particular Securities for the payment of which
such moneys or U.S. Government Obligations have been deposited with the Trustee,
of all sums due and to become due thereon for principal, premium, if any, and
interest.
The Company shall pay and indemnify the Trustee against any tax, fee or
other charge imposed on or assessed against the U.S. Government Obligations
deposited pursuant to Section 11.5 or the principal and interest received in
respect thereof other than any such tax, fee or other charge which by law is for
the account of the holders of outstanding Securities.
SECTION 11.3. Paying Agent to Repay Moneys Held.
Upon the satisfaction and discharge of this Indenture all moneys then
held by any paying agent of the Securities (other than the Trustee), upon
written demand of the Company, shall be repaid to it or paid to the Trustee, and
thereupon such paying agent shall be released from all further liability with
respect to such moneys.
SECTION 11.4. Return of Unclaimed Moneys.
Any moneys deposited with or paid to the Trustee or any paying agent for
payment of the principal of or premium, if any, or interest on Securities and
not applied but remaining unclaimed by the holders of Securities for two years
after the date upon which the principal of or premium, if any, or interest on
such Securities, as the case may be, shall have become due and payable, shall be
repaid to the Company by the Trustee or such paying agent on Company Request;
and the holder of any of the Securities shall thereafter look only to the
Company for
55
<PAGE>
any payment which such holder may be entitled to collect and all liability of
the Trustee or such paying agent with respect to such moneys shall thereupon
cease.
SECTION 11.5. Defeasance Upon Deposit of Moneys or U.S. Government
Obligations.
The Company shall be deemed to have been Discharged (as defined below)
from its obligations with respect to the Securities on the 91st day after the
conditions set forth below have been satisfied:
(1) The Company shall have deposited or caused to be deposited
irrevocably with the Trustee or the Defeasance Agent (as defined below) as trust
funds in trust, specifically pledged as security for, and dedicated solely to,
the benefit of the holders of the Securities (i) money in an amount, or (ii)
U.S. Government Obligations which through the payment of interest and principal
in respect thereof in accordance with their terms will provide, not later than
one day before the due date of any payment, money in an amount, or (iii) a
combination of (i) and (ii), sufficient, in the opinion (with respect to (ii)
and (iii)) of a nationally recognized firm of independent public accountants
expressed in a written certification thereof delivered to the Trustee and the
Defeasance Agent, if any, to pay and discharge each installment of principal of
and interest and premium, if any, on the outstanding Securities on the dates
such installments of principal, interest or premium are due;
(2) if the Securities are then listed on any national securities
exchange, the Company shall have delivered to the Trustee and the Defeasance
Agent, if any, an Opinion of Counsel to the effect that the exercise of the
option under this Section 11.5 would not cause such Securities to be delisted
from such exchange;
(3) no Default or Event of Default with respect to the Securities
shall have occurred and be continuing on the date of such deposit;
(4) the Company shall have delivered to the Trustee and the
Defeasance Agent, if any, an Opinion of Counsel to the effect that holders of
the Securities will not recognize income, gain or loss for United States federal
income tax purposes as a result of the exercise of the option under this Section
11.5 and will be subject to United States federal income tax on the same amount
and in the same manner and at the same times as would have been the case if such
option had not been exercised, and such opinion shall be based on a statute so
providing or be accompanied by a private letter ruling to that effect received
from the United States Internal Revenue Service or a revenue ruling pertaining
to a comparable form of transaction to that effect published by the United
States Internal Revenue Service; and
(5) the Company shall have delivered to the Trustee and the
Defeasance Agent, if any, an Officers' Certificate stating that in the opinion
of the signers all conditions precedent provided for in this Section 11.5 have
been compiled with.
56
<PAGE>
"Discharged" means that the Company shall be deemed to have paid and
discharged the entire indebtedness represented by, and obligations under, the
Securities and to have satisfied all the obligations under this Indenture
relating to the Securities (and the Trustee, at the expense of the Company,
shall execute proper instruments acknowledging the same), except (A) the rights
of holders of Securities to receive, from the trust fund described in clause (1)
above, payment of the principal of and the interest and premium, if any, on the
Securities when such payments are due; (B) the Company's obligations with
respect to the Securities under Sections 2.2, 2.7, 2.8, 3.2, 3.4, 6.10 and 11.4;
and (C) the rights, powers, trusts, duties and immunities of the Trustee
hereunder.
"Defeasance Agent" means another financial institution which is eligible
to act as Trustee hereunder and which assumes all of the obligations of the
Trustee necessary to enable the Trustee to act under this Article. In the event
such a Defeasance Agent is appointed pursuant to this Section, the following
conditions shall apply:
(1) The Trustee shall have approval rights over the document appointing
such Defeasance Agent and the document setting forth such Defeasance Agent's
rights and responsibilities; and
(2) The Defeasance Agent shall provide verification to the Trustee
acknowledging receipt of sufficient money and/or U. S. Government Obligations to
meet the applicable conditions set forth in this Section 11.5.
ARTICLE XII
IMMUNITY OF INCORPORATORS, STOCKHOLDERS,
OFFICERS AND DIRECTORS
SECTION 12.1. Indenture and Securities Solely Corporate Obligations.
No recourse for the payment of the principal of or premium, if any, or
interest on any Security, or for any claim based thereon or otherwise in respect
thereof, and no recourse under or upon any obligation, covenant or agreement of
the Company in this Indenture, or in any Security, or because of the creation of
any indebtedness represented thereby, shall be had against any incorporator,
stockholder, officer or director, as such, past, present or future, of the
Company or of any successor Person to the Company, either directly or through
the Company or any successor Person to the Company, whether by virtue of any
constitution, statute or rule of law, or by the enforcement of any assessment or
penalty or otherwise; it being expressly understood that all such liability is
hereby expressly waived and released as a condition of, and as a consideration
for, the execution of this Indenture and the issue of the Securities.
57
<PAGE>
ARTICLE XIII
MISCELLANEOUS PROVISIONS
SECTION 13.1. Successors.
All the covenants, stipulations, promises and agreements in this
Indenture contained by the Company shall bind its successors and assigns whether
so expressed or not.
SECTION 13.2. Official Acts by Successor Corporation.
Any act or proceeding by any provision of this Indenture authorized or
required to be done or performed by any board, committee or officer of the
Company shall and may be done and performed with like force and effect by the
like board, committee or officer of any corporation that shall at the time be
the lawful sole successor of the Company.
SECTION 13.3. Surrender of Company Powers.
The Company by instrument in writing executed by authority of 2/3
(two-thirds) of its Board of Directors and delivered to the Trustee may
surrender any of the powers reserved to the Company, and thereupon such power so
surrendered shall terminate both as to the Company, as the case may be, and as
to any successor Person.
SECTION 13.4. Addresses for Notices, Etc.
Any notice or demand which by any provision of this Indenture is
required or permitted to be given or served by the Trustee or by the holders of
Securities on the Company may be given or served by being deposited postage
prepaid by registered or certified mail in a post office letter box addressed
(until another address is filed by the Company with the Trustee for the purpose)
to the Company, 9920 South La Cienega Boulevard, 14th Floor, Inglewood,
California 90301, Attention: General Counsel. Any notice, direction, request or
demand by any Securityholder to or upon the Trustee shall be deemed to have been
sufficiently given or made, for all purposes, if given or made in writing at the
office of the Trustee, 450 West 33rd Street, New York, NY 10001, Attention:
Corporate Trustee Administration Department (unless another address is provided
by the Trustee to the Company for the purpose).
Any notice or communication to a Holder shall be mailed by first class
mail to his or her address shown on the register kept by the Registrar. Failure
to mail a notice or communication to a Holder or any defect in it shall not
affect its sufficiency with respect to other Holders.
58
<PAGE>
SECTION 13.5. Governing Law.
This Indenture and each Security shall be deemed to be a contract made
under the laws of the State of New York, and for all purposes shall be governed
by and construed in accordance with the laws of said State, without regard to
conflicts of laws principles thereof.
SECTION 13.6. Evidence of Compliance with Conditions Precedent.
Upon any application or demand by the Company to the Trustee to take any
action under any of the provisions of this Indenture, the Company shall furnish
to the Trustee an Officers' Certificate stating that in the opinion of the
signers all conditions precedent, if any, provided for in this Indenture
relating to the proposed action have been complied with and an Opinion of
Counsel stating that, in the opinion of such counsel, all such conditions
precedent have been complied with.
Each certificate or opinion provided for in this Indenture and delivered
to the Trustee with respect to compliance with a condition or covenant provided
for in this Indenture (except pursuant to Section 3.5) shall include (1) a
statement that the person making such certificate or opinion has read such
covenant or condition; (2) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions contained in
such certificate or opinion are based; (3) a statement that, in the opinion of
such person, he has made such examination or investigation as is necessary to
enable him to express an informed opinion as to whether or not such covenant or
condition has been complied with; and (4) a statement as to whether or not, in
the opinion of such person, such condition or covenant has been complied with.
SECTION 13.7. Business Days.
In any case where the date of payment of principal of or premium, if
any, or interest on the Securities will not be a Business Day, the payment of
such principal of or premium, if any, or interest on the Securities need not be
made on such date but may be made on the next succeeding Business Day, with the
same force and effect as if made on the date of payment and no interest shall
accrue for the period from and after such date.
SECTION 13.8. Trust Indenture Act to Control.
If and to the extent that any provision of this Indenture limits,
qualifies or conflicts with the duties imposed by Sections 310 to 317,
inclusive, of the Trust Indenture Act, such imposed duties shall control.
59
<PAGE>
SECTION 13.9. Table of Contents, Headings, Etc.
The table of contents and the titles and headings of the articles and
sections of this Indenture have been inserted for convenience of reference only,
are not to be considered a part hereof, and shall in no way modify or restrict
any of the terms or provisions hereof.
SECTION 13.10. Execution in Counterparts.
This Indenture may be executed in any number of counterparts, each of
which shall be an original, but such counterparts shall together constitute but
one and the same instrument.
SECTION 13.11. Separability.
In case any one or more of the provisions contained in this Indenture or
in the Securities shall for any reason be held to be invalid, illegal or
unenforceable in any respect, such invalidity, illegality or unenforceability
shall not affect any other provisions of this Indenture or of the Securities,
but this Indenture and the Securities shall be construed as if such invalid or
illegal or unenforceable provision had never been contained herein or therein.
SECTION 13.12. Assignment.
The Company will have the right at all times to assign any of its
respective rights or obligations under this Indenture to a direct or indirect
wholly owned Subsidiary of the Company, provided that, in the event of any such
assignment, the Company will remain primarily liable for all its obligations.
Subject to the foregoing, the Indenture is binding upon and inures to the
benefit of the parties thereto and their respective successors and assigns. This
Indenture may not otherwise be assigned by the parties thereto.
SECTION 13.13. Acknowledgment of Rights.
The Company acknowledges that, with respect to any Securities held by
Imperial Capital Trust or a trustee of such trust, if the Property Trustee of
such Trust fails to enforce its rights under this Indenture as the holder of the
Securities held as the assets of Imperial Capital Trust, any holder of Capital
Securities may institute, to the fullest extent permitted by law, legal
proceedings directly against the Company to enforce such Property Trustee's
rights under this Indenture without first instituting any legal proceedings
against such Property Trustee or any other person or entity. Notwithstanding the
foregoing, if an Event of Default has occurred and is continuing and such event
is attributable to the failure of the Company to pay principal of or premium, if
any, or interest on the Securities when due, the Company acknowledges that a
holder of Capital Securities may directly institute a proceeding for enforcement
of payment to such holder of the principal of or premium, if any, or interest on
the Securities having a principal amount equal to the aggregate liquidation
amount of the Capital Securities of such holder on or after the respective due
date specified in the Securities.
60
<PAGE>
ARTICLE XIV
REDEMPTION OF SECURITIES -- MANDATORY AND
OPTIONAL SINKING FUND
SECTION 14.1. Special Event Redemption.
If a Special Event has occurred and is continuing then, notwithstanding
Section 14.2(a) but subject to Section 14.2(c), the Company shall have the right
at any time prior to the Initial Optional Redemption Date, upon (i) not less
than 45 days written notice to the Trustee, which notice shall be accompanied by
an Officers' Certificate certifying that a Special Event entitling the Company
to redeem the Securities pursuant to this Section, has occurred and (ii) not
less than 30 days nor more than 60 days written notice to the Securityholders,
to redeem the Securities, in whole (but not in part), within 90 days following
the occurrence of such Special Event at the Special Event Redemption Price.
Following a Special Event, the Company shall take such action as is necessary to
promptly determine the Special Event Redemption Price, including without
limitation the appointment by the Company of a Quotation Agent. The Special
Event Redemption Price shall be paid prior to 12:00 noon, New York time, on the
date of such redemption or such earlier time as the Company determines, provided
that the Company shall deposit with the Trustee an amount sufficient to pay the
Special Event Redemption Price by 10:00 a.m., New York time, on the date such
Special Event Prepayment Price is to be paid. The Company shall provide the
Trustee with written notice of the Special Event Redemption Price promptly after
the calculation thereof, which notice shall include any calculation made by the
Quotation Agent in connection with the determination of the Special Event
Redemption Price.
SECTION 14.2. Optional Redemption by Company.
(a) Subject to the provisions of this Article XIV, including but not
limited to Section 14.2(c), the Company shall have the right to redeem the
Securities, in whole or in part, from time to time, on or after the Initial
Optional Redemption Date at the optional redemption prices set forth below
(expressed as percentages of principal) plus accrued and unpaid interest thereon
(including Additional Interest and Compounded Interest, if any) to the
applicable date of redemption (the "Optional Redemption Price"): if redeemed
during the 12-month period beginning June 30 of the years indicated below.
61
<PAGE>
Year Percentage
2007 105.113
2008 104.601
2009 104.090
2010 103.579
2011 103.068
2012 102.556
2013 102.045
2014 101.534
2015 101.023
2016 100.511
2017 and thereafter 100.00
If the Securities are only partially redeemed pursuant to this Section
14.2, the Securities will be redeemed by lot or by any other method utilized by
the Trustee; provided, that if at the time of redemption the Securities are
registered as a Global Security, the Depositary shall determine, in accordance
with its procedures, the principal amount of such Securities held for the
account of its participants to be redeemed. The Optional Redemption Price shall
be paid prior to 12:00 noon, New York time, on the date of such redemption or at
such earlier time as the Company determines, provided that the Company shall
deposit with the Trustee an amount sufficient to pay the Optional Redemption
Price by 10:00 a.m., New York time, on the date such Optional Redemption Price
is to be paid.
(b) Notwithstanding the first sentence of Section 14.2, upon the entry
of an order for dissolution of the Imperial Capital Trust by a court of
competent jurisdiction, the Securities thereafter will be subject to optional
redemption, in whole only, but not in part, on or after June 30, 2007, at the
Optional Redemption Prices set forth in Section 14.2 and otherwise in accordance
with this Article XIV.
(c) Any redemption of Securities pursuant to Section 14.1 or Section
14.2 shall be subject to the receipt by the Company of any required regulatory
approval, including but not limited to the approval of the Federal Reserve, if
then required.
SECTION 14.3. No Sinking Fund.
The Securities are not entitled to the benefit of any sinking fund.
62
<PAGE>
SECTION 14.4. Notice of Redemption; Selection of Securities.
In case the Company shall desire to exercise the right to redeem all,
or, as the case may be, any part of the Securities in accordance with their
terms, it shall fix a date for redemption and shall mail a notice of such
redemption at least 30 and not more than 60 days prior to the date fixed for
redemption to the holders of Securities so to be redeemed as a whole or in part
at their last addresses as the same appear on the Security Register. Such
mailing shall be by first class mail. The notice if mailed in the manner herein
provided shall be conclusively presumed to have been duly given, whether or not
the holder receives such notice. In any case, failure to give such notice by
mail or any defect in the notice to the holder of any Security designated for
redemption as a whole or in part shall not affect the validity of the
proceedings for the redemption of any other Security.
Each such notice of redemption shall specify the CUSIP number of the
Securities to be redeemed, the date fixed for redemption, the redemption price
at which the Securities are to be redeemed (or the method by which such
redemption price is to be calculated), the place or places of payment, that
payment will be made upon presentation and surrender of the Securities, that
interest accrued to the date fixed for redemption will be paid as specified in
said notice, and that on and after said date interest thereon or on the portions
thereof to be redeemed will cease to accrue. If less than all the Securities are
to be redeemed the notice of redemption shall specify the numbers of the
Securities to be redeemed. In case any Security is to be redeemed in part only,
the notice of redemption shall state the portion of the principal amount thereof
to be redeemed and shall state that on and after the date fixed for redemption,
upon surrender of such Security, a new Security or Securities in principal
amount equal to the unredeemed portion thereof will be issued.
By 10:00 a.m. New York time on the redemption date specified in the
notice of redemption given as provided in this Section, the Company will deposit
with the Trustee or with one or more paying agents an amount of money sufficient
to redeem on the redemption date all the Securities so called for redemption at
the appropriate Redemption Price, together with accrued interest to the date
fixed for redemption.
The Company will give the Trustee notice not less than 45 days prior to
the redemption date as to the aggregate principal amount of Securities to be
redeemed and the Trustee shall select, in such manner as in its sole discretion
it shall deem appropriate and fair, the Securities or portions thereof (in
integral multiples of $1,000, except as otherwise set forth in the applicable
form of Security) to be redeemed.
63
<PAGE>
SECTION 14.5. Payment of Securities Called for Redemption.
If notice of redemption has been given as provided in Section 14.4, the
Securities or portions of Securities with respect to which such notice has been
given shall become due and payable on the date and at the place or places stated
in such notice at the applicable Redemption Price, together with interest
accrued to the date fixed for redemption (subject to the rights of holders of
Securities on the close of business on a regular record date in respect of an
Interest Payment Date occurring on or prior to the redemption date), and on and
after said date (unless the Company shall default in the payment of such
Securities at the Redemption Price, together with interest accrued to said date)
interest on the Securities or portions of Securities so called for redemption
shall cease to accrue. On presentation and surrender of such Securities at a
place of payment specified in said notice, the said Securities or the specified
portions thereof shall be paid and redeemed by the Company at the applicable
Redemption Price, together with interest accrued thereon to the date fixed for
redemption (subject to the rights of holders of Securities on the close of
business on a regular record date in respect of an Interest Payment Date
occurring on or prior to the redemption date).
Upon presentation of any Security redeemed in part only, the Company
shall execute and the Trustee shall authenticate and make available for delivery
to the holder thereof, at the expense of the Company, a new Security or
Securities of authorized denominations, in principal amount equal to the
unredeemed portion of the Security so presented.
ARTICLE XV
SUBORDINATION OF SECURITIES
SECTION 15.1. Agreement to Subordinate.
The Company covenants and agrees, and each holder of Securities issued
hereunder likewise covenants and agrees, that the Securities shall be issued
subject to the provisions of this Article XV; and each holder of a Security,
whether upon original issue or upon transfer or assignment thereof, accepts and
agrees to be bound by such provisions.
The payment by the Company of the principal of, premium, if any, and
interest on all Securities issued hereunder, to the extent and in the manner
hereinafter set forth, shall be subordinated and junior in right of payment to
the prior payment in full of all Allocable Amounts with respect to Senior
Indebtedness, whether outstanding at the date of this Indenture or thereafter
incurred.
No provision of this Article XV shall prevent the occurrence of any
Default or Event of Default hereunder.
64
<PAGE>
SECTION 15.2. Default on Senior Indebtedness.
In the event and during the continuation of any default by the Company
in the payment of principal, premium, interest or any other payment due on any
Senior Indebtedness, or in the event that the maturity of any Senior
Indebtedness has been accelerated because of a default, then, in either case, no
payment shall be made by the Company with respect to the principal (including
redemption payments) of or premium, if any, or interest on the Securities.
In the event of the acceleration of the maturity of the Securities, then
no payment shall be made by the Company with respect to the principal (including
redemption payments) of or premium, if any, or interest on the Securities until
the holders of all Senior Indebtedness outstanding at the time of such
acceleration shall receive payment in full of all Allocable Amounts due in
respect of such Senior Indebtedness (including any amounts due upon
acceleration).
In the event that, notwithstanding the foregoing, any payment shall be
received by the Trustee when such payment is prohibited by the preceding
paragraphs of this Section 15.2, such payment shall be held in trust for the
benefit of, and shall be paid over or delivered to, the holders of Senior
Indebtedness or their respective representatives, or to the trustee or trustees
under any indenture pursuant to which any of such Senior Indebtedness may have
been issued, as their respective interests may appear, but only to the extent
that the holders of the Senior Indebtedness (or their representative or
representatives or a trustee) notify the Trustee in writing, within 90 days of
such payment of the Allocable Amounts then due and owing on such Senior
Indebtedness and only the Allocable Amounts specified in such notice to the
Trustee shall be paid to the holders of such Senior Indebtedness.
SECTION 15.3. Liquidation; Dissolution; Bankruptcy.
Upon any payment by the Company or distribution of assets of the Company
of any kind or character, whether in cash, property or securities, to creditors
upon any dissolution or winding-up or liquidation or reorganization of the
Company, whether voluntary or involuntary or in bankruptcy, insolvency,
receivership or other proceedings, all Allocable Amounts due upon all Senior
Indebtedness of the Company shall first be paid in full, or payment thereof
provided for in money in accordance with its terms, before any payment is made
by the Company on account of the principal (and premium, if any) or interest on
the Securities; and upon any such dissolution or winding-up or liquidation or
reorganization, any payment by the Company, or distribution of assets of the
Company of any kind or character, whether in cash, property or securities, to
which the Securityholders or the Trustee would be entitled to receive from the
Company, except for the provisions of this Article XV, shall be paid by the
Company or by any receiver, trustee in bankruptcy, liquidating trustee, agent or
other Person making such payment or distribution, or by the Securityholders or
by the Trustee under the Indenture if received by them or it, directly to the
holders of Senior Indebtedness of the Company (pro rata to such holders on the
basis of the respective Allocable Amounts of Senior Indebtedness
65
<PAGE>
held by such holders, as calculated by the Company) or their representative or
representatives, or to the trustee or trustees under any indenture pursuant to
which any instruments evidencing such Senior Indebtedness may have been issued,
as their respective interests may appear, to the extent necessary to pay all
Allocable Amounts in respect of such Senior Indebtedness in full, in money or
money's worth, after giving effect to any concurrent payment or distribution to
or for the holders of such Senior Indebtedness, before any payment or
distribution is made to the Securityholders or to the Trustee.
In the event that, notwithstanding the foregoing, any payment or
distribution of assets of the Company of any kind or character, whether in cash,
property or securities, prohibited by the foregoing, shall be received by the
Trustee before all Allocable Amounts in respect of Senior Indebtedness is paid
in full, or provision is made for such payment in money in accordance with its
terms, such payment or distribution shall be held in trust for the benefit of
and shall be paid over or delivered to the holders of such Senior Indebtedness
or their representative or representatives, or to the trustee or trustees under
any indenture pursuant to which any instruments evidencing such Senior
Indebtedness may have been issued, as their respective interests may appear, as
calculated by the Company, for application to the payment of all Senior
Indebtedness remaining unpaid to the extent necessary to pay all Allocable
Amounts in respect of such Senior Indebtedness in full in money in accordance
with its terms, after giving effect to any concurrent payment or distribution to
or for the benefit of the holders of such Senior Indebtedness.
For purposes of this Article XV, the words "cash, property or
securities" shall not be deemed to include shares of stock of the Company as
reorganized or readjusted, or securities of the Company or any other corporation
provided for by a plan of reorganization or readjustment, the payment of which
is subordinated at least to the extent provided in this Article XV with respect
to the Securities to the payment of Senior Indebtedness that may at the time be
outstanding, provided that (i) such Senior Indebtedness is assumed by the new
corporation, if any, resulting from any such reorganization or readjustment, and
(ii) the rights of the holders of such Senior Indebtedness are not, without the
consent of such holders, altered by such reorganization or readjustment. The
consolidation of the Company with, or the merger of the Company into, another
Person or the liquidation or dissolution of the Company following the sale,
conveyance, transfer or lease of its property as an entirety, or substantially
as an entirety, to another Person upon the terms and conditions provided for in
Article X of this Indenture shall not be deemed a dissolution, winding-up,
liquidation or reorganization for the purposes of this Section 15.3 if such
other Person, as a part of such consolidation, merger, sale, conveyance,
transfer or lease, shall comply with the conditions stated in Article X of this
Indenture.
SECTION 15.4. Subrogation.
Subject to the payment in full of all Allocable Amounts in respect of
Senior Indebtedness, the rights of the Securityholders shall be subrogated to
the rights of the holders
66
<PAGE>
of such Senior Indebtedness to receive payments or distributions of cash,
property or securities of the Company, as the case may be, applicable to such
Senior Indebtedness until the principal of (and premium, if any) and interest on
the Securities shall be paid in full; and, for the purposes of such subrogation,
no payments or distributions to the holders of such Senior Indebtedness of any
cash, property or securities to which the Securityholders or the Trustee would
be entitled except for the provisions of this Article XV, and no payment over
pursuant to the provisions of this Article XV to or for the benefit of the
holders of such Senior Indebtedness by Securityholders or the Trustee, shall, as
between the Company, its creditors other than holders of Senior Indebtedness of
the Company, and the holders of the Securities, be deemed to be a payment by the
Company to or on account of such Senior Indebtedness. It is understood that the
provisions of this Article XV are and are intended solely for the purposes of
defining the relative rights of the holders of the Securities, on the one hand,
and the holders of such Senior Indebtedness on the other hand.
Nothing contained in this Article XV or elsewhere in this Indenture or
in the Securities is intended to or shall impair, as between the Company, its
creditors other than the holders of Senior Indebtedness of the Company, and the
holders of the Securities, the obligation of the Company, which is absolute and
unconditional, to pay to the holders of the Securities the principal of (and
premium, if any) and interest on the Securities as and when the same shall
become due and payable in accordance with their terms, or is intended to or
shall affect the relative rights of the holders of the Securities and creditors
of the Company, as the case may be, other than the holders of Senior
Indebtedness of the Company, as the case may be, nor shall anything herein or
therein prevent the Trustee or the holder of any Security from exercising all
remedies otherwise permitted by applicable law upon default under the Indenture,
subject to the rights, if any, under this Article XV of the holders of such
Senior Indebtedness in respect of cash, property or securities of the Company,
as the case may be, received upon the exercise of any such remedy.
SECTION 15.5. Trustee to Effectuate Subordination.
Each Securityholder by such Securityholder's acceptance thereof
authorizes and directs the Trustee on such Securityholder's behalf to take such
action as may be necessary or appropriate to effectuate the subordination
provided in this Article XV and appoints the Trustee such Securityholder's
attorney-in-fact for any and all such purposes.
SECTION 15.6. Notice by the Company.
The Company shall give prompt written notice to a Responsible Officer of
the Trustee of any fact known to the Company that would prohibit the making of
any payment of monies to or by the Trustee in respect of the Securities pursuant
to the provisions of this Article XV. Notwithstanding the provisions of this
Article XV or any other provision of this Indenture, the Trustee shall not be
charged with knowledge of the existence of any facts that would prohibit the
making of any payment of monies to or by the Trustee in respect of the
Securities pursuant
67
<PAGE>
to the provisions of this Article XV, unless and until a Responsible Officer of
the Trustee assigned to its Principal Office shall have received written notice
thereof from the Company or a holder or holders of Senior Indebtedness or from
any trustee therefor or representative thereof; and before the receipt of any
such written notice, the Trustee, subject to the provisions of Article VI of
this Indenture, shall be entitled in all respects to assume that no such facts
exist; provided, however, that if the Trustee shall not have received the notice
provided for in this Section 15.6 at least two Business Days prior to the date
(i) upon which by the terms hereof any money may become payable for any purpose
(including, without limitation, the payment of the principal of (or premium, if
any) or interest on any Security), or (ii) moneys and/or U.S. Government
Obligations are deposited in trust pursuant to Article XI then, anything herein
contained to the contrary notwithstanding, the Trustee shall have full power and
authority to receive such money and U.S. Government Obligations and to apply the
same to the purposes for which they were received, and shall not be affected by
any notice to the contrary that may be received by it within two Business Days
prior to such date.
The Trustee, subject to the provisions of Article VI of this Indenture,
shall be entitled to conclusively rely on the delivery to it of a written notice
by a Person representing himself to be a holder of Senior Indebtedness of the
Company (or a trustee or representative on behalf of such holder) to establish
that such notice has been given by a holder of such Senior Indebtedness or a
trustee or representative on behalf of any such holder or holders. In the event
that the Trustee determines in good faith that further evidence is required with
respect to the right of any Person as a holder of such Senior Indebtedness to
participate in any payment or distribution pursuant to this Article XV, the
Trustee may request such Person to furnish evidence to the reasonable
satisfaction of the Trustee as to the amount of such Senior Indebtedness held by
such Person, the extent to which such Person is entitled to participate in such
payment or distribution and any other facts pertinent to the rights of such
Person under this Article XV, and, if such evidence is not furnished, the
Trustee may defer any payment to such Person pending judicial determination as
to the right of such Person to receive such payment.
Upon any payment or distribution of assets of the Company referred to in
this Article XV, the Trustee and the Securityholders shall be entitled to rely
upon any order or decree entered by any court of competent jurisdiction in which
such insolvency, bankruptcy, receivership, liquidation, reorganization,
dissolution, winding up or similar case or proceeding is pending, or a
certificate of the trustee in bankruptcy, liquidating trustee, custodian,
receiver, assignee for the benefit of creditors, agent or other person making
such payment or distribution, delivered to the Trustee or to the
Securityholders, for the purpose of ascertaining the persons entitled to
participate in such payment or distribution, the holders of Senior Indebtedness
and other indebtedness of the Company, the amount thereof or payable thereon,
the amount or amounts paid or distributed thereon and all other facts pertinent
thereto or to this Article XV.
68
<PAGE>
SECTION 15.7. Rights of the Trustee; Holders of Senior Indebtedness.
The Trustee in its individual capacity shall be entitled to all the
rights set forth in this Article XV in respect of any Senior Indebtedness at any
time held by it, to the same extent as any other holder of Senior Indebtedness,
and nothing in this Indenture shall deprive the Trustee of any of its rights as
such holder.
With respect to the holders of Senior Indebtedness, the Trustee
undertakes to perform or to observe only such of its covenants and obligations
as are specifically set forth in this Article XV, and no implied covenants or
obligations with respect to the holders of Senior Indebtedness shall be read
into this Indenture against the Trustee. The Trustee shall not be deemed to owe
any fiduciary duty to the holders of Senior Indebtedness and, subject to the
provisions of Article VI of this Indenture, the Trustee shall not be liable to
any holder of Senior Indebtedness if it shall pay over or deliver to
Securityholders, the Company or any other Person money or assets to which any
holder of Senior Indebtedness shall be entitled by virtue of this Article XV or
otherwise.
Nothing in this Article XV shall apply to claims of, or payments to, the
Trustee under or pursuant to Section 6.6.
SECTION 15.8. Subordination May Not Be Impaired.
No right of any present or future holder of any Senior Indebtedness to
enforce subordination as herein provided shall at any time in any way be
prejudiced or impaired by any act or failure to act on the part of the Company
or by any act or failure to act, in good faith, by any such holder, or by any
noncompliance by the Company with the terms, provisions and covenants of this
Indenture, regardless of any knowledge thereof that any such holder may have or
otherwise be charged with.
Without in any way limiting the generality of the foregoing paragraph,
the holders of Senior Indebtedness may, at any time and from time to time,
without the consent of or notice to the Trustee or the Securityholders, without
incurring responsibility to the Securityholders and without impairing or
releasing the subordination provided in this Article XV or the obligations
hereunder of the holders of the Securities to the holders of Senior
Indebtedness, do any one or more of the following: (i) change the manner, place
or terms of payment or extend the time of payment of, or renew or alter, such
Senior Indebtedness, or otherwise amend or supplement in any manner such Senior
Indebtedness or any instrument evidencing the same or any agreement under which
such Senior Indebtedness is outstanding; (ii) sell, exchange, release or
otherwise deal with any property pledged, mortgaged or otherwise securing such
Senior Indebtedness; (iii) release any Person liable in any manner for the
collection of such Senior Indebtedness; and (iv) exercise or refrain from
exercising any rights against the Company and any other Person.
69
<PAGE>
ARTICLE XVI
EXTENSION OF INTEREST PAYMENT PERIOD
SECTION 16.1. Extension of Interest Payment Period.
So long as no Event of Default has occurred and is continuing, the
Company shall have the right, at any time and from time to time during the term
of the Securities, to defer payments of interest by extending the interest
payment period of such Securities for a period not exceeding 10 consecutive
semi-annual periods, including the first such semi-annual period during such
extension period (the "Extended Interest Payment Period"), during which Extended
Interest Payment Period no interest shall be due and payable; provided that no
Extended Interest Payment Period shall end on a date other than an Interest
Payment Date or extend beyond the Maturity Date. To the extent permitted by
applicable law, interest, the payment of which has been deferred because of the
extension of the interest payment period pursuant to this Section 16.1, will
bear interest thereon at the Coupon Rate compounded semi-annually for each
semi-annual period of the Extended Interest Payment Period ("Compounded
Interest"). At the end of the Extended Interest Payment Period, the Company
shall pay all interest accrued and unpaid on the Securities, including any
Additional Interest and Compounded Interest (together, "Deferred Interest") that
shall be payable to the holders of the Securities in whose names the Securities
are registered in the Security Register on the first record date preceding the
end of the Extended Interest Payment Period. Before the termination of any
Extended Interest Payment Period, the Company may further defer payments of
interest by further extending such period, provided that such period, together
with all such previous and further extensions within such Extended Interest
Payment Period, shall not exceed 10 consecutive semi-annual periods, including
the first such semi-annual period during such Extended Interest Payment Period,
or extend beyond the Maturity Date. Upon the termination of any Extended
Interest Payment Period and the payment of all Deferred Interest then due, the
Company may commence a new Extended Interest Payment Period, subject to the
foregoing requirements. No interest shall be due and payable during an Extended
Interest Payment Period, except at the end thereof, but the Company may prepay
at any time all or any portion of the interest accrued during an Extended
Interest Payment Period.
SECTION 16.2. Notice of Extension.
(a) If the Property Trustee is the only registered holder of the
Securities at the time the Company selects an Extended Interest Payment Period,
the Company shall give written notice to the Administrative Trustees, the
Property Trustee and the Trustee of its selection of such Extended Interest
Payment Period five Business Days before the earlier of (i) the next succeeding
date on which Distributions on the Trust Securities issued by Imperial Capital
Trust are payable, or (ii) the date Imperial Capital Trust is required to give
notice of the record date, or the date such Distributions are payable, to any
national securities exchange or to holders of
70
<PAGE>
the Capital Securities issued by Imperial Capital Trust, but in any event at
least five Business Days before such record date.
(b) If the Property Trustee is not the only holder of the Securities at
the time the Company selects an Extended Interest Payment Period, the Company
shall give the holders of the Securities and the Trustee written notice of its
selection of such Extended Interest Payment Period at least 10 Business Days
before the earlier of (i) the next succeeding Interest Payment Date, or (ii) the
date the Company is required to give notice of the record or payment date of
such interest payment to any national securities exchange.
(c) The semi-annual period in which any notice is given pursuant to
paragraphs (a) or (b) of this Section 16.2 shall be counted as one of the 10
semi-annual periods permitted in the maximum Extended Interest Payment Period
permitted under Section 16.1.
The Chase Manhattan Bank hereby accepts the trusts in this Indenture
declared and provided, upon the terms and conditions hereinabove set forth.
71
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed by their respective officers thereunto duly authorized, as of the
day and year first above written.
IMPERIAL BANCORP
By /s/ Robert M. Franko
-----------------------------
Robert M. Franko
Executive Vice President
THE CHASE MANHATTAN BANK,
as Trustee
By /s/ Richard Lorenzen
-----------------------------
Richard Lorenzen
Senior Trust Officer
<PAGE>
EXHIBIT A
(FORM OF FACE OF SECURITY)
[IF THE SECURITY IS A GLOBAL SECURITY, INSERT: -- THIS SECURITY IS A
GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND
IS REGISTERED IN THE NAME OF A DEPOSITARY OR A NOMINEE OF A DEPOSITARY. THIS
SECURITY IS EXCHANGEABLE FOR SECURITIES REGISTERED IN THE NAME OF A PERSON OTHER
THAN THE DEPOSITARY OR ITS NOMINEE ONLY IN THE LIMITED CIRCUMSTANCES DESCRIBED
IN THE INDENTURE, AND NO TRANSFER OF THIS SECURITY (OTHER THAN A TRANSFER OF
THIS SECURITY AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY
A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE
DEPOSITARY) MAY BE REGISTERED EXCEPT IN LIMITED CIRCUMSTANCES.
UNLESS THIS SECURITY IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC") TO THE ISSUER OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY SECURITY ISSUED
IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT HEREON IS MADE TO CEDE & CO.
OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC),
ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY
PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN
INTEREST HEREIN.]
[IF THE SECURITY IS A RESTRICTED SECURITY INSERT: THIS SECURITY HAS NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT") OR ANY STATE SECURITIES LAWS OR ANY OTHER APPLICABLE SECURITIES LAW.
NEITHER THIS SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED,
SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE
ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT
SUBJECT TO, REGISTRATION.
THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF AGREES TO OFFER,
SELL OR OTHERWISE TRANSFER THIS SECURITY, PRIOR TO THE DATE (THE "RESALE
RESTRICTION TERMINATION DATE") WHICH IS TWO YEARS AFTER THE LATER OF THE
ORIGINAL ISSUANCE DATE HEREOF AND THE LAST DATE ON WHICH THE COMPANY OR ANY
"AFFILIATE" OF THE COMPANY WAS THE OWNER OF THIS SECURITY (OR ANY PREDECESSOR OF
THIS SECURITY) ONLY (A) TO THE COMPANY, (B) PURSUANT TO A REGISTRATION STATEMENT
A-1
<PAGE>
WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (C) SO LONG AS THIS
SECURITY IS ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER THE SECURITIES ACT
("RULE 144A"), TO A PERSON IT REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL
BUYER" (AS DEFINED IN RULE 144A) THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE
ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE
TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (D) TO AN INSTITUTIONAL
"ACCREDITED INVESTOR" WITHIN THE MEANING OF SUBPARAGRAPH (A)(1), (2), (3) OR (7)
OF RULE 501 UNDER THE SECURITIES ACT THAT IS ACQUIRING THIS SECURITY FOR ITS OWN
ACCOUNT, OR FOR THE ACCOUNT OF SUCH AN INSTITUTIONAL ACCREDITED INVESTOR, FOR
INVESTMENT PURPOSES AND NOT WITH A VIEW TO, OR FOR OFFER OR SALE IN CONNECTION
WITH, ANY DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT, OR (E) PURSUANT TO
ANY OTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS UNDER THE
SECURITIES ACT, SUBJECT TO THE RIGHT OF THE COMPANY PRIOR TO ANY SUCH OFFER,
SALE OR TRANSFER (i) PURSUANT TO CLAUSE (D) OR (E) TO REQUIRE THE DELIVERY OF AN
OPINION OF COUNSEL, CERTIFICATIONS AND/OR OTHER INFORMATION SATISFACTORY TO THE
COMPANY, AND (ii) PURSUANT TO CLAUSE (D), TO REQUIRE THAT A CERTIFICATE OF
TRANSFER IN THE FORM APPEARING ON THE REVERSE OF THIS SECURITY IS COMPLETED AND
DELIVERED BY THE TRANSFEREE TO THE COMPANY. SUCH HOLDER FURTHER AGREES THAT IT
WILL DELIVER TO EACH PERSON TO WHOM THIS SECURITY IS TRANSFERRED A NOTICE
SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND.]
A-2
<PAGE>
No. CUSIP No. ______________
IMPERIAL BANCORP
9.98% [SERIES A] [SERIES B] [PRIVATE EXCHANGE] JUNIOR SUBORDINATED
D E F E R R A B L E I N T E R E S T D E B E N T U R E
DUE DECEMBER 31, 2026
Imperial Bancorp, a California corporation (the "Company", which term
includes any successor Person under the Indenture hereinafter referred to), for
value received, hereby promises to pay to _________ or registered assigns, the
principal sum of _____________ Dollars on December 31, 2026 (the "Maturity
Date"), unless previously redeemed, and to pay interest on the outstanding
principal amount hereof from April 23, 1997, or from the most recent interest
payment date (each such date, an "Interest Payment Date") to which interest has
been paid or duly provided for, semi-annually (subject to deferral as set forth
herein) in arrears on June 30 and December 31 of each year, commencing June 30,
1997 at the rate of 9.98% per annum until the principal hereof shall have become
due and payable, and at the same rate per annum on any overdue principal and
premium, if any, and (without duplication and to the extent that payment of such
interest is enforceable under applicable law) on any overdue installment of
interest at the same rate per annum compounded semi-annually. The amount of
interest payable on any Interest Payment Date shall be computed on the basis of
a 360-day year of twelve 30-day months and, for any period less than a full
calendar month, the number of days elapsed in such month. In the event that any
date on which the principal of (or premium, if any) or interest on this Security
is payable is not a Business Day, then the payment payable on such date will be
made on the next succeeding day that is a Business Day (and without any interest
or other payment in respect of any such delay), with the same force and effect
as if made on such date. Pursuant to the Registration Rights Agreement, in
certain limited circumstances the Company will be required to pay Liquidated
Damages (as defined in the Registration Rights Agreement) with respect to this
Security. EACH HOLDER OF THIS SECURITY AGREES TO BE BOUND BY THE PROVISIONS OF
THE REGISTRATION RIGHTS AGREEMENT.
The interest installment so payable, and punctually paid or duly
provided for, on any Interest Payment Date will, as provided in the Indenture,
be paid to the person in whose name this Security (or one or more Predecessor
Securities, as defined in said Indenture) is registered at the close of business
on the regular record date for such interest installment, which shall be the
fifteenth day of the month preceding the month in which the relevant interest
payment date falls. Any such interest installment not punctually paid or duly
provided for shall forthwith cease to be payable to the holders on such regular
record date and may be paid to the Person in whose name this Security (or one or
more Predecessor Securities) is registered at the close of business on a special
record date to be fixed by the Trustee for the payment of such defaulted
interest, notice whereof shall be given to the holders of Securities not less
than 10 days prior to such special record date, or may be paid at any time in
any other lawful manner not inconsistent with the requirements of any securities
exchange on which the Securities may
A-3
<PAGE>
be listed, and upon such notice as may be required by such exchange, all as more
fully provided in the Indenture.
The principal of (and premium, if any) and interest on this Security
shall be payable at the office or agency of the Trustee maintained for that
purpose in any coin or currency of the United States of America that at the time
of payment is legal tender for payment of public and private debts; provided,
however, that, payment of interest may be made at the option of the Company by
(i) check mailed to the holder entitled thereto at such address as shall appear
in the Security Register or (ii) by wire transfer to an account maintained by
the Person entitled thereto, provided that proper written wire transfer
instructions have been received by the paying agent by the relevant record date.
Notwithstanding the foregoing, so long as the Holder of this Security is the
Property Trustee, the payment of the principal of (and premium, if any) and
interest on this Security will be made at such place and to such account as may
be designated by the Property Trustee.
The indebtedness evidenced by this Security is, to the extent provided
in the Indenture, subordinate and junior in right of payment to the prior
payment in full of all Allocable Amounts in respect of Senior Indebtedness, and
this Security is issued subject to the provisions of the Indenture with respect
thereto. Each holder of this Security, by accepting the same, (a) agrees to and
shall be bound by such provisions, (b) authorizes and directs the Trustee on his
or her behalf to take such action as may be necessary or appropriate to
acknowledge or effectuate the subordination so provided and (c) appoints the
Trustee his or her attorney-in-fact for any and all such purposes. Each holder
hereof, by his or her acceptance hereof, hereby waives all notice of the
acceptance of the subordination provisions contained herein and in the Indenture
by each holder of Senior Indebtedness, whether now outstanding or hereafter
incurred, and waives reliance by each such holder upon said provisions.
This Security shall not be entitled to any benefit under the Indenture
hereinafter referred to, or be valid or become obligatory for any purpose until
the Certificate of Authentication hereon shall have been signed by or on behalf
of the Trustee.
The provisions of this Security are continued on the reverse side hereof
and such provisions shall for all purposes have the same effect as though fully
set forth at this place.
A-4
<PAGE>
IN WITNESS WHEREOF, the Company has caused this instrument to be
executed.
IMPERIAL BANCORP
By: _______________________
Name:
Title
By: _______________________
Name:
Title:
(FORM OF CERTIFICATE OF AUTHENTICATION)
CERTIFICATE OF AUTHENTICATION
This is one of the Securities referred to in the within-mentioned
Indenture.
Dated ______________
The Chase Manhattan Bank,
as Trustee
By ____________________
Authorized Officer
A-5
<PAGE>
(FORM OF REVERSE OF SECURITY)
This Security is one of the [Series A Securities] [Series B Securities]
[Private Exchange Debentures] of the Company (herein sometimes referred to as
the "Securities"), specified in the Indenture, all issued or to be issued under
and pursuant to an Indenture, dated as of April 23, 1997 (the "Indenture"), duly
executed and delivered between the Company and The Chase Manhattan Bank, as
Trustee (the "Trustee"), to which Indenture reference is hereby made for a
description of the rights, limitations of rights, obligations, duties and
immunities thereunder of the Trustee, the Company and the holders of the
Securities.
Upon the occurrence and continuation of a Special Event, the Company
shall have the right at any time, within 90 days following the occurrence of a
Special Event, prior to June 30, 2007 (the "Initial Optional Redemption Date"),
to redeem this Security in whole (but not in part) at the Special Event
Redemption Price. "Special Event Redemption Price" shall mean, with respect to
any redemption of the Securities following a Special Event, an amount in cash
equal to the greater of (i) 100% of the principal amount to be redeemed or (ii)
the sum, as determined by a Quotation Agent, of the present values of the
principal amount and premium payable with respect to an Optional Redemption (as
defined below) on the Initial Optional Redemption Date, together with scheduled
payments of interest on the Securities from the redemption date to and including
the Initial Optional Redemption Date, discounted to the redemption date on a
semi-annual basis (assuming a 360-day year consisting of twelve 30-day months)
at the Adjusted Treasury Rate, plus, in each case, any accrued and unpaid
interest thereon, including Compounded Interest and Additional Interest, if any,
to the date of such redemption.
In addition, the Company shall have the right to redeem this Security,
in whole or in part, at any time on or after the Initial Optional Redemption
Date (an "Optional Redemption"), at the Optional Redemption Price as set forth
below (expressed as percentages of principal to be redeemed) plus accrued and
unpaid interest thereon (including Additional Interest and Compounded Interest,
if any) to the applicable date of redemption: if redeemed during the 12- month
period beginning June 30 of the years indicated below.
Year Percentage
---- ----------
2007 105.113
2008 104.601
2009 104.090
2010 103.579
2011 103.068
2012 102.556
2013 102.045
2014 101.534
2015 101.023
2016 100.511
2017 and thereafter 100.00
A-6
<PAGE>
The Optional Redemption Price or the Special Event Redemption Price, as
the case requires, shall be paid prior to 12:00 noon, New York time, on the date
of such redemption or at such earlier time as the Company determines, provided,
that the Company shall deposit with the Trustee an amount sufficient to pay the
applicable Redemption Price by 10:00 a.m., New York City time, on the date such
Redemption Price is to be paid. Any redemption pursuant to this paragraph will
be made upon not less than 30 days nor more than 60 days notice. If the
Securities are only partially redeemed by the Company pursuant to an Optional
Redemption, the Securities will be redeemed by lot or by any other method
utilized by the Trustee; provided that if, at the time of redemption, the
Securities are registered as a Global Security, the Depositary shall determine
in accordance with its procedures the principal amount of such Securities held
for the account of its participants to be redeemed.
In the event of redemption of this Security in part only, a new Security
or Securities for the unredeemed portion hereof will be issued in the name of
the holder hereof upon the cancellation hereof.
Notwithstanding the foregoing, any redemption of Securities by the
Company shall be subject to the receipt by the Company of any required
regulatory approval.
In case an Event of Default, as defined in the Indenture, shall have
occurred and be continuing, the principal of all of the Securities may be
declared, and upon such declaration shall become, due and payable, in the
manner, with the effect and subject to the conditions provided in the Indenture.
The Indenture contains provisions permitting the Company and the
Trustee, with the consent of the holders of a majority in aggregate principal
amount of the Securities at the time outstanding, as defined in the Indenture,
to execute supplemental indentures for the purpose of adding any provisions to
or changing in any manner or eliminating any of the provisions of the Indenture
or of modifying in any manner the rights of the holders of the Securities;
provided, however, that no such supplemental indenture shall, without the
consent of each holder of Securities then outstanding and affected thereby, (i)
extend the Maturity Date of any Securities, or reduce the principal amount
thereof, or reduce any amount payable on redemption thereof, or reduce the rate
or extend the time of payment of interest thereon (subject to Article XVI of the
Indenture), or make the principal of, or interest or premium on, the Securities
payable in any coin or currency other than U.S. dollars, or impair or affect the
right of any holder of Securities to institute suit for the payment thereof, or
(ii) reduce the aforesaid percentage of Securities, the holders of which are
required to consent to any such supplemental indenture. The Indenture also
contains provisions permitting the holders of a majority in aggregate principal
amount of the Securities at the time outstanding, on behalf of all of the
holders of the Securities, to waive any past default in the performance of any
of the covenants contained in the Indenture, or established pursuant to the
Indenture, and its consequences, except a default in the payment of the
principal of or premium, if any, or interest on any of the Securities or a
default in respect of any covenant or provision which under the Indenture cannot
be modified or amended without the consent of each holder of Securities then
outstanding. Any such
A-7
<PAGE>
consent or waiver by the holder of this Security (unless revoked as provided in
the Indenture) shall be conclusive and binding upon such Holder and upon all
future holders and owners of this Security and of any Security issued in
exchange herefor or in place hereof (whether by registration of transfer or
otherwise), irrespective of whether or not any notation of such consent or
waiver is made upon this Security.
No reference herein to the Indenture and no provision of this Security
or of the Indenture shall alter or impair the obligation of the Company, which
is absolute and unconditional, to pay the principal of and premium, if any, and
interest on this Security at the time and place and at the rate and in the money
herein prescribed.
The Company shall have the right, at any time and from time to time
during the term of the Securities, to defer payments of interest by extending
the interest payment period of such Securities for a period not exceeding 10
consecutive semi-annual periods, including the first such semi-annual period
during such extension period, and not to extend beyond the Maturity Date of the
Securities (an "Extended Interest Payment Period"), at the end of which period
the Company shall pay all interest then accrued and unpaid (together with
interest thereon at the rate specified for the Securities to the extent that
payment of such interest is enforceable under applicable law). Before the
termination of any such Extended Interest Payment Period, the Company may
further defer payments of interest by further extending such Extended Interest
Payment Period, provided that such Extended Interest Payment Period, together
with all such previous and further extensions within such Extended Interest
Payment Period, shall not exceed 10 consecutive semi-annual periods, including
the first semi-annual period during such Extended Interest Payment Period, and
shall not end on any date other than an Interest Payment Date or extend beyond
the Maturity Date of the Securities. Upon the termination of any such Extended
Interest Payment Period and the payment of all accrued and unpaid interest and
any additional amounts then due, the Company may commence a new Extended
Interest Payment Period, subject to the foregoing requirements.
The Company has agreed that it will not (i) declare or pay any dividends
or distributions on, or redeem, purchase, acquire, or make a liquidation payment
with respect to, any of the Company's capital stock (which includes common and
preferred stock) or (ii) make any payment of principal, interest or premium, if
any, on or repay or repurchase or redeem any debt securities of the Company that
rank pari passu with or junior in right of payment to the Securities or (iii)
make any guarantee payments with respect to any guarantee by the Company of any
securities or any Subsidiary of the Company (including Other Guarantees) if such
guarantee ranks pari passu or junior in right of payment to the Securities
(other than (a) dividends or distributions in shares of, or options, warrants or
rights to subscribe for or purchase shares of, Common Stock of the Company; (b)
any declaration of a dividend in connection with the implementation of a
stockholder's rights plan, or the issuance of stock under any such plan in the
future, or the redemption or repurchase of any such rights pursuant thereto; (c)
payments under the Capital Securities Guarantee; (d) as a direct result of, and
only to the extent required in order to avoid the issuance of fractional shares
of capital stock following a reclassification of the Company's capital stock or
the exchange or the conversion of one class or series of the Company's capital
stock for another class or series of the
A-8
<PAGE>
Company's capital stock; (e) the purchase of fractional interests in shares of
the Company's capital stock pursuant to the exchange or conversion of such
capital stock or the security being exchanged or converted and (f) purchases of
Common Stock related to the issuance of Common Stock or rights under any of the
Company's benefit plans for its directors, officers or employees or any of the
Company's dividend reinvestment plans) if at such time (i) an Event of Default
shall have occurred and be continuing (other than solely an Event of Default
under Section 5.1(c) of the Indenture), (ii) there shall have occurred any event
of which the Company has actual knowledge that (a) is, or with the giving of
notice or the lapse of time, or both, would be, an Event of Default (other than
solely an Event of Default under Section 5.1(c) of the Indenture) and (b) in
respect of which the Company shall not have taken reasonable steps to cure,
(iii) if such Securities are held by Imperial Capital Trust, the Company shall
be in default with respect to its payment obligations under the Capital
Securities Guarantee or (iv) the Company shall have given notice of its election
of the exercise of its right to extend the interest payment period and any such
extension shall be continuing.
The Securities are issuable only in registered form without coupons in
minimum denominations of $100,000 and integral multiples of $1,000 in excess
thereof. As provided in the Indenture and subject to the transfer restrictions
limitations as may be contained herein and therein from time to time, this
Security is transferable by the holder hereof on the Security Register of the
Company, upon surrender of this Security for registration of transfer at the
office or agency of the Company in the City and State of New York accompanied by
a written instrument or instruments of transfer in form satisfactory to the
Company and the Security registrar duly executed by the holder hereof or his
attorney duly authorized in writing, and thereupon one or more new Securities of
authorized denominations and for the same aggregate principal amount and series
will be issued to the designated transferee or transferees. No service charge
will be made for any such transfer, but the Company may require payment of a sum
sufficient to cover any tax or other governmental charge payable in relation
thereto.
Prior to due presentment for registration of transfer of this Security,
the Company, the Trustee, any authenticating agent, any paying agent, any
transfer agent and the registrar may deem and treat the holder hereof as the
owner hereof (whether or not this Security shall be overdue and notwithstanding
any notice of ownership or writing hereon made by anyone other than the Security
Registrar) for the purpose of receiving payment of or on account of the
principal hereof and premium, if any, and (subject to the Indenture) interest
due hereon and for all other purposes, and neither the Company nor the Trustee
nor any authenticating agent nor any paying agent nor any transfer agent nor any
registrar shall be affected by any notice to the contrary.
No recourse shall be had for the payment of the principal of or premium,
if any, or interest on this Security, or for any claim based hereon, or
otherwise in respect hereof, or based on or in respect of the Indenture, against
any incorporator, stockholder, officer or director, past, present or future, as
such, of the Company or of any predecessor or successor Person, whether by
virtue of any constitution, statute or rule of law, or by the enforcement of any
assessment or penalty or otherwise, all such liability being, by the acceptance
hereof and as part of the consideration for the issuance hereof, expressly
waived and released.
A-9
<PAGE>
All capitalized terms used in this Security that are defined in the
Indenture but not defined herein shall have the meanings assigned to them in the
Indenture.
THE INDENTURE AND THE SECURITIES SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO CONFLICT OF
LAW PROVISIONS THEREOF.
A-10
CERTIFICATE OF TRUST
OF
IMPERIAL CAPITAL TRUST I
This Certificate of Trust of Imperial Capital Trust I (the
"Trust"), dated as of April 8, 1997, is being duly executed and filed by the
undersigned, as trustees, to create a business trust under the Delaware Business
Trust Act (12 Del. C. ss. 3801, et seq.).
1. Name. The name of the business trust created hereby is
Imperial 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
Chase Manhattan Bank Delaware, 1201 Market Street, Wilmington, Delaware 19801.
3. Effective Date. This Certificate of Trust shall be effective
upon filing.
IN WITNESS WHEREOF, the undersigned, being the trustees of the
Trust, have executed this Certificate of Trust as of the date first-above
written.
CHASE MANHATTAN BANK DELAWARE, not in
its individual capacity but solely as
trustee of the Trust
By: /s/ John J. Cashin
------------------------------------------
Name: John J. Cashin
Title: Senior Trust Officer
THE CHASE MANHATTAN BANK, not in
its individual capacity but solely as
trustee of the Trust
By: /s/ Richard Lorenzen
------------------------------------------
Name: Richard Lorenzen
Title: Senior Trust Officer
EXECUTION COPY
================================================================================
AMENDED AND RESTATED DECLARATION
OF TRUST
IMPERIAL CAPITAL TRUST I
DATED AS OF APRIL 23, 1997
================================================================================
<PAGE>
TABLE OF CONTENTS
Page
ARTICLE I
INTERPRETATION AND DEFINITIONS............................................... 2
SECTION 1.1 Definitions............................................ 2
ARTICLE II
TRUST INDENTURE ACT..........................................................10
SECTION 2.1 Trust Indenture Act; Application.......................10
SECTION 2.2 Lists of Holders of Securities.........................10
SECTION 2.3 Reports by the Property Trustee........................11
SECTION 2.4 Periodic Reports to Property Trustee...................11
SECTION 2.5 Evidence of Compliance with Conditions Precedent.......12
SECTION 2.6 Events of Default; Waiver..............................12
SECTION 2.7 Event of Default; Notice...............................14
ARTICLE III
ORGANIZATION.................................................................15
SECTION 3.1 Name...................................................15
SECTION 3.2 Office.................................................15
SECTION 3.3 Purpose................................................15
SECTION 3.4 Authority..............................................16
SECTION 3.5 Title to Property of the Trust.........................16
SECTION 3.6 Powers and Duties of the Administrative Trustees.......16
SECTION 3.7 Prohibition of Actions by the Trust and the Trustees...20
SECTION 3.8 Powers and Duties of the Property Trustee..............21
SECTION 3.9 Certain Additional Duties and Responsibilities of the
Property Trustee...................................... 23
SECTION 3.10 Certain Rights of the Property Trustee................25
SECTION 3.11 Delaware Trustee......................................27
SECTION 3.12 Not Responsible for Recitals or Issuance of Securities28
SECTION 3.13 Duration of Trust.....................................28
SECTION 3.14 Mergers...............................................28
ARTICLE IV
SPONSOR......................................................................30
SECTION 4.1 Sponsor's Purchase of Common Securities................30
SECTION 4.2 Responsibilities of the Sponsor........................30
SECTION 4.3 Right to Proceed.......................................31
ARTICLE V
TRUSTEES.................................................................... 31
i
<PAGE>
Page
SECTION 5.1 Number of Trustees: Appointment of Co-Trustee..........31
SECTION 5.2 Delaware Trustee.......................................32
SECTION 5.3 Property Trustee; Eligibility..........................32
SECTION 5.4 Certain Qualifications of Administrative Trustees and
Delaware Trustee Generally.............................33
SECTION 5.5 Administrative Trustees................................33
SECTION 5.6 Delaware Trustee.......................................34
SECTION 5.7 Appointment, Removal and Resignation of Trustees.......34
SECTION 5.8 Vacancies among Trustees...............................36
SECTION 5.9 Effect of Vacancies....................................36
SECTION 5.10 Meetings..............................................36
SECTION 5.11 Delegation of Power...................................37
SECTION 5.12 Merger, Conversion, Consolidation or Succession to
Business 38
ARTICLE VI
DISTRIBUTIONS................................................................38
SECTION 6.1 Distributions..........................................38
ARTICLE VII
ISSUANCE OF SECURITIES.......................................................39
SECTION 7.1 General Provisions Regarding Securities................39
SECTION 7.2 Execution and Authentication...........................40
SECTION 7.3 Form and Dating........................................41
SECTION 7.4 Registrar, Paying Agent and Exchange Agent.............43
SECTION 7.5 Paying Agent to Hold Money in Trust....................43
SECTION 7.6 Replacement Securities.................................44
SECTION 7.7 Outstanding Capital Securities.........................44
SECTION 7.8 Capital Securities in Treasury.........................44
SECTION 7.9 Temporary Securities...................................45
SECTION 7.10 Cancellation..........................................46
SECTION 7.11 CUSIP Numbers.........................................46
ARTICLE VIII
DISSOLUTION AND TERMINATION OF TRUST.........................................46
SECTION 8.1 Dissolution and Termination of Trust...................46
ARTICLE IX
TRANSFER OF INTERESTS........................................................48
SECTION 9.1 Transfer of Securities.................................48
SECTION 9.2 Transfer Procedures and Restrictions...................49
SECTION 9.3 Book Entry Interests...................................57
SECTION 9.4 Notices to Clearing Agency.............................58
SECTION 9.5 Appointment of Successor Clearing Agency...............58
ii
<PAGE>
Page
ARTICLE X
LIMITATION OF LIABILITY OF
HOLDERS OF SECURITIES, TRUSTEES OR OTHERS................................... 58
SECTION 10.1 Liability............................................ 58
SECTION 10.2 Exculpation.......................................... 59
SECTION 10.3 Fiduciary Duty....................................... 60
SECTION 10.4 Indemnification...................................... 61
SECTION 10.5 Outside Businesses................................... 64
SECTION 10.6 Compensation; Fees................................... 64
ARTICLE XI
ACCOUNTING.................................................................. 65
SECTION 11.1 Fiscal Year.......................................... 65
SECTION 11.2 Certain Accounting Matters........................... 65
SECTION 11.3 Banking.............................................. 66
SECTION 11.4 Withholding.......................................... 66
ARTICLE XII
AMENDMENTS AND MEETINGS..................................................... 66
SECTION 12.1 Amendments........................................... 66
SECTION 12.2 Meetings of the Holders; Action by Written Consent... 69
ARTICLE XIII
REPRESENTATIONS OF PROPERTY TRUSTEE
AND DELAWARE TRUSTEE........................................................ 70
SECTION 13.1 Representations and Warranties of Property Trustee... 70
SECTION 13.2 Representations and Warranties of Delaware Trustee... 71
ARTICLE XIV
REGISTRATION RIGHTS......................................................... 72
SECTION 14.1 Registration Rights Agreement........................ 72
ARTICLE XV
MISCELLANEOUS............................................................... 72
SECTION 15.1 Notices.............................................. 72
SECTION 15.2 Governing Law........................................ 73
SECTION 15.3 Intention of the Parties............................. 74
SECTION 15.4 Headings............................................. 74
SECTION 15.5 Successors and Assigns............................... 74
SECTION 15.6 Partial Enforceability............................... 75
SECTION 15.7 Counterparts......................................... 75
iii
<PAGE>
Page
ANNEX I
TERMS OF 9.98% SERIES A/SERIES B/PRIVATE EXCHANGE CAPITAL
SECURITIES COMMON SECURITIES................................................ 1
EXHIBIT A-1
FORM OF CAPITAL SECURITY CERTIFICATE........................................ 1
EXHIBIT B-1
FORM OF COMMON SECURITY CERTIFICATE......................................... 1
iv
<PAGE>
AMENDED AND RESTATED
DECLARATION OF TRUST
OF
IMPERIAL CAPITAL TRUST I
April 23, 1997
AMENDED AND RESTATED DECLARATION OF TRUST ("Declaration")
dated and effective as of April 23, 1997, by the Trustees (as defined herein),
the Sponsor (as defined herein) and by the holders, from time to time, of
undivided beneficial interests in the assets of the Trust to be issued pursuant
to this Declaration;
WHEREAS, the Delaware Trustee, the Property Trustee and the
Sponsor established Imperial Capital Trust I (the "Trust"), a trust created
under the Business Trust Act pursuant to a Declaration of Trust dated as of
April 8, 1997 (the "Original Declaration"), and a Certificate of Trust filed
with the Secretary of State of the State of Delaware on April 8, 1997, for the
sole purpose of issuing and selling certain securities representing undivided
beneficial interests in the assets of the Trust and investing the proceeds
thereof in certain Debentures of the Debenture Issuer (each as hereinafter
defined);
WHEREAS, all of the Trustees and the Sponsor, by this
Declaration, amend and restate each and every term and provision of the Original
Declaration; and
NOW, THEREFORE, it being the intention of the parties hereto
to continue the Trust as a business trust under the Business Trust Act and that
this Declaration constitute the governing instrument of such business trust, the
Trustees declare that all assets contributed to the Trust will be held in trust
for the benefit of the holders, from time to time, of the securities
representing undivided beneficial interests in the assets of the Trust issued
hereunder, subject to the provisions of this Declaration.
1
<PAGE>
ARTICLE I
INTERPRETATION AND DEFINITIONS
SECTION 1.1 Definitions.
Unless the context otherwise requires:
(a) Capitalized terms used in this Declaration but not
defined in the preamble above have the respective meanings assigned to them in
this Section 1.1;
(b) a term defined anywhere in this Declaration has the
same meaning throughout;
(c) all references to "the Declaration" or "this
Declaration" are to this Declaration as modified, supplemented or amended from
time to time;
(d) all references in this Declaration to Articles and
Sections and Annexes and Exhibits are to Articles and Sections of and Annexes
and Exhibits to this Declaration unless otherwise specified;
(e) a term defined in the Trust Indenture Act has the
same meaning when used in this Declaration unless otherwise defined in this
Declaration or unless the context otherwise requires; and
(f) a reference to the singular includes the plural and
vice versa.
"Administrative Trustee" has the meaning set forth in Section
5.1.
"Affiliate" has the same meaning as given to that term in Rule
405 under the Securities Act or any successor rule thereunder.
"Agent" means any Paying Agent, Registrar or Exchange Agent.
"Authorized Officer" of a Person means any other Person that
is authorized to legally bind such former Person.
"Book Entry Interest" means a beneficial interest in a Global
Certificate registered in the name of a Clearing Agency or its nominee,
ownership and transfers of which
2
<PAGE>
shall be maintained and made through book entries by a Clearing Agency as
described in Sections 9.2 and 9.3.
"Business Day" means any day other than a Saturday or a Sunday
or a day on which banking institutions in the City of New York are authorized or
required by law or executive order to close.
"Business Trust Act" means Chapter 38 of Title 12 of the
Delaware Code, 12 Del. C. ss.3801 et seq., as it may be amended from time to
time, or any successor legislation.
"Capital Security Beneficial Owner" means, with respect to a
Book Entry Interest, a Person who is the beneficial owner of such Book Entry
Interest, as reflected on the books of the Clearing Agency, or on the books of a
Person maintaining an account with such Clearing Agency (directly as a Clearing
Agency Participant or as an indirect participant, in each case in accordance
with the rules of such Clearing Agency).
"Capital Securities" means, collectively, the Series A Capital
Securities, the Series B Capital Securities and the Private Exchange Capital
Securities.
"Capital Securities Guarantee" means, collectively, the Series
A Capital Securities Guarantee and the Series B Capital Securities Guarantee.
"Clearing Agency" means an organization registered as a
"Clearing Agency" pursuant to Section 17A of the Exchange Act that is acting as
depositary for the Capital Securities and in whose name or in the name of a
nominee of that organization shall be registered a Global Certificate and which
shall undertake to effect book entry transfers and pledges of the Capital
Securities.
"Clearing Agency Participant" means a broker, dealer, bank,
other financial institution or other Person for whom from time to time the
Clearing Agency effects book entry transfers and pledges of securities deposited
with the Clearing Agency.
"Closing Time" means the "Closing Time" under the Purchase
Agreement.
"Code" means the Internal Revenue Code of 1986, as amended
from time to time, or any successor legislation.
"Commission" means the United States Securities and Exchange
Commission as from time to time constituted, or if any time after the execution
of this Declaration such
3
<PAGE>
Commission is not existing and performing the duties now assigned to it under
applicable Federal securities laws, then the body performing such duties at such
time.
"Common Securities" has the meaning specified in Section
7.1(a).
"Common Securities Guarantee" means the guarantee agreement
dated as of April 23, 1997 of the Sponsor in respect of the Common Securities.
"Common Securities Subscription Agreement" means the
subscription agreement dated as of April 23, 1997 between the Trust and the
Sponsor relating to the Trust's 9.98% Common Securities representing undivided
beneficial interests in the assets of the Trust.
"Company Indemnified Person" means (a) any Administrative
Trustee; (b) any Affiliate of any Administrative Trustee; (c) any officers,
directors, shareholders, members, partners, employees, representatives or agents
of any Administrative Trustee; or (d) any officer, employee or agent of the
Trust or its Affiliates.
"Corporate Trust Office" means the office of the Property
Trustee at which the corporate trust business of the Property Trustee, at any
particular time, shall be principally administered, which office at the date of
execution of this Declaration is located at 450 West 33rd Street, 15th Floor,
New York, NY 10001.
"Covered Person" means: (a) any officer, director,
shareholder, partner, member, representative, employee or agent of (i) the Trust
or (ii) the Trust's Affiliates; and (b) any Holder of Securities.
"Debenture Issuer" means Imperial Bancorp, a California
corporation, or any successor entity resulting from any consolidation,
amalgamation, merger or other business combination, in its capacity as issuer of
the Debentures under the Indenture.
"Debenture Subscription Agreement" means the Subscription
Agreement dated as of April 23, 1997 between the Sponsor and the Trust relating
to the Debentures issuable pursuant to the Indenture.
"Debenture Trustee" means The Chase Manhattan Bank, a New York
banking corporation, as trustee under the Indenture until a successor is
appointed thereunder, and thereafter means such successor trustee.
4
<PAGE>
"Debentures" means, collectively, the Series A Debentures and
the Series B Debentures.
"Default" means an event, act or condition that with notice or
lapse of time, or both, would constitute an Event of Default.
"Definitive Capital Securities" shall have the meaning set
forth in Section 7.3(c).
"Delaware Trustee" has the meaning set forth in Section 5.2.
"Direct Action" shall have the meaning set forth in Section
3.8(e).
"Distribution" means a distribution payable to Holders in
accordance with Section 6.1.
"DTC" means The Depository Trust Company, the initial Clearing
Agency.
"Event of Default" in respect of the Securities means an Event
of Default (as defined in the Indenture) that has occurred and is continuing in
respect of the Debentures.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended from time to time, or any successor legislation.
"Exchange Agent" has the meaning set forth in Section 7.4.
"Exchange Offer" means the offer that may be made pursuant to
the Registration Rights Agreement (i) by the Trust to exchange Series B Capital
Securities for Series A Capital Securities and (ii) by the Debenture Issuer to
exchange Series B Debentures for Series A Debentures and the Series B Capital
Securities Guarantee for the Series A Capital Securities Guarantee.
"Federal Reserve Board" means the Board of Governors of the
Federal Reserve System.
"Fiduciary Indemnified Person" has the meaning set forth in
Section 10.4(b).
"Global Capital Securities" means the Restricted Global
Capital Securities and the Unrestricted Global Capital Securities.
5
<PAGE>
"Holder" means a Person in whose name a Security is
registered, such Person being a beneficial owner within the meaning of the
Business Trust Act.
"Indemnified Person" means a Company Indemnified Person or a Fiduciary
Indemnified Person.
"Indenture" means the Indenture dated as of April 23, 1997,
between the Debenture Issuer and The Chase Manhattan Bank, as amended from time
to time.
"Investment Company" means an investment company as defined in the
Investment Company Act.
"Investment Company Act" means the Investment Company Act of
1940, as amended from time to time, or any successor legislation.
"Legal Action" has the meaning set forth in Section 3.6(g).
"Majority in liquidation amount" means, with respect to the
Trust Securities, except as provided in the terms of the Capital Securities or
by the Trust Indenture Act, Holder(s) of outstanding Trust Securities voting
together as a single class or, as the context may require, Holders of
outstanding Capital Securities or Holders of outstanding Common Securities
voting separately as a class, who are the record owners of more than 50% of the
aggregate liquidation amount (including the stated amount that would be paid on
redemption, liquidation or otherwise, plus accrued and unpaid Distributions to
the date upon which the voting percentages are determined) of all outstanding
Securities of the relevant class.
"Offering Memorandum" has the meaning set forth in Section
3.6(b).
"Officer's Certificate" means, with respect to any Person, a
certificate signed by the Chairman, the Co-Chairman, a Vice Chairman, the Chief
Executive Officer, the President, a Vice President, the Comptroller, the
Secretary or an Assistant Secretary of such Person. Any Officer's Certificate
delivered with respect to compliance with a condition or covenant provided for
in this Declaration shall include:
(a) a statement that the officer signing the Certificate
has read the covenant or condition and the definitions relating thereto;
(b) a brief statement of the nature and scope of the
examination or investigation undertaken by such officer in rendering the
Certificate;
6
<PAGE>
(c) a statement that 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 such
officer, such condition or covenant has been complied with.
"Opinion of Counsel" shall mean a written opinion of counsel,
who may be an employee of the Sponsor, and who shall be acceptable to the
Property Trustee.
"Paying Agent" has the meaning specified in Section 7.4.
"Person" means a legal person, including any individual,
corporation, estate, partnership, joint venture, association, joint stock
company, limited liability company, trust, unincorporated association, or
government or any agency or political subdivision thereof, or any other entity
of whatever nature.
"Private Exchange" has the meaning set forth in the
Registration Rights Agreement.
"Private Exchange Capital Securities" mean the capital
securities of the Trust issued in a Private Exchange.
"Property Trustee" has the meaning set forth in Section 5.3(a).
"Property Trustee Account" has the meaning set forth in
Section 3.8(c).
"Purchase Agreement" means the Purchase Agreement for the
initial offering and sale of Capital Securities in the form of Exhibit C.
"QIBs" shall mean qualified institutional buyers as defined in
Rule 144A.
"Quorum" means a majority of the Administrative Trustees or,
if there are only two Administrative Trustees, both of them.
"Registrar" has the meaning set forth in Section 7.4.
7
<PAGE>
"Registration Rights Agreement" means the Registration Rights
Agreement dated as of April 23, 1997, by and among the Trust, the Debenture
Issuer and the Initial Purchasers named therein, as amended from time to time.
"Registration Statement" has the meaning set forth in the
Registration Rights Agreement.
"Related Party" means, with respect to the Sponsor, any direct
or indirect wholly owned subsidiary of the Sponsor or any other Person that
owns, directly or indirectly, 100% of the outstanding voting securities of the
Sponsor.
"Responsible Officer" means, with respect to the Property
Trustee, any officer within the Corporate Trust Office of the Property Trustee,
including any vice president, any assistant vice president, any assistant
secretary, any assistant treasurer, any trust officer, any senior trust officer
or other officer of the Corporate Trust Office of the Property Trustee
customarily performing functions similar to those performed by any of the above
designated officers and also means, with respect to a particular corporate trust
matter, any other officer to whom such matter is referred because of that
officer's knowledge of and familiarity with the particular subject.
"Restricted Definitive Capital Securities" has the meaning set
forth in Section 7.3(c).
"Restricted Capital Security" means a Capital Security
required by Section 9.2 to contain a Restricted Securities Legend.
"Restricted Global Capital Security" has the meaning set forth
in Section 7.3(a).
"Restricted Securities Legend" has the meaning set forth in
Section 9.2.
"Rule 144" means Rule 144 under the Securities Act, as such
rule may be amended from time to time, or any similar rule or regulation
hereafter adopted by the Commission.
"Rule 144A" means Rule 144A under the Securities Act, as such
rule may be amended from time to time, or any similar rule or regulation
hereafter adopted by the Commission.
8
<PAGE>
"Securities" or "Trust Securities" means the Common Securities
and the Capital Securities.
"Securities Act" means the Securities Act of 1933, as amended
from time to time, or any successor legislation.
"Securities Guarantees" means the Common Securities Guarantee
and the Capital Securities Guarantee.
"Series A Capital Securities" has the meaning specified in
Section 7.1(a).
"Series B Capital Securities" has the meaning specified in
Section 7.1(a).
"Series A Capital Securities Guarantee" means the guarantee
agreement dated as of April 23, 1997 of the Sponsor in respect of the Series A
Capital Securities.
"Series B Capital Securities Guarantee" means the guarantee
agreement to be entered in connection with the Exchange Offer by the Sponsor in
respect of the Series B Capital Securities.
"Series A Debentures" means the 9.98% Series A Junior
Subordinated Deferrable Interest Debentures due December 31, 2026 of the
Debenture Issuer issued pursuant to the Indenture.
"Series B Debentures" means the 9.98% Series B Junior
Subordinated Deferrable Interest Debentures due December 31, 2026 of the
Debenture Issuer issued pursuant to the Indenture.
"Special Event" has the meaning set forth in Annex I hereto.
"Sponsor" means Imperial Bancorp, a California corporation, or
any successor entity resulting from any merger, consolidation, amalgamation or
other business combination, in its capacity as sponsor of the Trust.
"Super Majority" has the meaning set forth in Section
2.6(a)(ii).
"10% in liquidation amount" means, with respect to the Trust
Securities, except as provided in the terms of the Capital Securities or by the
Trust Indenture Act, Holder(s) of outstanding Trust Securities voting together
as a single class or, as the context may require,
9
<PAGE>
Holders of outstanding Capital Securities or Holders of outstanding Common
Securities voting separately as a class, who are the record owners of 10% or
more of the aggregate liquidation amount (including the stated amount that would
be paid on redemption, liquidation or otherwise, plus accrued and unpaid
Distributions to the date upon which the voting percentages are determined) of
all outstanding Securities of the relevant class.
"Treasury Regulations" means the income tax regulations,
including temporary and proposed regulations, promulgated under the Code by the
United States Treasury, as such regulations may be amended from time to time
(including corresponding provisions of succeeding regulations).
"Trustee" or "Trustees" means each Person who has signed this
Declaration as a trustee, so long as such Person shall continue in office in
accordance with the terms hereof, and all other Persons who may from time to
time be duly appointed, qualified and serving as Trustees in accordance with the
provisions hereof, and references herein to a Trustee or the Trustees shall
refer to such Person or Persons solely in their capacity as trustees hereunder.
"Trust Indenture Act" means the Trust Indenture Act of 1939,
as amended from time to time, or any successor legislation.
"Unrestricted Global Capital Security" has the meaning set
forth in Section 9.2(b).
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act; Application.
(a) This Declaration is subject to the provisions of the
Trust Indenture Act that are required to be part of this Declaration and, to the
extent applicable, shall be governed by such provisions.
(b) The Property Trustee shall be the only Trustee which
is a Trustee for the purposes of the Trust Indenture Act.
(c) If and to the extent that any provision of this
Declaration limits, qualifies or conflicts with the duties imposed by ss.ss. 310
to 317, inclusive, of the Trust Indenture Act, such imposed duties shall
control.
10
<PAGE>
(d) The application of the Trust Indenture Act to this
Declaration shall not affect the nature of the Securities as equity securities
representing undivided beneficial interests in the assets of the Trust.
SECTION 2.2 Lists of Holders of Securities.
(a) Each of the Sponsor and the Administrative Trustees on
behalf of the Trust shall provide the Property Trustee, unless the Property
Trustee is Registrar for the Securities (i) within 14 days after each record
date for payment of Distributions, a list, in such form as the Property Trustee
may reasonably require, of the names and addresses of the Holders ("List of
Holders") as of such record date, provided that neither the Sponsor nor the
Administrative Trustees on behalf of the Trust shall be obligated to provide
such List of Holders at any time the List of Holders does not differ from the
most recent List of Holders given to the Property Trustee by the Sponsor and the
Administrative Trustees on behalf of the Trust, and (ii) at any other time,
within 30 days of receipt by the Trust of a written request for a List of
Holders as of a date no more than 14 days before such List of Holders is given
to the Property Trustee. The Property Trustee shall preserve, in as current a
form as is reasonably practicable, all information contained in Lists of Holders
given to it or which it receives in the capacity as Paying Agent (if acting in
such capacity), provided that the Property Trustee may destroy any List of
Holders previously given to it on receipt of a new List of Holders.
(b) The Property Trustee shall comply with its obligations
under ss.ss.311(a), 311(b) and 312(b) of the Trust Indenture Act.
SECTION 2.3 Reports by the Property Trustee.
Within 60 days after March 15 of each year, commencing March
15, 1998, the Property Trustee shall provide to the Holders of the Capital
Securities such reports as are required by ss. 313(a) of the Trust Indenture
Act, if any, in the form and in the manner provided by ss. 313 of the Trust
Indenture Act. The Property Trustee shall also comply with the other
requirements of ss. 313 of the Trust Indenture Act. The Sponsor shall promptly
notify the Property Trustee if and when the Capital Securities are listed on any
stock exchange.
11
<PAGE>
SECTION 2.4 Periodic Reports to Property Trustee.
Each of the Sponsor and the Administrative Trustees on behalf
of the Trust shall provide to the Property Trustee such documents, reports and
information as are required by ss. 314 (if any) and the compliance certificate
required by ss. 314 of the Trust Indenture Act in the form, in the manner and at
the times required by ss. 314(a)(4) of the Trust Indenture Act, such compliance
certificate to be delivered annually on or before 120 days after the end of each
fiscal year of the Sponsor.
Delivery of such reports, information and documents to the
Property Trustee is for informational purposes only and the Property Trustee's
receipt of such shall not constitute constructive notice of any information
contained therein or determinable from information contained therein, including
the Trust's compliance with any of its covenants hereunder (as to which the
Trustee is entitled to rely exclusively on Officer's Certificates).
SECTION 2.5 Evidence of Compliance with Conditions Precedent.
Each of the Sponsor and the Administrative Trustees on behalf
of the Trust shall provide to the Property Trustee such evidence of compliance
with any conditions precedent provided for in this Declaration that relate to
any of the matters set forth in ss. 314(c) of the Trust Indenture Act. Any
certificate or opinion required to be given by an officer pursuant to ss. 314(c)
(1) of the Trust Indenture Act may be given in the form of an Officer's
Certificate.
SECTION 2.6 Events of Default; Waiver.
(a) The Holders of a Majority in liquidation amount of Capital
Securities may, by vote, on behalf of the Holders of all of the Capital
Securities, waive any past Event of Default in respect of the Capital Securities
and its consequences, provided that, if the underlying Event of Default under
the Indenture:
(i) is not waivable under the Indenture, the
Event of Default under the Declaration shall also not be waivable; or
(ii) requires the consent or vote of greater than
a majority in aggregate principal amount of the holders of the Debentures (a
"Super Majority") to be waived under the Indenture, the Event of Default under
the Declaration may only be waived by the vote of the Holders of at least the
proportion in aggregate liquidation amount of the Capital Securities that the
relevant Super Majority represents of the aggregate principal amount of the
Debentures outstanding.
12
<PAGE>
The foregoing provisions of this Section 2.6(a) shall be in lieu of ss.
316(a)(1)(B) of the Trust Indenture Act and such ss. 316(a)(1)(B) of the Trust
Indenture Act is hereby expressly excluded from this Declaration and the
Securities, as permitted by the Trust Indenture Act. Upon such waiver, any such
default shall cease to exist, and any Event of Default with respect to the
Capital Securities arising therefrom shall be deemed to have been cured, for
every purpose of this Declaration, but no such waiver shall extend to any
subsequent or other default or an Event of Default with respect to the Capital
Securities or impair any right consequent thereon. Any waiver by the Holders of
the Capital Securities of an Event of Default with respect to the Capital
Securities shall also be deemed to constitute a waiver by the Holders of the
Common Securities of any such Event of Default with respect to the Common
Securities for all purposes of this Declaration without any further act, vote or
consent of the Holders of the Common Securities.
The Holders of a Majority in liquidation amount of the Capital
Securities shall have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Property Trustee or to
direct the exercise of any trust or power conferred upon the Property Trustee,
including the right to direct the Property Trustee to exercise the remedies
available to it as a holder of the Debentures; provided, however, that (subject
to the provisions of Section 3.9) the Property Trustee shall have the right to
decline to follow any such direction if the Property Trustee, upon the advice of
counsel, shall determine that the action so directed would be unjustly
prejudicial to the Holders not taking part in such direction or if the Property
Trustee, upon the advice of counsel, determines that the action or proceeding so
directed may not lawfully be taken or if the Property Trustee, in good faith, by
its board of directors or trustees, executive committee, or a trust committee of
directors or trustees, and/or Responsible Officers, shall determine that the
action or proceeding so directed would involve the Property Trustee in personal
liability.
(b) The Holders of a Majority in liquidation amount of the
Common Securities may, by vote, on behalf of the Holders of all of the Common
Securities, waive any past Event of Default with respect to the Common
Securities and its consequences, provided that, if the underlying Event of
Default under the Indenture:
(i) is not waivable under the Indenture, except
where the Holders of the Common Securities are deemed to have waived such Event
of Default under the Declaration as provided below in this Section 2.6(b), the
Event of Default under the Declaration shall also not be waivable; or
(ii) requires the consent or vote of a Super
Majority to be waived, except where the Holders of the Common Securities are
deemed to have waived such Event of
13
<PAGE>
Default under the Declaration as provided below in this Section 2.6(b), the
Event of Default under the Declaration may only be waived by the vote of the
Holders of at least the proportion in aggregate liquidation amount of the Common
Securities that the relevant Super Majority represents of the aggregate
principal amount of the Debentures outstanding;
provided further, each Holder of Common Securities will be deemed to have waived
any such Event of Default and all Events of Default with respect to the Common
Securities and its consequences if all Events of Default with respect to the
Capital Securities have been cured, waived or otherwise eliminated, and until
such Events of Default have been so cured, waived or otherwise eliminated, the
Property Trustee will be deemed to be acting solely on behalf of the Holders of
the Capital Securities and only the Holders of the Capital Securities will have
the right to direct the Property Trustee in accordance with the terms of the
Securities. The foregoing provisions of this Section 2.6(b) shall be in lieu of
ss.ss. 316(a)(1)(A) and 316(a)(1)(B) of the Trust Indenture Act and such ss.ss.
316(a)(1)(A) and 316(a)(1)(B) of the Trust Indenture Act are hereby expressly
excluded from this Declaration and the Securities, as permitted by the Trust
Indenture Act. Subject to the foregoing provisions of this Section 2.6(b), upon
such waiver, any such default shall cease to exist and any Event of Default with
respect to the Common Securities arising therefrom shall be deemed to have been
cured for every purpose of this Declaration, but no such waiver shall extend to
any subsequent or other default or Event of Default with respect to the Common
Securities or impair any right consequent thereon.
(c) A waiver of an Event of Default under the Indenture by the
Property Trustee, at the direction of the Holders of the Capital Securities,
constitutes a waiver of the corresponding Event of Default under this
Declaration. The foregoing provisions of this Section 2.6(c) shall be in lieu of
ss. 316(a)(1)(B) of the Trust Indenture Act and such ss. 316(a)(1)(B) of the
Trust Indenture Act is hereby expressly excluded from this Declaration and the
Securities, as permitted by the Trust Indenture Act.
14
<PAGE>
SECTION 2.7 Event of Default; Notice.
(a) The Property Trustee, within 90 days after the occurrence
of an Event of Default, shall transmit by mail, first class postage prepaid, to
the Holders notice of all defaults with respect to the Securities actually known
to a Responsible Officer of the Property Trustee, unless such defaults have been
cured before the giving of such notice (the term "defaults" for the purposes of
this Section 2.7(a) being hereby defined to be an Event of Default as defined in
the Indenture, not including any periods of grace provided for therein and
irrespective of the giving of any notice provided therein); provided that,
except for a default in the payment of principal of (or premium, if any) or
interest on any of the Debentures, the Property Trustee shall be protected in
withholding such notice if and so long as a Responsible Officer of the Property
Trustee in good faith determines that the withholding of such notice is in the
interests of the Holders.
(b) The Property Trustee shall not be deemed to have knowledge
of any default except:
(i) a default under Sections 5.1(a) and 5.1(b)
of the Indenture; or
(ii) any default as to which the Property Trustee
shall have received written notice or of which a Responsible Officer of the
Property Trustee charged with the administration of the Declaration shall have
actual knowledge.
(c) Within ten Business Days after the occurrence of any Event
of Default actually known to the Sponsor, the Sponsor shall transmit notice of
such Event of Default to the holders of the Capital Securities, the
Administrative Trustees and the Property Trustee, unless such Event of Default
shall have been cured or waived. The Sponsor and the Administrative Trustees
shall file annually with the Property Trustee a certification as to whether or
not they are in compliance with all the conditions and covenants applicable to
them under this Declaration.
15
<PAGE>
ARTICLE III
ORGANIZATION
SECTION 3.1 Name.
The Trust is named "Imperial Capital Trust I" as such name may
be modified from time to time by the Administrative Trustees following written
notice to the Holders of Securities and the other Trustees. The Trust's
activities may be conducted under the name of the Trust or any other name deemed
advisable by the Administrative Trustees.
SECTION 3.2 Office.
The address of the principal office of the Trust is c/o
Imperial Bancorp, 9920 South La Cienega Boulevard, 14th Floor, Inglewood,
California 90301. On ten Business Days written notice to the Holders of
Securities and the other Trustees, the Administrative Trustees may designate
another principal office.
SECTION 3.3 Purpose.
The exclusive purposes and functions of the Trust are (a) to
issue and sell Securities, (b) use the proceeds from the sale of the Securities
to acquire the Debentures, and (c) except as otherwise limited herein, to engage
in only those other activities necessary, advisable or incidental thereto. The
Trust shall not borrow money, issue debt or reinvest proceeds derived from
investments, mortgage or pledge any of its assets, or otherwise undertake (or
permit to be undertaken) any activity that would cause the Trust not to be
classified for United States federal income tax purposes as a grantor trust.
SECTION 3.4 Authority.
Subject to the limitations provided in this Declaration and to
the specific duties of the Property Trustee, the Administrative Trustees shall
have exclusive and complete authority to carry out the purposes of the Trust. An
action taken by the Administrative Trustees in accordance with their powers
shall constitute the act of and serve to bind the Trust and any action taken by
the Property Trustee on behalf of the Trust in accordance with its powers shall
constitute the act of and serve to bind the Trust. In dealing with the Trustees
acting on behalf of the Trust, no person shall be required to inquire into the
authority of the Trustees to bind the Trust. Persons dealing with the Trust are
entitled to rely conclusively on the power and authority of the Trustees as set
forth in this Declaration.
16
<PAGE>
SECTION 3.5 Title to Property of the Trust.
Except as provided in Section 3.8 with respect to the
Debentures and the Property Trustee Account or as otherwise provided in this
Declaration, legal title to all assets of the Trust shall be vested in the
Trust. The Holders shall not have legal title to any part of the assets of the
Trust, but shall have an undivided beneficial interest in the assets of the
Trust.
SECTION 3.6 Powers and Duties of the Administrative Trustees.
The Administrative Trustees shall have the exclusive power,
duty and authority to cause the Trust to engage in the following activities:
(a) to issue and sell the Securities in accordance with this
Declaration; provided, however, that (i) the Trust may issue no more than two
series of Capital Securities (as contemplated in Section 7.1(a)) and no more
than one series of Common Securities, (ii) there shall be no interests in the
Trust other than the Securities, and (iii) the issuance of Securities shall be
limited to a simultaneous issuance of Series A Capital Securities and Common
Securities at the Closing Time and an issuance of Series B Capital Securities
and the Private Exchange Capital Securities as contemplated in Section 7.1(a);
(b) in connection with the issue and sale of the Capital
Securities and the consummation of the Exchange Offer, at the direction of the
Sponsor, to:
(i) prepare and execute, if necessary, an
offering memorandum (the "Offering Memorandum") in preliminary and final form
prepared by the Sponsor, in relation to the offering and sale of Series A
Capital Securities to qualified institutional buyers in reliance on Rule 144A
under the Securities Act and to a limited number of institutional "accredited
investors" (as defined in Rule 501(a)(1), (2), (3) or (7) under the Securities
Act), and to execute and file with the Commission, at such time as determined by
the Sponsor, any Registration Statement, including any amendments thereto, as
contemplated by the Registration Rights Agreement;
(ii) execute and file any documents prepared by
the Sponsor, or take any acts as determined by the Sponsor to be necessary in
order to qualify or register all or part of the Capital Securities in any State
in which the Sponsor has determined to qualify or register such Capital
Securities for sale;
(iii) at the direction of the Sponsor, execute
and file an application, prepared by the Sponsor, to the New York Stock Exchange
or any other national stock
17
<PAGE>
exchange or the Nasdaq Stock Markets National Market for listing or quotation
of the Capital Securities;
(iv) execute and deliver letters, documents, or
instruments with DTC and other Clearing Agencies relating to the Capital
Securities;
(v) if required, execute and file with the
Commission a registration statement on Form 8-A, including any amendments
thereto, prepared by the Sponsor, relating to the registration of the Capital
Securities under Section 12(b) of the Exchange Act;
(vi) execute and enter into the Common Securities
Subscription Agreement providing for the purchase from the Trust of the Common
Securities; and
(vii) execute and enter into the Debenture
Subscription Agreement providing for the Trust to purchase from the Debenture
Issuer the Series A Debentures.
(c) to acquire the Series A Debentures with the proceeds of
the sale of the Series A Capital Securities and the Common Securities and to
exchange the Series A Debentures for a like principal amount of Series B
Debentures, pursuant to the Exchange Offer; provided, however, that the
Administrative Trustees shall cause legal title to the Debentures to be held of
record in the name of the Property Trustee for the benefit of the Holders;
(d) to give the Sponsor and the Property Trustee prompt
written notice of the occurrence of a Special Event;
(e) to establish a record date with respect to all actions to
be taken hereunder that require a record date be established, including and with
respect to, for the purposes of ss.316(c) of the Trust Indenture Act,
Distributions, voting rights, redemptions and exchanges, and to issue relevant
notices to the Holders of Capital Securities and Holders of Common Securities as
to such actions and applicable record dates;
(f) to take all actions and perform such duties as may be
required of the Administrative Trustees pursuant to the terms of this
Declaration or the Securities;
(g) to bring or defend, pay, collect, compromise, arbitrate,
resort to legal action, or otherwise adjust claims or demands of or against the
Trust ("Legal Action"), unless pursuant to Section 3.8(e), the Property Trustee
has the exclusive power to bring such Legal Action;
18
<PAGE>
(h) to employ or otherwise engage employees and agents (who
may be designated as officers with titles) and managers, contractors, advisors
and consultants and pay reasonable compensation for such services;
(i) to cause the Trust to comply with the Trust's obligations
under the Trust Indenture Act;
(j) to give the certificate required by ss. 314(a)(4) of the
Trust Indenture Act to the Property Trustee, which certificate may be executed
by any Administrative Trustee;
(k) to incur expenses that are necessary or incidental to
carry out any of the purposes of the Trust;
(l) to act as, or appoint another Person to act as, Registrar
and Exchange Agent for the Securities or to appoint a Paying Agent for the
Securities as provided in Section 7.4 except for such time as such power to
appoint a Paying Agent is vested in the Property Trustee;
(m) to give prompt written notice to the Property Trustee and
to Holders of any notice received from the Debenture Issuer of its election to
defer payments of interest on the Debentures by extending the interest payment
period under the Indenture;
(n) to execute all documents or instruments, perform all
duties and powers, and do all things for and on behalf of the Trust in all
matters necessary or incidental to the foregoing;
(o) to take all action that may be necessary or appropriate
for the preservation and the continuation of the Trust's valid existence,
rights, franchises and privileges as a statutory business trust under the laws
of the State of Delaware and of each other jurisdiction in which such existence
is necessary to protect the limited liability of the Holders of the Capital
Securities or to enable the Trust to effect the purposes for which the Trust was
created;
(p) to take any action, not inconsistent with this Declaration
or with applicable law, that the Administrative Trustees determine in their
discretion to be necessary or desirable in carrying out the activities of the
Trust as set out in this Section 3.6, including, but not limited to:
19
<PAGE>
(i) causing the Trust not to be deemed to be an
Investment Company required to be registered under the Investment Company Act;
(ii) causing the Trust to be classified for United
States federal income tax purposes as a grantor trust; and
(iii)cooperating with the Debenture Issuer to
ensure that the Debentures will be treated as indebtedness of the Debenture
Issuer for United States federal income tax purposes.
(q) to take all action necessary to consummate the Exchange
Offer or otherwise cause the Capital Securities to be registered pursuant to an
effective registration statement in accordance with the provisions of the
Registration Rights Agreement; and
(r) to take all action necessary to cause all applicable tax
returns and tax information reports that are required to be filed with respect
to the Trust to be duly prepared and filed by the Administrative Trustees, on
behalf of the Trust.
The Administrative Trustees must exercise the powers set forth
in this Section 3.6 in a manner that is consistent with the purposes and
functions of the Trust set out in Section 3.3, and the Administrative Trustees
shall not take any action that is inconsistent with the purposes and functions
of the Trust set forth in Section 3.3.
Subject to this Section 3.6, the Administrative Trustees shall
have none of the powers or the authority of the Property Trustee set forth in
Section 3.8.
Any expenses incurred by the Administrative Trustees pursuant
to this Section 3.6 shall be reimbursed by the Debenture Issuer.
The Administrative Trustees shall take all actions on behalf
of the Trust that are not specifically required by this Declaration to be taken
by any other Trustee.
SECTION 3.7 Prohibition of Actions by the Trust and the
Trustees.
(a) The Trust shall not, and the Trustees (including the
Property Trustee) shall not, engage in any activity other than as required or
authorized by this Declaration. The Trust shall not:
20
<PAGE>
(i) invest any proceeds received by the Trust
from holding the Debentures, but shall distribute all such proceeds to Holders
pursuant to the terms of this Declaration and of the Securities;
(ii) acquire any assets other than as expressly
provided herein;
(iii) possess Trust property for other than a
Trust purpose;
(iv) make any loans or incur any indebtedness
other than loans represented by the Debentures;
(v) possess any power or otherwise act in such a
way as to vary the Trust assets or the terms of the Securities in any way
whatsoever;
(vi) issue any securities or other evidences of
beneficial ownership of, or beneficial interest in, the Trust other than the
Securities; or
(vii) other than as provided in this Declaration
or Annex I, (A) direct the time, method and place of conducting any proceeding
with respect to any remedy available to the Debenture Trustee, or exercising any
trust or power conferred upon the Debenture Trustee with respect to the
Debentures, (B) waive any past default that is waivable under the Indenture, (C)
exercise any right to rescind or annul any declaration that the principal of all
the Debentures shall be due and payable, or (D) consent to any amendment,
modification or termination of the Indenture or the Debentures where such
consent shall be required unless the Trust shall have received an opinion of a
nationally recognized independent tax counsel experienced in such matters to the
effect that such modification will not cause more than an insubstantial risk
that for United States federal income tax purposes the Trust will not be
classified as a grantor trust.
SECTION 3.8 Powers and Duties of the Property Trustee.
(a) The legal title to the Debentures shall be owned by and
held of record in the name of the Property Trustee in trust for the benefit of
the Holders. The right, title and interest of the Property Trustee to the
Debentures shall vest automatically in each Person who may hereafter be
appointed as Property Trustee in accordance with Section 5.7. Such vesting and
cessation of title shall be effective whether or not conveyancing documents with
regard to the Debentures have been executed and delivered.
21
<PAGE>
(b) The Property Trustee shall not transfer its right, title
and interest in the Debentures to the Administrative Trustees or to the Delaware
Trustee (if the Property Trustee does not also act as Delaware Trustee).
(c) The Property Trustee shall:
(i) establish and maintain a segregated
non-interest bearing trust account (the "Property Trustee Account") in the name
of and under the exclusive control of the Property Trustee on behalf of the
Holders and, upon the receipt of payments of funds made in respect of the
Debentures held by the Property Trustee, deposit such funds into the Property
Trustee Account and make payments to the Holders of the Capital Securities and
Holders of the Common Securities from the Property Trustee Account in accordance
with Section 6.1. Funds in the Property Trustee Account shall be held uninvested
until disbursed in accordance with this Declaration. The Property Trustee
Account shall be an account that is maintained with a banking institution the
rating on whose long-term unsecured indebtedness is at least equal to the rating
assigned to the Capital Securities by a "nationally recognized statistical
rating organization", as that term is defined for purposes of Rule 436(g)(2)
under the Securities Act;
(ii) engage in such ministerial activities as
shall be necessary or appropriate to effect the redemption of the Common
Securities to the extent the Debentures are redeemed or mature; and
(iii) upon written notice of distribution issued
by the Administrative Trustees in accordance with the terms of the Securities,
engage in such ministerial activities as shall be necessary or appropriate to
effect the distribution of the Debentures to Holders of Securities upon the
occurrence of certain events.
(d) The Property Trustee shall take all actions and perform
such duties as may be specifically required of the Property Trustee pursuant to
the terms of the Securities.
(e) Subject to Section 3.9(a), the Property Trustee may take
any Legal Action which arises out of or in connection with an Event of Default
of which a Responsible Officer of the Property Trustee has actual knowledge or
the Property Trustee's duties and obligations under this Declaration or the
Trust Indenture Act and if such Property Trustee shall have failed to take such
Legal Action, the Holders of the Capital Securities may, to the fullest extent
permitted by law, take such Legal Action, to the same extent as if such Holders
of Capital Securities held an aggregate principal amount of Debentures equal to
the aggregate liquidation amount of such Capital Securities, without first
proceeding against the Property
22
<PAGE>
Trustee or the Trust; provided however, that if an Event of Default has occurred
and is continuing and such event is attributable to the failure of the Debenture
Issuer to pay the principal of or premium, if any, or interest on the Debentures
on the date such principal, premium, if any, or interest is otherwise payable
(or in the case of redemption, on the redemption date), then a Holder of Capital
Securities may directly institute a proceeding for enforcement of payment to
such Holder of the principal of or premium, if any, or interest on the
Debentures having a principal amount equal to the aggregate liquidation amount
of the Capital Securities of such Holder (a "Direct Action") on or after the
respective due date specified in the Debentures. In connection with such Direct
Action, the rights of the Holders of the Common Securities will be subrogated to
the rights of such Holder of Capital Securities to the extent of any payment
made by the Debenture Issuer to such Holder of Capital Securities in such Direct
Action. Except as provided in the preceding sentences, the Holders of Capital
Securities will not be able to exercise directly any other remedy available to
the holders of the Debentures.
(f) The Property Trustee shall not resign as a Trustee unless
either:
(i) the Trust has been completely liquidated and
the proceeds of the liquidation distributed to the Holders pursuant to the terms
of the Securities; or
(ii) a successor property trustee has been
appointed and has accepted that appointment in accordance with Section 5.7 (a
"Successor Property Trustee").
(g) The Property Trustee shall have the legal power to
exercise all of the rights, powers and privileges of a holder of Debentures
under the Indenture and, if an Event of Default actually known to a Responsible
Officer of the Property Trustee occurs and is continuing, the Property Trustee,
for the benefit of Holders, shall enforce its rights as holder of the Debentures
subject to the rights of the Holders pursuant to the terms of such Securities.
(h) The Property Trustee shall be authorized to undertake any
actions set forth in ss. 317(a) of the Trust Indenture Act.
(i) For such time as the Property Trustee is the Paying Agent,
the Property Trustee may authorize one or more Persons to act as additional
Paying Agents and to pay Distributions, redemption payments or liquidation
payments on behalf of the Trust with respect to all Securities and any such
Paying Agent shall comply with ss.317(b) of the Trust Indenture Act. Any such
additional Paying Agent may be removed by the Property Trustee at any time the
Property Trustee remains as Paying Agent and a successor Paying Agent or
additional
23
<PAGE>
Paying Agents may be (but are not required to be) appointed at any time by the
Property Trustee while the Property Trustee is so acting as Paying Agent.
(j) Subject to this Section 3.8, the Property Trustee shall
have none of the duties, liabilities, powers or the authority of the
Administrative Trustees set forth in Section 3.6.
The Property Trustee must exercise the powers set forth in
this Section 3.8 in a manner that is consistent with the purposes and functions
of the Trust set out in Section 3.3, and the Property Trustee shall not take any
action that is inconsistent with the purposes and functions of the Trust set out
in Section 3.3.
SECTION 3.9 Certain Additional Duties and Responsibilities
-----------------------------------------------------------
of the Property Trustee.
- ------------------------
(a) The Property Trustee, before the occurrence of any Event
of Default and after the curing of all Events of Default that may have occurred,
shall undertake to perform only such duties as are specifically set forth in
this Declaration and in the Securities and no implied covenants shall be read
into this Declaration against the Property Trustee. In case an Event of Default
has occurred (that has not been cured or waived pursuant to Section 2.6) of
which a Responsible Officer of the Property Trustee has actual knowledge, the
Property Trustee shall exercise such of the rights and powers vested in it by
this Declaration, and use the same degree of care and skill in their exercise,
as a prudent person would exercise or use under the circumstances in the conduct
of his or her own affairs.
(b) No provision of this Declaration shall be construed to
relieve the Property Trustee from liability for its own negligent action, its
own negligent failure to act, or its own willful misconduct, except that:
(i) prior to the occurrence of an Event of
Default and after the curing or waiving of all such Events of Default that may
have occurred:
(A) the duties and obligations of the
Property Trustee shall be determined solely by the express provisions of this
Declaration and in the Securities and the Property Trustee shall not be liable
except for the performance of such duties and obligations as are specifically
set forth in this Declaration and in the Securities, and no implied covenants or
obligations shall be read into this Declaration against the Property Trustee;
and
24
<PAGE>
(B) in the absence of bad faith on the
part of the Property Trustee, the Property Trustee may conclusively rely, as to
the truth of the statements and the correctness of the opinions expressed
therein, upon any certificates or opinions furnished to the Property Trustee and
conforming to the requirements of this Declaration; provided, however, that in
the case of any such certificates or opinions that by any provision hereof are
specifically required to be furnished to the Property Trustee, the Property
Trustee shall be under a duty to examine the same to determine whether or not
they conform to the requirements of this Declaration;
(ii) the Property Trustee shall not be liable for
any error of judgment made in good faith by a Responsible Officer of the
Property Trustee, unless it shall be proved that the Property Trustee was
negligent in ascertaining the pertinent facts upon which such judgment was made;
(iii) the Property Trustee shall not be liable
with respect to any action taken or omitted to be taken by it in good faith in
accordance with the direction of the Holders of not less than a Majority in
liquidation amount of the Securities relating to the time, method and place of
conducting any proceeding for any remedy available to the Property Trustee, or
exercising any trust or power conferred upon the Property Trustee under this
Declaration;
(iv) no provision of this Declaration shall
require the Property Trustee to expend or risk its own funds or otherwise incur
personal financial liability in the performance of any of its duties or in the
exercise of any of its rights or powers, if it shall have reasonable grounds for
believing that the repayment of such funds or liability is not reasonably
assured to it under the terms of this Declaration or indemnity reasonably
satisfactory to the Property Trustee against such risk or liability is not
reasonably assured to it;
(v) the Property Trustee's sole duty with
respect to the custody, safe keeping and physical preservation of the Debentures
and the Property Trustee Account shall be to deal with such property in a
similar manner as the Property Trustee deals with similar property for its own
account, subject to the protections and limitations on liability afforded to the
Property Trustee under this Declaration and the Trust Indenture Act;
(vi) the Property Trustee shall have no duty or
liability for or with respect to the value, genuineness, existence or
sufficiency of the Debentures or the payment of any taxes or assessments levied
thereon or in connection therewith;
(vii) the Property Trustee shall not be liable for
any interest on any money received by it except as it may otherwise agree in
writing with the Sponsor. Money
25
<PAGE>
held by the Property Trustee need not be segregated from other funds held by it
except in relation to the Property Trustee Account maintained by the Property
Trustee pursuant to Section 3.8(c)(i) and except to the extent otherwise
required by law; and
(viii) the Property Trustee shall not be
responsible for monitoring the compliance by the Administrative Trustees or the
Sponsor with their respective duties under this Declaration, nor shall the
Property Trustee be liable for any default or misconduct of the Administrative
Trustees or the Sponsor.
SECTION 3.10 Certain Rights of the Property Trustee.
(a) Subject to the provisions of Section 3.9:
(i) the Property Trustee may conclusively rely
and shall be fully protected in acting or refraining from acting upon any
resolution, certificate, statement, instrument, opinion, report, notice,
request, direction, consent, order, bond, debenture, note, other evidence of
indebtedness or other paper or document believed by it to be genuine and to have
been signed, sent or presented by the proper party or parties;
(ii) any direction or act of the Sponsor or the
Administrative Trustees contemplated by this Declaration may be sufficiently
evidenced by an Officer's Certificate;
(iii) whenever in the administration of this
Declaration, the Property Trustee shall deem it desirable that a matter be
proved or established before taking, suffering or omitting any action hereunder,
the Property Trustee (unless other evidence is herein specifically prescribed),
in the absence of bad faith on its part, may request and conclusively rely upon
an Officer's Certificate which, upon receipt of such request, shall be promptly
delivered by the Sponsor or the Administrative Trustees;
(iv) the Property Trustee shall have no duty to
see to any recording, filing or registration of any instrument (including any
financing or continuation statement or any filing under tax or securities laws)
or any rerecording, refiling or registration thereof;
(v) the Property Trustee may consult with
counsel or other experts of its selection and the advice or opinion of such
counsel and experts with respect to legal matters or advice within the scope of
such experts' area of expertise shall be full and complete authorization and
protection in respect of any action taken, suffered or omitted by it hereunder
in good faith and in accordance with such advice or opinion, such counsel may be
counsel to
26
<PAGE>
the Sponsor or any of its Affiliates, and may include any of its employees. The
Property Trustee shall have the right at any time to seek instructions
concerning the administration of this Declaration from any court of competent
jurisdiction;
(vi) the Property Trustee shall be under no
obligation to exercise any of the rights or powers vested in it by this
Declaration at the request or direction of any Holder, unless such Holder shall
have provided to the Property Trustee security and indemnity, reasonably
satisfactory to the Property Trustee, against the costs, expenses (including
reasonable attorney's fees and expenses and the expenses of the Property
Trustee's agents, nominees or custodians) and liabilities that might be incurred
by it in complying with such request or direction, including such reasonable
advances as may be requested by the Property Trustee; provided, that, nothing
contained in this Section 3.10(a)(vi) shall be taken to relieve the Property
Trustee, upon the occurrence of an Event of Default, of its obligation to
exercise the rights and powers vested in it by this Declaration;
(vii) the Property Trustee shall not be bound to
make any investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice, request, direction,
consent, order, bond, debenture, note, other evidence of indebtedness or other
paper or document, but the Property Trustee, in its discretion, may make such
further inquiry or investigation into such facts or matters as it may see fit;
(viii) the Property Trustee may execute any of the
trusts or powers hereunder or perform any duties hereunder either directly or by
or through agents, custodians, nominees or attorneys and the Property Trustee
shall not be responsible for any misconduct or negligence on the part of any
agent or attorney appointed with due care by it hereunder;
(ix) any action taken by the Property Trustee or
its agents hereunder shall bind the Trust and the Holders of the Securities, and
the signature of the Property Trustee or its agents alone shall be sufficient
and effective to perform any such action and no third party shall be required to
inquire as to the authority of the Property Trustee to so act or as to its
compliance with any of the terms and provisions of this Declaration, both of
which shall be conclusively evidenced by the Property Trustees' or its agent's
taking such action;
(x) whenever in the administration of this
Declaration the Property Trustee shall deem it desirable to receive instructions
with respect to enforcing any remedy or right or taking any other action
hereunder, the Property Trustee (i) may request instructions from the Holders
which instructions may only be given by the Holders of the same proportion in
liquidation amount of the Securities as would be entitled to direct the Property
Trustee under the terms of the Securities in respect of such remedy, right or
action, (ii) may refrain from
27
<PAGE>
enforcing such remedy or right or taking such other action until such
instructions are received, and (iii) shall be protected in conclusively relying
on or acting in accordance with such instructions;
(xi) except as otherwise expressly provided by
this Declaration, the Property Trustee shall not be under any obligation to take
any action that is discretionary under the provisions of this Declaration; and
(xii) the Property Trustee shall not be liable for
any action taken, suffered or omitted to be taken by it in good faith, without
negligence, and reasonably believed by it to be authorized or within the
discretion or rights or powers conferred upon it by this Declaration.
(b) No provision of this Declaration shall be deemed to impose
any duty or obligation on the Property Trustee to perform any act or acts or
exercise any right, power, duty or obligation conferred or imposed on it, in any
jurisdiction in which it shall be illegal, or in which the Property Trustee
shall be unqualified or incompetent in accordance with applicable law, to
perform any such act or acts, or to exercise any such right, power, duty or
obligation. No permissive power or authority available to the Property Trustee
shall be construed to be a duty.
SECTION 3.11 Delaware Trustee.
Notwithstanding any other provision of this Declaration other
than Section 5.2, the Delaware Trustee shall not be entitled to exercise any
powers, nor shall the Delaware Trustee have any of the duties and
responsibilities, of the Administrative Trustees or the Property Trustee
described in this Declaration. Except as set forth in Section 5.2, the Delaware
Trustee shall be a Trustee for the sole and limited purpose of fulfilling the
requirements of ss.3807 of the Business Trust Act.
SECTION 3.12 Not Responsible for Recitals or Issuance of
Securities.
The recitals contained in this Declaration and the Securities
shall be taken as the statements of the Sponsor, and the Trustees do not assume
any responsibility for their correctness. The Trustees make no representations
as to the value or condition of the property of the Trust or any part thereof.
The Trustees make no representations as to the validity or sufficiency of this
Declaration, the Debentures or the Securities.
28
<PAGE>
SECTION 3.13 Duration of Trust.
The Trust, unless dissolved pursuant to the provisions of
Article VIII hereof, shall have existence up to December 31, 2028.
SECTION 3.14 Mergers.
(a) The Trust may not merge with or into, consolidate,
amalgamate, or be replaced by, or convey, transfer or lease its properties and
assets substantially as an entirety to any Person, except as described in
Section 3.14(b) and (c) and Section 3 of Annex I.
(b) The Trust may, at the request of the Sponsor, with the
consent of the Administrative Trustees or, if there are more than two, a
majority of the Administrative Trustees and without the consent of the Holders,
the Delaware Trustee or the Property Trustee, merge with or into, consolidate,
amalgamate, or be replaced by, or convey, transfer or lease its properties and
assets as an entirety or substantially as an entirety to, a trust organized as
such under the laws of any State; provided that:
(i) such successor entity (the "Successor
Entity") either:
(A) expressly assumes all of the
obligations of the Trust under the Securities; or
(B) substitutes for the Securities other
securities having substantially the same terms as the Securities (the
"Successor Securities") so long as the Successor Securities rank the
same as the Securities rank with respect to Distributions and payments
upon liquidation, redemption and otherwise;
(ii) the Sponsor expressly appoints a trustee of
the Successor Entity that possesses the same powers and duties as the Property
Trustee as the Holder of the Debentures;
(iii) the Successor Securities are listed, or any
Successor Securities will be listed upon notification of issuance, on any
national securities exchange or with another organization on which the Capital
Securities are then listed or quoted;
(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;
29
<PAGE>
(v) such merger, consolidation, amalgamation,
replacement, conveyance, transfer or lease does not adversely affect the rights,
preferences and privileges of the Holders (including any Successor Securities)
in any material respect (other than with respect to any dilution of such
Holders' interests in the new entity);
(vi) such Successor Entity has a purpose
substantially identical to that of the Trust;
(vii) prior to such merger, consolidation,
amalgamation, replacement, conveyance, transfer or lease, the Sponsor has
received an opinion of an independent counsel to the Trust experienced in such
matters to the effect that:
(A) such merger, consolidation,
amalgamation, replacement, conveyance, transfer or lease does not
adversely affect the rights, preferences and privileges of the Holders
(including any Successor Securities) in any material respect (other
than with respect to any dilution of the Holders' interests in the new
entity); and
(B) following such merger,
consolidation, amalgamation, replacement, conveyance, transfer or
lease, neither the Trust nor the Successor Entity will be required to
register as an Investment Company; and
(viii) the Sponsor or any permitted successor or
assignee owns all of the common securities of such Successor Entity and
guarantees the obligations of such Successor Entity under the Successor
Securities at least to the extent provided by the Capital Securities Guarantee
and the Common Securities Guarantee.
(c) Notwithstanding Section 3.14(b), the Trust shall not,
except with the consent of Holders of 100% in liquidation amount of the
Securities, consolidate, amalgamate, merge with or into, or be replaced by, or
convey, transfer or lease its properties and assets as an entirety or
substantially as an entirety to, any other entity or permit any other entity to
consolidate, amalgamate, merge with or into, or replace it if such
consolidation, amalgamation, merger, replacement, conveyance, transfer or lease
would cause the Trust or the Successor Entity not to be classified as a grantor
trust for United States federal income tax purposes.
30
<PAGE>
ARTICLE IV
SPONSOR
SECTION 4.1 Sponsor's Purchase of Common Securities.
At the Closing Time, the Sponsor will purchase all of the
Common Securities then issued by the Trust, in an amount at least equal to 3% of
the capital of the Trust, at the same time as the Series A Capital Securities
are issued and sold.
SECTION 4.2 Responsibilities of the Sponsor.
In connection with the issue and sale of the Capital
Securities, the Sponsor shall have the exclusive right and responsibility to
engage in the following activities:
(a) to prepare the Offering Memorandum and to prepare for
filing by the Trust with the Commission any Registration Statement, including
any amendments thereto as contemplated by the Registration Rights Agreement;
(b) to determine the States in which to take appropriate
action to qualify or register for sale all or part of the Capital Securities and
to do any and all such acts, other than actions which must be taken by the
Trust, and advise the Trust of actions it must take, and prepare for execution
and filing any documents to be executed and filed by the Trust, as the Sponsor
deems necessary or advisable in order to comply with the applicable laws of any
such States;
(c) if deemed necessary or advisable by the Sponsor, to
prepare for filing by the Trust an application to the New York Stock Exchange or
any other national stock exchange or the Nasdaq National Market for listing or
quotation of the Capital Securities;
(d) to prepare for filing by the Trust with the Commission a
registration statement on Form 8-A (if necessary) relating to the registration
of the Capital Securities under Section 12(b) of the Exchange Act, including any
amendments thereto; and
(e) to negotiate the terms of and execute the Purchase
Agreement and the Registration Rights Agreement providing for the sale of the
Capital Securities.
31
<PAGE>
SECTION 4.3 Right to Proceed.
The Sponsor acknowledges the rights of the Holders of Capital
Securities, in the event that a failure of the Trust to pay Distributions on the
Capital Securities is attributable to the failure of the Company to pay interest
or principal on the Debentures, to institute a Direct Action against the
Debenture Issuer for enforcement of its payment obligations on the Debentures.
ARTICLE V
TRUSTEES
SECTION 5.1 Number of Trustees: Appointment of Co-Trustee.
The number of Trustees initially shall be four (4), and:
(a) at any time before the issuance of any Securities,
the Sponsor, by written instrument, may increase or decrease the number of
Trustees; and
(b) after the issuance of any Securities, the number of
Trustees may be increased or decreased by vote of the Holders of a Majority in
liquidation amount of the Common Securities voting as a class at a meeting of
the Holders of the Common Securities;
provided, however, that, the number of Trustees shall in no event be less than
two (2); and provided further that (1) one Trustee, in the case of a natural
person, shall be a person who is a resident of the State of Delaware or that, if
not a natural person, is an entity which has its principal place of business in
the State of Delaware; (2) there shall be at least one Trustee who is an
employee or officer of, or is affiliated with the Sponsor (an "Administrative
Trustee"); and (3) one Trustee shall be the Property Trustee for so long as this
Declaration is required to qualify as an indenture under the Trust Indenture
Act, and such Trustee may also serve as Delaware Trustee if it meets the
applicable requirements. Notwithstanding the above, unless an Event of Default
shall have occurred and be continuing, at any time or times, for the purpose of
meeting the legal requirements of the Trust Indenture Act or of any jurisdiction
in which any part of the Trust's property may at the time be located, the
Holders of a Majority in liquidation amount of the Common Securities acting as a
class at a meeting of the Holders of the Common Securities, and the
Administrative Trustees shall have power to appoint one or more persons either
to act as a co-trustee, jointly with the Property Trustee, of all or any part of
the Trust's property, or to act as separate trustee of any such property, in
either case with
32
<PAGE>
such powers as may be provided in the instrument of appointment, and to vest in
such person or persons in such capacity any property, title, right or power
deemed necessary or desirable, subject to the provisions of this Declaration. In
case an Event of Default has occurred and is continuing, the Property Trustee
alone shall have power to make any such appointment of a co-trustee.
SECTION 5.2 Delaware Trustee.
If required by the Business Trust Act, one Trustee (the
"Delaware Trustee") shall be:
(a) a natural person who is a resident of the State of
Delaware; or
(b) if not a natural person, an entity which has its
principal place of business in the State of Delaware, and otherwise meets the
requirements of applicable law,
provided that, if the Property Trustee has its principal place of business in
the State of Delaware and otherwise meets the requirements of applicable law,
then the Property Trustee shall also be the Delaware Trustee and Section 3.11
shall have no application.
SECTION 5.3 Property Trustee; Eligibility.
(a) There shall at all times be one Trustee (the "Property
Trustee") which shall act as Property Trustee which shall:
(i) not be an Affiliate of the Sponsor; and
(ii) be a corporation organized and doing
business under the laws of the United States of America or any State or
Territory thereof or of the District of Columbia, or a corporation or Person
permitted by the Commission to act as an institutional trustee under the Trust
Indenture Act, authorized under such laws to exercise corporate trust powers,
having a combined capital and surplus of at least 50 million U.S. dollars
($50,000,000), and subject to supervision or examination by Federal, State,
Territorial or District of Columbia authority. If such corporation publishes
reports of condition at least annually, pursuant to law or to the requirements
of the supervising or examining authority referred to above, then for the
purposes of this Section 5.3(a)(ii), the combined capital and surplus of such
corporation shall be deemed to be its combined capital and surplus as set forth
in its most recent report of condition so published.
33
<PAGE>
(b) If at any time the Property Trustee shall cease to be
eligible to so act under Section 5.3(a), the Property Trustee shall immediately
resign in the manner and with the effect set forth in Section 5.7(c).
(c) If the Property Trustee has or shall acquire any
"conflicting interest" within the meaning of ss. 310(b) of the Trust Indenture
Act, the Property Trustee and the Holder of the Common Securities (as if it were
the obligor referred to in ss. 310(b) of the Trust Indenture Act) shall in all
respects comply with the provisions of ss. 310(b) of the Trust Indenture Act,
subject to the penultimate paragraph thereof.
(d) The Capital Securities Guarantee shall be deemed to be
specifically described in this Declaration for purposes of clause (i) of the
first proviso contained in ss. 310(b) of the Trust Indenture Act.
(e) The initial Property Trustee shall be:
The Chase Manhattan Bank
450 West 33rd Street
New York, NY 10001
Attention: Corporate Trustee Administration Department
SECTION 5.4 Certain Qualifications of Administrative Trustees
and Delaware Trustee Generally.
Each Administrative Trustee and the Delaware Trustee (unless
the Property Trustee also acts as Delaware Trustee) shall be either a natural
person who is at least 21 years of age or a legal entity that shall act through
one or more Authorized Officers.
SECTION 5.5 Administrative Trustees.
The initial Administrative Trustees shall be:
Robert M. Franko and Richard M. Baker
Imperial Bancorp
9920 South La Cienega Boulevard
Inglewood, California 90301
34
<PAGE>
(a) Except as expressly set forth in this Declaration and
except if a meeting of the Administrative Trustees is called with respect to any
matter over which the Administrative Trustees have power to act, any power of
the Administrative Trustees may be exercised by, or with the consent of, any one
such Administrative Trustee.
(b) Unless otherwise determined by the Administrative
Trustees, and except as otherwise required by the Business Trust Act or
applicable law, any Administrative Trustee is authorized to execute on behalf of
the Trust any documents which the Administrative Trustees have the power and
authority to cause the Trust to execute pursuant to Section 3.6, provided, that,
the registration statement referred to in Section 3.6, including any amendments
thereto, shall be signed by all of the Administrative Trustees; and
(c) An Administrative Trustee may, by power of attorney
consistent with applicable law, delegate to any other natural person over the
age of 21 his or her power for the purposes of signing any documents which the
Administrative Trustees have power and authority to cause the Trust to execute
pursuant to Section 3.6.
SECTION 5.6 Delaware Trustee.
The initial Delaware Trustee shall be:
Chase Manhattan Bank Delaware
1201 Market Street
9th Floor
Wilmington, DE 19801
Attention: Corporate Trustee Administration Department
SECTION 5.7 Appointment, Removal and Resignation of Trustees.
(a) Subject to Section 5.7(b) of this Declaration and to
Section 6(b) of Annex I hereto, the Trustees may be appointed or removed without
cause at any time:
(i) until the issuance of any Securities, by
written instrument executed by the Sponsor;
(ii) unless an Event of Default shall have
occurred and be continuing after the issuance of any Securities, by vote of the
Holders of a Majority in liquidation amount
35
<PAGE>
of the Common Securities voting as a class at a meeting of the Holders of the
Common Securities; and
(iii) if an Event of Default shall have occurred
and be continuing after the issuance of the Securities, with respect to the
Property Trustee or the Delaware Trustee, by vote of Holders of a Majority in
liquidation amount of the Capital Securities voting as a class at a meeting of
Holders of the Capital Securities.
(b) (i) The Trustee that acts as Property Trustee shall not be
removed in accordance with Section 5.7(a) until a Successor Property Trustee has
been appointed and has accepted such appointment by written instrument executed
by such Successor Property Trustee and delivered to the Administrative Trustees
and the Sponsor; and
(ii) the Trustee that acts as Delaware Trustee
shall not be removed in accordance with this Section 5.7(a) until a successor
Trustee possessing the qualifications to act as Delaware Trustee under Sections
5.2 and 5.4 (a "Successor Delaware Trustee") has been appointed and has accepted
such appointment by written instrument executed by such Successor Delaware
Trustee and delivered to the Administrative Trustees and the Sponsor.
(c) A Trustee appointed to office shall hold office until his
successor shall have been appointed or until his death, removal or resignation.
Any Trustee may resign from office (without need for prior or subsequent
accounting) by an instrument in writing signed by the Trustee and delivered to
the Sponsor and the Trust, which resignation shall take effect upon such
delivery or upon such later date as is specified therein; provided, however,
that:
(i) No such resignation of the Trustee that acts
as the Property Trustee shall be effective:
(A) until a Successor Property Trustee
has been appointed and has accepted such appointment by instrument
executed by such Successor Property Trustee and delivered to the Trust,
the Sponsor and the resigning Property Trustee; or
(B) until the assets of the Trust have
been completely liquidated and the proceeds thereof distributed to the
holders of the Securities; and
(ii) no such resignation of the Trustee that acts
as the Delaware Trustee shall be effective until a Successor Delaware Trustee
has been appointed and has accepted such appointment by instrument executed by
such Successor Delaware Trustee and delivered to the Trust, the Sponsor and the
resigning Delaware Trustee.
36
<PAGE>
(d) The Holders of the Common Securities shall use their best
efforts to promptly appoint a Successor Delaware Trustee or Successor Property
Trustee, as the case may be, if the Property Trustee or the Delaware Trustee
delivers an instrument of resignation in accordance with this Section 5.7.
(e) If no Successor Property Trustee or Successor Delaware
Trustee shall have been appointed and accepted appointment as provided in this
Section 5.7 within 60 days after delivery of an instrument of resignation or
removal, the Property Trustee or Delaware Trustee resigning or being removed, as
applicable, may petition any court of competent jurisdiction for appointment of
a Successor Property Trustee or Successor Delaware Trustee. Such court may
thereupon, after prescribing such notice, if any, as it may deem proper, appoint
a Successor Property Trustee or Successor Delaware Trustee, as the case may be.
(f) No Property Trustee or Delaware Trustee shall be liable
for the acts or omissions to act of any Successor Property Trustee or Successor
Delaware Trustee, as the case may be.
SECTION 5.8 Vacancies among Trustees.
If a Trustee ceases to hold office for any reason and the
number of Trustees is not reduced pursuant to Section 5.1, or if the number of
Trustees is increased pursuant to Section 5.1, a vacancy shall occur. A
resolution certifying the existence of such vacancy by the Administrative
Trustees or, if there are more than two, a majority of the Administrative
Trustees, shall be conclusive evidence of the existence of such vacancy. The
vacancy shall be filled with a Trustee appointed in accordance with Section 5.7.
SECTION 5.9 Effect of Vacancies.
The death, resignation, retirement, removal, bankruptcy,
dissolution, liquidation, incompetence or incapacity to perform the duties of a
Trustee shall not operate to annul the Trust. Whenever a vacancy in the number
of Administrative Trustees shall occur, until such vacancy is filled by the
appointment of an Administrative Trustee in accordance with Section 5.7, the
Administrative Trustees in office, regardless of their number, shall have all
the powers granted to the Administrative Trustees and shall discharge all the
duties imposed upon the Administrative Trustees by this Declaration.
SECTION 5.10 Meetings.
37
<PAGE>
If there is more than one Administrative Trustee, meetings of
the Administrative Trustees shall be held from time to time upon the call of any
Administrative Trustee. Regular meetings of the Administrative Trustees may be
held at a time and place fixed by resolution of the Administrative Trustees.
Notice of any in-person meetings of the Administrative Trustees shall be hand
delivered or otherwise delivered in writing (including by facsimile, with a hard
copy by overnight courier) not less than 24 hours before such meeting. Notice of
any telephonic meetings of the Administrative Trustees or any committee thereof
shall be hand delivered or otherwise delivered in writing (including by
facsimile, with a hard copy by overnight courier) not less than 24 hours before
a meeting. Notices shall contain a brief statement of the time, place and
anticipated purposes of the meeting. The presence (whether in person or by
telephone) of an Administrative Trustee at a meeting shall constitute a waiver
of notice of such meeting except where an Administrative Trustee attends a
meeting for the express purpose of objecting to the transaction of any activity
on the ground that the meeting has not been lawfully called or convened. Unless
provided otherwise in this Declaration, any action of the Administrative
Trustees may be taken at a meeting by vote of a majority of the Administrative
Trustees present (whether in person or by telephone) and eligible to vote with
respect to such matter, provided that a Quorum is present, or without a meeting
by the unanimous written consent of the Administrative Trustees. In the event
there is only one Administrative Trustee, any and all action of such
Administrative Trustee shall be evidenced by a written consent of such
Administrative Trustee.
SECTION 5.11 Delegation of Power.
(a) Any Administrative Trustee may, by power of attorney
consistent with applicable law, delegate to any other natural person over the
age of 21 his or her power for the purpose of executing any documents
contemplated in Section 3.6, including any Registration Statement or amendment
thereto filed with the Commission, or making any other governmental filing.
(b) The Administrative Trustees shall have power to delegate
from time to time to such of the other Administrative Trustees or to officers of
the Trust the doing of such things and the execution of such instruments either
in the name of the Trust or the names of the Administrative Trustees or
otherwise as the Administrative Trustees may deem expedient, to the extent such
delegation is not prohibited by applicable law or contrary to the provisions of
the Trust, as set forth herein.
38
<PAGE>
SECTION 5.12 Merger, Conversion, Consolidation or
Succession to Business.
Any Person into which the Property Trustee or the Delaware
Trustee or any Administrative Trustee that is not a natural person, as the case
may be, may be merged or converted or with which it may be consolidated, or any
Person resulting from any merger, conversion or consolidation to which the
Property Trustee, the Delaware Trustee or the Administrative Trustee, as the
case may be, shall be a party, or any Person succeeding to all or substantially
all the corporate trust business of the Property Trustee, the Delaware Trustee
or the Administrative Trustee, as the case may be, shall be the successor of the
Property Trustee, the Delaware Trustee or the Administrative Trustee, as the
case may be, hereunder, provided such Person shall be otherwise qualified and
eligible under this Article, without the execution or filing of any paper or any
further act on the part of any of the parties hereto.
ARTICLE VI
DISTRIBUTIONS
SECTION 6.1 Distributions.
Holders shall receive Distributions in accordance with the
applicable terms of the relevant Holders' Securities. If and to the extent that
the Debenture Issuer makes a payment of interest (including Compounded Interest
(as defined in the Indenture) and Additional Interest (as defined in the
Indenture)), premium and/or principal on the Debentures held by the Property
Trustee or Liquidated Damages (as defined in the Registration Rights Agreement)
or any other payments pursuant to the Registration Rights Agreement with respect
to the Debentures held by the Property Trustee (the amount of any such payment
being a "Payment Amount"), the Property Trustee shall and is directed, to the
extent funds are available for that purpose, to make a distribution (a
"Distribution") of the Payment Amount to Holders in accordance with the
respective term of the Securities held by them.
39
<PAGE>
ARTICLE VII
ISSUANCE OF SECURITIES
SECTION 7.1 General Provisions Regarding Securities.
(a) The Administrative Trustees shall on behalf of the Trust
issue one class of capital securities representing undivided beneficial
interests in the assets of the Trust having such terms as are set forth in Annex
I (the "Series A Capital Securities") and one class of common securities
representing undivided beneficial interests in the assets of the Trust having
such terms as are set forth in Annex I (the "Common Securities"). The
Administrative Trustees shall on behalf of the Trust issue one class of capital
securities representing undivided beneficial interests in the Trust having such
terms as set forth in Annex I (the "Series B Capital Securities") in exchange
for Series A Capital Securities accepted for exchange in the Exchange Offer
(and, if required pursuant to the Registration Rights Agreement, the Private
Exchange Capital Securities), which Series B Capital Securities shall not bear
the legends required by Section 9.2(i) unless the Holder of such Series A
Capital Securities is either (A) a broker-dealer who purchased such Series A
Capital Securities directly from the Trust for resale pursuant to Rule 144A or
any other available exemption under the Securities Act, (B) a Person
participating in the distribution of the Series A Capital Securities or (C) a
Person who is an affiliate (as defined in Rule 144A) of the Trust. The Trust
shall issue no securities or other interests in the assets of the Trust other
than the Securities.
(b) The consideration received by the Trust for the issuance
of the Securities shall constitute a contribution to the capital of the Trust
and shall not constitute a loan to the Trust.
(c) Upon issuance of the Securities as provided in this
Declaration, the Securities so issued shall be deemed to be validly issued,
fully paid and non-assessable.
(d) Every Person, by virtue of having become a Holder or a
Capital Security Beneficial Owner in accordance with the terms of this
Declaration, shall be deemed to have expressly assented and agreed to the terms
of, and shall be bound by, this Declaration.
40
<PAGE>
SECTION 7.2 Execution and Authentication.
(a) The Securities shall be signed on behalf of the Trust by
an Administrative Trustee. In case any Administrative Trustee who shall have
signed any of the Securities shall cease to be such Administrative Trustee
before the Securities so signed shall be delivered by the Trust, such Securities
nevertheless may be delivered as though the person who signed such Securities
had not ceased to be such Administrative Trustee; and any Securities may be
signed on behalf of the Trust by such persons who, at the actual date of
execution of such Security, shall be the Administrative Trustees of the Trust,
although at the date of the execution and delivery of the Declaration any such
person was not such an Administrative Trustee.
(b) One Administrative Trustee shall sign the Capital
Securities for the Trust by manual or facsimile signature. Unless otherwise
determined by the Trust, such signature shall, in the case of Common Securities,
be a manual signature.
(c) A Capital Security shall not be valid until authenticated
by the manual signature of an authorized officer of the Property Trustee. The
signature shall be conclusive evidence that the Capital Security has been
authenticated under this Declaration.
(d) Upon a written order of the Trust signed by one
Administrative Trustee, the Property Trustee shall authenticate the Capital
Securities for original issue. The aggregate number of Capital Securities
outstanding at any time shall not exceed the number set forth in the Terms in
Annex I hereto except as provided in Section 7.6.
(e) The Property Trustee may appoint an authenticating agent
acceptable to the Trust to authenticate Capital Securities. An authenticating
agent may authenticate Capital Securities whenever the Property Trustee may do
so. Each reference in this Declaration to authentication by the Property Trustee
includes authentication by such agent. An authenticating agent has the same
rights as the Property Trustee to deal with the Sponsor or an Affiliate.
41
<PAGE>
SECTION 7.3 Form and Dating.
The Capital Securities and the Property Trustee's certificate
of authentication shall be substantially in the form of Exhibit A-1 and the
Common Securities shall be substantially in the form of Exhibit B-1, each of
which is hereby incorporated in and expressly made a part of this Declaration.
Certificates representing the Securities may be printed, lithographed or
engraved or may be produced in any other manner as is reasonably acceptable to
the Administrative Trustees, as evidenced by their execution thereof. The
Securities may have letters, CUSIP or other numbers, notations or other marks of
identification or designation and such legends or endorsements required by law,
stock exchange rule, agreements to which the Trust is subject, if any, or usage
(provided that any such notation, legend or endorsement is in a form acceptable
to the Trust). The Trust at the direction of the Sponsor shall furnish any such
legend not contained in Exhibit A-1 to the Property Trustee in writing. Each
Capital Security shall be dated the date of its authentication. The terms and
provisions of the Securities set forth in Annex I and the forms of Securities
set forth in Exhibits A-1 and B-1 are part of the terms of this Declaration and
to the extent applicable, the Property Trustee and the Sponsor, by their
execution and delivery of this Declaration, expressly agree to such terms and
provisions and to be bound thereby.
(a) Global Securities. Securities offered and sold to QIBs in
reliance on Rule 144A, as provided in the Purchase Agreement, shall be issued in
the form of one or more, permanent global Securities in definitive, fully
registered form without distribution coupons with the global legend and
Restricted Securities Legend set forth in Exhibit A-1 hereto (a "Restricted
Global Capital Security"), which shall be deposited on behalf of the purchasers
of the Capital Securities represented thereby with the Property Trustee, at its
New York office, as custodian for the Clearing Agency, and registered in the
name of the Clearing Agency or a nominee of the Clearing Agency, duly executed
by the Trust and authenticated by the Property Trustee as hereinafter provided.
The number of Capital Securities represented by a Global Capital Security may
from time to time be increased or decreased by adjustments made on the records
of the Property Trustee and the Clearing Agency or its nominee as hereinafter
provided.
(b) Book-Entry Provisions. This Section 7.3(b) shall apply
only to the Global Capital Securities and such other Capital Securities in
global form as may be authorized by the Trust to be deposited with or on behalf
of the Clearing Agency.
The Trust shall execute and the Property Trustee shall, in
accordance with Section 7.2, authenticate and make available for delivery
initially one or more Restricted Global Capital Securities that (i) shall be
registered in the name of Cede & Co. or other
42
<PAGE>
nominee of such Clearing Agency and (ii) shall be delivered by the Trustee to
such Clearing Agency or pursuant to such Clearing Agency's written instructions
or held by the Property Trustee as custodian for the Clearing Agency.
Members of, or participants in, the Clearing Agency
("Participants") shall have no rights under this Declaration with respect to any
Global Capital Security held on their behalf by the Clearing Agency or by the
Property Trustee as the custodian of the Clearing Agency or under such Global
Capital Security, and the Clearing Agency may be treated by the Trust, the
Property Trustee and any agent of the Trust or the Property Trustee as the
absolute owner of such Global Capital Security for all purposes whatsoever.
Notwithstanding the foregoing, nothing herein shall prevent the Trust, the
Property Trustee or any agent of the Trust or the Property Trustee from giving
effect to any written certification, proxy or other authorization furnished by
the Clearing Agency or impair, as between the Clearing Agency and its
Participants, the operation of customary practices of such Clearing Agency
governing the exercise of the rights of a holder of a beneficial interest in any
Global Capital Security.
(c) Definitive Capital Securities. Except as provided in
Section 7.9, owners of beneficial interests in a Global Capital Security will
not be entitled to receive physical delivery of certificated Capital Securities
("Definitive Capital Securities"). Purchasers of Securities who are "accredited
investors" (as defined in Rule 501(a)(1), (2), (3) or (7) under the Securities
Act) will receive Capital Securities in the form of individual certificates in
definitive, fully registered form without distribution coupons and with the
Restricted Securities Legend set forth in Exhibit A-1 hereto ("Restricted
Definitive Capital Securities"); provided, however, that upon transfer of such
Restricted Definitive Capital Securities to a QIB, such Restricted Definitive
Capital Securities will, unless the Restricted Global Capital Security has
previously been exchanged, be exchanged for an interest in a Restricted Global
Capital Security pursuant to the provisions of Section 9.2. Restricted
Definitive Capital Securities will bear the Restricted Securities Legend set
forth on Exhibit A-1 unless removed in accordance with Section 9.2.
43
<PAGE>
SECTION 7.4 Registrar, Paying Agent and Exchange Agent.
The Trust shall maintain in the Borough of Manhattan, The City
of New York, (i) an office or agency where Capital Securities may be presented
for registration of transfer ("Registrar"), (ii) an office or agency where
Capital Securities may be presented for payment ("Paying Agent") and (iii) an
office or agency where Securities may be presented for exchange ("Exchange
Agent"). The Registrar shall keep a register of the Capital Securities and of
their transfer. Subject to Section 3.8(i), the Trust may appoint the Registrar,
the Paying Agent and the Exchange Agent and may appoint one or more
co-registrars, one or more additional paying agents and one or more additional
exchange agents in such other locations as it shall determine. The term
"Registrar" includes any additional registrar, "Paying Agent" includes any
additional paying agent and the term "Exchange Agent" includes any additional
exchange agent. Subject to Section 3.8(i), the Trust may change any Paying
Agent, Registrar, co-registrar or Exchange Agent without prior notice to any
Holder. The Paying Agent shall be permitted to resign as Paying Agent upon 30
days written notice to the Trustees. The Trust shall notify the Property Trustee
of the name and address of any Agent not a party to this Declaration. If the
Trust fails to appoint or maintain another entity as Registrar, Paying Agent or
Exchange Agent, the Property Trustee shall act as such. The Trust or any of its
Affiliates may act as Paying Agent, Registrar or Exchange Agent. The Trust shall
act as Paying Agent, Registrar, co-registrar and Exchange Agent for the Common
Securities.
The Trust initially appoints the Property Trustee as
Registrar, Paying Agent and Exchange Agent for the Capital Securities.
SECTION 7.5 Paying Agent to Hold Money in Trust.
The Trust shall require each Paying Agent other than the
Property Trustee to agree in writing that the Paying Agent will hold in trust
for the benefit of Holders or the Property Trustee all money held by the Paying
Agent for the payment of liquidation amounts or Distributions on the Securities,
and will notify the Property Trustee if there are insufficient funds for such
purpose. While any such insufficiency continues, the Property Trustee may
require a Paying Agent to pay all money held by it to the Property Trustee. The
Trust at any time may require a Paying Agent to pay all money held by it to the
Property Trustee and to account for any money disbursed by it. Upon payment over
to the Property Trustee, the Paying Agent (if other than the Trust or an
Affiliate of the Trust) shall have no further liability for the money. If the
Trust or the Sponsor or an Affiliate of the Trust or the Sponsor acts as Paying
Agent, it shall segregate and hold in a separate trust fund for the benefit of
the Holders all money held by it as Paying Agent.
44
<PAGE>
SECTION 7.6 Replacement Securities.
If a Holder claims that a Security owned by it has been lost,
destroyed or wrongfully taken or if such Security is mutilated and is
surrendered to the Trust or in the case of the Capital Securities to the
Property Trustee, the Trust shall issue and the Property Trustee shall
authenticate a replacement Security if the Property Trustee's and the Trust's
requirements, as the case may be, are met. At the request of the Property
Trustee or the Sponsor, an indemnity bond may be required from the Holder which,
in the judgment of the Property Trustee, is sufficient to protect the Trustees,
the Sponsor or any authenticating agent from any loss which any of them may
suffer if a Security is replaced. The Trust may charge such Holder for its
expenses in replacing a Security.
Every replacement Security is an additional beneficial
interest in the Trust.
SECTION 7.7 Outstanding Capital Securities.
The Capital Securities outstanding at any time are all the
Capital Securities authenticated by the Property Trustee except for those
canceled by it, those delivered to it for cancellation, and those described in
this Section as not outstanding.
If a Capital Security is replaced or purchased pursuant to
Section 7.6 hereof, it ceases to be outstanding unless the Property Trustee
receives proof satisfactory to it that the replaced, paid or purchased Capital
Security is held by a bona fide purchaser.
If Capital Securities are considered paid in accordance with
the terms of this Declaration, they cease to be outstanding and Distributions on
them shall cease to accumulate.
A Capital Security does not cease to be outstanding because
one of the Trust, the Sponsor or an Affiliate of the Sponsor holds the Security.
SECTION 7.8 Capital Securities in Treasury.
In determining whether the Holders of the required amount of
Securities have concurred in any direction, waiver or consent, Capital
Securities owned by the Trust, the Sponsor or an Affiliate of the Sponsor, as
the case may be, shall be disregarded and deemed not to be outstanding, except
that for the purposes of determining whether the Property Trustee shall be fully
protected in relying on any such direction, waiver or consent, only Securities
which the Property Trustee actually knows are so owned shall be so disregarded.
45
<PAGE>
SECTION 7.9 Temporary Securities.
(a) Until definitive Securities are ready for delivery, the
Trust may prepare and, in the case of the Capital Securities, the Property
Trustee shall authenticate temporary Securities. Temporary Securities shall be
substantially in the form of definitive Securities but may have variations that
the Trust considers appropriate for temporary Securities. Without unreasonable
delay, the Trust shall prepare and, in the case of the Capital Securities, the
Property Trustee shall authenticate definitive Securities in exchange for
temporary Securities.
(b) A Global Capital Security deposited with the Clearing
Agency or with the Property Trustee as custodian for the Clearing Agency
pursuant to Section 7.3 shall be transferred to the beneficial owners thereof in
the form of certificated Capital Securities only if such transfer complies with
Section 9.2 and (i) the Clearing Agency notifies the Sponsor that it is
unwilling or unable to continue as Clearing Agency for such Global Capital
Security or if at any time such Clearing Agency ceases to be a "clearing agency"
registered under the Exchange Act and a clearing agency is not appointed by the
Sponsor within 90 days of such notice or within 90 days after the Sponsor
becomes aware of such non-registration, (ii) a Default or an Event of Default
has occurred and is continuing or (iii) the Trust at its sole discretion elects
to cause the issuance of certificated Capital Securities.
(c) Any Global Capital Security that is transferable to the
beneficial owners thereof in the form of certificated Capital Securities
pursuant to this Section 7.9 shall be surrendered by the Clearing Agency to the
Property Trustee located in the Borough of Manhattan, The City of New York, to
be so transferred, in whole or from time to time in part, without charge, and
the Property Trustee shall authenticate and make available for delivery, upon
such transfer of each portion of such Global Capital Security, an equal
aggregate liquidation amount of Securities of authorized denominations in
accordance with Section 9.2(n) hereof and in the form of certificated Capital
Securities. Any portion of a Global Capital Security transferred pursuant to
this Section shall be registered in such names as the Clearing Agency shall
direct. Any Capital Security in the form of certificated Capital Securities
delivered in exchange for an interest in the Restricted Global Capital Security
shall, except as otherwise provided by Sections 7.3 and 9.1, bear the Restricted
Securities Legend set forth in Exhibit A-1 hereto.
(d) Subject to the provisions of Section 7.9(c), the Holder of
a Global Capital Security may grant proxies and otherwise authorize any person,
including Participants and persons that may hold interests through Participants,
to take any action which such Holder is entitled to take under this Declaration
or the Securities.
46
<PAGE>
(e) In the event of the occurrence of any of the events
specified in Section 7.9(b), the Trust will promptly make available to the
Property Trustee a reasonable supply of certificated Capital Securities in fully
registered form without distribution coupons.
SECTION 7.10 Cancellation.
The Trust at any time may deliver Capital Securities to the
Property Trustee for cancellation. The Registrar, Paying Agent and Exchange
Agent shall forward to the Property Trustee any Capital Securities surrendered
to them for registration of transfer, redemption, exchange or payment. The
Property Trustee shall promptly cancel all Capital Securities, surrendered for
registration of transfer, redemption, exchange, payment, replacement or
cancellation and shall dispose of canceled Capital Securities as the Trust
directs, provided that the Property Trustee shall not be obligated to destroy
Capital Securities. The Trust may not issue new Capital Securities to replace
Capital Securities that it has paid or that have been delivered to the Property
Trustee for cancellation or that any holder has exchanged.
SECTION 7.11 CUSIP Numbers.
The Trust in issuing the Capital Securities may use "CUSIP"
numbers (if then generally in use), and, if so, the Property Trustee shall use
"CUSIP" numbers in notices of redemption as a convenience to Holders of Capital
Securities; provided that any such notice may state that no representation is
made as to the correctness of such numbers either as printed on the Capital
Securities or as contained in any notice of a redemption and that reliance may
be placed only on the other identification numbers printed on the Capital
Securities, and any such redemption shall not be affected by any defect in or
omission of such numbers. The Sponsor will promptly notify the Property Trustee
of any change in the CUSIP numbers.
ARTICLE VIII
DISSOLUTION AND TERMINATION OF TRUST
SECTION 8.1 Dissolution and Termination of Trust.
(a) The Trust shall dissolve:
(i) upon the bankruptcy of the Sponsor;
47
<PAGE>
(ii) upon the filing of a certificate of
dissolution or liquidation or its equivalent with respect to the Sponsor; or the
revocation of the Sponsor's charter and the expiration of 90 days after the date
of revocation without a reinstatement thereof;
(iii) upon receipt by the Property Trustee of
written notice from the holder of the Common Securities directing the Property
Trustee to dissolve the Trust (which direction is optional, and except as
otherwise expressly provided below, within the discretion of the holder of the
Common Securities) and provided, further, that such direction (and the resulting
distribution of a Like Amount of the Debentures as provided in Annex I hereto)
is conditioned on (x) the receipt by the Sponsor or the Trust, as the case
requires, of any required regulatory approval, and (y) the Administrative
Trustee's receipt of an opinion of a tax counsel experienced in such matters (a
"No Recognition Opinion"), which opinion may rely on published rulings of the
Internal Revenue Service, to the effect that the Holders will not recognize any
gain or loss for United States federal income tax purposes as a result of the
dissolution of the Trust (and the resulting distribution of Debentures);
(iv) upon the entry of a decree of judicial
dissolution of the Trust by a court of competent jurisdiction;
(v) when all of the Securities shall have been
called for redemption and the amounts necessary for redemption thereof shall
have been paid to the Holders in accordance with the terms of the Securities;
(vi) upon the repayment of the Debentures or at
such time as no Debentures are outstanding; or
(vii) the expiration of the term of the Trust
provided in Section 3.13.
(b) As soon as is practicable after the occurrence of an
event referred to in Section 8.1(a) and after satisfaction of liabilities to
creditors, and subject to the terms set forth in Annex I hereto, the
Administrative Trustees (each of whom is hereby authorized to take such action)
shall file a certificate of cancellation with the Secretary of State of the
State of Delaware.
(c) The provisions of Section 3.9 and Article X shall
survive the termination of the Trust.
48
<PAGE>
ARTICLE IX
TRANSFER OF INTERESTS
SECTION 9.1 Transfer of Securities.
(a) Securities may only be transferred, in whole or in part,
in accordance with the terms and conditions set forth in this Declaration and in
the terms of the Securities. Any transfer or purported transfer of any Security
not made in accordance with this Declaration shall be null and void.
(b) Subject to this Article IX, Capital Securities may only be
transferred, in whole or in part, in accordance with the terms and conditions
set forth in this Declaration. Any transfer or purported transfer of any
security not made in accordance with this Declaration shall be null and void.
(c) The Sponsor may not transfer the Common Securities.
(d) The Administrative Trustees shall provide for the
registration of Securities and of the transfer of Securities, which will be
effected without charge but only upon payment (with such indemnity as the
Administrative Trustees may require) in respect of any tax or other governmental
charges that may be imposed in relation to it. Upon surrender for registration
of transfer of any Securities, the Administrative Trustees shall cause one or
more new Securities to be issued in the name of the designated transferee or
transferees. Every Security surrendered for registration of transfer shall be
accompanied by a written instrument of transfer in form satisfactory to the
Administrative Trustees and the Registrar duly executed by the Holder or such
Holders attorney duly authorized in writing. Each Security surrendered for
registration of transfer shall be canceled by the Property Trustee in accordance
with Section 7.10. A transferee of a Security shall be entitled to the rights
and subject to the obligations of a Holder hereunder upon the receipt by such
transferee of a Security. By acceptance of a Security, each transferee shall be
deemed to have agreed to be bound by this Declaration.
49
<PAGE>
SECTION 9.2 Transfer Procedures and Restrictions.
(a) General. Except as otherwise provided in Section 9.2(b),
if Capital Securities are issued upon the transfer, exchange or replacement of
Capital Securities bearing the Restricted Securities Legend set forth in Exhibit
A-1 hereto, or if a request is made to remove such Restricted Securities Legend
on Capital Securities, the Capital Securities so issued shall bear the
Restricted Securities Legend, or the Restricted Securities Legend shall not be
removed, as the case may be, unless there is delivered to the Trust and the
Property Trustee such satisfactory evidence, which shall include an Opinion of
Counsel licensed to practice law in the State of New York, as may be reasonably
required by the Sponsor, that neither the legend nor the restrictions on
transfer set forth therein are required to ensure that transfers thereof are
made pursuant to an exception from the registration requirements of the
Securities Act or, with respect to Restricted Capital Securities, that such
Securities are not "restricted" within the meaning of Rule 144. Upon provision
of such satisfactory evidence, the Property Trustee, at the written direction of
the Trust, shall authenticate and deliver Capital Securities that do not bear
the legend.
(b) Transfers After Effectiveness of a Registration Statement.
After the effectiveness of a Registration Statement with respect to any Capital
Securities (including a shelf registration statement with respect to the resale
of the Private Exchange Capital Securities), subject to Section 7.1(a), all
requirements pertaining to Restrictive Securities Legends on such Capital
Securities will cease to apply, and beneficial interests in a Capital Security
in global form without such legends will be available to transferees of such
Capital Securities, upon exchange of the transferring Holder's Restricted
Definitive Capital Security or directions to transfer such holder's beneficial
interest in the Restricted Global Capital Security. No such transfer or exchange
of a Restricted Definitive Capital Security or of an interest in the Restricted
Global Capital Security shall be effective unless the transferor delivers to the
Trust a certificate in a form substantially similar to that attached hereto as
the "Form of Assignment" in Exhibit A-1. Except as otherwise provided in Section
9.2(m), after the effectiveness of a Registration Statement, the Trust shall
issue and the Property Trustee, upon a written order of the Trust signed by one
Administrative Trustee, shall authenticate a Capital Security in global form
without the Restricted Securities Legend (the "Unrestricted Global Capital
Security") for deposit with the Clearing Agency to evidence transfers of
beneficial interests from the (i) Restricted Global Capital Security and (ii)
Restricted Definitive Capital Securities.
(c) Transfer and Exchange of Definitive Capital
Securities. When Definitive Capital Securities are presented to the Registrar or
co-Registrar
(x) to register the transfer of such Definitive
Capital Securities; or
50
<PAGE>
(y) to exchange such Definitive Capital
Securities for an equal number of Definitive Capital Securities,
the Registrar or co-registrar shall register the transfer or make the exchange
as requested if its reasonable requirements for such transaction are met;
provided, however, that the Definitive Capital Securities surrendered for
transfer or exchange:
(i) shall be duly endorsed or accompanied by a
written instrument of transfer in form reasonably satisfactory to the
Administrative Trustees and the Registrar or co-registrar, duly executed by the
Holder thereof or his attorney duly authorized in writing; and
(ii) in the case of Definitive Capital Securities
that are Restricted Definitive Capital Securities:
(A) if such Restricted Capital
Securities are being delivered to the Registrar by a Holder for
registration in the name of such Holder, without transfer, shall be
accompanied by a certification from such Holder to that effect; or
(B) if such Restricted Capital
Securities are being transferred, shall be accompanied by: (i) a
certification from the transferor in a form substantially similar to
that attached hereto as the "Form of Assignment" in Exhibit A-1, and
(ii) if the Trust so requests, evidence reasonably satisfactory to it
as to the compliance with the restrictions set forth in the Restricted
Securities Legend.
(d) Restrictions on Transfer of a Definitive Capital Security
for a Beneficial Interest in a Global Capital Security. A Definitive Capital
Security may not be exchanged for a beneficial interest in a Global Capital
Security except upon satisfaction of the requirements set forth below. Upon
receipt by the Property Trustee of a Definitive Capital Security, duly endorsed
or accompanied by appropriate instruments of transfer, in form satisfactory to
the Registrar and the Administrative Trustees, together with:
(i) if such Definitive Capital Security is a
Restricted Capital Security, certification in a form substantially similar to
that attached hereto as the "Form of Assignment" in Exhibit A-1; and
(ii) whether or not such Definitive Capital
Security is a Restricted Capital Security, written instructions directing the
Property Trustee to make, or to direct the Clearing Agency to make, an
adjustment on its books and records with respect to the
51
<PAGE>
appropriate Global Capital Security to reflect an increase in the number of the
Capital Securities represented by such Global Capital Security,
then the Property Trustee shall cancel such Definitive Capital Security and
cause, or direct the Clearing Agency to cause, the aggregate number of Capital
Securities represented by the appropriate Global Capital Security to be
increased accordingly. If no Global Capital Securities are then outstanding, the
Trust shall issue and the Property Trustee shall authenticate, upon written
order of any Administrative Trustee, an appropriate number of Capital Securities
in global form.
(e) Transfer and Exchange of Global Capital Securities.
Subject to Section 9.02(f), the transfer and exchange of Global Capital
Securities or beneficial interests therein shall be effected through the
Clearing Agency, in accordance with this Declaration (including applicable
restrictions on transfer set forth herein, if any) and the procedures of the
Clearing Agency therefor.
(f) Transfer of a Beneficial Interest in a Global Capital
Security for a Definitive Capital Security.
(i) Any person having a beneficial interest in a
Global Capital Security may upon request, but only upon 20 days prior notice to
the Property Trustee, and if accompanied by the information specified below,
exchange such beneficial interest for a Definitive Capital Security representing
the same number of Capital Securities. Upon receipt by the Property Trustee from
the Clearing Agency or its nominee on behalf of any Person having a beneficial
interest in a Global Capital Security of written instructions or such other form
of instructions as is customary for the Clearing Agency or the person designated
by the Clearing Agency as having such a beneficial interest in a Global Capital
Security and a certification from the transferor (in a form substantially
similar to that attached hereto as the "Form of Assignment" in Exhibit A-1),
which may be submitted by facsimile, then the Property Trustee will cause the
aggregate number of Capital Securities represented by Global Capital Securities
to be reduced on its books and records and, following such reduction, the Trust
will execute and the Property Trustee will authenticate and make available for
delivery to the transferee a Definitive Capital Security.
(ii) Definitive Capital Securities issued in
exchange for a beneficial interest in a Global Capital Security pursuant to this
Section 9.2(f) shall be registered in such names and in such authorized
denominations, subject to Section 9.2(n) hereof, as the Clearing Agency,
pursuant to instructions from its Participants or indirect participants or
otherwise, shall instruct the Property Trustee in writing. The Property Trustee
shall deliver such Capital
52
<PAGE>
Securities to the Persons in whose names such Capital Securities are so
registered in accordance with such instructions of the Clearing Agency.
(g) Restrictions on Transfer and Exchange of Global
Capital Securities. Notwithstanding any other provisions of this Declaration
(other than the provisions set forth in subsection (h) of this Section 9.2), a
Global Capital Security may not be transferred as a whole except by the Clearing
Agency to a nominee of the Clearing Agency or another nominee of the Clearing
Agency or by the Clearing Agency or any such nominee to a successor Clearing
Agency or a nominee of such successor Clearing Agency.
(h) Authentication of Definitive Capital Securities. If
at any time:
(i) there occurs a Default or an Event of
Default which is continuing, or
(ii) the Trust, in its sole discretion, notifies
the Property Trustee in writing that it elects to cause the issuance of
Definitive Capital Securities under this Declaration,
then the Trust will execute, and the Property Trustee, upon receipt of a written
order of the Trust signed by one Administrative Trustee requesting the
authentication and delivery of Definitive Capital Securities to the Persons
designated by the Trust, will authenticate and make available for delivery
Definitive Capital Securities, equal in number to the number of Capital
Securities represented by the Global Capital Securities, in exchange for such
Global Capital Securities.
(i) Legend.
(i) Except as permitted by the following
paragraph (ii), each Capital Security certificate evidencing the Restricted
Global Capital Securities and the Restricted Definitive Capital Securities (and
all Restricted Capital Securities issued in exchange therefor or substitution
thereof) shall bear a legend (the "Restricted Securities Legend") in
substantially the following form:
THE CAPITAL SECURITIES REPRESENTED HEREBY
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE "SECURITIES ACT")
OR ANY STATE SECURITIES LAWS OR ANY OTHER
APPLICABLE SECURITIES LAW. NEITHER THIS CAPITAL
53
<PAGE>
SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE
REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR
OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR
UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO,
REGISTRATION.
THE HOLDER OF THIS CAPITAL SECURITY BY ITS
ACCEPTANCE HEREOF AGREES TO OFFER, SELL OR
OTHERWISE TRANSFER THIS CAPITAL SECURITY, PRIOR
TO THE DATE (THE "RESALE RESTRICTION TERMINATION DATE") WHICH
IS TWO YEARS AFTER THE LATER OF THE ORIGINAL ISSUANCE DATE
HEREOF AND THE LAST DATE ON WHICH IMPERIAL BANCORP (THE
"COMPANY") OR ANY "AFFILIATE" OF THE COMPANY WAS THE OWNER OF
THIS CAPITAL SECURITY (OR ANY PREDECESSOR OF THIS CAPITAL
SECURITY) ONLY (A) TO THE COMPANY, (B) PURSUANT TO A
REGISTRATION STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER
THE SECURITIES ACT, (C) SO LONG AS THIS CAPITAL SECURITY IS
ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER THE SECURITIES
ACT ("RULE 144A"), TO A PERSON IT REASONABLY BELIEVES IS A
"QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A) THAT
PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A
QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE
TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (D) TO AN
INSTITUTIONAL "ACCREDITED INVESTOR" WITHIN THE MEANING OF
SUBPARAGRAPH (A)(1), (2), (3) OR (7) OF RULE 501 UNDER THE
SECURITIES ACT THAT IS ACQUIRING THIS CAPITAL SECURITY FOR ITS
OWN ACCOUNT, OR FOR THE ACCOUNT OF SUCH AN INSTITUTIONAL
ACCREDITED INVESTOR, FOR INVESTMENT PURPOSES AND NOT WITH A
VIEW TO, OR FOR OFFER OR SALE IN CONNECTION WITH, ANY
DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT, OR (E)
PURSUANT TO ANY OTHER AVAILABLE
54
<PAGE>
EXEMPTION FROM THE REGISTRATION REQUIREMENTS UNDER THE
SECURITIES ACT, SUBJECT TO THE RIGHT OF THE TRUST AND THE
COMPANY PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER (i) PURSUANT
TO CLAUSE (D) OR (E) TO REQUIRE THE DELIVERY OF AN OPINION OF
COUNSEL, CERTIFICATIONS AND/OR OTHER INFORMATION SATISFACTORY
TO EACH OF THEM, AND (ii) PURSUANT TO CLAUSE (D), TO REQUIRE
THAT A CERTIFICATE OF TRANSFER IN THE FORM APPEARING ON THE
REVERSE OF THIS CAPITAL SECURITY IS COMPLETED AND DELIVERED BY
THE TRANSFEREE TO THE TRUST. SUCH HOLDER FURTHER AGREES THAT
IT WILL DELIVER TO EACH PERSON TO WHOM THIS CAPITAL SECURITY
IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS
LEGEND.
(ii) Upon any sale or transfer of a Restricted
Capital Security (including any Restricted Capital Security represented by a
Restricted Global Capital Security) pursuant to an effective registration
statement under the Securities Act or pursuant to Rule 144 under the Securities
Act after such registration statement ceases to be effective:
(A) in the case of any Restricted
Capital Security that is a Definitive Capital Security, the Registrar
shall permit the Holder thereof to exchange such Restricted Capital
Security for a Definitive Capital Security that does not bear the
Restricted Securities Legend and rescind any restriction on the
transfer of such Restricted Capital Security; and
(B) in the case of any Restricted
Capital Security that is represented by a Restricted Global Capital
Security, the Registrar shall permit the Holder of such Restricted
Global Capital Security to exchange such Restricted Global Capital
Security for another Global Capital Security that does not bear the
Restricted Securities Legend.
(j) Cancellation or Adjustment of Global Capital Security. At
such time as all beneficial interests in a Global Capital Security have either
been exchanged for Definitive Capital Securities to the extent permitted by this
Declaration or redeemed, repurchased or canceled in accordance with the terms of
this Declaration, such Global Capital Security shall be returned to the Clearing
Agency for cancellation or retained and canceled by the Property
55
<PAGE>
Trustee. At any time prior to such cancellation, if any beneficial interest in a
Global Capital Security is exchanged for Definitive Capital Securities, Capital
Securities represented by such Global Capital Security shall be reduced and an
adjustment shall be made on the books and records of the Property Trustee (if it
is then the custodian for such Global Capital Security) with respect to such
Global Capital Security, by the Property Trustee to reflect such reduction.
(k) Obligations with Respect to Transfers and Exchanges
of Capital Securities.
(i) To permit registrations of transfers and
exchanges, the Trust shall execute and the Property Trustee shall authenticate
Definitive Capital Securities and Global Capital Securities at the Registrar's
or co-Registrar's request in accordance with the terms of this Declaration.
(ii) Registrations of transfers or exchanges will
be effected without charge, but only upon payment (with such indemnity as the
Trust or the Sponsor may require) in respect of any tax or other governmental
charge that may be imposed in relation to it.
(iii) The Registrar or co-registrar shall not be
required to register the transfer of or exchange of (a) Capital Securities
during a period beginning at the opening of business 15 days before the day of
mailing of a notice of redemption or any notice of selection of Capital
Securities for redemption and ending at the close of business on the day of such
mailing; or (b) any Capital Security so selected for redemption in whole or in
part, except the unredeemed portion of any Capital Security being redeemed in
part.
(iv) Prior to the due presentation for
registrations of transfer of any Capital Security, the Trust, the Property
Trustee, the Paying Agent, the Registrar or any co-registrar may deem and treat
the person in whose name a Capital Security is registered as the owner of such
Capital Security for the purpose of receiving Distributions on such Capital
Security (subject to Section 2(c) of Annex I hereto) and for all other purposes
whatsoever, and none of the Trust, the Property Trustee, the Paying Agent, the
Registrar or any co-registrar shall be affected by notice to the contrary.
(v) All Capital Securities issued upon any
transfer or exchange pursuant to the terms of this Declaration shall evidence
the same security and shall be entitled to the same benefits under this
Declaration as the Capital Securities surrendered upon such transfer or
exchange.
56
<PAGE>
(l) No Obligation of the Property Trustee.
(i) The Property Trustee shall have no
responsibility or obligation to any beneficial owner of a Global Capital
Security, a Participant in the Clearing Agency or other Person with respect to
the accuracy of the records of the Clearing Agency or its nominee or of any
Participant thereof, with respect to any ownership interest in the Capital
Securities or with respect to the delivery to any Participant, beneficial owner
or other Person (other than the Clearing Agency) of any notice (including any
notice of redemption) or the payment of any amount, under or with respect to
such Capital Securities. All notices and communications to be given to the
Holders and all payments to be made to Holders under the Capital Securities
shall be given or made only to or upon the order of the registered Holders
(which shall be the Clearing Agency or its nominee in the case of a Global
Capital Security). The rights of beneficial owners in any Global Capital
Security shall be exercised only through the Clearing Agency subject to the
applicable rules and procedures of the Clearing Agency. The Property Trustee may
conclusively rely and shall be fully protected in relying upon information
furnished by the Clearing Agency or any agent thereof with respect to its
Participants and any beneficial owners.
(ii) The Property Trustee and Registrar shall
have no obligation or duty to monitor, determine or inquire as to compliance
with any restrictions on transfer imposed under this Declaration or under
applicable law with respect to any transfer of any interest in any Capital
Security (including any transfers between or among Clearing Agency Participants
or beneficial owners in any Global Capital Security) other than to require
delivery of such certificates and other documentation or evidence as are
expressly required by, and to do so if and when expressly required by, the terms
of this Declaration, and to examine the same to determine substantial compliance
as to form with the express requirements hereof.
(m) Exchange of Series A Capital Securities for Series B
Capital Securities or Private Exchange Capital Securities. The Series A Capital
Securities may be exchanged for Series B Capital Securities pursuant to the
terms of the Exchange Offer. In addition, the Series A Capital Securities may be
exchanged in a Private Exchange for Private Exchange Capital Securities under
the circumstances described in the Registration Rights Agreement.
The Trustee shall make such exchange as follows:
The Sponsor shall present the Property Trustee with an
Officer's Certificate certifying the following:
57
<PAGE>
(A) upon issuance of the Series B
Capital Securities or the Private Exchange Capital Securities, as the
case may be, the transactions contemplated by the Exchange Offer or the
Private Exchange have been consummated; and
(B) the number of Series A Capital
Securities properly tendered in the Exchange Offer and the Private
Exchange that are represented by a Global Capital Security and the
number of Series A Capital Securities properly tendered in the Exchange
Offer and the Private Exchange that are represented by Definitive
Capital Securities, the name of each Holder of such Definitive Capital
Securities, the liquidation amount of Capital Securities properly
tendered in the Exchange Offer or the Private Exchange, as the case may
be, by each such Holder and the name and address to which Definitive
Capital Securities for Series B Capital Securities or Private Exchange
Capital Securities, as the case may be, shall be registered and sent
for each such Holder.
The Property Trustee, upon receipt of such Officer's
Certificate, shall authenticate a Global Capital Security for Series B Capital
Securities or Private Exchange Capital Securities, as the case may be, in
aggregate liquidation amount equal to the aggregate liquidation amount of Series
A Capital Securities represented by a Global Capital Security and Definitive
Capital Securities indicated in such Officer's Certificate as having been
properly tendered.
If, upon consummation of the Exchange Offer or the Private
Exchange, less than all the outstanding Series A Capital Securities shall have
been properly tendered and not withdrawn, the Property Trustee shall make an
endorsement on the Global Capital Security for Series A Capital Securities
indicating the reduction in the number and aggregate liquidation amount
represented thereby as a result of the Exchange Offer or the Private Exchange,
as the case may be.
(n) Minimum Transfers. Capital Securities may only be
transferred in minimum blocks of not less than $100,000 aggregate liquidation
amount. Any purported transfer in violation of this provision shall be void. The
minimum transfer amount shall apply both before and after the filing of the
effectiveness of the Registration Statement.
SECTION 9.3 Book Entry Interests.
Global Capital Securities shall initially be registered on the
books and records of the Trust in the name of Cede & Co., the nominee of the
Clearing Agency, and no Capital Security Beneficial Owner will receive a
definitive Capital Security Certificate representing
58
<PAGE>
such Capital Security Beneficial Owner's interests in such Global Capital
Securities, except as provided in Sections 7.9 and 9.2. Unless and until
definitive, fully registered Capital Securities certificates have been issued to
the Capital Security Beneficial Owners pursuant to Sections 7.9 and 9.2:
(a) the provisions of this Section 9.3 shall be in full
force and effect;
(b) the Trust and the Trustees shall be entitled to deal with
the Clearing Agency for all purposes of this Declaration (including the payment
of Distributions on the Global Capital Securities and receiving approvals, votes
or consents hereunder) as the Holder of the Capital Securities and the sole
holder of the Global Certificates and shall have no obligation to the Capital
Security Beneficial Owners;
(c) to the extent that the provisions of this Section 9.3
conflict with any other provisions of this Declaration, the provisions of this
Section 9.3 shall control; and
(d) the rights of the Capital Security Beneficial Owners shall
be exercised only through the Clearing Agency and shall be limited to those
established by law and agreements between such Capital Security Beneficial
Owners and the Clearing Agency and/or the Clearing Agency Participants and the
Clearing Agency will receive all Distributions pursuant to the terms of this
Declaration and payments of Distributions on the Global Certificates to such
Clearing Agency Participants will be made by the Clearing Agency in accordance
with its established procedures. DTC will make book entry transfers among the
Clearing Agency Participants.
SECTION 9.4 Notices to Clearing Agency.
Whenever a notice or other communication to the Capital
Security Holders is required under this Declaration, the Trustees shall give all
such notices and communications specified herein to be given to the Holders of
Global Capital Securities to the Clearing Agency, and shall have no notice
obligations to the Capital Security Beneficial Owners.
SECTION 9.5 Appointment of Successor Clearing Agency.
If any Clearing Agency elects to discontinue its services as
securities depositary with respect to the Capital Securities, the Administrative
Trustees may, in their sole discretion, appoint a successor Clearing Agency with
respect to such Capital Securities.
59
<PAGE>
ARTICLE X
LIMITATION OF LIABILITY OF
HOLDERS OF SECURITIES, TRUSTEES OR OTHERS
SECTION 10.1 Liability.
(a) Except as expressly set forth in this Declaration,
the Securities Guarantees and the terms of the Securities, the Sponsor shall
not be:
(i) personally liable for the return of any
portion of the capital contributions (or any return thereon) of the Holders of
the Securities which shall be made solely from assets of the Trust; and
(ii) be required to pay to the Trust or to any
Holder of Securities any deficit upon dissolution of the Trust or otherwise.
(b) Pursuant to ss. 3803(a) of the Business Trust Act, the
Holders of the Common Securities 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; provided,
however, that the Holder of the Common Securities shall be liable for all of the
debts and obligations of the Trust (other than with respect to the Securities)
to the extent not satisfied out of the Trust's assets.
(c) Pursuant to ss. 3803(a) of the Business Trust Act, the
Holders of the Capital Securities shall be entitled to the same limitation of
personal liability extended to stockholders of private corporations for profit
organized under the General Corporation Law of the State of Delaware.
SECTION 10.2 Exculpation.
(a) No Indemnified Person shall be liable, responsible or
accountable in damages or otherwise to the Trust or any Covered Person for any
loss, damage or claim incurred by reason of any act or omission performed or
omitted by such Indemnified Person in good faith on behalf of the Trust and in a
manner such Indemnified Person reasonably believed to be within the scope of the
authority conferred on such Indemnified Person by this Declaration or by law,
except that an Indemnified Person shall be liable for any such loss, damage or
claim incurred by reason of such Indemnified Person's gross negligence or
willful misconduct with respect to such acts or omissions.
60
<PAGE>
(b) An Indemnified Person shall be fully protected in relying
in good faith upon the records of the Trust and upon such information, opinions,
reports or statements presented to the Trust by any Person as to matters the
Indemnified Person reasonably believes are within such other Person's
professional or expert competence and, if selected by such Indemnified Person,
has been selected by such Indemnified Person with reasonable care on behalf of
the Trust, including information, opinions, reports or statements as to the
value and amount of the assets, liabilities, profits, losses, or any other facts
pertinent to the existence and amount of assets from which Distributions to
Holders of Securities might properly be paid.
SECTION 10.3 Fiduciary Duty.
(a) To the extent that, at law or in equity, an Indemnified
Person has duties (including fiduciary duties) and liabilities relating thereto
to the Trust or to any other Covered Person, an Indemnified Person acting under
this Declaration shall not be liable to the Trust or to any other Covered Person
for its good faith reliance on the provisions of this Declaration. The
provisions of this Declaration, to the extent that they restrict the duties and
liabilities of an Indemnified Person otherwise existing at law or in equity
(other than the duties imposed on the Property Trustee under the Trust Indenture
Act), are agreed by the parties hereto to replace such other duties and
liabilities of such Indemnified Person.
(b) Unless otherwise expressly provided herein:
(i) whenever a conflict of interest exists or
arises between any Covered Person and any Indemnified Person; or
(ii) whenever this Declaration or any other
agreement contemplated herein or therein provides that an Indemnified Person
shall act in a manner that is, or provides terms that are, fair and reasonable
to the Trust or any Holder of Securities, the Indemnified Person shall resolve
such conflict of interest, take such action or provide such terms, considering
in each case the relative interest of each party (including its own interest) to
such conflict, agreement, transaction or situation and the benefits and burdens
relating to such interests, any customary or accepted industry practices, and
any applicable generally accepted accounting practices or principles. In the
absence of bad faith by the Indemnified Person, the resolution, action or term
so made, taken or provided by the Indemnified Person shall not constitute a
breach of this Declaration or any other agreement contemplated herein or of any
duty or obligation of the Indemnified Person at law or in equity or otherwise.
61
<PAGE>
(c) Whenever in this Declaration an Indemnified Person is
permitted or required to make a decision:
(i) in its "discretion" or under a grant of
similar authority, the Indemnified Person shall be entitled to consider such
interests and factors as it desires, including its own interests, and shall have
no duty or obligation to give any consideration to any interest of or factors
affecting the Trust or any other Person; or
(ii) in its "good faith" or under another express
standard, the Indemnified Person shall act under such express standard and shall
not be subject to any other or different standard imposed by this Declaration or
by applicable law.
SECTION 10.4 Indemnification.
(a) (i) The Sponsor shall indemnify, to the full extent
permitted by law, any Company Indemnified Person who was or is a party or is
threatened to be made a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative
(other than an action by or in the right of the Trust) by reason of the fact
that he is or was a Company Indemnified Person against expenses (including
attorney's fees and expenses), judgments, fines and amounts paid in settlement
actually and reasonably incurred by him in connection with such action, suit or
proceeding if he acted in good faith and in a manner he reasonably believed to
be in or not opposed to the best interests of the Trust, and, with respect to
any criminal action or proceeding, had no reasonable cause to believe his
conduct was unlawful. The termination of any action, suit or proceeding by
judgment, order, settlement, conviction, or upon a plea of nolo contendere or
its equivalent, shall not, of itself, create a presumption that the Company
Indemnified Person did not act in good faith and in a manner which he reasonably
believed to be in or not opposed to the best interests of the Trust, and, with
respect to any criminal action or proceeding, had reasonable cause to believe
that his conduct was unlawful.
(ii) The Sponsor shall indemnify, to the full
extent permitted by law, any Company Indemnified Person who was or is a party or
is threatened to be made a party to any threatened, pending or completed action
or suit by or in the right of the Trust to procure a judgment in its favor by
reason of the fact that he is or was a Company Indemnified Person against
expenses (including attorney's fees and expenses) actually and reasonably
incurred by him in connection with the defense or settlement of such action or
suit if he acted in good faith and in a manner he reasonably believed to be in
or not opposed to the best interests of the Trust and except that no such
indemnification shall be made in respect of any claim, issue or matter as to
which such Company Indemnified Person shall have been adjudged to be liable to
62
<PAGE>
the Trust unless and only to the extent that the Court of Chancery of Delaware
or the court in which such action or suit was brought shall determine upon
application that, despite the adjudication of liability but in view of all the
circumstances of the case, such person is fairly and reasonably entitled to
indemnity for such expenses which such Court of Chancery or such other court
shall deem proper.
(iii) To the extent that a Company Indemnified
Person shall be successful on the merits or otherwise (including dismissal of an
action without prejudice or the settlement of an action without admission of
liability) in defense of any action, suit or proceeding referred to in
paragraphs (i) and (ii) of this Section 10.4(a), or in defense of any claim,
issue or matter therein, he shall be indemnified, to the full extent permitted
by law, against expenses (including attorney's fees) actually and reasonably
incurred by him in connection therewith.
(iv) Any indemnification under paragraphs (i) and
(ii) of this Section 10.4(a) (unless ordered by a court) shall be made by the
Sponsor only as authorized in the specific case upon a determination that
indemnification of the Company Indemnified Person is proper in the circumstances
because he has met the applicable standard of conduct set forth in paragraphs
(i) and (ii). Such determination shall be made (1) by the Administrative
Trustees by a majority vote of a quorum consisting of such Administrative
Trustees who were not parties to such action, suit or proceeding, (2) if such a
quorum is not obtainable, or, even if obtainable, if a quorum of disinterested
Administrative Trustees so directs, by independent legal counsel in a written
opinion, or (3) by the Common Security Holder of the Trust.
(v) Expenses (including attorney's fees and
expenses) incurred by a Company Indemnified Person in defending a civil,
criminal, administrative or investigative action, suit or proceeding referred to
in paragraphs (i) and (ii) of this Section 10.4(a) shall be paid by the Sponsor
in advance of the final disposition of such action, suit or proceeding upon
receipt of an undertaking by or on behalf of such Company Indemnified Person to
repay such amount if it shall ultimately be determined that he is not entitled
to be indemnified by the Sponsor as authorized in this Section 10.4(a).
Notwithstanding the foregoing, no advance shall be made by the Sponsor if a
determination is reasonably and promptly made (i) by the Administrative Trustees
by a majority vote of a quorum of disinterested Administrative Trustees, (ii) if
such a quorum is not obtainable, or, even if obtainable, if a quorum of
disinterested Administrative Trustees so directs, by independent legal counsel
in a written opinion or (iii) the Common Security Holder of the Trust, that,
based upon the facts known to the Administrative Trustees, counsel or the Common
Security Holder at the time such determination is made, such Company Indemnified
Person acted in bad faith or in a manner that such person did not believe to be
in or not opposed to the best interests of the Trust, or,
63
<PAGE>
with respect to any criminal proceeding, that such Company Indemnified Person
believed or had reasonable cause to believe his conduct was unlawful. In no
event shall any advance be made in instances where the Administrative Trustees,
independent legal counsel or Common Security Holder reasonably determine that
such person deliberately breached his duty to the Trust or its Common or Capital
Security Holders.
(vi) The indemnification and advancement of
expenses provided by, or granted pursuant to, the other paragraphs of this
Section 10.4(a) shall not be deemed exclusive of any other rights to which those
seeking indemnification and advancement of expenses may be entitled under any
agreement, vote of stockholders or disinterested directors of the Sponsor or
Capital Security Holders of the Trust or otherwise, both as to action in his
official capacity and as to action in another capacity while holding such
office. All rights to indemnification under this Section 10.4(a) shall be deemed
to be provided by a contract between the Sponsor and each Company Indemnified
Person who serves in such capacity at any time while this Section 10.4(a) is in
effect. Any repeal or modification of this Section 10.4(a) shall not affect any
rights or obligations then existing.
(vii) The Sponsor or the Trust may purchase and
maintain insurance on behalf of any person who is or was a Company Indemnified
Person against any liability asserted against him and incurred by him in any
such capacity, or arising out of his status as such, whether or not the Sponsor
would have the power to indemnify him against such liability under the
provisions of this Section 10.4(a).
(viii) For purposes of this Section 10.4(a),
references to "the Trust" shall include, in addition to the resulting or
surviving entity, any constituent entity (including any constituent of a
constituent) absorbed in a consolidation or merger, so that any person who is or
was a director, trustee, officer or employee of such constituent entity, or is
or was serving at the request of such constituent entity as a director, trustee,
officer, employee or agent of another entity, shall stand in the same position
under the provisions of this Section 10.4(a) with respect to the resulting or
surviving entity as he would have with respect to such constituent entity if its
separate existence had continued.
(ix) The indemnification and advancement of
expenses provided by, or granted pursuant to, this Section 10.4(a), unless
otherwise provided when authorized or ratified, shall continue as to a person
who has ceased to be a Company Indemnified Person and shall inure to the benefit
of the heirs, executors and administrators of such a person.
(b) To the fullest extent permitted by law, the Sponsor agrees
to indemnify the (i) Property Trustee, (ii) the Delaware Trustee, (iii) any
Affiliate of the Property Trustee
64
<PAGE>
and the Delaware Trustee, and (iv) any officers, directors, shareholders,
members, partners, employees, representatives, custodians, nominees or agents of
the Property Trustee and the Delaware Trustee (each of the Persons in (i)
through (iv) being referred to as a "Fiduciary Indemnified Person") for, and to
hold each Fiduciary Indemnified Person harmless against, any and all loss,
liability, damage, claim or expense including taxes (other than taxes based on
the income of such Fiduciary Indemnified Person) incurred without negligence or
bad faith on its part, arising out of or in connection with the acceptance or
administration of the trust or trusts hereunder, including the costs and
expenses (including reasonable legal fees and expenses) of defending itself
against or investigating any claim or liability in connection with the exercise
or performance of any of its powers or duties hereunder. The obligation to
indemnify as set forth in this Section 10.4(b) shall survive the dissolution of
the Trust and the termination and discharge of this Declaration.
SECTION 10.5 Outside Businesses.
Any Covered Person, the Sponsor, the Delaware Trustee and the
Property Trustee may engage in or possess an interest in other business ventures
of any nature or description, independently or with others, similar or
dissimilar to the business of the Trust, and the Trust and the Holders shall
have no rights by virtue of this Declaration in and to such independent ventures
or the income or profits derived therefrom, and the pursuit of any such venture,
even if competitive with the business of the Trust, shall not be deemed wrongful
or improper. No Covered Person, the Sponsor, the Delaware Trustee or the
Property Trustee shall be obligated to present any particular investment or
other opportunity to the Trust even if such opportunity is of a character that,
if presented to the Trust, could be taken by the Trust, and any Covered Person,
the Sponsor, the Delaware Trustee and the Property Trustee shall have the right
to take for its own account (individually or as a partner or fiduciary) or to
recommend to others any such particular investment or other opportunity. Any
Covered Person, the Delaware Trustee and the Property Trustee may engage or be
interested in any financial or other transaction with the Sponsor or any
Affiliate of the Sponsor, or may act as depositary for, trustee or agent for, or
act on any committee or body of holders of, securities or other obligations of
the Sponsor or its Affiliates.
SECTION 10.6 Compensation; Fees
The Sponsor agrees:
(a) to pay to the Trustees from time to time reasonable
compensation 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); and
65
<PAGE>
(b) except as otherwise expressly provided herein, to
reimburse the Trustees upon request for all reasonable expenses, disbursements
and advances incurred or made by the Trustees in accordance with any provision
of this Declaration (including the reasonable compensation and the expenses and
disbursements of their respective agents and counsel), except any such expense,
disbursement or advance as may be attributable to their respective negligence or
bad faith.
The provisions of this Section 10.6 shall survive the
dissolution of the Trust and the termination of this Declaration and the removal
or resignation of any Trustee.
No Trustee may claim any lien or charge on any property of the
Trust as a result of any amount due pursuant to this Section 10.6.
ARTICLE XI
ACCOUNTING
SECTION 11.1 Fiscal Year.
The fiscal year ("Fiscal Year") of the Trust shall be the
calendar year, or such other year as is required by the Code.
SECTION 11.2 Certain Accounting Matters.
(a) At all times during the existence of the Trust, the
Administrative Trustees shall keep, or cause to be kept, full books of account,
records and supporting documents, which shall reflect in reasonable detail, each
transaction of the Trust. The books of account shall be maintained on the
accrual method of accounting, in accordance with generally accepted accounting
principles, consistently applied. The Trust shall use the accrual method of
accounting for United States federal income tax purposes. The books of account
and the records of the Trust shall be examined by and reported upon as of the
end of each Fiscal Year of the Trust by a firm of independent certified public
accountants selected by the Administrative Trustees.
(b) The Administrative Trustees shall cause to be prepared and
delivered to each of the Holders, within 90 days after the end of each Fiscal
Year of the Trust, annual financial statements of the Trust, including a balance
sheet of the Trust as of the end of such Fiscal Year, and the related statements
of income or loss;
66
<PAGE>
(c) The Administrative Trustees shall cause to be duly
prepared and delivered to each of the Holders, any annual United States federal
income tax information statement required by the Code, containing such
information with regard to the Securities held by each Holder as is required by
the Code and the Treasury Regulations. Notwithstanding any right under the Code
to deliver any such statement at a later date, the Administrative Trustees shall
endeavor to deliver all such information statements within 30 days after the end
of each Fiscal Year of the Trust.
(d) The Administrative Trustees shall cause to be duly
prepared and filed with the appropriate taxing authority, an annual United
States federal income tax return, on a Form 1041 or such other form required by
United States federal income tax law, and any other annual income tax returns
required to be filed by the Administrative Trustees on behalf of the Trust with
any state or local taxing authority.
SECTION 11.3 Banking. The Trust shall maintain one or more
bank accounts in the name and for the sole benefit of the Trust; provided,
however, that all payments of funds in respect of the Debentures held by the
Property Trustee shall be made directly to the Property Trustee Account and no
other funds of the Trust shall be deposited in the Property Trustee Account. The
sole signatories for such accounts shall be designated by the Administrative
Trustees; provided, however, that the Property Trustee shall designate the
signatories for the Property Trustee Account.
SECTION 11.4 Withholding. The Trust and the Administrative
Trustees shall comply with all withholding requirements under United States
federal, state and local law. The Trust shall request, and the Holders shall
provide to the Trust, such forms or certificates as are necessary to establish
an exemption from withholding with respect to each Holder, and any
representations and forms as shall reasonably be requested by the Trust to
assist it in determining the extent of, and in fulfilling, its withholding
obligations. The Administrative Trustees shall file required forms with
applicable jurisdictions and, unless an exemption from withholding is properly
established by a Holder, shall remit amounts withheld with respect to the Holder
to applicable jurisdictions. To the extent that the Trust is required to
withhold and pay over any amounts to any authority with respect to Distributions
or allocations to any Holder, the amount withheld shall be deemed to be a
Distribution in the amount of the withholding to the Holder. In the event of any
claimed over withholding, Holders shall be limited to an action against the
applicable jurisdiction. If the amount required to be withheld was not withheld
from actual Distributions made, the Trust may reduce subsequent Distributions by
the amount of such withholding.
67
<PAGE>
ARTICLE XII
AMENDMENTS AND MEETINGS
SECTION 12.1 Amendments.
(a) Except as otherwise provided in this Declaration or by any
applicable terms of the Securities, this Declaration may only be amended by a
written instrument approved and executed by:
(i) the Administrative Trustees (or if there are
more than two Administrative Trustees a majority of the Administrative
Trustees);
(ii) the Property Trustee;
(iii) if the amendment affects the rights, powers,
duties, obligations or immunities of the Delaware Trustee, the Delaware Trustee;
and
(iv) the Sponsor.
(b) No amendment shall be made, and any such purported
amendment shall be void and ineffective:
(i) unless, the Property Trustee shall have
first received an Officer's Certificate from each of the Trust and the Sponsor
that such amendment is permitted by, and conforms to, the terms of this
Declaration (including the terms of the Securities); and
(ii) unless the Property Trustee shall have
received an Opinion of Counsel (who may be counsel to the Sponsor or the Trust)
that such amendment is permitted by, and conforms to, the terms of this
Declaration (including the terms of the Securities),
provided, however, that the Property Trustee and the Delaware Trustee (to the
extent the Delaware Trustee is required to sign such amendment) shall not be
required to sign any such amendment which affects the rights, powers, duties,
obligations or immunities of the Property Trustee or the Delaware Trustee, as
the case may be, under the Declaration or otherwise; and
68
<PAGE>
(iii) to the extent the result of such amendment
would be to:
(A) cause the Trust to fail to continue
to be classified for purposes of United States federal income taxation
as a grantor trust;
(B) reduce or otherwise adversely affect
the powers of the Property Trustee in contravention of the Trust
Indenture Act; or
(C) cause the Trust to be deemed to be
an Investment Company required to be registered under the Investment
Company Act;
(c) At such time after the Trust has issued any Securities
that remain outstanding, any amendment that would adversely affect, in any
material respect, the rights, privileges or preferences of any Holder of
Securities may be effected only with such additional requirements as may be set
forth in the terms of such Securities;
(d) Section 9.1(c) and this Section 12.1 shall not be
amended without the consent of all of the Holders of the Securities;
(e) Article Four shall not be amended without the consent
of the Holders of a Majority in liquidation amount of the Common Securities and;
(f) The rights of the holders of the Common Securities
under Article Five to increase or decrease the number of, and appoint and remove
Trustees shall not be amended without the consent of the Holders of a Majority
in liquidation amount of the Common Securities; and
(g) Notwithstanding Section 12.1(c), this Declaration may
be amended without the consent of the Holders of the Securities to:
(i) cure any ambiguity, correct or supplement
any provision in this Declaration that may be inconsistent with any other
provision of this Declaration or to make any other provisions with respect to
matters or questions arising under this Declaration which shall not be
inconsistent with the other provisions of the Declaration;
(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 at all times that any Securities are outstanding or to ensure that the
Trust will not be required to register as an Investment Company under the
Investment Company Act; or
69
<PAGE>
(iii) modify, eliminate or add to any provision of
the Declaration to such extent as shall be necessary to enable the Trust and the
Debenture Issuer to conduct an Exchange Offer in the manner contemplated by the
Registration Rights Agreement;
provided, however, that in the case of clause (i), such action shall not
adversely affect in any material respect the interest of the holders of the
Trust Securities.
(h) The Holders of the Series A Capital Securities, the Series
B Capital Securities and the Private Exchange Capital Securities shall vote or
provide consent for all purposes together as a single class.
Any amendments of this Declaration shall become effective when notice thereof is
given to the Holders.
SECTION 12.2 Meetings of the Holders; Action by Written
Consent.
(a) Meetings of the Holders of any class of Securities may be
called at any time by the Administrative Trustees (or as provided in the terms
of the Securities) to consider and act on any matter on which Holders of such
class of Securities are entitled to act under the terms of this Declaration, the
terms of the Securities or the rules of any stock exchange on which the Capital
Securities are listed or admitted for trading. The Administrative Trustees shall
call a meeting of the Holders of such class if directed to do so by the Holders
of at least 10% in liquidation amount of such class of Securities. Such
direction shall be given by delivering to the Administrative Trustees one or
more notices in a writing stating that the signing Holders of Securities wish to
call a meeting and indicating the general or specific purpose for which the
meeting is to be called. Any Holders calling a meeting shall specify in writing
the Securities held by the Holders exercising the right to call a meeting and
only those Securities specified shall be counted for purposes of determining
whether the required percentage set forth in the second sentence of this
paragraph has been met.
(b) Except to the extent otherwise provided in the terms of
the Securities, the following provisions shall apply to meetings of Holders of
Securities:
(i) notice of any such meeting shall be given to
all the Holders of Securities having a right to vote thereat at least seven days
and not more than 60 days before the date of such meeting. Whenever a vote,
consent or approval of the Holders is permitted or required under this
Declaration or the rules of any stock exchange on which the Capital Securities
are listed or admitted for trading, such vote, consent or approval may be given
at a meeting of the Holders. Any action that may be taken at a meeting of the
Holders of
70
<PAGE>
Securities may be taken without a meeting if a consent in writing setting forth
the action so taken is signed by the Holders of Securities owning not less than
the minimum amount of Securities in liquidation amount that would be necessary
to authorize or take such action at a meeting at which all Holders having a
right to vote thereon were present and voting. Prompt notice of the taking of
action without a meeting shall be given to the Holders entitled to vote who have
not consented in writing. The Administrative Trustees may specify that any
written ballot submitted to the Security Holder for the purpose of taking any
action without a meeting shall be returned to the Trust within the time
specified by the Administrative Trustees;
(ii) each Holder may authorize any Person to act
for it by proxy on all matters in which a Holder is entitled to participate,
including waiving notice of any meeting, or voting or participating at a
meeting. No proxy shall be valid after the expiration of 11 months from the date
thereof unless otherwise provided in the proxy. Every proxy shall be revocable
at the pleasure of the Holder of Securities executing it. Except as otherwise
provided herein, all matters relating to the giving, voting or validity of
proxies shall be governed by the General Corporation Law of the State of
Delaware relating to proxies, and judicial interpretations thereunder, as if the
Trust were a Delaware corporation and the Holders were stockholders of a
Delaware corporation;
(iii) each meeting of the Holders shall be
conducted by the Administrative Trustees or by such other Person that the
Administrative Trustees may designate; and
(iv) unless the Business Trust Act, this
Declaration, the terms of the Securities, the Trust Indenture Act or the listing
rules of any stock exchange on which the Capital Securities are then listed or
trading otherwise provides, the Administrative Trustees, in their sole
discretion, shall establish all other provisions relating to meetings of
Holders, including notice of the time, place or purpose of any meeting at which
any matter is to be voted on by any Holders of Securities, waiver of any such
notice, action by consent without a meeting, the establishment of a record date,
quorum requirements, voting in person or by proxy or any other matter with
respect to the exercise of any such right to vote.
71
<PAGE>
ARTICLE XIII
REPRESENTATIONS OF PROPERTY TRUSTEE
AND DELAWARE TRUSTEE
SECTION 13.1 Representations and Warranties of Property
Trustee.
The Trustee that acts as initial Property Trustee represents
and warrants to the Trust and to the Sponsor at the date of this Declaration,
and each Successor Property Trustee represents and warrants to the Trust and the
Sponsor at the time of the Successor Property Trustee's acceptance of its
appointment as Property Trustee (with appropriate changes to clause (a) below)
that:
(a) The Property Trustee is a New York banking corporation
with trust powers and authority to execute and deliver, and to carry out and
perform its obligations under the terms of, this Declaration;
(b) The execution, delivery and performance by the Property
Trustee of this Declaration has been duly authorized by all necessary corporate
action on the part of the Property Trustee. This Declaration has been duly
executed and delivered by the Property Trustee and constitutes a legal, valid
and binding obligation of the Property Trustee, enforceable against it in
accordance with its terms, subject to applicable bankruptcy, reorganization,
moratorium, insolvency, and other similar laws affecting creditors' rights
generally and to general principles of equity and the discretion of the court
(regardless of whether the enforcement of such remedies is considered in a
proceeding in equity or at law);
(c) The execution, delivery and performance of this
Declaration by the Property Trustee does not conflict with or constitute a
breach of the charter or by-laws of the Property Trustee; and
(d) No consent, approval or authorization of, or registration
with or notice to, any New York State or federal banking authority is required
for the execution, delivery or performance by the Property Trustee of this
Declaration.
SECTION 13.2 Representations and Warranties of Delaware
Trustee.
The Trustee that acts as initial Delaware Trustee represents
and warrants to the Trust and to the Sponsor at the date of this Declaration,
and each Successor Delaware Trustee represents and warrants to the Trust and the
Sponsor at the time of the Successor Delaware Trustee's acceptance of its
appointment as Delaware Trustee that:
72
<PAGE>
(a) 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;
(b) The execution, delivery and performance by the Delaware
Trustee of this Declaration has been duly authorized by all necessary corporate
action on the part of the Delaware Trustee. This Declaration has been duly
executed and delivered by the Delaware Trustee and constitutes a legal, valid
and binding obligation of the Delaware Trustee, enforceable against it in
accordance with its terms, subject to applicable bankruptcy, reorganization,
moratorium, insolvency, and other similar laws affecting creditors' rights
generally and to general principles of equity and the discretion of the court
(regardless of whether the enforcement of such remedies is considered in a
proceeding in equity or at law);
(c) No consent, approval or authorization of, or registration
with or notice to, any federal banking authority is required for the execution,
delivery or performance by the Delaware Trustee of this Declaration; and
(d) The Delaware Trustee is a natural person who is a resident
of the State of Delaware or, if not a natural person, an entity which has its
principal place of business in the State of Delaware.
ARTICLE XIV
REGISTRATION RIGHTS
SECTION 14.1 Registration Rights Agreement.
The Holders of the Capital Securities, the Debentures and the
Capital Securities Guarantee are entitled to the benefits of the Registration
Rights Agreement.
ARTICLE XV
MISCELLANEOUS
SECTION 15.1 Notices.
All notices provided for in this Declaration shall be in
writing, duly signed by the party giving such notice, and shall be delivered,
telecopied or mailed by first class mail, as follows:
73
<PAGE>
(a) if given to the Trust, in care of the Administrative
Trustees at the Trust's mailing address set forth below (or such other address
as the Trust may give notice of to the Holders and the Property Trustee):
Imperial Capital Trust I
c/o Imperial Bancorp
9920 South La Cienega Boulevard, 14th Floor
Inglewood, California 90301
Attention: Office of General Counsel
(b) if given to the Delaware Trustee, at the mailing address
set forth below (or such other address as Delaware Trustee may give notice of to
the Holders):
Chase Manhattan Bank Delaware
1201 Market Street
Wilmington, Delaware 19801
Attention: Corporate Trustee Administration Department
(c) if given to the Property Trustee, at the Property
Trustee's mailing address set forth below (or such other address as the Property
Trustee may give notice of to the Holders):
The Chase Manhattan Bank
450 West 33rd Street
New York, New York 10001
Attention: Corporate Trustee Administration Department
(d) if given to the Holder of the Common Securities, at the
mailing address of the Sponsor set forth below (or such other address as the
Holder of the Common Securities may give notice to the Trust and the Property
Trustee):
Imperial Bancorp
9920 South La Cienega Boulevard, 14th Floor
Inglewood, California 90301
Attention: General Counsel
74
<PAGE>
(e) if given to any other Holder, at the address set
forth on the books and records of the Trust.
All such notices shall be deemed to have been given when
received in person, telecopied with receipt confirmed, or mailed by first class
mail, postage prepaid except that if a notice or other document is refused
delivery or cannot be delivered because of a changed address of which no notice
was given, such notice or other document shall be deemed to have been delivered
on the date of such refusal or inability to deliver.
SECTION 15.2 Governing Law.
This Declaration and the rights of the parties hereunder shall
be governed by and interpreted in accordance with the laws of the State of
Delaware and all rights and remedies shall be governed by such laws without
regard to principles of conflict of laws of the State of Delaware or any other
jurisdiction that would call for the application of the law of any jurisdiction
other than the State of Delaware; provided, however, that there shall not be
applicable to the parties hereunder or this Declaration any provision of the
laws (statutory or common) of the State of Delaware (other than the Business
Trust Act) pertaining to trusts that relate to or regulate, in a manner
inconsistent with the terms hereof (A) the filing with any court or governmental
body or agency of Trustee accounts or schedules of Trustee fees and charges, (B)
affirmative requirements to post bonds for Trustees, officers, agents or
employees of a trust, (C) the necessity for obtaining court or other
governmental approval concerning the acquisition, holding or disposition of real
or personal property, (D) fees or other sums payable to Trustees, officers,
agents or employees of a trust, (E) the allocation of receipts and expenditures
to income or principal, (F) restrictions or limitations on the permissible
nature, amount or concentration of trust investments or requirements relating to
the titling, storage or other manner of holding or investing Trust assets or (G)
the establishment of fiduciary or other standards of responsibility or
limitations on the acts or powers of trustees that are inconsistent with the
limitations or liabilities or authorities and powers of the Trustees hereunder
as set forth or referenced in this Declaration, provided that, the immunities
and standard of care of the Property Trustee in connection with the
administration of its trusts hereunder shall be governed by and interpreted in
accordance with the laws of the jurisdiction of its incorporation. Section 3540
of Title 12 of the Delaware Code shall not apply to the Trust.
SECTION 15.3 Intention of the Parties.
It is the intention of the parties hereto that the Trust be
classified for United States federal income tax purposes as a grantor trust. The
provisions of this Declaration shall be interpreted to further this intention of
the parties. The parties hereto agree, and any Holder
75
<PAGE>
by the purchase of a Trust Security shall be deemed to have agreed, to treat in
all tax and accounting filings and reports (i) the Trust as a grantor trust and
(ii) the Debentures as indebtedness.
SECTION 15.4 Headings.
Headings contained in this Declaration are inserted for
convenience of reference only and do not affect the interpretation of this
Declaration or any provision hereof.
SECTION 15.5 Successors and Assigns.
Whenever in this Declaration any of the parties hereto is
named or referred to, the successors and assigns of such party shall be deemed
to be included, and all covenants and agreements in this Declaration by the
Sponsor and the Trustees shall bind and inure to the benefit of their respective
successors and assigns, whether so expressed.
SECTION 15.6 Partial Enforceability.
If any provision of this Declaration, or the application of
such provision to any Person or circumstance, shall be held invalid, the
remainder of this Declaration, or the application of such provision to persons
or circumstances other than those to which it is held invalid, shall not be
affected thereby.
SECTION 15.7 Counterparts.
This Declaration may contain more than one counterpart of the
signature page and this Declaration may be executed by the affixing of the
signature of the Sponsor and each of the Trustees to one of such counterpart
signature pages. All of such counterpart signature pages shall be read as though
one, and they shall have the same force and effect as though all of the signers
had signed a single signature page.
76
<PAGE>
IN WITNESS WHEREOF, the undersigned have caused these presents
to be executed as of the day and year first above written.
Robert M. Franko,
in his capacity as Administrative Trustee
/s/ Robert M. Franko
-------------------------------------------------
Richard M. Baker,
in his capacity as Administrative Trustee
/s/ Richard M. Baker
-------------------------------------------------
CHASE MANHATTAN BANK DELAWARE,
as Delaware Trustee
By: /s/ John Cashin
---------------------------------------------
John Cashin
Senior Trust Officer
THE CHASE MANHATTAN BANK,
as Property Trustee
By: /s/ Richard M. Lorenzen
----------------------------------------------
Richard M. Lorenzen
Senior Trust Officer
IMPERIAL BANCORP,
as Sponsor
By:/s/ Robert M. Franko
----------------------------------------------
Robert M. Franko
Executive Vice President
<PAGE>
ANNEX I
TERMS OF
9.98% SERIES A/SERIES B/PRIVATE EXCHANGE CAPITAL SECURITIES
COMMON SECURITIES
Pursuant to Section 7.1 of the Amended and Restated
Declaration of Trust, dated as of April 23, 1997 (as amended from time to time,
the "Declaration"), the designation, rights, privileges, restrictions,
preferences and other terms and provisions of the Securities are set out below
(each capitalized term used but not defined herein has the meaning set forth in
the Declaration or, if not defined in such Declaration, as defined in the
Offering Memorandum):
1. Designation and Number.
(a) Capital Securities. 75,000 Series A Capital Securities
of the Trust, 75,000 Series B Capital Securities of the Trust, 75,000 Private
Exchange Capital Securities, each series with an aggregate liquidation amount
with respect to the assets of the Trust of Seventy Five Million dollars
($75,000,000), and each with a liquidation amount with respect to the assets of
the Trust of $1,000 per Security, are hereby designated for the purposes of
identification only as "9.98% Series A Capital Securities", "9.98% Series B
Capital Securities" and "9.98% Private Exchange Capital Securities",
respectively (collectively, the "Capital Securities"). The certificates
evidencing the Capital Securities shall be substantially in the form of Exhibit
A-1 to the Declaration, with such changes and additions thereto or deletions
therefrom as may be required by ordinary usage, custom or practice or to conform
to the rules of any stock exchange on which the Capital Securities are listed.
(b) Common Securities. 2,320 Common Securities of the Trust
with an aggregate liquidation amount with respect to the assets of the Trust of
Two Million Three Hundred Twenty Thousand dollars ($2,320,000) and a liquidation
amount with respect to the assets of the Trust of $1,000 per Security, are
hereby designated for the purposes of identification only as "Common Securities"
(the "Common Securities"). The certificates evidencing the Common Securities
shall be substantially in the form of Exhibit B-1 to the Declaration, with such
changes and additions thereto or deletions therefrom as may be required by
ordinary usage, custom or practice.
2. Distributions.
(a) Distributions payable on each Security will be fixed at
a rate per annum of 9.98% (the "Coupon Rate") of the liquidation amount of
$1,000 per Security (the "Liquidation Amount"), such rate being the rate of
interest payable on the Debentures to be held by the Property Trustee.
Distributions in arrears for more than one semi-annual period will bear
additional distributions thereon compounded semi-annually at the Coupon Rate (to
the
I - 1
<PAGE>
extent permitted by applicable law). Pursuant to the Registration Rights
Agreement, in certain limited circumstances the Debenture Issuer will be
required to pay Liquidated Damages (as defined in the Registration Rights
Agreement) with respect to the Debentures. The term "Distributions", as used
herein, includes distributions of any such interest and Liquidated Damages
payable unless otherwise stated. A Distribution is payable only to the extent
that payments are made in respect of the Debentures held by the Property Trustee
and to the extent the Property Trustee has funds on hand legally available
therefor.
(b) Distributions on the Securities will be cumulative, will
accumulate from the most recent date to which Distributions have been paid or
duly provided for or, if no Distributions have been paid or duly provided for,
from April 23, 1997, and will be payable semi-annually in arrears on June 30 and
December 31 of each year, commencing on June 30, 1997 (each, a "Distribution
Date"), except as otherwise described below. Distributions will be computed on
the basis of a 360-day year consisting of twelve 30-day months and for any
period less than a full calendar month on the basis of the actual number of days
elapsed in such month. As long as no Event of Default has occurred and is
continuing under the Indenture, the Debenture Issuer has the right under the
Indenture to defer payments of interest by extending the interest payment period
at any time and from time to time on the Debentures for a period not exceeding
10 consecutive semi-annual periods, including the first such semi-annual period
during such period (each an "Extension Period"), during which Extension Period
no interest shall be due and payable on the Debentures, provided that no
Extension Period shall end on a day other than an interest payment date for the
Debentures or shall extend beyond the Maturity Date of the Debentures. As a
consequence of such deferral, Distributions will also be deferred. Despite such
deferral, Distributions will continue to accumulate with additional
Distributions thereon (to the extent permitted by applicable law but not at a
rate greater than the rate at which interest is then accruing on the Debentures)
at the Coupon Rate compounded semi-annually during any such Extension Period.
Prior to the termination of any such Extension Period, the Debenture Issuer may
further defer payments of interest by further extending such Extension Period;
provided that such Extension Period, together with all such previous and further
extensions within such Extension Period, may not exceed 10 consecutive
semi-annual periods, including the first semi-annual period during such
Extension Period, or extend beyond the Maturity Date of the Debentures. Upon the
termination of any Extension Period and the payment of all amounts then due, the
Debenture Issuer may commence a new Extension Period, subject to the above
requirements.
(c) Distributions on the Securities will be payable to the
Holders thereof as they appear on the books and records of the Trust on the
fifteenth day of the month preceding the month in which the relevant
Distribution Date occurs, which Distribution Dates correspond to the interest
payment dates on the Debentures. Subject to any applicable laws and regulations
and the provisions of the Declaration, each such payment in respect of the
Capital Securities will be made as follows: (i) if the Capital Securities are
held in global form by a Clearing Agency (or its nominee), in accordance with
the procedures of the Clearing Agency, and (ii) if the Capital Securities are
held in definitive form, by check mailed to the address of
I - 2
<PAGE>
the holder thereof entitled thereto as reflected in the records of the
Registrar, unless otherwise agreed by the Trust. The relevant record dates for
the Common Securities shall be the same as the record dates for the Capital
Securities. Distributions payable on any Securities that are not punctually paid
on any Distribution Date, as a result of the Debenture Issuer having failed to
make a payment under the Debentures, will cease to be payable to the Holder on
the relevant record date, and such defaulted Distribution will instead be
payable to the Person in whose name such Securities are registered on the
special record date or other specified date determined in accordance with the
Indenture. If any date on which Distributions are payable on the Securities is
not a Business Day, then payment of the Distribution payable on such date will
be made on the next succeeding day that is a Business Day (and without any
interest or other payment in respect of any such delay), with the same force and
effect as if made on such date.
(d) In the event that there is any money or other property
held by or for the Trust on a Distribution Date that is not accounted for
hereunder, such property shall be distributed Pro Rata (as defined herein) among
the Holders of the Securities.
3. Liquidation Distribution Upon Dissolution.
In the event of any dissolution of the Trust or the Sponsor
otherwise gives notice of its election to dissolve the Trust pursuant to and in
compliance with the provisions of Section 8.1(a)(iii) of the Declaration, the
Trust shall be liquidated by the Administrative Trustees as expeditiously as the
Administrative Trustees determine to be possible by distributing, after paying
or making reasonable provision to pay all claims and obligations of the Trust in
accordance with Section 3808(e) of the Business Trust Act, to the Holders a Like
Amount (as defined below) of the Debentures, unless such distribution is
determined by the Property Trustee not to be practicable, in which event such
Holders will be entitled to receive out of the assets of the Trust legally
available for distribution to Holders, after paying or making reasonable
provision to pay all claims and obligations of the Trust in accordance with
Section 3808(e) of the Business Trust Act, an amount equal to the aggregate of
the liquidation amount of $1,000 per Security plus accumulated and unpaid
Distributions thereon to the date of payment (such amount being the "Liquidation
Distribution").
"Like Amount" means (i) with respect to a redemption of the
Securities, Securities having a Liquidation Amount equal to the principal amount
of Debentures to be paid in accordance with their terms and (ii) with respect to
a distribution of Debentures upon the liquidation of the Trust, Debentures
having a principal amount equal to the Liquidation Amount of the Securities of
the Holder to whom such Debentures are distributed.
If, upon any such liquidation, the Liquidation Distribution
can be paid only in part because the Trust has insufficient assets on hand
legally available to pay in full the aggregate Liquidation Distribution, then
the amounts payable directly by the Trust on the Capital Securities shall be
paid on a Pro Rata basis.
I - 3
<PAGE>
4. Redemption and Distribution.
(a) Upon the repayment of the Debentures in whole or in
part, at maturity or upon early redemption (either at the option of the
Debenture Issuer or pursuant to a Special Event, as described below), the
proceeds from such repayment shall be simultaneously applied by the Property
Trustee (subject to the Property Trustee having received notice no later than 45
days prior to such repayment) to redeem a Like Amount of the Securities at a
redemption price equal to (i) in the case of the repayment of the Debentures at
maturity, the Maturity Redemption Price (as defined below), (ii) in the case of
the optional redemption of the Debentures upon the occurrence and continuation
of a Special Event, the Special Event Redemption Price (as defined below) and
(iii) in the case of the optional redemption of the Debentures other than as a
result of the occurrence and continuance of a Special Event, the Optional
Redemption Price (as defined below). The Maturity Redemption Price, the Special
Event Redemption Price and the Optional Redemption Price are referred to
collectively as the "Redemption Price". Holders will be given not less than 30
nor more than 60 days notice of such redemption.
(b) (i) The "Maturity Redemption Price", with respect to
a redemption of Securities, shall mean an amount equal to the principal of
and accrued and unpaid interest on the Debentures as of the maturity date
thereof.
(ii) In the case of an optional redemption, if fewer than
all the outstanding Securities are to be so redeemed, the Securities will be
redeemed Pro Rata and the Capital Securities to be redeemed will be determined
as described in Section 4(f)(ii) below. Upon the entry of an order for the
dissolution of the Trust by a court of competent jurisdiction, the Debentures
thereafter will be subject to optional repayment, in whole, but not in part, on
or after June 30, 2007 (the "Initial Optional Redemption Date").
The Debenture Issuer shall have the right (subject to the
conditions in the Indenture) to elect to redeem the Debentures in whole or in
part at any time on or after the Initial Optional Redemption Date, upon not less
than 30 days and not more than 60 days notice, at the Optional Redemption Price
and, simultaneous with such redemption, to cause a Like Amount of the Securities
to be redeemed by the Trust at the Optional Redemption Price on a Pro Rata
basis. "Optional Redemption Price" shall mean a price equal to the percentage of
the liquidation amount of Securities to be redeemed plus accumulated and unpaid
Distributions thereon, if any, to the date of such redemption, if redeemed
during the 12-month period beginning June 30 of the years indicated below:
I - 4
<PAGE>
Year Percentage
---- ----------
2007 105.113
2008 104.601
2009 104.090
2010 103.579
2011 103.068
2012 102.556
2013 102.045
2014 101.534
2015 101.023
2016 100.511
2017 and thereafter 100.00
(c) If at any time a Tax Event or a Regulatory Capital Event
(each as defined below, and each a "Special Event") occurs, the Debenture Issuer
shall have the right (subject to the conditions set forth in the Indenture) at
any time prior to the Initial Optional Redemption Date, upon not less than 30
nor more than 60 days notice, to redeem the Debentures in whole, but not in
part, within the 90 days following the occurrence of such Special Event (the "90
Day Period"), and, simultaneous with such redemption, to cause a Like Amount of
the Securities to be redeemed by the Trust at the Special Event Redemption Price
on a Pro Rata basis.
"Tax Event" shall occur upon receipt by the Administrative
Trustees and the Sponsor of an opinion of Weil, Gotshal & Manges LLP, or any
other nationally recognized tax counsel (a "Tax Event Opinion") experienced in
such matters to the effect that, as a result of any amendment to, or change
(including any announced prospective change) in, the laws or any regulations
thereunder of the United States or any political subdivision or taxing authority
thereof or therein, or as a result of any official administrative pronouncement
or judicial decision interpreting or applying such laws or regulations, which
amendment or change is effective or which pronouncement or decision is announced
on or after the Issue Date, there is more than an insubstantial risk that (i)
the Trust is, or will be within 90 days of the date of such opinion, subject to
United States federal income tax with respect to income received or accrued on
the Debentures, (ii) interest payable by the Debenture Issuer on the Debentures
is not, or within 90 days of the date of such opinion, will not be, deductible
by the Debenture Issuer, in whole or in part, for United States federal income
tax purposes, or (iii) the Trust is, or will be within 90 days of the date of
such opinion, subject to more than a de minimis amount of other taxes, duties or
other governmental charges.
"Regulatory Capital Event" shall occur at any time following
the date (the "Election Date") on which the Debenture Issuer shall effectively
elect to treat the Capital Securities as Tier 1 Capital (or its equivalent),
that the Debenture Issuer shall have received an opinion of independent bank
regulatory counsel experienced in such matters to the effect that,
I - 5
<PAGE>
as a result of (a) any amendment to, or change (including any announced
prospective change) in, the laws (or any regulations thereunder) of the United
States or any rules, guidelines or policies of the Federal Reserve Board or (b)
any official administrative pronouncement or judicial decision interpreting or
applying such laws or regulations, which amendment or change is effective or
such pronouncement or decision is announced on or after the Election Date, the
Capital Securities do not constitute, or within 90 days of the date thereof,
will not constitute, Tier I Capital (or its then equivalent); provided, however,
that a Regulatory Capital Event shall not occur by reason of the use of the
proceeds of the Capital Securities in the manner contemplated by the Offering
Memorandum.
"Special Event Redemption Price" shall mean, with respect to a
redemption of Securities, a price equal to the greater of (i) 100% of the
principal of a Like Amount of Debentures to be redeemed or (ii) the sum, as
determined by a Quotation Agent (as defined in the Indenture), of the present
values of the principal amount and premium payable with respect to an optional
redemption of a Like Amount of the Debentures on the Initial Optional Redemption
Date, together with scheduled payments of interest on the Debentures from the
redemption date to and including the Initial Optional Redemption Date,
discounted to the redemption date on a semi-annual basis (assuming a 360-day
year consisting of twelve 30-day months) at the Adjusted Treasury Rate (as
defined in the Indenture), plus, in each case, accumulated and unpaid
Distributions thereon, if any, to the date of such redemption.
(d) On and from the date fixed by the Administrative Trustees
for any distribution of Debentures and liquidation of the Trust: (i) the
Securities will no longer be deemed to be outstanding and (ii) the Clearing
Agency or its nominee (or any successor Clearing Agency or its nominee), as the
Holder of the Capital Securities, will receive a registered global certificate
or certificates representing the Debentures to be delivered upon such
distribution and any certificates representing Securities not held by the
Clearing Agency or its nominee (or any successor Clearing Agency or its nominee)
will be deemed to represent beneficial interests in a Like Amount of Debentures
until such certificates are presented to the Debenture Issuer or its agent for
transfer or reissue.
(e) The Trust may not redeem fewer than all the outstanding
Securities unless all accumulated and unpaid Distributions have been paid on all
Securities for all semi-annual Distribution periods terminating on or before the
date of redemption.
(f) The procedure with respect to redemptions or distributions
of Debentures shall be as follows:
(i) Notice of any redemption of, or notice of distribution of
Debentures in exchange for, the Securities (a "Redemption/Distribution Notice")
will be given by the Trust by mail to each Holder to be redeemed or exchanged
not fewer than 30 nor more than 60 days before the date fixed for redemption or
exchange thereof which, in the case of a redemption,
I - 6
<PAGE>
will be the date fixed for redemption of the Debentures. The
Redemption/Distribution Notice shall identify the Securities to be redeemed or
exchanged and shall state:
(A) the redemption/distribution date;
(B) the Redemption Price; provided, however, if the Redemption
Price is not known at the time the Redemption/Distribution Notice is
sent, such notice shall set forth the manner of calculation thereof;
(C) the name and address of the Paying Agent;
(D) that Securities called for redemption or exchange must be
surrendered to the Paying Agent to collect the Redemption Price;
(E) if fewer than all of the outstanding Securities are to
redeemed or exchanged, the identification and amounts of the particular
Securities to be redeemed or exchanged, as the case may be;
(F) that, unless the Debenture Issuer defaults in paying the
Redemption Price, any distributions on the Securities called for
redemption will cease to accrue on and after such redemption date; and
(G) the CUSIP number, if any, of the Securities called for
redemption or exchange.
For purposes of the calculation of the date of redemption or exchange and the
dates on which notices are given pursuant to this Section 4(f)(i), a
Redemption/Distribution Notice shall be deemed to be given on the day such
notice is first mailed by first-class mail, postage prepaid, to Holders. Each
Redemption/Distribution Notice shall be addressed to the Holders of Securities
at the address of each such Holder appearing in the books and records of the
Trust. No defect in the Redemption/Distribution Notice or in the mailing of
either thereof with respect to any Holder shall affect the validity of the
redemption or exchange proceedings with respect to any other Holder.
(ii) In the event that fewer than all the outstanding
Securities are to be redeemed, the Securities to be redeemed shall be redeemed
Pro Rata from each Holder of Securities, it being understood that, in respect of
Capital Securities registered in the name of and held of record by the Clearing
Agency or its nominee (or any successor Clearing Agency or its nominee), the
distribution of the proceeds of such redemption will be made to the Clearing
Agency and disbursed by such Clearing Agency in accordance with the procedures
applied by such agency or nominee.
I - 7
<PAGE>
(iii) If Securities are to be redeemed and the Trust gives a
Redemption/Distribution Notice, (which notice will be irrevocable), then (A)
with respect to Capital Securities issued in book-entry form, by 12:00 noon, New
York City time, on the redemption date, provided that the Debenture Issuer has
paid the Property Trustee a sufficient amount of cash in connection with the
related redemption or maturity of the Debentures by 10:00 a.m., New York City
time, on the maturity date or the date of redemption, as the case requires, the
Property Trustee will deposit irrevocably with the Clearing Agency or its
nominee (or successor Clearing Agency or its nominee) funds sufficient to pay
the applicable Redemption Price with respect to such Capital Securities, and (B)
with respect to Capital Securities issued in certificated form and Common
Securities, provided that the Debenture Issuer has paid the Property Trustee a
sufficient amount of cash in connection with the related redemption or maturity
of the Debentures, the Property Trustee will pay the relevant Redemption Price
to the Holders of such Securities against presentation to the Paying Agent of
the certificates therefor. If a Redemption/Distribution Notice shall have been
given and funds deposited as required, if applicable, then immediately prior to
the close of business on the date of such deposit, or on the redemption date, as
applicable, Distributions will cease to accumulate on the Securities so called
for redemption and all rights of Holders so called for redemption will cease,
except the right of the Holders of such Securities to receive the Redemption
Price, but without interest on such Redemption Price, and such Securities shall
cease to be outstanding.
(iv) Payment of accumulated and unpaid Distributions on the
Redemption Date of the Securities will be subject to the rights of Holders of
Securities on the close of business on a regular record date in respect of a
Distribution Date occurring on or prior to such Redemption Date.
Neither the Administrative Trustees nor the Trust shall be
required to register or cause to be registered the transfer of (i) any
Securities beginning on the opening of business 15 days before the day of
mailing of a notice of redemption or any notice of selection of Securities for
redemption or (ii) any Securities selected for redemption except the unredeemed
portion of any Security being redeemed. If any date fixed for redemption of
Securities is not a Business Day, then payment of the Redemption Price payable
on such date will be made on the next succeeding day that is a Business Day (and
without any interest or other payment in respect of any such delay), with the
same force and effect as if made on such date fixed for redemption. If payment
of the Redemption Price in respect of any Securities is improperly withheld or
refused and not paid either by the Property Trustee or by the Sponsor as
guarantor pursuant to the relevant Securities Guarantee, Distributions on such
Securities will continue to accumulate from the original redemption date to the
actual date of payment, in which case the actual payment date will be considered
the date fixed for redemption for purposes of calculating the Redemption Price.
I - 8
<PAGE>
(v) Redemption/Distribution Notices shall be sent by the
Property Trustee on behalf of the Trust to (A) in respect of the Capital
Securities, the Clearing Agency or its nominee (or any successor Clearing Agency
or its nominee) if the Global Certificates have been issued or, if Definitive
Capital Security Certificates have been issued, to the Holder thereof, and (B)
in respect of the Common Securities, to the Holder thereof.
(vi) Subject to the foregoing and applicable law (including,
without limitation, United States federal securities laws and banking laws),
provided the acquiror is not the Holder of the Common Securities or the obligor
under the Indenture, the Sponsor or any of its subsidiaries may at any time and
from time to time purchase outstanding Capital Securities by tender, in the open
market or by private agreement.
5. Voting Rights - Capital Securities.
(a) Except as provided under Sections 5(b) and 7 and as
otherwise required by law and the Declaration, the Holders of the Capital
Securities will have no voting rights.
(b) So long as any Debentures are held by the Property
Trustee, the Trustees shall not (i) direct the time, method and place of
conducting any proceeding for any remedy available to the Debenture Trustee, or
executing any trust or power conferred on such Debenture Trustee with respect to
the Debentures, (ii) waive any past default that is waivable under Section 5.7
of the Indenture, (iii) exercise any right to rescind or annul a declaration of
acceleration of the maturity of the principal of the Debentures or (iv) consent
to any amendment, modification or termination of the Indenture or the
Debentures, where such consent shall be required, without, in each case,
obtaining the prior approval of the Holders of a Majority in liquidation amount
of all outstanding Capital Securities; provided, however, that where a consent
under the Indenture would require the consent of each holder of Debentures
affected thereby, no such consent shall be given by the Property Trustee without
the prior approval of each Holder of the Capital Securities. The Trustees shall
not revoke any action previously authorized or approved by a vote of the Holders
of the Capital Securities except by subsequent vote of such Holders. Subject to
Section 2.7 of the Declaration, the Property Trustee shall notify each Holder of
Capital Securities of any notice of default with respect to the Debentures. In
addition to obtaining the foregoing approvals of such Holders of the Capital
Securities, prior to taking any of the foregoing actions, the Trustees shall
obtain an opinion of counsel experienced in such matters to the effect that the
Trust will not be classified as an association taxable as a corporation for
United States federal income tax purposes on account of such action.
If an Event of Default under the Declaration has occurred and
is continuing and such event is attributable to the failure of the Debenture
Issuer to pay principal of or premium, if any, or interest on the Debentures on
the due date (or in the case of redemption, on the redemption date), then a
Holder of Capital Securities may directly institute a proceeding for enforcement
of payment to such Holder of the principal of or premium, if any, or interest on
I - 9
<PAGE>
a Like Amount of Debentures (a "Direct Action") on or after the respective due
date specified in the Debentures. In connection with such Direct Action, the
rights of the Common Securities Holder will be subordinated to the rights of
such Holder of Capital Securities to the extent of any payment made by the
Debenture Issuer to such Holder of Capital Securities in such Direct Action.
Except as provided in the second preceding sentence, the Holders of Capital
Securities will not be able to exercise directly any other remedy available to
the holders of the Debentures.
Any approval or direction of Holders of Capital Securities may
be given at a separate meeting of Holders of Capital Securities convened for
such purpose, at a meeting of all of the Holders of Securities in the Trust or
pursuant to written consent. The Administrative Trustees will cause a notice of
any meeting at which Holders of Capital Securities are entitled to vote, or of
any matter upon which action by written consent of such Holders is to be taken,
to be mailed to each Holder of record of Capital Securities. Each such notice
will include a statement setting forth (i) the date of such meeting or the date
by which such action is to be taken, (ii) a description of any resolution
proposed for adoption at such meeting on which such Holders are entitled to vote
or of such matter upon which written consent is sought and (iii) instructions
for the delivery of proxies or consents.
No vote or consent of the Holders of the Capital Securities
will be required for the Trust to redeem and cancel Capital Securities or to
distribute the Debentures in accordance with the Declaration and the terms of
the Securities.
Notwithstanding that Holders of Capital Securities are
entitled to vote or consent under any of the circumstances described above, any
of the Capital Securities that are owned by the Sponsor or any Affiliate of the
Sponsor shall not be entitled to vote or consent and shall, for purposes of such
vote or consent, be treated as if they were not outstanding.
6. Voting Rights - Common Securities.
(a) Except as provided under Sections 6(b), 6(c) and 7 as
otherwise required by law and the Declaration, the Holders of the Common
Securities will have no voting rights.
(b) Unless an Event of Default shall have occurred and be
continuing, any Trustee may be removed at any time by the holder of the Common
Securities. If an Event of Default has occurred and is continuing, the Property
Trustee and the Delaware Trustee may be removed at such time by the Holders of a
Majority in liquidation amount of the outstanding Capital Securities. In no
event will the Holders of the Capital Securities have the right to vote to
appoint, remove or replace the Administrative Trustees, which voting rights are
vested exclusively in the Sponsor as the Holder of the Common Securities. No
resignation or removal of a Trustee and no appointment of a successor trustee
shall be effective until the acceptance of appointment by the successor trustee
in accordance with the provisions of the Declaration.
I - 10
<PAGE>
(c) So long as any Debentures are held by the Property
Trustee, the Trustees shall not (i) direct the time, method and place of
conducting any proceeding for any remedy available to the Debenture Trustee, or
executing any trust or power conferred on such Debenture Trustee with respect to
the Debentures, (ii) waive any past default that is waivable under Section 5.7
of the Indenture, (iii) exercise any right to rescind or annul a declaration of
acceleration of the maturity of the principal of the Debentures or (iv) consent
to any amendment, modification or termination of the Indenture or the
Debentures, where such consent shall be required, without, in each case,
obtaining the prior approval of the Holders of a Majority in liquidation amount
of all outstanding Common Securities; provided, however, that where a consent
under the Indenture would require the consent of each holder of Debentures
affected thereby, no such consent shall be given by the Property Trustee without
the prior approval of each Holder of the Common Securities. The Trustees shall
not revoke any action previously authorized or approved by a vote of the Holders
of the Common Securities except by subsequent vote of such Holders. Subject to
Section 2.7 of the Declaration, the Property Trustee shall notify each Holder of
Common Securities of any notice of default with respect to the Debentures. In
addition to obtaining the foregoing approvals of such Holders of the Common
Securities, prior to taking any of the foregoing actions, the Trustees shall
obtain an opinion of counsel experienced in such matters to the effect that the
Trust will not be classified as an association taxable as a corporation for
United States federal income tax purposes on account of such action.
If an Event of Default under the Declaration has occurred and
is continuing and such event is attributable to the failure of the Debenture
Issuer to pay principal of or premium, if any, or interest on the Debentures on
the due date (or in the case of redemption, on the redemption date), then a
Holder of Common Securities may institute a Direct Action for enforcement of
payment to such Holder of the principal of or premium, if any, or interest on a
Like Amount of Debentures on or after the respective due date specified in the
Debentures. In connection with any Direct Action, the rights of the Common
Securities Holder will be subordinated to the rights of such Holder of Capital
Securities to the extent of any payment made by the Debenture Issuer to such
Holder of Common Securities in such Direct Action. Except as provided in the
second preceding sentence, the Holders of Common Securities will not be able to
exercise directly any other remedy available to the holders of the Debentures.
Any approval or direction of Holders of Common Securities may
be given at a separate meeting of Holders of Common Securities convened for such
purpose, at a meeting of all of the Holders of Securities in the Trust or
pursuant to written consent. The Administrative Trustees will cause a notice of
any meeting at which Holders of Common Securities are entitled to vote, or of
any matter upon which action by written consent of such Holders is to be taken,
to be mailed to each Holder of record of Common Securities. Each such notice
will include a statement setting forth (i) the date of such meeting or the date
by which such action is to be taken, (ii) a description of any resolution
proposed for adoption at such meeting on which such Holders are entitled to vote
or of such matter upon which written consent is sought and (iii) instructions
for the delivery of proxies or consents.
I - 11
<PAGE>
No vote or consent of the Holders of the Common Securities
will be required for the Trust to redeem and cancel Common Securities or to
distribute the Debentures in accordance with the Declaration and the terms of
the Securities.
7. Amendments to Declaration.
In addition to the requirements set out in Section 12.1 of the
Declaration, the Declaration may be amended from time to time by the Sponsor,
the Property Trustee and the Administrative Trustees, without the consent of the
Holders of the Securities (i) to cure any ambiguity, correct or supplement any
provisions in the Declaration that may be inconsistent with any other
provisions, or to make any other provisions with respect to matters or questions
arising under the Declaration which shall not be inconsistent with the other
provisions of the Declaration, or (ii) to modify, eliminate or add to any
provisions of the Declaration to such extent as shall be necessary to ensure
that the Trust will be classified for United States federal income tax purposes
as a grantor trust at all times that any Securities are outstanding or to ensure
that the Trust will not be required to register as an "Investment Company" under
the Investment Company Act; provided, however, that in the case of clause (i),
such action shall not adversely affect in any material respect the interests of
any Holder of Securities, and any amendments of the Declaration shall become
effective when notice thereof is given to the holders of the Securities. The
Declaration may be amended by the Trustees and the Sponsor with (i) the consent
of Holders representing a Majority in liquidation amount of all outstanding
Securities, and (ii) receipt by the Trustees of an Opinion of Counsel to the
effect that such amendment or the exercise of any power granted to the Trustees
in accordance with such amendment will not affect the Trust's status as a
grantor trust for United States federal income tax purposes or the Trust's
exemption from status as an Investment Company under the Investment Company Act,
provided that, without the consent of each Holder of Trust Securities, the
Declaration may not be amended to (i) change the amount or timing of any
Distribution on the Trust Securities or otherwise adversely affect the amount of
any Distribution required to be made in respect of the Trust Securities as of a
specified date or (ii) restrict the right of a holder of Trust Securities to
institute suit for the enforcement of any such payment on or after such date.
8. Pro Rata.
A reference in these terms of the Securities to any payment,
distribution or treatment as being "Pro Rata" shall mean pro rata to each Holder
according to the aggregate liquidation amount of the Securities held by the
relevant Holder in relation to the aggregate liquidation amount of all
Securities outstanding unless, in relation to a payment, an Event of Default
under the Declaration has occurred and is continuing, in which case any funds
available to make such payment shall be paid first to each Holder of the Capital
Securities pro rata according to the aggregate liquidation amount of Capital
Securities held by the relevant Holder relative to the aggregate liquidation
amount of all Capital Securities outstanding, and only after satisfaction of all
amounts owed to the Holders of the Capital Securities, to each
I - 12
<PAGE>
Holder of Common Securities pro rata according to the aggregate liquidation
amount of Common Securities held by the relevant Holder relative to the
aggregate liquidation amount of all Common Securities outstanding. In any such
proration, the Trust may make such adjustments as may be appropriate in order
that only Securities in authorized denominations shall be redeemed (subject to
the minimum block requirement of Section 9.2(n) of the Declaration).
9. Ranking.
The Capital Securities rank pari passu with the Common
Securities and payment thereon shall be made Pro Rata with the Common
Securities, except that, if an Event of Default under the Declaration occurs and
is continuing, no payments in respect of Distributions on, or payments upon
liquidation, redemption or otherwise with respect to, the Common Securities
shall be made until the Holders of the Capital Securities shall be paid in full
the Distributions, Redemption Price, Liquidation Distribution and other payments
to which they are entitled at such time.
10. Acceptance of Securities Guarantee and Indenture.
Each Holder of Capital Securities and Common Securities, by
the acceptance thereof, agrees to the provisions of the Capital Securities
Guarantee and the Common Securities Guarantee, respectively, including the
subordination provisions therein and to the provisions of the Indenture.
11. No Preemptive Rights.
The Holders of the Securities shall have no preemptive or
similar rights to subscribe for any additional securities.
12. Miscellaneous.
These terms constitute a part of the Declaration.
The Sponsor will provide a copy of the Declaration, the
Capital Securities Guarantee or the Common Securities Guarantee (as may be
appropriate), and the Indenture (including any supplemental indenture) to a
Holder without charge on written request to the Sponsor at its principal place
of business.
I - 13
<PAGE>
EXHIBIT A-1
FORM OF CAPITAL SECURITY CERTIFICATE
[FORM OF FACE OF SECURITY]
[IF THIS GLOBAL SECURITY IS A GLOBAL CAPITAL SECURITY, INSERT:
THIS CAPITAL SECURITY IS A GLOBAL CAPITAL SECURITY WITHIN THE MEANING OF THE
DECLARATION HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF THE
DEPOSITORY TRUST COMPANY (THE "CLEARING AGENCY") OR A NOMINEE OF THE CLEARING
AGENCY. THIS CAPITAL SECURITY IS EXCHANGEABLE FOR CAPITAL SECURITIES REGISTERED
IN THE NAME OF A PERSON OTHER THAN THE CLEARING AGENCY OR ITS NOMINEE ONLY IN
THE LIMITED CIRCUMSTANCES DESCRIBED IN THE DECLARATION AND NO TRANSFER OF THIS
CAPITAL SECURITY (OTHER THAN A TRANSFER OF THIS CAPITAL SECURITY AS A WHOLE BY
THE CLEARING AGENCY TO A NOMINEE OF THE CLEARING AGENCY OR BY A NOMINEE OF THE
CLEARING AGENCY TO THE CLEARING AGENCY OR ANOTHER NOMINEE OF THE CLEARING
AGENCY) MAY BE REGISTERED EXCEPT IN LIMITED CIRCUMSTANCES.
UNLESS THIS CAPITAL SECURITY IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (55 WATER STREET, NEW YORK, NEW
YORK) TO THE TRUST OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR
PAYMENT, AND ANY CAPITAL SECURITY ISSUED IS REGISTERED IN THE NAME OF CEDE & CO.
OR SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY AND ANY PAYMENT HEREON IS MADE TO CEDE & CO., ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY A PERSON IS
WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.]
[IF THIS CAPITAL SECURITY IS A RESTRICTED CAPITAL SECURITY,
INSERT: THE CAPITAL SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT") OR ANY STATE
SECURITIES LAWS OR ANY OTHER APPLICABLE SECURITIES LAW. NEITHER THIS CAPITAL
SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD,
ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE
ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT
SUBJECT TO, REGISTRATION.
A - 1
<PAGE>
THE HOLDER OF THIS CAPITAL SECURITY BY ITS ACCEPTANCE HEREOF
AGREES TO OFFER, SELL OR OTHERWISE TRANSFER THIS CAPITAL SECURITY, PRIOR TO THE
DATE (THE "RESALE RESTRICTION TERMINATION DATE") WHICH IS TWO YEARS AFTER THE
LATER OF THE ORIGINAL ISSUANCE DATE HEREOF AND THE LAST DATE ON WHICH IMPERIAL
BANCORP (THE "COMPANY") OR ANY "AFFILIATE" OF THE COMPANY WAS THE OWNER OF THIS
CAPITAL SECURITY (OR ANY PREDECESSOR OF THIS CAPITAL SECURITY) ONLY (A) TO THE
COMPANY, (B) PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BEEN DECLARED
EFFECTIVE UNDER THE SECURITIES ACT, (C) SO LONG AS THIS CAPITAL SECURITY IS
ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER THE SECURITIES ACT ("RULE
144A"), TO A PERSON IT REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER"
(AS DEFINED IN RULE 144A) THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT
OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS
BEING MADE IN RELIANCE ON RULE 144A, (D) TO AN INSTITUTIONAL "ACCREDITED
INVESTOR" WITHIN THE MEANING OF SUBPARAGRAPH (A)(1), (2), (3) OR (7) OF RULE 501
UNDER THE SECURITIES ACT THAT IS ACQUIRING THIS CAPITAL SECURITY FOR ITS OWN
ACCOUNT, OR FOR THE ACCOUNT OF SUCH AN INSTITUTIONAL ACCREDITED INVESTOR, FOR
INVESTMENT PURPOSES AND NOT WITH A VIEW TO, OR FOR OFFER OR SALE IN CONNECTION
WITH, ANY DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT, OR (E) PURSUANT TO
ANY OTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS UNDER THE
SECURITIES ACT, SUBJECT TO THE RIGHT OF THE TRUST AND THE COMPANY PRIOR TO ANY
SUCH OFFER, SALE OR TRANSFER (i) PURSUANT TO CLAUSE (D) OR (E) TO REQUIRE THE
DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATIONS AND/OR OTHER INFORMATION
SATISFACTORY TO EACH OF THEM, AND (ii) PURSUANT TO CLAUSE (D), TO REQUIRE THAT A
CERTIFICATE OF TRANSFER IN THE FORM APPEARING ON THE REVERSE OF THIS CAPITAL
SECURITY IS COMPLETED AND DELIVERED BY THE TRANSFEREE TO THE TRUST. SUCH HOLDER
FURTHER AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM THIS CAPITAL SECURITY
IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND.]
A - 2
<PAGE>
Certificate Number Number of Capital Securities
CUSIP NO. __________
Certificate Evidencing Capital Securities
of
Imperial Capital Trust I
9.98% [Series A] [Series B] [Private Exchange] Capital Securities
(liquidation amount $1,000 per Capital Security)
Imperial Capital Trust I, a statutory business trust created
under the laws of the State of Delaware (the "Trust"), hereby certifies that
_____ (the "Holder") is the registered owner of [$_______ in aggregate
liquidation amount of Capital Securities of the Trust]1 [the aggregate
liquidation amount of Capital Securities of the Trust specified in Schedule A
hereto]2 representing undivided beneficial interests in the assets of the Trust
designated the 9.98% [Series A] [Series B] [Private Exchange] Capital Securities
(liquidation amount $1,000 per Capital Security) (the "Capital Securities"). The
Capital Securities are transferable on the books and records of the Trust, in
person or by a duly authorized attorney, upon surrender of this certificate duly
endorsed and in proper form for transfer. The designation, rights, privileges,
restrictions, preferences and other terms and provisions of the Capital
Securities represented hereby are issued and shall in all respects be subject to
the provisions of the Amended and Restated Declaration of Trust of the Trust
dated as of April 23, 1997, as the same may be amended from time to time (the
"Declaration"), including the designation of the terms of the Capital Securities
as set forth in Annex I to the Declaration. Capitalized terms used but not
defined herein shall have the meaning given them in the Declaration. The Sponsor
will provide a copy of the Declaration, the Capital Securities Guarantee and the
Indenture to a Holder without charge upon written request to the Trust at its
principal place of business.
Upon receipt of this certificate, the Holder is bound by the
Declaration, the Registration Rights Agreement and is entitled to the benefits
thereunder and to the benefits of the Capital Securities Guarantee, to the
extent provided therein.
By its acceptance, the Holder agrees to treat, for United
States federal income tax purposes, the Debentures as indebtedness and the
Capital Securities as evidence of indirect beneficial ownership in the
Debentures.
- --------
1 Insert in Definitive Capital Securities only.
2 Insert in Global Capital Securities only.
A - 3
<PAGE>
Certificate Number Number of Capital Securities
CUSIP NO. __________
A - 4
<PAGE>
IN WITNESS WHEREOF, the Trust has executed this certificate
this ___ day of _________, ___.
IMPERIAL CAPITAL TRUST I
By:_____________________________
Name:
Title: Administrative Trustee
PROPERTY TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Capital Securities referred to in the
within-mentioned Declaration.
Dated: ________ __, 1997
THE CHASE MANHATTAN BANK,
as Property Trustee
By: _____________________
Authorized Officer
A - 5
<PAGE>
[FORM OF REVERSE OF SECURITY]
Distributions payable on each Capital Security will be fixed
at a rate per annum of 9.98% (the "Coupon Rate") of the liquidation amount of
$1,000 per Capital Security, such rate being the rate of interest payable on the
Debentures to be held by the Property Trustee. Distributions in arrears for more
than one semi-annual period will bear interest thereon compounded semi-annually
at the Coupon Rate (to the extent permitted by applicable law). Pursuant to the
Registration Rights Agreement, in certain limited circumstances the Debenture
Issuer will be required to pay Liquidated Damages (as defined in the
Registration Rights Agreement) with respect to the Debentures. The term
"Distributions", as used herein, includes such cash distributions and any such
interest and such Liquidated Damages payable unless otherwise stated. A
Distribution is payable only to the extent that payments are made in respect of
the Debentures held by the Property Trustee and to the extent the Property
Trustee has funds on hand legally available therefor.
Distributions on the Capital Securities will be cumulative,
will accumulate from the most recent date to which Distributions have been paid
or duly provided for or, if no Distributions have been paid or duly provided
for, from April 23, 1997 and will be payable semi-annually in arrears, on June
30 and December 31 of each year, commencing on June 30, 1997, except as
otherwise described below. Distributions will be computed on the basis of a
360-day year consisting of twelve 30-day months and, for any period less than a
full calendar month, the number of days elapsed in such month. As long as no
Event of Default has occurred and is continuing under the Indenture, the
Debenture Issuer has the right under the Indenture to defer payments of interest
by extending the interest payment period at any time and from time to time on
the Debentures for a period not exceeding 10 consecutive calendar semi-annual
periods, including the first such semi-annual period during such extension
period (each an "Extension Period"), provided that no Extension Period shall end
on a day other than an interest payment date for the Debentures or shall extend
beyond the Maturity Date of the Debentures. As a consequence of such deferral,
Distributions will also be deferred. Despite such deferral, semi-annual
Distributions will continue to accumulate with interest thereon (to the extent
permitted by applicable law, but not at a rate exceeding the rate of interest
then accruing on the Debentures) at the Coupon Rate compounded semi-annually
during any such Extension Period. Prior to the termination of any such Extension
Period, the Debenture Issuer may further defer payments of interest by further
extending such Extension Period; provided that such Extension Period, together
with all such previous and further extensions within such Extension Period, may
not exceed 10 consecutive semi-annual periods, including the first semi-annual
period during such Extension Period, or extend beyond the Maturity Date of the
Debentures. Payments of accumulated Distributions will be payable to Holders as
they appear on the books and records of the Trust on the first record date
preceding the end of the Extension Period. Upon the termination of any Extension
Period and the payment of all
A - 6
<PAGE>
amounts then due, the Debenture Issuer may commence a new Extension Period,
subject to the above requirements.
Subject to the prior obtaining of any regulatory approval then
required and to certain other conditions set forth in the Declaration and the
Indenture, the Property Trustee may, at the direction of the Holder of the
Common Securities, at any time dissolve the Trust and, after satisfaction of
liabilities to creditors of the Trust as required by applicable law, cause the
Debentures to be distributed to the holders of the Securities in liquidation of
the Trust or, simultaneous with any redemption of the Debentures, cause a Like
Amount of the Securities to be redeemed by the Trust.
The Capital Securities shall be governed by, and construed in
accordance with, the laws of the State of Delaware (without regard to conflict
of laws principles that would call for the application of the substantive law of
any jurisdiction other than the State of Delaware).
The Capital Securities shall be redeemable as provided in the
Declaration.
---------------------
A - 7
<PAGE>
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this Capital Security
Certificate to:
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Insert assignees social security or tax identification number)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Insert address and zip code of assignee)
and irrevocably appoints
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- ------------------------ agent to transfer this Capital Security Certificate
on the books of the Trust. The agent may substitute another to act for him
or her.
Date: _______________________
Signature: __________________
(Sign exactly as your name appears on the other side of this Capital Security
Certificate)
Signature Guarantee 3: ___________________________________
- -------------------------
3 Signature must be guaranteed by an "eligible guarantor institution"
that is a bank, stockbroker, savings and loan association or credit
union meeting the requirements of the Registrar, which requirements
include membership or participation in the Securities Transfer Agents
Medallion Program ("STAMP") or such other "signature guarantee program"
as may be determined by the Registrar in addition to, or in
substitution for, STAMP, all in accordance with the Securities and
Exchange Act of 1934, as amended.
A - 8
<PAGE>
[Include the following if the Capital Security bears a Restricted Securities
Legend --
In connection with any transfer of any of the Capital Securities evidenced by
this certificate, the undersigned confirms that such Capital Securities are
being:
CHECK ONE BOX BELOW
(1) [ ] exchanged for the undersigned's own account without
transfer; or
2) [ ] transferred pursuant to and in compliance with Rule 144A
under the Securities Act of 1933; or
(3) [ ] transferred to an institutional "accredited investor"
within the meaning of subparagraph (a)(1), (2), (3) or
(7) of Rule 501 under the Securities Act of 1933 that is
acquiring the Capital Securities for its own account, or
for the account of such an institutional "accredited
investor," for investment purposes and not with a view
to, or for offer or sale in connection with, any
distribution in violatio of the Securities Act of 1933;
or
(4) [ ] transferred pursuant to another available exemption from
the registration requirements of the Securities Act of
1933; or
(5) [ ] transferred pursuant to an effective registration
statement.
Unless one of the boxes is checked, the Registrar will refuse to register any of
the Capital Securities evidenced by this certificate in the name of any person
other than the registered Holder hereof; provided, however, that if box (3) or
(4) is checked, the Registrar may require, prior to registering any such
transfer of the Capital Securities such legal opinions, certifications and other
information as the Trust has reasonably requested to confirm that such transfer
is being made pursuant to an exemption from, or in a transaction not subject to,
the registration requirements of the Securities Act of 1933, such as the
exemption provided by Rule 144 under such Act; provided, further, that (i) if
box 2 is checked, the transferee must also certify that it is a qualified
institutional buyer as defined in Rule 144A or (ii) if box (3) is checked, the
transferee must also provide to the Registrar a Transferee Letter of
Representation in the form attached to the Offering Memorandum of the Trust
dated April 18, 1997; provided, further, that after the date that a Registration
Statement has been filed and so long as such Registration Statement continues to
be effective, the Registrar may only permit transfers for which box (5) has been
checked.
____________________________
Signature
A - 9
<PAGE>
Schedule A 1
The initial aggregate liquidation amount of Capital Securities
evidenced by the Certificate to which this Schedule is attached is
$_____________ (equivalent to ______ Capital Securities). The notations on the
following table evidence decreases and increases in the number of Capital
Securities evidenced by such Certificate.
Liquidation Amount
Decrease in Increase in of Capital Securities
Liquidation Amount Liquidation Amount After such Decrease Notation by
of Capital Securities of Capital Securities or Increase Registrar
- --------------------- --------------------- ----------- ---------
- --------
1. Append to Global Capital Securities only.
A - 10
<PAGE>
EXHIBIT B-1
FORM OF COMMON SECURITY CERTIFICATE
THIS COMMON SECURITY HAS NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT") OR ANY STATE
SECURITIES LAWS OR ANY OTHER APPLICABLE SECURITIES LAW. NEITHER THIS COMMON
SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD,
ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE
ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT
SUBJECT TO, REGISTRATION.
THIS SECURITY MAY NOT BE OFFERED, SOLD, PLEDGED OR
OTHERWISE TRANSFERRED.
B - 1
<PAGE>
Certificate Number Number of Common Securities
Certificate Evidencing Common Securities
of
Imperial Capital Trust I
9.98% Common Securities
(liquidation amount $1,000 per Common Security)
Imperial Capital Trust I, a statutory business trust created
under the laws of the State of Delaware (the "Trust"), hereby certifies that
Imperial Bancorp (the "Holder") is the registered owner of 2,320 common
securities of the Trust representing undivided beneficial interests in the
assets of the Trust designated the 9.98% Common Securities (liquidation amount
$1,000 per Common Security) (the "Common Securities"). The Common Securities are
not transferable. The designation, rights, privileges, restrictions, preferences
and other terms and provisions of the Common Securities represented hereby are
issued and shall in all respects be subject to the provisions of the Amended and
Restated Declaration of Trust of the Trust dated as of April 23, 1997, as the
same may be amended from time to time (the "Declaration"), including the
designation of the terms of the Common Securities as set forth in Annex I to the
Declaration. Capitalized terms used but not defined herein shall have the
meaning given them in the Declaration. The Sponsor will provide a copy of the
Declaration, the Common Securities Guarantee and the Indenture (including any
supplemental indenture) to a Holder without charge upon written request to the
Sponsor at its principal place of business.
Upon receipt of this certificate, the Sponsor is bound by the
Declaration and is entitled to the benefits thereunder and to the benefits of
the Common Securities Guarantee to the extent provided therein.
By its acceptance, the Holder agrees to treat, for United
States federal income tax purposes, the Debentures as indebtedness and the
Common Securities as evidence of indirect beneficial ownership in the
Debentures.
B - 2
<PAGE>
IN WITNESS WHEREOF, the Trust has executed this certificate
this ___ day of _____________, 1997.
IMPERIAL CAPITAL TRUST I
By: ______________________________
Name:
Title: Administrative Trustee
B - 3
<PAGE>
[FORM OF REVERSE OF SECURITY]
Distributions payable on each Common Security will be fixed at
a rate per annum of 9.98% (the "Coupon Rate") of the liquidation amount of
$1,000 per Common Security, such rate being the rate of interest payable on the
Debentures to be held by the Property Trustee. Distributions in arrears for more
than one semi-annual period will bear interest thereon compounded semi-annually
at the Coupon Rate (to the extent permitted by applicable law). Pursuant to the
Registration Rights Agreement, in certain limited circumstances the Debenture
Issuer will be required to pay Liquidated Damages (as defined in the
Registration Rights Agreement) with respect to the Debentures. The term
"Distributions", as used herein, includes such cash distributions and any such
interest and such Liquidated Damages payable unless otherwise stated. A
Distribution is payable only to the extent that payments are made in respect of
the Debentures held by the Property Trustee and to the extent the Property
Trustee has funds legally available therefor.
Distributions on the Common Securities will be cumulative,
will accrue from the most recent date to which Distributions have been paid or
duly provided or, if no Distributions have been paid or duly provided, from
April 23, 1997 and will be payable semi-annually in arrears, on June 30 and
December 30 of each year, commencing on June 30, 1997, except as otherwise
described below. Distributions will be computed on the basis of a 360-day year
consisting of twelve 30-day months and, for any period less than a full calendar
month, the number of days elapsed in such month. As long as no Event of Default
has occurred and is continuing under the Indenture, the Debenture Issuer has the
right under the Indenture to defer payments of interest by extending the
interest payment period at any time and from time to time on the Debentures for
a period not exceeding 10 consecutive calendar semi-annual periods, including
the first such semi-annual period during such extension period (each an
"Extension Period"), provided that no Extension Period shall end on a day other
than an interest payment date for the Debentures or extend beyond the Maturity
Date of the Debentures. As a consequence of such deferral, Distributions will
also be deferred. Despite such deferral, Distributions will continue to
accumulate with interest thereon (to the extent permitted by applicable law, but
not at a rate exceeding the rate of interest then accruing on the Debentures) at
the Coupon Rate compounded semi-annually during any such Extension Period. Prior
to the termination of any such Extension Period, the Debenture Issuer may
further defer payments of interest by further extending such Extension Period;
provided that such Extension Period, together with all such previous and further
extensions within such Extension Period, may not exceed 10 consecutive
semi-annual periods, including the first semi-annual period during such
Extension Period, or extend beyond the Maturity Date of the Debentures. Payments
of accrued Distributions will be payable to Holders as they appear on the books
and records of the Trust on the first record date preceding the end of the
Extension Period. Upon the termination of any Extension Period and the payment
of all amounts then
B - 4
<PAGE>
due, the Debenture Issuer may commence a new Extension Period, subject to the
above requirements.
Subject to the Sponsor obtaining any regulatory prior approval
then required and to certain other conditions set forth in the Declaration and
the Indenture, the Property Trustee may, at the direction of the Holder of the
Common Securities, at any time liquidate the Trust and, after satisfaction of
liabilities to creditors of the Trust as required by applicable law, cause the
Debentures to be distributed to the holders of the Securities in liquidation of
the Trust or, simultaneous with any redemption of the Debentures, cause a Like
Amount of the Securities to be redeemed by the Trust.
The Common Securities shall be governed by, and construed in
accordance with, the laws of the State of Delaware (without regard to conflicts
by laws principles that would call for the application of the substantive law of
any jurisdiction other than the State of Delaware).
The Common Securities shall be redeemable as provided in the
Declaration.
---------------------
B - 5
EXECUTION COPY
====================================
SERIES A CAPITAL SECURITIES GUARANTEE AGREEMENT
Imperial Bancorp
Dated as of April 23, 1997
====================================
<PAGE>
TABLE OF CONTENTS
Page
----
ARTICLE I DEFINITIONS AND INTERPRETATION.............................. 2
SECTION 1.1. Definitions and Interpretation......................... 2
ARTICLE II TRUST INDENTURE ACT......................................... 6
SECTION 2.1. Trust Indenture Act; Application....................... 6
SECTION 2.2. Lists of Holders of Securities......................... 7
SECTION 2.3. Reports by the Capital Securities
Guarantee Trustee...................................... 7
SECTION 2.4. Periodic Reports to Capital Securities
Guarantee Trustee...................................... 7
SECTION 2.5. Evidence of Compliance with Conditions
Precedent.............................................. 8
SECTION 2.6. Events of Default; Waiver.............................. 8
SECTION 2.7. Events of Default; Notice.............................. 8
SECTION 2.8. Conflicting Interests.................................. 9
ARTICLE III POWERS, DUTIES AND RIGHTS OF
CAPITAL SECURITIES GUARANTEE TRUSTEE........................ 9
SECTION 3.1. Powers and Duties of the Capital
Securities Guarantee Trustee........................... 9
SECTION 3.2. Certain Rights of Capital Securities
Guarantee Trustee...................................... 12
SECTION 3.3. Not Responsible for Recitals or Issuance
of Series A Capital Securities
Guarantee.............................................. 15
ARTICLE IV CAPITAL SECURITIES GUARANTEE TRUSTEE........................ 15
SECTION 4.1. Capital Securities Guarantee Trustee;
Eligibility............................................ 15
SECTION 4.2. Appointment, Removal and Resignation of
Capital Securities Guarantee Trustee................... 16
ARTICLE V GUARANTEE................................................... 17
SECTION 5.1. Guarantee.............................................. 17
SECTION 5.2. Waiver of Notice and Demand............................ 17
SECTION 5.3. Obligations Not Affected............................... 17
SECTION 5.4. Rights of Holders...................................... 19
SECTION 5.5. Guarantee of Payment................................... 19
SECTION 5.6. Subrogation............................................ 20
SECTION 5.7. Independent Obligations................................ 20
ARTICLE VI LIMITATION OF TRANSACTIONS; SUBORDINATION................... 20
SECTION 6.1. Limitation of Transactions............................. 20
SECTION 6.2. Ranking................................................ 21
<PAGE>
ARTICLE VII TERMINATION..................................................22
ARTICLE VIII COMPENSATION AND EXPENSES OF
CAPITAL SECURITIES GUARANTEE TRUSTEE.........................22
ARTICLE IX INDEMNIFICATION..............................................23
SECTION 9.1. Exculpation.............................................23
SECTION 9.2. Indemnification.........................................24
ARTICLE X MISCELLANEOUS................................................24
SECTION 10.1. Successors and Assigns................................ 24
SECTION 10.2. Amendments............................................ 24
SECTION 10.3. Notices............................................... 25
SECTION 10.4. Exchange Offer........................................ 26
SECTION 10.5. Benefit............................................... 26
SECTION 10.6. Governing Law......................................... 26
<PAGE>
SERIES A CAPITAL SECURITIES GUARANTEE AGREEMENT
This GUARANTEE AGREEMENT (the "Series A Capital Securities Guarantee"),
dated as of April 23, 1997, is executed and delivered by Imperial Bancorp, a
California corporation (the "Guarantor"), and The Chase Manhattan Bank, a New
York banking corporation, as trustee (the "Capital Securities Guarantee
Trustee"), for the benefit of the Holders (as defined herein) from time to time
of the Series A Capital Securities (as defined herein) of Imperial Capital Trust
I, a Delaware statutory business trust (the "Issuer").
WHEREAS, pursuant to an Amended and Restated Declaration of Trust (the
"Declaration"; and capitalized terms used herein not otherwise defined shall
have the meanings ascribed thereto in the Declaration), dated as of April 23,
1997, among the trustees of the Issuer, the Guarantor, as sponsor, and the
holders from time to time of undivided beneficial interests in the assets of the
Issuer, the Issuer is issuing on the date hereof 75,000 capital securities,
having an aggregate liquidation amount of $75,000,000, such capital securities
being designated the 9.98% Series A Capital Securities (collectively the "Series
A Capital Securities") and, in connection with an Exchange Offer has agreed to
execute and deliver the Series B Capital Securities Guarantee for the benefit of
holders of the Series B Capital Securities.
WHEREAS, as incentive for the Holders to purchase the Series A Capital
Securities, the Guarantor desires irrevocably and unconditionally to agree, to
the extent set forth in this Series A Capital Securities Guarantee, to pay to
the Holders the Guarantee Payments (as defined herein). The Guarantor agrees to
make certain other payments on the terms and conditions set forth herein.
WHEREAS, the Guarantor is executing and delivering a guarantee
agreement (the "Common Securities Guarantee"), with substantially identical
terms to this Series A Capital Securities Guarantee, for the benefit of the
holders of the Common Securities (as defined herein), except that if an Event of
Default has occurred and is continuing, the rights of holders of the Common
Securities to receive Guarantee Payments under the Common Securities Guarantee
are subordinated, to the extent and in the manner set forth in the Common
Securities Guarantee, to the rights of holders of Series A Capital Securities
and the Series B Capital Securities to receive Guarantee Payments under this
<PAGE>
Series A Capital Securities Guarantee and the Series B Capital Securities
Guarantee, as the case may be.
NOW, THEREFORE, in consideration of the purchase by each Holder of the
Series A Capital Securities and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Guarantor executes
and delivers this Series A Capital Securities Guarantee for the benefit of the
Holders.
ARTICLE I
DEFINITIONS AND INTERPRETATION
SECTION 1.1. Definitions and Interpretation
In this Series A Capital Securities Guarantee, unless the context
otherwise requires:
(a) Capitalized terms used in this Series A Capital Securities
Guarantee but not defined in the preamble above have the respective meanings
assigned to them in this Section 1.1;
(b) all references to "the Series A Capital Securities Guarantee" or
"this Series A Capital Securities Guarantee" are to this Series A Capital
Securities Guarantee as modified, supplemented or amended from time to time;
(c) all references in this Series A Capital Securities Guarantee to
Articles and Sections are to Articles and Sections of this Series A Capital
Securities Guarantee, unless otherwise specified;
(d) a term defined in the Trust Indenture Act has the same meaning when
used in this Series A Capital Securities Guarantee, unless otherwise defined in
this Series A Capital Securities Guarantee or unless the context otherwise
requires; and
(e) a reference to the singular includes the plural and vice versa.
"Affiliate" has the same meaning as given to that term in Rule 405
under the Securities Act of 1933, as amended, or any successor rule thereunder.
<PAGE>
"Business Day" means any day other than a Saturday or a Sunday, or a
day on which banking institutions in The City of New York are authorized or
required by law or executive order to close.
"Capital Securities Guarantee Trustee" means The Chase Manhattan Bank,
a New York banking corporation, until a Successor Capital Securities Guarantee
Trustee has been appointed and has accepted such appointment pursuant to the
terms of this Series A Capital Securities Guarantee and thereafter means each
such Successor Capital Securities Guarantee Trustee.
"Common Securities" means the securities representing common undivided
beneficial interests in the assets of the Issuer.
"Corporate Trust Office" means the office of the Capital Securities
Guarantee Trustee at which the corporate trust business of the Capital
Securities Guarantee Trustee shall, at any particular time, be principally
administered, which office at the date of execution of this Agreement is located
at 450 West 33rd Street, New York, New York 10001.
"Covered Person" means any Holder or beneficial owner of Series A
Capital Securities. "Debentures" means the series of subordinated debt
securities of the Guarantor designated the 9.98% Series A Junior Subordinated
Deferrable Interest Debentures due December 31, 2026 held by the Property
Trustee of the Issuer. "Event of Default" means a default by the Guarantor on
any of its payment or other obligations under this Series A Capital Securities
Guarantee. "Guarantee Payments" means the following payments or distributions,
without duplication, with respect to the Series A Capital Securities, to the
extent not paid or made by the Issuer: (i) any accumulated and unpaid
Distributions that are required to be paid on such Series A Capital Securities
to the extent the Issuer has funds on hand legally available therefor at such
time, (ii) the redemption price, including all accumulated and unpaid
Distributions to the date of redemption (the "Redemption Price"), to the extent
the Issuer has funds on hand legally available therefor at such time, with
respect to any Series A Capital
<PAGE>
Securities called for redemption by the Issuer, and (iii) upon a voluntary or
involuntary termination and liquidation of the Issuer (other than in connection
with the distribution of Debentures to the Holders in exchange for Series A
Capital Securities as provided in the Declaration), the lesser of (a) the
aggregate of the liquidation amount and all accumulated and unpaid Distributions
on the Series A Capital Securities to the date of payment, to the extent the
Issuer has funds on hand legally available therefor, and (b) the amount of
assets of the Issuer remaining available for distribution to Holders in
liquidation of the Issuer. If an Event of Default has occurred and is
continuing, no Guarantee Payments under the Common Securities Guarantee with
respect to the Common Securities or any guarantee payment under any Other Common
Securities Guarantees shall be made until the Holders shall be paid in full the
Guarantee Payments to which they are entitled under this Series A Capital
Securities Guarantee.
"Holder" shall mean any holder, as registered on the books and records
of the Issuer, of any Series A Capital Securities; provided, however, that, in
determining whether the holders of the requisite percentage of Series A Capital
Securities have given any request, notice, consent or waiver hereunder, "Holder"
shall not include the Guarantor or any Affiliate of the Guarantor.
"Indemnified Person" means the Capital Securities Guarantee Trustee,
any Affiliate of the Capital Securities Guarantee Trustee, or any officers,
directors, shareholders, members, partners, employees, representatives,
nominees, custodians or agents of the Capital Securities Guarantee Trustee.
"Indenture" means the Indenture dated as of April 23, 1997, between the
Guarantor (the "Debenture Issuer") and The Chase Manhattan Bank, as trustee,
pursuant to which the Debentures are to be issued to the Property Trustee of the
Issuer.
"Majority in liquidation amount of the Series A Capital Securities"
means, except as provided by the Trust Indenture Act, a vote by Holders of more
than 50% of the aggregate liquidation amount (including the stated amount that
would be paid on redemption, liquidation or otherwise, plus accumulated and
unpaid Distributions to the date upon which the voting percentages are
determined) of all Series A Capital Securities.
<PAGE>
"Officer's Certificate" means, with respect to any Person, a
certificate signed by the Chairman, the Co-Chairman, a Vice Chairman, the Chief
Executive Officer, the President, a Vice President, the Comptroller, the
Secretary or an Assistant Secretary of the Guarantor. Any Officer's Certificate
delivered with respect to compliance with a condition or covenant provided for
in this Series A Capital Securities Guarantee (other than pursuant to Section
314(a)(4) of the Trust Indenture Act) shall include:
(a) a statement that the officer signing the Officer's Certificate has
read the covenant or condition and the definitions relating thereto;
(b) a statement that such officer has made such examination or
investigation as, in such officer's opinion, is necessary to enable such
officer to express an informed opinion as to whether or not such covenant or
condition has been complied with; and
(c) a statement as to whether, in the opinion of such officer, such
condition or covenant has been complied with.
"Other Common Securities Guarantees" shall have the same meaning as
"Other Guarantees" in the Common Securities Guarantee.
"Other Debentures" means all junior subordinated debentures issued by
the Guarantor from time to time and sold to trusts to be established by the
Guarantor (if any), in each case similar to the Issuer.
"Other Guarantees" means all guarantees to be issued by the Guarantor
with respect to capital securities (if any) similar to the Series A Capital
Securities issued by other trusts to be established by the Guarantor (if any),
in each case similar to the Issuer.
"Registration Rights Agreement" means the Registration Rights
Agreement, dated as of April 23, 1997, by and among the Guarantor, the Issuer
and the Initial Purchasers named therein as such agreement may be amended,
modified or supplemented from time to time.
"Responsible Officer" means, with respect to the Capital Securities
Guarantee Trustee, any officer within the Corporate Trust Office of the Capital
Securities Guarantee
<PAGE>
Trustee, including any vice president, any assistant vice president, any
assistant secretary, any assistant treasurer, any trust officer, any senior
trust officer or other officer in the Corporate Trust Office of the Capital
Securities Guarantee Trustee customarily performing functions similar to those
performed by any of the above designated officers and also means, with respect
to a particular corporate trust matter, any other officer to whom such matter is
referred because of that officer's knowledge of and familiarity with the
particular subject.
"Successor Capital Securities Guarantee Trustee" means a successor
Capital Securities Guarantee Trustee possessing the qualifications to act as
Capital Securities Guarantee Trustee under Section 4.1.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as
amended.
"Trust Securities" means the Common Securities and the Series A Capital
Securities and Series B Capital Securities, collectively.
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1. Trust Indenture Act; Application
(a) This Series A Capital Securities Guarantee is subject to the
provisions of the Trust Indenture Act that are required to be part of this
Series A Capital Securities Guarantee and, to the extent applicable, shall be
governed by such provisions; and
(b) if and to the extent that any provision of this Series A Capital
Securities Guarantee limits, qualifies or conflicts with the duties imposed by
Section 310 to 317, inclusive, of the Trust Indenture Act, such imposed duties
shall control.
<PAGE>
SECTION 2.2. Lists of Holders of Securities
(a) The Guarantor shall provide the Capital Securities Guarantee
Trustee (unless the Capital Securities Guarantee Trustee is otherwise the
registrar of the Series A Capital Securities) with a list, in such form as the
Capital Securities Guarantee Trustee may reasonably require, of the names and
addresses of the Holders ("List of Holders") (i) within 14 days after each
record date for payment of Distributions (which shall list the Holders as of
such dates), and (ii) at any other time within 30 days of receipt by the
Guarantor of a written request for a List of Holders as of a date no more than
14 days before such List of Holders is given to the Capital Securities Guarantee
Trustee; provided, however, that the Guarantor shall not be obligated to provide
such List of Holders at any time the List of Holders does not differ from the
most recent List of Holders given to the Capital Securities Guarantee Trustee by
the Guarantor. The Capital Securities Guarantee Trustee may destroy any List of
Holders previously given to it on receipt of a new List of Holders.
(b) The Capital Securities Guarantee Trustee shall comply with its
obligations under Sections 311(a), 311(b) and Section 312(b) of the Trust
Indenture Act.
SECTION 2.3. Reports by the Capital Securities Guarantee Trustee
Within 60 days after March 15 of each year, commencing March 15, 1998,
the Capital Securities Guarantee Trustee shall provide to the Holders such
reports as are required by Section 313(a) of the Trust Indenture Act, if any, in
the form and in the manner provided by Section 313 of the Trust Indenture Act.
The Capital Securities Guarantee Trustee shall also comply with the other
requirements of Section 313 of the Trust Indenture Act.
SECTION 2.4. Periodic Reports to Capital Securities Guarantee Trustee
The Guarantor shall provide to the Capital Securities Guarantee Trustee
such documents, reports and information as required by Section 314 (if any) and
the compliance certificate required by Section 314 of the Trust Indenture Act in
the form, in the manner and at the times required by Section 314(a)(4) of the
Trust Indenture Act, such compliance certificate to be delivered on or before
120 days after the end of each fiscal year of the Guarantor. Delivery of such
<PAGE>
reports, information and documents to the Capital Securities Guarantee Trustee
is for informational purposes only and the Capital Securities Guarantee
Trustee's receipt of such shall not constitute constructive notice of any
information contained therein or determinable from information contained
therein, including the Guarantor's compliance with any of its covenants
hereunder (as to which the Capital Securities Guarantee Trustee is entitled to
rely exclusively on Officer's Certificates).
SECTION 2.5. Evidence of Compliance with Conditions Precedent
The Guarantor shall provide to the Capital Securities Guarantee Trustee
such evidence of compliance with any conditions precedent, if any, provided for
in this Series A Capital Securities Guarantee that relate to any of the matters
set forth in Section 314(c) of the Trust Indenture Act. Any certificate or
opinion required to be given by an officer pursuant to Section 314(c)(1) may be
given in the form of an Officer's Certificate.
SECTION 2.6. Events of Default; Waiver
The Holders of a Majority in liquidation amount of Series A Capital
Securities may, by vote, on behalf of all 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 Series A Capital Securities
Guarantee, but no such waiver shall extend to any subsequent or other default or
Event of Default or impair any right consequent thereon.
SECTION 2.7. Events of Default; Notice
(a) The Capital Securities Guarantee Trustee, within 90 days after the
occurrence of a default with respect to this Series A Capital Securities
Guarantee, shall mail by first class postage prepaid, to all Holders, notices of
all defaults actually known to a Responsible Officer of the Capital Securities
Guarantee Trustee, unless such defaults have been cured before the giving of
such notice; provided that, except in the case of default in the payment of any
Guarantee Payment, the Capital Securities Guarantee Trustee shall be protected
in withholding such notice if and so long as a Responsible Officer of the
<PAGE>
Capital Securities Guarantee Trustee in good faith determines that the
withholding of such notice is in the interests of the Holders.
(b) The Capital Securities Guarantee Trustee shall not be deemed to
have knowledge of any Event of Default unless the Capital Securities Guarantee
Trustee shall have received written notice from the Guarantor, or a Responsible
Officer of the Capital Securities Guarantee Trustee charged with the
administration of the Declaration shall have obtained actual knowledge, of such
Event of Default.
SECTION 2.8. Conflicting Interests
The Declaration shall be deemed to be specifically described in this
Series A Capital Securities Guarantee for the purposes of clause (i) of the
first proviso contained in Section 310(b) of the Trust Indenture Act.
ARTICLE III
POWERS, DUTIES AND RIGHTS OF
CAPITAL SECURITIES GUARANTEE TRUSTEE
SECTION 3.1. Powers and Duties of the Capital Securities Guarantee
Trustee
(a) This Series A Capital Securities Guarantee shall be held by the
Capital Securities Guarantee Trustee for the benefit of the Holders, and the
Capital Securities Guarantee Trustee shall not transfer this Series A Capital
Securities Guarantee to any Person except a Holder exercising such Holder's
rights pursuant to Section 5.4(b) or to a Successor Capital Securities Guarantee
Trustee on acceptance by such Successor Capital Securities Guarantee Trustee of
its appointment to act as Successor Capital Securities Guarantee Trustee. The
right, title and interest of the Capital Securities Guarantee Trustee shall
automatically vest in any Successor Capital Securities Guarantee Trustee, and
such vesting and succession of title shall be effective whether or not
conveyancing documents have been executed and delivered pursuant to the
appointment of such Successor Capital Securities Guarantee Trustee.
(b) If an Event of Default actually known to a Responsible Officer of
the Capital Securities Guarantee Trustee has occurred and is continuing, the
<PAGE>
Capital Securities Guarantee Trustee shall enforce this Series A Capital
Securities Guarantee for the benefit of the Holders.
(c) The Capital Securities Guarantee Trustee, before the occurrence of
any Event of Default and after the curing of all Events of Default that may have
occurred, shall undertake to perform only such duties as are specifically set
forth in this Series A Capital Securities Guarantee, and no implied covenants
shall be read into this Series A Capital Securities Guarantee against the
Capital Securities Guarantee Trustee. In case an Event of Default has occurred
(that has not been cured or waived pursuant to Section 2.6) of which a
Responsible Officer of the Capital Securities Guarantee Trustee has actual
knowledge, the Capital Securities Guarantee Trustee shall exercise such of the
rights and powers vested in it by this Series A Capital Securities Guarantee,
and use the same degree of care and skill in its exercise thereof, as a prudent
person would exercise or use under the circumstances in the conduct of his or
her own affairs.
(d) No provision of this Series A Capital Securities Guarantee shall be
construed to relieve the Capital Securities Guarantee Trustee from liability for
its own negligent action, its own negligent failure to act, or its own willful
misconduct, except that:
(1) 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:
(i) the duties and obligations of the Capital Securities Guarantee
Trustee shall be determined solely by the express provisions of this Series
A Capital Securities Guarantee, and the Capital Securities Guarantee Trustee
shall not be liable except for the performance of such duties and
obligations as are specifically set forth in this Series A Capital
Securities Guarantee, and no implied covenants or obligations shall be read
into this Series A Capital Securities Guarantee against the Capital
Securities Guarantee Trustee; and
(ii) in the absence of bad faith on the part of the Capital Securities
Guarantee Trustee, the Capital Securities Guarantee Trustee may conclusively
rely, as to the truth of the statements and the correctness of
<PAGE>
the opinions expressed therein, upon any certificates or opinions furnished
to the Capital Securities Guarantee Trustee and conforming to the
requirements of this Series A Capital Securities Guarantee; provided,
however, that in the case of any such certificates or opinions that by any
provision hereof are specifically required to be furnished to the Capital
Securities Guarantee Trustee, the Capital Securities Guarantee Trustee shall
be under a duty to examine the same to determine whether or not they conform
to the requirements of this Series A Capital Securities Guarantee;
(2) the Capital Securities Guarantee Trustee shall not be liable for
any error of judgment made in good faith by a Responsible Officer of the Capital
Securities Guarantee Trustee, unless it shall be proved that the Capital
Securities Guarantee Trustee was negligent in ascertaining the pertinent facts
upon which such judgment was made;
(3) the Capital Securities Guarantee Trustee shall not be liable with
respect to any action taken or omitted to be taken by it in good faith in
accordance with the direction of the Holders of a Majority in liquidation amount
of the Series A Capital Securities relating to the time, method and place of
conducting any proceeding for any remedy available to the Capital Securities
Guarantee Trustee, or exercising any trust or power conferred upon the Capital
Securities Guarantee Trustee under this Series A Capital Securities Guarantee;
and
(4) no provision of this Series A Capital Securities Guarantee shall
require the Capital Securities Guarantee Trustee to expend or risk its own funds
or otherwise incur personal financial liability in the performance of any of its
duties or in the exercise of any of its rights or powers, if the Capital
Securities Guarantee Trustee shall have reasonable grounds for believing that
the repayment of such funds or liability is not reasonably assured to it under
the terms of this Series A Capital Securities Guarantee or indemnity, reasonably
satisfactory to the Capital Securities Guarantee Trustee, against such risk or
liability is not reasonably assured to it.
<PAGE>
SECTION 3.2. Certain Rights of Capital Securities Guarantee Trustee
(a) Subject to the provisions of Section 3.1:
(i) The Capital Securities Guarantee Trustee may conclusively rely, and
shall be fully protected in acting or refraining from acting, upon any
resolution, certificate, statement, instrument, opinion, report, notice,
request, direction, consent, order, bond, debenture, note, other evidence of
indebtedness or other paper or document believed by it to be genuine and to
have been signed, sent or presented by the proper party or parties;
(ii) Any direction or act of the Guarantor contemplated by this Series
A Capital Securities Guarantee may be sufficiently evidenced by an Officer's
Certificate;
(iii) Whenever, in the administration of this Series A Capital
Securities Guarantee, the Capital Securities Guarantee Trustee shall deem it
desirable that a matter be proved or established before taking, suffering or
omitting any action hereunder, the Capital Securities Guarantee Trustee
(unless other evidence is herein specifically prescribed), in the absence of
bad faith on its part, may request and conclusively rely upon an Officer's
Certificate which, upon receipt of such request, shall be promptly delivered
by the Guarantor;
(iv) The Capital Securities Guarantee Trustee shall have no duty to see
to any recording, filing or registration of any instrument (or any
rerecording, refiling or registration thereof);
(v) The Capital Securities Guarantee Trustee may consult with counsel
of its selection, and the advice or opinion of such counsel with respect to
legal matters shall be full and complete authorization and protection in
respect of any action taken, suffered or omitted by it hereunder in good
faith and in accordance with such advice or opinion. Such counsel may be
counsel to the Guarantor or any of its Affiliates and may include any of its
employees. The Capital Securities Guarantee Trustee shall have the right at
any time to seek instructions concerning the administration of
<PAGE>
this Series A Capital Securities Guarantee from any court of competent
jurisdiction;
(vi) The Capital Securities Guarantee Trustee shall be under no
obligation to exercise any of the rights or powers vested in it by this
Series A Capital Securities Guarantee at the request or direction of any
Holder, unless such Holder shall have provided to the Capital Securities
Guarantee Trustee such security and indemnity, reasonably satisfactory to
the Capital Securities Guarantee Trustee, against the costs, expenses
(including reasonable attorneys' fees and expenses and the expenses of the
Capital Securities Guarantee Trustee's agents, nominees or custodians) and
liabilities that might be incurred by it in complying with such request or
direction, including such reasonable advances as may be requested by the
Capital Securities Guarantee Trustee; provided that, nothing contained in
this Section 3.2(a)(vi) shall be taken to relieve the Capital Securities
Guarantee Trustee, upon the occurrence of an Event of Default, of its
obligation to exercise the rights and powers vested in it by this Series A
Capital Securities Guarantee;
(vii) The Capital Securities Guarantee Trustee shall not be bound to
make any investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note, other evidence of
indebtedness or other paper or document, but the Capital Securities
Guarantee Trustee, in its discretion, may make such further inquiry or
investigation into such facts or matters as it may see fit;
(viii) The Capital Securities Guarantee Trustee may execute any of the
trusts or powers hereunder or perform any duties hereunder either directly
or by or through agents, nominees, custodians or attorneys, and the Capital
Securities Guarantee Trustee shall not be responsible for any misconduct or
negligence on the part of any agent or attorney appointed with due care by
it hereunder;
(ix) Any action taken by the Capital Securities Guarantee Trustee or
its agents hereunder shall bind the Holders, and the signature of the
Capital Securities Guarantee Trustee or its agents alone shall
<PAGE>
be sufficient and effective to perform any such action. No third party shall
be required to inquire as to the authority of the Capital Securities
Guarantee Trustee to so act or as to its compliance with any of the terms
and provisions of this Series A Capital Securities Guarantee, both of which
shall be conclusively evidenced by the Capital Securities Guarantee
Trustee's or its agent's taking such action;
(x) Whenever in the administration of this Series A Capital Securities
Guarantee the Capital Securities Guarantee Trustee shall deem it desirable
to receive instructions with respect to enforcing any remedy or right or
taking any other action hereunder, the Capital Securities Guarantee Trustee
(i) may request instructions from the Holders of a Majority in liquidation
amount of the Series A Capital Securities, (ii) may refrain from enforcing
such remedy or right or taking such other action until such instructions are
received, and (iii) shall be protected in conclusively relying on or acting
in accordance with such instructions; and
(xi) The Capital Securities Guarantee Trustee shall not be liable for
any action taken, suffered, or omitted to be taken by it in good faith,
without negligence, and reasonably believed by it to be authorized or within
the discretion or rights or powers conferred upon it by this Series A
Capital Securities Guarantee.
(b) No provision of this Series A Capital Securities Guarantee shall be
deemed to impose any duty or obligation on the Capital Securities Guarantee
Trustee to perform any act or acts or exercise any right, power, duty or
obligation conferred or imposed on it in any jurisdiction in which it shall be
illegal, or in which the Capital Securities Guarantee Trustee shall be
unqualified or incompetent in accordance with applicable law, to perform any
such act or acts or to exercise any such right, power, duty or obligation. No
permissive power or authority available to the Capital Securities Guarantee
Trustee shall be construed to be a duty.
<PAGE>
SECTION 3.3. Not Responsible for Recitals or Issuance of Series A
Capital Securities Guarantee
The recitals contained in this Series A Capital Securities Guarantee
shall be taken as the statements of the Guarantor, and the Capital Securities
Guarantee Trustee does not assume any responsibility for their correctness. The
Capital Securities Guarantee Trustee makes no representation as to the validity
or sufficiency of this Series A Capital Securities Guarantee.
ARTICLE IV
CAPITAL SECURITIES GUARANTEE TRUSTEE
SECTION 4.1. Capital Securities Guarantee Trustee; Eligibility
(a) There shall at all times be a Capital Securities Guarantee Trustee
which shall:
(i) not be an Affiliate of the Guarantor; and
(ii) be a corporation organized and doing business under the laws of
the United States of America or any State or Territory thereof or of the
District of Columbia, or a corporation or Person permitted by the Securities
and Exchange Commission to act as an institutional trustee under the Trust
Indenture Act, authorized under such laws to exercise corporate trust
powers, having a combined capital and surplus of at least 50 million U.S.
dollars ($50,000,000), and subject to supervision or examination by Federal,
State, Territorial or District of Columbia authority. If such corporation
publishes reports of condition at least annually, pursuant to law or to the
requirements of the supervising or examining authority referred to above,
then, for the purposes of this Section 4.1(a)(ii), the combined capital and
surplus of such corporation shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so published.
(b) If at any time the Capital Securities Guarantee Trustee shall cease
to be eligible to so act under Section 4.1(a), the Capital Securities Guarantee
Trustee shall immediately resign in the manner and with the effect set out in
Section 4.2(c).
<PAGE>
(c) If the Capital Securities Guarantee Trustee has or shall acquire
any "conflicting interest" within the meaning of Section 310(b) of the Trust
Indenture Act, the Capital Securities Guarantee Trustee and Guarantor shall in
all respects comply with the provisions of Section 310(b) of the Trust Indenture
Act, subject to the penultimate paragraph thereof.
SECTION 4.2. Appointment, Removal and Resignation of Capital Securities
Guarantee Trustee
(a) Subject to Section 4.2(b), the Capital Securities Guarantee Trustee
may be appointed or removed without cause at any time by the Guarantor except
during an Event of Default.
(b) The Capital Securities Guarantee Trustee shall not be removed in
accordance with Section 4.2(a) until a Successor Capital Securities Guarantee
Trustee has been appointed and has accepted such appointment by written
instrument executed by such Successor Capital Securities Guarantee Trustee and
delivered to the Guarantor.
(c) The Capital Securities Guarantee Trustee shall hold office until a
Successor Capital Securities Guarantee Trustee shall have been appointed or
until its removal or resignation. The Capital Securities Guarantee Trustee may
resign from office (without need for prior or subsequent accounting) by an
instrument in writing executed by the Capital Securities Guarantee Trustee and
delivered to the Guarantor, which resignation shall not take effect until a
Successor Capital Securities Guarantee Trustee has been appointed and has
accepted such appointment by instrument in writing executed by such Successor
Capital Securities Guarantee Trustee and delivered to the Guarantor and the
resigning Capital Securities Guarantee Trustee.
(d) If no Successor Capital Securities Guarantee Trustee shall have
been appointed and accepted appointment as provided in this Section 4.2 within
60 days after delivery of an instrument of removal or resignation, the Capital
Securities Guarantee Trustee resigning or being removed may petition any court
of competent jurisdiction for appointment of a Successor Capital Securities
Guarantee Trustee. Such court may thereupon, after prescribing such notice, if
any, as it may deem proper, appoint a Successor Capital Securities Guarantee
Trustee.
<PAGE>
(e) No Capital Securities Guarantee Trustee shall be liable for the
acts or omissions to act of any Successor Capital Securities Guarantee Trustee.
(f) Upon termination of this Series A Capital Securities Guarantee or
removal or resignation of the Capital Securities Guarantee Trustee pursuant to
this Section 4.2, the Guarantor shall pay to the Capital Securities Guarantee
Trustee all amounts due to the Capital Securities Guarantee Trustee accrued to
the date of such termination, removal or resignation.
ARTICLE V
GUARANTEE
SECTION 5.1. Guarantee
The Guarantor hereby irrevocably and unconditionally agrees to pay in
full to the Holders the Guarantee Payments (without duplication of amounts
theretofore paid by the Issuer), as and when due, regardless of any defense,
right of set-off or counterclaim that the Issuer may have or assert. The
Guarantor's obligation to make a Guarantee Payment may be satisfied by direct
payment of the required amounts by the Guarantor to the Holders or by causing
the Issuer to pay such amounts to the Holders.
SECTION 5.2. Waiver of Notice and Demand
The Guarantor hereby waives notice of acceptance of this Series A
Capital Securities Guarantee and of any liability to which it applies or may
apply, presentment, demand for payment, any right to require a proceeding first
against the Issuer or any other Person before proceeding against the Guarantor,
protest, notice of nonpayment, notice of dishonor, notice of redemption and all
other notices and demands.
SECTION 5.3. Obligations Not Affected
The obligations, covenants, agreements and duties of the Guarantor
under this Series A Capital Securities Guarantee 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
<PAGE>
any express or implied agreement, covenant, term or condition relating to the
Series A Capital Securities to be performed or observed by the Issuer;
(b) the extension of time for the payment by the Issuer of all or any
portion of the Distributions, Redemption Price, Liquidation Distribution or any
other sums payable under the terms of the Series A Capital Securities (as such
terms are defined therein) or the extension of time for the performance of any
other obligation under, arising out of, or in connection with, the Series A
Capital Securities (other than an extension of time for payment of
Distributions, Redemption Price, Liquidation Distribution or other sum payable
that results from the extension of any interest payment period on the Debentures
permitted by the Indenture);
(c) any failure, omission, delay or lack of diligence on the part of
the Holders to enforce, assert or exercise any right, privilege, power or remedy
conferred on the Holders pursuant to the terms of the Series A Capital
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 Series A Capital
Securities;
(f) the settlement or compromise of any obligation guaranteed hereby or
hereby incurred;
(g) the consummation of the Exchange Offer; or
(h) except as set forth in Article VII hereof, any other circumstance
whatsoever that might otherwise constitute a legal or equitable discharge or
defense of a guarantor, it being the intent of this Section 5.3 that the
obligations of the Guarantor with respect to the Guarantee Payments shall be
absolute and unconditional under any and all circumstances.
<PAGE>
There shall be no obligation of the Holders to give notice to, or
obtain consent of, the Guarantor with respect to the happening of any of the
foregoing.
SECTION 5.4. Rights of Holders
(a) The Holders of a Majority in liquidation amount of the Series A
Capital Securities have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Capital Securities
Guarantee Trustee in respect of this Series A Capital Securities Guarantee or
exercising any trust or power conferred upon the Capital Securities Guarantee
Trustee under this Series A Capital Securities Guarantee; provided, however,
that, subject to Section 3.1, the Capital Securities Guarantee Trustee shall
have the right to decline to follow any such direction if the Capital Securities
Guarantee Trustee, upon advice of counsel, shall determine that the action so
directed would be unjustly prejudicial to the Holders not taking part in such
direction or if the Capital Securities Guarantee Trustee, upon advice of
counsel, determines that the action or proceeding so directed may not lawfully
be taken or if the Capital Securities Guarantee Trustee in good faith by its
board of directors or trustees, executive committee, or a trust committee of
directors or trustees and/or Responsible Officers shall determine that the
action or proceedings so directed would involve the Capital Securities Guarantee
Trustee in personal liability.
(b) If the Capital Securities Guarantee Trustee fails to enforce such
Series A Capital Securities Guarantee, any Holder may institute a legal
proceeding directly against the Guarantor to enforce the Capital Securities
Guarantee Trustee's rights under this Series A Capital Securities Guarantee,
without first instituting a legal proceeding against the Issuer, the Capital
Securities Guarantee Trustee or any other Person. The Guarantor waives any right
or remedy to require that any action be brought first against the Issuer or any
other Person before proceeding directly against the Guarantor.
SECTION 5.5. Guarantee of Payment
This Series A Capital Securities Guarantee creates a guarantee of
payment and not of collection.
<PAGE>
SECTION 5.6. Subrogation
The Guarantor shall be subrogated to all rights of the Holders against
the Issuer in respect of any amounts paid to such Holders by the Guarantor under
this Series A Capital Securities Guarantee; provided, however, that the
Guarantor shall not (except to the extent required by mandatory provisions of
law) be entitled to enforce or exercise any right that it may acquire by way of
subrogation or any indemnity, reimbursement or other agreement, in all cases as
a result of payment under this Series A Capital Securities Guarantee, if, at the
time of any such payment, any amounts are due and unpaid under this Series A
Capital Securities Guarantee. If any amount shall be paid to the Guarantor in
violation of the preceding sentence, the Guarantor agrees to hold such amount in
trust for the Holders and to pay over such amount to the Holders.
SECTION 5.7. Independent Obligations
The Guarantor acknowledges that its obligations hereunder are
independent of the obligations of the Issuer with respect to the Series A
Capital Securities, and that the Guarantor shall be liable as principal and as
debtor hereunder to make Guarantee Payments pursuant to the terms of this Series
A Capital Securities Guarantee notwithstanding the occurrence of any event
referred to in subsections (a) through (h), inclusive, of Section 5.3 hereof.
ARTICLE VI
LIMITATION OF TRANSACTIONS; SUBORDINATION
SECTION 6.1. Limitation of Transactions
If (i) an Event of Default (as defined in the Indenture) shall have
occurred and be continuing (other than solely an Event of Default as described
in Section 5.1(c) of the Indenture), (ii) there shall have occurred any event of
which the Guarantor has actual knowledge that (a) is, or with the giving of
notice or the lapse of time, or both, would be an Event of Default (as defined
in the Indenture), other than solely an Event of Default as described in Section
5.1(c) of the Indenture, and (b) in respect of which the Guarantor shall not
have taken reasonable steps to cure, (iii) in the event the Debentures are held
by the Property Trustee and the Guarantor shall be in default with respect to
<PAGE>
its payment of any obligations under this Series A Capital Securities Guarantee
or (iv) the Guarantor shall have given notice of its election of the exercise of
its right to extend the interest payment period pursuant to Section 16.1 of the
Indenture and any such extension shall be continuing, then, in each such case,
so long as any Series A Capital Securities remain outstanding, the Guarantor
shall not (i) declare or pay any dividends or distributions on, or redeem,
purchase, acquire, or make a liquidation payment with respect to, any of the
Guarantor's capital stock (which includes common and preferred stock) or (ii)
make any payment of principal, interest or premium, if any, on or repay or
repurchase or redeem any debt securities of the Guarantor (including any Other
Debentures) that rank pari passu with or junior in right of payment to the
Debentures or (iii) make any guarantee payments with respect to any guarantee by
the Guarantor of any securities of any subsidiary of the Guarantor (including
Other Guarantees) if such guarantee ranks pari passu or junior in right of
payment to the Debentures (other than (a) dividends or distributions in shares
of, or options, warrants, rights to subscribe for or purchase shares of, common
stock of the Guarantor, (b) any declaration of a dividend in connection with the
implementation of a stockholder's rights plan, or the issuance of stock under
any such plan in the future, or the redemption or repurchase of any such rights
pursuant thereto, (c) payments under the Series A Capital Securities Guarantee,
(d) as a direct result of, and only to the extent required in order to avoid the
issuance of fractional shares of capital stock following, a reclassification of
the Guarantor's capital stock or the exchange or the conversion of one class or
series of the Guarantor's capital stock for another class or series of the
Guarantor's capital stock, (e) the purchase of fractional interests in shares of
the Guarantor's capital stock pursuant to the conversion or exchange provisions
of such capital stock or the security being converted or exchanged, and (f)
purchases of common stock related to the issuance of common stock or rights
under any of the Guarantor's benefit plans for its directors, officers or
employees or any of the Guarantor's dividend reinvestment plans).
SECTION 6.2. Ranking
This Series A Capital Securities Guarantee will constitute an unsecured
obligation of the Guarantor and will rank (i) subordinate and junior in right of
payment to Senior Indebtedness (as defined in the Indenture), to the same extent
<PAGE>
and in the same manner that the Debentures are subordinated to Senior
Indebtedness pursuant to the Indenture, it being understood that the terms of
Article XV of the Indenture shall apply to the obligations of the Guarantor
under this Series A Capital Securities Guarantee as if (x) such Article XV were
set forth herein in full and (y) such obligations were substituted for the term
"Securities" appearing in such Article XV, (ii) pari passu with the Debentures,
the Other Debentures and with the most senior preferred or preference stock now
or hereafter issued by the Guarantor and with any Other Guarantee and any Other
Common Securities Guarantee and any guarantee now or hereafter entered into by
the Guarantor in respect of any preferred or preference stock of any Affiliate
of the Guarantor, and (iii) senior to the Guarantor's common stock.
ARTICLE VII
TERMINATION
This Series A Capital Securities Guarantee shall terminate (i)
upon full payment of the Redemption Price of all Series A Capital Securities,
(ii) upon liquidation of the Issuer and the full payment of the amounts payable
in accordance with the Declaration or the distribution of the Debentures to the
Holders of all of the Series A Capital Securities, or (iii) upon exchange of all
the Series A Capital Securities for the Series B Capital Securities in the
Exchange Offer and the execution and delivery of the Series B Capital Securities
Guarantee. Notwithstanding the foregoing, this Series A Capital Securities
Guarantee will continue to be effective or will be reinstated, as the case may
be, if at any time any Holder must restore payment of any sums paid under the
Series A Capital Securities or under this Series A Capital Securities Guarantee.
ARTICLE VIII
COMPENSATION AND EXPENSES OF
CAPITAL SECURITIES GUARANTEE TRUSTEE
The Guarantor agrees:
(a) to pay to the Capital Securities Guarantee Trustee from time to
time reasonable compensation for all services rendered by it hereunder (which
compensation shall not be limited by any provision or law in regard to the
compensation of a trustee of an express trust); and
<PAGE>
(b) except as otherwise expressly provided herein, to reimburse the
Capital Securities Guarantee Trustee upon request for all reasonable expenses,
disbursements and advances incurred or made by the Capital Securities Guarantee
Trustee in accordance with any provision of this Series A Capital Securities
Guarantee (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 their respective negligence or bad faith.
The provisions of this Article VIII shall survive the dissolution of
the Issuer and the termination of this Series A Capital Securities Guarantee and
the removal or resignation of the Capital Securities Guarantee Trustee.
The Capital Securities Guarantee Trustee may not claim any lien or
charge on any property of the Issuer as a result of any amount due pursuant to
this Article VIII.
ARTICLE IX
INDEMNIFICATION
SECTION 9.1. Exculpation
(a) No Indemnified Person shall be liable, responsible or accountable
in damages or otherwise to the Guarantor or any Covered Person for any loss,
damage or claim incurred by reason of any act or omission performed or omitted
by such Indemnified Person in good faith in accordance with this Series A
Capital Securities Guarantee and in a manner that such Indemnified Person
reasonably believed to be within the scope of the authority conferred on such
Indemnified Person by this Series A Capital Securities Guarantee or by law,
except that an Indemnified Person shall be liable for any such loss, damage or
claim incurred by reason of such Indemnified Person's negligence or willful
misconduct with respect to such acts or omissions.
(b) An Indemnified Person shall be fully protected in relying in good
faith upon the records of the Guarantor and upon such information, opinions,
reports or statements presented to the Guarantor by any Person as to matters the
Indemnified Person reasonably believes are within such other Person's
professional or expert competence, including information, opinions, reports or
<PAGE>
statements as to the value and amount of the assets, liabilities, profits,
losses, or any other facts pertinent to the existence and amount of assets from
which Distributions to Holders might properly be paid.
SECTION 9.2. Indemnification
The Guarantor agrees to indemnify each Indemnified Person for, and to
hold each Indemnified Person harmless against, any and all loss, liability,
damage, claim or expense incurred without negligence or bad faith on its part,
arising out of or in connection with the acceptance or administration of the
trust or trusts hereunder, including the costs and expenses (including
reasonable legal fees and expenses) of defending itself against, or
investigating, any claim or liability in connection with the exercise or
performance of any of its powers or duties hereunder. The obligation to
indemnify as set forth in this Section 9.2 shall survive the dissolution of the
Issuer, the termination of this Series A Capital Securities Guarantee and the
removal or resignation of the Capital Securities Guarantee Trustee.
ARTICLE X
MISCELLANEOUS
SECTION 10.1. Successors and Assigns
All guarantees and agreements contained in this Series A Capital
Securities Guarantee shall bind the successors, assigns, receivers, trustees and
representatives of the Guarantor and shall inure to the benefit of the Holders
then outstanding.
SECTION 10.2. Amendments
Except with respect to any changes that do not materially adversely
affect the rights of Holders (in which case no consent of Holders will be
required), this Series A Capital Securities Guarantee may only be amended with
the prior approval of the Holders of a Majority in liquidation amount of the
Series A Capital Securities (including the stated amount that would be paid on
redemption, liquidation or otherwise, plus accrued and unpaid Distributions to
the date upon which the voting percentages are determined). The provisions of
the Declaration with respect to consents to amendments thereof (whether at a
meeting or otherwise) shall apply to the giving of such approval.
<PAGE>
SECTION 10.3. Notices
All notices provided for in this Series A Capital Securities Guarantee
shall be in writing, duly signed by the party giving such notice, and shall be
delivered, telecopied or mailed by first class mail, as follows:
(a) If given to the Issuer, in care of the Administrative Trustee at
the Issuer's mailing address set forth below (or such other address as the
Issuer may give notice of to the Holders and the Capital Securities Guarantee
Trustee):
Imperial Capital Trust I
c/o Imperial Bancorp
9920 S. La Cienega Boulevard
Inglewood, California 90301
Attention: General Counsel
Telecopy: (310) 417-5695
(b) If given to the Capital Securities Guarantee Trustee, at the
Capital Securities Guarantee Trustee's mailing address set forth below (or such
other address as the Capital Securities Guarantee Trustee may give notice of to
the Holders and the Issuer):
The Chase Manhattan Bank
450 West 33rd Street
New York, New York 10001
Attention: Corporate Trustee
Administration Department
Telecopy: (212) 946-8158
(c) If given to the Guarantor, at the Guarantor's mailing address set
forth below (or such other address as the Guarantor may give notice of to the
Holders of the Series A Capital Securities and the Capital Securities Guarantee
Trustee):
Imperial Bancorp
9920 S. La Cienega Boulevard
Inglewood, California 90301
Attention: General Counsel
Telecopy: (310) 417-5775
<PAGE>
(d) If given to any Holder of Series A Capital Securities, at the
address set forth on the books and records of the Issuer.
All such notices shall be deemed to have been given when received in
person, telecopied with receipt confirmed, or mailed by first class mail,
postage prepaid except that if a notice or other document is refused delivery or
cannot be delivered because of a changed address of which no notice was given,
such notice or other document shall be deemed to have been delivered on the date
of such refusal or inability to deliver.
SECTION 10.4. Exchange Offer
In the event an Exchange Offer Registration Statement (as defined in
the Registration Rights Agreement) becomes effective and the Issuer issues any
Series B Capital Securities in the Exchange Offer, the Guarantor will enter into
a new capital securities guarantee agreement, in substantially the same form as
this Series A Capital Securities Guarantee, with respect to the Series B Capital
Securities.
SECTION 10.5. Benefit
This Series A Capital Securities Guarantee is solely for the benefit of
the Holders and, subject to Section 3.1(a), is not separately transferable from
the Series A Capital Securities.
SECTION 10.6. Governing Law
THIS SERIES A CAPITAL SECURITIES GUARANTEE SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK,
WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES THEREOF.
<PAGE>
THIS SERIES A CAPITAL SECURITIES GUARANTEE is executed as of the day
and year first above written.
IMPERIAL BANCORP, as Guarantor
By:/s/ Robert M. Franko
------------------------------------
Robert M. Franko
Executive Vice President
THE CHASE MANHATTAN BANK, as
Capital Securities Guarantee
Trustee
By:/s/ Richard Lorenzen
------------------------------------
Richard Lorenzen
Senior Trust Officer
================================================================================
REGISTRATION RIGHTS AGREEMENT
Dated April 23, 1997
among
IMPERIAL BANCORP
IMPERIAL CAPITAL TRUST I
and
KEEFE, BRUYETTE & WOODS, INC.
LEHMAN BROTHERS INC.
UBS SECURITIES LLC
as Initial Purchasers
================================================================================
<PAGE>
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (the "Agreement") is made and
entered into as of April 23, 1997 among Imperial Bancorp, a California
corporation (the "Corporation"), Imperial Capital Trust I, a business trust
created under the laws of the state of Delaware (the "Trust"), and KEEFE,
BRUYETTE & WOODS, INC. ("Keefe Bruyette"), LEHMAN BROTHERS INC. and UBS
SECURITIES LLC (together, the "Initial Purchasers").
This Agreement is made pursuant to the Purchase Agreement dated
April 23, 1997 (the "Purchase Agreement"), among the Corporation, as issuer of
the 9.98% Series A Junior Subordinated Deferrable Interest Debentures due
December 31, 2026 (the "Subordinated Debentures"), the Trust and the Initial
Purchasers, which provides for among other things, the sale by the Trust to the
Initial Purchasers of 75,000 of the Trust's 9.98% Series A Capital Securities,
liquidation amount $1,000 per Capital Security (the "Capital Securities"), the
proceeds of which will be used by the Trust to purchase Subordinated Debentures.
The Capital Securities, together with the Subordinated Debentures and the
Corporation's guarantee of the Capital Securities (the "Capital Securities
Guarantee") are collectively referred to as the "Securities". In order to induce
the Initial Purchasers to enter into the Purchase Agreement, the Corporation and
the Trust have agreed to provide to the Initial Purchasers and their direct and
indirect transferees the registration rights set forth in this Agreement. The
execution and delivery of this Agreement is a condition to the closing under the
Purchase Agreement.
In consideration of the foregoing, the parties hereto agree as
follows:
1. Definitions. As used in this Agreement, the
following capitalized defined terms shall have the following
meanings:
2
<PAGE>
"Advice" shall have the meaning set forth in the last paragraph of
Section 3 hereof.
"Applicable Period" shall have the meaning set forth in
Section 3(t) hereof.
"Business Day" means any day other than a Saturday, a Sunday, or a day
on which banking institutions in the City of New York are authorized or required
by law or executive order to close.
"Closing Time" shall mean the Closing Time as defined in the
Purchase Agreement.
"Corporation" shall have the meaning set forth in the preamble to this
Agreement and also includes the Corporation's successors and permitted assigns.
"Declaration" or "Declaration of Trust" shall mean the Amended and
Restated Declaration of Trust, dated as of April 23, 1997, by the trustees named
therein and the Corporation as sponsor.
"Depositary" shall mean The Depository Trust Corporation, or any other
depositary appointed by the Trust; provided, however, that such depositary must
have an address in the Borough of Manhattan, in The City of New York.
"Effectiveness Period" shall have the meaning set forth in
Section 2(b) hereof.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended from time to time.
"Exchange Offer" shall mean the offer by the Corporation and the Trust
to the Holders to exchange all of the Registrable Securities (other than Private
Exchange Securities) for a like principal amount of Exchange Securities pursuant
to Section 2(a) hereof.
3
<PAGE>
"Exchange Offer Registration" shall mean a registration under the
Securities Act effected pursuant to Section 2(a) hereof.
"Exchange Offer Registration Statement" shall mean an exchange offer
registration statement on Form S-4 (or, if applicable, on another appropriate
form), and all amendments and supplements to such registration statement, in
each case including the Prospectus contained therein, all exhibits thereto and
all material incorporated by reference therein.
"Exchange Period" shall have the meaning set forth in Section
2(a) hereof.
"Exchange Securities" shall mean (i) with respect to the Subordinated
Debentures, the 9.98% Series B Junior Subordinated Deferrable Interest
Debentures due December 31, 2026 (the "Exchange Debentures") containing terms
identical to the Subordinated Debentures (except that they will not contain
terms with respect to the transfer restrictions under the Securities Act and
will not provide for any increase in the interest rate thereon), (ii) with
respect to the Capital Securities, the Trust's 9.98% Series B Capital
Securities, liquidation amount $1,000 per Capital Security (the "Exchange
Capital Securities") which will have terms identical to the Capital Securities
(except they will not contain terms with respect to transfer restrictions under
the Securities Act and will not provide for any increase in the interest rate
thereon) and (iii) with respect to the Capital Securities Guarantee, the
Corporation's guarantee (the "Exchange Capital Securities Guarantee") of the
Exchange Capital Securities which will have terms identical to the Capital
Securities Guarantee.
"Holder" shall mean the Initial Purchasers, for so long as they own any
Registrable Securities, and each of its respective successors, assigns and
direct and indirect transferees, including Participating Broker-Dealers, who
become registered owners of Registrable Securities under the Indenture or
Declaration of Trust.
"Indenture" shall mean the Indenture relating to the Subor-
dinated Debentures and the Exchange Debentures dated as of
4
<PAGE>
April 23, 1997 among the Corporation, as issuer, and The Chase Manhattan Bank,
as trustee, as the same may be amended from time to time in accordance with the
terms thereof.
"Initial Purchasers" shall have the meaning set forth in the
preamble to this Agreement.
"Inspectors" shall have the meaning set forth in Section 3(n)
hereof.
"Issue Date" shall mean the date of original issuance of the
Securities.
"Liquidated Damages" shall have the meaning set forth in
Section 2(e) hereof.
"Majority Holders" shall mean the Holders of a majority of the aggregate
liquidation amount of outstanding Capital Securities.
"Participating Broker-Dealer" shall have the meaning set
forth in Section 3(t) hereof.
"Person" shall mean an individual, partnership, corporation, trust or
unincorporated organization, limited liability company, or a government or
agency or political subdivision thereof.
"Private Exchange" shall have the meaning set forth in
Section 2(a) hereof.
"Private Exchange Securities" shall have the meaning set forth in
Section 2(a) hereof.
"Prospectus" shall mean the prospectus included in a Registration
Statement, including any preliminary prospectus, and any such prospectus as
amended or supplemented by any prospectus supplement, including a prospectus
supplement with respect to the terms of the offering of any portion of the
Registrable Securities covered by a Shelf Registration Statement, and by all
other amendments and supplements to a prospectus, including post-
5
<PAGE>
effective amendments, and in each case including all material
incorporated by reference therein.
"Purchase Agreement" shall have the meaning set forth in the
preamble to this Agreement.
"Records" shall have the meaning set forth in Section 3(n)
hereof.
"Registration Default" shall have the meaning set forth in
Section 2(e) hereof.
"Registrable Securities" shall mean the Securities and, if issued, the
Private Exchange Securities; provided, however, that Securities or Private
Exchange Securities, as the case may be, shall cease to be Registrable
Securities when (i) a Registration Statement with respect to such Securities or
Private Exchange Securities for the exchange or resale thereof, as the case may
be, shall have been declared effective under the Securities Act and such
Securities or Private Exchange Securities, as the case may be, shall have had
the opportunity to have been disposed of pursuant to such Registration
Statement, (ii) such Securities or Private Exchange Securities, as the case may
be, shall have been sold to the public pursuant to Rule 144(k) (or any similar
provision then in force, but not Rule 144A) under the Securities Act, (iii) such
Securities or Private Exchange Securities, as the case may be, shall have ceased
to be outstanding or (iv) with respect to the Securities, such Securities have
been exchanged for Exchange Securities upon consummation of the Exchange Offer
and are thereafter freely tradeable by the holder thereof (other than an
affiliate of the Corporation).
"Registration Expenses" shall mean any and all expenses incident to
performance of or compliance by the Corporation with this Agreement, including
without limitation: (i) all SEC or National Association of Securities Dealers,
Inc. (the "NASD") registration and filing fees, including, if applicable, the
fees and expenses of any "qualified independent underwriter" (and its counsel)
that is required to be retained by any Holder of Registrable Securities in
accordance with the rules and
6
<PAGE>
regulations of the NASD, (ii) all fees and expenses incurred in connection with
compliance with state securities or blue sky laws (including reasonable fees and
disbursements of counsel for any underwriters or Holders in connection with blue
sky qualification of any of the Exchange Securities or Registrable Securities)
and compliance with the rules of the NASD, (iii) all expenses of any Persons in
preparing or assisting in preparing, word processing, printing and distributing
any Registration Statement, any Prospectus and any amendments or supplements
thereto, and in preparing or assisting in preparing, printing and distributing
any underwriting agreements, securities sales agreements and other documents
relating to the performance of and compliance with this Agreement, (iv) all
rating agency fees, (v) the fees and disbursements of counsel for the
Corporation and of the independent certified public accountants of the
Corporation, including the expenses of any "cold comfort" letters required by or
incident to such performance and compliance, (vi) the fees and expenses of the
Trustees, and any exchange agent or custodian, and (vii) the reasonable fees and
expenses of any special experts retained by the Corporation in connection with
any Registration Statement.
"Registration Statement" shall mean any registration statement of the
Corporation and the Trust which covers any of the Exchange Securities or
Registrable Securities pursuant to the provisions of this Agreement, and all
amendments and supplements to any such Registration Statement, including
post-effective amendments, in each case including the Prospectus contained
therein, all exhibits thereto and all material incorporated by reference
therein.
"Rule 144(k) Period" shall mean the period of two years (or such shorter
period as may hereafter be referred to in Rule 144(k) under the Securities Act
(or similar successor rule)) commencing on the Issue Date.
"SEC" shall mean the Securities and Exchange Commission.
"Securities" shall have the meaning set forth in the preamble
to this Agreement.
7
<PAGE>
"Securities Act" shall mean the Securities Act of 1933, as amended from
time to time.
"Shelf Registration" shall mean a registration effected pursuant to
Section 2(b) hereof.
"Shelf Registration Event" shall have the meaning set forth in Section
2(b) hereof.
"Shelf Registration Event Date" shall have the meaning set forth in
Section 2(b) hereof.
"Shelf Registration Statement" shall mean a "shelf" registration
statement of the Corporation and the Trust pursuant to the provisions of Section
2(b) hereof which covers all of the Regis- trable Securities or all of the
Private Exchange Securities, as the case may be, on an appropriate form under
Rule 415 under the Securities Act, or any similar rule that may be adopted by
the SEC, and all amendments and supplements to such registration statement,
including post-effective amendments, in each case including the Prospectus
contained therein, all exhibits thereto and all material incorporated by
reference therein.
"TIA" shall have the meaning set forth in Section 3(l) hereof.
"Trustees" shall mean any and all trustees with respect to (i) the
Capital Securities under the Declaration, (ii) the Subordinated Debentures under
the Indenture and (iii) the Capital Securities Guarantee.
2. Registration Under the Securities Act.
(a) Exchange Offer. To the extent not prohibited by any
applicable law or applicable interpretation of the staff of the SEC, the
Corporation and the Trust shall, for the benefit of the Holders, at the
Corporation's cost, use its best efforts to (i) cause to be filed with the SEC
within 150 days after the Issue Date an Exchange Offer Registration Statement
under the Securities Act covering the Exchange Offer, (ii) cause such Exchange
Offer Registration Statement to be declared effective under the Securi-
8
<PAGE>
ties Act by the SEC not later than the date which is 180 days after the Issue
Date, and (iii) keep such Exchange Offer Registration Statement effective for
not less than 30 calendar days (or longer if required by applicable law) after
the date notice of the Exchange Offer is mailed to the Holders. Upon the
effectiveness of the Exchange Offer Registration Statement, the Corporation and
the Trust shall promptly commence the Exchange Offer, it being the objective of
such Exchange Offer to enable each Holder eligible and electing to exchange
Registrable Securities for a like principal amount of Exchange Debentures or a
like liquidation amount of Exchange Capital Securities, together with the
Exchange Guarantee, as applicable (assuming that such Holder is not an affiliate
of the Corporation within the meaning of Rule 405 under the Securities Act and
is not a broker-dealer tendering Registrable Securities acquired directly from
the Corporation for its own account, acquires the Exchange Securities in the
ordinary course of such Holder's business and has no arrangements or
understandings with any Person to participate in the Exchange Offer for the
purpose of distributing the Exchange Securities), to transfer such Exchange
Securities from and after their receipt without any limitations or restrictions
under the Securities Act and under state securities or blue sky laws.
In connection with the Exchange Offer, the Corporation and the
Trust shall:
(i) mail to each Holder a copy of the Prospectus forming part of the
Exchange Offer Registration Statement, together with an appropriate letter of
transmittal and related documents;
(ii) keep the Exchange Offer open for acceptance for a period of not
less than 30 days after the date notice thereof is mailed to the Holders (or
longer if required by applicable law) (such period referred to herein as the
"Exchange Period");
(iii) utilize the services of the Depositary for the Ex-
change Offer;
9
<PAGE>
(iv) permit Holders to withdraw tendered Securities at any time prior
to the close of business, New York time, on the last Business Day of the
Exchange Period, by sending to the institution specified in the notice, a
facsimile transmission, if permitted by the terms of the letter of transmittal,
or letter setting forth the name of such Holder, the principal amount of
Securities delivered for exchange, and a statement that such Holder is
withdrawing his election to have such Securities exchanged;
(v) notify each Holder that any Security not tendered by such Holder in
the Exchange Offer will remain outstanding and continue to accrue interest or
accumulate distributions, as the case may be, but will not retain any rights
under this Agreement (except in the case of the Initial Purchasers and
Participating Broker-Dealers as provided herein); and
(vi) otherwise comply in all respects with all applicable
laws relating to the Exchange Offer.
If any Initial Purchaser determines upon advice of its outside
counsel that it is not eligible to participate in the Exchange Offer with
respect to the exchange of Securities constituting any portion of an unsold
allotment in the initial distribution, as soon as practicable upon receipt by
the Corporation and the Trust of a written request from such Initial Purchaser,
the Corporation and the Trust, as applicable, shall issue and deliver to such
Initial Purchaser in exchange (the "Private Exchange") for the Securities held
by such Initial Purchaser, a like liquidation amount of Capital Securities of
the Trust, together with the Exchange Guarantee, or a like principal amount of
the Subordinated Debentures of the Corporation, as applicable, that are
identical (except that such securities may bear a customary legend with respect
to restrictions on transfer pursuant to the Securities Act) to the Exchange
Securities (the "Private Exchange Securities") and which are issued pursuant to
the Indenture, the Declaration or the Guarantee (which provides that the
Exchange Securities will not be subject to the transfer restrictions set forth
in the Indenture or the Declaration, as applicable, and that the Exchange
Securities, the Private Exchange Securities and the Securities will vote and
consent together on all matters as one
10
<PAGE>
class and that neither the Exchange Securities, the Private Exchange Securities
nor the Securities will have the right to vote or consent as a separate class on
any matter). The Private Exchange Securities shall be of the same series as the
Exchange Securities and the Corporation and the Trust will seek to cause the
CUSIP Service Bureau to issue the same CUSIP Numbers for the Private Exchange
Securities as for the Exchange Securities issued pursuant to the Exchange Offer.
As soon as practicable after the close of the Exchange Offer and,
if applicable, the Private Exchange, the Corporation and the Trust, as the case
requires, shall:
(i) accept for exchange all Securities or portions thereof
tendered and not validly withdrawn pursuant to the Exchange Offer
or the Private Exchange;
(ii) deliver, or cause to be delivered, to the applicable
Trustee for cancellation all Securities or portions thereof so
accepted for exchange by the Corporation; and
(iii) issue, and cause the applicable Trustee under the Indenture, the
Declaration or the Guarantee, as applicable, to promptly authenticate and
deliver to each Holder, new Exchange Securities or Private Exchange Securities,
as applicable, equal in principal amount to the principal amount of the
Subordinated Debentures or equal in liquidation amount to the liquidation amount
to the Capital Securities (together with the guarantee thereof) as are
surrendered by such Holder.
Distributions on each Exchange Capital Security and interest on
each Exchange Debenture and Private Exchange Security issued pursuant to the
Registered Exchange Offer and in the Private Exchange will accrue from the last
date on which a Distribution or interest was paid on the Capital Security or the
Subordinated Debenture surrendered in exchange therefore or, if no Distribution
or interest has been paid on such Capital Security or Subordinated Debenture,
from the Issue Date and will be paid on the first interest payment date of the
Exchange Capital Security, Exchange Debenture or Private Exchange Security, as
the case may
11
<PAGE>
be. To the extent not prohibited by any law or applicable interpretation of the
staff of the SEC, the Corporation and the Trust shall use their best efforts to
complete the Exchange Offer as provided above, and shall comply with the
applicable requirements of the Securities Act, the Exchange Act and other
applicable laws in connection with the Exchange Offer. The Exchange Offer shall
not be subject to any conditions, other than that the Exchange Offer does not
violate applicable law or any applicable interpretation of the staff of the SEC.
Each Holder of Registra- ble Securities who wishes to exchange such Registrable
Securities for Exchange Securities in the Exchange Offer will be required to
make certain customary representations in connection therewith, including, in
the case of any Holder of Capital Securities, representations that (i) it is not
an affiliate of the Trust or the Corporation, (ii) the Exchange Securities to be
received by it were acquired in the ordinary course of its business and (iii) at
the time of the Exchange Offer, it has no arrangement with any person to
participate in the distribution (within the meaning of the Securities Act) of
the Exchange Capital Securities. The Corporation and the Trust shall inform the
Initial Purchasers, after consultation with the Trustee, of the names and
addresses of the Holders to whom the Exchange Offer is made, and the Initial
Purchasers shall have the right to contact such Holders and otherwise facilitate
the tender of Registrable Securities in the Exchange Offer.
Upon consummation of the Exchange Offer in accordance with this
Section 2(a), the provisions of this Agreement shall continue to apply, mutatis
mutandis, solely with respect to Registrable Securities that are Private
Exchange Securities and Exchange Securities held by Participating
Broker-Dealers, and the Corporation and the Trust shall have no further
obligation to register the Registrable Securities (other than Private Exchange
Securities) pursuant to Section 2(b) of this Agreement.
(b) Shelf Registration. In the event that (i) the Corporation or
the Trust reasonably determine, after conferring with counsel (which may be
in-house counsel), that the Exchange Offer Registration provided in Section 2(a)
above is not available because of any change in law or in currently prevailing
12
<PAGE>
interpretations of the staff of the SEC or if a Tax Event (as defined in the
Indenture) has occurred that could have an adverse effect on the Corporation or
the Trust if it were to issue Exchange Securities, (ii) the Exchange Offer
Registration Statement is not declared effective within 180 days of the Issue
Date or (iii) upon the request of any Initial Purchaser with respect to any
Registrable Securities held by it, if such Initial Purchaser is not permitted,
in the reasonable opinion of Brown & Wood LLP, pursuant to applicable law or
applicable interpretations of the staff of the SEC, to participate in the
Exchange Offer and thereby receive securities that are freely tradeable without
restriction under the Securities Act and applicable blue sky or state securities
laws (any of the events specified in (i)-(iii) being a "Shelf Registration
Event" and the date of occurrence thereof, the "Shelf Registration Event Date"),
the Corporation and the Trust shall, at their cost, use their best efforts to
cause to be filed as promptly as practicable after such Shelf Registration Event
Date, as the case may be, and, in any event, within 75 days after such Shelf
Registration Event Date (which shall be no earlier than 90 days after the
Closing Time), a Shelf Registration Statement providing for the sale by the
Holders of all of the Registrable Securities, and shall use its best efforts to
have such Shelf Registration Statement declared effective by the SEC as soon as
practicable. No Holder of Registrable Securities shall be entitled to include
any of its Registrable Securities in any Shelf Registration pursuant to this
Agreement unless and until such Holder agrees in writing to be bound by all of
the provisions of this Agreement applicable to such Holder and furnishes to the
Corporation and the Trust in writing, within 15 days after receipt of a request
therefor, such information as the Corporation and the Trust may, after
conferring with counsel with regard to information relating to Holders that
would be required by the SEC to be included in such Shelf Registration Statement
or Prospectus included therein, reasonably request for inclusion in any Shelf
Registration Statement or Prospectus included therein. Each Holder as to which
any Shelf Registration is being effected agrees to furnish to the Corporation
and the Trust all information with respect to such Holder necessary to make the
information previously furnished to the Corporation by such Holder not
materially misleading.
13
<PAGE>
The Corporation and the Trust agree to use their best efforts to
keep the Shelf Registration Statement continuously effective for the Rule 144(k)
Period (subject to extension pursuant to the last paragraph of Section 3 hereof)
or for such shorter period which will terminate when all of the Registrable
Securities covered by the Shelf Registration Statement have been sold pursuant
to the Shelf Registration Statement or cease to be outstanding (the
"Effectiveness Period"). The Corporation and the Trust shall not permit any
securities other than Registrable Securities to be included in the Shelf
Registration. The Corporation and the Trust will, in the event a Shelf
Registration Statement is declared effective, provide to each Holder a
reasonable number of copies of the Prospectus which is a part of the Shelf
Registration Statement, notify each such Holder when the Shelf Registration has
become effective and use its best efforts to take certain other actions as are
required to permit certain unrestricted resales of the Registrable Securities.
The Corporation and the Trust further agree, if necessary, to supplement or
amend the Shelf Registration Statement, if required by the rules, regulations or
instructions applicable to the registration form used by the Corporation for
such Shelf Registration Statement or by the Securities Act or by any other rules
and regulations thereunder for shelf registrations, and the Corporation and the
Trust agree to furnish to the Holders of Registrable Securities copies of any
such supplement or amendment promptly after its being used or filed with the
SEC.
(c) Expenses. The Corporation shall pay all Registration Expenses
in connection with the registration pursuant to Section 2(a) or 2(b) hereof.
Except as provided herein, each Holder shall pay all expenses of its counsel,
underwriting discounts and commissions and transfer taxes, if any, relating to
the sale or disposition of such Holder's Registrable Securities pursuant to the
Shelf Registration Statement.
(d) Effective Registration Statement. An Exchange Offer
Registration Statement pursuant to Section 2(a) hereof or a Shelf Registration
Statement pursuant to Section 2(b) hereof will not be deemed to have become
effective unless it has been declared effective by the SEC (or is automatically
effective); provided,
14
<PAGE>
however, that if, after it has been declared effective, the offering of
Registrable Securities pursuant to a Shelf Registration Statement is interfered
with by any stop order, injunction or other order or requirement of the SEC or
any other governmental agency or court, such Registration Statement will be
deemed not to have been effective during the period of such interference, until
the offering of Registrable Securities pursuant to such Registration Statement
may legally resume. The Corporation and the Trust will be deemed not to have
used their best efforts to cause the Exchange Offer Registration Statement or
the Shelf Registration Statement, as the case may be, to become, or to remain,
effective during the requisite period if either of them voluntarily take any
action that would result in any such Registration Statement not being declared
effective or in the Holders of Registrable Securities covered thereby not being
able to exchange or offer and sell such Registrable Securities during that
period unless such action is required by applicable law.
(e) Liquidated Damages. In the event that (i) (A) neither the
Exchange Offer Registration Statement nor a Shelf Registration Statement is
filed with the SEC on or prior to the 150th day after the Issue Date or (B)
notwithstanding that the Corporation and the Trust have consummated or will
consummate an Exchange Offer, the Corporation and the Trust are required to file
a Shelf Registration Statement and such Shelf Registration Statement is not
filed on or prior to the date required by Section 2(b) hereof, then commencing
on the day after the applicable required filing date, additional interest shall
accrue on the principal amount of the Subordinated Debentures, and additional
Distributions shall accumulate on the liquidation amount of the Capital
Securities, each at a rate of 0.25% per annum; or
(ii) (A) neither the Exchange Offer Registration Statement nor a Shelf
Registration Statement is declared effective by the SEC on or prior to the 180th
day after the applicable required filing date or (B) notwithstanding that the
Corporation and the Trust have consummated an Exchange Offer, the Corporation
and the Trust are required to file a Shelf Registration Statement and such Shelf
Registration Statement is not declared effective by the SEC on or prior to the
180th day after the applicable required filing
15
<PAGE>
date, then, commencing on the 181st day after the applicable required filing
date, additional interest shall accrue on the principal amount of the
Subordinated Debentures, and additional distributions shall accumulate on the
liquidation amount of the Capital Securities, each at a rate of 0.25% per annum;
or
(iii) (A) neither the Exchange Offer has been consummated on or prior to
the 210th day after the Issue Date or (B) if applicable, the Shelf Registration
Statement has been declared effective and such Shelf Registration Statement
ceases to be effective at any time prior to the second anniversary of the Issue
Date (other than after such time as all Capital Securities have been disposed of
thereunder or otherwise cease to be Registrable Securities), then additional
interest shall accrue on the principal amount of Subordinated Debentures, and
additional distributions shall accumulate on the liquidation amount of the
Capital Securities, each at a rate of 0.25% per annum commencing on (x) the
211th day after the Issue Date, in the case of (A) above, or (y) the day such
Shelf Registration Statement ceases to be effective in the case of (B) above;
provided, however, that neither the additional interest rate on the Subordinated
Debentures, nor the additional distribution rate on the liquidation amount of
the Capital Securities, may exceed in the aggregate 0.25% per annum; provided,
further, however, that (1) upon the filing of the Exchange Offer Registration
Statement or a Shelf Registration Statement (in the case of clause (i) above),
(2) upon the effectiveness of the Exchange Offer Registration Statement or a
Shelf Registration Statement (in the case of clause (ii) above), or (3) upon the
exchange of Exchange Capital Securities, Exchange Guarantees and Exchange
Subordinated Debentures for all Capital Securities, Guarantees and Subordinated
Debentures tendered (in the case of clause (iii)(A) above), or upon the
effectiveness of the Shelf Registration Statement which had ceased to remain
effective (in the case of clause (iii)(B) above), additional interest on the
Subordinated Debentures, and additional distributions on the liquidation amount
of the Capital Securities as a result of such clause (or the relevant subclause
thereof), as the case may be, shall cease to accrue or accumulate, as the case
may be.
16
<PAGE>
Any amounts of additional interest and additional Distributions due
pursuant to Section 2(e)(i), (ii) or (iii) above ("Liquidated Damages") will be
payable in cash on the next succeeding June 30 or December 31, as the case may
be, to holders on the relevant record dates for the payment of interest and
Distributions pursuant to the Indenture and the Declaration, respectively.
(f) Specific Enforcement. Without limiting the remedies available
to the Holders, the Corporation and the Trust acknowledge that any failure by
the Corporation or the Trust to comply with its obligations under Section 2(a)
and Section 2(b) hereof may result in material irreparable injury to the Holders
for which there is no adequate remedy at law, that it would not be possible to
measure damages for such injuries precisely and that, in the event of any such
failure, any Holder may obtain such relief as may be required to specifically
enforce the Corporation's and the Trust's obligations under Section 2(a) and
Section 2(b) hereof.
3. Registration Procedures. In connection with the
obligations of the Corporation and the Trust with respect to the
Registration Statements pursuant to Sections 2(a) and 2(b) hereof,
the Corporation and the Trust shall use their best efforts to:
(a) prepare and file with the SEC a Registration Statement or
Registration Statements as prescribed by Sections 2(a) and 2(b) hereof
within the relevant time period specified in Section 2 hereof on the
appropriate form under the Securities Act, which form (i) shall be
selected by the Corporation and the Trust, (ii) shall, in the case of a
Shelf Registration, be available for the sale of the Registrable
Securities by the selling Holders thereof and (iii) shall comply as to
form in all material respects with the requirements of the applicable
form and include all financial statements required by the SEC to be
filed therewith; and use its best efforts to cause such Registration
Statement to become effective and remain effective in accordance with
Section 2 hereof; provided, however, that if (1) such filing is pursuant
to Section 2(b), or (2) a Prospectus contained in
17
<PAGE>
an Exchange Offer Registration Statement filed pursuant to Section 2(a)
is required to be delivered under the Securities Act by any
Participating Broker-Dealer who seeks to sell Exchange Securities,
before filing any Registration Statement or Prospectus or any amendments
or supplements thereto, the Corporation and the Trust shall furnish to
and afford the Holders of the Registrable Securities and each such
Participating Broker-Dealer, as the case may be, covered by such
Registration Statement, their counsel and the managing underwriters, if
any, a reasonable opportunity to review, at their expense, copies of all
such documents (including copies of any documents to be incorporated by
reference therein and all exhibits thereto) proposed to be filed. The
Corporation and the Trust shall not file any Registration Statement or
Prospectus or any amendments or supplements thereto in respect of which
the Holders must be afforded an opportunity to review prior to the
filing of such document if the Majority Holders or such Participating
Broker-Dealer, as the case may be, their counsel or the managing
underwriters, if any, shall reasonably object (except in the event
counsel to the Corporation and the Trust determines such filing is
necessary);
(b) prepare and file with the SEC such amendments and
post-effective amendments to each Registration Statement as may be
necessary to keep such Registration Statement effective for the
Effectiveness Period or the Applicable Period, as the case may be; and
cause each Prospectus to be supplemented, if so determined by the
Corporation or the Trust or requested by the SEC, by any required
prospectus supplement and as so supplemented to be filed pursuant to
Rule 424 (or any similar provision then in force) under the Securities
Act, and comply with the provisions of the Securities Act, the Exchange
Act and the rules and regulations promulgated thereunder applicable to
it with respect to the disposition of all securities covered by each
Registration Statement during the Effectiveness Period or the Applicable
Period, as the case may be, in accordance with the intended method or
methods of distribution by the selling Holders thereof
18
<PAGE>
described in this Agreement (including sales by any Partici-
pating Broker-Dealer);
(c) in the case of a Shelf Registration, (i) notify each Holder
of Registrable Securities included in the Shelf Registration Statement,
at least three Business Days prior to filing, that a Shelf Registration
Statement with respect to the Registrable Securities is being filed and
advising such Holder that the distribution of Registrable Securities
will be made in accordance with the method selected by the Majority
Holders; and (ii) furnish to each Holder of Regis- trable Securities
included in the Shelf Registration Statement and to each underwriter of
an underwritten offering of Registrable Securities, if any, without
charge, as many copies of each Prospectus, including each preliminary
Prospectus, and any amendment or supplement thereto and such other
documents as such Holder or underwriter may reasonably request, in order
to facilitate the public sale or other disposition of the Registrable
Securities; and (iii) consent to the use of the Prospectus or any
amendment or supplement thereto by each of the selling Holders of
Registrable Securities included in the Shelf Registration Statement in
connection with the offering and sale of the Registrable Securities
covered by the Prospectus or any amendment or supplement thereto;
(d) in the case of a Shelf Registration, use its best efforts to
register or qualify the Registrable Securities under all applicable
state securities or "blue sky" laws of such jurisdictions by the time
the applicable Registration Statement is declared effective by the SEC
as any Holder of Registrable Securities covered by a Registration
Statement and each underwriter of an underwritten offering of Regis-
trable Securities shall reasonably request in writing in advance of such
date of effectiveness, and do any and all other acts and things which
may be reasonably necessary or advisable to enable such Holder and
underwriter to consummate the disposition in each such jurisdiction of
such Registrable Securities owned by such Holder; provided, however,
that the Corporation and the Trust shall not be required to (i)
19
<PAGE>
qualify as a foreign corporation or as a dealer in securities in any
jurisdiction where it would not otherwise be required to qualify but for
this Section 3(d), (ii) file any general consent to service of process
in any jurisdiction where it would not otherwise be subject to such
service of process or (iii) subject itself to taxation in any such
jurisdiction if it is not then so subject;
(e) in the case of (1) a Shelf Registration or (2) Participating
Broker-Dealers from whom the Corporation or the Trust has received prior
written notice that they will be utilizing the Prospectus contained in
the Exchange Offer Registration Statement as provided in Section 3(t)
hereof, are seeking to sell Exchange Securities and are required to
deliver Prospectuses, notify each Holder of Registrable Securities, or
such Participating Broker-Dealers, as the case may be, their counsel and
the managing underwriters, if any, promptly and promptly confirm such
notice in writing (i) when a Registration Statement has become effective
and when any post-effective amendments and supplements thereto become
effective, (ii) of any request by the SEC or any state securities
authority for amendments and supplements to a Registration Statement or
Prospectus or for additional information after the Registration
Statement has become effective, (iii) of the issuance by the SEC or any
state securities authority of any stop order suspending the
effectiveness of a Registration Statement or the qualification of the
Registrable Securities or the Exchange Securities to be offered or sold
by any Participating Broker-Dealer in any jurisdiction described in
paragraph 3(d) hereof or the initiation of any proceedings for that
purpose, (iv) in the case of a Shelf Registration, if, between the
effective date of a Registration Statement and the closing of any sale
of Registrable Securities covered thereby, the representations and
warranties of the Corporation and the Trust contained in any purchase
agreement, securities sales agreement or other similar agreement, if any
cease to be true and correct in all material respects, and (v) of the
happening of any event or the failure of any event to occur or the
discovery of any facts or otherwise, during the Effectiveness Period
which
20
<PAGE>
makes any statement made in such Registration Statement or the related
Prospectus untrue in any material respect or which causes such
Registration Statement or Prospectus to omit to state a material fact
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, and (vi) if
the Corporation and the Trust's reasonable determination is that a
post-effective amendment to the Registration Statement would be
appropriate;
(f) make every reasonable effort to obtain the withdrawal of any
order suspending the effectiveness of a Registration Statement at the
earliest practicable time;
(g) in the case of a Shelf Registration, furnish to each Holder
of Registrable Securities included within the coverage of such Shelf
Registration Statement, without charge, at least one conformed copy of
each Registration Statement relating to such Shelf Registration and any
post-effective amendment thereto (without documents incorporated therein
by reference or exhibits thereto, unless requested);
(h) in the case of a Shelf Registration, cooperate with the
selling Holders of Registrable Securities to facilitate the timely
preparation and delivery of certificates representing Registrable
Securities to be sold and not bearing any restrictive legends and in
such denominations (consistent with the provisions of the Indenture and
the Declaration) and registered in such names as the selling Holders or
the underwriters may reasonably request at least two Business Days prior
to the closing of any sale of Registrable Securities pursuant to such
Shelf Registration Statement;
(i) in the case of a Shelf Registration or an Exchange Offer
Registration, upon the occurrence of any circumstance contemplated by
Section 3(e)(ii), 3(e)(iii), 3(e)(v) or 3(e)(vi) hereof, use its best
efforts to prepare a supplement or post-effective amendment to a
Registration Statement or the related Prospectus or any document
incorporated therein
21
<PAGE>
by reference or file any other required document so that, as thereafter
delivered to the purchasers of the Registrable Securities, such
Prospectus will not contain any untrue statement of a material fact or
omit to state a material fact necessary to make the statements therein,
in the light of the circumstances under which they were made, not
misleading; and to notify each Holder to suspend use of the Prospectus
as promptly as practicable after the occurrence of such an event, and
each Holder hereby agrees to suspend use of the Prospectus until the
Corporation has amended or supplemented the Prospectus to correct such
misstatement or omission;
(j) in the case of a Shelf Registration, a reasonable time prior
to the filing of any document which is to be incorporated by reference
into a Registration Statement or a Prospectus after the initial filing
of a Registration Statement, provide a reasonable number of copies of
such document to the Holders; and make such of the representatives of
the Corporation and the Trust as shall be reasonably requested by the
Holders of Registrable Securities or the Initial Purchasers on behalf of
such Holders available for discussion of such document;
(k) obtain a CUSIP number for all Exchange Capital Securities and
the Capital Securities (and if the Trust has made a distribution of the
Subordinated Debentures to the Holders of the Capital Securities, the
Subordinated Debentures or the Exchange Subordinated Debentures) as the
case may be, not later than the effective date of a Registration
Statement, and provide the Trustee with certificates for the Exchange
Securities or the Registrable Securities, as the case may be, in a form
eligible for deposit with the Deposi- tary;
(l) cause the Indenture, the Declaration, the Guarantee and the
Exchange Guarantee to be qualified under the Trust Indenture Act of 1939
(the "TIA") in connection with the registration of the Exchange
Securities or Registrable Securities, as the case may be, and effect
such changes to such documents as may be required for them to be so
qualified
22
<PAGE>
in accordance with the terms of the TIA and execute, and use its best
efforts to cause the relevant trustee to execute, all documents as may
be required to effect such changes, and all other forms and documents
required to be filed with the SEC to enable such documents to be so
qualified in a timely manner;
(m) in the case of a Shelf Registration, enter into such
agreements (including underwriting agreements) as are customary in
secondary underwritten offerings and take all such other appropriate
actions as are reasonably requested in order to expedite or facilitate
the registration or the disposition of such Registrable Securities, and
in such connection, whether or not an underwriting agreement is entered
into and whether or not the registration is an underwritten
registration, if requested by (x) any Initial Purchaser, in the case
where an Initial Purchaser holds Securities acquired by it as part of
its initial distribution and (y) other Holders of Securities covered
thereby: (i) make such representations and warranties to Holders of such
Registrable Securities and the underwriters (if any), with respect to
the business of the Trust, the Corporation and its subsidiaries as then
conducted and the Registration Statement, Prospectus and documents, if
any, incorporated or deemed to be incorporated by reference therein, in
each case, as are customarily made by issuers to underwriters in
secondary underwritten offerings, and confirm the same if and when
requested; (ii) obtain opinions of counsel to the Corporation (who may
be an employee of the Corporation) and the Trust and updates thereof
(which may be in the form of a reliance letter) in form and substance
reasonably satisfactory to the managing underwriters (if any) and the
Holders of a majority in principal amount of the Registrable Securities
being sold, addressed to each selling Holder and the underwriters (if
any) covering the matters customarily covered in opinions requested in
underwritten offerings and such other matters as may be reasonably
requested by such underwriters (it being agreed that the matters to be
covered by such opinion may be subject to customary qualifications and
exceptions); (iii) obtain "cold comfort" letters and
23
<PAGE>
updates thereof in form and substance reasonably satisfactory to the
managing underwriters from the independent certified public accountants
of the Corporation and the Trust (and, if necessary, any other
independent certified public accountants of any subsidiary of the
Corporation and the Trust or of any business acquired by the Corporation
and the Trust for which financial statements and financial data are, or
are required to be, included in the Registration Statement), addressed
to each of the underwriters, such letters to be in customary form and
covering matters of the type customarily covered in "cold comfort"
letters in connection with underwritten offerings and such other matters
as reasonably requested by such underwriters in accordance with
Statement on Auditing Standards No. 72; and (iv) if an underwriting
agreement is entered into, the same shall contain indemnification
provisions and procedures no less favorable than those set forth in
Section 4 hereof (or such other provisions and procedures acceptable to
Holders of a majority in aggregate principal amount of Registrable
Securities covered by such Registration Statement and the managing
underwriters or agents) with respect to all parties to be indemnified
pursuant to said Section (including, without limitation, such
underwriters and selling Holders). The above shall be done at each
closing under such underwriting agreement, or as and to the extent
required thereunder;
(n) if (1) a Shelf Registration is filed pursuant to Section 2(b)
or (2) a Prospectus contained in an Exchange Offer Registration
Statement filed pursuant to Section 2(a) is required to be delivered
under the Securities Act by any Participating Broker-Dealer who seeks to
sell Exchange Securities during the Applicable Period, make reasonably
available for inspection by any selling Holder of such Registrable
Securities being sold, or each such Participating Broker-Dealer, as the
case may be, any underwriter participating in any such disposition of
Registrable Securities, if any, and any attorney, accountant or other
agent retained by any such selling Holder or each such Participating
Broker-Dealer, as the case may be, or underwriter (collectively, the
"Inspectors"), at the offices where normally
24
<PAGE>
kept, during reasonable business hours, all financial and other records,
pertinent corporate documents and properties of the Trust, the
Corporation and its subsidiaries (collectively, the "Records") as shall
be reasonably necessary to enable them to exercise any applicable due
diligence responsibilities, and cause the officers, directors and
employees of the Trust, the Corporation and its subsidiaries to supply
all relevant information in each case reasonably requested by any such
Inspector in connection with such Registration Statement provided,
however, that the foregoing inspection and information gathering shall
be coordinated on behalf of the Purchasers by you and on behalf of the
other parties, by one counsel designated by you and on behalf of such
other parties as described in Section 2(c) hereof. Records which the
Corporation and the Trust determine, in good faith, to be confidential
and any records which it notifies the Inspectors are confidential shall
not be disclosed by the Inspectors (and the Inspectors shall so agree in
writing) unless (i) the disclosure of such Records is necessary to avoid
or correct a material misstatement or omission in such Registration
Statement, (ii) the release of such Records is ordered pursuant to a
subpoena or other order from a court of competent jurisdiction or is
necessary in connection with any action, suit or proceeding or (iii) the
information in such Records has been made generally available to the
public. Each selling Holder of such Registrable Securities and each such
Participating Broker-Dealer will be required to agree in writing that
information obtained by it as a result of such inspections shall be
deemed confidential and shall not be used by it as the basis for any
market transactions in the securities of the Trust or the Corporation
unless and until such is made generally available to the public. Each
selling Holder of such Registrable Securities and each such
Participating Broker-Dealer will be required to further agree in writing
that it will, upon learning that disclosure of such Records is sought in
a court of competent jurisdiction, give notice to the Corporation and
allow the Corporation at its expense to undertake appropriate action to
prevent disclosure of the Records deemed confidential;
25
<PAGE>
(o) comply with all applicable rules and regulations of the SEC
so long as any provision of this Agreement shall be applicable and make
generally available to its security- holders earning statements
satisfying the provisions of Section 11(a) of the Securities Act and
Rule 158 thereunder (or any similar rule promulgated under the
Securities Act) no later than 45 days after the end of any 12-month
period (or 90 days after the end of any 12-month period if such period
is a fiscal year) (i) commencing at the end of any fiscal quarter in
which Registrable Securities are sold to underwriters in a firm
commitment or best efforts underwritten offering and (ii) if not sold to
underwriters in such an offering, commencing on the first day of the
first fiscal quarter of the Corporation after the effective date of a
Registration Statement, which statements shall cover said 12- month
periods;
(p) upon consummation of an Exchange Offer or a Private Exchange,
if requested by a Trustee, obtain an opinion of counsel to the
Corporation (who may be an employee of the Corporation) addressed to the
Trustee for the benefit of all Holders of Registrable Securities
participating in the Exchange Offer or the Private Exchange, as the case
may be, which opinion provides that (i) the Corporation and the Trust,
as the case requires, has duly authorized, executed and delivered the
Exchange Securities and Private Exchange Securities, and (ii) each of
the Exchange Securities or the Private Exchange Securities, as the case
may be, constitute a legal, valid and binding obligation of the
Corporation or the Trust, as the case requires, enforceable against the
Corporation or the Trust, as the case requires, in accordance with its
respective terms (in each case, with customary exceptions);
(q) if an Exchange Offer or a Private Exchange is to be
consummated, upon delivery of the Registrable Securities by Holders to
the Corporation or the Trust, as applicable (or to such other Person as
directed by the Corporation or the Trust, respectively), in exchange for
the Exchange Securities or the Private Exchange Securities, as the case
may be, the
26
<PAGE>
Corporation or the Trust, as applicable, shall mark, or cause to be
marked, on such Registrable Securities delivered by such Holders that
such Registrable Securities are being cancelled in exchange for the
Exchange Securities or the Private Exchange Securities, as the case may
be; in no event shall such Registrable Securities be marked as paid or
otherwise satisfied;
(r) cooperate with each seller of Registrable Securities covered
by any Registration Statement and each underwriter, if any,
participating in the disposition of such Registrable Securities and
their respective counsel in connection with any filings required to be
made with the NASD;
(s) use its best efforts to take all other steps necessary to
effect the registration of the Registrable Securities covered by a
Registration Statement contemplated hereby;
(t) (A) in the case of the Exchange Offer Registration Statement
(i) include in the Exchange Offer Registration Statement a section
entitled "Plan of Distribution," which section shall be reasonably
acceptable to the Initial Purchasers or another representative of the
Participating Broker-Dealers, and which shall contain a summary
statement of the positions taken or policies made by the staff of the
SEC with respect to the potential "underwriter" status of any
broker-dealer (a "Participating Broker-Dealer") that holds Registrable
Securities acquired for its own account as a result of market-making
activities or other trading activities and that will be the beneficial
owner (as defined in Rule 13d-3 under the Exchange Act) of Exchange
Securities to be received by such broker-dealer in the Exchange Offer,
whether such positions or policies have been publicly disseminated by
the staff of the SEC or such positions or policies, in the reasonable
judgment of the Initial Purchasers or such other representative,
represent the prevailing views of the staff of the SEC, including a
statement that any such broker-dealer who receives Exchange
27
<PAGE>
Securities for Registrable Securities pursuant to the Exchange Offer may
be deemed a statutory underwriter and must deliver a prospectus meeting
the requirements of the Securities Act in connection with any resale of
such Exchange Securities, (ii) furnish to each Participating
Broker-Dealer who has delivered to the Corporation the notice referred
to in Section 3(e), without charge, as many copies of each Prospectus
included in the Exchange Offer Registration Statement, including any
preliminary prospectus, and any amendment or supplement thereto, as such
Participating Broker-Dealer may reasonably request (each of the
Corporation and the Trust hereby consents to the use of the Prospectus
forming part of the Exchange Offer Registration Statement or any
amendment or supplement thereto by any Person subject to the prospectus
delivery requirements of the Securities Act, including all Participating
Broker-Dealers, in connection with the sale or transfer of the Exchange
Securities covered by the Prospectus or any amendment or supplement
thereto), (iii) use its best efforts to keep the Exchange Offer
Registration Statement effective and to amend and supplement the
Prospectus contained therein in order to permit such Prospectus to be
lawfully delivered by all Persons subject to the prospectus delivery
requirements of the Securities Act for such period of time as such
Persons must comply with such requirements under the Securities Act and
applicable rules and regulations in order to resell the Exchange
Securities; provided, however, that such period shall not be required to
exceed 90 days (or such longer period if extended pursuant to the last
sentence of Section 3 hereof) (the "Applicable Period"), and (iv)
include in the transmittal letter or similar documentation to be
executed by an exchange offeree in order to participate in the Exchange
Offer (x) the following provision:
"If the exchange offeree is a broker-dealer holding Registrable
Securities acquired for its own account as a result of
market-making activities or other trading activities, it will
deliver a prospectus meeting the requirements of the Securities
Act in connec-
28
<PAGE>
tion with any resale of Exchange Securities received in respect
of such Registrable Securities pursuant to the Exchange Offer";
and (y) a statement to the effect that by a broker-dealer making the
acknowledgment described in clause (x) and by delivering a Prospectus in
connection with the exchange of Registrable Securities, the broker-dealer will
not be deemed to admit that it is an underwriter within the meaning of the
Securities Act; and
(B) in the case of any Exchange Offer Registration Statement, the
Corporation and the Trust agree to deliver to the Initial Purchasers or
to another representative of the Participating Broker-Dealers, if
requested by any such Initial Purchasers or such other representative of
the Participating Broker-Dealers, on behalf of the Participating
Broker-Dealers upon consummation of the Exchange Offer an officers'
certificate containing certifications substantially similar to those set
forth in Section 5(f) of the Purchase Agreement and such additional
certifications as are customarily delivered in a public offering of debt
securities.
The Corporation or the Trust may require each seller of
Registrable Securities as to which any registration is being effected to furnish
to the Corporation or the Trust, as applicable, such information regarding such
seller as may be required by the staff of the SEC to be included in a
Registration Statement. The Corporation or the Trust may exclude from such
registration the Registrable Securities of any seller who unreasonably fails to
furnish such information within a reasonable time after receiving such request.
The Corporation shall have no obligation to register under the Securities Act
the Registrable Securities of a seller who so fails to furnish such information.
In the case of (1) a Shelf Registration Statement or (2)
Participating Broker-Dealers who have notified the Corporation and the Trust
that they will be utilizing the Prospectus contained in the Exchange Offer
Registration Statement as provided in Section 3(t) hereof, are seeking to sell
Exchange Securities and
29
<PAGE>
are required to deliver Prospectuses, each Holder agrees that, upon receipt of
any notice from the Corporation or the Trust of the happening of any event of
the kind described in Section 3(e)(ii), 3(e)(iii), 3(e)(v) or 3(e)(vi) hereof,
such Holder will forthwith discontinue disposition of Registrable Securities
pursuant to a Registration Statement until such Holder's receipt of the copies
of the supplemented or amended Prospectus contemplated by Section 3(i) hereof or
until it is advised in writing (the "Advice") by the Corporation and the Trust
that the use of the applicable Prospectus may be resumed, and, if so directed by
the Corporation and the Trust, such Holder will deliver to the Corporation or
the Trust (at the Corporation's or the Trust's expense, as the case requires)
all copies in such Holder's possession, other than permanent file copies then in
such Holder's possession, of the Prospectus covering such Registrable Securities
or Exchange Securities, as the case may be, current at the time of receipt of
such notice. If the Corporation or the Trust shall give any such notice to
suspend the disposition of Registrable Securities or Exchange Securities, as the
case may be, pursuant to a Registration Statement, the Corporation and the Trust
shall use their best efforts to file and have declared effective (if an
amendment) as soon as practicable an amendment or supplement to the Registration
Statement and shall extend the period during which such Registration Statement
shall be maintained effective pursuant to this Agreement by the number of days
in the period from and including the date of the giving of such notice to and
including the date when the Corporation and the Trust shall have made available
to the Holders (x) copies of the supplemented or amended Prospectus necessary to
resume such dispositions or (y) the Advice.
4. Indemnification and Contribution. (a) In connection with any
Registration Statement, the Corporation and the Trust shall, jointly and
severally, indemnify and hold harmless each Initial Purchaser, each Holder, each
underwriter who participates in an offering of the Registrable Securities, each
Participating Broker-Dealer, each Person, if any, who controls any of such
parties within the meaning of Section 15 of the Securities Act or Section 20 of
the Exchange Act and each of their respective directors, officers, employees and
agents, as follows:
30
<PAGE>
(i) from and against any and all loss, liability, claim, damage
and expense whatsoever, joint or several, as incurred, arising out of
any untrue statement or alleged untrue statement of a material fact
contained in any Registration Statement (or any amendment thereto),
covering Registrable Securities or Exchange Securities, including all
documents incorporated therein by reference, or the omission or alleged
omission therefrom of a material fact required to be stated therein or
necessary to make the statements therein not misleading or arising out
of any untrue statement or alleged untrue statement of a material fact
contained in any Prospectus (or any amendment or supplement thereto) or
the omission or alleged omission therefrom of a material fact necessary
in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading;
(ii) from and against any and all loss, liability, claim, damage
and expense whatsoever, joint or several, as incurred, to the extent of
the aggregate amount paid in settlement of any litigation, or any
investigation or proceeding by any court or governmental agency or body,
commenced or threatened, or of any claim whatsoever based upon any such
untrue statement or omission, or any such alleged untrue statement or
omission, if such settlement is effected with the prior written consent
of the Corporation; and
(iii) from and against any and all expenses whatsoever, as
incurred (including reasonable fees and disbursements of counsel chosen
by such Holder, such Participating Broker-Dealer, or any underwriter
(except to the extent otherwise expressly provided in Section 4(c)
hereof)), reasonably incurred in investigating, preparing or defending
against any litigation, or any investigation or proceeding by any court
or governmental agency or body, commenced or threatened, or any claim
whatsoever based upon any such untrue statement or omission, or any such
alleged untrue statement or omission, to the extent that any such
expense is not paid under subparagraph (i) or (ii) of this Section 4(b);
31
<PAGE>
provided, however, that (i) this indemnity does not apply to any loss,
liability, claim, damage or expense to the extent arising out of an untrue
statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with written information furnished in writing to the
Corporation or the Trust by such Holder, such Participating Broker-Dealer or any
underwriter, as the case may be, expressly for use in the Registration Statement
(or any amendment thereto) or any Prospectus (or any amendment or supplement
thereto) and (ii) the Corporation and the Trust shall not be liable to any such
Holder, Participating Broker-Dealer, any underwriter or controlling person with
respect to any untrue statement or alleged untrue statement or omission or
alleged omission in any preliminary Prospectus to the extent that any such loss,
liability, claim, damage or expense of any Holder, Participating Broker-Dealer,
any underwriter or controlling person results from the fact that such Holder,
any underwriter or Participating Broker-Dealer sold Securities to a person to
whom there was not sent or given, at or prior to the written confirmation of
such sale, a copy of the final Prospectus as then amended or supplemented if the
Corporation had previously furnished copies thereof to such Holder, underwriter
or Participating Broker-Dealer and the loss, liability, claim, damage or expense
of such Holder, underwriter, Participating Broker-Dealer or controlling person
results from an untrue statement or omission of a material fact contained in the
preliminary Prospectus which was corrected in the final Prospectus. Any amounts
advanced by the Corporation or the Trust to an indemnified party pursuant to
this Section 4 as a result of such losses shall be returned to the Corporation
or the Trust if it shall be finally determined by such a court in a judgment not
subject to appeal or final review that such indemnified party was not entitled
to indemnification by the Corporation or the Trust.
(b) Each Holder agrees, severally and not jointly, to indemnify
and hold harmless the Corporation, the Trust, any underwriter and the other
selling Holders and each of their respective directors, officers (including each
officer of the Corporation and the Trust who signed the Registration Statement),
employees and agents and each Person, if any, who controls the Corporation, the
Trust, any underwriter or any other selling Holder within the
32
<PAGE>
meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act,
from and against any and all loss, liability, claim, damage and expense
whatsoever described in the indemnity contained in Section 4(a) hereof, as
incurred, but only with respect to untrue statements or omissions, or alleged
untrue statements or omissions, made in the Registration Statement (or any
amendment thereto) or any Prospectus (or any amendment or supplement thereto) in
reliance upon and in conformity with written information furnished to the
Corporation or the Trust by such selling Holder with respect to such Holder
expressly for use in the Registration Statement (or any amendment thereto), or
any such Prospectus (or any amendment or supplement thereto); provided, however,
that, in the case of Shelf Registration Statement, no such Holder shall be
liable for any claims hereunder in excess of the amount of net proceeds received
by such Holder from the sale of Registrable Securities pursuant to such Shelf
Registration Statement.
(c) Each indemnified party shall give prompt notice to each
indemnifying party of any action commenced against it in respect of which
indemnity may be sought hereunder, enclosing a copy of all papers properly
served on such indemnified party, but failure to so notify an indemnifying party
shall not relieve such indemnifying party from any liability which it may have
under this Section 4, except to the extent that it is materially prejudiced by
such failure. An indemnifying party may participate at its own expense in the
defense of such action. If an indemnifying party so elects within a reasonable
time after receipt of such notice, an indemnifying party, severally or jointly
with any other indemnifying parties receiving such notice, may assume the
defense of such action with counsel chosen by it and reasonably acceptable to
the indemnified parties defendant in such action, provided, however, that if (i)
representation of such indemnified party by the same counsel would present a
conflict of interest or (ii) the actual or potential defendants in, or targets
of, any such action include both the indemnified party and the indemnifying
party and any such indemnified party reasonably determines that there may be
legal defenses available to such indemnified party which are different from or
in addition to those available to such indemnifying party, then in the case of
clauses (i) and (ii) of
33
<PAGE>
this Section 4(c) such indemnifying party and counsel for each indemnifying
party or parties shall not be entitled to assume such defense. If an
indemnifying party is not entitled to assume the defense of such action as a
result of the proviso to the preceding sentence, counsel for such indemnifying
party and counsel for each indemnified party or parties shall be entitled to
conduct the defense of such indemnified party or parties. If an indemnifying
party assumes the defense of such action, in accordance with and as permitted by
the provisions of this paragraph, such indemnifying parties shall not be liable
for any fees and expenses of counsel for the indemnified parties incurred
thereafter in connection with such action. In no event shall the indemnifying
parties be liable for the fees and expenses of more than one counsel (in
addition to local counsel), separate from its own counsel, for all indemnified
parties in connection with any one action or separate but similar or related
actions in the same jurisdiction arising out of the same general allegations or
circumstances. No indemnifying party shall, without the prior written consent of
the indemnified parties, settle or compromise or consent to the entry of any
judgment with respect to any litigation, or any investigation or proceeding by
any governmental agency or body, commenced or threatened, or any claim
whatsoever in respect of which indemnification or contribution could be sought
under this Section 4 (whether or not the indemnified parties are actual or
potential parties thereto), unless such settlement, compromise or consent (i)
includes an unconditional written release in form and substance satisfactory to
the indemnified parties of each indemnified party from all liability arising out
of such litigation, investigation, proceeding or claim and (ii) does not include
a statement as to or an admission of fault, culpability or a failure to act by
or on behalf of any indemnified party.
(d) Notwithstanding the last sentence of Section 4(c), if at any
time an indemnified party shall have requested an indemnifying party to
reimburse the indemnified party for reasonable fees and expenses of counsel
pursuant to Section 4(a)(iii) above, such indemnifying party agrees that it
shall be liable for any settlement effected without its written consent if (i)
such settlement is entered into more than 60 days after receipt by such
34
<PAGE>
indemnifying party of the aforesaid request, (ii) such indemnifying party shall
have received notice of the terms of such settlement at least 30 days prior to
such settlement being entered into and (iii) such indemnifying party shall not
have reimbursed such indemnified party in accordance with such request prior to
the date of such settlement; provided that an indemnifying party shall not be
liable for any such settlement effected without its consent if such indemnifying
party (1) reimburses such indemnified party in accordance with such request to
the extent it considers reasonable and (2) provides written notice to the
indemnified party substantiating the unpaid balance as unreasonable, in each
case prior to the date of such settlement.
(e) In order to provide for just and equitable contribution in
circumstances under which any of the indemnity provisions set forth in this
Section 4 is for any reason held to be unavailable to the indemnified parties
although applicable in accordance with its terms, the Corporation, the Trust,
and the Holders shall contribute to the aggregate losses, liabilities, claims,
damages and expenses of the nature contemplated by such indemnity agreement
incurred by the Corporation, the Trust, and the Holders, as incurred; provided
that no Person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the 1933 Act) shall be entitled to contribution from any Person
that was not guilty of such fraudulent misrepresentation. As between the
Corporation, the Trust and the Holders, such parties shall contribute to such
aggregate losses, liabilities, claims, damages and expenses of the nature
contemplated by such indemnity agreement in such proportion as shall be
appropriate to reflect the relative fault of the Corporation and Trust, on the
one hand, and the Holders, on the other hand, with respect to the statements or
omissions which resulted in such loss, liability, claim, damage or expense, or
action in respect thereof, as well as any other relevant equitable
considerations. The relative fault of the Corporation and the Trust, on the one
hand, and of the Holders, on the other hand, shall be determined by reference
to, among other things, whether the untrue or alleged untrue statement of a
material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Corporation or the Trust, on the one
hand, or by or on behalf of the Holders,
35
<PAGE>
on the other, and the parties' relative intent, knowledge, access to information
and opportunity to correct or prevent such statement or omission. The
Corporation, the Trust and the Holders of the Registrable Securities agree that
it would not be just and equitable if contribution pursuant to this Section 4
were to be determined by pro rata allocation or by any other method of
allocation that does not take into account the relevant equitable
considerations. For purposes of this Section 4, each affiliate of a Holder, and
each director, officer, employee, agent and Person, if any, who controls a
Holder or such affiliate within the meaning of Section 15 of the Securities Act
or Section 20 of the Exchange Act shall have the same rights to contribution as
such Holder, and each director of each of the Corporation or the Trust, each
officer of each of the Corporation or the Trust who signed the Registration
Statement, and each Person, if any, who controls each of the Corporation and the
Trust within the meaning of Section 15 of the Securities Act or Section 20 of
the Exchange Act shall have the same rights to contribution as each of the
Corporation or the Trust.
5. Participation in Underwritten Registrations. No
-------------------------------------------
Holder may participate in any underwritten registration hereunder
unless such Holder (a) agrees to sell such Holder's Registrable
Securities on the basis provided in any underwriting arrangements
approved by the Persons entitled hereunder to approve such
arrangements and (b) completes and executes all reasonable
questionnaires, powers of attorney, indemnities, underwriting
agreements, lock-up letters and other documents reasonably
required under the terms of such underwriting arrangements.
6. Selection of Underwriters. The Holders of Regis- trable
Securities covered by the Shelf Registration Statement who desire to do so may
sell the securities covered by such Shelf Registration in an underwritten
offering. In any such underwritten offering, the underwriter or underwriters and
manager or managers that will administer the offering will be selected by the
Holders of a majority in aggregate principal amount of the Registrable
Securities included in such offering; provided, however, that such underwriters
and managers must be reasonably satisfactory to the Corporation and the Trust.
36
<PAGE>
7. Miscellaneous.
(a) Rule 144 and Rule 144A. For so long as the Corporation or the
Trust is subject to the reporting requirements of Section 13 or 15 of the
Exchange Act and any Registrable Securities remain outstanding, each of the
Corporation and the Trust, as the case may be, will use its best efforts to file
the reports, if any, required to be filed by it under the Securities Act and
Section 13(a) or 15(d) of the Exchange Act and the rules and regulations adopted
by the SEC thereunder, and each of the Corporation and the Trust agrees that if
it ceases to be so required to file such reports, it will, upon the request of
any Holder of Registrable Securities (a) make publicly available such
information as is necessary to permit sales of their securities pursuant to Rule
144 under the Securities Act, (b) deliver such information to a prospective
purchaser as is necessary to permit sales of their securities pursuant to Rule
144A under the Securities Act and it will take such further action as any Holder
of Registrable Securities may reasonably request, and (c) take such further
action that is reasonable in the circumstances, in each case, to the extent
required from time to time to enable such Holder to sell its Registrable
Securities without registration under the Securities Act within the limitation
of the exemptions provided by (i) Rule 144 under the Securities Act, as such
rule may be amended from time to time, (ii) Rule 144A under the Securities Act,
as such rule may be amended from time to time, or (iii) any similar rules or
regulations hereafter adopted by the SEC. Upon the request of any Holder of
Registrable Securities, the Corporation and the Trust will deliver to such
Holder a written statement as to whether it has complied with such requirements.
(b) No Inconsistent Agreements. Except as set forth in the
Declaration or the Indenture, the Corporation or the Trust has not entered into
nor will the Corporation or the Trust on or after the date of this Agreement
enter into any agreement which is inconsistent with the rights granted to the
Holders of Registrable Securities in this Agreement or otherwise conflicts with
the provisions hereof. The rights granted to the Holders hereunder do not in any
way conflict with and are not inconsistent with the
37
<PAGE>
rights granted to the holders of the Corporation's or the Trust's other issued
and outstanding securities under any such agreements.
(c) Amendments and Waivers. The provisions of this Agreement,
including the provisions of this sentence, may not be amended, modified or
supplemented, and waivers or consents to departures from the provisions hereof
may not be given unless the Corporation and the Trust have obtained the written
consent of Holders of at least a majority in aggregate principal amount of the
outstanding Registrable Securities affected by such amendment, modification,
supplement, waiver or departure; provided no amendment, modification or
supplement or waiver or consent to the departure with respect to the provisions
of Section 4 hereof shall be effective as against any Holder of Registrable
Securities unless consented to in writing by such Holder of Registrable
Securities. Notwithstanding the foregoing sentence, (i) this Agreement may be
amended, without the consent of any Holder of Registrable Securities, by written
agreement signed by the Corporation, the Trust and Keefe Bruyette, to cure any
ambiguity, correct or supplement any provision of this Agreement that may be
inconsistent with any other provision of this Agreement or to make any other
provisions with respect to matters or questions arising under this Agreement,
the Declaration or the Indenture which shall not be inconsistent with other
provisions of this Agreement, (ii) this Agreement may be amended, modified or
supplemented, and waivers and consents to departures from the provisions hereof
may be given, by written agreement signed by the Corporation, the Trust and
Keefe Bruyette to the extent that any such amendment, modification, supplement,
waiver or consent is, in their reasonable judgment, necessary or appropriate to
comply with applicable law (including any interpretation of the Staff of the
SEC) or any change therein and (iii) to the extent any provision of this
Agreement relates to the Initial Purchasers, such provision may be amended,
modified or supplemented, and waivers or consents to departures from such
provisions may be given, by written agreement signed by Keefe Bruyette, the
Corporation and the Trust.
(d) Notices. All notices and other communications
provided for or permitted hereunder shall be made in writing by
38
<PAGE>
hand-delivery, registered first-class mail, telecopier, or any courier
guaranteeing overnight delivery (i) if to a Holder, at the most current address
given by such Holder to the Corporation or the Trust by means of a notice given
in accordance with the provisions of this Section 7(d), which address initially
is, with respect to the Initial Purchasers, the address set forth in the
Purchase Agreement; and (ii) if to the Corporation or the Trust, initially at
the Corporation's address set forth in the Purchase Agreement and thereafter at
such other address, notice of which is given in accordance with the provisions
of this Section 7(d).
All such notices and communications shall be deemed to have been
duly given: at the time delivered by hand, if personally delivered; five
Business Days after being deposited in the mail, postage prepaid, if mailed;
when receipt is acknowledged, if telecopied; and on the next Business Day, if
timely delivered to an air courier guaranteeing overnight delivery.
Copies of all such notices, demands or other communications shall
be concurrently delivered by the Person giving the same to The Chase Manhattan
Bank (or any successor trustee), at the address specified in the Indenture.
(e) Successors and Assigns. This Agreement shall inure to the
benefit of and be binding upon the successors, assigns and transferees of the
Initial Purchasers, including, without limitation and without the need for an
express assignment, subsequent Holders; provided, however, that nothing herein
shall be deemed to permit any assignment, transfer or other disposition of
Registrable Securities in violation of the terms of the Purchase Agreement or
the Indenture. If any transferee of any Holder shall acquire Registrable
Securities, in any manner, whether by operation of law or otherwise, such
Registrable Securities shall be held subject to all of the terms of this
Agreement, and by taking and holding such Registrable Securities, such Person
shall be conclusively deemed to have agreed to be bound by the obligations
hereunder and to perform all of the terms and provisions of this Agreement and
such Person shall be entitled to receive the benefits hereof.
39
<PAGE>
(f) Third Party Beneficiary. Each of the Initial Purchasers shall
be a third party beneficiary of the agreements made hereunder between the
Corporation and the Trust, on the one hand, and the Holders, on the other hand,
and shall have the right to enforce such agreements on behalf of such Holders
directly to the extent it deems such enforcement necessary or advisable to
protect its rights or the rights of Holders hereunder.
(g) Counterparts. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
(h) Headings. The headings in this Agreement are for convenience
of reference only and shall not limit or otherwise affect the meaning hereof.
(i) GOVERNING LAW. THIS AGREEMENT SHALL BE DEEMED TO HAVE BEEN
MADE IN THE STATE OF NEW YORK. THE VALIDITY AND INTERPRETATION OF THIS
AGREEMENT, AND THE TERMS AND CONDITIONS SET FORTH HEREIN, SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT
GIVING EFFECT TO ANY PROVISIONS RELATING TO CONFLICTS OF LAWS. EACH OF THE
PARTIES HERETO AGREES TO SUBMIT TO THE JURISDICTION OF THE COURTS OF THE STATE
OF NEW YORK IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS
AGREEMENT.
(j) Severability. In the event that any one or more of the
provisions contained herein, or the application thereof in any circumstance, is
held invalid, illegal or unenforceable, the validity, legality and
enforceability of any such provision in every other respect and of the remaining
provisions contained herein shall not be affected or impaired thereby.
(k) Securities Held by the Corporation, the Trust or its
Affiliates. Whenever the consent or approval of Holders of a specified
percentage of Registrable Securities is required hereunder, Registrable
Securities held by the Corporation, the Trust or its affiliates (as such term is
defined in Rule 405 under
40
<PAGE>
the Securities Act) shall not be counted in determining whether such consent or
approval was given by the Holders of such required percentage.
41
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Agreement as
of the date first written above.
Imperial Bancorp
By: /s/ Robert M. Franko
-------------------------------
Robert M. Franko
Executive Vice President
Imperial Capital Trust I
By: /s/ Richard M. Baker
-------------------------------
Richard M. Baker
CONFIRMED AND ACCEPTED, as of the date first above written:
KEEFE, BRUYETTE & WOODS, INC.
LEHMAN BROTHERS INC.
UBS SECURITIES LLC
By: KEEFE, BRUYETTE & WOODS, INC.
By: /s/ Peter J. Wirth
------------------------------
Peter J. Wirth
Senior Vice President
42
EXHIBIT 12
<TABLE>
<CAPTION>
====================================================================================================================================
RATIO OF EARNINGS TO FIXED CHARGES Pro-forma
- -------------------------------------------------------------------------------------------------------------------- Remaining
Year Ended December 31, Bank
(Dollars in thousands)
- -------------------------------------------------------------------------------------------------------------------- --------------
1996 1995 1994 1993 1992 1996
- -------------------------------------------------------------------------------------------------------------------- --------------
<S> <C> <C> <C> <C> <C> <C>
Ratio of Earnings to Fixed Charges:
- -------------------------------------------------------------------------------------------------------------------- --------------
Excluding interest on deposits 13.64x 4.87x 2.04x --(1) 3.21x 7.96x
- -------------------------------------------------------------------------------------------------------------------- --------------
Including interest on deposits 2.04x 1.43x 1.18x --(1) 1.23x 1.55x
- -------------------------------------------------------------------------------------------------------------------- --------------
- -------------------------------------------------------------------------------------------------------------------- --------------
COMPUTATION:
- -------------------------------------------------------------------------------------------------------------------- --------------
Net income before income taxes from continuing
operations 105,580 31,725 10,590 960 23,943 38,493
- -------------------------------------------------------------------------------------------------------------------- --------------
Less undistributed income from ICII 32,205 5,192 3,489 7,898 -- --
- -------------------------------------------------------------------------------------------------------------------- --------------
Total interest expense 68,054 60,154 37,415 36,280 101,683 68,054
- -------------------------------------------------------------------------------------------------------------------- --------------
Portion of rent expense that represents the
interest factor 2,301 2,192 2,581 2,773 2,933 2,029
- -------------------------------------------------------------------------------------------------------------------- --------------
Income as adjusted including interest expense 143,730 88,879 47,097 32,115 128,559 108,576
- -------------------------------------------------------------------------------------------------------------------- --------------
Less interest on deposits 64,551 55,491 33,184 31,072 93,795 64,551
- -------------------------------------------------------------------------------------------------------------------- --------------
Income as adjusted excluding interest on deposits 79,179 33,388 13,913 1,043 34,764 44,025
- -------------------------------------------------------------------------------------------------------------------- --------------
Total interest expense 68,054 60,154 37,415 36,280 101,683 68,054
- -------------------------------------------------------------------------------------------------------------------- --------------
Portion of rent expense that represents the
interest factor 2,301 2,192 2,581 2,773 2,933 2,029
- -------------------------------------------------------------------------------------------------------------------- --------------
Total fixed charges including interest on deposits 70,355 62,346 39,996 39,053 104,616 70,083
- -------------------------------------------------------------------------------------------------------------------- --------------
Less interest on deposits 64,551 55,491 33,184 31,072 93,795 64,551
- -------------------------------------------------------------------------------------------------------------------- --------------
Total fixed charges excluding interest on deposits 5,804 6,855 6,812 7,981 10,821 5,532
====================================================================================================================================
</TABLE>
- ---------------
1. Earnings were inadequate to cover fixed charges in 1993 by $6.9 milion.
EXHIBIT 23.1
The Board of Directors
Imperial Bancorp:
We consent to the use of our report incorporated herein by reference and to the
reference to our firm under headings "Selected Consolidated Financial Data of
Imperial Bancorp" and "Experts" in the prospectus.
KPMG PEAT MARWICK LLP
Los Angeles, California
April 9, 1997
