AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JUNE 6, 1997,
REGISTRATION NO. 333-
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-4
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
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U.S.B. HOLDING CO., INC. UNION STATE CAPITAL TRUST I
(Exact name of Registrant as (Exact name of Registrant as
specified in its charter) specified in its trust agreement)
DELAWARE DELAWARE
(State or other jurisdiction of (State or other jurisdiction of
incorporation or organization) incorporation or organization)
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6712 6719
(Primary Standard Industrial (Primary Standard Industrial
Classification Code Number) Classification Code Number)
36-3197969 13-7117454
(I.R.S. Employer (I.R.S. Employer
Identification No.) Identification No.)
100 DUTCH HILL ROAD
ORANGEBURG, NEW YORK 10962
(914) 365-4600
(Address, including zip code, and telephone number, including area
code, of Registrants' principal executive offices)
STEVEN T. SABATINI
EXECUTIVE VICE PRESIDENT, CHIEF FINANCIAL OFFICER AND ASSISTANT SECRETARY
U.S.B. HOLDING CO., INC.
100 DUTCH HILL ROAD
ORANGEBURG, NEW YORK 10962
(914) 365-4600
(Name, address, including zip code, and telephone number, including
area code, of agents for service)
COPIES TO:
LOUIS J. BEVILACQUA, ESQ.
DERRICK D. CEPHAS, ESQ.
CADWALADER, WICKERSHAM & TAFT
100 MAIDEN LANE
NEW YORK, NEW YORK 10038
Approximate Date of Commencement of Proposed Sale to the Public:
As soon as practicable after this Registration Statement becomes effective.
If any of the securities being registered on this Form are to be offered in
connection with the formation of a holding company and there is compliance with
General Instruction G, check the following box. |_|
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
Amount Proposed Maximum Proposed Maximum Amount of
Title of Each Class of Securities to be Offering Price Aggregate Registration
to be Registered Registered Per Unit(1) Offering Price(1) Fee(2)
<S> <C> <C> <C> <C>
9.58% Series B Capital Securities
of Union State Capital Trust I... $20,000,000 100% $20,000,000 $6,060.60
Series B Junior Subordinated Debt
Securities of U.S.B. Holding Co.,
Inc. (2).........................
U.S.B. Holding Co., Inc. Guarantee
with respect to Capital
Securities(3)....................
Total....................... $20,000,000(4) 100% $20,000,000(5) $6,060.60
<FN>
(1) Estimated solely for the purpose of computing the registration fee.
(2) No separate consideration will be received for the Series B Junior
Subordinated Debt Securities of U.S.B. Holding Co., Inc. (the "Junior
Subordinated Debt Securities") distributed upon any liquidation of Union
State Capital Trust I.
(3) No separate consideration will be received for the U.S.B. Holding Co., Inc.
Guarantee.
(4) This Registration Statement is deemed to cover rights of holders of Junior
Subordinated Debt Securities under the Indenture, the rights of holders of
9.58% Series B Capital Securities (the "Capital Securities") of Union State
Capital Trust I under the Amended and Restated Declaration of Trust and the
rights of holders of such Capital Securities under the U.S.B. Holding Co.,
Inc. Guarantee.
(5) Such amount represents the liquidation amount of the Capital Securities to
be exchanged hereunder and the principal amount of Junior Subordinated Debt
Securities that may be distributed to holders of such Capital Securities
upon any liquidation of Union State Capital Trust I.
</FN>
</TABLE>
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THE REGISTRANTS HEREBY AMEND THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANTS
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
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 by 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 JUNE 6, 1997
UNION STATE CAPITAL TRUST I
OFFER TO EXCHANGE ITS
9.58% SERIES B CAPITAL SECURITIES
(LIQUIDATION AMOUNT $1,000 PER CAPITAL SECURITY)
WHICH HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933
FOR ANY AND ALL OF ITS OUTSTANDING
9.58% SERIES A CAPITAL SECURITIES
(LIQUIDATION AMOUNT $1,000 PER CAPITAL SECURITY)
UNCONDITIONALLY GUARANTEED, AS DESCRIBED HEREIN, BY
U.S.B. HOLDING CO., INC.
THE EXCHANGE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M.,
NEW YORK CITY TIME, ON , 1997, UNLESS EXTENDED
---------------------
Union State Capital Trust I, a trust formed under the laws of the State of
Delaware (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 $20,000,000 aggregate liquidation amount of its 9.58% Series B Capital
Securities (the "New Capital Securities") that 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 9.58% Series A Capital
Securities (the "Old Capital Securities"), of which $20,000,000 aggregate
liquidation amount is outstanding. Pursuant to the Exchange Offer, U.S.B.
Holding Co., Inc., a Delaware corporation (the "Corporation" or "USB"), is also
offering to exchange (i) its guarantee of payments of cash distributions and
payments on liquidation of the Trust or redemption of the New Capital Securities
(the "New Guarantee") for a like guarantee in respect of the Old Capital
Securities (the "Old Guarantee") and (ii) all of its Series B Junior
Subordinated Debt Securities due February 1, 2027 (the "New Junior Subordinated
Debt Securities") for a like aggregate principal amount of its Series A Junior
Subordinated Debt Securities due February 1, 2027 (the "Old Junior Subordinated
Debt Securities"), which New Guarantee and New Junior Subordinated Debt
Securities also have been registered under the Securities Act. The Old Capital
Securities, the Old Guarantee and the Old Junior Subordinated Debt Securities
are collectively referred to herein as the "Old Securities," and the New Capital
Securities, the New Guarantee and the New Junior Subordinated Debt Securities
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 Debt Securities will not
provide for any increase in the interest rate thereon. See "Description of New
Securities" and "Description of Old Securities." The New Capital Securities are
being offered for exchange in order to satisfy certain obligations of the
Corporation and the Trust under the Registration Agreement dated as of February
5, 1997 (the "Registration Rights Agreement") among the Corporation, the Trust
and the Initial Purchaser (as defined herein). In the event that the Exchange
Offer is consummated, any Old Capital Securities that remain outstanding after
consummation of the Exchange Offer and the New Capital Securities issued issued
under 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).
This Prospectus and the Letter of Transmittal are first being mailed to all
holders of Old Capital Securities on , 1997.
SEE "RISK FACTORS" COMMENCING ON PAGE 22 FOR CERTAIN INFORMATION THAT
SHOULD BE CONSIDERED BY HOLDERS IN DECIDING WHETHER TO TENDER OLD CAPITAL
SECURITIES IN THE EXCHANGE OFFER.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR
HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE
SECURITIES 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.
<PAGE>
The New Capital Securities and the Old Capital Securities (collectively,
the "Capital Securities") represent beneficial interests in the assets of the
Trust. The Corporation is the owner of all of the beneficial interests
represented by common securities of the Trust (the "Common Securities," and
together with the Capital Securities, the "Trust Securities"). The Chase
Manhattan Bank is the Property Trustee of the Trust. The Trust exists for the
exclusive purposes of issuing the Trust Securities, and investing the proceeds
thereof in the Junior Subordinated Debt Securities (as defined herein). The
Junior Subordinated Debt Securities will mature on February 1, 2027 (the "Stated
Maturity"). The Capital Securities will have a preference over the Common
Securities under certain circumstances with respect to cash distributions and
amounts payable on liquidation, redemption or otherwise. See "Description of New
Capital Securities--Subordination of Common Securities."
As used herein, (i) the "Indenture" means the Indenture, dated as of
February 5, 1997, as amended and supplemented from time to time, between the
Corporation and The Chase Manhattan Bank, as Debenture Trustee (the "Debenture
Trustee"), (ii) the "Declaration" means the Amended and Restated Declaration of
Trust, dated as of February 5, 1997 relating to the Trust among the Corporation,
as Sponsor, The Chase Manhattan Bank as Property Trustee (the "Property
Trustee"), Chase Manhattan Bank Delaware, as Delaware Trustee, (the "Delaware
Trustee"), and four Administrative Trustees named therein (collectively, with
the Property Trustee and Delaware Trustee, the "Issuer Trustees"). In addition,
as the context may require, unless otherwise expressly stated, (i) the term
"Capital Securities" includes the Old Capital Securities and the New Capital
Securities, (ii) the term "Trust Securities" includes the Capital Securities and
the Common Securities, (iii) the term "Junior Subordinated Debt Securities"
includes the Old Junior Subordinated Debt Securities and the New Junior
Subordinated Debt Securities and (iv) the term "Guarantee" includes the Old
Guarantee and the New Guarantee.
Holders of the New Capital Securities will be entitled to receive
cumulative cash distributions, in each case arising from the payment of interest
on the Junior Subordinated Debt Securities, accruing from February 5, 1997, and
payable semi-annually in arrears on the 1st day of February and August of each
year, commencing August 1, 1997, at the annual rate of 9.58% of the liquidation
amount of $1,000 per New Capital Security ("Distributions"). Subject to certain
exceptions, the Corporation will have the right to defer payments of interest on
the Junior Subordinated Debt Securities 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, however, that no
Extension Period may extend beyond the Stated Maturity of the Junior
Subordinated Debt Security. Upon the termination of any such Extension Period
and the payment of all interest then accrued and unpaid (together with interest
thereon at the 9.58%, compounded semi-annually, to the extent permitted by
applicable law), the Corporation may elect to begin a new Extension Period,
subject to the requirements set forth herein. If interest payments on the Junior
Subordinated Debt Securities are so deferred, Distributions on the Trust
Securities will also be deferred and the Corporation will not be permitted,
subject to certain exceptions described herein, to declare or pay any cash
distributions with respect to the Corporation's capital stock (which includes
common and preferred stock) or to make any payment with respect to debt
securities of the Corporation that rank pari passu with or junior to the Junior
Subordinated Debt Securities. During an Extension Period, interest on the Junior
Subordinated Debt Securities will continue to accrue (as well as the amount of
Distributions to which holders of the Trust Securities are entitled will
accumulate) at the rate of 9.58% per annum, compounded semi-annually, and
holders of Trust Securities will be required to accrue interest income for
United States federal income tax purposes. See "Description of New Junior
Subordinated Debt Securities--Option to Extend Interest Payment Date" and
"Certain United States Federal Income Tax Considerations--Interest Income and
Original Issue Discount."
The Corporation will, through the New Guarantee, the Declaration, the New
Junior Subordinated Debt Securities and the Indenture (each as defined herein),
taken together, fully, irrevocably and unconditionally guarantee as described
herein, all of the Trust's obligations under the New Capital Securities. See
"Relationship Among the New Capital Securities, the New Junior Subordinated Debt
Securities and the New Guarantee--Full and Unconditional Guarantee." The
Corporation has agreed to guarantee the payment of Distributions and payments on
liquidation or redemption of the New Capital Securities, but only in each case
to the extent of funds held by the Trust, as described herein. See "Description
of New Guarantee." If the Corporation does not make interest payments on the
Junior Subordinated Debt Securities held by the Trust, the Trust will have
insufficient funds to pay Distributions on the Trust Securities. The Guarantee
does not cover the payment of Distributions when the Trust does not have
sufficient funds to pay such Distributions. In such event, a holder of Capital
Securities may institute a legal proceeding directly against the Corporation for
enforcement of payment to such holder of the principal of or interest on Junior
Subordinated Debt Securities having a principal amount equal to the aggregate
liquidation amount of the Capital Securities held by such holder (a "Direct
Action"). See "Description of New Junior Subordinated Debt
Securities--Enforcement of Certain Rights by Holders of Capital Securities." The
obligations of the Corporation under the Guarantee and the Junior Subordinated
Debt Securities are subordinate and junior in right of payment to all Senior
Debt (as defined in "Description of New Junior Subordinated Debt
Securities--Subordination") of the Corporation. In addition, because the
Corporation is a holding company, the Junior Subordinated Debt Securities and
the Guarantee are effectively subordinated to all existing and future
liabilities of the Corporation's subsidiaries, including deposit liabilities of
its bank subsidiary.
The Trust Securities are subject to mandatory redemption (i) in whole, but
not in part, at the Stated Maturity of the Junior Subordinated Debt Securities
at a redemption price equal to the principal amount of, plus accrued and unpaid
interest on, the Junior Subordinated Debt Securities (the "Maturity Redemption
Price"), (ii) in whole, but not in part, at any time prior to February 1, 2007,
contemporaneously with the optional redemption of the Junior Subordinated Debt
Securities 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 February 1, 2007 contemporaneously with any optional redemption
by the Corporation of Junior Subordinated Debt Securities at a redemption price
(the "Optional Redemption Price") equal to the Optional Prepayment Price (as
defined below). Any of the Maturity Redemption Price, the Special Event
Redemption Price or the Optional Redemption Price may be referred to herein as
the "Redemption Price." See "Description of New Capital Securities--Mandatory
Redemption." Subject to the Corporation having received prior approval of the
Board of Governors of the Federal Reserve System (the "Federal Reserve") to do
so if then required under applicable capital guidelines or policies of the
Federal Reserve, the Junior Subordinated Debt Securities are redeemable prior to
the Stated Maturity (i) at the option of the Corporation on or after February 1,
2007, in whole or in part at any time at a redemption price (the "Optional
Prepayment Price") equal to 104.790% of the principal amount thereof on February
1, 2007 declining ratably on each February 1 thereafter to 100% on or after
February 1, 2017, plus accrued and unpaid interest thereon to the date of
redemption or (ii) at any time prior to February 1, 2007, in whole but not in
part, upon the occurrence and continuation of a Special Event, at a redemption
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 prepayment price with respect to an optional redemption
of such Junior Subordinated Debt Securities on February 1, 2007, together with
scheduled payments of interest accruing from the redemption date to February 1,
2007, in each case, 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 herein), plus accrued but unpaid interest thereon to
the date of redemption. See "Description of New Junior Subordinated Debt
Securities--Optional Redemption" and "--Special Event Prepayment."
The Corporation has the right at any time to terminate the Trust and cause
a Like Amount (as defined herein) of the Junior Subordinated Debt Securities to
be distributed to the holders of the Trust Securities upon liquidation of the
Trust, subject to (i) the Corporation having received an opinion of counsel to
the effect that such distribution will not be a taxable event to the holders of
the Capital Securities and (ii) prior approval of the Federal Reserve to do so
if then required under applicable capital guidelines or policies of the Federal
Reserve. In the event of such termination of the Trust, after satisfaction of
liabilities to creditors of the Trust as required by applicable law, the holders
of the Trust Securities generally will be entitled to receive a liquidation
amount of $1,000 per Trust Security plus accumulated and unpaid Distributions
thereon to the date of payment, which shall be in the form of a distribution of
a Like Amount of Junior Subordinated Debt Securities, subject to certain
exceptions. See "Description of New Capital Securities--Liquidation of the Trust
and Distribution of Junior Subordinated Debt Securities."
The Capital Securities will be issued, and may be transferred, only in
blocks having a Liquidation Value of not less than $100,000 (100 Capital
Securities) or any integral multiple of $1,100 (one Capital Security) in excess
thereof.
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The Trust is making the Exchange Offer of the New Capital Securities in
reliance on the position of the staff of the Division of Corporation Finance of
the Securities and Exchange Commission (the "Commission") as set forth in
certain interpretive letters addressed to third parties in other transactions.
However, neither the Corporation nor the Trust has sought its own interpretive
letter and there can be no assurance that the staff of the Division of
Corporation Finance of the Commission would make a similar determination with
respect to the Exchange Offer as it has made in such interpretive letters to
third parties. Based on these interpretations by the staff of the Division of
Corporation Finance of the Commission, and subject to the two immediately
following sentences, the Corporation and the Trust believe that the New Capital
Securities issued pursuant to this Exchange Offer in exchange for the Old
Capital Securities may be offered for resale, resold and otherwise transferred
by a holder thereof (other than a holder who is a broker-dealer) without further
compliance with the registration and prospectus delivery requirements of the
Securities Act, provided that such New Capital Securities are acquired in the
ordinary course of such holder's business and that such holder is not
participating, and has no arrangement or understanding with any person to
participate, in a distribution (within the meaning of the Securities Act) of
such New Capital Securities. However, any holder of Old Capital Securities who
is an "affiliate" of the Corporation or the Trust or who intends to participate
in the Exchange Offer for the purpose of distributing the New Capital
Securities, or any broker-dealer who purchased the Old Capital Securities from
the Trust to resell pursuant to Rule 144A under the Securities Act ("Rule 144A")
or any other available exemption under the Securities Act, (a) will not be able
to rely on the interpretations of the staff of the Division of Corporation
Finance of the Commission set forth in the above-mentioned interpretive letters,
(b) will not be permitted or entitled to tender such Old Capital Securities in
the Exchange Offer and (c) must comply with the registration and prospectus
delivery requirements of the Securities Act in connection with any sale or other
transfer of such Old Capital Securities unless such sale is made pursuant to an
exemption from such requirements. In addition, as described below, if any
broker-dealer holds the Old Capital Securities acquired for its own account as a
result of market-making or other trading activities and exchanges such Old
Capital Securities for the New Capital Securities, then such broker-dealer must
deliver a prospectus meeting the requirements of the Securities Act in
connection with any resales of such New Capital Securities.
Each holder of Old Capital Securities 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 Corporation or the Trust,
(ii) any New Capital Securities to be received by it are being acquired in the
ordinary course of its business, (iii) it has no arrangement or understanding
with any person to participate in a distribution (within the meaning of the
Securities Act) of such New Capital Securities, and (iv) if such holder is not a
broker-dealer, such holder is not engaged in, and does not intend to engage in,
a distribution (within the meaning of the Securities Act) of such New Capital
Securities. In addition, the Corporation 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 Corporation 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 Securities Exchange Act of 1934, as amended) on behalf
of whom such holder holds the Capital Securities to be exchanged in the Exchange
Offer. Each broker-dealer that receives New Capital Securities for its own
account pursuant to the Exchange Offer must acknowledge 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, a broker-dealer will not be deemed
to admit that it is an "underwriter" within the meaning of the Securities Act.
Based on the position taken by the staff of the Division of Corporation Finance
of the Commission in the interpretive letters referred to above, the Corporation
and the Trust believe that broker-dealers who acquired Old Capital Securities
for their own accounts, as a result of market-making activities or other trading
activities ("Participating Broker-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 that
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. Accordingly, this Prospectus, as it may be amended
or supplemented from time to time, may be used by a Participating Broker-Dealer
in connection with resales of New Capital Securities received in exchange for
Old Capital Securities acquired by such broker-dealer as a result of
market-making activities or other trading activities. The Trust and the
Corporation have agreed that, ending on the close of business on the 180th day
following the Expiration Date (as described herein) (subject to extension under
certain limited circumstances described below) or, if earlier, when all such New
Capital Securities have been disposed of by such Participating Broker-Dealer,
they will make this Prospectus available to a Participating Broker-Dealer for
use in connection with any such resale. See "Plan of Distribution." However, a
Participating Broker-Dealer who intends to use this Prospectus in connection
with the resale of New Capital Securities received in exchange for Old Capital
Securities pursuant to the Exchange Offer must notify the Corporation or the
Trust, or cause the Corporation or the Trust to be notified, on or prior to the
Expiration Date, that it is a Participating Broker-Dealer. Such notice may be
given in the space provided for that purpose in the Letter of Transmittal or may
be delivered to the Exchange Agent at one of the addresses set forth herein
under "The Exchange Offer--Exchange Agent." Any Participating Broker-Dealer who
is an "affiliate" of the Corporation or the Trust may not rely on such
interpretive letters and must comply with the registration and prospectus
delivery requirements of the Securities Act in connection with any resale
transaction. See "The Exchange Offer--Resales of New Capital Securities."
In that regard, each Participating Broker-Dealer who surrenders Old Capital
Securities pursuant to the Exchange Offer will be deemed to have agreed, by
execution of the Letter of Transmittal, that, upon receipt of notice from the
Corporation or the Trust of the occurrence of any event or the discovery of any
fact that makes any statement contained or incorporated by reference in this
Prospectus untrue in any material respect or that 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 Participating Broker-Dealer will
suspend the sale of New Capital Securities (or the New Guarantee or the New
Junior Subordinated Debt Securities, as applicable) pursuant to this Prospectus
until the Corporation or the Trust has amended or supplemented this Prospectus
to correct such misstatement or omission and has furnished copies of the amended
or supplemented Prospectus to such Participating Broker-Dealer or the
Corporation or the Trust has given notice that the sale of the New Capital
Securities (or the New Guarantee or the New Junior Subordinated Debt Securities,
as applicable) may be resumed, as the case may be. If the Corporation or the
Trust gives such notice to suspend the sale of the New Capital Securities (or
the New Guarantee or the New Junior Subordinated Debt Securities, as
applicable), it shall extend the 180-day period referred to above during which
Participating Broker-Dealers are entitled to use this Prospectus in connection
with the resale of New Capital Securities by the number of days during the
period from and including the date of the giving of such notice to and including
the date when Participating Broker-Dealers shall have received copies of the
amended or supplemented Prospectus necessary to permit resales of the New
Capital Securities or to and including the date on which the Corporation or the
Trust has given notice that the sale of New Capital Securities (or the New
Guarantee or the New Junior Subordinated Debt Securities, as applicable) 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.
Although the Initial Purchaser has informed the Corporation and the Trust that
it currently intends to make a market in the New Capital Securities, it is not
obligated to do so, 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 New Capital Securities. The Corporation and the
Trust do not intend to apply for listing of the New Capital Securities on any
securities exchange or for quotation through the National Association of
Securities Dealers Automated Quotation System ("NASDAQ").
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 Trust Agreement
(except for those rights that terminate upon the consummation of the Exchange
Offer). Following the 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 Corporation nor the Trust
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 a 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 Corporation or the Trust (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 the Old Capital Securities being tendered for exchange.
However, the Exchange Offer is subject to certain events and conditions that may
be waived by the Corporation or the Trust and to the terms and provisions of the
Registration Rights Agreement. Old Capital Securities may be tendered in whole
or in part in an aggregate liquidation amount of not less than $100,000 (100
Capital Securities) or any integral multiple of $1,000 liquidation amount (one
Capital Security) in excess thereof. The Corporation as Issuer of Junior
Subordinated Debt Securities has agreed to pay all expenses of the Exchange
Offer. See "The Exchange Offer--Fees and Expenses." Holders of the Old Capital
Securities whose Old Capital Securities are accepted for exchange will not
receive 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 February 5, 1997 but will receive such Distributions
on the New Capital Securities. See "The Exchange Offer--Distributions on New
Capital Securities."
Neither the Corporation nor the Trust will receive any cash 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."
<PAGE>
--------------------
NO DEALER, SALESPERSON OR OTHER INDIVIDUAL HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED OR
INCORPORATED BY REFERENCE IN THIS PROSPECTUS IN CONNECTION WITH THIS EXCHANGE
OFFER AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE
RELIED UPON AS HAVING BEEN AUTHORIZED BY THE CORPORATION OR THE TRUST. NEITHER
THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL UNDER ANY
CIRCUMSTANCE CREATE AN IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS
OF THE CORPORATION OR THE TRUST SINCE THE DATE HEREOF. THIS PROSPECTUS DOES NOT
CONSTITUTE AN OFFER OR A SOLICITATION BY ANYONE IN ANY JURISDICTION IN WHICH
SUCH OFFER OR SOLICITATION IS NOT AUTHORIZED OR IN WHICH THE PERSON MAKING SUCH
OFFER OR SOLICITATION IS NOT QUALIFIED TO DO SO OR ANYONE TO WHOM IT IS UNLAWFUL
TO MAKE SUCH OFFER OR SOLICITATION.
--------------------
TABLE OF CONTENTS
Available Information.................................................11
Incorporation of Certain Documents by Reference.......................11
Summary...............................................................13
Risk Factors..........................................................22
Use of Proceeds.......................................................28
Union State Capital Trust I...........................................28
U.S.B. Holding Co., Inc...............................................29
Selected Historical Financial Information.............................32
Capitalization........................................................36
The Exchange Offer....................................................37
Description of New Capital Securities.................................46
Description of New Junior Subordinated Debt Securities................58
Description of New Guarantee..........................................67
Description of Old Securities.........................................70
Relationship Among the New Capital Securities, the New
Junior Subordinated Debentures and the New Guarantee................71
Certain United States Federal Income Tax Considerations...............72
Certain ERISA Considerations..........................................76
Plan of Distribution..................................................77
Legal Matters.........................................................78
Independent Auditors..................................................78
--------------------
<PAGE>
AVAILABLE INFORMATION
The Corporation 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. Such reports, proxy statements and other information can be
inspected and copied at the public reference facilities of the Commission at
Room 1024, 450 Fifth Street, N.W., Washington, D.C. 20549 and at the regional
offices of the Commission located at 7 World Trade Center, 13th Floor, Suite
1300, New York, New York 10048 and Suite 1400, Citicorp Center, 14th Floor, 500
West Madison Street, Chicago, Illinois 60661. Copies of such material can also
be obtained at prescribed rates by writing to the Public Reference Section of
the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549. Such
information may also be accessed electronically by means of the Commission's
home page on the Internet (http://www.sec.gov.). The Corporation's common stock
is listed on the American Stock Exchange and all reports, proxy and information
statements and other information filed by the Corporation with the Commission
also may be inspected at the offices at the American Stock Exchange, 86 Trinity
Place, New York, New York 10006-1181.
No separate financial statements of the Trust have been included herein.
The Corporation and the Trust do not consider that such financial statements
would be material to holders of the Capital Securities because the Trust is a
newly formed special purpose entity, has no operating history or independent
operations and is not engaged in and does not propose to engage in any activity
other than (i) issuing and selling the Trust Securities, (ii) using the proceeds
from the sale of the Trust Securities to acquire the Junior Subordinated Debt
Securities issued by the Corporation and (iii) engaging in only those other
activities necessary, advisable or incidental thereto (such as registering the
transfer of Capital Securities). See "Union State Capital Trust I," "Description
of New Capital Securities," "Description of New Junior Subordinated Debt
Securities" and "Description of New Guarantee." In addition, the Corporation
does not expect that the Trust will file reports under the Exchange Act with the
Commission.
This Prospectus constitutes a part of a registration statement on Form S-4
(the "Registration Statement") filed by the Corporation and the Trust with the
Commission under the Securities Act. This Prospectus does not contain all the
information set forth in the Registration Statement, certain parts of which are
omitted in accordance with the rules and regulations of the Commission, and
reference is hereby made to the Registration Statement and to the exhibits
relating thereto for further information with respect to the Corporation, the
Trust and the New Securities. Any statements contained herein concerning the
provisions of any document are not necessarily complete, and, in each instance,
reference is made to the copy of such document filed as an exhibit to the
Registration Statement or otherwise filed with the Commission. Each such
statement is qualified in its entirety by such reference.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by the Corporation with the Commission are
incorporated into this Prospectus by reference:
1. The Corporation's Annual Report on Form 10-K for the year ended December
31, 1996;
2. The Corporation's Current Reports on Form 8-K dated January 28, 1997 and
February 6, 1997;
3. The Corporation's Registration Statement on Form 8-A dated March 17,
1997; and
4. The Corporation's Quarterly Report on Form 10-Q for the quarter ended
March 31, 1997.
Each document or report filed by the Corporation pursuant to Section 13
(a), 13 (c), 14 or 15 (d) of the Exchange Act after the date hereof and prior to
the termination of any offering of securities made by this Prospectus shall be
deemed to be incorporated by reference into this Prospectus and to be a part of
this Prospectus from the date of filing of such document. Any statement
contained herein or, in a document all or a portion of which is incorporated or
deemed to be incorporated by reference herein, shall be deemed to be modified or
superseded for purposes of this Prospectus to the extent that a statement
contained herein or in any other subsequently filed document that also is or is
deemed to be incorporated by reference herein modifies or supersedes such
statement. Any such 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 Corporation will provide
without charge to any person to whom this Prospectus is delivered, on the
written or oral request of such person, a copy of any or all of the foregoing
documents incorporated by reference herein (other than exhibits not specifically
incorporated by reference into the texts of such documents). Requests for such
documents should be directed to:
U.S.B. Holding Co., Inc.
100 Dutch Hill Road
Orangeburg, New York 10962
Telephone: (914) 365-4600
Attention: Steven T. Sabatini, Executive
Vice President, Chief
Financial Officer and Assistant Secretary.
<PAGE>
SUMMARY
The following summary is qualified in its entirety by the more detailed
information appearing elsewhere in this Prospectus or incorporated by reference
herein.
UNION STATE CAPITAL TRUST I
The Trust is a statutory business trust formed under Delaware law pursuant
to (i) the Declaration and (ii) the filing of a certificate of trust of the
Trust with the Delaware Secretary of State on January 27, 1997. The Trust's
business and affairs are conducted by the Issuer Trustees: The Chase Manhattan
Bank, as Property Trustee, Chase Manhattan Bank Delaware, as Delaware Trustee,
and four individual Administrative Trustees who are employees or officers of or
affiliated with the Corporation. The Trust exists for the exclusive purposes of
(i) issuing and selling the Trust Securities, (ii) using the proceeds from the
sale of the Trust Securities to acquire the Junior Subordinated Debt Securities
issued by the Corporation and (iii) engaging in only those other activities
necessary, advisable or incidental thereto (such as registering the transfer of
the Capital Securities). The Junior Subordinated Debt Securities will be the
sole assets of the Trust, and payments under the Junior Subordinated Debt
Securities will be the sole revenues of the Trust. All of the Common Securities
will be owned directly or indirectly by the Corporation.
USB
U.S.B. Holding Co., Inc. (the "Corporation" or "USB"), a Delaware
corporation incorporated in 1982, is a bank holding company registered under the
Bank Holding Company Act of 1956, as amended, which provides financial services
through its wholly-owned subsidiaries. The Corporation and its subsidiaries
derive substantially all of their revenue and income from the furnishing of
banking and related financial services primarily to customers in Rockland and
Westchester Counties, New York.
Union State Bank (the "Bank"), the Corporation's sole banking subsidiary,
is a New York state chartered commercial bank established in 1969. The Bank
offers a wide range of banking services to individuals, municipalities,
corporations and small and medium-size businesses through its 18 retail banking
facilities in Rockland and Westchester Counties. The Bank's corporate offices
are located in Rockland County and the Bank also has a branch located in
Westchester County, which only closes loans and disburses funds. The Bank's
products and services include checking accounts, NOW accounts, money market
accounts, savings accounts (passbook and statement), certificates of deposit,
retirement accounts, business, personal, residential, construction, home equity,
second mortgage and condominium mortgage loans, loans for education, health and
similar expenditures, credit cards, other consumer oriented financial services
and safe deposit facilities. The Bank also makes available to its customers
automated teller machines (ATMs) and has a remote banking service for business
customers. The deposits of the Bank are insured to the extent permitted by law
pursuant to the Federal Deposit Insurance Act of 1950, as amended.
The Corporation currently has no banking subsidiaries other than the Bank,
although, prior to December 31, 1995, the Corporation owned Royal Oak Savings
Bank, F.S.B. ("Royal"), a federal thrift subsidiary located in Maryland. The
Corporation formed Royal in January 1991 to acquire deposits and certain assets
of two federal thrift institutions located in Maryland from the Resolution Trust
Company. Prior to its sale by the Corporation, Royal offered a wide range of
services to individuals and businesses in Baltimore and Carroll Counties,
Maryland. Royal had assets of approximately $47,000,000 as of December 31, 1995.
On December 31, 1995, all of the common stock of Royal was sold by the
Corporation to Monocacy Bancshares, Inc. Immediately prior to such sale,
substantially all of Royal's loans and investment securities, including its
credit card business, were purchased from Royal, for book value, by the Bank and
the Corporation, in effect transferring Royal's branch system, loan servicing
function, cash and certain immaterial assets to Monocacy Bancshares, Inc. The
Bank and the Corporation intend to maintain the loan portfolio purchased from
Royal, as the Corporation believes such portfolio represents an attractive
asset, and intend to continue to expand the credit card business acquired from
Royal. The Corporation does not intend, however, to expand its lending or other
business in the Maryland market, except for its credit card business.
The Corporation's assets at March 31, 1997 totaled $891.4 million, which
represents an increase of $87.9 million or 10.9% over assets as of December 31,
1996. The average annual growth rate in assets of the Corporation for the five
years ended December 31, 1996 was 15.6%. The Corporation has, through the Bank,
grown primarily by originating assets through the Bank's lending group and by
acquiring bank qualified securities. The Bank's funding requirements have been
met primarily through increased retail deposits which have been generated by the
Bank's expanding branch network and by an expansion of the Bank's existing
retail deposit base, as well as from municipal deposits and borrowings. The
Bank's current market shares are approximately 11.6% and .8% of Rockland and
Westchester deposits, respectively. The Bank is the largest independent bank
headquartered in Rockland County and believes it is able to attract and retain
customers because of its knowledge of its local markets, and the ability of its
professional staff to provide a high degree of service to its customers.
The Bank expects to continue to expand by opening new retail branches,
enhancing computerized and telephonic delivery channels, and expanding loan
originations in the Bank's market area. Acquisitions of other smaller financial
institutions and branches will be considered to supplement growth in the Bank's
present markets and in contiguous markets. The Corporation has not made any
acquisitions of other banking institutions to date, other than its acquisition
of Royal.
The Corporation's net income was $9.4 million in 1996, compared to $9.3
million in 1995, or an increase of 1%. The 1995 amount includes net income of
$2.1 million as a result of the sale of Royal, while the 1996 amount includes
approximately $300,000 of net income attributable to the sale of a branch
facility which was previously part of Royal's branch system. See "Recent
Developments." Excluding these amounts, as well as net income from Royal in
1995, 1996 net income increased $2.1 million or 30% over net income in 1995. Net
income for 1996 and 1995, excluding the effects of the transactions described
above and the net income of Royal in 1995, was $9.1 million and $7.0 million,
respectively.
Net income of the Corporation for the three months ended March 31, 1997 was
$2.3 million, an increase of $.1 million or 4% over earnings of $2.2 million for
the same period last year. Net income for the three months ended March 31, 1996
included gains on securities transactions of $.4 million while the same period
in 1997 did not include any material gains from sale of securities. Net income
per common and common equivalent share for the quarter ended March 31, 1997 was
$.35 compared to $.34 per common and common equivalent share for the same period
in the previous year.
The Corporation's business strategy is to provide commercial and consumer
banking services to its local customer base. For the quarter ended March 31,
1997 and the fiscal year ended December 31, 1996, USB reported a return on
average assets and return on average common equity of 1.11% and 17.12% and 1.25%
and 18.60%, respectively. Management believes that the Corporation's net
interest margin on a tax equivalent basis and efficiency ratio for the quarter
ended March 31, 1997 and the fiscal year ended December 31, 1996 of 4.25% and
52.71%, and 4.43% and 51.09%, respectively, illustrate the underlying strength
of USB's business strategy. See "Selected Historical Financial Information."
The principal executive offices of USB are located at 100 Dutch Hill Road,
Orangeburg, New York 10962 and its telephone number is (914) 365-4600.
USB is a legal entity separate and distinct from its subsidiaries. The
ability of holders of debt and equity securities of USB to benefit from the
distribution of assets of any subsidiary upon the liquidation or reorganization
of such subsidiary is subordinate to prior claims of creditors of the subsidiary
(including depositors in the case of banking subsidiaries), except to the extent
that a claim of USB as a creditor may be recognized.
There are various statutory and regulatory limitations on the extent to
which present and future banking subsidiaries of USB can finance or otherwise
transfer funds to USB or its nonbanking subsidiaries, whether in the form of
loans, extensions of credit, investments or asset purchases, including
regulatory limitations on the payment of dividends directly or indirectly to USB
from the Bank. Federal and state bank regulatory agencies also have the
authority to limit further the Bank's payment of dividends based on such factors
as the maintenance of adequate capital for such subsidiary bank, which could
reduce the amount of dividends otherwise payable. Under applicable banking
statutes, at March 31, 1997, the Bank could have declared additional dividends
of approximately $14.6 million to USB without prior regulatory approval.
Under the policy of the Federal Reserve, USB is expected to act as a source
of financial strength to the Bank and any other subsidiary bank which USB might
own and to commit resources to support each subsidiary bank in circumstances
where USB might not do so absent such policy. In addition, any subordinated
loans by USB to the Bank or any other subsidiary bank which USB might own would
also be subordinate in right of payment to deposits and obligations to general
creditors of such subsidiary banks.
THE EXCHANGE OFFER
The Exchange Offer.......Up to $20,000,000 aggregate liquidation amount of the
New Capital Securities are being offered in exchange
for a like aggregate liquidation amount of the Old
Capital Securities. The Old Capital Securities may be
tendered for exchange in whole or in part in a
liquidation amount of $100,000 (100 Capital Securities)
or any integral multiple of $1,000 (one Capital
Security) in excess thereof. The Corporation 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..........5:00 p.m., New York City time, on ___________, 1997,
unless the Exchange Offer is extended by the
Corporation or the Trust (in which case the Expiration
Date will be the latest date and time to which the
Exchange Offer is extended). See "The Exchange
Offer--Terms of the Exchange Offer."
Conditions to the
Exchange Offer...........The Exchange Offer is subject to certain conditions,
which may be waived by the Corporation and the Trust in
their sole discretion. The Exchange Offer is not
conditioned upon any minimum liquidation amount of the
Old Capital Securities being tendered. See "The
Exchange Offer--Conditions to the Exchange Offer."
Offer....................The Corporation and the Trust reserve the right in
their sole and absolute discretion, subject to
applicable law, at any time and from time to time, (i)
to delay the acceptance of the Old Capital Securities
for exchange, (ii) to terminate the Exchange Offer if
certain specified conditions 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 the 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--Terms of the Exchange Offer."
Withdrawal Rights........Tenders of the 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
Exchange Agent in conformity with certain procedures
set forth below under "The Exchange Offer--Withdrawal
Rights."
Procedures for
Tendering the Old
Capital Securities.......Certain brokers, dealers, commercial banks, trust
companies and other nominees who hold Old Capital
Securities through The Depository Trust Company ("DTC")
may effect tenders by book-entry transfer through DTC's
Automated Tender Offer Program ("ATOP"). Beneficial
owners 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. Tendering holders of Old Capital
Securities that do not use ATOP 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, to the Exchange Agent, either
with the certificates of the Old Capital Securities to
be tendered or in compliance with the specified
procedures for guaranteed delivery of Old Capital
Securities. Tendering holders of Old Capital Securities
that use ATOP will, by so doing, acknowledge that they
are bound by the terms of the Letter of Transmittal.
See "The Exchange Offer -- Procedures for Tendering the
Old Capital Securities."
Letters of Transmittal and certificates representing
Old Capital Securities should not be sent to the
Corporation or the Trust. Such documents should only be
sent to the Exchange Agent.
Resales of the New
Capital Securities.......The Corporation and the Trust are making the Exchange
Offer in reliance on the position of the staff of the
Division of Corporation Finance of the Commission as
set forth in certain interpretive letters addressed to
third parties in other transactions. However, neither
the Corporation nor the Trust has sought its own
interpretive letter and there can be no assurance that
the staff of the Division of Corporation Finance of the
Commission would make a similar determination with
respect to the Exchange Offer as it has made in such
interpretive letters to third parties. Based on these
interpretations by the staff of the Division of
Corporation Finance of the Commission, and subject to
the two immediately following sentences, the
Corporation and the Trust believe that New Capital
Securities issued pursuant to this Exchange Offer in
exchange for Old Capital Securities may be offered for
resale, resold and otherwise transferred by a holder
thereof (other than a holder who is a broker-dealer)
without further compliance with the registration and
prospectus delivery requirements of the Securities Act,
provided that such New Capital Securities are acquired
in the ordinary course of such holder's business and
that such holder is not participating, and has no
arrangement or understanding with any person to
participate, in a distribution (within the meaning of
the Securities Act) of such New Capital Securities.
However, any holder of Old Capital Securities who is an
"affiliate" of the Corporation or the Trust or who
intends to participate in the Exchange Offer for the
purpose of distributing the New Capital Securities, or
any broker-dealer who purchased the Old Capital
Securities from the Trust to resell pursuant to Rule
144A or any other available exemption under the
Securities Act, (a) will not be able to rely on the
interpretations of the staff of the Division of
Corporation Finance of the Commission set forth in the
above-mentioned interpretive letters, (b) will not be
permitted or entitled to tender such Old Capital
Securities in the Exchange Offer and (c) must comply
with the registration and prospectus delivery
requirements of the Securities Act in connection with
any sale or other transfer of such Old Capital
Securities unless such sale is made pursuant to an
exemption from such requirements. In addition, as
described below, if any broker-dealer holds Old Capital
Securities acquired for its own account as a result of
market-making or other trading activities and exchanges
such Old Capital Securities for New Capital Securities,
then such broker-dealer must deliver a prospectus
meeting the requirements of the Securities Act in
connection with any resales of such New Capital
Securities.
Each holder of Old Capital Securities 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
Corporation or the Trust, (ii) any New Capital
Securities to be received by it are being acquired in
the ordinary course of its business, (iii) it has no
arrangement or understanding with any person to
participate in a distribution (within the meaning of
the Securities Act) of such New Capital Securities, and
(iv) if such holder is not a broker-dealer, such holder
is not engaged in, and does not intend to engage in, a
distribution (within the meaning of the Securities Act)
of such New Capital Securities. Each broker-dealer that
receives New Capital Securities for its own account
pursuant to the Exchange Offer must acknowledge 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, a
broker-dealer will not be deemed to admit that it is an
"underwriter" within the meaning of the Securities Act.
Based on the position taken by the staff of the
Division of Corporation Finance of the Commission in
the interpretive letters referred to above, the
Corporation and the Trust believe that Participating
Broker-Dealers who acquired Old Capital Securities for
their own accounts as a result of market-making
activities or other trading activities may fulfill
their prospectus delivery requirements with respect to
the New Capital Securities received upon exchange of
such Old Capital Securities (other than the Old Capital
Securities that 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. Accordingly, this
Prospectus, as it may be amended or supplemented from
time to time, may be used by a Participating
Broker-Dealer in connection with resales of New Capital
Securities received in exchange for Old Capital
Securities where such Old Capital Securities were
acquired by such Participating Broker-Dealer for its
own account as a result of market-making or other
trading activities. Subject to certain provisions set
forth in the Registration Rights Agreement and to the
limitations described below under "The Exchange
Offer--Resales of New Capital Securities," the
Corporation and the Trust have agreed that this
Prospectus, as it may be amended or supplemented from
time to time, may be used by a Participating
Broker-Dealer in connection with resales of such New
Capital Securities for a period ending 180 days after
the Expiration Date (subject to extension under certain
limited circumstances) or, if earlier, when all such
New Capital Securities have been disposed of by such
Participating Broker-Dealer. See "Plan of
Distribution." Any Participating Broker-Dealer who is
an "affiliate" of the Corporation or the Trust may not
rely on such interpretive letters and must comply with
the registration and prospectus delivery requirements
of the Securities Act in connection with any resale
transaction. See "The Exchange Offer--Resales of New
Capital Securities."
Exchange Agent...........The exchange agent with respect to the Exchange Offer
is The Chase Manhattan Bank (the "Exchange Agent"). The
addresses, and telephone and facsimile numbers, of the
Exchange Agent are set forth in "The Exchange
Offer--Exchange Agent" and in the Letter of
Transmittal.
Use of Proceeds..........Neither the Corporation nor the Trust will receive any
cash proceeds from the issuance of the New Capital
Securities offered hereby. See "Use of Proceeds."
Certain United States
Federal Income Tax
Considerations; ERISA
Considerations...........Holders of Old Capital Securities should review the
information set forth under "Certain United States
Federal Income Tax Considerations" and "ERISA
Considerations" prior to tendering Old Capital
Securities pursuant to the Exchange Offer.
THE NEW CAPITAL SECURITIES
Securities Offered.......Up to $20,000,000 aggregate liquidation amount of the
Trust's New Capital Securities that have been
registered under the Securities Act (liquidation amount
$1,000 per New Capital Security). The New Capital
Securities will be issued and the Old Capital
Securities were issued under the Declaration. The New
Capital Securities and any Old Capital Securities that
remain outstanding after consummation of the Exchange
Offer will vote together as a single class for purposes
of determining whether holders of the requisite
percentage in outstanding liquidation amount thereof
have taken certain actions or exercised certain rights
under the Declaration. See "Description of New Capital
Securities--Voting Rights; Amendment of the
Declaration." The terms of the New Capital Securities
are identical in all material respects to the terms of
the Old Capital Securities, except that the New Capital
Securities have been registered under the Securities
Act and will not be subject to certain restrictions on
transfer applicable to the Old Capital Securities and
will not provide for any increase in the Distribution
rate thereon. See "The Exchange Offer--Purpose of the
Exchange Offer," "Description of New Capital
Securities," "Description of New Junior Subordinated
Debt Securities," "Description of New Guarantee" and
"Description of Old Securities."
Distribution Dates.......February 1 and August 1 of each year, commencing August
1, 1997.
Extension Periods........Distributions on the New Capital Securities may be
deferred for the duration of any Extension Period
elected by the Corporation with respect to the payment
of interest on the New Junior Subordinated Debt
Securities. No Extension Period will exceed 10
consecutive semi-annual periods or extend beyond the
Stated Maturity of the Junior Subordinated Debt
Securities. See "Description of New Junior Subordinated
Debt Securities--Option to Extend Interest Payment
Date" and "Certain United States Federal Income Tax
Considerations--Interest Income and Original Issue
Discount."
Ranking..................The New Capital Securities will rank pari passu, and
payments thereon will be made pro rata, with the Common
Securities except as described under "Description of
New Capital Securities--Subordination of Common
Securities." The New Junior Subordinated Debt
Securities will rank pari passu with all other junior
subordinated debt securities to be issued by the
Corporation pursuant to the Indenture with
substantially similar subordination terms ("Other
Debentures"), and which will be issued and sold (if at
all) to other trusts to be established by the
Corporation (if any), in each case similar to the Trust
("Other Trusts"), and will be unsecured and subordinate
and junior in right of payment to the extent and in the
manner set forth in the Indenture to all Senior Debt of
the Corporation. See "Description of New Junior
Subordinated Debt Securities." The New Guarantee will
rank pari passu with all other guarantees (if any) to
be issued by the Corporation with respect to capital
securities (if any) to be issued by the Trust, if any,
and will constitute an unsecured obligation of the
Corporation and will rank subordinate and junior in
right of payment to the extent and in the manner set
forth in the Guarantee to all Senior Debt. See
"Description of New Guarantee." In addition, because
the Corporation is a holding company, the New Junior
Subordinated Debt Securities and the New Guarantee are
effectively subordinated to all existing and future
liabilities of the Corporation's subsidiaries,
including deposit liabilities of the Bank.
Redemption...............The New Capital Securities and Common Securities are
subject to mandatory redemption (i) in whole, but not
in part, at the Stated Maturity of the New Junior
Subordinated Debt Securities upon the redemption
thereof, (ii) in whole, but not in part, at any time
prior to February 1, 2007, contemporaneously with the
optional redemption of the New Junior Subordinated Debt
Securities upon the occurrence and continuation of a
Special Event (as defined herein) and (iii) in whole or
in part at any time on or after February 1, 2007
contemporaneously with any optional redemption by the
Corporation of New Junior Subordinated Debt Securities,
in each case at the applicable Redemption Price. See
"Description of New Capital Securities--Mandatory
Redemption."
No Rating................The New Capital Securities are not expected to be rated
by any rating service, nor is any security issued by
the Corporation so rated.
Transfer Restrictions....The Capital Securities will be issued, and may be
transferred, only in blocks having a liquidation amount
of not less than $100,000 (100 Capital Securities) or
any integral multiple of $1,000 (one Capital Security)
in excess thereof. 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.
See "Description of New Capital
Securities--Restrictions on Transfer."
ERISA Considerations.....Prospective purchasers must carefully consider the
restrictions on purchase set forth under "Certain ERISA
Considerations."
Absence of Market
for the New Capital
Securities...............The New Capital Securities will be a new issue of
securities for which there is currently no market.
Although the Initial Purchaser has informed the Trust
and the Corporation that it currently intends to make a
market in the New Capital Securities, the Initial
Purchaser is not obligated to do so, 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 New
Capital Securities. The Trust and the Corporation do
not intend to apply for listing of the New Capital
Securities on any securities exchange or for quotation
through NASDAQ. See "Plan of Distribution."
Risk Factors.............Prospective investors should carefully consider the
matters set forth under "Risk Factors."
<PAGE>
RISK FACTORS
Prospective purchasers of the New Capital Securities should carefully
review the information contained elsewhere in this Prospectus or incorporated by
reference herein and should particularly consider the following matters.
Ranking of Obligations Under the Guarantee
and the Junior Subordinated Debt Securities
The obligations of the Corporation under the Guarantee issued by the
Corporation for the benefit of the holders of Capital Securities and under the
Junior Subordinated Debt Securities are unsecured and rank subordinate and
junior in right of payment to all Senior Debt of the Corporation. At March 31,
1997, the Corporation had no Senior Debt outstanding. Upon the issuance of the
Junior Subordinated Debt Securities, the Corporation will not have any
indebtedness that ranks pari passu with or junior to its obligations under the
Guarantee and the Junior Subordinated Debt Securities. Because the Corporation
is a bank holding company, the right of the Corporation to participate in any
distribution of assets of any subsidiary, including the Bank, upon such
subsidiary's liquidation or reorganization or otherwise (and thus the ability of
holders of the New Capital Securities to benefit indirectly from such
distribution) is subject to the prior claims of creditors of such subsidiary,
except to the extent that the Corporation may itself be recognized as a creditor
of such subsidiary. Accordingly, the Junior Subordinated Debt Securities will be
effectively subordinated to all existing and future liabilities of the
Corporation's subsidiaries, and holders of Junior Subordinated Debt Securities
should look only to the assets of the Corporation for payments on the Junior
Subordinated Debt Securities. Because the Corporation is a holding company with
limited assets and liabilities, a substantial portion of the consolidated
liabilities of the Corporation are liabilities of its subsidiaries. The
Guarantee will constitute an unsecured obligation of the Corporation and will
rank subordinate and junior in right of payment to all Senior Debt in the same
manner as the Junior Subordinated Debt Securities. See "USB." None of the
Indenture, the Guarantee or the Declaration places any limitation on the amount
of secured or unsecured debt, including Senior Debt, that may be incurred by the
Corporation or any subsidiary. See "Description of New Junior Subordinated Debt
Securities--Subordination" and "Description of New Guarantee--Status of the
Guarantee."
The ability of the Trust to pay amounts due on the Capital Securities is
solely dependent upon the Corporation making payments on the Junior Subordinated
Debt Securities as and when required.
In addition, there are various statutory and regulatory limitations on the
extent to which present and future banking subsidiaries of USB can finance or
otherwise transfer funds to USB or its nonbanking subsidiaries, whether in the
form of loans, extensions of credit, investments or asset purchases, including
regulatory limitations on the payment of dividends directly or indirectly to USB
from the Bank. Federal and state bank regulatory agencies also have the
authority to limit further the Bank's payment of dividends based on such factors
as the maintenance of adequate capital for such subsidiary bank, which could
reduce the amount of dividends otherwise payable. Under applicable banking
statutes, at March 31, 1997, the Bank could have declared additional dividends
of approximately $14.6 million to USB without prior regulatory approval.
Option to Extend Interest Payment Date;
Tax Consequences; Market Price
Consequences
So long as no Debenture Event of Default (as defined herein) has occurred
and is continuing, the Corporation has the right under the Indenture to defer
the payment of interest on the Junior Subordinated Debt Securities at any time
or from time to time for a period not exceeding 10 consecutive semi-annual
periods with respect to each Extension Period; provided, however, that no
Extension Period may extend beyond the Stated Maturity of the Junior
Subordinated Debt Securities. As a consequence of any such deferral, semi-annual
Distributions on the Capital Securities by the Trust will also 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 9.58%
per annum, compounded semi-annually) from the relevant payment date for such
Distributions during any such Extension Period. During any Extension Period, the
Corporation 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 Corporation'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 Corporation (including Other
Debentures) that rank pari passu with or junior in interest to, the Junior
Subordinated Debt Securities or (iii) make any guarantee payments with respect
to any guarantee by the Corporation of the debt securities of any subsidiary of
the Corporation (including Other Guarantees) if such guarantee ranks pari passu
with or junior in interest to the Junior Subordinated Debt Securities (other
than (a) dividends or distributions in common stock of the Corporation, (b) any
declaration of a dividend in connection with the implementation of a
stockholders' rights plan, 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) purchases or acquisitions of shares of the
Corporation's common stock in connection with the satisfaction by the
Corporation of its obligations under any employee benefit plan or any other
contractual obligation of the Corporation (other than a contractual obligation
ranking pari passu with or junior to the Junior Subordinated Debt Securities),
(e) as a result of a reclassification of the Corporation's capital stock or the
exchange or conversion of one class or series of the Corporation's capital stock
for another class or series of the Corporation's capital stock or (f) the
purchase of fractional interests in shares of the Corporation's capital stock
pursuant to the conversion or exchange provisions of such capital stock or the
security being converted or exchanged). Prior to the termination of any
Extension Period, the Corporation may further extend such Extension Period;
provided, however, that such extension does not cause such Extension Period to
exceed 10 consecutive semi-annual periods or to extend beyond the Stated
Maturity. Upon the termination of any Extension Period and the payment of all
interest then accrued and unpaid on the Junior Subordinated Debt Securities
(together with interest thereon at the annual rate of 9.58%, compounded
semi-annually, to the extent permitted by applicable law), the Corporation may
elect to begin a new Extension Period, subject to the above requirements. There
is no limitation on the number of times that the Corporation may elect to begin
an Extension Period. See "Description of New Capital Securities--Distributions"
and "Description of New Junior Subordinated Debt Securities--Option to Extend
Interest Payment Date."
Because the Corporation believes that the likelihood of its exercising its
option to defer payments of interest is remote, the Junior Subordinated Debt
Securities will be treated under Treasury regulations as issued without
"original issue discount" ("OID") for United States federal income tax purposes.
As a result, holders of Capital Securities generally will include their
allocable share of the interest on the Junior Subordinated Debt Securities in
taxable income under their own methods of tax accounting (i.e., cash or
accrual). The Corporation currently has no intention to exercise its option to
defer payments of interest. Under certain Treasury regulations, however, if the
Corporation exercises its right to defer payments of interest, the Junior
Subordinated Debt Securities will become OID instruments. Consequently, holders
of Capital Securities will be required to include their pro rata share of OID in
gross income as it accrues for United States federal income tax purposes in
advance of the receipt of cash attributable to such interest income. See
"Certain United States Federal Income Tax Considerations--Interest Income and
Original Issue Discount" and "--Sales of Capital Securities."
Should the Corporation elect to exercise its right to defer payments of
interest on the Junior Subordinated Debt Securities in the future, the market
price of the Capital Securities is likely to be adversely 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
Corporation's right to defer interest payments on the Junior Subordinated Debt
Securities, the market price of the Capital Securities (which represent
beneficial ownership interests in the Trust holding the Junior Subordinated Debt
Securities as its sole assets) may be more volatile than the market prices of
other securities that are not subject to such deferrals.
Special Event Redemption
Upon the occurrence and continuation of a Special Event prior to February
1, 2007, the Corporation may, at its option and subject to receipt of prior
approval of the Federal Reserve if such approval is then required under
applicable law, rules, guidelines or policies, redeem the Junior Subordinated
Debt Securities in whole, but not in part, at the Special Event Prepayment Price
(as defined herein). In such event, the Trust will redeem the Trust Securities
to the same extent as the Junior Subordinated Debt Securities are redeemed by
the Corporation. See "Description of New Junior Subordinated Debt
Securities--Special Event Prepayment," "Description of New Capital
Securities--Mandatory Redemption" and "Description of New Capital
Securities--Liquidation of the Trust and Distribution of Junior Subordinated
Debt Securities."
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 Corporation of an opinion of
independent counsel experienced in such matters to the effect that, as a result
of any amendment to, or change (including any announced proposed 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 proposed change, 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 Debt Securities, (ii) interest payable by the Corporation on the
Junior Subordinated Debt Securities is not, or within 90 days of the date of
such opinion, will not be, deductible by the Corporation, in whole or in part,
for United States federal income tax purposes, or (iii) the Trust is, or will be
within 90 days of the date of such opinion, subject to more than a de minimis
amount of other taxes, duties or other governmental charges.
A "Regulatory Capital Event" means that the Corporation 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 date of original
issuance of the Capital Securities, the Capital Securities do not constitute, or
within 90 days of the date thereof, will not constitute, Tier 1 capital (as
defined herein) (or its then equivalent); provided, however, that the
distribution of the Junior Subordinated Debt Securities in connection with the
liquidation of the Trust by the Corporation and the treatment thereafter of the
Junior Subordinated Debt Securities as other than Tier 1 capital shall not in
and of itself constitute a Regulatory Capital Event unless such liquidation
shall have occurred in connection with a Tax Event.
Proposed Legislation
On February 6, 1997, as part of President Clinton's fiscal 1998 Budget
Proposal, the United States Treasury Department proposed legislation (the
"Proposed Legislation") that would, among other things, deny an issuer a federal
income tax deduction for interest in respect of certain debt obligations, such
as the Junior Subordinated Debt Securities, but only if the debt obligations are
issued on or after "the date of the first committee action." If the proposed
legislation is enacted in its current form, it should not apply to the Junior
Subordinated Debt Securities, which were issued prior to the date of first
committee action (which has not yet occurred). There can be no assurances,
however, that the Proposed Legislation, if enacted, or similar legislation
enacted after the date hereof, would not adversely affect the tax treatment of
the Junior Subordinated Debt Securities, resulting in a Tax Event. A Tax Event
would permit the Corporation, upon the receipt of any required regulatory
approval, to cause a redemption of the Trust Securities at the Special Event
Redemption Price. See "Description of New Capital Securities--Mandatory
Redemption" and "Description of New Junior Subordinated Debt Securities--Special
Event Prepayment."
Liquidation Distribution of Junior Subordinated Debt Securities
The Corporation has the right at any time to liquidate the Trust and
distribute the Junior Subordinated Debt Securities to holders of the Trust
Securities. Such right is subject to (i) the Corporation having received an
opinion of counsel to the effect that such distribution will not be a taxable
event to the holders of the Capital Securities, and (ii) the prior approval of
the Federal Reserve if such approval is then required. Under current United
States federal income tax law, a distribution of Junior Subordinated Debt
Securities upon the dissolution of the Trust would not be a taxable event to
holders of the Capital Securities. If, however, the Trust is liquidated 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 United States Federal Income Tax Considerations--Distribution of
Junior Subordinated Debt Securities or Cash Upon Liquidation of the Trust."
There can be no assurance as to the market prices for Capital Securities or
Junior Subordinated Debt Securities that may be distributed in exchange for
Capital Securities if a liquidation of the Trust occurs. Accordingly, the
Capital Securities or the Junior Subordinated Debt Securities may trade at a
discount to the price that the investor paid to purchase the Capital Securities
offered hereby. Because holders of Capital Securities may receive Junior
Subordinated Debt Securities on termination of the Trust, prospective purchasers
of New Capital Securities are also making an investment decision with regard to
the New Junior Subordinated Debt Securities and should carefully review all the
information regarding the New Junior Subordinated Debt Securities contained
herein. See "Description of New Capital Securities--Liquidation of the Trust and
Distribution of Junior Subordinated Debt Securities" and "Description of New
Junior Subordinated Debt Securities--General."
Rights Under the Guarantee
The New Guarantee will guarantee, and the Old Guarantee guarantees, as the
case may be, 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 available therefor at such time, (ii) the applicable Redemption
Price with respect to any Capital Securities called for redemption, to the
extent that the Trust has funds on hand available therefor at such time, and
(iii) upon a voluntary or involuntary dissolution, winding-up or liquidation of
the Trust (unless the Junior Subordinated Debt Securities are distributed to
holders of the Trust 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 available therefor at
such time, and (b) the amount of assets of the Trust remaining available for
distribution to holders of the Capital Securities after the satisfaction of
liabilities to creditors of the Trust as provided by applicable law.
The holders of not less than a majority in aggregate liquidation amount of
the Capital Securities have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Guarantee Trustee (as
defined herein) in respect of the Guarantee or to direct the exercise of any
trust power conferred upon the Guarantee Trustee under the Guarantee. Any holder
of the Capital Securities may institute a legal proceeding directly against the
Corporation to enforce its rights under the Guarantee without first instituting
a legal proceeding against the Trust, the Guarantee Trustee or any other person
or entity. If the Corporation were to default on its obligation to pay amounts
payable under the Junior Subordinated Debt Securities, the Trust would lack
funds for the payment of Distributions or amounts payable on redemption of the
Capital Securities or otherwise, and, in such event, holders of the Capital
Securities would 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
Corporation to pay principal of or interest on the Junior Subordinated Debt
Securities on the applicable payment date, then a holder of Capital Securities
may institute a Direct Action. Notwithstanding any payments made to a holder of
Capital Securities by the Corporation in connection with a Direct Action, the
Corporation shall remain obligated to pay the principal of and interest on the
Junior Subordinated Debt Securities, and the Corporation shall be subrogated to
the rights of the holder of such Capital Securities with respect to payments on
the Capital Securities to the extent of any payments made by the Corporation to
such holder in any Direct Action. 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 Debt Securities or assert directly any
other rights in respect of the Junior Subordinated Debt Securities. See
"Description of New Junior Subordinated Debt Securities--Enforcement of Certain
Rights by Holders of Capital Securities," "Description of New Junior
Subordinated Debt Securities--Debenture Events of Default" and "Description of
New Guarantee." The Declaration provides that each holder of Capital Securities
by acceptance thereof agrees to the provisions of the Guarantee and the
Indenture. The Chase Manhattan Bank will act as Guarantee Trustee under the
Guarantee and will hold the Guarantee for the benefit of the holders of the
Capital Securities. The Chase Manhattan Bank will also act as Property Trustee
under the Declaration and as Debenture Trustee under the Indenture.
Limited Voting Rights
Holders of Capital Securities will generally have limited voting rights
relating only to the modification of the Capital Securities, the dissolution,
winding-up or liquidation of the Trust, and the exercise of the Trust's rights
as holder of Junior Subordinated Debt Securities. The right to vote to appoint,
remove or replace the Property Trustee or the Delaware Trustee is vested
exclusively in the holder of the Common Securities except upon the occurrence of
certain events described herein. The Property Trustee, the Administrative
Trustees and the Corporation may amend the Declaration without the consent of
holders of Capital Securities to ensure that the Trust will be classified for
United States federal income tax purposes as a grantor trust, even if such
action adversely affects the interests of such holders. See "Description of New
Capital Securities--Removal of Issuer Trustees" and "--Voting Rights; Amendment
of the Declaration."
Key Employees
The Corporation's success depends to a significant degree upon the
continued contributions of its key management, including Thomas E. Hales, its
Chairman of the Board, President and Chief Executive Officer. The Corporation's
success also depends upon its ability to attract and retain highly qualified
personnel. Competition for such personnel is intense, and there can be no
assurance that the Corporation will be successful in hiring or retaining
qualified personnel. Loss of key personnel or the inability to hire or retain
qualified personnel could have an adverse effect on the Corporation's business.
Regional Concentration
The Corporation's lending activities are concentrated principally in
Rockland and Westchester Counties, two counties which are part of the greater
New York metropolitan area. In addition, a significant portion of the
Corporation's loans are secured by real estate located in these areas. An
economic downturn in Rockland and Westchester Counties or in the greater New
York metropolitan area or a severe reduction in real estate values in such areas
may adversely affect the performance of the Corporation's loans and consequently
the performance, financial condition and outlook of the Corporation.
Consequences of a 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 that 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 that
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 Agreement (subject to certain limited exceptions). The
Corporation and the Trust do not intend to register under the Securities Act any
Old Capital Securities that 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.
The New Capital Securities and any Old Capital Securities that remain
outstanding after consummation of the Exchange Offer will vote together as a
single class for purposes of determining whether holders of the requisite
percentage in outstanding liquidation amount thereof have taken certain actions
or exercised certain rights under the Declaration. See "Description of New
Capital Securities--Voting Rights; Amendment of the Declaration."
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 "Description of Old Securities."
Absence of Public Market
The Old Capital Securities were issued to, and the Corporation believes
such securities are currently owned by, a relatively small number of beneficial
owners. The Old Capital Securities have not been registered under the Securities
Act and will be subject to certain restrictions on transferability if they are
not exchanged for the New Capital Securities. Although the New Capital
Securities may be resold or otherwise transferred by the holders (who are not
affiliates of the Corporation or the Trust) without compliance with the
registration requirements under the Securities Act (subject to certain
limitations), they will constitute a new issue of securities with no established
trading market. Capital Securities may be transferred by the holders thereof
only in blocks having a liquidation amount of not less than $100,000 (100
Capital Securities) or any integral multiple of $1,000 (one Capital Security) in
excess thereof. The Corporation and the Trust have been advised by the Initial
Purchaser that the Initial Purchaser presently intends to make a market in the
New Capital Securities. However, the Initial Purchaser is not obligated to do so
and any market-making activity with respect to the New Capital Securities may be
discontinued at any time without notice. In addition, such market-making
activity will be subject to the limits imposed by the Securities Act and the
Exchange Act and may be limited during the Exchange Offer. Accordingly, no
assurance can be given that an active public or other market will develop for
the New Capital Securities or the Old Capital Securities or as to the liquidity
of or the trading market for the New Capital Securities or the Old Capital
Securities. If an active public market does not develop, the market price and
liquidity of the New Capital Securities may be adversely affected.
If a public trading market develops for the New Capital Securities, future
trading prices will depend on many factors, including, among other things,
prevailing interest rates, the Corporation's results and the market for similar
securities. Depending on these and other factors, the New Capital Securities may
trade at a discount.
Notwithstanding the registration of the New Capital Securities in the
Exchange Offer, holders who are "affiliates" (as defined under Rule 405 of the
Securities Act) of the Corporation or the Trust 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 broker-dealer that receives New Capital Securities for its own account
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, must acknowledge that it will deliver a prospectus in
connection with any resale of such New Capital Securities. See "Plan of
Distribution."
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 Trust of such Old Capital Securities, a properly completed and
duly executed Letter of Transmittal 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 Corporation nor the Trust is under any
duty to give notification of defects or irregularities with respect to the
tenders of the Old Capital Securities for exchange.
<PAGE>
USE OF PROCEEDS
Neither the Corporation 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 canceled.
All of the proceeds from the sale of the Old Capital Securities and Common
Securities were invested by the Trust in the Old Junior Subordinated Debt
Securities. The Corporation applied $3,250,000 of the net proceeds from the sale
of the Old Junior Subordinated Debt Securities to the redemption of its
outstanding preferred stock and $14.5 million was contributed to the Bank as an
additional capital contribution. The remainder of such net proceeds was applied
to the Corporation's general funds to be used by its management for general
corporate purposes, including, from time to time, the making of additional
investments in, and advances to, its subsidiaries, principally the Bank. A
portion of such proceeds could be used in connection with one or more future
acquisitions. From time to time, the Corporation investigates and holds
discussions and negotiations in connection with possible transactions with other
banks. As of the date of this Prospectus, the Corporation has not entered into
any agreements or understandings with respect to any potential acquisition or
any other material transactions of the type referred to above and no discussions
or negotiations are taking place. Pending such application by the Corporation,
such net proceeds have been and, in the future may be, invested in short-term
interest-bearing securities and in equity securities, or used to reduce
borrowings.
UNION STATE CAPITAL TRUST I
The Trust is a statutory business trust formed under Delaware law pursuant
to (i) the original declaration of trust executed by the Corporation, as
Depositor, Chase Manhattan Bank Delaware, as Delaware Trustee, and the
Administrative Trustees named therein, which original declaration of trust will
be amended and restated and executed by the Corporation, as Depositor, The Chase
Manhattan Bank, as Property Trustee, Chase Manhattan Bank Delaware, as Delaware
Trustee, and the Administrative Trustees named therein (the "Declaration"), and
(ii) the filing of a certificate of trust with the Delaware Secretary of State
on January 27, 1997. The Trust exists for the exclusive purposes of (i) issuing
and selling the Trust Securities, (ii) using the proceeds from the sale of the
Trust Securities to acquire the Junior Subordinated Debt Securities and (iii)
engaging in only those other activities necessary, advisable or incidental
thereto (such as registering the transfer of the Capital Securities).
Accordingly, the Junior Subordinated Debt Securities will be the sole assets of
the Trust, and payments under the Junior Subordinated Debt Securities will be
the sole revenues of the Trust. All of the Common Securities are owned directly
by the Corporation. The Common Securities rank pari passu, and payments will be
made thereon pro rata, with the Capital Securities, except that upon the
occurrence and continuance of an Event of Default under the Declaration
resulting from a Debenture Event of Default, the rights of the Corporation as
holder of the Common Securities to payments in respect of Distributions and
payments upon liquidation, redemption or otherwise will be subordinated to the
rights of the holders of the Capital Securities. See "Description of New Capital
Securities--Subordination of Common Securities." The Corporation acquired Common
Securities in an aggregate liquidation amount equal to approximately 3% of the
total capital of the Trust. The Trust has a term of 40 years, but may terminate
earlier as provided in the Declaration. The Trust's business and affairs are
conducted by its trustees, each appointed by the Corporation as holder of the
Common Securities. The trustees for the Trust will be The Chase Manhattan Bank,
as the Property Trustee, Chase Manhattan Bank Delaware, as the Delaware Trustee,
and, as Administrative Trustees, four individuals who are employees or officers
of or are otherwise affiliated with the Corporation (collectively, the "Issuer
Trustees"). The Chase Manhattan Bank, as Property Trustee, will act as sole
indenture trustee under the Declaration. The Chase Manhattan Bank will also act
as trustee under the Guarantee Agreement and the Indenture. See "Description of
Junior Subordinated Debt Securities" and "Description of Guarantee." The holder
of the Common Securities of the Trust, or the holders of a majority in
liquidation amount of the Capital Securities if an Event of Default under the
Declaration resulting from a Debenture Event of Default has occurred and is
continuing, will be entitled to appoint, remove or replace the Property Trustee
and/or Delaware Trustee. In no event will the holders of the Capital Securities
have the right to vote to appoint, remove or replace the Administrative
Trustees; such voting rights are vested exclusively in the holder of the Common
Securities. The duties and obligations of each Issuer Trustee are governed by
the Declaration. Pursuant to the expense provisions under the Indenture, the
Corporation, as obligor on the Junior Subordinated Debt Securities, will pay all
fees and expenses related to the Trust and the offering of the Capital
Securities and will pay, directly or indirectly, all ongoing costs, expenses and
liabilities of the Trust. See "Description of New Capital Securities--Expenses
and Taxes." The principal executive office of the Trust is:
c/o U.S.B. Holding Co., Inc.
100 Dutch Hill Road
Orangeburg, New York 10962
Telephone: (914) 365-4600
Attention: Steven T. Sabatini, Executive
Vice President, Chief
Financial Officer and Assistant Secretary.
USB
U.S.B. Holding Co., Inc. (the "Corporation" or "USB"), a Delaware
corporation incorporated in 1982, is a bank holding company registered under the
Bank Holding Company Act of 1956, as amended, which provides financial services
through its wholly-owned subsidiaries. The Corporation and its subsidiaries
derive substantially all of their revenue and income from the furnishing of
banking and related financial services primarily to customers in Rockland and
Westchester Counties, New York.
Union State Bank (the "Bank"), the Corporation's sole banking subsidiary,
is a New York state chartered commercial bank established in 1969. The Bank
offers a wide range of banking services to individuals, municipalities,
corporations and small and medium-size businesses through its 18 retail banking
facilities in Rockland and Westchester Counties. The Bank's corporate offices
are located in Rockland County and the Bank also has a branch located in
Westchester County, which only closes loans and disburses funds. The Bank's
products and services include checking accounts, NOW accounts, money market
accounts, savings accounts (passbook and statement), certificates of deposit,
retirement accounts, business, personal, residential, construction, home equity,
second mortgage and condominium mortgage loans, loans for education, health and
similar expenditures, credit cards, other consumer oriented financial services
and safe deposit facilities. The Bank also makes available to its customers
automated teller machines (ATMs) and has a remote banking service for business
customers. The deposits of the Bank are insured to the extent permitted by law
pursuant to the Federal Deposit Insurance Act of 1950, as amended.
The Corporation currently has no banking subsidiaries other than the Bank,
although, prior to December 31, 1995, the Corporation owned Royal Oak Savings
Bank, F.S.B. ("Royal"), a federal thrift subsidiary located in Maryland. The
Corporation formed Royal in January 1991 to acquire deposits and certain assets
of two federal thrift institutions located in Maryland from the Resolution Trust
Company. Prior to its sale by the Corporation, Royal offered a wide range of
services to individuals and businesses in Baltimore and Carroll Counties,
Maryland. Royal had assets of approximately $47,000,000 as of December 31, 1995.
On December 31, 1995, all of the common stock of Royal was sold by the
Corporation to Monocacy Bancshares, Inc. Immediately prior to such sale,
substantially all of Royal's loans and investment securities, including its
credit card business, were purchased from Royal, for book value, by the Bank and
the Corporation, in effect transferring Royal's branch system, loan servicing
function, cash and certain immaterial assets to Monocacy Bancshares, Inc. The
Bank and the Corporation intend to maintain the loan portfolio purchased from
Royal, as the Corporation believes such portfolio represents an attractive
asset, and intend to continue to expand the credit card business acquired from
Royal. The Corporation does not intend, however, to expand its lending or other
business in the Maryland market, except for its credit card business.
The Corporation's assets at March 31, 1997 totaled $891.4 million, which
represents an increase of $87.9 million or 10.9% over assets as of December 31,
1996. The average annual growth rate in assets of the Corporation for the five
years ended December 31, 1996 was 15.6%. The Corporation has, through the Bank,
grown primarily by originating assets through the Bank's lending group and by
acquiring bank qualified securities. The Bank's funding requirements have been
met primarily through increased retail deposits which have been generated by the
Bank's expanding branch network and by an expansion of the Bank's existing
retail deposit base, as well as from municipal deposits and borrowings. The
Bank's current market shares are approximately 11.6% and .8% of Rockland and
Westchester deposits, respectively. The Bank is the largest independent bank
headquartered in Rockland County and believes it is able to attract and retain
customers because of its knowledge of its local markets, and the ability of its
professional staff to provide a high degree of service to its customers.
The Bank expects to continue to expand by opening new retail branches,
enhancing computerized and telephonic delivery channels, and expanding loan
originations in the Bank's market area. Acquisitions of other smaller financial
institutions and branches will be considered to supplement growth in the Bank's
present markets and in contiguous markets. The Corporation has not made any
acquisitions of other banking institutions to date, other than its acquisition
of Royal.
The Corporation's net income was $9.4 million in 1996, compared to $9.3
million in 1995, or an increase of 1%. The 1995 amount includes net income of
$2.1 million as a result of the sale of Royal, while the 1996 amount includes
approximately $300,000 of net income attributable to the sale of a branch
facility which was previously part of Royal's branch system. See "Recent
Developments." Excluding these amounts, as well as net income from Royal in
1995, 1996 net income increased $2.1 million or 30% over the net income in 1995.
Net income for 1996 and 1995, excluding the effects of the transactions
described above and net income of Royal in 1995, was $9.1 million and $7.0
million, respectively.
Net income of the Corporation for the three months ended March 31, 1997 was
$2.3 million, an increase of $.1 million or 4% over earnings of $2.2 million for
the same period last year. Net income for the three months ended March 31, 1996
included gains on securities transactions of $.4 million while the same period
in 1997 did not include any material gains from sales of securities. Net income
per common and common equivalent share for the quarter ended March 31, 1997 was
$.35 compared to $.34 per common and common equivalent share for the same period
in the previous year.
The Corporation's business strategy is to provide commercial and consumer
banking services to its local customer base. For the quarter ended March 31,
1997 and the fiscal year ended December 31, 1996, USB reported a return on
average assets and return on average common equity of 1.11% and 17.12%, and
1.25% and 18.60%, respectively. Management believes that the Corporation's net
interest margin on a tax equivalent basis and efficiency ratio for the quarter
ended March 31, 1997 and the fiscal year ended December 31, 1996 of 4.25% and
52.71%, and 4.43% and 51.09%, respectively, illustrate the underlying strength
of USB's business strategy. See "Selected Historical Financial Information."
The principal executive offices of USB are located at 100 Dutch Hill Road,
Orangeburg, New York 10962 and its telephone number is (914) 365-4600.
USB is a legal entity separate and distinct from its subsidiaries. The
ability of holders of debt and equity securities of USB to benefit from the
distribution of assets of any subsidiary upon the liquidation or reorganization
of such subsidiary is subordinate to prior claims of creditors of the subsidiary
(including depositors in the case of banking subsidiaries), except to the extent
that a claim of USB as a creditor may be recognized.
There are various statutory and regulatory limitations on the extent to
which present and future banking subsidiaries of USB can finance or otherwise
transfer funds to USB or its nonbanking subsidiaries, whether in the form of
loans, extensions of credit, investments or asset purchases, including
regulatory limitations on the payment of dividends directly or indirectly to USB
from the Bank. Federal and state bank regulatory agencies also have the
authority to limit further the Bank's payment of dividends based on such factors
as the maintenance of adequate capital for such subsidiary bank, which could
reduce the amount of dividends otherwise payable. Under applicable banking
statutes, at March 31, 1997, the Bank could have declared additional dividends
of approximately $14.6 million to USB without prior regulatory approval.
Under the policy of the Federal Reserve, USB is expected to act as a source
of financial strength to the Bank and any other subsidiary bank which USB might
own and to commit resources to support each subsidiary bank in circumstances
where USB might not do so absent such policy. In addition, any subordinated
loans by USB to the Bank or any other subsidiary bank which USB might own would
also be subordinate in right of payment to deposits and obligations to general
creditors of such subsidiary banks.
RECENT DEVELOPMENTS
The Corporation listed its stock on the American Stock Exchange and began
trading under the symbol "UBH" on April 16, 1997. The Corporation has been a
publicly traded stockholder-owned corporation since 1983 (and the Bank has been
publicly owned from 1969 to 1983, at which time all shares of Bank stock were
exchanged for stock of the Corporation on a one-for-one basis), but its stock
had not previously traded on an exchange or through NASDAQ.
On May 14, 1997, the stockholders of U.S.B. Holding Co., Inc. approved (i)
an amendment to the Certificate of Incorporation of the Corporation to increase
the amount of common stock authorized to be issued from 7,000,000 shares to
20,000,000 and (ii) the 1997 Employee Stock Option Plan, which authorizes
issuance of options to purchase up to 600,000 shares by employees of the
Company.
<PAGE>
SELECTED HISTORICAL FINANCIAL INFORMATION
The following summary sets forth selected consolidated financial data for
USB and its subsidiaries for the quarters ended March 31, 1997 and 1996, and for
each of the years in the five-year period ended December 31, 1996. Such
information is derived from audited financial information for the years ended
December 31, 1992, 1993, 1994, 1995 and 1996, and from unaudited financial
information for the quarters ended March 31, 1996 and 1997. The following
summary should be read in conjunction with the financial information
incorporated herein by reference to other documents or included elsewhere
herein. See "Incorporation of Certain Documents by Reference."
<PAGE>
<TABLE>
<CAPTION>
Quarter Ended
March 31, Years Ended December 31,
1997 1996 1996 1995 1994 1993 1992
(in thousands, except ratios and per share amounts)
<S> <C> <C> <C> <C> <C> <C> <C>
Consolidated summary of
operations:
Interest income......................... $15,953 $13,080 $57,216 $49,692 $39,601 $34,544 $34,007
Interest expense........................ 7,950 6,245 27,601 24,318 15,933 13,138 15,293
Net interest income..................... 8,003 6,835 29,615 25,374 23,668 21,406 18,714
Provision for loan losses............... (630) (475) (2,275) (1,200) (993) (763) (745)
Net gain on sale of Royal Oak Savings -- -- -- 3,520 -- -- --
Bank, F.S.B.......................
Net gain on sale of branch facility -- -- 600 -- -- -- --
Other non-interest income............... 874 778 3,608 3,628 3,086 3,123 2,949
Net security gains (losses)............. (3) 447 819 167 69 780 321
Non-interest expense.................... (4,899) (4,242) (18,179) (17,851) (15,704) (14,741) (13,790)
------- ------- -------- -------- -------- -------- --------
Income before income taxes.............. 3,345 3,343 14,188 13,638 10,126 9,805 7,449
Provision for income taxes.............. 1,013 1,093 4,774 4,311 3,126 3,605 2,699
Net income.............................. $2,332 $2,250 $9,414 $9,327 $7,000 $6,200 $4,750
Weighted average common and common
equivalent shares outstanding.....6,632,592 6,433,517 6,512,997 6,304,758 6,080,892 5,687,112 5,459,509
Common shares outstanding at
period end........................6,196,816 6,166,233 6,183,036 6,146,978 5,926,783 5,804,510 5,566,391
Consolidated per share data:
Net income per common and common
equivalent share.................. $0.35 $0.34 $1.40 $1.43 $1.10 $1.03 $0.81
Cash dividends per common share........ $0.09 $0.068 $.30 $.27 $.22 $.16 $.12
Book value per common share at
period end........................ $8.76 $7.80 $8.67 $7.74 $5.83 $5.29 $4.41
Consolidated balance sheet data at the
end of the period:
Securities available-for-sale.......... $206,202 $183,609 $168,756 $170,889 $75,944 $99,981 $88,609
Securities held-to-maturity............ 99,901 58,877 81,019 60,266 149,580 100,025 95,250
Loans, net of unearned income
and fees.......................... 528,575 419,503 503,511 391,341 333,570 275,823 232,249
Allowance for loan losses.............. 6,265 4,265 5,742 3,904 3,320 2,852 2,496
Total assets........................... 891,360 701,239 803,451 678,783 602,603 508,638 462,634
Deposits............................... 742,056 630,409 682,280 610,635 543,862 469,016 429,272
Borrowings............................. 68,471 14,000 59,692 10,000 15,900 -- --
Long-term debt qualifying as
regulatory capital................ -- -- -- -- 1,800 1,800 2,000
Corporation-Obligated Mandatory
Redeemable Capital Securities
of Subsidiary Trust............... 20,000 -- -- -- -- -- --
Stockholders' equity................... 54,259 51,873 56,866 51,333 38,319 34,435 28,525
Consolidated average balance sheet data:
Securities............................. $277,449 $230,390 $252,716 $243,255 $219,017 $206,441 $155,481
Loans, net of unearned income
and fees.......................... 507,703 403,634 449,785 352,244 305,411 244,813 235,921
Total assets........................... 841,240 690,529 751,376 655,147 568,010 494,615 435,547
Deposits............................... 709,082 621,722 665,450 593,853 514,869 454,462 403,925
Borrowings............................. 62,520 12,145 30,857 13,243 10,147 2,858 --
Long-term debt qualifying as
regulatory capital................ -- -- -- 710 1,800 1,908 1,940
Corporation-Obligated Mandatory
Redeemable Capital Securities
of Subsidiary Trust............... 12,000 -- -- -- -- -- --
Stockholders' equity................... 55,919 51,806 52,534 44,408 37,756 31,762 26,374
Selected financial ratios:
Return on average total assets......... 1.11% 1.30% 1.25% 1.42% 1.23% 1.25% 1.09%
Return on average common stockholders'
equity........................... 17.12% 18.07% 18.60% 22.17% 19.66% 21.08% 19.76%
Net interest margin on a tax equivalent
basis............................ 4.25% 4.37% 4.43% 4.46% 4.82% 5.08% 4.94%
Efficiency ratio....................... 52.71% 52.31% 51.09% 57.61% 54.12% 56.19% 60.86%
Tier 1 capital ratio................... 12.65% 11.10% 10.45% 11.37% 10.58% 10.33% 9.67%
Total risk based capital ratio......... 13.93% 12.01% 11.50% 12.26% 11.82% 11.74% 11.22%
Leverage ratio......................... 8.88% 7.53% 7.06% 7.43% 6.86% 6.64% 6.13%
Allowance for loan losses to net loans. 1.20% 1.03% 1.15% 1.01% 1.01% 1.04% 1.09%
Allowance for loan losses/
nonperforming loans............... 81.33% 59.35% 70.98% 96.73% 56.23% 71.91% 64.76%
Net charge-offs to average net loans... .09% .11% .10% .17% .17% .17% .06%
Nonperforming assets to total assets... .94% 1.21% 1.09% .73% 1.07% .96% 1.27%
Ratio of earnings to fixed charges:
Excluding interest on deposits.. 3.69x 16.26x 8.08x 13.91x 14.71x 28.44x 29.50x
Including interest on deposits.. 1.42x 1.53x 1.51x 1.56x 1.63x 1.74x 1.48x
Ratio of earnings to combined fixed
charges and preferred stock
dividend requirements:
Excluding interest on deposits.. 3.55x 0.59x 6.62x 9.68x 9.10x 11.60x 9.70x
Including interest on deposits.. 1.41x 1.50x 1.49x 1.53x 1.58x 1.67x 1.43x
Proforma ratio of earnings to
combined fixed charges and
preferred stock dividend
requirements, assuming issuance
of Capital Securities and repayment
of existing preferred stock at
beginning of period:
Excluding interest on deposits.. 2.65x -- 4.10x -- -- -- --
Including interest on deposits.. 1.34x -- 1.41x -- -- -- --
<FN>
Notes to Selected Historical Financial Information
(1) Net income for the years ended December 31, 1996 and 1995, excluding the
nonrecurring gain on the sale of Royal in 1995 of $2.1 million, as well as
Royal's 1995 net income and net income from the sale of a branch, which was
previously part of the Royal branch system, in 1996 of $.3 million, would have
been approximately $9.1 million, or $1.35 per share, and $7,000,000, or $1.06
per share, respectively. Return on average total assets and return on average
total common equity, excluding the effect of the Royal transactions discussed
above, was 1.21% and 17.99%, and 1.07% and 16.48% for the years ended December
31, 1996 and 1995, respectively.
(2) Effective January 1, 1994, the Corporation adopted Statement of Financial
Accounting Standards No. 115, "Accounting for Certain Investments in Debt and
Equity Securities." The Statement requires that securities available-for-sale be
reported at fair value, with unrealized gains and losses reflected as a separate
component of stockholders' equity.
(3) In October 1995, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standards ("SFAS") No. 123, "Accounting for Stock-Based
Compensation." SFAS No. 123 establishes a fair value based method of accounting
for stock-based compensation plans and encourages, but does not require,
entities to adopt that method in place of the provisions of Accounting
Principles Board Opinion ("APB") No. 25, "Accounting for Stock Issued to
Employees," for all arrangements under which employees receive shares of stock
or other equity instruments of the employer or the employer incurs liabilities
to employees in amounts based on the price of the Corporation's stock. SFAS No.
123 requires significantly expanded disclosure in complete financial statements,
including disclosure of pro forma net income and earnings per share as if the
fair value based method were used to account for stock based compensation, if
the intrinsic value method of APB No. 25 is retained. SFAS No. 123 also
establishes fair value as the measurement basis for transactions in which an
entity acquires goods for services from non-employees in exchange for equity
instruments. The accounting provisions of SFAS No. 123 are effective for
transactions entered into after December 15, 1995. Effective January 1, 1996,
the Corporation adopted SFAS No. 123 and has decided that it will continue to
measure compensation cost for employee stock compensation plans in accordance
with the provisions of APB No. 25. Information on the Corporation's net income
and net income per common equivalent share, determined as if the Corporation had
accounted for its stock options under the fair value method of SFAS No. 123
resulted in pro forma net income of $8,925,000 and $8,988,000, and net income
per common and common equivalent share of $1.34 and $1.38 for the years ended
December 31, 1996 and 1995, respectively.
(4) The Corporation declared a 10% stock dividend on April 24, 1996 to
stockholders of record on May 31, 1996, which was distributed on June 14, 1996.
In addition, the Corporation declared a two-for-one stock split in the form of a
100% stock dividend on November 20, 1996 to stockholders of record on December
13, 1996, which was distributed on December 30, 1996. The weighted average
common and common equivalent shares outstanding, common shares outstanding, and
per share amounts have been adjusted to reflect the stock dividend and
two-for-one stock split distributed in 1996.
(5) The efficiency ratio is calculated based upon operating expenses divided by
net interest income on a tax equivalent basis plus non-interest income,
excluding gain or loss on security and loan sales and gain on sale of Royal in
1995, and the sale of the Royal branch in 1996.
(6) The leverage ratio is computed based on Tier 1 capital divided by fourth
quarter average assets for each year.
(7) For the purpose of computing the consolidated ratios of earnings to fixed
charges, earnings represent consolidated income before taxes plus fixed charges.
Fixed charges excluding interest on deposits consist of interest on long-term
and short-term borrowings, including interest related to the Capital Securities
for the quarter ended March 31, 1997, and one-third of rental expense (which is
deemed representative of the interest factor). Fixed charges including interest
on deposits consist of the foregoing items plus interest on deposits. Preferred
stock dividend requirements represent pre-tax earnings that would be required to
cover dividends on preferred stock. Proforma ratio of earnings to combined fixed
charges and preferred stock dividend requirements is adjusted for the issuance
of the Capital Securities offered hereby and the application of a portion of the
net proceeds thereof to redeem the existing preferred stock as of the first day
of the period reflected.
</FN>
</TABLE>
CAPITALIZATION
The following table sets forth the unaudited consolidated capitalization of
USB at March 31, 1997 and December 31, 1996, and December 31, 1996 as adjusted
for capital securities issuance, and use of proceeds. The issuance of the New
Capital Securities in the Exchange Offer will have no effect on the
capitalization of USB. This table is based on, and is qualified in its entirety
by, the historical consolidated financial statements of USB, including the
related notes thereto, which are included in documents incorporated by reference
or included elsewhere herein, and should be read in conjunction therewith.
<TABLE>
<CAPTION>
December 31, 1996
-----------------------------
As Adjusted
For Capital
Securities
Issuance, and March 31, 1997
Actual Use of Proceeds Actual
------------ ---------------- ----------------
<S> <C> <C> <C>
(in thousands, except percentages)
Federal Home Loan Bank Long-Term Advances............. $25,267 $25,267 $24,996
Total Long-Term Borrowings..... $25,267 $25,267 $24,996
Corporation-Obligated Mandatory Redeemable Capital
Securities of Subsidiary Trust(1).................. $-- $20,000 $20,000
Minority interest-junior preferred stock of
consolidated subsidiary $-- $-- $37
============ ================ ================
Stockholders' Equity:
Preferred Stock, no par value; authorized 100,000
shares; 32,500 shares outstanding (actual)........ $3,250 $-- $--
Common Stock, 6,334,338 shares at March 31, 1997
and $5.00 par value; authorized 7,000,000
shares, issued 6,326,808 shares at
December 31, 1996 (2)............................. 31,634 31,634 31,672
Additional paid in capital........................... 10,783 10,783 10,899
Retained earnings.................................... 12,664 12,664 14,406
Unrealized losses on securities available-for-sale, (570) (570) (1,788)
net of taxes
Treasury stock, at cost, 137,522 shares at March 31,
1997 and 143,772 shares at December 31, 1996...... (895) (895) (930)
Total Stockholders' Equity.......... $56,866 $53,616 $54,259
Capital Ratios
Equity/Assets 7.08% 6.54% 6.09%
Tier 1 Capital Ratios(3)(4) 10.45% 13.07% 12.65%
Risk Adjusted Capital Ratios(3) 11.50% 14.47% 13.93%
Leverage Ratio (4) 7.06% 8.89% 8.88%
<FN>
(1) The "Corporation-Obligated Mandatory Redeemable Capital Securities of
Subsidiary Trust" reflects the Capital Securities at their issue price. As
described herein, the sole asset of the Trust is $20,619,000 of Junior
Subordinated Debt Securities (including the amounts attributable to the
issuance of the Common Securities of the Trust), which will mature on
February 1, 2027. The Corporation owns all of the Common Securities of the
Trust. It is anticipated that the Trust will not be subject to the
reporting requirements under the Exchange Act.
(2) On May 14n/1997, the stockholders of U.S.B. Holding Co., Inc. approved an
amendment to the Certificate of Incorporation of the Corporation to
increase the amount of common stock authorized to be issued from 7,000,000
shares to 20,000,000 shares.
(3) Assumes the proceeds from the issuance of Capital Securities are invested
in mortgage-backed securities at December 31, 1996 which have a twenty
percent risk weight.
(4) Capital securities are included in the Tier 1 and leverage capital ratio
to the extent such amount of capital securities does not exceed 25 percent
of total Tier 1 or leverage capital.
</FN>
</TABLE>
THE EXCHANGE OFFER
Purpose of the Exchange Offer
In connection with the sale of the Old Capital Securities, the Corporation
and the Trust entered into a registration rights agreement with the Initial
Purchaser (the "Registration Rights Agreement") wherein the Corporation and the
Trust agreed, for the benefit of the holders of the Capital Securities, (i) to
file with the Commission within 150 calendar days after February 5, 1997 the
Registration Statement relating to the Exchange Offer for (1) the New Capital
Securities, which will have terms identical in all material respects to the Old
Capital Securities, (2) the New Guarantee, which will have terms identical in
all material respects to the Old Guarantee, and (3) the New Junior Subordinated
Debt Securities, which will have terms identical in all material respects to the
Old Junior Subordinated Debt Securities, and (ii) to use their best efforts to
cause the Registration Statement to be declared effective under the Securities
Act within 180 calendar days after February 5, 1997.
The Exchange Offer is not being made to, nor will the Trust 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 person whose
Old Capital Securities are held of record by The Depository Trust Company
("DTC") and who desires to deliver such Old Capital Securities by book-entry
transfer at DTC.
Pursuant to the Exchange Offer, the Corporation will exchange as soon as
practicable after the date hereof, the Old Guarantee for the New Guarantee and
the Old Junior Subordinated Debt Securities, in an amount corresponding to the
Old Capital Securities accepted for exchange, for a like aggregate principal
amount of the New Junior Subordinated Debt Securities. The New Guarantee and New
Junior Subordinated Debt Securities have been registered under the Securities
Act.
Terms of the Exchange Offer
The Trust hereby offers, upon the terms and subject to the conditions set
forth in this Prospectus and in the accompanying Letter of Transmittal, to
exchange up to $20,000,000 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 (as defined herein) and not
properly withdrawn in accordance with the procedures described below. The Trust
will issue, promptly after the Expiration Date (as defined herein), an aggregate
liquidation amount of up to $20,000,000 of New Capital Securities in exchange
for a like principal 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 (100 Capital Securities) or any integral multiple of $1,000 liquidation
amount (one Capital Security) in excess thereof.
The Exchange Offer is not conditioned upon any minimum liquidation amount
of Old Capital Securities being tendered. As of the date of this Prospectus,
$20,000,000 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 that 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 Agreement, except under limited circumstances. See "Risk
Factors--Consequences of a Failure to Exchange Old Capital Securities" and
"Description of Old 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 Corporation 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 CORPORATION, THE BOARD OF DIRECTORS OF THE CORPORATION 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 BASED ON SUCH HOLDERS OWN FINANCIAL POSITION AND REQUIREMENTS.
The term "Expiration Date" means 5:00 p.m., New York City time, on , 1997
unless the Exchange Offer is extended by the Corporation or the Trust (in which
case the term "Expiration Date" shall mean the latest date and time to which the
Exchange Offer is extended).
The Corporation and the Trust expressly reserve the right in their sole and
absolute discretion, subject to applicable law, at any time and from time to
time, (i) to delay the acceptance of the 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 Trust determines, in its
sole and absolute discretion, that any of the events or conditions referred to
under "--Conditions to the Exchange Offer" have occurred or exist or have not
been satisfied, (iii) to extend the Expiration Date of the Exchange Offer and
retain all 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 Corporation and the Trust to constitute a material change, or if the
Corporation and the Trust waive a material condition of the Exchange Offer, the
Corporation and the Trust will promptly disclose such amendment by means of a
prospectus supplement that will be distributed to the holders of the Old Capital
Securities, and the Corporation and the Trust will extend the Exchange Offer to
the extent required by Rule 14e-1 under the Exchange Act.
Any such delay in acceptance, extension, termination or amendment will be
followed promptly by oral or written notice thereof to the Exchange Agent and by
making a public announcement thereof, and such announcement in the case of an
extension will be made no later than 9:00 a.m., New York City time, on the next
business day after the previously scheduled Expiration Date. Without limiting
the manner in which the Corporation and the Trust may choose to make any public
announcement and subject to applicable law, the Corporation 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 the 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, the New Capital
Securities for the Old Capital Securities validly tendered and not withdrawn
promptly after the Expiration Date.
In all cases, delivery of the New Capital Securities in exchange for the
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) the Old Capital Securities or a book-entry confirmation of a book-entry
transfer of the Old Capital Securities into the Exchange Agent's account at DTC,
(ii) the Letter of Transmittal (or facsimile thereof), properly completed and
duly executed, with any required signature guarantees, including an agent's
message, and (iii) any other documents required by the Letter of Transmittal.
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.
Subject to the terms and conditions of the Exchange Offer, the Trust will
be deemed to have accepted for exchange, and thereby exchanged, the Old Capital
Securities validly tendered and not withdrawn as, if and when the Trust gives
oral or written notice to the Exchange Agent of the Trust's acceptance of such
Old Capital Securities for exchange pursuant to the Exchange Offer. The Exchange
Agent will act as agent for the Trust for the purpose of receiving tenders of
the 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 Trust's acceptance for exchange of
Old Capital Securities) or the Trust extends the Exchange Offer or is unable to
accept for exchange or exchange the Old Capital Securities tendered pursuant to
the Exchange Offer, then, without prejudice to the Trust's rights set forth
herein, the Exchange Agent may, nevertheless, on behalf of the Trust and subject
to Rule 14e-1(c) under the Exchange 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, a holder of the 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 the Old
Capital Securities, that the Trust will acquire good, marketable and
unencumbered title to the tendered the 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 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. Tendering holders of Old Capital Securities that use ATOP will, by doing
so, acknowledge that they are bound by the terms of the Letter of Transmittal.
Procedures for Tendering the Old Capital Securities
Valid Tender. Except as set forth below, in order for the 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 and any other required documents, must be
received by the Exchange Agent at its address set forth under "--Exchange
Agent," and either (i) tendered Old Capital Securities must be received by the
Exchange Agent, or (ii) such Old Capital Securities must be tendered pursuant to
the procedures for book-entry transfer set forth below and a book-entry
confirmation 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. 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 ATOP procedures for transfers. Such holder of Old Capital
Securities using ATOP should transmit its acceptance to DTC on or prior to the
Expiration Date (or comply with the guaranteed delivery procedures set forth
below). DTC will verify such acceptance, execute a book-entry transfer of the
tendered Old Capital Securities into the Exchange Agent's account at DTC and
then send to the Exchange Agent confirmation of such book-entry transfer,
including an agent's message confirming that DTC has received an express
acknowledgment from such holder that such holder has received and agrees to be
bound by the Letter of Transmittal and that the Trust and the Corporation may
enforce the Letter of Transmittal against such holder (a "book-entry
confirmation").
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 owner
wishes to participate in the Exchange Offer.
Certificates. If the tender is not made through ATOP, certificates
representing Old Capital Securities, as well as the Letter of Transmittal (or
facsimile thereof), properly completed and duly executed, with any required
signature guarantees, and any other documents required by the Letter of
Transmittal, must be received by the Exchange Agent at its address set forth
under "-- Exchange Agent" on or prior to the Expiration Date in order for such
tender to be effective (or the guaranteed delivery procedures set forth below
must be complied with).
If less than all of the 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. The entire amount of Old Capital
Securities delivered to the Exchange Agent will be deemed to have been tendered
unless otherwise indicated.
Signature Guarantees. Certificates for the Old Capital Securities need not
be endorsed and signature guarantees on the Letter of Transmittal are
unnecessary unless (a) a certificate for the Old Capital Securities is
registered in a name other than that of the person surrendering the certificate
or (b) such holder completes the box entitled "Special Issuance Instructions" or
"Special Delivery Instructions" in the Letter of Transmittal. In the case of (a)
or (b) above, such certificates for the 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
firm or other entity identified in Rule 17Ad-15 under the Exchange Act as an
"eligible guarantor institution," including (as such terms are defined therein):
(i) a bank; (ii) a broker, dealer, municipal securities broker or dealer or
government securities broker or dealer; (iii) a credit union; (iv) a national
securities exchange, registered securities association or clearing agency; or
(v) a savings association that is a participant in a Securities Transfer
Association (an "Eligible Institution"), unless surrendered on behalf of such
Eligible Institution. See Instruction 1 to the Letter of Transmittal.
Guaranteed Delivery. If a holder desires to tender the 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 prior to the Expiration
Date, or the procedure 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:
(a) such tenders are made by or through an Eligible Institution;
(b) 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 the Expiration Date; and
(c) 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), 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 the New Capital
Securities in exchange for the 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 the 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), together with any required signature guarantees and any other
documents required by the Letter of Transmittal. Accordingly, the delivery of
the New Capital Securities might not be made to all tendering holders at the
same time, and will depend upon when the Old Capital Securities, book-entry
confirmations with respect to the Old Capital Securities and other required
documents are received by the Exchange Agent.
The Trust's acceptance for exchange of the Old Capital Securities tendered
pursuant to any of the procedures described above will constitute a binding
agreement between the tendering holder and the Trust upon the terms and subject
to the conditions of the Exchange Offer.
Determination Of Validity. All questions as to the form of documents,
validity, eligibility (including time of receipt) and acceptance for exchange of
any tendered Old Capital Securities will be determined by the Corporation and
the Trust, in their sole discretion, whose determination shall be final and
binding on all parties. The Corporation and the Trust reserve the absolute
right, in their sole and absolute discretion, to reject any and all tenders
determined by them not to be in proper form or the acceptance of which, or
exchange for, may, in the opinion of counsel to the Corporation and the Trust,
be unlawful. The Corporation 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 of any particular holder
whether or not similar conditions or irregularities are waived in the case of
other holders.
The interpretation by the Corporation and the Trust of the terms and
conditions of the Exchange Offer (including the Letter of Transmittal and the
instructions thereto) will be final and binding. No tender of the 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 Corporation,
the Trust, any affiliates or assigns of the Corporation 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
Corporation and the Trust, proper evidence satisfactory to the Corporation and
the Trust, in their sole discretion, of such person's authority to so act must
be submitted.
A beneficial owner of the 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 the New Capital Securities
The Trust is making the Exchange Offer for the New Capital Securities in
reliance on the position of the staff of the Division of Corporation Finance of
the Commission as set forth in certain interpretive letters addressed to third
parties in other transactions. However, neither the Corporation nor the Trust
sought its own interpretive letter and there can be no assurance that the staff
of the Division of Corporation Finance of the Commission would make a similar
determination with respect to the Exchange Offer as it has in such interpretive
letters to third parties. Based on these interpretations by the staff of the
Division of Corporation Finance of the Commission, and subject to the two
immediately following sentences, the Corporation and the Trust believe that the
New Capital Securities issued pursuant to this Exchange Offer in exchange for
the Old Capital Securities may be offered for resale, resold and otherwise
transferred by a holder thereof (other than a holder who is a broker-dealer)
without further compliance with the registration and prospectus delivery
requirements of the Securities Act, provided that such New Capital Securities
are acquired in the ordinary course of such holder's business and that such
holder is not participating, and has no arrangement or understanding with any
person to participate, in a distribution (within the meaning of the Securities
Act) of such New Capital Securities. However, any holder of the Old Capital
Securities who is an "affiliate" of the Corporation or the Trust or who intends
to participate in the Exchange Offer for the purpose of distributing the New
Capital Securities, or any broker-dealer who purchased the Old Capital
Securities from the Trust to resell pursuant to Rule 144A or any other available
exemption under the Securities Act, (a) will not be able to rely on the
interpretations of the staff of the Division of Corporation Finance of the
Commission set forth in the above-mentioned interpretive letters, (b) will not
be permitted or entitled to tender such Old Capital Securities in the Exchange
Offer and (c) must comply with the registration and prospectus delivery
requirements of the Securities Act in connection with any sale or other transfer
of such Old Capital Securities unless such sale is made pursuant to an exemption
from such requirements. In addition, as described below, if any broker-dealer
holds Old Capital Securities acquired for its own account as a result of
market-making or other trading activities and exchanges such Old Capital
Securities for the New Capital Securities, then such broker-dealer must deliver
a prospectus meeting the requirements of the Securities Act in connection with
any resales of such New Capital Securities.
Each holder of Old Capital Securities who wishes to exchange the Old
Capital Securities for the New Capital Securities in the Exchange Offer will be
required to represent that (i) it is not an "affiliate" of the Corporation or
the Trust, (ii) any New Capital Securities to be received by it are being
acquired in the ordinary course of its business, (iii) it has no arrangement or
understanding with any person to participate in a distribution (within the
meaning of the Securities Act) of such New Capital Securities, and (iv) if such
holder is not a broker-dealer, such holder is not engaged in, and does not
intend to engage in, a distribution (within the meaning of the Securities Act)
of such New Capital Securities. In addition, the Corporation 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 Corporation and the Trust (or an agent
thereof) in writing information as to the number of "beneficial owners" (within
the meaning of Rule 13d-3 under the Exchange Act) on behalf of whom such holder
holds the Capital Securities to be exchanged in the Exchange Offer. Each
broker-dealer that receives the New Capital Securities for its own account
pursuant to the Exchange Offer must acknowledge 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, a broker-dealer will not be deemed
to admit that it is an "underwriter" within the meaning of the Securities Act.
Based on the position taken by the staff of the Division of Corporation Finance
of the Commission in the interpretive letters referred to above, the Corporation
and the Trust believe that Participating Broker-Dealers who acquired the Old
Capital Securities for their own accounts as a result of market-making
activities or other trading activities may fulfill their prospectus delivery
requirements with respect to the New Capital Securities received upon exchange
of such Old Capital Securities (other than the Old Capital Securities that
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. Accordingly, this Prospectus, as it may be amended
or supplemented from time to time, may be used by a Participating Broker-Dealer
during the period referred to below in connection with resales of New Capital
Securities received in exchange for Old Capital Securities where such Old
Capital Securities were acquired by such Participating Broker-Dealer for its own
account as a result of market-making or other trading activities. Subject to
certain provisions set forth in the Registration Rights Agreement, the
Corporation and the Trust have agreed that this Prospectus, as it may be amended
or supplemented from time to time, may be used by a Participating Broker-Dealer
in connection with resales of such New Capital Securities for a period ending
180 days after the Expiration Date (subject to extension under certain limited
circumstances described below) or, if earlier, when all such New Capital
Securities have been disposed of by such Participating Broker-Dealer. See "Plan
of Distribution." However, a Participating Broker-Dealer who intends to use this
Prospectus in connection with the resale of the New Capital Securities received
in exchange for Old Capital Securities pursuant to the Exchange Offer must
notify the Corporation or the Trust, or cause the Corporation or the Trust to be
notified, on or prior to the Expiration Date, that it is a Participating
Broker-Dealer. Such notice may be given in the space provided for that purpose
in the Letter of Transmittal or may be delivered to the Exchange Agent at one of
the addresses set forth herein under "--Exchange Agent." Any Participating
Broker-Dealer who is an "affiliate" of the Corporation or the Trust may not rely
on such interpretive letters and must comply with the registration and
prospectus delivery requirements of the Securities Act in connection with any
resale transaction.
In that regard, each Participating Broker-Dealer who surrenders the Old
Capital Securities pursuant to the Exchange Offer will be deemed to have agreed,
by execution of the Letter of Transmittal, that, upon receipt of notice from the
Corporation or the Trust of the occurrence of any event or the discovery of any
fact that makes any statement contained or incorporated by reference in this
Prospectus untrue in any material respect or that 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, such Participating Broker-Dealer will suspend the
sale of the New Capital Securities (or the New Guarantee or the New Junior
Subordinated Debt Securities, as applicable) pursuant to this Prospectus until
the Corporation or the Trust has amended or supplemented this Prospectus to
correct such misstatement or omission and has furnished copies of the amended or
supplemented Prospectus to such Participating Broker-Dealer or the Corporation
or the Trust has given notice that the sale of the New Capital Securities (or
the New Guarantee or the New Junior Subordinated Debt Securities, as applicable)
may be resumed, as the case may be. If the Corporation or the Trust gives such
notice to suspend the sale of the New Capital Securities (or the New Guarantee
or the New Junior Subordinated Debt Securities, as applicable), it shall extend
the 180-day period referred to above during which Participating Broker-Dealers
are entitled to use this Prospectus in connection with the resale of the New
Capital Securities by the number of days during the period from and including
the date of the giving of such notice to and including the date when
Participating Broker-Dealers shall have received copies of the amended or
supplemented Prospectus necessary to permit resales of the New Capital
Securities or to and including the date on which the Corporation or the Trust
has given notice that the sale of the New Capital Securities (or the New
Guarantee or the New Junior Subordinated Debt Securities, as applicable) may be
resumed, as the case may be.
Withdrawal Rights
Except as otherwise provided herein, tenders of the Old Capital Securities
may be withdrawn at any time on or prior to the Expiration Date.
In order for a withdrawal to be effective a written, telegraphic, telex or
facsimile transmission of such notice of withdrawal must be timely received by
the Exchange Agent at 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 the 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 the 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 serial
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 the Old Capital Securities tendered for the
account of an Eligible Institution. If the 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 the Old Capital Securities, in which case a notice of withdrawal
will be effective if delivered to the Exchange Agent by written, telegraphic,
telex or facsimile transmission. Withdrawals of tenders of the Old Capital
Securities may not be rescinded. The 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 Trust, in its sole
discretion, whose determination shall be final and binding on all parties.
Neither the Corporation, the Trust, any affiliates or assigns of the Corporation
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 the New Capital Securities
Holders of the Old Capital Securities whose Old Capital Securities are
accepted for exchange will not receive 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 February
5, 1997. Accordingly, holders of the New Capital Securities as of the record
date for the payment of Distributions on August 1, 1997 will be entitled to
receive Distributions accumulated from and after February 5, 1997.
Conditions to the Exchange Offer
Notwithstanding any other provisions of the Exchange Offer, or any
extension of the Exchange Offer, the Corporation 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 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 that permits the New Capital Securities issued pursuant to the
Exchange Offer in exchange for the Old Capital Securities to be offered for
resale, resold and otherwise transferred by holders thereof (other than
broker-dealers and any such holder that is an "affiliate" of the Corporation 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; or
(b) any law, statute, rule or regulation shall have been adopted or enacted
which, in the judgment of the Corporation or the Trust, would reasonably be
expected to impair its ability to proceed with the Exchange Offer; or
(c) a stop order shall have been issued by the 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 Corporation
or the Trust, threatened for that purpose any governmental approval has not been
obtained, which approval the Corporation or the Trust shall, in its sole
discretion, deem necessary for the consummation of the Exchange Offer as
contemplated hereby.
If the Corporation or the Trust determines in its sole and absolute
discretion that any of the foregoing events or conditions has occurred or exists
or has not been satisfied, it may, subject to applicable law, terminate the
Exchange Offer (whether or not any 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 Corporation or the
Trust will promptly disclose such waiver or amendment by means of a prospectus
supplement that will be distributed to the registered holders of the Old Capital
Securities and will extend the Exchange Offer to the extent required by Rule
14e-1 under the Exchange Act.
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:
BY REGISTERED OR CERTIFIED MAIL: BY HAND OR OVERNIGHT DELIVERY:
The Chase Manhattan Bank The Chase Manhattan Bank
450 West 33rd Street, 15th Floor 450 West 33rd Street, 15th Floor
New York, New York 10001-2697 New York, New York 10001-2697
Attention: Global Trust Services Attention: Global Trust Services
Shiek Wiltshire Shiek Wiltshire
Confirm By Telephone:
(212) 946-3082
Facsimile Transmissions:
(ELIGIBLE INSTITUTIONS ONLY)
(212) 946-8158
Delivery to other than the above address or facsimile number will not
constitute a valid delivery.
Fees and Expenses
The Corporation 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 Corporation 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 the 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, the
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 the 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 Corporation nor the Trust will make any payment to brokers,
dealers or other nominees soliciting acceptances of the Exchange Offer.
DESCRIPTION OF NEW CAPITAL SECURITIES
Pursuant to the terms of the Declaration, the Issuer Trustees on behalf of
the Trust have issued the Old Capital Securities and will issue the New Capital
Securities. The New Capital Securities will represent beneficial ownership
interests in the Trust and the holders thereof will be entitled to a preference
in certain circumstances with respect to Distributions and amounts payable on
redemption of the Trust Securities or liquidation of the Trust over the Common
Securities, as well as other benefits as described in the Declaration. See
"--Subordination of Common Securities." The Declaration has been qualified under
the Trust Indenture Act of 1939, as amended (the "Trust Indenture Act"). This
summary of certain provisions of the New Capital Securities and the Declaration
does not purport to be complete and is subject to, and is qualified in its
entirety by reference to, all the provisions of the Declaration, including the
definitions therein of certain terms. The form of the Declaration is available
upon request from the Issuer Trustees.
General
The Capital Securities (including the Old Capital Securities and the New
Capital Securities) are limited to $20 million aggregate liquidation amount at
any one time outstanding. The Capital Securities will rank pari passu, and
payments will be made thereon pro rata with the Common Securities except as
described under "--Subordination of Common Securities." Legal title to the
Junior Subordinated Debt Securities will be held by the Property Trustee on
behalf of the Trust in trust for the benefit of the holders of the Capital
Securities and Common Securities. The Guarantee Agreement executed by the
Corporation for the benefit of the holders of the Capital Securities (the
"Guarantee Agreement") will provide for the New Guarantee on a subordinated
basis with respect to the New Capital Securities but will not guarantee payment
of Distributions or amounts payable on redemption of the New Capital Securities
or on liquidation of the Trust when the Trust does not have funds on hand
available to make such payments. See "Description of New Guarantee."
Distributions
Distributions on each New Capital Security will be payable at the annual
rate of 9.58% of the stated liquidation amount of $1,000, and will be payable
semi-annually in arrears on February 1 and August 1 of each year to the holders
of the New Capital Securities at the close of business on January 15 or July 15
(each, a "record date"), as the case may be, next preceding the relevant
Distribution Date (as defined herein). Distributions on the Capital Securities
will be cumulative. Distributions will accumulate from the date of original
issuance. The amount of Distributions payable for any period will be computed on
the basis of a 360-day year of twelve 30-day months. In the event that any date
on which Distributions are payable on the New 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 additional Distributions or other payments in respect to any such delay)
with the same force and effect as if made on the date such payment was
originally payable (each date on which Distributions are payable in accordance
with the foregoing, a "Distribution Date"). A "Business Day" shall mean any day
other than a Saturday or a Sunday, or a day on which banking institutions in The
City of New York are authorized or required by law or executive order to remain
closed, or a day on which the corporate trust office of the Property Trustee or
the Debenture Trustee is closed for business.
So long as no Debenture Event of Default has occurred and is continuing,
the Corporation has the right under the Indenture to defer the payment of
interest on the New Junior Subordinated Debt Securities 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 of the New Junior Subordinated Debt Securities. As a
consequence of any such election, semi-annual Distributions on the New Capital
Securities by the Trust will be deferred during any such Extension Period.
Distributions to which holders of the New Capital Securities are entitled will
accumulate additional Distributions thereon at the rate per annum of 9.58%
thereof, compounded semi-annually from the relevant payment date for such
Distributions. The term "Distributions" as used herein shall include any such
additional Distributions.
During any such Extension Period, the Corporation 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 Corporation'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 Corporation (including Other Debentures) that rank pari passu
with or junior in interest to the New Junior Subordinated Debt Securities, or
(iii) make any guarantee payments with respect to any guarantee by the
Corporation of the debt securities of any subsidiary of the Corporation
(including Other Guarantees) if such guarantee ranks pari passu with or junior
in interest to the New Junior Subordinated Debt Securities (other than (a)
dividends or distributions in common stock of the Corporation, (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) purchases or acquisitions of shares of the
Corporation's common stock in connection with the satisfaction by the
Corporation of its obligations under any employee benefit plan or any other
contractual obligation of the Corporation (other than a contractual obligation
ranking pari passu with or junior to the New Junior Subordinated Debt
Securities), (e) as a result of a reclassification of the Corporation's capital
stock or the exchange or conversion of one class or series of the Corporation's
capital stock for another class or series of the Corporation's capital stock or,
(f) the purchase of fractional interests in shares of the Corporation's capital
stock pursuant to the conversion or exchange provisions of such capital stock or
the security being converted or exchanged).
Prior to the termination of any such Extension Period, the Corporation 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 of the New Junior Subordinated Debt
Securities. Upon the termination of any such Extension Period and the payment of
all amounts then due, and subject to the foregoing limitations, the Corporation
may elect to begin a new Extension Period. The Corporation must give the
Property Trustee, the Administrative Trustees and the Debenture Trustee notice
of its election of any such Extension Period at least five Business Days prior
to the earlier of (i) the date the Distributions on the New Capital Securities
would have been payable except for the election to begin such Extension Period
or (ii) the date the Administrative Trustees are required to give notice to any
automated quotation system or to holders of such New 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 Corporation may elect to begin an Extension
Period. See "Description of New Junior Subordinated Debt Securities--Option to
Extend Interest Payment Date" and "Certain United States Federal Income Tax
Considerations--Interest Income and Original Issue Discount."
Although the Corporation may in the future exercise its right to defer
payments of interest on the Junior Subordinated Debt Securities, the Corporation
has no such current intention.
The revenue of the Trust available for distribution to holders of the New
Capital Securities will be limited to payments under the New Junior Subordinated
Debt Securities in which the Trust will invest the proceeds from the issuance
and sale of the Trust Securities. See "Description of New Junior Subordinated
Debt Securities--General." If the Corporation does not make interest payments on
the New Junior Subordinated Debt Securities, the Property Trustee will not have
funds available to pay Distributions on the New Capital Securities. The payment
of Distributions (if and to the extent the Trust has funds legally available for
the payment of such Distributions and cash sufficient to make such payments) is
guaranteed by the Corporation on a limited basis as set forth herein under
"Description of New Guarantee."
Mandatory Redemption
Upon the repayment in full at the Stated Maturity or a redemption at any
time in whole or in part of the New Junior Subordinated Debt Securities (other
than following the distribution of the New Junior Subordinated Debt Securities
to the holders of the Trust Securities), the proceeds from such repayment or
redemption shall be applied by the Property Trustee to redeem a Like Amount of
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 New Junior
Subordinated Debt Securities at the Stated Maturity, the Maturity Redemption
Price (equal to the principal of, and accrued but unpaid interest on, the New
Junior Subordinated Debt Securities), (ii) in the case of the redemption of the
New Junior Subordinated Debt Securities prior to February 1, 2007 in connection
with the occurrence of a Special Event, the Special Event Redemption Price
(equal to the Special Event Prepayment Price (as defined under "Description of
New Junior Subordinated Debt Securities--Special Event Prepayment")) or (iii) in
the case of the optional redemption of the New Junior Subordinated Debt
Securities on or after February 1, 2007, the Optional Redemption Price (equal to
the Optional Prepayment Price (as defined under "Description of New Junior
Subordinated Debt Securities--Optional Redemption")). If less than all of the
New Junior Subordinated Debt Securities are to be repaid or redeemed on a
Redemption Date, then the proceeds from such repayment or redemption shall be
allocated to the redemption pro rata of the Trust Securities.
Redemption of the New Junior Subordinated Debt Securities prior to Stated
Maturity may be subject to receipt of prior approval by the Federal Reserve if
then required under applicable capital guidelines or policies of the Federal
Reserve.
If the Trust is required to pay any additional taxes, duties or other
governmental charges as a result of a Tax Event, the Corporation will pay such
additional sums on the New Junior Subordinated Debt Securities.
"Additional Sums" means the additional amounts as may be necessary in order
that the amount of Distributions then due and payable by the Trust on the
outstanding Trust Securities shall not be reduced as a result of any additional
taxes, duties and other governmental charges to which the Trust has become
subject as a result of a Tax Event.
Redemption Procedures
Trust Securities shall be redeemed, if at all, at the applicable Redemption
Price with the proceeds from the contemporaneous repayment or redemption of the
Junior Subordinated Debt Securities. Redemptions of the Trust Securities shall
be made and the applicable Redemption Price shall be payable on each Redemption
Date only to the extent that the Trust has funds on hand available for the
payment of such applicable Redemption Price. See also "--Subordination of Common
Securities."
If the Trust gives a notice of redemption in respect of the New Capital
Securities, then, by 12:00 noon, New York City time, on the Redemption Date, to
the extent funds are available, with respect to the New Capital Securities held
in global form, the Property Trustee will deposit irrevocably with DTC funds
sufficient to pay the applicable Redemption Price and will give DTC irrevocable
instructions and authority to pay the applicable Redemption Price to the holders
of the Capital Securities. See "--Form, Denomination, Book-Entry Procedures and
Transfer." With respect to the New Capital Securities held in certificated form,
the Property Trustee, to the extent funds are available, will irrevocably
deposit with the paying agent for the New Capital Securities funds sufficient to
pay the applicable Redemption Price and will give such paying agent irrevocable
instructions and authority to pay the applicable Redemption Price to the holders
thereof upon surrender of their certificates evidencing the New Capital
Securities. See "--Payment and Paying Agency." Notwithstanding the foregoing,
Distributions payable on or prior to the Redemption Date shall be payable to the
holders of the New Capital Securities on the relevant record dates for the
related Distribution Dates. If notice of redemption shall have been given and
funds deposited as required, then upon the date of such deposit, all rights of
the holders of the New Capital Securities will cease, except the right of the
holders of the New Capital Securities to receive the applicable Redemption
Price, but without interest on such Redemption Price, and the New Capital
Securities will cease to be outstanding. In the event that any date fixed for
redemption of New Capital Securities is not a Business Day, then payment of the
applicable Redemption Price payable on such date will be made on the next
succeeding day which is a Business Day (and without any interest or other
payment in respect of any such delay), except that, if such Business Day falls
in the next calendar year, such payment will be made on the immediately
preceding Business Day. In the event that payment of the applicable Redemption
Price is improperly withheld or refused and not paid either by the Trust or by
the Corporation pursuant to the Guarantee as described under "Description of New
Guarantee," Distributions on New Capital Securities will continue to accrue at
the then applicable rate, from the Redemption Date originally established by the
Trust to the date such applicable Redemption Price is actually paid, in which
case the actual payment date will be the date fixed for redemption for purposes
of calculating the applicable Redemption Price.
Subject to applicable law (including, without limitation, United States
federal securities law), the Corporation or its subsidiaries may at any time and
from time to time purchase outstanding New 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 before the Redemption Date to each holder of Trust Securities at its
registered address. Unless the Corporation defaults in payment of the applicable
Prepayment Price on, or in the repayment of, the New Junior Subordinated Debt
Securities, on and after the Redemption Date, Distributions will cease to accrue
on the Trust Securities called for redemption.
Liquidation of the Trust and Distribution
of Junior Subordinated Debt Securities
The Corporation will have the right at any time to terminate the Trust and
cause a Like Amount of the Junior Subordinated Debt Securities to be distributed
to the holders of the Trust Securities in liquidation of the Trust. Such right
is subject to (i) the Corporation having received an opinion of counsel to the
effect that such distribution will not be a taxable event to holders of New
Capital Securities and (ii) the prior approval of the Federal Reserve if then
required under applicable capital guidelines or policies of the Federal Reserve.
Upon liquidation of the Trust and certain other events, the New Junior
Subordinated Debt Securities may be distributed to holders of the Capital
Securities. Under current United States federal income tax law, a distribution
of New Junior Subordinated Debt Securities upon the dissolution of the Trust
would not be a taxable event to holders of the New Capital Securities.
The Trust shall automatically terminate upon the first to occur of: (i)
certain events of bankruptcy, dissolution or liquidation of the Corporation;
(ii) the distribution of a Like Amount of the Junior Subordinated Debt
Securities to the holders of the Trust Securities if the Corporation, as
Depositor, has given written direction to the Property Trustee to terminate the
Trust (which direction is optional and, except as described above, wholly within
the discretion of the Corporation, as Depositor); (iii) redemption of all of the
Trust Securities as described under "Mandatory Redemption" above; (iv)
expiration of the term of the Trust; and (v) the entry of an order for the
dissolution of the Trust by a court of competent jurisdiction.
If a termination occurs as described in clause (i), (ii), (iv) or (v)
above, the Trust shall be liquidated by the Issuer Trustees as expeditiously as
the Issuer Trustees determine to be possible by distributing, after satisfaction
of liabilities to creditors of the Trust as provided by applicable law, to the
holders of such Trust Securities a Like Amount of the New Junior Subordinated
Debt Securities, unless such distribution would not be practical, in which event
such holders will be entitled to receive out of the assets of the Trust
available for distribution to holders, after satisfaction of liabilities to
creditors of the Trust as provided by applicable law, an amount equal to the
aggregate of the liquidation amount plus accumulated and unpaid Distributions
thereon to the date of payment (such amount being the "Liquidation
Distribution"). If such Liquidation Distribution can be paid only in part
because the Trust has insufficient assets available to pay in full the aggregate
Liquidation Distribution, then the amounts payable directly by the Trust on the
Capital Securities shall be paid on a pro rata basis. The holder(s) of the
Common Securities will be entitled to receive distributions upon any such
liquidation pro rata with the holders of the Capital Securities, except that if
a Debenture Event of Default has occurred and is continuing, the Capital
Securities shall have a priority over the Common Securities. See
"--Subordination of Common Securities."
"Like Amount" means (i) with respect to a redemption of Trust Securities,
Trust Securities having a liquidation amount equal to the principal amount of
Junior Subordinated Debt Securities to be contemporaneously redeemed in
accordance with the Indenture, allocated to the Trust Securities based upon
their relative liquidation amounts and the proceeds of which will be used to pay
the Redemption Price of such Trust Securities and (ii) with respect to a
distribution of Junior Subordinated Debt Securities to holders of Trust
Securities in connection with a dissolution or liquidation of the Trust, Junior
Subordinated Debt Securities having a principal amount equal to the liquidation
amount of the Trust Securities of the holder to whom such Junior Subordinated
Debt Securities are distributed.
If the Corporation elects not to redeem the Junior Subordinated Debt
Securities prior to maturity and the Trust is not liquidated and the Junior
Subordinated Debt Securities are not distributed to holders of the Trust
Securities, the Capital Securities will remain outstanding until the repayment
of the Junior Subordinated Debt Securities at the Stated Maturity.
After the liquidation date is fixed for any distribution of Junior
Subordinated Debt Securities to holders of the Trust Securities (i) the Capital
Securities will no longer be deemed to be outstanding, (ii) DTC or its nominee,
as the record holder of the Capital Securities, will receive a registered global
certificate or certificates representing the Junior Subordinated Debt Securities
to be delivered upon such distribution with respect to Capital Securities held
by DTC or its nominee and (iii) any certificates representing Capital Securities
not held by DTC or its nominee will be deemed to represent Junior Subordinated
Debt Securities having a principal amount equal to the liquidation amount of
such Capital Securities and bearing accrued and unpaid interest in an amount
equal to the accumulated and unpaid Distributions on such Capital Securities
until such certificates are presented to the Administrative Trustees or their
agent for cancellation, whereupon the Corporation will issue to such holder, and
the Debenture Trustee will authenticate, a certificate representing such Junior
Subordinated Debt Securities.
There can be no assurance as to the market prices for the Capital
Securities or the Junior Subordinated Debt Securities that may be distributed in
exchange for the Trust Securities if a dissolution and liquidation of the Trust
were to occur. Accordingly, the Capital Securities that an investor may
purchase, or the Junior Subordinated Debt Securities that the investor may
receive on dissolution and liquidation of the Trust, may trade at a discount to
the price that the investor paid to purchase the Capital Securities offered
hereby.
Subordination of Common Securities
Payment of Distributions on, and the Redemption Price of, the Trust
Securities shall be made pro rata to the holders of the Trust Securities based
on the liquidation amount of the Trust Securities; provided, however, that if on
any Distribution Date or Redemption Date any Event of Default resulting from a
Debenture Event of Default or an Event of Default under the Declaration 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 such
Common Securities, shall be made unless payment in full in cash of all
accumulated and unpaid Distributions on all of the outstanding Capital
Securities for all Distribution periods terminating on or prior thereto, or, in
the case of payment of the applicable Redemption Price, the full amount of such
Redemption Price on all of the outstanding Capital Securities, shall have been
made or provided for, and all funds available to the Property Trustee shall
first be applied to the payment in full in cash of all Distributions on, or the
Redemption Price of, the Capital Securities then due and payable.
In the case of any Event of Default under the Declaration resulting from a
Debenture Event of Default, the Corporation as holder of the Common Securities
will be deemed to have waived any right to act with respect to any such Event of
Default until the effect of all such Events of Default have been cured, waived
or otherwise eliminated. Until all such Events of Default have been so cured,
waived or otherwise eliminated, the Property Trustee shall act solely on behalf
of the holders of such Capital Securities and not on behalf of the Corporation
as holder of the Common Securities, and only the holders of the Capital
Securities will have the right to direct the Property Trustee to act on their
behalf.
Events of Default; Notice
Any one of the following events constitutes an "Event of Default" under the
Declaration (an "Event of Default") (whatever the reason for such Event of
Default and whether it shall be voluntary or involuntary or be effected by
operation of law or pursuant to any judgment, decree or order of any court or
any order, rule or regulation of any administrative or governmental body):
(i) the occurrence of a Debenture Event of Default (see "Description
of New Junior Subordinated Debt Securities--Debenture Events of Default");
or
(ii) default by the Trust in the payment of any Distribution when it
becomes due and payable, and continuation of such default for a period of
30 days; or
(iii) default by the Trust in the payment of any Redemption Price of
any Trust Security when it becomes due and payable; or
(iv) default in the performance, or breach, in any material respect,
of any covenant or warranty of the Issuer Trustees in the Declaration
(other than a covenant or warranty, a default in the performance of which
or the breach of which is addressed in clause (ii) or (iii) above), and
continuation of such default or breach for a period of 60 days after there
has been given, by registered or certified mail, to the defaulting Issuer
Trustee or Issuer Trustees by the holders of at least 25% in aggregate
liquidation amount of the outstanding Capital Securities, a written notice
specifying such default or breach and requiring it to be remedied and
stating that such notice is a "Notice of Default" under the Declaration; or
(v) the occurrence of certain events of bankruptcy or insolvency with
respect to the Property Trustee and the failure by the Corporation to
appoint a successor Property Trustee within 60 days thereof.
Within 10 Business Days after the occurrence of any Event of Default
actually known to the Property Trustee, the Property Trustee shall transmit
notice of such Event of Default to the holders of the Capital Securities, the
Administrative Trustees and the Corporation, as Depositor, unless such Event of
Default shall have been cured or waived. The Corporation, as Depositor, and the
Administrative Trustees are required to file annually with the Property Trustee
a certificate as to whether or not they are in compliance with all the
conditions and covenants applicable to them under the Declaration.
If a Debenture Event of Default or an Event of Default under the
Declaration has occurred and is continuing, the Capital Securities shall have a
preference over the Common Securities as described above. See "--Liquidation of
the Trust and Distribution of New Junior Subordinated Debt Securities" and
"--Subordination of Common Securities."
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 rights are vested exclusively in the Corporation 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.
Co-trustees and Separate Property Trustee
Unless an Event of Default shall have occurred and be continuing, at any
time or times, for the purpose of meeting the legal requirements of the Trust
Indenture Act or of any jurisdiction in which any part of the Trust's property
may at the time be located, the Corporation, as the holder of the Common
Securities, and the Administrative Trustees shall have power to appoint one or
more persons either to act as a co-trustee, jointly with the Property Trustee,
of all or any part of such Trust's property, or to act as separate trustee of
any such property, in either case with such powers as may be provided in the
instrument of appointment, and to vest in such person or persons in such
capacity any property, title, right or power deemed necessary or desirable,
subject to the provisions of the Declaration. In case a Debenture Event of
Default has occurred and is continuing, the Property Trustee alone shall have
power to make such appointment.
Merger or Consolidation of Issuer Trustees
Any Person into which the Property Trustee, the Delaware Trustee or any
Administrative Trustee that is not a natural person may be merged or converted
or with which it may be consolidated or any Person resulting from any merger,
conversion or consolidation to which such Issuer Trustee shall be a party, or
any Person 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 Person shall be otherwise qualified and eligible.
Mergers, Consolidations, Amalgamations or Replacements of the Trust
The Trust may not merge with or into, consolidate, amalgamate or be
replaced by, or convey, transfer or lease its properties and assets
substantially as an entirety to any corporation or other Person, except as
described below or as otherwise set forth in the Declaration. The Trust may, at
the request of the Corporation, as Depositor, with the consent of the
Administrative Trustees but without the consent of the holders of the Capital
Securities, the Property Trustee or the Delaware Trustee, merge with or into,
consolidate, amalgamate or be replaced by, or convey, transfer or lease its
properties and assets substantially as an entirety to, a trust organized as such
under the laws of any state; provided, however, that (i) such successor entity
either (a) expressly assumes all of the obligations of the Trust with respect to
the Capital Securities or (b) substitutes for the Capital Securities other
securities having substantially the same terms as the Capital Securities (the
"Successor Securities") so long as the Successor Securities rank the same as the
Capital Securities rank in priority with respect to distributions and payments
upon liquidation, redemption and otherwise, (ii) the Corporation expressly
appoints a trustee of such successor entity possessing the same powers and
duties as the Property Trustee as the holder of the Junior Subordinated Debt
Securities, (iii) if the Capital Securities are then listed or traded, the
Successor Securities are listed or traded, or any Successor Securities will be
listed or traded upon notification of issuance, on any national securities
exchange or other organization on which the Capital Securities are then listed
or traded, if any, (iv) if the Capital Securities (including any Successor
Securities) are rated by any nationally recognized statistical rating
organization prior to such transaction, such merger, consolidation,
amalgamation, replacement, conveyance, transfer or lease does not cause the
Capital Securities (including any Successor Securities) to be downgraded by any
nationally recognized statistical rating organization, (v) such merger,
consolidation, amalgamation, replacement, conveyance, transfer or lease does not
adversely affect the rights, preferences and privileges of the holders of the
Capital Securities (including any Successor Securities) in any material respect,
(vi) such successor entity has a purpose identical to that of the Trust, (vii)
prior to such merger, consolidation, amalgamation, replacement, conveyance,
transfer or lease, the Corporation has received an opinion from independent
counsel to the Trust experienced in such matters to the effect that (a) such
merger, consolidation, amalgamation, replacement, conveyance, transfer or lease
does not adversely affect the rights, preferences and privileges of the holders
of the Capital Securities (including any Successor Securities) in any material
respect, and (b) following such merger, consolidation, amalgamation,
replacement, conveyance, transfer or lease, neither the Trust nor such successor
entity will be required to register as an investment company under the
Investment Company Act of 1940, as amended (the "Investment Company Act"), and
(viii) the Corporation or any permitted successor or assignee owns all of the
common securities of such successor entity and guarantees the obligations of
such successor entity under the Successor Securities at least to the extent
provided by the Guarantee. Notwithstanding the foregoing, the Trust shall not,
except with the consent of holders of 100% in liquidation amount of the Trust
Securities, consolidate, amalgamate, merge with or into, or be replaced by or
convey, transfer or lease its properties and assets substantially as an entirety
to any other entity or permit any other entity to consolidate, amalgamate, merge
with or into, or replace it, if such consolidation, amalgamation, merger,
replacement, conveyance, transfer or lease would cause the Trust or the
successor entity to be classified as other than a grantor trust for United
States federal income tax purposes.
Voting Rights; Amendment of the Declaration
Except as provided below and under "Description of New
Guarantee--Amendments and Assignment" and as otherwise required by law and the
Declaration, the holders of the New Capital Securities will have no voting
rights.
The Declaration may be amended from time to time by the Corporation, the
Property Trustee and the Administrative Trustees, without the consent of the
holders of the Trust Securities, (i) to cure any ambiguity, correct or
supplement any provision in the Declaration that may be inconsistent with any
other provision, or to make any other provisions with respect to matters or
questions arising under the Declaration, which shall not be inconsistent with
the other provisions of the Declaration, or (ii) 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; 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 Trust Securities, and any amendments of the
Declaration shall become effective when notice thereof is given to the holders
of the Trust Securities. The Declaration may be amended by the Issuer Trustees
and the Corporation with (i) the consent of holders representing not less than a
majority (based upon liquidation amounts) of the outstanding Trust Securities,
and (ii) 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. In addition, without the consent of each holder of Trust Securities, the
Declaration may not be amended to (i) change the amount or timing of any
Distribution on the Trust Securities or otherwise adversely affect the amount of
any Distribution required to be made in respect of the Trust Securities as of a
specified date or (ii) restrict the right of a holder of Trust Securities to
institute suit for the enforcement of any such payment on or after such date.
So long as any Junior Subordinated Debt Securities are held by the Trust,
the Issuer Trustees shall not (i) direct the time, method and place of
conducting any proceeding for any remedy available to the Debenture Trustee, or
executing any trust or power conferred on the Property Trustee with respect to
the Junior Subordinated Debt Securities, (ii) waive any past default that is
waivable under Section 5.13 of the Indenture, (iii) exercise any right to
rescind or annul a declaration that the principal of all the Junior Subordinated
Debt Securities shall be due and payable or (iv) consent to any amendment,
modification or termination of the Indenture or the Junior Subordinated Debt
Securities, where such consent shall be required, without, in each case,
obtaining the prior approval of the holders of a majority in aggregate
liquidation amount of all outstanding Capital Securities; provided, however,
that where a consent under the Indenture would require the consent of each
holder of Junior Subordinated Debt Securities affected thereby, no such consent
shall be given by the Property Trustee without the prior consent of each holder
of the Capital Securities. The Issuer Trustees shall not revoke any action
previously authorized or approved by a vote of the holders of the Capital
Securities except by subsequent vote of such holders. The Property Trustee shall
notify each holder of Capital Securities of any notice of default with respect
to the Junior Subordinated Debt Securities. In addition to obtaining the
foregoing approvals of such holders of the Capital Securities, prior to taking
any of the foregoing actions, the 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 or as a publicly traded partnership 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 New Capital Securities in accordance with
the Declaration.
Notwithstanding that holders of the Capital Securities are entitled to vote
or consent under any of the circumstances described above, any of the Capital
Securities that are owned by the Corporation, the Issuer Trustees or any
affiliate of the Corporation or any Issuer Trustees, shall, for purposes of such
vote or consent, be treated as if they were not outstanding.
Expenses and Taxes
In the Indenture, the Corporation, as issuer of the Junior Subordinated
Debt Securities, has agreed to pay all debts and other obligations (other than
with respect to payments of Distributions, amount payable upon redemption and
the liquidation amount of the Trust Securities) and all costs and expenses of
the Trust (including costs and expenses relating to the organization of the
Trust, the fees and expenses of the Issuer Trustees and the costs and expenses
relating to the operation of the Trust) and the offering of the New Capital
Securities, and to pay any and all taxes and all costs and expenses with respect
to the foregoing (other than United States withholding taxes) to which the Trust
might become subject. The foregoing obligations of the Corporation under the
Indenture are for the benefit of, and shall be enforceable by, any person to
whom any such debts, obligations, costs, expenses and taxes are owed (a
"Creditor") whether or not such Creditor has received notice thereof. Any such
Creditor may enforce such obligations of the Corporation directly against the
Corporation, and the Corporation has irrevocably waived any right or remedy to
require that any such Creditor take any action against the Trust or any other
person before proceeding against the Corporation. The Corporation has also
agreed in the Indenture to execute such additional agreement(s) as may be
necessary or desirable to give full effect to the foregoing.
Form, Denomination, Book-Entry Procedures and Transfer
The New Capital Securities initially will be represented by one or more New
Capital Securities in registered, global form (collectively, the "Global Capital
Securities"). The Global Capital Securities will be deposited upon issuance with
the Property Trustee as custodian for DTC, in New York, New York, and registered
in the name of DTC or its nominee, in each case for credit to an account of a
direct or indirect participant in DTC as described below.
Except as set forth below, the Global Capital Securities may be
transferred, in whole and not in part, only to another nominee of DTC or to a
successor of DTC or its nominee and only in amounts that would not cause a
holder to own less than 100 Capital Securities. Beneficial interests in the
Global Capital Securities may not be exchanged for Capital Securities in
certificated form except in the limited circumstances described below.
Depositary Procedures
DTC has advised the Trust and the Corporation as follows: DTC is a limited
purpose trust company organized under the laws of the State of New York, a
member of the Federal Reserve System, a "clearing corporation" within the
meaning of the Uniform Commercial Code and a "clearing agency" registered
pursuant to the provisions of Section 17A of the Exchange Act. DTC was created
to hold securities for its participating organizations (collectively, the
"Participants") and to facilitate the clearance and settlement of transactions
in those securities between Participants through electronic book-entry changes
to accounts of its Participants, thereby eliminating the need for physical
movement of certificates. Participants include securities brokers and dealers
(including the Initial Purchaser), banks, trust companies, clearing corporations
and certain other organizations. Indirect access to DTC's system is also
available to other entities such as banks, brokers, dealers and trust companies
that clear through or maintain a custodial relationship with a Participant,
either directly or indirectly (collectively, the "Indirect Participants").
Persons who are not Participants may beneficially own securities held by or on
behalf of DTC only through the Participants or the Indirect Participants. The
ownership interest and transfer of ownership interest of each actual purchaser
of each security held by or on behalf of DTC are recorded on the records of the
Participants and Indirect Participants.
DTC has also advised the Trust and the Corporation that, pursuant to
procedures established by it, (i) upon deposit of the Global Capital Securities,
DTC will credit the accounts of Participants designated by the Initial Purchaser
with portions of the principal amount of the Global Capital Securities and (ii)
ownership of such interests in the Global Capital Securities will be shown on,
and the transfer of ownership thereof will be effected only through, records
maintained by DTC (with respect to the Participants) or by the Participants and
the Indirect Participants (with respect to other owners of beneficial interests
in the Global Capital Securities).
Investors in the Global Capital Securities may hold their interests therein
directly through DTC, if they are Participants in DTC, or indirectly through
organizations which are Participants in such system. All interests in a Global
Capital Security will be subject to the procedures and requirements of DTC. The
laws of some states require that certain persons take physical delivery in
certificated form. Consequently, the ability to transfer beneficial interests in
a Global Capital Security to such persons will be limited to that extent.
Because DTC can act only on behalf of Participants, which in turn act on behalf
of Indirect Participants and certain banks, the ability of a person having
beneficial interests in a Global Capital Security to pledge such interests to
persons or entities that do not participate in the DTC system, or otherwise take
actions in respect of such interests, may be affected by the lack of a physical
certificate evidencing such interests. For certain other restrictions on the
transferability of the Capital Securities, see "Exchange of Book-Entry Capital
Securities for Certificated Capital Securities."
Except as described below, owners of beneficial interests in the Global
Capital Securities will not be entitled to have Capital Securities registered in
their names, will not receive or be entitled to receive physical delivery of
Capital Securities in certificated form and will not be considered the
registered owners or holders thereof under the Declaration for any purpose.
Payments in respect of the Global Capital Security registered in the name
of DTC or its nominee will be payable by the Property Trustee to DTC or its
nominee as the registered holder under the Declaration by wire transfer in
immediately available funds on each interest payment date. Under the terms of
the Declaration, the Property Trustee will treat the persons in whose names the
Capital Securities, including the Global Capital Securities, are registered as
the owners thereof for the purpose of receiving such payments and for any and
all other purposes whatsoever. Consequently, neither the Property Trustee nor
any agent thereof has or will have any responsibility or liability for (i) any
aspect of DTC's records or any Participant's or Indirect Participant's records
relating to, or payments made on account of, beneficial ownership interests in
the Global Capital Securities, or for maintaining, supervising or reviewing any
of DTC's records or any Participant's or Indirect Participant's records relating
to the beneficial ownership interests in the Global Capital Securities, or (ii)
any other matter relating to the actions and practices of DTC or any of its
Participants or Indirect Participants. DTC has advised the Trust and the
Corporation that its current practice, upon receipt of any payment in respect of
securities such as the Capital Securities, is to credit the accounts of the
relevant Participants with the payment on the payment date, in amounts
proportionate to their respective holdings in liquidation amount of beneficial
interests in the Global Capital Security, as shown on the records of DTC, unless
DTC has reason to believe it will not receive payment on such payment date.
Payments by the Participants and the Indirect Participants to the beneficial
owners of Capital Securities represented by Global Capital Securities held
through such Participants will be governed by standing instructions and
customary practices and will be the responsibility of the Participants or the
Indirect Participants and will not be the responsibility of DTC, the Property
Trustee or the Trust. Neither the Trust nor the Property Trustee will be liable
for any delay by DTC or any of its Participants in identifying the beneficial
owners of the Capital Securities, and the Trust and the Property Trustee may
conclusively rely on and will be protected in relying on instructions from DTC
or its nominee for all purposes.
Interests in the Global Capital Securities will trade in DTC's Same-Day
Funds Settlement System and secondary market trading activity in such interests
will therefore settle in immediately available funds, subject in all cases to
the rules and procedures of DTC and its Participants. Transfers between
Participants in DTC will be effected in accordance with DTC's procedures, and
will be settled in same-day funds.
DTC has advised the Trust and the Corporation that it will take any action
permitted to be taken by a holder of New Capital Securities (including, without
limitation, the presentation of New Capital Securities for exchange as described
below) only at the direction of one or more Participants to whose account with
DTC interests in the Global Capital Securities are credited and only in respect
of such portion of the aggregate liquidation amount of the New Capital
Securities represented by the Global Capital Securities as to which such
Participant or Participants has or have given such direction. However, if there
is an Event of Default under the Declaration, DTC reserves the right to exchange
the Global Capital Securities for New Capital Securities in certificated form
and to distribute such New Capital Securities to its Participants.
So long as DTC or its nominee is the registered owner of the Global Capital
Securities, DTC or such nominee, as the case may be, will be considered the sole
owner or holder of the Capital Securities represented by the Global Capital
Security for all purposes under the Declaration.
The information in this section concerning DTC and its book-entry system
has been obtained from sources that the Trust and the Corporation believe to be
reliable, but neither the Trust nor the Corporation takes responsibility for the
accuracy thereof.
Although DTC has agreed to the foregoing procedures to facilitate transfers
of interest in the Global Capital Securities among Participants in DTC, it is
under no obligation to perform or to continue to perform such procedures, and
such procedures may be discontinued at any time. Neither the Trust nor the
Property Trustee will have any responsibility for the performance by DTC or its
Participants or Indirect Participants of their respective obligations under the
rules and procedures governing their operations.
Exchange of Book-Entry Capital Securities for Certificated Capital
Securities
A Global Capital Security is exchangeable for New Capital Securities in
registered certificated form if: (i) DTC (x) notifies the Trust that it is no
longer willing or able to properly discharge its responsibilities with respect
to the Global Capital Securities and the Corporation is unable to locate a
qualified successor, or (y) has ceased to be a "clearing agency" registered
under the Exchange Act; (ii) the Corporation at its option elects to terminate
the book-entry system through DTC; or (iii) there shall have occurred and be
continuing a Debenture Event of Default. In addition, beneficial interests in a
Global Capital Security may be exchanged by or on behalf of DTC for certificated
New Capital Securities upon request by DTC, but only upon at least 20 days prior
written notice given to the Property Trustee in accordance with DTC's customary
procedures. In all cases, certificated New Capital Securities delivered in
exchange for any Global Capital Security or beneficial interests therein will be
registered in the names, and issued in any approved denominations, requested by
or on behalf of DTC (in accordance with its customary procedures, unless the
Property Trustee (based on an opinion of counsel) determines otherwise in
compliance with applicable law.
The Chase Manhattan Bank has informed the Trust that so long as it serves
as paying agent for the Capital Security, it anticipates that information
regarding Distributions on the Capital Security including payment date, Record
Date and redemption information will be made available through The Chase
Manhattan Bank at (212) 946-3082.
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 New 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 Corporation. The Paying Agent
shall be permitted to resign as Paying Agent upon 30 days' written notice to the
Property Trustee, the Administrative Trustees and the Corporation. In the event
that the Property Trustee shall no longer be the Paying Agent, the
Administrative Trustees shall appoint a successor (which shall be a bank or
trust company acceptable to the Administrative Trustees and the Corporation) to
act as Paying Agent.
Restriction on Transfer
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) or any integral multiple of $1,000 (one Capital Security) in excess
thereof. Any attempt, transfer or other disposition of New 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 New Capital Securities for any purpose, including but
not limited to the receipt of Distributions on such New Capital Securities, and
such transferee shall be deemed to have no interest whatsoever in such New
Capital Securities.
Registrar and Transfer Agent
The Property Trustee will act as registrar and transfer agent for the New
Capital Securities.
Registration of transfers of the New Capital Securities will be effected
without charge by or on behalf of the Trust, but upon payment of any tax or
other governmental charges that may be imposed in connection with any transfer
or exchange. The Trust will not be required to register or cause to be
registered the transfer of the New Capital Securities after they have been
called for redemption.
Information Concerning the Property Trustee
The Property Trustee, other than during the occurrence and continuance of
an Event of Default, undertakes to perform only such duties as are specifically
set forth in the Declaration and, during the existence of an Event of Default,
must exercise the same degree of care and skill as a prudent person would
exercise or use in the conduct of his or her own affairs. Subject to this
provision, the Property Trustee is under no obligation to exercise any of the
powers vested in it by the Declaration at the request of any holder of Trust
Securities unless it is offered reasonable indemnity against the costs, expenses
and liabilities that might be incurred thereby. If no Event of Default has
occurred and is continuing and the Property Trustee is required to decide
between alternative causes of action, construe ambiguous provisions in the
Declaration or is unsure of the application of any provision of the Declaration,
and the matter is not one on which holders of the Capital Securities or the
Common Securities are entitled under the Declaration to vote, then the Property
Trustee shall take such action as is directed by the Corporation and, if not so
directed, shall take such action as it deems advisable and in the best interests
of the holders of the Trust Securities and will have no liability except for its
own bad faith, negligence or willful misconduct.
Miscellaneous
The Administrative Trustees are authorized and directed to conduct the
affairs of and to operate the Trust in such a way that the Trust will not be
deemed to be an "investment company" required to be registered under the
Investment Company Act or classified as an association or a publicly traded
partnership taxable as a corporation for United States federal income tax
purposes, and so that the Junior Subordinated Debt Securities will be treated as
indebtedness of the Corporation for United States federal income tax purposes.
In this connection, the Corporation and the Administrative Trustees are
authorized to take any action, not inconsistent with applicable law, the
certificate of trust of the Trust or the Declaration, that the Corporation and
the Administrative Trustees determine in their discretion to be necessary or
desirable for such purposes, as long as such action does not materially
adversely affect the interests of the holders of the Trust Securities.
Holders of the Trust Securities have no preemptive or similar rights.
The Trust may not borrow money or issue debt or mortgage or pledge any of
its assets.
DESCRIPTION OF NEW JUNIOR SUBORDINATED DEBT SECURITIES
The Old Junior Subordinated Debt Securities were issued and the New Junior
Subordinated Debt Securities will be issued as a separate series under a Junior
Subordinated Indenture, as supplemented from time to time (as so supplemented,
the "Indenture"), between the Corporation and The Chase Manhattan Bank, as
trustee (the "Debenture Trustee"). The Indenture has been qualified under the
Trust Indenture Act. This summary of certain terms and provisions of the Junior
Subordinated Debt Securities and the Indenture does not purport to be complete,
and where reference is made to particular provisions of the Indenture, such
provisions, including the definitions of certain terms, some of which are not
otherwise defined herein, are qualified in their entirety by reference to all of
the provisions of the Indenture and those terms made a part of the Indenture by
the Trust Indenture Act.
General
Concurrently with the issuance of the Old Capital Securities, the Trust
invested the proceeds thereof, together with the consideration paid by the
Corporation for the Common Securities in Old Junior Subordinated Debt Securities
issued by the Corporation. Pursuant to the Exchange Offer, the Corporation will
exchange the Old Junior Subordinated Debt Securities, in an amount corresponding
to the Old Capital Securities accepted for exchange, for a like aggregate
principal amount of the New Junior Subordinated Debt Securities as soon as
practicable after the date hereof.
The New Junior Subordinated Debt Securities will bear interest at the
annual rate of 9.58% of the principal amount thereof, payable semi-annually in
arrears on February 1 and August 1 of each year (each, an "Interest Payment
Date"), commencing August 1, 1997, to the person in whose name each New Junior
Subordinated Debt Security is registered, subject to certain exceptions, at the
close of business on the January 15 or July 15 next preceding such Interest
Payment Date. It is anticipated that, until the liquidation of the Trust, each
New Junior Subordinated Debt Security will be held by the Trust for the benefit
of the holders of the Trust Securities. The amount of interest payable for any
period will be computed on the basis of a 360-day year of twelve 30-day months.
In the event that any date on which interest is payable on the New Junior
Subordinated Debt Securities is not a Business Day, then payment of the interest
payable on such date will be made on the next succeeding day that is a Business
Day (and without any interest or other payment in respect of any such delay),
with the same force and effect as if made on the date such payment was
originally payable. Accrued interest that is not paid on the applicable Interest
Payment Date will bear additional interest on the amount thereof (to the extent
permitted by law) at the rate per annum of 9.58% thereof, compounded
semi-annually from the relevant Interest Payment Date. 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 applicable.
The New Junior Subordinated Debt Securities will be issued as a series of
New Junior Subordinated Debt Securities under the Indenture. Unless previously
redeemed or repurchased, the New Junior Subordinated Debt Securities will mature
on February 1, 2027.
The New Junior Subordinated Debt Securities will rank pari passu with the
Old Junior Subordinated Debentures, will be unsecured and will rank junior and
be subordinate in right of payment to all Senior Debt to the extent provided in
the Indenture. With respect to all matters on which holders of Junior
Subordinated Debt Securities are entitled to vote, the New Junior Subordinated
Debt Securities and the Old Junior Subordinated Debt Securities will vote
together as a class. Because the Corporation is a bank holding company, the
right of the Corporation to participate in any distribution of assets of any
subsidiary, including the Bank, upon such subsidiary's liquidation or
reorganization or otherwise (and thus the ability of holders of the New Capital
Securities to benefit indirectly from such distribution) is subject to the prior
claims of creditors of such subsidiary, except to the extent that the
Corporation may itself be recognized as a creditor of such subsidiary.
Accordingly, the New Junior Subordinated Debt Securities will be subordinated to
all Senior Debt and effectively subordinated to all existing and future
liabilities of the Corporation's subsidiaries, and holders of New Junior
Subordinated Debt Securities should look only to the assets of the Corporation
for payments on the New Junior Subordinated Debt Securities. The Indenture does
not limit the incurrence or issuance of other secured or unsecured debt of the
Corporation, including Senior Debt, whether under the Indenture or any existing
or other indenture that the Corporation may enter into in the future or
otherwise. See "--Subordination."
The New Junior Subordinated Debt Securities will rank pari passu with all
Other Debentures issued under the Indenture and will be unsecured and
subordinate and junior in right of payment to the extent and in the manner set
forth in the Indenture to all Senior Debt of the Corporation. See
"--Subordination." The Corporation is a non-operating holding company and almost
all of the operating assets of the Corporation and its consolidated subsidiaries
are owned by such subsidiaries. The Corporation relies primarily on dividends
from such subsidiaries to meet its obligations. The Corporation is a legal
entity separate and distinct from its present and future banking and non-banking
affiliates. The Corporation's bank subsidiaries are subject to certain
restrictions imposed by federal law on any extensions of credit to, and certain
other transactions with, the Corporation and certain other affiliates, and on
investments in stock or other securities thereof. Such restrictions prevent the
Corporation and such other affiliates from borrowing from such banks unless the
loans are secured by various types of collateral. In addition, payment of
dividends to the Corporation by a bank subsidiary is subject to ongoing review
by banking regulators and is subject to various statutory limitations and in
certain circumstances requires approval by banking regulatory authorities. The
Corporation does not have any present intention to issue any Other Debentures.
The Other Debentures will be issuable in one or more series pursuant to an
indenture supplemental to the Indenture or a resolution of the Corporation's
Board of Directors or a committee thereof.
Form, Registration and Transfer
If the New Junior Subordinated Debt Securities are distributed to holders
of the Trust Securities upon the termination of the Trust, such New Junior
Subordinated Debt Securities may be represented by one or more global
certificates registered in the name of Cede and Company as the nominee of DTC.
The depository arrangements for such New Junior Subordinated Debt Securities 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 New 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 New
Junior Subordinated Debt Securities 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 Corporation may designate from time to time, except that at the
option of the Corporation payment of any interest may be made (except in the
case of New Junior Subordinated Debt Securities in global form), (i) by check
mailed to the address of the Person entitled thereto as such address shall
appear in the register for New Junior Subordinated Debt Securities 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 New Junior Subordinated
Debt Security will be made to the person in whose name such New Junior
Subordinated Debt Security is registered at the close of business on the Record
Date for such interest, except in the case of defaulted interest. The
Corporation may at any time designate additional Paying Agents or rescind the
designation of any Paying Agent; however the Corporation will at all times be
required to maintain a Paying Agent in each Place of Payment for the New Junior
Subordinated Debt Securities.
Any moneys deposited with the Debenture Trustee or any Paying Agent, or
then held by the Corporation in trust, for the payment of the principal of (and
premium, if any) or interest on any New Junior Subordinated Debt Security 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 Corporation, be
repaid to the Corporation and the holder of such New Junior Subordinated Debt
Security shall thereafter look, as a general unsecured creditor, only to the
Corporation for payment thereof.
Option to Extend Interest Payment Date
So long as no Debenture Event of Default has occurred and is continuing,
the Corporation has the right under the Indenture to defer the payment of
interest 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,
however, that no Extension Period may extend beyond the Stated Maturity of the
New Junior Subordinated Debt Securities. At the end of an Extension Period, the
Corporation must pay all interest then accrued and unpaid on the New Junior
Subordinated Debt Securities (together with interest thereon at the annual rate
of 9.58%, compounded semi-annually from the relevant Interest Payment Date, to
the extent permitted by applicable law). During an Extension Period, interest
will continue to accrue and holders of New Junior Subordinated Debt Securities
(and holders of the Trust Securities while Trust Securities are outstanding)
will be required to accrue interest income (in the form of OID) for United
States federal income tax purposes. See "Certain United States Federal Income
Tax Considerations--Interest Income and Original Issue Discount."
During any Extension Period, the Corporation 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 Corporation'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 Corporation (including any Other Debentures) that rank pari
passu with or junior in interest to the New Junior Subordinated Debt Securities
or (iii) make any guarantee payments with respect to any guarantee by the
Corporation of the debt securities of any subsidiary of the Corporation
(including any Other Guarantees) if such guarantee ranks pari passu with or
junior in interest to the New Junior Subordinated Debt Securities (other than
(a) dividends or distributions in common stock of the Corporation, (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) purchases or acquisitions of shares of the
Corporation's common stock in connection with the satisfaction by the
Corporation of its obligations under any employee benefit plan or any other
contractual obligation of the Corporation (other than a contractual obligation
ranking pari passu with or junior to the New Junior Subordinated Debt
Securities), (e) as a result of a reclassification of the Corporation's capital
stock or the exchange or conversion of one class or series of the Corporation's
capital stock for another class or series of the Corporation's capital stock, or
(f) the purchase of fractional interests in shares of the Corporation's capital
stock pursuant to the conversion or exchange provisions of such capital stock or
the security being converted or exchanged). Prior to the termination of any
Extension Period, the Corporation may further extend such Extension Period;
provided, however, that such extension does not cause such Extension Period to
exceed 10 consecutive semi-annual periods or to extend beyond the Stated
Maturity. Upon the termination of any Extension Period and the payment of all
interest then accrued and unpaid on the New Junior Subordinated Debt Securities
(together with interest thereon at the annual rate of 9.58%, compounded
semi-annually, to the extent permitted by applicable law), the Corporation 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 Corporation 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
automated quotation system 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 Corporation'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 Corporation may elect to begin an Extension Period.
Optional Redemption
The New Junior Subordinated Debt Securities will be redeemable, in whole or
in part, at the option of the Corporation at any time prior to Stated Maturity
and on or after February 1, 2007, subject to the Corporation having received
prior approval of the Federal Reserve if then required under applicable capital
guidelines or policies of the Federal Reserve, at a redemption price (the
"Optional Prepayment Price") equal to the following prices, expressed in
percentages of the principal amount of the New Junior Subordinated Debt
Securities plus accrued but unpaid interest to but excluding the date fixed for
redemption. If redeemed during the 12-month period beginning February 1:
Year Percentage
2007.................................................. 104.790
2008.................................................. 104.311
2009.................................................. 103.832
2010.................................................. 103.353
2011.................................................. 102.874
2012.................................................. 102.395
2013.................................................. 101.916
2014.................................................. 101.437
2015.................................................. 100.958
2016.................................................. 100.479
and at 100% on or after February 1, 2017.
Special Event Prepayment
If a Special Event shall occur and be continuing prior to February 1, 2007,
the Corporation may, 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 New Junior Subordinated Debt
Securities within 90 days after the occurrence of such Special Event, in whole,
but not in part, at a prepayment price (the "Special Event Prepayment Price")
equal to the greater of (i) 100% of the principal amount of such New Junior
Subordinated Debt Securities 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 Redemption Price with respect to an optional redemption of such New
Junior Subordinated Debt Securities on February 1, 2007, together with scheduled
payments of interest accruing from the prepayment date to February 1, 2007 (the
"Remaining Life"), 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 each case, accrued interest thereon to
the date of prepayment. See "Description of New Capital Securities--Liquidation
of the Trust and Distribution of New Junior Subordinated Debt Securities."
"Special Event" means a Tax Event or a Regulatory Capital Event.
"Tax Event" means the receipt by the Corporation of an opinion of
independent counsel experienced in such matters to the effect that, as a result
of any amendment to, or change (including any announced proposed 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 proposed change, 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 New Junior
Subordinated Debt Securities, (ii) interest payable by the Corporation on the
New Junior Subordinated Debt Securities is not, or within 90 days of the date of
such opinion, will not be, deductible by the Corporation, in whole or in part,
for United States federal income tax purposes, or (iii) the Trust is, or will be
within 90 days of the date of such opinion, subject to more than a de minimis
amount of other taxes, duties or other governmental charges.
"Regulatory Capital Event" means that the Corporation 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 date of original
issuance of the Capital Securities, the Capital Securities do not constitute, or
within 90 days of the date thereof, will not constitute Tier 1 capital (or its
then equivalent); provided, however, that the distribution of the New Junior
Subordinated Debt Securities in connection with the liquidation of the Trust by
the Corporation and the treatment thereafter of the New Junior Subordinated Debt
Securities as other than Tier 1 capital shall not in and of itself constitute a
Regulatory Capital Event unless such liquidation shall have occurred in
connection with a Tax Event.
"Adjusted Treasury Rate" means, with respect to 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 that is
published weekly by the Federal Reserve and which establishes yields on actively
traded United States Treasury securities adjusted to constant maturity under the
caption "Treasury Constant Maturities," for the maturity corresponding to the
Remaining Life (if no maturity is within three months before or after the
Remaining Life, yields for the two published maturities most closely
corresponding to the Remaining Life shall be determined and the 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,
calculated using a price for the Comparable Treasury Issue (expressed as a
percentage of its principal amount) equal to the Comparable Treasury Price for
such prepayment date, in each case calculated on the third Business Day
preceding the prepayment date, plus in each case (a) 2.25% if such prepayment
date occurs on or prior to February 1, 1998 and (b) 1.50% in all other cases.
"Comparable Treasury Issue" means the United States Treasury security
selected by the Quotation Agent as having a maturity comparable to the Remaining
Life of the New Junior Subordinated Debt Securities to be prepaid that would be
utilized, at the time of selection and in accordance with customary financial
practice, in pricing new issues of corporate debt securities of comparable
maturity with the Remaining Life of the New Junior Subordinated Debt Securities.
If no United States Treasury security has a maturity which is within a period
from three months before to three months after February 1, 2007, 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 using
such securities.
"Quotation Agent" means the Reference Treasury Dealer selected by the
Debenture Trustee to act as such after consultation with the Corporation.
"Reference Treasury Dealer" means: (i) a nationally-recognized U.S. Government
Securities dealer selected by the Debenture Trustee after consultation with the
Corporation and its respective successors; provided, however, that if the
foregoing shall cease to be a primary U.S. Government securities dealer in New
York City (a "Primary Treasury Dealer"), the Corporation shall substitute
therefor another Primary Treasury Dealer; or (ii) any other Primary Treasury
Dealer selected by the Debenture Trustee after consultation with the
Corporation.
"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 of such Reference Treasury Dealer Quotations,
or (b) if the Debenture Trustee obtains fewer than three 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.
Notice of any redemption will be mailed at least 30 days but not more than
60 days before the redemption date to each holder of New Junior Subordinated
Debt Securities to be redeemed at its registered address. Unless the Corporation
defaults in payment of the Special Event Prepayment Price, on and after the
prepayment date interest ceases to accrue on the New Junior Subordinated Debt
Securities.
Additional Sums
If the Trust is required to pay any additional taxes, duties or other
governmental charges as a result of a Tax Event, the Corporation will pay as
additional amounts on the New Junior Subordinated Debt Securities such amounts
as shall be required so that the Distributions payable by the Trust shall not be
reduced as a result of any such additional taxes, duties or other governmental
charges. The Corporation has covenanted in the Indenture, if and so long as (i)
the Trust is the holder of all New Junior Subordinated Debt Securities and (ii)
a Tax Event in respect of the Trust has occurred and is continuing, to pay to
the Trust such Additional Sums (as defined under "Description of Capital
Securities--Mandatory Redemption").
Restrictions on Certain Payments
The Corporation will also covenant that, if at such time (i) there shall
have occurred and is continuing a Debenture Event of Default, (ii) the
Corporation shall be in default with respect to its payment of any obligations
under the Guarantee or (iii) the Corporation shall have given notice of its
election of an Extension Period as provided in the Indenture and shall not have
rescinded such notice, or such Extension Period, or any extension thereof shall
be continuing, 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 Corporation's capital stock (which includes common and preferred stock),
(ii) make any payment of principal, interest or premium, if any, on or repay or
repurchase or redeem any debt securities of the Corporation (including Other
Debentures) that rank pari passu with or junior in interest to the New Junior
Subordinated Debt Securities (other than with respect to the New Junior
Subordinated Debt Securities) or (iii) make any guarantee payments with respect
to any guarantee by the Corporation of the debt securities of any subsidiary of
the Corporation (including under Other Guarantees) if such guarantee ranks pari
passu with or junior in interest to the New Junior Subordinated Debt Securities
(other than (a) dividends or distributions in common stock of the Corporation,
(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) purchases or acquisitions of shares of the
Corporation's common stock in connection with the satisfaction by the
Corporation of its obligations under any employee benefit plan or any other
contractual obligation of the Corporation (other than a contractual obligation
ranking pari passu with or junior in interest to the New Junior Subordinated
Debt Securities), (e) as a result of a reclassification of the Corporation's
capital stock or the exchange or conversion of one class or series of the
Corporation's capital stock for another class or series of the Corporation's
capital stock or (f) the purchase of fractional interests in shares of the
Corporation's capital stock pursuant to the conversion or exchange provisions of
such capital stock or the security being converted or exchanged).
Modification of Indenture
From time to time the Corporation and the Debenture Trustee may, without
the consent of the holders of New Junior Subordinated Debt Securities, amend,
waive or supplement the Indenture for specified purposes, including, among other
things, curing ambiguities, defects or inconsistencies (provided that any such
action does not materially adversely affect the interest of the holders of New
Junior Subordinated Debt Securities or the holders of the Capital Securities so
long as they remain outstanding) and qualifying, or maintaining the
qualification of, the Indenture under the Trust Indenture Act. The Indenture
contains provisions permitting the Corporation and the Debenture Trustee, with
the consent of the holders of not less than a majority in principal amount of
New Junior Subordinated Debt Securities, to modify the Indenture in a manner
affecting the rights of the holders of New Junior Subordinated Debt Securities;
provided, however, that no such modification may, without the consent of the
holder of each outstanding New Junior Subordinated Debt Security so affected,
(i) change the Stated Maturity, or reduce the principal amount of the New Junior
Subordinated Debt Securities, or reduce the rate or extend the time of payment
of interest thereon or (ii) reduce the percentage of principal amount of New
Junior Subordinated Debt Securities, the holders of which are required to
consent to any such modification of the Indenture.
In addition, the Corporation and the Debenture Trustee may execute, without
the consent of any holder of New Junior Subordinated Debt Securities, any
supplemental Indenture for the purpose of creating any Other Debentures.
Debenture Events of Default
The Indenture provides that any one or more of the following described
events with respect to the New Junior Subordinated Debt Securities that has
occurred and is continuing constitutes a "Debenture Event of Default":
(i) failure for 30 days to pay any interest on the New Junior
Subordinated Debt Securities 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 New
Junior Subordinated Debt Securities when due, whether at maturity, upon
redemption, by declaration of acceleration 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 Corporation from the Debenture Trustee or the holders of at least
25% in aggregate outstanding principal amount of the New Junior
Subordinated Debt Securities; or
(iv) certain events in bankruptcy, insolvency or reorganization of the
Corporation; or
(v) the voluntary or involuntary dissolution, winding-up or
termination of the Trust, except in connection with the distribution of the
New Junior Subordinated Debt Securities to the holder of Trust Securities
in liquidation of the Trust, the redemption of all of the Trust Securities
of the Trust, or certain mergers, consolidations or amalgamations, each as
permitted by the Declaration.
The holders of a majority in aggregate outstanding principal amount of the
New Junior Subordinated Debt Securities have the right to direct the time,
method and place of conducting any proceeding for any remedy available to the
Debenture Trustee. The Debenture Trustee or the holders of not less than 25% in
aggregate outstanding principal amount of the New Junior Subordinated Debt
Securities may declare the principal due and payable immediately upon a
Debenture Event of Default and, should the Debenture Trustee or such holders of
New Junior Subordinated Debt Securities fail to make such declaration, the
holders of at least 25% in aggregate liquidation amount of the Capital
Securities shall have such right. The holders of a majority in aggregate
outstanding principal amount of the New Junior Subordinated Debt Securities may
annul such declaration and waive the default if the default (other than the
non-payment of the principal of the New Junior Subordinated Debt Securities
which has become due solely by such acceleration) has been cured and a sum
sufficient to pay all matured installments of interest and principal due
otherwise than by acceleration has been deposited with the Debenture Trustee.
Should the holders of New Junior Subordinated Debt Securities fail to annul such
declaration and waive such default, the holders of a majority in aggregate
liquidation amount of the Capital Securities shall have such right.
The holders of a majority in aggregate outstanding principal amount of the
New Junior Subordinated Debt Securities affected thereby may, on behalf of the
holders of all the New Junior Subordinated Debt Securities, waive any past
default, except a default in the payment of principal of (or premium, if any) or
interest (unless such default has been cured and a sum sufficient to pay all
matured installments of interest and 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 New Junior
Subordinated Debt Security. Should the holders of such New Junior Subordinated
Debt Securities fail to annul such declaration and waive such default, the
holders of a majority in aggregate liquidation amount of the Capital Securities
shall have such right. The Corporation is required to file annually with the
Debenture Trustee a certificate as to whether or not the Corporation is in
compliance with all the conditions and covenants applicable to it under the
Indenture.
In case a Debenture Event of Default shall occur and be continuing, the
Property Trustee will have the right to declare the principal of and the
interest on the New Junior Subordinated Debt Securities, and any other amounts
payable under the Indenture, to be forthwith due and payable and to enforce its
other rights as a creditor with respect to the New Junior Subordinated Debt
Securities.
Enforcement of Certain Rights by Holders of New Capital Securities
If a Debenture Event of Default has occurred and is continuing and such
event is attributable to the failure of the Corporation to pay interest or
principal on the New Junior Subordinated Debt Securities on the date such
interest or principal is otherwise payable, a holder of Capital Securities may
institute a Direct Action. The Corporation may not amend the Indenture to remove
the foregoing right to bring a Direct Action without the prior written consent
of the holders of all of the Capital Securities. Notwithstanding any payments
made to a holder of Capital Securities by the Corporation in connection with a
Direct Action, the Corporation shall remain obligated to pay the principal of or
interest on the New Junior Subordinated Debt Securities, and the Corporation
shall be subrogated to the rights of the holder of such Capital Securities with
respect to payments on the Capital Securities to the extent of any payments made
by the Corporation to such holder in any Direct Action.
The holders of the Capital Securities will not be able to exercise directly
any remedies, other than those set forth in the preceding paragraph, available
to the holders of the New Junior Subordinated Debt Securities unless there shall
have been an Event of Default under the Declaration. See "Description New of
Capital Securities--Events of Default; Notice."
Consolidation, Merger, Sale of Assets and Other Transactions
The Indenture provides that the Corporation shall not consolidate with or
merge with or into any other Person or convey, transfer or lease its properties
and assets substantially as an entirety to any Person, and no Person shall
consolidate with or merge with or into the Corporation or convey, transfer or
lease its properties and assets substantially as an entirety to the Corporation,
unless (i) in case the Corporation consolidates with or merges with or into
another Person or conveys or transfers its properties and assets substantially
as an entirety to any Person, the successor Person is organized under the laws
of the United States or any state or the District of Columbia, and such
successor Person expressly assumes the Corporation's obligations on the New
Junior Subordinated Debt Securities issued under the Indenture; (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; (iii) such transaction is
permitted under the Declaration and the Guarantee and does not give rise to any
breach or violation of the Declaration or the Guarantee; and (iv) certain other
conditions as prescribed in the Indenture are met.
The general provisions of the Indenture do not afford holders of the New
Junior Subordinated Debt Securities protection in the event of a highly
leveraged or other transaction involving the Corporation that may adversely
affect holders of the New Junior Subordinated Debt Securities.
Subordination
In the Indenture, the Corporation has covenanted and agreed that any New
Junior Subordinated Debt Securities issued thereunder shall be subordinate and
junior in right of payment to all Senior Debt to the extent provided in the
Indenture. Upon any payment or distribution of assets to creditors upon any
liquidation, dissolution, winding-up, reorganization, assignment for the benefit
of creditors, marshaling of assets or any bankruptcy, insolvency, debt
restructuring or similar proceedings in connection with any insolvency or
bankruptcy proceeding of the Corporation, the holders of Senior Debt will first
be entitled to receive payment in full of principal of (and premium, if any) and
interest, if any, on such Senior Debt before the holders of New Junior
Subordinated Debt Securities will be entitled to receive or retain any payment
or distribution in respect thereof; provided, however, that holders of Senior
Debt shall not be entitled to receive payment of any such amounts to the extent
that such holders would be required by the subordination provisions of such
Senior Debt to pay such amounts over to the obligees on trade accounts payable
or other liabilities arising in the ordinary course of business.
In the event of the acceleration of the maturity of the New Junior
Subordinated Debt Securities, the holders of all Senior Debt outstanding at the
time of such acceleration will first be entitled to receive payment in full of
all amounts due thereon (including any amounts due upon acceleration) before the
holders of the New Junior Subordinated Debt Securities will be entitled to
receive or retain any payment in respect of the principal of (or premium, if
any) or interest, if any, on the New Junior Subordinated Debt Securities;
provided, however, that holders of Senior Debt shall not be entitled to receive
payment of any such amounts to the extent that such holders would be required by
the subordination provisions of such Senior Debt to pay such amounts over to the
obligees on trade accounts payable or other liabilities arising in the ordinary
course of business.
In the event that the Corporation shall default in the payment of any
principal of (or premium, if any), or interest, if any, on any Senior Debt when
the same becomes due and payable, whether at maturity or at a date fixed for
prepayment or by declaration of acceleration or otherwise, then, unless and
until such default shall have been cured or waived or shall have ceased to exist
or all Senior Debt shall have been paid, no direct or indirect payment (in cash,
property, securities, by set-off or otherwise) shall be made or agreed to be
made for principal, premium, if any, or interest, if any, on the New Junior
Subordinated Debt Securities, or in respect of any redemption, repayment,
retirement, purchase or other acquisition of any of the New Junior Subordinated
Debt Securities.
"Debt" means (i) the principal of (and premium, if any), and unpaid
interest on indebtedness for money borrowed, (ii) purchase money and similar
obligations, (iii) obligations under capital leases, (iv) guarantees,
assumptions or purchase commitments relating to, or other transactions as a
result of which the Corporation is responsible for the payment of such
indebtedness of others, (v) renewals, extensions and refunding of any such
indebtedness, (vi) interest or obligations in respect of any such indebtedness
accruing after the commencement of any insolvency or bankruptcy proceedings and
(vii) obligations associated with derivative products such as interest rate and
currency exchange contracts, foreign exchange contracts, commodity contracts and
similar arrangements; provided, however, that Debt shall not include trade
accounts payable or accrued liabilities in the ordinary course of business.
"Senior Debt" means the principal of (and premium, if any) and interest, if
any (including interest accruing on or after the filing of any petition in
bankruptcy or for reorganization relating to the Corporation whether or not such
claim for post-petition interest is allowed in such proceeding), on Debt of the
Corporation, whether incurred on or prior to the date of the Indenture or
thereafter incurred, unless, in the instrument creating or evidencing the same
or pursuant to which the same is outstanding, it is provided that such
obligations are not superior in right of payment to the New Junior Subordinated
Debt Securities or the Other Debentures; provided, however, that Senior Debt
shall not be deemed to include (i) any Debt of the Corporation which, when
incurred and without respect to any election under Section 1111(b) of the United
States Bankruptcy Code of 1978, as amended, was without recourse to the
Corporation, (ii) any Debt of the Corporation to any of its subsidiaries, (iii)
Debt to any employee of the Corporation, (iv) Debt which by its terms is
subordinated to trade accounts payable or accrued liabilities arising in the
ordinary course of business to the extent that payments made to the holders of
such Debt by the holders of the New Junior Subordinated Debt Securities as a
result of the subordination provisions of the Indenture would be greater than
such payments otherwise would have been as a result of any obligation of such
holders of such debt to pay amounts over to the obligees on such trade accounts
payable or accrued liabilities arising in the ordinary course of business as a
result of subordination provisions to which such Debt is subject, and (v) any
other debt securities issued pursuant to the Indenture.
The Indenture places no limitation on the amount of Senior Debt that may be
incurred by the Corporation. The Corporation may from time to time incur
indebtedness constituting Senior Debt. On March 31, 1997 the Corporation had no
outstanding Senior Debt.
Governing Law
The Indenture and the New Junior Subordinated Debt Securities will be
governed by and construed in accordance with the laws of the State of New York.
Information Concerning the Debenture Trustee
Following the Exchange Offer and the qualification of the Indenture under
the Trust Indenture Act, the Debenture Trustee shall have and be subject to all
the duties and responsibilities specified with respect to an indenture trustee
under the Trust Indenture Act. Subject to such provisions, the Debenture Trustee
is under no obligation to exercise any of the powers vested in it by the
Indenture at the request of any holder of New Junior Subordinated Debt
Securities, unless offered reasonable indemnity by such holder against the
costs, expenses and liabilities which might be incurred thereby. The Debenture
Trustee is not required to expend or risk its own funds or otherwise incur
personal financial liability in the performance of its duties if the Debenture
Trustee reasonably believes that repayment or adequate indemnity is not
reasonably assured to it.
DESCRIPTION OF NEW GUARANTEE
The Old Guarantee was executed and delivered by the Corporation
concurrently with the issuance by the Trust of the Old Capital Securities for
the benefit of the holders from time to time of such Old Capital Securities. The
Chase Manhattan Bank will act as trustee (the "Guarantee Trustee") under the
Guarantee Agreement. As soon as practicable after the date hereof, the Old
Securities will be exchanged by the Corporation for the New Securities for the
benefit of the holders from time to time of the New Capital Securities. The
Guarantee Agreement will be qualified under the Trust Indenture Act. This
summary of certain provisions of the New 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 New 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 Corporation will irrevocably agree to pay in full on a subordinated
basis, to the extent set forth herein, the Guarantee Payments (as defined
herein) to the holders of the New 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 New Capital Securities, to the extent not paid by or on behalf of
the Trust (the "Guarantee Payments"), will be subject to the New Guarantee: (i)
any accrued and unpaid Distributions required to be paid on the New Capital
Securities, to the extent that the Trust has funds on hand available therefor at
such time, (ii) the applicable Redemption Price with respect to New Capital
Securities called for redemption, to the extent that the Trust has funds on hand
available therefor at such time, or (iii) upon a voluntary or involuntary
dissolution, winding up or liquidation of the Trust (other than in connection
with the distribution of New Junior Subordinated Debt Securities to the holders
of the New Capital Securities or the redemption of all of the Capital
Securities) the lesser of (a) the Liquidation Distribution, to the extent the
Trust has funds available therefor and (b) the amount of assets of the Trust
remaining available for distribution to holders of the New Capital Securities
upon liquidation of the Trust after satisfaction of liabilities to creditors of
the Trust as required by applicable law. The Corporation's obligation to make a
Guarantee Payment may be satisfied by direct payment of the required amounts by
the Corporation to the holders of the New Capital Securities or by causing the
Trust to pay such amounts to such holders.
The New Guarantee will be an irrevocable guarantee on a subordinated basis
of the Trust's obligations under the Trust Securities, although it will apply
only to the extent that the Trust has funds sufficient to make such payments,
and is not a guarantee of collection. If the Corporation does not make interest
payments on the New Junior Subordinated Debt Securities held by the Trust, the
Trust will not be able to pay Distributions on the New Capital Securities and
will not have funds legally available therefor.
The New Guarantee will rank subordinate and junior in right of payment to
all Senior Debt to the same extent that the New Junior Subordinated Debt
Securities are so subordinated. See "--Status of the New Guarantee." Because the
Corporation is a holding company, the right of the Corporation 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
such subsidiary, except to the extent the Corporation may itself be recognized
as a creditor of that subsidiary. Accordingly, the Corporation's obligations
under the New Guarantee will be effectively subordinated to all existing and
future liabilities of the Corporation's subsidiaries, including deposits, and
claimants should look only to the assets of the Corporation for payments
thereunder. See "USB." The New Guarantee does not limit the incurrence or
issuance of other secured or unsecured debt of the Corporation, including Senior
Debt, whether under the Indenture, any other indenture that the Corporation may
enter into in the future or otherwise.
The Corporation has, through the New Guarantee, the Declaration, the New
Junior Subordinated Debt Securities and the Indenture, taken together, fully,
irrevocably and unconditionally guaranteed all of the Trust's obligations under
the New 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 New Capital Securities. See "Relationship Among
the New Capital Securities, the New Junior Subordinated Debt Securities and the
New Guarantee."
Status of the New Guarantee
The New Guarantee will constitute an unsecured obligation of the
Corporation and will rank subordinate and junior in right of payment to all
Senior Debt in the same manner as New Junior Subordinated Debt Securities.
The Guarantee will rank pari passu with all Other Guarantees issued by the
Corporation. The New Guarantee will constitute a guarantee of payment and not of
collection (i.e., the guaranteed party may institute a legal proceeding directly
against the Corporation to enforce its rights under the New Guarantee without
first instituting a legal proceeding against any other person or entity). The
New Guarantee will be held for the benefit of the holders of the Capital
Securities. The New Guarantee will not be discharged except by payment of the
Guarantee Payments in full to the extent not paid by the Trust or upon
distribution to the holders of the Trust Securities of the New Junior
Subordinated Debt Securities. The New Guarantee does not place a limitation on
the amount of additional Senior Debt that may be incurred by the Corporation.
The Corporation may from time to time incur indebtedness constituting Senior
Debt.
Amendments and Assignment
Except with respect to any changes which do not materially adversely affect
the rights of holders of the Capital Securities (in which case no vote will be
required), the New Guarantee may not be amended without the prior approval of
the holders of not less than a majority of the aggregate liquidation amount of
such outstanding New Capital Securities. The manner of obtaining any such
approval will be as set forth under "Description of New Capital
Securities--Voting Rights; Amendment of the Declaration." All guarantees and
agreements contained in the Guarantee shall bind the successors, assigns,
receivers, trustees and representatives of the Corporation and shall inure to
the benefit of the holders of the New Capital Securities then outstanding.
Events of Default
An event of default under the New Guarantee will occur upon the failure of
the Corporation to perform any of its payment or other obligations thereunder;
provided, however, that except with respect to a default in payment of any
Guarantee Payment, the Corporation shall have received notice of default and
shall not have cured such default within 60 days after receipt of such notice.
The holders of not less than a majority in aggregate liquidation amount of the
New 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 or power
conferred upon the Guarantee Trustee under the Guarantee.
Any holder of the New Capital Securities may institute a legal proceeding
directly against the Corporation to enforce its rights under the New Guarantee
without first instituting a legal proceeding against the Trust, the Guarantee
Trustee or any other person or entity.
The Corporation, as guarantor, is required to file annually with the
Guarantee Trustee a certificate as to whether or not the Corporation is in
compliance with all the conditions and covenants applicable to it under the New
Guarantee.
Consolidation, Merger, Sale of Assets and Other Transactions
The New Guarantee provides that the Corporation shall not consolidate with
or merge with or into any other Person or convey, transfer or lease its
properties and assets substantially as an entirety to any Person, and no Person
shall consolidate with or merge with or into the Corporation or convey, transfer
or lease its properties and assets substantially as an entirety to the
Corporation, unless (i) in case the Corporation consolidates with or merges with
or into another Person or conveys or transfers its properties and assets
substantially as an entirety to any Person, the successor Person is organized
under the laws of the United States or any state or the District of Columbia and
such successor Person expressly assumes the Corporation's obligations under the
New Guarantee; (ii) immediately after giving effect thereto, no event of default
under the New Guarantee, and no event which, after notice or lapse of time or
both, would become an event of default under the New Guarantee, shall have
happened and be continuing; (iii) such transaction is permitted under the
Declaration and the Indenture and does not give rise to any breach or violation
of the Declaration or the Indenture; and (iv) certain other conditions as
prescribed in the New Guarantee are met.
Information Concerning the Guarantee Trustee
The Guarantee Trustee, other than during the occurrence and continuance of
a default by the Corporation in performance of the New Guarantee, undertakes to
perform only such duties as are specifically set forth in the New Guarantee and,
after default with respect to the New Guarantee, must exercise the same degree
of care and skill as a prudent person would exercise or use in the conduct of
his or her own affairs. Subject to this provision, the Guarantee Trustee is
under no obligation to exercise any of the powers vested in it by the New
Guarantee at the request of any holder of the New Capital Securities unless it
is offered reasonable indemnity against the costs, expenses and liabilities that
might be incurred thereby.
Termination of the Guarantee
The New Guarantee will terminate and be of no further force and effect upon
full payment of the applicable Redemption Price of the New Capital Securities,
upon full payment of the amounts payable upon liquidation of the Trust or upon
distribution of New Junior Subordinated Debt Securities to the holders of the
New Capital Securities. The New Guarantee will continue to be effective or will
be reinstated, as the case may be, if at any time any holder of the New Capital
Securities must restore payment of any sums paid under the New Capital
Securities or the New Guarantee.
Governing Law
The New Guarantee will be governed by and construed in accordance with the
laws of the State of New York.
DESCRIPTION OF OLD SECURITIES
The terms of the Old Securities are identical in all material respects to
the New Securities, except that (i) the Old Securities have not been registered
under the Securities Act, are subject to certain restrictions on transfer and
are entitled to certain rights under the applicable Registration Rights
Agreement (which rights will terminate upon consummation of the Exchange Offer,
except under limited circumstances), (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. The Old Securities provide that, in the event that a registration
statement relating to the Exchange Offer has not been filed by July 5, 1997 and
been declared effective by August 4, 1997 or, in certain limited circumstances,
in the event a shelf registration statement (the "Shelf Registration Statement")
with respect to the resale of the Old Capital Securities is not declared
effective by July 5, 1997, then interest will accrue (in addition to the stated
interest rate on the Old Junior Subordinated Debentures) at the rate of 0.25%
per annum on the principal amount of the Old Junior Subordinated Debentures and
Distributions will accrue (in addition to the stated Distribution rate on the
Old Capital Securities) at the rate of 0.25% per annum on the liquidation amount
of the Old Capital Securities, for the period from the occurrence of such event
until such time as such required Exchange Offer is consummated or any required
Shelf Registration Statement is effective. The New Securities are not, and upon
consummation of the Exchange Offer the Old Securities will not be, entitled to
any such additional interest or Distributions. Accordingly, holders of Old
Capital Securities should review the information set forth under "Risk Factors
- -- Certain Consequences of a Failure to Exchange Old Capital Securities" and
"Description of New Securities."
RELATIONSHIP AMONG THE NEW CAPITAL SECURITIES, THE
NEW JUNIOR SUBORDINATED DEBT SECURITIES AND THE NEW GUARANTEE
Full and Unconditional Guarantee
Payments of Distributions and other amounts due on the New Capital
Securities (to the extent the Trust has funds available for the payment of such
Distributions) are irrevocably guaranteed by the Corporation as and to the
extent set forth under "Description of New Guarantee." Taken together, the
Corporation's obligations under the New Junior Subordinated Debt Securities, the
Indenture, the Declaration and the New Guarantee provide, in the aggregate, a
full, irrevocable and unconditional guarantee of payments of Distributions and
other amounts due on the Capital Securities. If and to the extent that the
Corporation does not make payments on the New Junior Subordinated Debt
Securities, the Trust will not pay Distributions or other amounts due on the New
Capital Securities. The New Guarantee does not cover payment of Distributions
when the Trust does not have sufficient funds to pay such Distributions. In such
event, the remedy of a holder of New Capital Securities is to institute a Direct
Action. The obligations of the Corporation under the New Guarantee are
subordinate and junior in right of payment to all Senior Debt.
Sufficiency of Payments
As long as payments of interest and other payments are made when due on the
New Junior Subordinated Debt Securities, such payments will be sufficient to
cover Distributions and other payments due on the New Capital Securities,
primarily because (i) the aggregate principal amount or Prepayment Price of the
New Junior Subordinated Debt Securities will be equal to the sum of the
aggregate liquidation amount or Redemption Price, as applicable, of the Trust
Securities; (ii) the interest rate and interest and other payment dates on the
New Junior Subordinated Debt Securities will match the Distribution rate and
Distribution and other payment dates for the New Capital Securities; (iii) the
Corporation, as issuer of the Junior Subordinated Debt Securities, shall pay for
all costs, expenses and liabilities of the Trust except the Trust's obligations
to holders of Trust Securities under such Trust Securities; and (iv) the
Declaration further provides that the Trust will not engage in any activity that
is not consistent with the limited purposes thereof.
Enforcement Rights of Holders of New Capital Securities
A holder of any New Capital Security may institute a legal proceeding
directly against the Corporation to enforce its rights under the New Guarantee
without first instituting a legal proceeding against the Guarantee Trustee, the
Trust or any other person or entity.
A default or event of default under any Senior Debt would not constitute a
default or Event of Default under the Declaration. However, in the event of
payment defaults under, or acceleration of, Senior Debt, the subordination
provisions of the Indenture provide that no payments may be made in respect of
the New Junior Subordinated Debt Securities until such Senior Debt has been paid
in full or any payment default thereunder has been cured or waived. Failure to
make required payments on New Junior Subordinated Debt Securities would
constitute an Event of Default under the Declaration.
Limited Purpose of the Trust
The Trust Securities evidence a beneficial interest in the Trust, and the
Trust exists for the sole purpose of issuing the Trust Securities, investing the
proceeds of the Trust Securities in Junior Subordinated Debt Securities and
engaging in other activities necessary or incidental thereto.
Rights Upon Termination
Upon any voluntary or involuntary termination, winding-up or liquidation of
the Trust involving the liquidation of the New Junior Subordinated Debt
Securities, after satisfaction of the liabilities of creditors of the Trust as
required by applicable law, the holders of the Trust Securities will be entitled
to receive, out of assets held by the Trust, the Liquidation Distribution in
cash. See "Description of New Capital Securities--Liquidation of the Trust and
Distribution of New Junior Subordinated Debt Securities." Upon any voluntary or
involuntary liquidation or bankruptcy of the Corporation, the Property Trustee,
as holder of the New Junior Subordinated Debt Securities, would be a
subordinated creditor of the Corporation, subordinated in right of payment to
all Senior Debt as set forth in the Indenture, but entitled to receive payment
in full of principal and interest, before any stockholders of the Corporation
receive payments or distributions. Since the Corporation is the guarantor under
the New Guarantee and has agreed to pay for all costs, expenses and liabilities
of the Trust (other than the Trust's obligations to the holders of its Trust
Securities), the positions of a holder of New Capital Securities and a holder of
New Junior Subordinated Debt Securities relative to other creditors and to
stockholders of the Corporation in the event of liquidation or bankruptcy of the
Corporation are expected to be substantially the same.
CERTAIN UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS
General
The following summary of certain federal income tax considerations is based
on the advice of Cadwalader, Wickersham & Taft, special counsel to the
Corporation and the Trust ("Tax Counsel"). This summary describes the principal
federal income tax consequences of the purchase, beneficial ownership and
disposition of Capital Securities purchased at initial issuance and held as
capital assets, but does not purport to be a comprehensive description of all of
the tax considerations that may be relevant to a decision to purchase Capital
Securities. Except to the extent discussed below under "Non-United States
Holders," this summary deals only with (i) citizens or residents of the United
States or any State or political subdivision thereof, (ii) corporations,
partnerships and other business entities created or organized under the laws of
the United States, (iii) estates the income of which is subject to U.S. federal
income taxation regardless of its source, and (iv) trusts with respect to which
a court within the United States is able to exercise primary supervision over
its administration and one or more U.S. fiduciaries have the authority to
control all substantive decisions (each, a "United States Holder"). This summary
does not address investors that may be subject to special rules, such as banks,
tax-exempt entities, insurance companies, dealers in securities or currencies,
persons whose functional currency is not the U.S. dollar, and persons that will
hold the Capital Securities as part of a "straddle" or "conversion transaction"
for federal income tax purposes or otherwise as part of an integrated
transaction.
This summary is based on laws, regulations, rulings and decisions in effect
as of the date of this Offering Memorandum, all of which are subject to change,
with possible retroactive effect. No ruling from the Internal Revenue Service
(the "IRS") will be sought with respect to the Capital Securities, and the IRS
could take a contrary view with respect to the matters described below.
PROSPECTIVE HOLDERS SHOULD CONSULT THEIR TAX ADVISORS AS TO THE FEDERAL, STATE,
LOCAL, AND OTHER TAX CONSEQUENCES TO THEM OF THE PURCHASE, OWNERSHIP AND
DISPOSITION OF CAPITAL SECURITIES. FOR A DISCUSSION OF THE POSSIBLE REDEMPTION
OF THE CAPITAL SECURITIES UPON THE OCCURRENCE OF CERTAIN TAX EVENTS, SEE
"DESCRIPTION OF NEW CAPITAL SECURITIES--LIQUIDATION OF THE TRUST AND
DISTRIBUTION OF JUNIOR SUBORDINATED DEBT SECURITIES."
Consequences of the Exchange
The exchange of New Capital Securities for Old Capital Securities pursuant
to the Exchange Offer will not constitute a taxable event for U.S. federal
income tax purposes. Accordingly, no gain or loss will be recognized by a Holder
upon receipt of a New Capital Security, the holding period of the New Capital
Security will include the holding period of the Old Capital Security exchanged
therefor and the adjusted tax basis of the New Capital Security will be the same
as the adjusted tax basis immediately before the exchange of the Old Capital
Security exchanged therefor.
Classification of the Junior Subordinated Debt Securities
Tax Counsel has advised the Corporation that, in its opinion, and based on
certain representations, facts and assumptions set forth in such opinion, the
Junior Subordinated Debt Securities will be classified as indebtedness of the
Corporation for U.S. federal income tax purposes. The Corporation and the Trust,
and holders of the Capital Securities (by acceptance of a beneficial interest in
a Capital Security), will agree to treat the Junior Subordinated Debt Securities
as indebtedness for all U.S. federal, state and local income and franchise tax
purposes.
Classification of the Trust
Tax Counsel has advised the Corporation that, in its opinion, under current
law and assuming full compliance with the terms of the Declaration and other
documents, and based upon certain facts and assumptions contained in such
opinion, the Trust will be classified as a grantor trust for United States
federal income tax purposes and not as an association taxable as a corporation.
Accordingly, for U.S. federal income tax purposes, each holder of Capital
Securities will be considered the owner of an undivided interest in the Junior
Subordinated Debt Securities and will be required to include in gross income its
allocable share of interest (or original issue discount ("OID")) on the Junior
Subordinated Debt Securities.
Interest Income and Original Issue Discount
Under applicable Treasury regulations, a debt instrument is deemed to be
issued with OID if there is more than a remote contingency that periodic stated
interest payments due on the instrument will not be timely paid. The exercise by
the Corporation of its option to defer the payment of stated interest on the
Capital Securities would prevent the Corporation from declaring dividends on any
class of equity. The Corporation believes that the likelihood of its exercising
its option to defer payment of stated interest is remote within the meaning of
such regulations. As a result, the Corporation intends to take the position,
based on the advice of Tax Counsel, that the Junior Subordinated Debt Securities
will not be deemed to be issued with OID and stated interest on the Junior
Subordinated Debt Securities generally will be taxable to a holder as ordinary
interest income at the time it is paid or accrued in accordance with such
holder's regular method of tax accounting.
If, however, the Corporation exercises its right to defer payments of
interest on the Junior Subordinated Debt Securities, the Junior Subordinated
Debt Securities will become OID instruments at such time and, consequently, each
holder of the Capital Securities will be required to accrue as OID the
difference between all remaining amounts payable on its pro rata share of the
Junior Subordinated Debt Securities and its adjusted tax basis in the Capital
Securities. In general, any OID will be accrued by all holders (including cash
method holders) on a constant yield basis over the remaining term of the Junior
Subordinated Debt Securities (and even during the Extension Period when the
Corporation will not pay interest). Moreover, even after the end of an Extension
Period, all holders will be required to continue to include their pro rata share
of any OID on the Junior Subordinated Debt Securities in income under the
constant yield method, regardless of their method of tax accounting and in
advance of the receipt of the cash attributable to such interest income. Under
the OID constant yield method, a holder will accrue an amount of interest income
each year that approximates the stated interest payments called for under the
terms of the Junior Subordinated Debt Securities, and actual cash payments of
interest on the Junior Subordinated Debt Securities will not be reported
separately as taxable income. Any amount of OID included in a holder's gross
income (whether or not during an Extension Period) with respect to a Capital
Security will increase such holder's tax basis in such Capital Security, and the
amount of distributions received by a holder in respect of such accrued OID will
reduce the tax basis of such Capital Security.
The Treasury regulations described above have not yet been addressed in any
rulings or other interpretations by the IRS, and it is possible that the IRS
could take a contrary position. If the IRS successfully asserts that the Junior
Subordinated Debt Securities are issued with OID regardless of whether the
Corporation actually exercises its option to defer payments of interest, all
holders of Capital Securities would be required to include such OID in income on
a constant yield basis as described above.
Corporate holders of Capital Securities will not be entitled to a
dividends-received deduction with respect to any income recognized by such
holders with respect to the Capital Securities.
Distribution of Junior Subordinated Debt Securities
or Cash Upon Liquidation of the Trust
As described under the caption "Description of New Capital
Securities--Liquidation of the Trust and Distribution of New Junior Subordinated
Debt Securities," Junior Subordinated Debt Securities may be distributed to
holders in exchange for the Capital Securities and in liquidation of the Trust
at any time subject to the prior receipt of the approval of the Federal Reserve
if such approval is then so required and the Corporation having received an
opinion of counsel to the effect that such liquidation and distribution would
not be a taxable event to the holders of Capital Securities. Such a distribution
will be non-taxable and will result in the holder receiving directly its pro
rata share of the Junior Subordinated Debt Securities previously held indirectly
through the Trust, with a holding period and aggregate tax basis equal to the
holding period and aggregate tax basis such holder had in its Capital Securities
before such distribution.
A holder will accrue interest (or OID) in respect of the Junior
Subordinated Debt Securities received from the Trust in the same manner that the
holder was required to accrue interest (or OID) in respect of the Capital
Securities. See "--Interest Income and Original Issue Discount."
Sales of Capital Securities
A holder that sells Capital Securities (including a redemption of Capital
Securities by the Corporation for cash) will recognize gain or loss equal to the
difference between the amount realized by the holder on the sale of the Capital
Securities (except to the extent that such amount realized is characterized as a
payment in respect of accrued but unpaid interest on such holder's allocable
share of the Junior Subordinated Debt Securities that the holder had not
previously included in gross income) and the holder's adjusted tax basis in the
Capital Securities sold or redeemed. Such gain or loss will be capital gain or
loss, and will be long-term capital gain or loss if the Capital Securities have
been held for more than one year. Analogous treatment will apply to the sale or
redemption of any Junior Subordinated Debt Securities distributed to holders in
redemption of their Capital Securities.
Proposed Legislation
On February 6, 1997, as part of President Clinton's fiscal 1998 Budget
Proposal, the United States Treasury Department proposed legislation (the
"Proposed Legislation") that would, among other things, deny an issuer a federal
income tax deduction for interest in respect of certain debt obligations, such
as the Junior Subordinated Debt Securities, but only if the debt obligations are
issued on or after "the date of the first committee action." If the proposed
legislation is enacted in its current form, it should not apply to the Junior
Subordinated Debt Securities, which were issued prior to the date of first
committee action (which has not yet occurred). There can be no assurances,
however, that the Proposed Legislation, if enacted, or similar legislation
enacted after the date hereof, would not adversely affect the tax treatment of
the Junior Subordinated Debt Securities, resulting in a Tax Event. A Tax Event
would permit the Corporation, upon the receipt of any required regulatory
approval, to cause a redemption of the Trust Securities at the Special Event
Redemption Price. See "Description of New Capital Securities--Mandatory
Redemption" and "Description of New Junior Subordinated Debt Securities--Special
Event Prepayment."
Non-United States Holders
In the case of a holder that is, for U.S. federal income tax purposes, a
foreign corporation, a nonresident alien individual, a nonresident alien
fiduciary of a foreign estate or trust, or a foreign partnership one or more of
the members of which is, for U.S. federal income tax purposes, a foreign
corporation, a nonresident alien individual or a nonresident alien fiduciary of
a foreign estate or trust, and does not hold the Capital Securities in
connection with the conduct of a trade or business in the United States (each a
"Non-United States Holder"): (a) distributions of principal and interest
(including OID) on the Junior Subordinated Debt Securities, and distributions on
the Capital Securities, each with respect to a Non-United States Holder, will
not be subject to U.S. withholding tax, provided that (i) the holder does not
actually or constructively own 10 percent or more of the combined voting power
of all classes of stock of the Corporation, (ii) the holder is not a controlled
foreign corporation that is related to the Corporation through stock ownership,
and (iii) the holder provides a statement signed under penalties of perjury that
includes its name and address and certifies that it is not a United States
holder; (b) gain realized on the sale, exchange or redemption of Capital
Securities will not be subject to U.S. federal income tax unless the holder is
an individual who is present in the United States for 183 days or more in the
taxable year of the sale, exchange or redemption, and certain other conditions
are met; and (c) Capital Securities will not be subject to U.S. federal estate
tax as a result of the death of a holder who is not a citizen or resident of the
United States at the time of death, provided that such holder did not at the
time of death actually or constructively own 10 percent or more of the combined
voting power of all classes of stock of the Corporation and, at the time of such
holder's death, payments of interest on such Capital Securities would not have
been effectively connected with the conduct by such holder of a trade or
business in the United States.
Treasury regulations have been proposed that would affect the persons
required to provide the statement described above under clause (a). In
particular, these proposed regulations, if finalized as proposed, would require
a statement to be submitted by direct (and certain indirect) owners of certain
entities that are treated as foreign partnerships for federal income tax
purposes. If finalized as proposed, these proposed Treasury regulations could
affect certain holders of Capital Securities.
Backup Withholding and Information Reporting
Information reporting requirements apply to certain payments of principal
of and interest on (and the amount of OID, if any, accrued on) a debt
obligation, and to proceeds of certain sales of a debt obligation before
maturity, paid to certain nonexempt persons. In addition, a backup withholding
tax also may apply with respect to such amounts if such a holder fails to
provide correct taxpayer identification numbers and other information. The
backup withholding tax rate is 31%. The Corporation, or a paying agent or a
broker, as the case may be, will be required to withhold from any payment that
is subject to backup withholding unless the holder furnishes its taxpayer
identification number in the manner prescribed in applicable Treasury
Regulations and certain other conditions are met.
Under current law, payments on Capital Securities owned by a Non-United
States Holder will not be subject to information reporting requirements or
backup withholding tax if the statement described above in clause (a) under
"Non-United States Holders" is duly provided.
Under current law, information reporting requirements and backup
withholding tax will not apply to any payment of the proceeds of the sale of
Capital Securities effected outside the United States by the foreign office of a
"broker" (as defined in applicable Treasury regulations), provided that such
broker (i) is not a U.S. person, (ii) derives less than 50 percent of its gross
income for certain periods from the conduct of a trade or business in the United
States, and (iii) is not a controlled foreign corporation as to the United
States (a person described in (i), (ii) and (iii), a "foreign controlled
person"). Under current law, payment of the proceeds of the sale of Capital
Securities effected outside the United States by the foreign office of a broker
that is not a foreign controlled person will not be subject to backup
withholding tax, but will be subject to information reporting requirements
unless such broker has documentary evidence in its records that the beneficial
owner is not a U.S. person and certain other conditions are met, or the holder
otherwise establishes an exemption. Payment by a U.S. office of a broker of the
proceeds of a sale of Capital Securities will be subject to backup withholding
and information reporting unless the holder certifies that it is not a U.S.
person under penalties of perjury or otherwise establishes an exemption.
Treasury regulations have been proposed that would alter certain of these
rules. If finalized as proposed, these proposed Treasury regulations could
affect certain holders of Capital Securities.
Any amounts withheld under the backup withholding rules from a payment to a
holder will be allowed as a refund or a credit against such holder's U.S.
federal income tax.
CERTAIN ERISA CONSIDERATIONS
Each fiduciary of a pension, profit-sharing or other employee benefit plan
(a "Plan") subject to Title I of the Employee Retirement Income Security Act of
1974, as amended ("ERISA"), should consider the fiduciary standards of ERISA in
the context of the Plan's particular circumstances before authorizing an
investment in the New Capital Securities. Accordingly, among other factors, the
fiduciary should consider whether the investment would satisfy the prudence and
diversification requirements of ERISA and would be consistent with the documents
and instruments governing the Plan.
Section 406 of ERISA and Section 4975 of the Internal Revenue Code of 1986,
as amended (the "Code") prohibit Plans, as well as individual retirement
accounts and Keogh plans subject to Section 4975 of the Code (also "Plans"),
from engaging in certain transactions involving "plan assets" with persons who
are "parties in interest" under ERISA or "disqualified persons" under the Code
("Parties in Interest") with respect to such Plan. A violation of these
"prohibited transaction" rules may result in an excise tax or other liabilities
under ERISA and/or Section 4975 of the Code for such persons, unless exemptive
relief is available under an applicable statutory or administrative exemption.
Employee benefit plans that are governmental plans (as defined in Section 3(32)
of ERISA), certain church plans (as defined in Section 3(33) of ERISA) and
foreign plans (as described in Section 4(b)(5) of ERISA) are not subject to the
requirements of ERISA or Section 4975 of the Code.
Under a regulation (the "Plan Assets Regulation") issued by the U.S.
Department of Labor (the "DOL"), the assets of the Trust would be deemed to
include assets of Plans owning New Capital Securities for purposes of ERISA and
Section 4975 of the Code if the New Capital Securities constituted equity
interests in the Trust and no exception were applicable under the Plan Assets
Regulation. An "equity interest" is defined under the Plan Assets Regulation as
any interest in an entity other than an instrument which is treated as
indebtedness under applicable local law and which has no substantial equity
features and specifically includes a beneficial interest in a trust.
Pursuant to exceptions contained in the Plan Assets Regulation, the assets
of the Trust would not be deemed to include assets of Plans owning New Capital
Securities if the aggregate investment in New Capital Securities by Plans, other
employee benefit plans not subject to Title I of ERISA or Section 4975 of the
Code, and entities whose underlying assets include Plan assets (collectively,
"Benefit Plan Investors") is not "significant", or if the New Capital Securities
qualify as "publicly offered securities" as defined in the Plan Asset
Regulation. For this purpose, equity participation by Benefit Plan Investors
will not be considered "significant" on any date only if, immediately after the
most recent acquisition of New Capital Securities, the aggregate interest in the
New Capital Securities held by Benefit Plan Investors will be less than 25% of
the value of the New Capital Securities. Although it is possible that the equity
participation by Benefit Plan Investors in New Capital Securities on any date
will not be "significant" for purposes of the Plan Assets Regulation, such
result cannot be assured.
The New Capital Securities may qualify as "publicly offered securities"
under the Plan Assets Regulations if, at the time of the Exchange Offer, they
are "widely held" and "freely transferable". Under the Plan Assets Regulation, a
class of securities is "widely held" only if it is a class of securities that is
owned by 100 or more investors independent of the issuer and of one another.
Although it is possible that at the time of the Exchange Offer the New Capital
Securities will be "widely held", such result cannot be assured. Whether a
security is "freely transferable" for purposes of the Plan Assets Regulation is
a factual question to be determined on the basis of all relevant facts and
circumstances. If at the time of the Exchange Offer the New Capital Securities
qualify as "publicly offered securities", the assets of the Trust should not
include assets of Plans acquiring New Capital Securities. If the New Capital
Securities do not qualify as "publicly offered securities", the plan asset
considerations discussed herein could be applicable in connection with the
investment by Plans in the New Capital Securities.
Certain transactions involving the Trust could be deemed to constitute
direct or indirect prohibited transactions under ERISA and Section 4975 of the
Code if the assets of the Trust were deemed to include assets of Plans owning
New Capital Securities. For example, if the Corporation is a Party in Interest
with respect to an investing Plan (either directly or by reason of its ownership
of the Trust or of any of the Corporation's other subsidiaries), extensions of
credit between the Corporation and the Trust (as represented by the New Junior
Subordinated Debt Securities and the New Guarantee) would likely be prohibited
by Section 406(a)(1)(B) of ERISA and Section 4975(c)(1)(B) of the Code, unless
exemptive relief were available under an applicable administrative exemption
(see below).
The DOL has issued five prohibited transaction class exemptions ("PTCEs")
that may provide exemptive relief for direct or indirect prohibited transactions
resulting from the purchase or holding of the New Capital Securities, assuming
that assets of the Trust were deemed to include assets of Plans owning such
securities. Those class exemptions are PTCE 96-23 (for certain transactions
determined by in-house asset managers), PTCE 95-60 (for certain transactions
involving insurance company general accounts), PTCE 91-38 (for certain
transactions involving bank collective investment funds), PTCE 90-1 (for certain
transactions involving insurance company pooled separate accounts) and PTCE
84-14 (for certain transactions determined by independent qualified professional
asset managers).
Because the New Capital Securities may constitute equity interests in the
Trust for purposes of applying ERISA and Section 4975 of the Code, the New
Capital Securities may not be purchased or held by any Plan, or any person
investing the assets of a Plan, unless such purchaser or holding meets the
conditions for exemptive relief acting on behalf of or under PTCE 96-23, 95-60,
91-38, 90-1 or 84-14. See "Notice to Investors." Furthermore, to avoid certain
prohibited transactions under ERISA and the Code that could result under certain
circumstances if the New Capital Securities are deemed to be such equity
interests.
Due to the complexity of these rules and the penalties that may be imposed
upon persons involved in non-exempt prohibited transactions, it is particularly
important that fiduciaries or other persons considering purchasing the New
Capital Securities on behalf of or with the assets of any Plan consult with
their counsel regarding the potential consequences if the assets of the Trust
were deemed to include plan assets and the availability of exemptive relief
under PTCE 96-23, 95-60, 91-38, 90-1 or 84-14.
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 by such broker-dealer as a result of market-making activities or other
trading activities. The Trust and the Corporation have agreed that, starting on
the Expiration Date and ending on the close of business on the 180th day
following the Expiration Date, it will make this Prospectus, as amended or
supplemented, available to any broker-dealer for use in connection with any such
resale. In addition, for a period of 180 days after the Expiration Date, all
dealers effecting transactions in the New Capital Securities may be required to
deliver a prospectus.
The Trust and the Corporation will not receive any proceeds from any sale
of New Capital Securities by broker-dealers or other parties. 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 at negotiated prices. Any such resale may be
made directly to purchasers or to or through brokers or dealers who may receive
compensation in the form of commissions or concessions from any such
broker-dealer and/or the purchasers of any such 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
concessions received by any such persons may be deemed to be underwriting
compensation under the Securities Act. The Letter of Transmittal states that by
acknowledging that it will deliver and by delivering a prospectus, a
broker-dealer will not be deemed to admit that it is an "underwriter" within the
meaning of the Securities Act.
For a period of 180 days after the Expiration Date, the Trust and the
Corporation will promptly send additional copies of this Prospectus and any
amendment or supplement to this Prospectus to any broker-dealer that requests
such documents in the Letter of Transmittal. The Trust and the Corporation have
agreed to pay all expenses incident to the Exchange Offer (including the
expenses of one counsel for the holders of the Capital Securities) other than
commissions or concessions of any brokers or dealers and will indemnify the
holders of the Capital Securities (including any broker-dealers) against certain
liabilities, including liabilities under the Securities Act.
LEGAL MATTERS
Certain legal matters will be passed upon for the Corporation and the Trust
by Cadwalader, Wickersham & Taft and Ashby & Geddes.
INDEPENDENT AUDITORS
The consolidated financial statements of U.S.B. Holding Co., Inc. and
subsidiaries as of December 31, 1996 and 1995 and for each of the years in the
three year period ended December 31, 1996, included in this Prospectus or
incorporated by reference in this Prospectus from the Corporation's 1996 Annual
Report on Form 10-K and appearing in the Corporation's 1996 Annual Report to
Shareholders, have been audited by Deloitte & Touche LLP, independent auditors,
as stated in their report dated January 24, 1997 (February 5, 1997 as to Note
17) which is also incorporated by reference herein.
<PAGE>
PART II
INFORMATION NOT REQUIRED IN THE PROSPECTUS
ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 145 of the Delaware General Corporation Law authorizes a
corporation to indemnify any director, officer, employee or other agent of the
corporation to whatever extent specified in or authorized by (i) the articles of
organization, (ii) a by-law adopted by the stockholders or (iii) a vote adopted
by the holders of a majority of the shares of stock entitled to vote on the
election of directors.
The Corporation's By-laws provide indemnity to the Corporation's directors
and officers in such capacity or as directors or officers of a wholly-owned
subsidiary of the Corporation for liability resulting from judgments, fines,
expenses or settlement amounts incurred in connection with any action, including
an action by or in the right of the Corporation, brought against such person in
such capacity. Under Delaware law and the By-laws, no indemnification may be
provided for any person with respect to any matter as to which he or she shall
have been adjudicated in any proceeding not to have acted in good faith in the
reasonable belief that his or her action was in the best interest of the
Corporation or of such subsidiary. The By-laws also provide that, with respect
to any matter disposed of by a compromise payment by such director or officer
pursuant to a consent decree or otherwise, no indemnification shall be provided
unless such compromise shall be ordered by a court or shall be approved as being
in the best interest of the Corporation, after notice that it involves such
indemnification: (a) by a disinterested majority of the directors then in office
or (b) by a majority of the disinterested directors then in office, provided
that there has been obtained an opinion in writing of independent counsel to the
effect that such person does not appear not to have acted in good faith in the
reasonable belief that his or her action was in the best interests of the
Corporation or (c) by the holders of a majority of the outstanding stock at the
time entitled to vote for directors, exclusive of any stock owned by any
interested director or officer. Under Delaware law, a court may uphold
indemnification in connection with a suit in which there is a recovery or by in
the right of a corporation.
The By-laws also provide for indemnification for all other directors and
officers of the Corporation's wholly-owned subsidiaries to the extent authorized
by the Board of Directors in each individual case, based on the same statutory
standard set forth in the preceding paragraph. Where such a person is wholly
successful in defending the claim, he or she shall be entitled to
indemnification. Directors and officers of other subsidiaries and employees and
agents of the Corporation and any subsidiaries may be indemnified as determined
by the Board from time to time.
In addition, as permitted under Delaware law, the Corporation maintains
liability insurance covering directors and officers of the Corporation and its
subsidiaries.
ITEM 21. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
EXHIBIT
4.1 Indenture of U.S.B. Holding Co., Inc. relating to the Junior Subordinated
Debt Securities
4.2 Form of Certificate of New Junior Subordinated Debt Securities
4.3 Certificate of Trust of Union State Capital Trust I
4.4 Declaration of Trust of Union State Capital Trust I
4.5 Amended and Restated Declaration of Trust for Union State Capital Trust I
4.6 Form of New Capital Security Certificate for Union State Capital Trust I
4.7 Form of New Guarantee of U.S.B. Holding Co., Inc. relating to the New
Capital Securities
4.8 Registration Agreement
5.1 Opinion and consent of Cadwalader, Wickersham & Taft to U.S.B. Holding Co.,
Inc. as to legality of the New Guarantee to be issued by U.S.B. Holding
Co., Inc.
5.2 Opinion of Ashby & Geddes, special Delaware counsel, as to legality of the
New Capital Securities and the New Junior Subordinated Debt Securities to
be issued by Union State Capital Trust I and U.S.B. Holding Co., Inc.
8.1 Opinion of Cadwalader, Wickersham & Taft, special tax counsel, as to
certain federal income tax matters.
12.1 Computation of ratio of earnings to fixed charges (excluding interest on
deposits)
12.2 Computation of ratio of earnings to fixed charges (including interest on
deposits)
23.1 Consent of Deloitte & Touche LLP
23.2 Consent of Cadwalader, Wickersham & Taft (included in Exhibit 5.1)
23.3 Consent of Ashby & Geddes (included in Exhibit 5.2)
24 Power of Attorney of certain officers and directors of U.S.B. Holding Co.,
Inc. (included on the signature page hereto)
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 Amended and Restated Declaration of Trust of Union State
Capital Trust I
25.3 Form T-1 Statement of Eligibility of The Chase Manhattan Bank to act as
Trustee under the New Guarantee for the benefit of the holders of New
Capital Securities of Union State Capital Trust I
99.1 Form of Letter of Transmittal
99.2 Form of Notice of Guaranteed Delivery
99.3 Form of Exchange Agent Agreement
99.4 Form of Letter to Brokers, Dealers, Commercial Banks, Trust Companies and
Other Nominees
99.5 Form of Letter to Clients
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, where applicable, of a Registrant's annual report pursuant to Section
13(a) or Section 15(d) of the Securities Exchange Act of 1934 (and, where
applicable, each filing of an employee benefit plan's annual report pursuant to
Section 15(d) of the Securities Exchange Act of 1934) that is incorporated by
reference in this Registration Statement shall be deemed to be a new
registration statement relating to the securities offered herein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of each
undersigned Registrant pursuant to the provisions, or otherwise, each Registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by each undersigned Registrant of
expenses incurred or paid by a director, officer of controlling person of each
Registrant in the successful defense of any action, suit or proceeding) is
asserted by such director, officer or controlling person in connection with the
securities being registered, each Registrant will, unless in the opinion of its
counsel the matter has been settled by the controlling precedent, submit to a
court of appropriate jurisdiction the question whether such indemnification by
it is against public policy as expressed in the Act and will be governed by the
final adjudication of such issue.
The undersigned Registrants hereby undertake to respond to requests for
information that is incorporated by reference into the Prospectus pursuant to
Item 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.
The undersigned Registrants hereby undertake to supply by means of a
post-effective amendment all information concerning a transaction, and the
company being acquired or involved therein, that was not the subject of and
included in the registration statement when it became effective.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, U.S.B. Holding
Co., Inc. certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-4 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in New York, New York, on the 6th day of June, 1997.
U.S.B HOLDING CO., INC.
By /s/ Michael M. Fury
-----------------------------------
(Michael H. Fury)
(General Counsel and Secretary)
POWER OF ATTORNEY
Pursuant to the requirements of the Securities Act of 1933, this Power of
Attorney has been signed by the following persons in the capacities and on the
dates indicated. By so signing, each of the undersigned, in his capacity as a
director or officer, or both, as the case may be, of U.S.B. Holding Co., Inc.
(the "Corporation"), does hereby appoint Thomas E. Hales, Steven T. Sabatini and
Michael H. Fury, and each of them severally, or if more than one acts, a
majority of them, his true and lawful attorneys or attorney to execute in his
name, place and stead, in his capacity as a director or officer of both, as the
case may be, of the Corporation, the Registration Statement on Form S-4 to be
filed with the Securities and Exchange Commission (the "Commission"), and any
and all amendments to said Registration Statement and all instruments necessary
or incidental in connection therewith, and to file the same with the Commission.
Each of said attorneys shall have full power and authority to do and perform in
the name and on behalf of each of the undersigned, in any and all capacities,
every act whatsoever requisite or necessary to be done in the premises as fully
and to all intents and purposes as each of the undersigned might or could do in
person, hereby ratifying and approving the acts of said attorneys and each of
them.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
SIGNATURE TITLE DATE
/s/ Thomas E. Hales Chairman of the Board, June 6, 1997
- -------------------------------- President, Chief
(Thomas E. Hales) Executive Officer and Director
/s/ Steven T. Sabatini Executive Vice President, Chief
- -------------------------------- Financial Officer and
(Steven T. Sabatini) Assistant Secretary June 6, 1997
_____________________________ Director ______________, 1997
(Kenneth J. Torsoe)
/s/ Raymond J. Crotty Executive Vice President, Chief
- -------------------------------- Credit Officer, Assistant
(Raymond J. Crotty) Secretary and Director June 6, 1997
/s/ Fred F. Graziano Treasurer and Director June 6, 1997
- --------------------------------
(Fred F. Graziano)
/s/ Michael H. Fury Secretary, General Counsel June 6, 1997
- -------------------------------- and Director
(Michael H. Fury)
/s/ Howard V. Ruderman Director June 6, 1997
- --------------------------------
(Howard V. Ruderman)
/s/ Herbert Peckman Director June 6, 1997
- --------------------------------
(Herbert Peckman)
Pursuant to the requirements of the Securities Act of 1933, Union State
Capital Trust I certifies that it has reasonable grounds to believe that it
meets all the requirements for filing on Form S-4 and has duly caused this
registration statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in New York, New York, on the 6th day of June, 1997.
UNION STATE CAPITAL TRUST I
By /s/ Thomas E. Hales
Thomas E. Hales,
as Administrative Trustee
By /s/ Steven T. Sabatini
Steven T. Sabatini,
as Administrative Trustee
By /s/ Michael H. Fury
Michael H. Fury,
as Administrative Trustee
By /s/ Raymond J. Crotty
Raymond J. Crotty,
as Administrative Trustee
EXHIBIT INDEX
PAGE EXHIBIT NO.
DESCRIPTION
4.1 Indenture of U.S.B. Holding Co., Inc. relating to the Junior Subordinated
Debt Securities
4.2 Form of Certificate of New Junior Subordinated Debt Securities
4.3 Certificate of Trust of Union State Capital Trust I
4.4 Declaration of Trust of Union State Capital Trust I
4.5 Amended and Restated Declaration of Trust for Union State Capital Trust I
4.6 Form of New Capital Security Certificate for Union State Capital Trust I
4.7 Form of New Guarantee of U.S.B. Holding Co., Inc. relating to the New
Capital Securities
4.8 Registration Agreement
5.1 Opinion and consent of Cadwalader, Wickersham & Taft to U.S.B. Holding Co.,
Inc. as to legality of the New Guarantee to be issued by U.S.B. Holding
Co., Inc.
5.2 Opinion of Ashby & Geddes, special Delaware counsel, as to legality of the
New Capital Securities and the New Junior Subordinated Debt Securities to
be issued by Union State Capital Trust I and U.S.B. Holding Co., Inc.
8.1 Opinion of Cadwalader, Wickersham & Taft, special tax counsel, as to
certain federal income tax matters.
12.1 Computation of ratio of earnings to fixed charges (excluding interest on
deposits)
12.2 Computation of ratio of earnings to fixed charges (including interest on
deposits)
23.1 Consent of Deloitte & Touche LLP
23.2 Consent of Cadwalader, Wickersham & Taft (included in Exhibit 5.1)
23.3 Consent of Ashby & Geddes (included in Exhibit 5.2)
24 Power of Attorney of certain officers and directors of U.S.B. Holding Co.,
Inc. (included on the signature page hereto)
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 Amended and Restated Declaration of Trust of Union State
Capital Trust I
25.3 Form T-1 Statement of Eligibility of The Chase Manhattan Bank to act as
trustee under the New Guarantee for the benefit of the holders of New
Capital Securities of Union State Capital Trust I
99.1 Form of Letter of Transmittal
99.2 Form of Notice of Guaranteed Delivery
99.3 Form of Exchange Agent Agreement
99.4 Form of Letter to Brokers, Dealers, Commercial Banks, Trust Companies and
Other Nominees
99.5 Form of Letter to Clients
================================================================================
U.S.B. HOLDING CO., INC.
to
THE CHASE MANHATTAN BANK
Trustee
JUNIOR SUBORDINATED INDENTURE
Dated as of February 5, 1997
================================================================================
<PAGE>
U.S.B. HOLDING CO., INC.
Reconciliation and tie between the Trust Indenture Act of 1939 (including
cross-references to provisions of Sections 310 to and including 317 which,
pursuant to Section 318(c) of the Trust Indenture Act of 1939, as amended by the
Trust Reform Act of 1990, are a part of and govern the Indenture whether or not
physically contained therein) and the Junior Subordinated Indenture, dated as of
February 5, 1997.
Indenture
Trust Indenture Act Section Section
ss.310(a)(1), (2) and (5)................................ 6.09
ss.310(a)(3)............................................. Not Applicable
ss.310(a)(4)............................................. Not Applicable
ss.310(b)................................................ 6.08, 6.10
ss.310(c)................................................ Not Applicable
ss.311(a)................................................ 6.13
ss.311(b)................................................ 6.13
ss.312(a)................................................ 7.01, 7.02 (a)
ss.312(b)................................................ 7.02(b)
ss.312(c)................................................ 7.02(c)
ss.313(a)................................................ 7.03(a)
ss.313(b)................................................ 7.03 (b)
ss.313(c)................................................ 7.03 (a), 7.03 (b)
ss.313(d)................................................ 7.03(c)
ss.314(a)(1), (2) and (3)................................ 7.04
ss.314(a)(4)............................................. 10.04
ss.314(b)................................................ Not Applicable
ss.314(c)(1)............................................. 1.02
ss.314(c)(2)............................................. 1.02
ss.314(c)(3)............................................. Not Applicable
ss.314(d)................................................ Not Applicable
ss.314(e)................................................ 1.02
ss.314(f)................................................ Not Applicable
ss.315(a)................................................ 6.01(a)
ss.315(b)................................................ 6.02, 7.03(a)
ss.315(c)................................................ 6.01(b)
ss.315(d)................................................ 6.01(c)
ss.315(d)(1)............................................. 6.01(c)(1)
ss.315(d)(2)............................................. 6.01(c)(2)
ss.315(d)(3)............................................. 6.01(c)(3)
ss.315(e)................................................ 5.14
ss.316(a)................................................ 1.01
ss.316(a)(1)(A).......................................... 5.12
ss.316(a)(1)(B).......................................... 5.13
ss.316(a)(2)............................................. Not Applicable
ss.316(b)................................................ 5.08
ss.316(c)................................................ 1.04(f)
ss.317(a)(1)............................................. 5.03
ss.317(a)(2)............................................. 5.04
ss.317(b)................................................ 10.03
ss.318(a)................................................ 1.07
- --------------------
Note:This reconciliation and tie shall not, for any purpose, be deemed to be a
part of the Junior Subordinated Indenture.
<PAGE>
TABLE OF CONTENTS
Page
ARTICLE I Definitions and Other Provisions of General Application
<TABLE>
<CAPTION>
<S> <C>
SECTION 1.01. Definitions ......................................................1
SECTION 1.02. Compliance Certificate and Opinions..............................11
SECTION 1.03. Forms of Documents Delivered to Trustee..........................12
SECTION 1.04. Acts of Holders..................................................12
SECTION 1.05. Notices, Etc. to Trustee and Company.............................13
SECTION 1.06. Notice to Holders; Waiver........................................14
SECTION 1.07. Conflict with Trust Indenture Act................................14
SECTION 1.08. Effect of Headings and Table of Contents.........................14
SECTION 1.09. Successors and Assigns...........................................14
SECTION 1.10. Separability Clause..............................................14
SECTION 1.11. Benefits of Indenture............................................15
SECTION 1.12. Governing Law....................................................15
SECTION 1.13. Non-Business Days................................................15
ARTICLE II Security Forms
SECTION 2.01. Forms Generally..................................................15
SECTION 2.02. Form of Face of Security.........................................16
SECTION 2.03. Form of Reverse of Security......................................20
SECTION 2.04. Additional Provisions Required in Global Security................24
SECTION 2.05. Form of Trustee's Certificate of Authentication..................25
ARTICLE III The Securities
SECTION 3.01. Title and Terms..................................................25
SECTION 3.02. Denominations....................................................27
SECTION 3.03. Execution, Authentication, Delivery and Dating...................27
SECTION 3.04. Temporary Securities.............................................29
SECTION 3.05. Global Securities................................................29
SECTION 3.06. Registration, Transfer and Exchange Generally; Certain
Transfers and Exchanges; Restricted Securities Legends ..........31
SECTION 3.07. Mutilated, Destroyed, Lost and Stolen Securities.................34
SECTION 3.08. Payment of Interest; Interest Rights Preserved...................35
SECTION 3.09. Persons Deemed Owners............................................37
SECTION 3.10. Cancellation.....................................................37
SECTION 3.11. Computation of Interest..........................................37
SECTION 3.12. Deferrals of Interest Payment Dates..............................37
SECTION 3.13. Agreed Tax Treatment.............................................39
SECTION 3.14. CUSIP Numbers....................................................39
ARTICLE IV Satisfaction and Discharge
SECTION 4.01. Satisfaction and Discharge of Indenture..........................39
SECTION 4.02. Application of Trust Money.......................................40
ARTICLE V Remedies
SECTION 5.01. Events of Default................................................40
SECTION 5.02. Acceleration of Maturity; Rescission and Annulment...............42
SECTION 5.03. Collection of Indebtedness and Suits for Enforcement by Trustee..44
SECTION 5.04. Trustee May File Proofs of Claim.................................44
SECTION 5.05. Trustee May Enforce Claim Without Possession of Securities.......45
SECTION 5.06. Application of Money Collected...................................45
SECTION 5.07. Limitation on Suits..............................................46
SECTION 5.08. Unconditional Right of Holders to Receive Principal,
Premium and Interest................ ............................47
SECTION 5.09. Restoration of Rights and Remedies...............................47
SECTION 5.10. Rights and Remedies Cumulative...................................47
SECTION 5.11. Delay or Omission Not Waiver.....................................47
SECTION 5.12. Control by Holders...............................................48
SECTION 5.13. Waiver of Past Defaults..........................................48
SECTION 5.14. Undertaking for Costs............................................49
SECTION 5.15. Waiver of Usury, Stay or Extension Laws..........................49
SECTION 5.16. Option to Waive Certain Rights...................................49
SECTION 5.17. Tax Treatment of the Junior Subordinated Debt Securities.........49
ARTICLE VI The Trustee
SECTION 6.01. Certain Duties and Responsibilities..............................50
SECTION 6.02. Notice of Defaults...............................................51
SECTION 6.03. Certain Rights of Trustee........................................51
SECTION 6.04. Not Responsible for Recitals or Issuance of Securities...........52
SECTION 6.05. May Hold Securities..............................................52
SECTION 6.06. Money Held in Trust..............................................53
SECTION 6.07. Compensation and Reimbursement...................................53
SECTION 6.08. Disqualification; Conflicting Interests..........................53
SECTION 6.09. Corporate Trustee Required, Eligibility..........................54
SECTION 6.10. Resignation and Removal; Appointment of Successor................54
SECTION 6.11. Acceptance of Appointment by Successor...........................56
SECTION 6.12. Merger, Conversion, Consolidation or Succession to Business......57
SECTION 6.13. Preferential Collection of Claims Against Company................57
SECTION 6.14. Appointment of Authenticating Agent..............................57
SECTION 6.15. Trustee's Rights and Obligations After Qualification of Indenture59
ARTICLE VII Holder's Lists and Reports by Trustee and Company
SECTION 7.01. Company to Furnish Trustee Names and Addresses of Holders........59
SECTION 7.02. Preservation of Information, Communications to Holders...........60
SECTION 7.03. Reports by Trustee...............................................60
SECTION 7.04. Reports by Company...............................................60
ARTICLE VIII Consolidation, Merger, Conveyance, Transfer or Lease
SECTION 8.01. Company May Consolidate, etc., Only on Certain Terms.............61
SECTION 8.02. Successor Corporation Substituted................................61
ARTICLE IX Supplemental Indentures
SECTION 9.01. Supplemental Indentures without Consent of Holders...............62
SECTION 9.02. Supplemental Indentures with Consent of Holders..................63
SECTION 9.03. Execution of Supplemental Indentures.............................65
SECTION 9.04. Effect of Supplemental Indentures................................65
SECTION 9.05. Conformity with Trust Indenture Act..............................65
SECTION 9.06. Reference in Securities to Supplemental Indentures...............65
ARTICLE X Covenants
SECTION 10.01. Payment of Principal, Premium and Interest......................66
SECTION 10.02. Maintenance of Office or Agency.................................66
SECTION 10.03. Money for Security Payments to be Held in Trust.................66
SECTION 10.04. Statement as to Compliance......................................68
SECTION 10.05. Waiver of Certain Covenants.....................................68
SECTION 10.06. Payment of the Trust's Costs and Expenses.......................68
SECTION 10.07. Additional Covenants............................................69
SECTION 10.08. Information Returns.............................................70
ARTICLE XI Redemption or Prepayment of Securities
SECTION 11.01. Applicability of this Article...................................70
SECTION 11.02. Election to Redeem; Notice to Trustee...........................70
SECTION 11.03. Selection of Securities to be Redeemed..........................70
SECTION 11.04. Notice of Redemption............................................71
SECTION 11.05. Deposit of Redemption Price.....................................72
SECTION 11.06. Payment of Securities Called for Redemption.....................72
SECTION 11.07. Company's Right of Redemption...................................72
ARTICLE XII Exchange and Registration Rights
SECTION 12.01. Exchange 73
SECTION 12.02. Registration....................................................73
SECTION 12.03. Liquidated Damages..............................................74
SECTION 12.04. Compliance with Law.............................................74
ARTICLE XIII Sinking Funds
SECTION 13.01. Applicability of Article........................................74
SECTION 13.02. Satisfaction of Sinking Fund Payments with Securities...........74
SECTION 13.03. Redemption of Securities for Sinking Fund.......................75
ARTICLE XIV Subordination of Securities
SECTION 14.01. Securities Subordinate to Senior Debt...........................76
SECTION 14.02. Payment Over of Proceeds Upon Dissolution, Etc..................77
SECTION 14.03. Prior Payment to Senior Debt Upon Acceleration of Securities....78
SECTION 14.04. No Payment When Senior Debt in Default..........................79
SECTION 14.05. Payment Permitted If No Default.................................79
SECTION 14.06. Subrogation to Rights of Holders of Senior Debt.................80
SECTION 14.07. Provisions Solely to Define Relative Rights.....................80
SECTION 14.08. Trustee to Effectuate Subordination.............................80
SECTION 14.09. No Waiver of Subordination Provisions...........................81
SECTION 14.10. Notice to Trustee...............................................81
SECTION 14.11. Reliance on Judicial Order or Certificate of Liquidating Agent..81
SECTION 14.12. Trustee Not Fiduciary for Holders of Senior Debt................81
SECTION 14.13. Rights of Trustee as Holder of Senior Debt; Preservation
of Trustee's Rights............ ................................82
SECTION 14.14. Article Applicable to Paying Agents.............................82
SECTION 14.15. Certain Conversions or Exchanges Deemed Payment.................82
</TABLE>
<PAGE>
Exhibit A - Form of Restricted Securities Certificate
<PAGE>
JUNIOR SUBORDINATED INDENTURE, dated as of
February 5, 1997 between U.S.B. HOLDING CO., INC., a
bank holding company established under the laws of
Delaware (hereinafter called the "Company") having
its principal office at 100 Dutch Hill Road,
Orangeburg, New York 10962, and THE CHASE MANHATTAN
BANK, a New York banking corporation, as Trustee
(hereinafter called the "Trustee").
RECITALS OF THE COMPANY
The Company has duly authorized the execution and delivery of this
Indenture to provide for the issuance from time to time of its unsecured junior
subordinated debt securities in series (hereinafter called the "Securities") of
substantially the tenor hereinafter provided, including, without limitation,
Securities issued to evidence loans made to the Company of the proceeds from the
issuance from time to time by one or more business trusts (each a "U.S.B.H.
Capital Trust" and, collectively, the "U.S.B.H. Capital Trusts") of preferred
trust interests in such U.S.B.H. Capital Trusts (the "Capital Securities") and
common interests in such U.S.B.H. Capital Trusts (the "Common Securities" and,
collectively with the Capital Securities, the "Trust Securities"), and to
provide the terms and conditions upon which the Securities are to be
authenticated, issued and delivered.
NOW THEREFORE, THIS INDENTURE WITNESSETH: For and in consideration of the
premises and the purchase of the Securities by the Holders thereof, it is
mutually covenanted and agreed, for the equal and proportionate benefit of all
Holders of the Securities or of any series thereof, as follows:
ARTICLE I
DefinitionsandOtherProvisionsofGeneralApplication"
SECTION1.01. Definitions. For all purposes of this Indenture, except as
otherwise expressly provided or unless the context otherwise requires:
(1) The terms defined in this Article have the meanings assigned to them in
this Article, and include the plural as well as the singular.
(2) All other terms used herein which are defined in the Trust Indenture
Act, either directly or by reference therein, have the meanings assigned to them
therein.
(3) All accounting terms not otherwise defined herein have the meanings
assigned to them in accordance with generally accepted accounting principles,
and the term "generally accepted accounting principles" with respect to any
computation required or permitted hereunder shall mean such accounting
principles which are generally accepted at the date or time of such computation;
provided, that when two or more principles are so generally accepted, it shall
mean that set of principles consistent with those in use by the Company.
(4) The words "herein", "hereof" and "hereunder" and other words of similar
import refer to this Indenture as a whole and not to any particular Article,
Section or other subdivision.
"Act", when used with respect to any Holder, has the meaning specified in
Section 1.04.
"Additional Interest" means the interest, if any, that shall accrue on any
interest on the Securities of any series the payment of which has not been made
on the applicable Interest Payment Date and which shall accrue at the rate per
annum specified or determined as specified in any Officers' Certificate
delivered pursuant to Section 3.01 of the Indenture.
"Additional Sums" has the meaning specified in Section 10.06.
"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 corresponding
to the Remaining Life (if no maturity is within three months before or after the
Remaining Life, yields for the two published maturities most closely
corresponding to the Remaining Life shall be determined and the 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,
calculated using a price for the Comparable Treasury Issue (expressed as a
percentage of its principal amount) equal to the Comparable Treasury Price for
such prepayment date, in each case calculated on the third Business Day
preceding the prepayment date, plus in each case (a) if such prepayment is in
connection with a Tax Event, (1) 2.25% if such prepayment occurs on or prior to
February 1, 1998 and (2) 1.50% in all other cases, and (b) if such prepayment is
in connection with a Regulatory Capital Event, (1) 2.25% if such prepayment
occurs on or prior to February 1, 1998 and (2) 1.50% in all other cases.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person; provided, however, that an Affiliate of the
Company shall not be deemed to include any U.S.B.H. Capital Trust to which
Securities have been issued. For the purposes of this definition, "control" when
used with respect to any specified Person means the power to direct the
management and policies of such Person, directly or indirectly, whether through
the ownership of voting securities, by contract or otherwise; and the terms
"controlling" and "controlled" have meanings correlative to the foregoing.
"Agent Member" means any member of, or participant in, the Depositary.
"Amended and Restated Declaration of Trust" for each series of Securities
has the meaning specified in the Officers' Certificate for such series delivered
pursuant to Section 3.01 of this Indenture.
"Authenticating Agent" means any Person authorized by the Trustee pursuant
to Section 6.14 to act on behalf of the Trustee to authenticate Securities of
one or more series.
"Board of Directors" means either the board of directors of the Company or
any committee of that board duly authorized to act hereunder.
"Board Resolution" means a copy of a resolution certified by the Secretary
or an Assistant Secretary of the Company to have been duly adopted by the Board
of Directors, or such committee of the Board of Directors or officers of the
Company to which authority to act on behalf of the Board of Directors has been
delegated, and to be in full force and effect on the date of such certification,
and delivered to the Trustee.
"Business Day" means any day other than (i) a Saturday or Sunday, (ii) a
day on which banking institutions in The City of New York are authorized or
required by law or executive order to remain closed, or (iii) a day on which the
Corporate Trust Office of the Trustee, or, with respect to the Securities of a
series issued to a U.S.B.H. Capital Trust, the principal office of the Property
Trustee under the related Trust Agreement, is closed for business.
"Capital Securities" has the meaning specified in the first recital of this
Indenture, and shall include, where appropriate, Exchange Capital Securities as
defined in Article XII.
"Commission" means the Securities and Exchange Commission, as from time to
time constituted, created under the Securities Exchange Act of 1934, as amended,
or if at any time under the execution of this instrument such Commission is not
existing and performing the duties now assigned to it under the Trust Indenture
Act, then the body performing such duties on such date.
"Common Securities" has the meaning specified in the first recital of this
Indenture.
"Common Stock" means the common stock, $5.00 par value, of the Company.
"Company" means the Person named as the "Company" in the first paragraph of
this instrument until a successor Person shall have become such pursuant to the
applicable provisions of this Indenture, and thereafter "Company" shall mean
such successor Person.
"Company Request" and "Company Order" mean, respectively, the written
request or order signed in the name of the Company by the Chairman, Chief
Executive Officer, President or a Vice President, and by the Treasurer, an
Assistant Treasurer, the Controller, the Secretary or an Assistant Secretary of
the Company, and delivered to the Trustee.
"Comparable Treasury Issue" means the United States Treasury security
selected by the Quotation Agent as having a maturity comparable to the Remaining
Life of the Security to be prepaid that would be utilized, at the time of
selection and in accordance with customary financial practice, in pricing new
issues of corporate debt securities of comparable maturity with the Remaining
Life of the Securities. If no United States Treasury Security has a maturity
which is within a period from three months before to three months after,
February 1, 2007, 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 using such securities.
"Comparable Treasury Price" means, with respect to any prepayment date, (i)
the average of the bid and asked prices for the Comparable Treasury Issue
(expressed in each case as a percentage of its principal amount) on the third
Business Day preceding such prepayment date, as set forth in the daily
statistical release (or any successor release) published by the Federal Reserve
Bank of New York and designated "Composite 3:30 p.m. Quotations for U.S.
Government Securities" or (ii) if such release (or any successor release) is not
published or does not contain such prices on such Business Day, (a) the average
of five Reference Treasury Dealer Quotations for such prepayment date, after
excluding the highest and lowest of 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.
"Corporate Trust Office", means the principal office of the Trustee at
which at any particular time its corporate trust business shall be administered,
which office as of the date of this Indenture is located at 450 West 33rd
Street, 15th Floor, New York, New York 10001, Attention: Corporate Trustee
Administration Department.
"Corporation" includes a corporation, association, company, joint-stock
company or business trust.
"Declaration of Trust" for each series of Securities has the meaning
specified in the Officers' Certificate for such series delivered pursuant to
Section 3.01 of this Indenture.
"Debt" means (i) the principal of and premium, if any, and unpaid interest
on indebtedness for money borrowed, (ii) purchase money and similar obligations,
(iii) obligations under capital leases, (iv) guarantees, assumptions or purchase
commitments relating to, or other transactions as a result of which the Company
is responsible for the payment of, such indebtedness of others, (v) renewals,
extensions and refunding of any such indebtedness, (vi) interest or obligations
in respect of any such indebtedness accruing after the commencement of any
insolvency or bankruptcy proceedings and (vii) obligations associated with
derivative products such as interest rate and currency exchange contracts,
foreign exchange contracts, commodity contracts and similar arrangements;
provided, however, that Debt shall not include trade accounts payable or accrued
liabilities in the ordinary course of business.
"Defaulted Interest" has the meaning specified in Section 3.08.
"Depositary" means, with respect to the Securities of any series issuable
or issued in whole or in part in the form of one or more Global Securities, the
Person designated as Depositary by the Company pursuant to Section 3.01 with
respect to such series (or any successor thereto (a "Successor Depositary")).
"Discount Security" means any security which provides for an amount less
than the principal amount thereof to be due and payable upon a declaration of
acceleration of the Maturity thereof pursuant to Section 5.02.
"Dollar" means the currency of the United States of America that, as at the
time of payment, is legal tender for the payment of public and private debts.
"DTC" means The Depository Trust Company.
"Event of Default", unless otherwise specified in the supplemental
indenture creating a series of Securities, has the meaning specified in Article
V.
"Extension Period" has the meaning specified in Section 3.12.
"Federal Reserve" means the Board of Governors of the Federal Reserve
System.
"Foreign Currency" means any currency issued by the government of one or
more countries other than the United States of America or by any recognized
confederation or association of such governments.
"Global Security" means a Security in the form prescribed in Section 2.04
evidencing all or part of a series of Securities, issued to the Depositary of
its nominee for such series, and registered in the name of such Depositary or
its nominee.
"Guarantee Agreement" for each series of Securities has the meaning
specified in the Officers' Certificate for such series delivered pursuant to
Section 3.01 of this Indenture.
"Holder" means a Person in whose name a Security is registered in the
Securities Register.
"Indenture" means this instrument as originally executed or as it may from
time to time be supplemented or amended by one or more indentures supplemental
hereto entered into pursuant to the applicable provisions hereof and shall
include the terms of each particular series of Securities established as
contemplated by Section 3.01.
"Institutional Accredited Investor" means an accredited investor within the
meaning of Rule 501(a)(1), (2), (3) or (7) of Regulation D under the Securities
Act.
"Interest Payment Date" means as to each series of Securities the Stated
Maturity of an installment of interest on such Securities.
"Interest Rate" means the rate of interest specified or determined as
specified in each Security as being the rate of interest payable on such
Security.
"Junior Subordinated Payment" has the meaning specified in Section 14.02.
"Lien" means any mortgage, pledge, lien, security interest or other
encumbrance.
"Liquidation Amount" has the meaning specified in Section 1.01 of the Trust
Agreement.
"Maturity", when used with respect to any Security, means the date on which
the principal of such Security becomes due and payable as therein or herein
provided, whether as the Stated Maturity or by declaration of acceleration, call
for redemption or otherwise.
"1940 Act" means the Investment Company Act of 1940, as amended.
"Officers' Certificate" means a certificate signed by the Chairman and
Chief Executive Officer, President, or Vice President, and by the Treasurer, the
Controller, the Chief Financial Officer, the Secretary or any Assistant
Secretary of the Company, and delivered to the Trustee, which certificate shall
comply with the provisions of Section 1.03 hereof.
"Opinion of Counsel" means a written opinion of counsel, who may be counsel
for the Company, which opinion shall comply with the provisions of Section 1.03
hereof.
"Original Issue Date" means the date of issuance specified as such in each
Security.
"Other Debentures" means, with respect to any series of Securities, all
junior subordinated debt securities to be issued by the Company pursuant to this
Indenture, other than such series of Securities, with substantially similar
subordination terms, and which will be issued and sold (if at all) to any
U.S.B.H. Capital Trust established by the Company (if any), and will be
unsecured and subordinate and junior in right of payment to the extent and to
the manner set forth in this Indenture to all Senior Debt of the Company.
"Other Guarantees" means, with respect to any series of Securities, all
guarantees (if any) to be issued by the Company with respect to Capital
Securities (if any) to be issued by any U.S.B.H. Capital Trust to be established
by the Company (if any), other than the guarantee related to such series of
Securities.
"Outstanding" means, when used in reference to any Securities, as of the
date of determination, all Securities theretofore authenticated and delivered
under this Indenture, except:
(i) Securities theretofore canceled by the Trustee or delivered to the
Trustee for cancellation;
(ii) Securities for whose payment money in the necessary amount has
been theretofore deposited with the Trustee or any Paying Agent in trust
for the Holders of such Securities; and
(iii) Securities in substitution for or in lieu of which other
Securities have been authenticated and delivered or which have been paid
pursuant to Section 3.07, unless proof satisfactory to the Trustee is
presented that any such Securities are held by Holders in whose hands such
Securities are valid, binding and legal obligations of the Company;
provided, however, that in determining whether the Holders of the requisite
principal amount of Outstanding Securities have given any request, demand,
authorization, direction, notice, consent or waiver hereunder, Securities owned
by the Company or any other obligor upon the Securities or any Affiliate of the
Company or such other obligor shall be disregarded and deemed not to be
Outstanding, except that, in determining whether the Trustee shall be protected
in relying upon any such request, demand, authorization, direction, notice,
consent or waiver, only Securities which a Responsible officer actually knows to
be so owned shall be so disregarded. Securities so owned which have been pledged
in good faith may be regarded as Outstanding if the pledgee establishes to the
satisfaction of the Trustee the pledgee's right so to act with respect to such
Securities and that the pledgee is not the Company or any other obligor upon the
Securities or any Affiliate of the Company or of such other obligor. Upon the
written request of the Trustee, the Company shall furnish the Trustee promptly
an Officers' Certificate listing and identifying all Securities, if any, known
by the Company to be owned or held by or for the account of the Company, or any
other obligor on the Securities or any Affiliate of the Company or such obligor,
and, subject to the provisions of Section 6.01, the Trustee shall be entitled to
accept such Officers' Certificate as conclusive evidence of the facts therein
set forth and of the fact that all Securities not listed therein are Outstanding
for the purpose of any such determination.
"Paying Agent" means the Trustee or any Person authorized by the Company to
pay the principal of (or premium, if any) or interest on any Securities on
behalf of the Company.
"Person" means any individual, Corporation, partnership, joint venture,
trust, unincorporated organization or government or any agency or political
subdivision thereof.
"Place of Payment" means, with respect to the Securities of any series, the
place or places where the principal of (and premium, if any) and interest on the
Securities of such series are payable pursuant to Sections 3.01 and 3.11.
"Predecessor Security" of any particular Security means every previous
Security evidencing all or a portion of the same debt as that evidenced by such
particular Security; and, for the purposes of this definition, any security
authenticated and delivered under Section 3.07 in lieu of a lost, destroyed or
stolen Security shall be deemed to evidence the same debt as the lost, destroyed
or stolen Security.
"Proceeding" has the meaning specified in Section 14.02.
"Property Trustee" means, in respect of any U.S.B.H. Capital Trust, the
commercial bank or trust company identified as the "Property Trustee" in the
related Trust Agreement, solely in its capacity as Property Trustee of such
U.S.B.H. Capital Trust under each Trust Agreement and not in its individual
capacity, or its successor in interest in such capacity, or any successor
property trustee appointed as therein provided.
"Quotation Agent" means the Reference Treasury Dealer selected by the
Trustee to act as such after consultation with the Company.
"Redemption Date", when used with respect to any Security of a series to be
redeemed, means the date fixed for such redemption by or pursuant to this
Indenture.
"Reference Treasury Dealer" means a nationally-recognized U.S. Government
Securities dealer selected by the Trustee after consultation with the Company
and its respective successors.
"Reference Treasury Dealer Quotations" means, with respect to each
Reference Treasury Dealer and any prepayment date, the average, as determined by
the Trustee, of the bid and asked prices at 5:00 p.m., New York City time, on
the third Business Day preceding such prepayment date 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.
"Regular Record Date" for the interest payable on any Interest Payment Date
with respect to the Securities of a series means, unless otherwise provided
pursuant to Section 3.01 with respect to Securities of a series, the date which
is the Business Day next preceding such Interest Payment Date.
"Regulatory Capital Event" means the Company shall have received an opinion
of independent bank regulatory counsel experienced in such matters to the effect
that, as a result of (a) any amendment to, or change (including any announced
prospective change) in the laws (or any 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 date of original
issuance of the Capital Securities, the Capital Securities do not constitute, or
within 90 days of the date thereof, will not constitute, Tier 1 capital (or its
then equivalent); provided, however, that the distribution of the Securities in
connection with the liquidation of the Trust by the Company and the treatment
thereafter of the Securities as other than Tier 1 capital shall not in and of
itself constitute a Regulatory Capital Event unless such liquidation shall have
occurred in connection with a Tax Event.
"Remaining Life" has the meaning specified in Section 2.03.
"Responsible Officer", when used with respect to the Trustee means any
officer of the Trustee having direct responsibility for the administration of
this Indenture, and also means, with respect to a particular matter, any other
officer of the Trustee to whom such matter is referred because of such officer's
knowledge of and familiarity with the particular subject.
"Restricted Security" means each Security required pursuant to Section
3.06(c) hereof to bear a Restricted Securities Legend.
"Restricted Securities Certificate" means a certificate substantially in
the form set forth in Exhibit A to this Indenture.
"Restricted Securities Legend" means a legend substantially in the form of
the legend required in the form of Security set forth in Section 2.02 to be
placed on a Restricted Security.
"Securities" or "Security" means any debt securities or debt security, as
the case may be, authenticated and delivered under this Indenture.
"Securities Act" means the Securities Act of 1933, as amended.
"Securities Certificate" means a certificate evidencing ownership of
Securities.
"Securities Register" and "Securities Registrar" have the respective
meanings specified in Section 3.06.
"Senior Debt" with respect to any series of Securities means the principal
of (and premium, if any) and interest, if any (including interest accruing on or
after the filing of any petition in bankruptcy or for reorganization relating to
the Company whether or not such claim for post-petition interest is allowed in
such proceeding), on Debt of the Company, whether incurred on or prior to the
date of this Indenture or thereafter incurred, unless, in the instrument
creating or evidencing the same or pursuant to which the same is outstanding, it
is provided that such obligations are not superior in right of payment to the
Securities or the Other Debentures; provided, however, that Senior Debt shall
not be deemed to include (a) any Debt of the Company which, when incurred and
without respect to any election under Section 1111(b) of the U.S. Bankruptcy
Code of 1978, as amended, was without recourse to the Company; (b) any Debt of
the Company to any of its Subsidiaries; (c) Debt to any employee of the Company;
(d) Debt to the extent such debt is by its terms is subordinated to trade
accounts payable or accrued liabilities arising in the ordinary course of
business to the extent that payments made to the holders of such Debt by the
Holders as a result of the subordination provisions of this Indenture would be
greater than such payments otherwise would have been as a result of any
obligation of such holders of such Debt to pay amounts over to the obligees on
such trade accounts payable or accrued liabilities arising in the ordinary
course of business as a result of the subordination provisions to which such
Debt is subject; and (e) any other debt securities issued pursuant to this
Indenture.
"Special Record Date" for the payment of any Defaulted Interest means a
date fixed by the Trustee pursuant to Section 3.08.
"Stated Maturity" when used with respect to any Security or any installment
of principal thereof or interest thereon means the date specified pursuant to
the terms of such Security as the date on which the principal of such Security
or such installment of interest is due and payable, in the case of such
principal, as such date may be shortened or extended as provided pursuant to the
terms of such Security and this Indenture.
"Subsidiary" means a corporation more than 50% of the outstanding voting
stock of which is owned, directly or indirectly, by the Company or by one or
more other Subsidiaries, or by the Company and one or more other Subsidiaries.
For purposes of this definition, "voting stock" means stock which ordinarily has
voting power for the election of directors, whether at all times or only so long
as no senior class of stock has such voting power by reason of any contingency.
"Successor Security" of any particular Security means every Security issued
after, and evidencing all or a portion of the same debt as that evidenced by,
such particular Security; and, for the purposes of this definition, any Security
authenticated and delivered under Section 3.07 in exchange for or in lieu of a
mutilated, destroyed, lost or stolen Security shall be deemed to evidence the
same debt as the mutilated, destroyed, lost or stolen Security.
"Tax Event" means the receipt by the Company of an opinion of independent
counsel experienced in such matters to the effect that, as a result of any
amendment to, or change (including any announced proposed 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 proposed
change, pronouncement or decision is announced on or after the Original Issue
Date of the applicable series of Securities or of the applicable Capital
Securities issued by the affected U.S.B.H. Capital Trust, there is more than an
insubstantial risk that (i) such U.S.B.H. Capital Trust is, or will be within 90
days of the date of such opinion of independent counsel, subject to United
States Federal income tax with respect to income received or accrued on such
Securities, (ii) interest payable by the Company on such series of Securities is
not, or within 90 days of the date of such opinion of independent counsel, will
not be, deductible by the Company, in whole or in part, for United States
Federal income tax purposes, or (iii) such U.S.B.H. Capital Trust is, or will be
within 90 days of the date of such opinion of independent counsel, subject to
more than a de minimis amount of other taxes, duties or other governmental
charges.
"Trust Agreement" with respect to each series of Securities means the
Declaration of Trust with respect to such series, as amended by the Amended and
Restated Declaration of Trust with respect to such series.
"Trustee" means the Person named as the "Trustee" in the first paragraph of
this instrument until a Successor Trustee shall have become such pursuant to the
applicable provisions of this Indenture, and thereafter "Trustee" shall mean or
include each Person who is then a Trustee hereunder and, if at any time there is
more than one such Person, "Trustee" as used with respect to the Securities of
any series shall mean the Trustee with respect to Securities of that series.
"Trust Indenture Act" means the Trust Indenture Act of 1939 (15 U.S.C.
ss.ss. 77aaa-77bbbb), as amended and as in effect on the date of this Indenture,
except as provided in Sections 1.07 and 9.05 hereof, provided that in the event
the Trust Indenture Act of 1939 is amended after such date, "Trust Indenture
Act" means, to the extent required by any such amendment, the Trust Indenture
Act of 1939, as so amended.
"Trust Securities" has the meaning specified in the first recital of this
Indenture.
"U.S.B.H. Capital Trust" has the meaning specified in the first recital of
this Indenture.
"U.S.B. Holding Co., Inc. Guarantee" means the guarantee by the Company of
the distributions on the Trust Securities of a U.S.B.H. Capital Trust to the
extent of the Guarantee Agreement.
"Vice President", when used with respect to the Company, means any duly
appointed vice president, whether or not designated by a number or a word or
words added before or after the title "vice president".
SECTION 1.02. Compliance Certificate and Opinions. Upon any application or
request by the Company to the Trustee to take any action under any provision of
this Indenture, the Company shall furnish to the Trustee an Officers'
Certificate stating that all conditions precedent (including covenants
compliance with which constitutes a condition precedent), if any, provided for
in this Indenture relating to the proposed action have been complied with and an
Opinion of Counsel stating that in the opinion of such counsel that all such
conditions precedent (including covenants compliance with which constitute a
condition precedent), if any, have been complied with, except that in the case
of any such application or request as to which the furnishing of such documents
is specifically required by any provision of this Indenture relating to such
particular application or request, no additional certificate or opinion need be
furnished.
Every certificate or opinion with respect to compliance with a condition or
covenant provided for in this Indenture (other than the certificates provided
regarding conditions or covenants waived by the Holders pursuant to Section
10.05) shall include:
(1) a statement that each individual signing such certificate or
opinion has read such covenant or condition and the definitions herein
relating thereto;
(2) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(3) a statement that, in the opinion of each such individual, he has
made such examination or investigation as is necessary to enable him to
express an informed opinion as to whether or not such covenant or condition
has been complied with; and
(4) a statement as to whether, in the opinion of each such individual,
such condition or covenant has been complied with.
SECTION 1.03. Forms of Documents Delivered to Trustee. In any case where
several matters are required to be certified by, or covered by an opinion of,
any specified Person, it is not necessary that all such matters be certified by,
or covered by the opinion of, only one Person, or that they be so certified or
covered by only one document, but one such Person may certify or give an opinion
with respect to some matters and one or more other such Persons as to other
matters, and any such Person may certify or given an opinion as to such matters
in one or several documents.
Any certificate or opinion of an officer of the Company may be based,
insofar as it relates to legal matters, upon a certificate or opinion of, or
representations by, counsel, unless such officer knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representation
with respect to matters upon which his certificate or opinion is based are
erroneous. Any such certificate or Opinion of Counsel may be based, insofar as
it relates to factual matters, upon a certificate or opinion of, or
representations by, an officer or officers of the Company stating that the
information with respect to such factual matters is in the possession of the
Company, unless such counsel knows, or in the exercise of reasonable care should
know, that the certificate or opinion or representations with respect to such
matters are erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions, or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
SECTION 1.04. Acts of Holders. (a) Any request, demand, authorization,
direction, notice, consent, waiver or other action provided by this Indenture to
be given to or taken by Holders, may be embodied in and evidenced by one or more
instruments of substantially similar tenor signed by such Holders in person or
by an agent duly appointed in writing; and, except as herein otherwise expressly
provided, such action shall become effective when such instrument or instruments
is or are delivered to the Trustee, and, where it is hereby expressly required,
to the Company. Such instrument or instruments (and the action embodied therein
and evidenced thereby) are herein sometimes referred to as the "Act" of the
Holders signing such instrument or instruments. Proof of execution of any such
instrument or of a writing appointing any such agent shall be sufficient for any
purpose of this Indenture and (subject to Section 6.01) conclusive in favor of
the Trustee and the Company, if made in the manner provided in this Section.
(b) The fact and date of the execution by any Person of any such instrument
or writing may be proved by the affidavit of a witness of such execution or by
the certificate of any notary public or other officer authorized by law to take
acknowledgments of deeds, certifying that the individual signing such instrument
or writing acknowledged to him the execution thereof. Where such execution is by
a Person acting in other than his individual capacity, such certificate or
affidavit shall also constitute sufficient proof of his authority.
(c) The fact and date of the execution by any Person of any such instrument
or writing, or the authority of the Person executing the same, may also be
proved in any other manner which the Trustee deems sufficient and in accordance
with such reasonable rules as the Trustee may determine.
(d) The ownership of Securities shall be proved by the Securities Register.
(e) Any request, demand, authorization, direction, notice, consent, waiver
or other action by the Holder of any Security shall bind every future Holder of
the same Security and the Holder of every Security issued upon the transfer
thereof or in exchange therefor or in lieu thereof in respect of anything done
or suffered to be done by the Trustee or the Company in reliance thereon,
whether or not notation of such action is made upon such Security.
(f) The Company may, but shall not be obligated to, fix a record date for
the purpose of determining the Holders entitled to take any action under this
Indenture by vote or consent. Except as otherwise provided herein, such record
date shall be the later of 30 days prior to the first solicitation of such
consent or vote or the date of the most recent list of Securityholders furnished
to the Trustee pursuant to Section 7.01 prior to such solicitation. If a record
date is fixed, those persons who were Securityholders at such record date (or
their duly designated proxies), and only those persons, shall be entitled to
take such action by vote or consent or to revoke any vote or consent previously
given, whether or not such persons continue to be Holders after such record
date, provided, however, that unless such vote or consent is obtained from the
Holders (or their duly designated proxies) of the requisite principal amount of
Outstanding Securities prior to the date which is the 120th day after such
record date, any such vote or consent previously given shall automatically and
without further action by any Holder be canceled and of no further effect.
SECTION 1.05. Notices, Etc. to Trustee and Company. Any request, demand,
authorization, direction, notice, consent, waiver or Act of Holders or other
document provided or permitted by this Indenture to be made upon, given or
furnished to, or filed with:
(1) the Trustee by any holder or by the Company shall be sufficient
for every purpose hereunder if made, given, furnished or filed in writing
to or with the Trustee at its Corporate Trust Office, or
(2) the Company by the Trustee or by any Holder shall be sufficient
for every purpose (except as otherwise provided in Section 5.01 hereof)
hereunder if in writing and mailed, first class, postage prepaid, to the
Company addressed to it at the address of its principal office specified in
the first paragraph of this instrument or at any other address previously
furnished in writing to the Trustee by the Company.
SECTION 1.06. Notice to Holders; Waiver. Where this Indenture provides for
notice to Holders of any event, such notice shall be sufficiently given (unless
otherwise herein expressly provided) if in writing and mailed, first class
postage prepaid, to each Holder affected by such event, at the address of such
Holder as it appears in the Securities Register, not later than the latest date,
and not earlier than the earliest date, prescribed for the giving of such
notice. In any case where notice to Holders is given by mail, neither the
failure to mail such notice, nor any defect in any notice so mailed, to any
particular Holder shall affect the sufficiency of such notice with respect to
other Holders. Where this Indenture provides for notice in any manner, such
notice may be waived in writing by the Person entitled to receive such notice,
either before or after the event, and such waiver shall be the equivalent of
such notice. Waivers of notice by Holders shall be filed with the Trustee, but
such filing shall not be a condition precedent to the validity of any action
taken in reliance upon such waiver.
SECTION 1.07. Conflict with Trust Indenture Act. This Indenture will not be
qualified under the Trust Indenture Act except upon the effectiveness of a
registration statement as contemplated in Article XII hereof. If any provision
of this Indenture limits, qualifies or conflicts with the duties imposed by any
of Section 310 to 317, inclusive, of the Trust Indenture Act through operation
of Section 318(c) thereof, such imposed duties shall control.
SECTION 1.08. Effect of Headings and Table of Contents. The Article and
Section headings herein and the Table of Contents are for convenience only and
shall not affect the construction hereof.
SECTION 1.09. Successors and Assigns. All covenants and agreements in this
Indenture by the Company shall bind its successors and assigns, whether so
expressed or not.
SECTION 1.10. Separability Clause. In case any provision in this Indenture
or in the Securities shall be invalid, illegal or unenforceable, the validity,
legality or enforceability of the remaining provisions shall not in any way be
affected or impaired thereby.
SECTION 1.11. Benefits of Indenture. Nothing in this Indenture or in the
Securities, express or implied, shall give to any Person, other than the parties
hereto, any Paying Agent and their successors and assigns, the holders of Senior
Debt and the Holders of the Securities, any benefit or any legal or equitable
right, remedy or claim under this Indenture.
SECTION 1.12. Governing Law. This Indenture and the Securities shall be
governed by and construed in accordance with the laws of the State of New York
without regard to the conflicts of laws principles thereof.
SECTION 1.13. Non-Business Days. In any case where any Interest Payment
Date, Redemption Date or Stated Maturity of any Security shall not be a Business
Day, then (notwithstanding any other provision of this Indenture or the
Securities) payment of interest or principal need not be made on such date, but
may be made on the next succeeding Business Day (and no interest shall accrue
for the period from and after such Interest Payment Date, Redemption Date or
Stated Maturity, as the case may be, until such next succeeding Business Day)
except that, if such Business Day is in the next succeeding calendar year, such
payment shall be made on the immediately preceding Business Day, in each case
with the same force and effect as if made on the Interest Payment Date or
Redemption Date or at the Stated Maturity, as the case may be, such payment was
originally payable.
ARTICLE II
Security Forms
SECTION 2.01. Forms Generally. The Securities of each series and the
Trustee's certificate of authentication shall be in substantially the forms set
forth in this Article, or in such other form or forms as shall be established by
or pursuant to a Board Resolution or in one or more indentures supplemental
hereto, in each case with such appropriate insertions, omissions, substitutions
and other variations as are required or permitted by this Indenture and may have
such letters, numbers or other marks of identification and such legends or
endorsements placed thereon as may be required to comply with applicable tax
laws or the rules of any securities exchange or as may, consistently herewith,
be determined by the officers executing such securities, as evidenced by their
execution of the Securities. If the form of Securities of any series is
established by action taken pursuant to a Board Resolution, a copy of an
appropriate record of such action shall be certified by the Secretary or an
Assistant Secretary of the Company and delivered to the Trustee at or prior to
the delivery of the Company Order contemplated by Section 3.03 with respect to
the authentication and delivery of such Securities.
The definitive Securities shall be printed, lithographed or engraved or
produced by any combination of these methods, if required by any securities
exchange on which the Securities may be listed, on a steel engraved border or
steel engraved borders or may be produced in any other manner permitted by the
rules or any securities exchange on which the Securities may be listed, all as
determined by the officers executing such Securities, as evidenced by their
execution of such Securities.
Securities distributed to holders of book-entry Capital Securities shall be
distributed in the form of one or more Global Securities registered in the name
of a Depositary or its nominee, and deposited with the Securities Registrar, as
custodian for such Depositary, or held by such Depositary for credit by the
Depositary to the respective accounts of the beneficial owners of the Securities
represented thereby (or such other accounts they may direct). Securities
distributed to holders of Capital Securities other than book-entry Capital
Securities shall not be issued in the form of a Global Security or any other
form intended to facilitate book-entry trading in beneficial interests in such
Securities.
SECTION 2.02. Form of Face of Security.
[If this Security is a Restricted Security, insert -- THIS SECURITY HAS NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT"), OR ANY STATE SECURITIES LAWS. NEITHER THIS SECURITY NOR ANY INTEREST OR
PARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED,
ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION UNLESS
SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT. THE HOLDER OF THIS SECURITY BY ITS
ACCEPTANCE HEREOF AGREES TO OFFER, SELL OR OTHERWISE TRANSFER SUCH SECURITY
PRIOR TO THE DATE WHICH IS THREE YEARS AFTER THE LATER OF THE ORIGINAL ISSUE
DATE HEREOF AND THE LAST DATE ON WHICH U.S.B. HOLDING CO., INC. (THE
"CORPORATION") OR ANY AFFILIATE OF THE CORPORATION WAS THE OWNER OF THIS
SECURITY (OR ANY PREDECESSOR OF THIS SECURITY) (THE "RESALE RESTRICTIONS
TERMINATION DATE") ONLY (A) TO THE CORPORATION, (B) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT, (C) FOR SO LONG AS THE
SECURITIES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER THE SECURITIES
ACT ("RULE 144A"), TO A PERSON IT REASONABLY BELIEVES IS A "QUALIFIED
INSTITUTIONAL BUYER" AS DEFINED IN RULE 144A THAT PURCHASES FOR ITS OWN ACCOUNT
OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN
THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (D) TO AN
INSTITUTIONAL "ACCREDITED INVESTOR" WITHIN THE MEANING OF SUBPARAGRAPH (a)(1),
(2), (3) OR (7) OF RULE 501 UNDER THE SECURITIES ACT ACQUIRING THE SECURITY FOR
ITS OWN ACCOUNT OR FOR THE ACCOUNT OF SUCH AN INSTITUTIONAL "ACCREDITED
INVESTOR," FOR INVESTMENT PURPOSES AND NOT WITH A VIEW TO, OR FOR OFFER OR SALE
IN CONNECTION WITH, ANY DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT, OR (E)
PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF
THE SECURITIES ACT, SUBJECT TO THE CORPORATION'S AND THE TRUSTEE'S RIGHT PRIOR
TO ANY SUCH OFFER, SALE OR TRANSFER PURSUANT TO CLAUSES (D) OR (E) TO REQUIRE
THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION
SATISFACTORY TO EACH OF THEM IN ACCORDANCE WITH THE AMENDED AND RESTATED
DECLARATION OF TRUST, A COPY OF WHICH MAY BE OBTAINED FROM THE CORPORATION OR
THE TRUSTEE. THIS LEGEND WILL BE REMOVED UPON THE REQUEST OF A HOLDER AFTER THE
RESALE RESTRICTIONS TERMINATION DATE.]
<PAGE>
U.S.B. HOLDING CO., INC.
(Title of Security)
No. $
U.S.B. HOLDING CO., INC., a corporation organized and existing under the
laws of Delaware (hereinafter called the "Company", which term includes any
successor corporation under the Indenture hereinafter referred to), for value
received, hereby promises to pay to , or its registered assigns, the principal
sum of Dollars on . The Company further promises to pay interest on said
principal sum from or from the most recent interest payment date (each such
date, an "Interest Payment Date") on which interest has been paid or duly
provided for, [monthly] (quarterly] [semi-annually] [if applicable,
insert--(subject to deferral as set forth herein)], in arrears on [insert
applicable Interest Payment Dates] of each year, commencing , at the rate of %
per annum, until the principal hereof shall have become due and payable, [if
applicable, insert--plus Additional Interest, if any,] until the principal
hereof is paid or duly provided for or made available for payment [if
applicable, insert--and on any overdue principal and (without duplication and to
the extent that payment of such interest is enforceable under applicable law) on
any overdue installment of interest at the rate of % per annum, compounded
[monthly] [quarterly] [semi-annually] [annually] as Additional Interest]. The
amount of interest payable for any period shall be computed on the basis of
twelve 30-day months and a 360-day year. The amount of interest payable for any
partial period shall be computed on the basis of the number of days elapsed in a
360-day year of twelve 30-day months. In the event that any date on which
interest is payable on this Security is not a Business Day, then a payment of
the interest payable on such date will be made on the next succeeding day which
is a Business Day (and without any interest or other payment in respect of any
such delay), (except that, if such Business Day is in the next succeeding
calendar year, such payment shall be made on the immediately preceding Business
Day, in each case] with the same force and effect as if made on the date the
payment was originally payable. A "Business Day" shall mean any day other than
(i) a Saturday or Sunday, (ii) a day on which banking institutions in The City
of New York are authorized or required by law or executive order to remain
closed or (iii) a day on which the Corporate Trust Office of the Trustee or the
Corporate Trust Office of the Property Trustee under the Trust Agreement
hereinafter referred to for U.S.B.H. Capital Trust is closed for business. The
interest installment so payable, and punctually paid or duly provided for, on
any Interest Payment Date will, as provided in the Indenture, be paid to the
Person in whose name this Security (or one or more Predecessor Securities, as
defined in the Indenture) is registered at the close of business on the Regular
Record Date for such interest installment, which shall be the [insert definition
of Regular Record Dates]. Any such interest installment not so punctually paid
or duly provided for shall forthwith cease to be payable to the Holder on such
Regular Record Date and may either be paid to the Person in whose name this
Security (or one or more Predecessor Securities) is registered at the close of
business on a Special Record Date for the payment of such Defaulted Interest to
be fixed by the Trustee, notice whereof shall be given to Holders of Securities
of this series not less than 10 days prior to such Special Record Date, or be
paid at any time in any other lawful manner not inconsistent with the
requirements of any securities exchange on which the Securities of this series
may be listed, and upon such notice as may be required by such exchange, all as
more fully provided in said Indenture.
[If applicable, insert -- So long as no Event of Default has occurred and
is continuing, the Company shall have the right at any time during the term of
this Security, from time to time, to defer payment of interest on such Security
for up to consecutive [monthly] [quarterly] [semi-annual] interest payment
periods with respect to each deferral period (each an "Extension Period"),
during which Extension Periods the Company shall have the right to make partial
payments of interest on any Interest Payment Date, and at the end of which the
Company shall pay all interest then accrued and unpaid (together with Additional
Interest thereon to the extent permitted by applicable law); provided, however,
that no Extension Period may extend beyond the Maturity of this Security. During
any such Extension Period, 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 of, interest or premium,
if any, on or repay, repurchase or redeem any debt securities of the Company
(including Other Debentures) that ranks pari passu with or junior in interest to
this Security or (iii) make any guarantee payments with respect to any guarantee
by the Company of the debt securities of any Subsidiary of the Company
(including Other Guarantees) if such guarantee ranks pari passu with or junior
in interest to this Security (other than (a) dividends or distributions in
Common Stock of the Company, (b) any declaration of a dividend in connection
with the implementation of a stockholders' rights plan, or the issuance of stock
under any such plan in the future, or the redemption or repurchase of any such
rights pursuant thereto, (c) payments under the applicable U.S.B. Holding Co.,
Inc. Guarantee, (d) purchases or acquisitions of shares of the Company's Common
Stock in connection with the satisfaction by the Company of its obligations
under any employee benefit plan or other contractual obligation of the Company
(other than a contractual obligation ranking pari passu with or junior to these
Securities), (e) as a result of a reclassification of the Company's capital
stock or the exchange or conversion of one class or series of the Company's
capital stock for another class or series of the Company's capital stock, or (f)
the purchase of fractional interests in shares of the Company's capital stock
pursuant to the conversion or exchange provisions of such capital stock or the
security being converted or exchanged). Prior to the termination of any such
Extension Period, the Company may further extend such Extension Period,
provided, however, that such extension does not cause such Extension Period to
exceed consecutive [monthly] [quarterly] [semi-annual] interest payment periods
or extend beyond the Maturity of this Security. Upon the termination of any such
Extension Period and the payment of all accrued and unpaid interest and any
Additional Interest then due, 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 shall give the
Holder of this Security and the Trustee notice of its election to begin any
Extension Period at least five Business Days prior to the Interest Payment Date,
[if applicable, insert--or, with respect to the Securities issued to a U.S.B.H.
Capital Trust, prior to the earlier of (i) the date the Distributions on the
Capital Securities would have been payable except for the election to begin or
extend such Extension Period or (ii) the date the Administrative Trustees are
required to give notice to any automated quotation system or to holders of such
Capital Securities of the record date or the date such Distributions are
payable, but in any event not less than five Business Days prior to such record
date]. There is no limitation on the number of times the Company may elect to
begin an Extension Period.
Payment of the principal of (and premium, if any) and interest on this
Security will be made at the office or agency of the Company maintained for that
purpose in the United States, in such coin or currency of the United States of
America as at the time of payment is legal tender for payment of public and
private debts [if applicable, insert--; provided, however, that at the option of
the Company payment of any interest may be made (except Securities in Global
form) (i) by check mailed to the address of the Person entitled thereto as such
address shall appear in the Securities Register or (ii) by wire transfer in
immediately available funds at such place and to such account as may be
designated by the Person entitled thereto as specified in the Securities
Register].
The indebtedness evidenced by this Security is, to the extent provided in
the Indenture, subordinate and junior in right of payment to the prior payment
in full of all Senior Debt, and this Security is issued subject to the
provisions of the Indenture with respect thereto. Each Holder of this Security,
by accepting the same, (a) agrees to and shall be bound by such provisions, (b)
authorizes and directs the Trustee on his behalf to take such actions as may be
necessary or appropriate to effectuate the subordination so provided and (c)
appoints the Trustee his attorney-in-fact for any and all such purposes. Each
Holder hereof, by his acceptance hereof, waives all notice of the acceptance of
the subordination provisions contained herein and in the Indenture by each
holder of Senior Debt, whether now outstanding or hereinafter incurred, and
waives reliance by each such holder upon said provisions.
Reference is hereby made to the further provisions of this Security set
forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been executed by the
Trustee referred to on the reverse hereof by manual signature, this Security
shall not be entitled to any benefit under the Indenture or be valid or
obligatory for any purpose.
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed under its corporate seal.
Date: U.S.B. HOLDING CO., INC.,
[Seal]
By
------------------------------------
[Chairman and Chief
Executive Officer,
President or
Vice President]
Attest:
- -----------------------------------
[Secretary or Assistant Secretary]
SECTION 2.03. Form of Reverse of Security. This Security is one of a duly
authorized issue of securities of the Company (herein called the "Securities"),
issued and to be issued in one or more series under a Junior Subordinated
Indenture, dated as of February 5, 1997, [as supplemented by an Officers'
Certificate dated as of ____________, (herein called the "Indenture"), between
the Company and The Chase Manhattan Bank, as Trustee (herein called the
"Trustee", which term includes any successor trustee under the Indenture), to
which Indenture and all indentures supplemental thereto reference is hereby made
for a statement of the respective rights, limitations of rights, duties and
immunities thereunder of the Trustee, the Company and the Holders of the
Securities, and of the terms upon which the Securities are, and are to be,
authenticated and delivered. This Security is one of the series designated on
the face hereof [, limited in aggregate principal amount to $ ].
All terms used in this Security that are defined in the Indenture [if
applicable, insert--and in the Amended and Restated Declaration of Trust of
[insert the applicable U.S.B.H. Capital Trust ], dated as of [ ] (the "Amended
and Restated Declaration of Trust") among U.S.B. Holding Co., Inc., as
Depositor, and the Trustees named therein,] shall have the meanings assigned to
them in the Indenture or, to the extent not defined in the Indenture, the
Amended and Restated Declaration of Trust, as the case may be.
[If applicable, insert -- On or after the Company may at any time, at its
option, subject to the terms and conditions of Article XI of the Indenture and
subject to the Company having received prior approval of the Federal Reserve if
then required under applicable capital guidelines of the Federal Reserve, redeem
this Security in whole or in part at any time or from time to time prior to
maturity, at a redemption price (the "Optional Prepayment Price") equal to the
following prices, expressed in percentages of the principal amount of the
Securities together with accrued but unpaid interest to but excluding the date
fixed for redemption. If redeemed during the 12-month period beginning
____________:
Year Redemption
Price
[Insert year and redemption prices]
and at 100% on or after _____________.]
[If applicable, insert -- If a Tax Event or a Regulatory Capital Event
(each a "Special Event") shall occur and be continuing prior to , , the Company
may, 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 Securities within 90 days after the occurrence of
such Special Event, in whole (but not in part), at a prepayment price (the
"Special Event Prepayment Price") equal to the greater of (i) 100% of the
principal amount of such Securities and (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 Securities on to , , together with scheduled payments of
interest accruing from the prepayment date to , (the "Remaining Life"), in each
case discounted to the prepayment date on a semiannual basis (assuming a 360-day
year consisting of 30-day months) at the Adjusted Treasury Rate, plus, in each
case, accrued interest thereon to the date of prepayment. In the case of
redemption on or after to , following a Special Event, the Special Event
Prepayment Price shall equal the Optional Prepayment Price then applicable to a
redemption as described above.]
In the event of redemption of this Security in part only, a new Security or
Securities of this series for the unredeemed portion hereof will be issued in
the name of the Holder hereof upon the cancellation hereof.
[If the Security is not a Discount Security, -- If an Event of Default with
respect to Securities of this series shall occur and be continuing, the
principal of this Security may be declared due and payable in the manner, with
the effect and subject to the conditions provided in the Indenture].
[If the Security is a Discount Security, -- If an Event of Default with
respect to Securities of this series shall occur and be continuing, an amount of
principal of this Security may be declared due and payable in the manner, with
the effect and subject to the conditions provided in the Indenture. Such amount
shall be equal to [ -- insert formula for determining the amount]. Upon payment
(i) of the amount of principal so declared due and payable and (ii) of interest
on any overdue principal and overdue interest (in each case to the extent that
the payment of such interest shall be legally enforceable), all of the Company's
obligations in respect of the payment of the principal of and interest, if any,
on this Security shall terminate.]
The Indenture permits, with certain exceptions as therein provided, the
Company and the Trustee at any time to enter into a supplemental indenture or
indentures for the purpose of modifying in any manner the rights and obligations
of the Company and of the Holders of the Securities, with the consent of the
Holders of not less than a majority in principal amount of the Outstanding
Securities of each series to be affected by such supplemental indenture. The
Indenture also contains provisions permitting Holders of specified percentages
in principal amount of the Securities of each series at the time Outstanding, on
behalf of the Holders of all Securities of such series, to waive compliance by
the Company with certain provisions of the Indenture and certain past defaults
under the Indenture and their consequences. Any such consent or waiver by the
Holder of this Security shall be conclusive and binding upon such Holder and
upon all future Holders of this Security and of any Security issued upon the
registration of transfer hereof or in exchange herefor or in lieu hereof,
whether or not notation of such consent or waiver is made upon this Security.
[If the Security is not a Discount Security, -- As provided in and subject
to the provisions of the Indenture, if an Event of Default with respect to the
Securities of this series at the time Outstanding occurs and is continuing, then
and in every such case the Trustee or the Holders of not less than 25% in
principal amount of the Outstanding Securities of this series may declare the
principal amount of all the Securities of this series to be due and payable
immediately, by a notice in writing to the Company (and to the Trustee if given
by Holders), provided, however, that, in the case of the Securities of this
series issued to a U.S.B.H. Capital Trust, if upon an Event of Default, the
Trustee or the Holders of not less than 25% in principal amount of the
Outstanding Securities of this series fails to declare the principal of all the
Securities of this series to be immediately due and payable, the holders of at
least 25% in aggregate Liquidation Amount of the corresponding series of Capital
Securities then outstanding shall have such right by a notice in writing to the
Company and the Trustee. The Holders of a majority in aggregate principal amount
of the Outstanding Securities of these Securities may annul such declaration and
waive the default if the default (other than the non-payment of the principal of
these Securities which has become due solely by such acceleration) has been
cured and a sum sufficient to pay all matured installments of interest and
principal due otherwise than by acceleration has been deposited with the
Trustee. Should the Holders of these Securities fail to annul such declaration
and waive such default, the holders of a majority in aggregate Liquidation
Amount of the Capital Securities shall have such right. Upon any such
declaration such specified amount of and the accrued interest (including any
Additional Interest) on all the Securities of this series shall become
immediately due and payable, provided that the payment of principal and interest
(including any Additional Interest) on such Securities shall remain subordinated
to the extent provided in Article XIV of the Indenture.]
[If the Security is a Discount Security, -- As provided in and subject to
the provisions of the Indenture, if an Event of Default with respect to the
Securities of this series at the time Outstanding occurs and is continuing, then
and in every such case the Trustee or the Holders of not less than such portion
of the principal amount as may be specified in the terms of this series of all
the Securities of this series to be due and payable immediately, by a notice in
writing to the Company (and to the Trustee if given by Holders), provided that,
in the case of the Securities of this series issued to a U.S.B.H. Capital Trust,
if upon an Event of Default, the Trustee or the Holders of not less than 25% in
principal amount of the Outstanding Securities of this series fails to declare
the principal of all the Securities of this series to be immediately due and
payable, the holders of at least 25% in aggregate Liquidation Amount of the
corresponding series of Capital Securities then outstanding shall have such
right by a notice in writing to the Company and the Trustee. The Holders of a
majority in aggregate principal amount of the Outstanding Securities of these
Securities may annul such declaration and waive the default if the default
(other than the nonpayment of the principal of these Securities which has become
due solely by such acceleration) has been cured and a sum sufficient to pay all
matured installments of interest and principal due otherwise than by
acceleration has been deposited with the Trustee. Should the Holders of these
Securities fail to annul such declaration and waive such default, the holders of
a majority in aggregate Liquidation Amount of the Capital Securities shall have
such right. Upon any such declaration such specified amount of and the accrued
interest (including any Additional Interest) on all the Securities of this
series shall become immediately due and payable, provided that the payment of
principal and interest (including any Additional Interest) on such Securities
shall remain subordinated to the extent provided in Article XIII of the
Indenture.]
No reference herein to the Indenture and no provision of this Security or
of the Indenture shall alter or impair the obligation of the Company, which is
absolute and unconditional, to pay the principal of (and premium, if any) and
interest on this Security at the times, place and rate, and in the coin or
currency, herein prescribed.
As provided in the Indenture and subject to certain limitations therein set
forth, the transfer of this Security is registrable in the Securities Register,
upon surrender of this Security for registration of transfer at the office or
agency of the Company maintained pursuant to Section 10.02 of the Indenture duly
endorsed by, or accompanied by a written instrument of transfer in form
satisfactory to the Company and the Securities Registrar duly executed by, the
Holder hereof or his attorney duly authorized in writing and thereupon one or
more new Securities of this series, of authorized denominations and for the same
aggregate principal amount, will be issued to the designated transferee or
transferees. No service charge shall be made for any such registration of
transfer or exchange, but the Company may require payment of a sum sufficient to
cover any tax or other governmental charge payable in connection therewith.
Prior to due presentment of this Security for registration of transfer, the
Company, the Trustee and any agent of the Company or the Trustee shall treat the
Person in whose name this Security is registered as the owner hereof for all
purposes, whether or not this Security be overdue, and neither the Company, the
Trustee nor any such agent shall be affected by notice to the contrary.
The Securities of this series are issuable only in registered form without
coupons in denominations of $____________ and any integral multiple thereof. As
provided in the Indenture and subject to certain limitations therein set forth,
Securities of this series are exchangeable for a like aggregate principal amount
of Securities of such series of a different authorized denomination, as
requested by the Holder surrendering the same.
The Company and, by its acceptance of this Security or a beneficial
interest therein, the Holder of, and any Person that acquires a beneficial
interest in, this Security intend that such Security constitute indebtedness and
agree to treat such Security as indebtedness for all United States Federal,
state and local tax purposes.
THE INDENTURE AND THIS SECURITY SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO CONFLICTS OF
LAWS PRINCIPLES THEREOF.
SECTION 2.04. Additional Provisions Required in Global
SecuritySECTION2.04.AdditionalProvisionsRequiredinGlobalSecurity". Any Global
Security issued hereunder shall, in additional to the provisions contained in
Sections 2.02 and 2.03, bear a legend in substantially the following form:
"This Security is a Global Security within the meaning of the
Indenture hereinafter referred to and is registered in the name of The
Depository Trust Company (the "Depositary") or a nominee of the
Depositary. This Security is exchangeable for Securities registered in
the name of a person other than the Depositary or its nominee only in
the limited circumstances described in the Indenture and no transfer of
this Security (other than a transfer of this Security as a whole by the
Depositary to a nominee of the Depositary or by a nominee of the
Depositary to the Depositary or another nominee of the Depositary) may
be registered except in limited circumstances.
Unless this Security is presented by an authorized representative of
The Depositary Trust Company (55 Water Street, New York) to U.S.B.
Holding Co., Inc. or its agent for registration of transfer, exchange
or payment, and any Security issued is registered in the name of Cede &
Co. or such other name as requested by an authorized representative of
The Depository Trust Company and any payment hereon is made to Cede &
Co., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY
A PERSON IS WRONGFUL inasmuch as the registered owner hereof, Cede &
Co., has an interest herein."
SECTION 2.05. Form of Trustee's Certificate of Authentication. This is one
of the Securities referred to in the within mentioned Indenture:
THE CHASE MANHATTAN BANK
as Trustee
By:
-----------------------------
Authorized Officer
ARTICLE III
The Securities
SECTION 3.01. Title and Terms. The aggregate principal amount of Securities
which may be authenticated and delivered under this Indenture is unlimited.
The Securities may be issued in one or more series. There shall be
established in or pursuant to a Board Resolution, and set forth in an Officers'
Certificate, or established in one or more indentures supplemental hereto, prior
to the issuance of Securities of a series:
(a) the title of the securities of such series, which shall
distinguish the Securities of the series from all other Securities;
(b) the limit, if any, upon the aggregate principal amount of the
Securities of such series which may be authenticated and delivered under
this Indenture (except for Securities authenticated and delivered upon
registration of transfer of, or in exchange for, or in lieu of, other
Securities of the series pursuant to Section 3.04, 3.06, 3.07, 9.06 or
11.06); provided, however, that the authorized aggregate principal amount
of such series may be increased above such amount by a Board Resolution to
such effect;
(c) the Stated Maturity or Maturities on which the principal of the
Securities of such series is payable or the method of determination
thereof;
(d) the rate or rates, if any, at which the Securities of such series
shall bear interest, if any, the rate or rates and extent to which
Additional Interest, if any, shall be payable in respect of any Securities
of such series, the Interest Payment Dates on which such interest shall be
payable, the right, pursuant to Section 3.12 or as otherwise set forth
therein, of the Company to defer or extend an Interest Payment Date, and
the Regular Record Date for the interest payable on any Interest Payment
Date or the method by which any of the foregoing shall be determined;
(e) the place or places where the principal of (and premium, if any)
and interest on the Securities of such series shall be payable, the place
or places where the Securities of such series may be presented for
registration of transfer or exchange, and the place or places where notices
and demands to or upon the Company in respect of the Securities of such
series may be made;
(f) the period or periods within or the date or date on which, if any,
the price or prices at which and the terms and conditions upon which the
Securities of such series may be redeemed, in whole or in part, at the
option of the Company;
(g) the obligation or the right, if any, of the Company to redeem,
repay or purchase the Securities of such series pursuant to any sinking
fund, amortization or analogous provisions, or at the option of a Holder
thereof, and the period or periods within which, the prices or prices at
which, the currency or currencies (including currency unit or units) in
which and the other terms and conditions upon which Securities of the
series shall be redeemed, repaid or purchased, in whole or in part,
pursuant to such obligations;
(h) the denominations in which any Securities of such series shall be
issuable, if other than denominations of $1,000 and any integral multiple
thereof;
(i) if other than Dollars, the currency or currencies (including
currency unit or units) in which the principal of (and premium, if any) and
interest, if any, on the Securities of the series shall be payable, or in
which the Securities of the series shall be denominated and the manner of
determining the equivalent thereof in Dollars for purposes of the
definition of the term "Outstanding";
(j) the additions, modifications or deletions, if any, in the Events
of Default or covenants of the Company set forth herein with respect to the
Securities of such series;
(k) if other than the principal amount thereof, the portion of the
principal amount of Securities of such series that shall be payable upon
declaration of acceleration of the Maturity thereof;
(l) the additions or changes, if any, to this Indenture with respect
to the Securities of such series as shall be necessary to permit or
facilitate the issuance of the Securities of such series in bearer form,
registrable or not registrable as to principal, and with or without
interest coupons;
(m) any index or indices used to determine the amount of payments of
principal of and premium, if any, on the Securities of such series or the
manner in which such amounts will be determined;
(n) the issuance of a temporary Global Security representing all of
the Securities of such series and exchange of such temporary Global
Security for definitive Securities of such series;
(o) whether the Securities of the series shall be issued in whole or
in part in the form of one or more Global Securities and, in such case, the
Depositary for such Global Securities, which Depositary shall be a clearing
agency registered under the Securities Exchange Act of 1934, as amended;
(p) the appointment of any Paying Agent or Agents for the Securities
of such series;
(q) the terms of any right to convert or exchange Securities of such
series into any other securities or property of the Company, and the
additions or changes, if any, to this Indenture with respect to the
Securities of such series to permit or facilitate such conversion or
exchange;
(r) the transfer restrictions and legends required to be on the
Securities;
(s) the definitions of Amended and Restated Declaration of Trust,
Declaration of Trust and Guarantee Agreement for each series;
(t) the relative degree, if any, to which the Securities of the series
shall be senior to or be subordinated to other series of Securities in
right of payment, whether such other series of Securities are Outstanding
or not; and
(u) any other terms of the Securities of such series (which terms
shall not be inconsistent with the provisions of this Indenture).
All Securities of any one series shall be substantially identical except as
to denomination and except as may otherwise be provided herein or in or pursuant
to such Board Resolution and set forth in such Officers' Certificate or in any
such indenture supplemental hereto.
Unless otherwise provided with respect to the Securities of any series, at
the option of the Company, interest on the Securities of any series that bears
interest may be paid by (i) by mailing a check to the address of the person
entitled thereto as such address shall appear in the Securities Register or (ii)
by wire transfer in immediately available funds at such place and to such
account as may be designated by the person entitled thereto as specified in the
Securities Register.
SECTION 3.02. Denominations. The Securities of each series shall be in
registered form without coupons and shall be issuable in denominations of $1,000
and any integral multiple thereof, unless otherwise specified as contemplated by
Section 3.01.
SECTION 3.03. Execution, Authentication, Delivery and Dating. The
Securities shall be executed on behalf of the Company by its Chairman of the
Board, its President or one of its Vice Presidents under its corporate seal
reproduced or impressed thereon and attested by its Secretary or one of its
Assistant Secretaries. The signature of any of these officers on the Securities
may be manual or facsimile.
Securities bearing the manual or facsimile signatures of individuals who
were at any time the proper officers of the Company shall bind the Company,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Securities or did not
hold such offices at the date of such Securities. At any time and from time to
time after the execution and delivery of this Indenture, the Company may deliver
Securities executed by the Company to the Trustee for authentication. Securities
may be authenticated on original issuance from time to time and delivered
pursuant to such procedures acceptable to the Trustee ("Procedures") as may be
specified from time to time by Company Order. Procedures may authorize
authentication and delivery pursuant to oral instructions of the Company or a
duly authorized agent, which instructions shall be promptly confirmed in
writing.
Prior to the delivery of a Security in any such form to the Trustee for
authentication, the Company shall deliver to the Trustee the following:
(a) a Company Order requesting the Trustee's authentication and
delivery of all or a portion of the Securities of such series, and if less
than all, setting forth procedures for such authentication;
(b) the Board Resolution by or pursuant to which such form of Security
has been approved, and the Board Resolution, if any, by or pursuant to
which the terms of the Securities of such series have been approved, and,
if pursuant to a Board Resolution, an Officers' Certificate describing the
action taken;
(c) an Officers' Certificate dated the date such certificate is
delivered to the Trustee, stating that all conditions precedent provided
for in this Indenture relating to the authentication and delivery of
Securities in such form and with such terms have been complied with; and
(d) an Opinion of Counsel substantially to the effect that (i) the
form of such Securities has been duly authorized and approved in conformity
with the provisions of this Indenture; (ii) the terms of such Securities
have been duly authorized and determined in conformity with the provisions
of this Indenture, or, if such terms are to be determined pursuant to
Procedures, as defined above, when so determined such terms shall have been
duly authorized and determined in conformity with the provisions of this
Indenture; and (iii) Securities in such form when completed by appropriate
insertions and executed and delivered by the Company to the Trustee for
authentication in accordance with this Indenture, authenticated and
delivered by the Trustee in accordance with this Indenture within the
authorization as to aggregate principal amount established from time to
time by the Board of Directors and sold in the manner specified in such
Opinion of Counsel, will be the legal, valid and binding obligations of the
Company entitled to the benefits of this Indenture, subject to applicable
bankruptcy, reorganization, insolvency and similar laws generally affecting
creditors, rights, to general equitable principles and except as
enforcement thereof may be limited by (A) requirements that a claim with
respect to any Securities denominated other than in Dollars (or a Foreign
Currency or currency unit judgment in respect of such claim) be converted
into Dollars at a rate of exchange prevailing on a date determined pursuant
to applicable law or (B) governmental authority to limit, delay or prohibit
the making of payments in Foreign Currencies or currency units or payments
outside the United States, and subject to such other qualifications as such
counsel shall conclude do not materially affect the rights of Holders of
such Securities.
The Trustee shall be entitled to receive the documents referred to in
clauses (b) and (d) above only at or prior to the first request of the Company
to the Trustee to authenticate Securities of such series.
Each Security shall be dated the date of its authentication.
No Security shall be entitled to any benefit under this Indenture, or be
valid or obligatory for any purpose, unless there appears on such Security a
certificate of authentication substantially in the form provided for herein
executed by the Trustee by the manual signature of one of its authorized
officers, and such certificate upon any Security shall be conclusive evidence,
and the only evidence, that such Security has been duly authenticated and
delivered hereunder.
SECTION 3.04. Temporary Securities. Pending the preparation of definitive
Securities of any series, the Company may execute, and upon Company Order the
Trustee shall authenticate and deliver, temporary Securities which are printed,
lithographed, typewritten, mimeographed or otherwise produced, in any
denomination, substantially of the tenor of the definitive Securities of such
series in lieu of which they are issued and with such appropriate insertions,
omissions, substitutions and other variations as the officers executing such
Securities may determine, as evidenced by their execution of such Securities.
If temporary Securities of any series are issued, the Company will cause
definitive Securities of such series to be prepared without unreasonable delay.
After the preparation of definitive Securities, the temporary Securities shall
be exchangeable for definitive Securities upon surrender of the temporary
Securities at the office or agency of the Company designated for that purpose
without charge to the Holder. Upon surrender for cancellation of any one or more
temporary Securities, the Company shall execute and the Trustee shall
authenticate and deliver in exchange therefor a like principal amount of
definitive Securities of the same series of authorized denominations having the
same Original Issue Date and Stated Maturity and having the same terms as such
temporary Securities. Until so exchanged, the temporary Securities shall in all
respects be entitled to the same benefits under this Indenture as definitive
Securities.
SECTION 3.05. Global Securities. (a) Each Global Security issued under this
Indenture shall be registered in the name of the Depositary designated by the
Company for such Global Security or a nominee thereof and delivered to such
Depositary or a nominee thereof or custodian therefor, and each such Global
Security shall constitute a single Security for all purposes of this Indenture.
(b) Notwithstanding any other provision in this Indenture, no Global
Security may be exchanged in whole or in part for Securities registered, and no
transfer of a Global Security in whole or in part may be registered, in the name
of any Person other than the Depositary for such Global Security or a nominee
thereof unless (a) such Depositary advises the Trustee in writing that such
Depositary is no longer willing or able to properly discharge its
responsibilities as Depositary with respect to such Global Security, and the
Company is unable to locate a qualified successor, (b) the Company executes and
delivers to the Trustee a Company Order stating that the Company elects to
terminate the book-entry system through the Depositary, (c) there shall have
occurred and be continuing an Event of Default or (d) pursuant to the following
sentence. All or any portion of a Global Security may be exchanged for a
Security that has a like aggregate principal amount and is not a Global Security
upon 20 days' prior request made by the Depositary or its Agent Member to the
Securities Registrar.
(c) If any Global Security is to be exchanged for other Securities or
canceled in whole, it shall be surrendered by or on behalf of the Depositary or
its nominee to the Securities Registrar for exchange or cancellation as provided
in this Article III. If any Global Security is to be exchanged for other
Securities or canceled in part, or if another Security is to be exchanged in
whole or in part for a beneficial interest in any Global Security, then either
(i) such Global Security shall be so surrendered for exchange or cancellation as
provided in this Article III or (ii) the principal amount thereof shall be
reduced, subject to Section 3.06(b)(iv), or increased by an amount equal to the
portion thereof to be so exchanged or canceled, or equal to the principal amount
of such other Security to be so exchanged for a beneficial interest therein, as
the case may be, by means of an appropriate adjustment made on the records of
the Securities Registrar, whereupon the Trustee shall instruct the Depositary or
its authorized representative to make a corresponding adjustment to its records.
Upon any such surrender or adjustment of a Global Security by the Depositary,
accompanied by registration instructions and, to the extent required by Section
3.06, a Restricted Securities Certificate, the Trustee shall, subject to Section
3.05(b) and as otherwise provided in this Article III, authenticate and deliver
any Securities issuable in exchange for such Global Security (or any portion
thereof) in accordance with the instructions of the Depositary. The Trustee
shall not be liable for any delay in delivery of such instructions and may
conclusively rely on, and shall be fully protected in relying on, such
instructions.
(d) The Depositary or its nominee, as registered owner of a Global
Security, shall be the Holder of such Global Security for all purposes under
this Indenture and the Securities, and owners of beneficial interests in a
Global Security shall hold such interest pursuant to the rules and procedures of
the Depositary. Accordingly, any such owner's beneficial interests in a Global
Security shall be shown only on, and the transfer of such interest shall be
effected only through, records maintained by the Depositary or its nominee or
its Agent Members. Neither the Trustee nor the Securities Registrar shall have
any liability in respect of any transfers effected by the Depositary.
(e) The rights of the beneficial interests in a Global Security shall be
exercised only through the Depositary and shall be limited to those established
by law and agreements between such owners and the Depositary and/or its Agent
Members.
SECTION 3.06. Registration, Transfer and Exchange Generally; Certain
Transfers and Exchanges; Restricted Securities Legends. (a) The Company shall
cause to be kept at the Corporate Trust Office of the Trustee a register in
which, subject to such reasonable regulations as it may prescribe, the Company
shall provide for the registration of the Securities and of transfers of
Securities. Such register is herein sometimes referred to as the "Securities
Register". The Trustee is hereby appointed "Securities Registrar" for the
purpose of registering the Securities and transfers of Securities as herein
provided.
Upon surrender for registration of transfer of any Security at the office
or agency of the Company designated for that purpose the Company shall execute,
and the Trustee shall authenticate and deliver, in the name of the designated
transferee or transferees, one or more new Securities of the same series of any
authorized denominations, of a like aggregate principal amount, of the same
Original Issue Date and Stated Maturity and having the same terms.
At the option of the Holder, Securities may be exchanged for other
Securities of the same series of any authorized denominations, of a like
aggregate principal amount, of the same Original Issue Date and Stated Maturity
and having the same terms, upon surrender of the Securities to be exchanged at
such office or agency. Whenever any securities are so surrendered for exchange,
the Company shall execute, and the Trustee shall authenticate and deliver, the
Securities which the Holder making the exchange is entitled to receive.
All Securities issued upon any registration of transfer or exchange of
Securities shall be the valid obligations of the Company, evidencing the same
debt, and entitled to the same benefits under this Indenture, as the Securities
surrendered upon such registration of transfer or exchange.
Every Security presented or surrendered for registration of transfer or
exchange shall (if so required by the Company or the Securities Registrar) be
duly endorsed, or be accompanied by a written instrument of transfer in form
satisfactory to the Company and the Securities Registrar, duly executed by the
Holder thereof or his attorney duly authorized in writing.
No service charge shall be made to a Holder for any registration of
transfer or exchange of Securities, but the Company may require payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
connection with any registration of transfer or exchange of Securities.
Neither the Company nor the Trustee shall be required, pursuant to the
provisions of this Section, (a) to issue, register any transfer or exchange any
Security of any series during a period beginning at the opening of business 15
days before the day of selection for redemption of Securities pursuant to
Article XI and ending at the close of business on the day of mailing of notice
of redemption or (b) to transfer or exchange any Security so selected for
redemption in whole or in part, except, in the case of any Security to be
redeemed in part, any portion thereof not to be redeemed.
(b) Certain Transfers and Exchanges. Notwithstanding any other provision of
the Indenture, the registration of transfers and exchanges of Securities and
beneficial interests in a Global Capital Security of the kinds specified in this
Section 3.06(b) shall be made only in accordance with this Section 3.06(b).
(i) Non-Global Security to Global Security. if the Holder of a
Security (other than a Global Security) wishes at any time to transfer all or
any portion of such Security to a Person who wishes to take delivery thereof in
the form of a beneficial interest in a Global Security, the registration of such
transfer may be effected only in accordance with the provisions of this clause
(b)(i) and subject to the rules and procedures of the Depositary. Upon receipt
by the Securities Registrar of (A) such Security as provided in Section 3.06(a)
and instructions satisfactory to the Securities Registrar directing that a
beneficial interest in the Global Security in a specified principal amount not
greater than the principal amount of such Security be credited to a specified
Agent Member's account and (B) a Securities Certificate duly executed by such
Holder or such Holder's attorney duly authorized in writing, then the Securities
Registrar shall cancel such Security (and issue a new Security in respect of the
untransferred portion thereof) as provided in Section 3.06(a) and increase the
aggregate principal amount of the Global Security by the specified principal
amount as provided in Section 3.05(c).
(ii) Non-Global Security to Non-Global Security. A Security that is
not a Global Security may be transferred, in whole or in part, to a Person who
takes delivery in the form of another Security that is not a Global Security as
provided in Section 3.06(a); provided, that in connection with the registration
of transfer of such Security that is a Restricted Security, the Securities
Registrar shall have received a Restricted Securities Certificate duly executed
by the transferor Holder or such Holder's attorney duly authorized in writing.
(iii) Exchanges between Global Security and Non-Global Security. A
beneficial interest in a Global Security may be exchanged for a Security that is
not a Global Security as provided in Section 3.05.
(iv) Limitations Relating to Principal Amount. Notwithstanding any
other provision of this Indenture and unless otherwise specified as permitted by
Section 3.01, Securities or portions thereof may be registered for transfer or
exchanged only in blocks having an aggregate principal amount of not less than
$100,000 and integral multiples of $1,000 in excess thereof. Any transfer,
exchange or other disposition of Securities in contravention of this Section
3.06(b)(iv) shall be deemed to be void and of no legal effect whatsoever, any
such transferee shall be deemed not to be the Holder or owner of any beneficial
interest in such Securities for any purpose, including but not limited to the
receipt of interest payable on such Securities, and such transferee shall be
deemed to have no interest whatsoever in such Securities.
(c) Restricted Securities Legend. (i) Except as set forth below, all
Securities shall bear a Restricted Securities Legend, as follows:
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS.
NEITHER THIS SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE
REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR
OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION UNLESS SUCH
TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT. THE HOLDER OF THIS SECURITY BY ITS
ACCEPTANCE HEREOF AGREES TO OFFER, SELL OR OTHERWISE TRANSFER SUCH
SECURITY PRIOR TO THE DATE WHICH IS THREE YEARS AFTER THE LATER OF THE
ORIGINAL ISSUE DATE HEREOF AND THE LAST DATE ON WHICH U.S.B. HOLDING
CO., INC. (THE "CORPORATION") OR ANY AFFILIATE OF THE CORPORATION WAS
THE OWNER OF THIS SECURITY (OR ANY PREDECESSOR OF THIS SECURITY) (THE
"RESALE RESTRICTIONS TERMINATION DATE") ONLY (A) TO THE CORPORATION,
(B) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
SECURITIES ACT, (C) FOR SO LONG AS THE SECURITIES ARE ELIGIBLE FOR
RESALE PURSUANT TO RULE 144A UNDER THE SECURITIES ACT ("RULE 144A"), TO
A PERSON IT REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER" AS
DEFINED IN RULE 144A THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE
ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT
THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (D) TO AN
INSTITUTIONAL "ACCREDITED INVESTOR" WITHIN THE MEANING OF SUBPARAGRAPH
(a)(1), (2), (3) OR (7) OF RULE 501 UNDER THE SECURITIES ACT ACQUIRING
THE SECURITY FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF SUCH AN
INSTITUTIONAL "ACCREDITED INVESTOR," FOR INVESTMENT PURPOSES AND NOT
WITH A VIEW TO, OR FOR OFFER OR SALE IN CONNECTION WITH, ANY
DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT, OR (E) PURSUANT TO
ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT, SUBJECT TO THE CORPORATION'S AND THE TRUSTEE'S RIGHT
PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER PURSUANT TO CLAUSES (D) OR
(E) TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION
AND/OR OTHER INFORMATION SATISFACTORY TO EACH OF THEM IN ACCORDANCE
WITH THE AMENDED AND RESTATED DECLARATION OF TRUST, A COPY OF WHICH MAY
BE OBTAINED FROM THE CORPORATION OR THE TRUSTEE. THIS LEGEND WILL BE
REMOVED UPON THE REQUEST OF A HOLDER AFTER THE RESALE RESTRICTIONS
TERMINATION DATE.
(ii) Subject to Section 3.06(d) and to the following clauses
of this Section 3.06(c), a Security (other than a Global Security) that
does not bear a Restricted Securities Legend may be issued in exchange
for or in lieu of a Restricted Security or any portion thereof that
bears such legend if, in the Company's judgment, placing such a legend
upon such new Security is not necessary to ensure compliance with the
registration requirements of the Securities Act, and the Trustee, at
the written direction of the Company in the form of an Officers'
Certificate, shall countersign and deliver such a new Security as
provided in this Article III.
(iii) Notwithstanding the foregoing provisions of this
Section 3.06(c), a successor Security of a Security that does not bear
a Restricted Securities Legend shall not bear such form of legend
unless the Company has reasonable cause to believe that such successor
Security is a "restricted security" within the meaning of Rule 144
under the Securities Act, in which case the Trustee, at the written
direction of the Company in the form of an Officers' Certificate, shall
countersign and deliver a new Security bearing a Restricted Securities
Legend in exchange for such successor Security as provided in this
Article III.
(iv) Upon any sale or transfer of a Restricted Security
(including any Restricted Security represented by a Global Security)
pursuant to an effective registration statement under the Securities
Act or pursuant to Rule 144 under the Securities Act after such
registration ceases to be effective: (A) in the case of any Restricted
Security that is a definitive Security, the Securities Registrar shall
permit the Holder thereof to exchange such Restricted Security for a
definitive Security that does not bear the Restricted Securities Legend
and rescind the restriction on transfer of such Restricted Security;
and (B) in the case of any Restricted Security that is represented by a
Global Security, the Securities Registrar shall permit the Holder of
such Global Security to exchange such Global Security for another
Global Security that does not bear the Restricted Securities Legend.
(v) If Restricted Securities are being presented or
surrendered for transfer or exchange then there shall be (if so
required by the Trustee), (A) if such Restricted Securities are being
delivered to the Securities Registrar by a Holder for registration in
the name of such Holder, without transfer, a certification from such
Holder to that effect; or (B) if such Restricted Securities are being
transferred, (i) a certification from the transferor in a form
substantially similar to that attached hereto as Exhibit A, and (ii) if
the Company or Securities Registrar so requests, evidence reasonably
satisfactory to them as to the compliance with the restrictions set
forth in the Restricted Securities Legend.
SECTION 3.07. Mutilated, Destroyed, Lost and Stolen Securities. If any
mutilated Security is surrendered to the Trustee together with such security or
indemnity as may be required by the Company or the Trustee to save each of them
harmless, the Company shall execute and the Trustee shall authenticate and
deliver in exchange therefor a new Security of the same issue and series of like
tenor and principal amount, having the same Original Issue Date and Stated
Maturity and bearing the same Interest Rate as such mutilated Security, and
bearing a number not contemporaneously outstanding.
If there shall be delivered to the Company and to the Trustee (i) evidence
to their satisfaction of the destruction, loss or theft of any Security, and
(ii) such security or indemnity as may be required by them to save each of them
harmless, then, in the absence of notice to the Company or the Trustee that such
Security has been acquired by a bona fide purchaser, the issuing Company shall
execute and upon its request the Trustee shall authenticate and deliver, in lieu
of any such destroyed, lost or stolen Security, a new Security of the same issue
and series of like tenor and principal amount, having the same Original Issue
Date and Stated Maturity and bearing the same Interest Rate as such destroyed,
lost or stolen Security, and bearing a number not contemporaneously outstanding.
In case any such mutilated, destroyed, lost or stolen Security has become
or is about to become due and payable, the Company in its discretion may,
instead of issuing a new Security, pay such Security.
Upon the issuance of any new Security under this Section, the Company may
require the payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in relation thereto and any other expenses (including
the fees and expenses of the Trustee) connected therewith.
Every new Security issued pursuant to this Section in lieu of any
destroyed, lost or stolen Security shall constitute an original additional
contractual obligation of the Company, whether or not the destroyed, lost or
stolen Security shall be at any time enforceable by anyone, and shall be
entitled to all the benefits of this Indenture equally and proportionately with
any and all other Securities duly issued hereunder.
The provisions of this Section are exclusive and shall preclude (to the
extent lawful) all other rights and remedies with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Securities.
SECTION 3.08. Payment of Interest; Interest Rights Preserved. Interest on
any Security of any series which is payable, and is punctually paid or duly
provided for, on any Interest Payment Date, shall be paid to the Person in whose
name that Security (or one or more Predecessor Securities) is registered at the
close of business on the Regular Record Date for such interest in respect of
Securities of such series, except that, unless otherwise provided in the
Securities of such series, interest payable on the Stated Maturity of a Security
shall be paid to the Person to whom principal is paid. The initial payment of
interest on any Security of any series which is issued between a Regular Record
Date and the related Interest Payment Date shall be payable as provided in such
Security or in the Board Resolution pursuant to Section 3.01 with respect to the
related series of Securities.
Any interest on any Security which is payable, but is not timely paid or
duly provided for, on any Interest Payment Date for Securities of such series
(herein called "Defaulted Interest"), shall forthwith cease to be payable to the
registered Holder on the relevant Regular Record Date by virtue of having been
such Holder, and such Defaulted Interest may be paid by the Company, at its
election in each case, as provided in Clause (1) or (2) below:
(1) The Company may elect to make payment of any Defaulted Interest to the
Persons in whose names the Securities of such series in respect of which
interest is in default (or their respective Predecessor Securities) are
registered at the close of business on a Special Record Date for the payment of
such Defaulted Interest, which shall be fixed in the following manner. The
Company shall notify the Trustee in writing of the amount of Defaulted Interest
proposed to be paid on each Security and the date of the proposed payment, and
at the same time the Company shall deposit with the Trustee an amount of money
equal to the aggregate amount proposed to be paid in respect of such Defaulted
Interest or shall make arrangements satisfactory to the Trustee for such deposit
prior to the date of the proposed payment, such money when deposited to be held
in trust for the benefit of the Persons entitled to such Defaulted Interest as
in this Clause provided. Thereupon the Trustee shall fix a Special Record Date
for the payment of such Defaulted Interest which shall not be more than 15 days
and not less than 10 days prior to the date of the proposed payment and not less
than 10 days after the receipt by the Trustee of the notice of the proposed
payment. The Trustee shall promptly notify the Company of such Special Record
Date and, in the name and at the expense of the Company, shall cause notice of
the proposed payment of such Defaulted Interest and the Special Record Date
therefor to be mailed, first class, postage prepaid, to each Holder of a
Security of such series at the address of such Holder as it appears in the
Securities Register not less than 10 days prior to such Special Record Date. The
Trustee may, in its discretion, in the name and at the expense of the Company,
cause a similar notice to be published at least once in a newspaper, customarily
published in the English language on each Business Day and of general
circulation in the Borough of Manhattan, The City of New York, but such
publication shall not be a condition precedent to the establishment of such
Special Record Date. Notice of the proposed payment of such Defaulted Interest
and the Special Record Date therefor having been mailed as aforesaid, such
Defaulted Interest shall be paid to the Persons in whose names the Securities of
such series (or their respective Predecessor Securities) are registered on such
Special Date and shall no longer be payable pursuant to the following Clause
(2).
(2) The Company may make payment of any Defaulted Interest in any other
lawful manner not inconsistent with the requirements of any securities exchange
on which the Securities of the series in respect of which interest is in default
may be listed and, upon such notice as may be required by such exchange (or by
the Trustee if the Securities are not listed), if, after notice given by the
Company to the Trustee of the proposed payment pursuant to this Clause, such
payment shall be deemed practicable by the Trustee.
Subject to the foregoing provisions of this Section, each Security
delivered under this Indenture upon transfer of or in exchange for or in lieu of
any other Security shall carry the rights to interest accrued and unpaid, and to
accrue, which were carried by such other Security.
SECTION 3.09. Persons Deemed Owners. The Company, the Trustee and any agent
of the Company or the Trustee may treat the Person in whose name any Security is
registered as the owner of such Security for the purpose of receiving payment of
principal of and (subject to Section 3.08) interest on such Security and for all
other purposes whatsoever, whether or not such Security be overdue, and neither
the Company, the Trustee nor any agent of the Company or the Trustee shall be
affected by notice to the contrary. No holder of any beneficial interest in any
Global Security held on its behalf by a Depositary shall have any rights under
this Indenture with respect to such Global Security, and such Depositary may be
treated by the Company, the Trustee and any agent of the Company or the Trustee
as the owner of such Global Security for all purposes whatsoever.
Notwithstanding the foregoing, nothing herein shall prevent the Company or the
Trustee from giving effect to any written certification, proxy, or other
authorization furnished by a Depositary or impair, as between the Depositary and
such holders of beneficial interests, the operation of customary practices
governing the exercise of the rights of the Depositary (or its nominee) as
Holder of any Security.
SECTION 3.10. Cancellation. All Securities surrendered for payment,
redemption, transfer or exchange shall, if surrendered to any Person other than
the Trustee, be delivered to the Trustee, and any such Securities and Securities
surrendered directly to the Trustee for any such purpose shall be promptly
canceled by it. The Company may at any time deliver to the Trustee for
cancellation any Securities previously authenticated and delivered hereunder
which the Company may have acquired in any manner whatsoever, and all Securities
so delivered shall be promptly canceled by the Trustee. No Securities shall be
authenticated in lieu of or in exchange for any Securities canceled as provided
in this Section, except as expressly permitted by this Indenture. All canceled
Securities shall be destroyed by the Trustee and the Trustee shall deliver to
the Company a certificate of such destruction.
SECTION 3.11. Computation of Interest. Except as otherwise specified as
contemplated by Section 3.01 for Securities of any series, interest on the
Securities of each series for any period shall be computed on the basis of a
360-day year of twelve 30-day months and interest on the Securities of each
series for any partial period shall be computed on the basis of the number of
days elapsed in a 360-day year of twelve 30-day months.
SECTION 3.12. Deferrals of Interest Payment Dates. If specified as
contemplated by Section 3.01 with respect to the Securities of a particular
series, provided that no Event of Default has occurred and is continuing with
respect to the Securities, the Company shall have the right, at any time or from
time to time during the term of such series, to defer the payment of interest on
such Securities for such period or periods as may be specified as contemplated
by Section 3.01 (each, an "Extension Period") during which Extension Periods the
Company shall have the right to make partial payments of interest on any
Interest Payment Date. No Extension Period shall end on a date other than an
Interest Payment Date. At the end of any such Extension Period the Company shall
pay all interest then accrued and unpaid on the Securities (together with
Additional Interest thereon, if any, at the rate specified for the Securities of
such series to the extent permitted by applicable law), provided, however, that
no Extension Period may extend beyond the Maturity of these Securities. During
any such Extension Period, the Company shall not (i) declare or pay dividends or
distributions on, or redeem, purchase, acquire or make a liquidation payment
with respect to, any of the Company's capital stock (which includes common and
preferred stock), or (ii) make any payment of principal, interest or premium, if
any, on or repay, repurchase or redeem any debt securities of the Company
(including Other Debentures) that rank pari passu with or junior in interest to
the Securities of such series or (iii) make any guarantee payments with respect
to any guarantee by the Company of the debt securities of any Subsidiary of the
Company (including Other Guarantees) if such guarantee ranks pari passu with or
junior in interest to the Securities of such series (other than (a) dividends or
distributions in common stock of the Company, (b) any declaration of a dividend
in connection with the implementation of a stockholders' rights plan, or the
issuance of stock under any such plan in the future, or the redemption or
repurchase of any such rights pursuant thereto, (c) payments under the
applicable U.S.B. Holding Co., Inc. Guarantee, (d) purchases or acquisitions of
shares of the Company's Common Stock in connection with the satisfaction by the
Company of its obligations under any employee benefit plan or other contractual
obligation of the Company (other than a contractual obligation ranking pari
passu with or junior to these Securities, (e) as a result of a reclassification
of the Company's capital stock or the exchange or conversion of one class or
series of the Company's capital stock for another class or series of the
Company's capital stock, or (f) the purchase of fractional interests in shares
of the Company's capital stock pursuant to the conversion or exchange provisions
of such capital stock or the security being converted or exchanged). Prior to
the termination of any such Extension Period, the Company may further extend
such Extension Period; provided, however, that no Extension Period shall exceed
the period or periods specified in such Securities or extend beyond the Maturity
of such Securities. Upon termination of any Extension Period and upon the
payment of all accrued and unpaid interest and any Additional Interest 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 shall give
the Holders of the Securities of such series and the Trustee and the Property
Trustee notice of its election to begin any such Extension Period (or an
extension thereof) at least five Business Days prior to the Interest Payment
Date or, with respect to the Securities of a series issued to a U.S.B.H. Capital
Trust, prior to the earlier of (i) the date the Distributions on the Trust
Securities of such U.S.B.H. Capital Trust would have been payable except for the
election to begin or extend such Extension Period or (ii) the date the
Administrative Trustees of such U.S.B.H. Capital Trust are required to give
notice to any automated quotation system or to holders of Trust Securities of
the record date or the date such Distributions are payable, but in any event not
less than 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.
SECTION 3.13. Agreed Tax Treatment. Each Security issued hereunder shall
provide that the Company and, by its acceptance of a Security or a beneficial
interest therein, the Holder of, and any Person that acquires a beneficial
interest in, such Security intend that such Security constitute indebtedness and
agree to treat such Security as indebtedness for all United States federal,
state and local tax purposes.
SECTION 3.14. CUSIP Numbers. The Company in issuing the Securities may use
"CUSIP" numbers (if then generally in use), and, if so, the Trustee shall use
"CUSIP" numbers in notices of redemption or other related material as a
convenience to Holders; provided, however, that any such notice or other related
material may state that no representation is made as to the correctness of such
numbers either as printed on the Securities or as contained in any notice of a
redemption or other related material and that reliance may be placed only on the
other identification numbers printed on the Securities, and any such redemption
shall not be affected by any defect in or omission of such numbers. The Company
will promptly notify the Trustee of any change in the CUSIP numbers.
ARTICLE IV
Satisfaction and Discharge
SECTION 4.01. Satisfaction and Discharge of Indenture. This Indenture shall
cease to be of further effect (except as to (i) any surviving rights of
transfer, substitution and exchange of Securities, (ii) rights hereunder of
Holders to receive payments of principal of (and premium, if any) and interest
on the Securities and other rights, duties and obligations of the Holders as
beneficiaries hereof with respect to the amounts, if any, deposited with the
Trustee pursuant to this Article IV and (iii) the rights and obligations of the
Trustee hereunder), and the Trustee, on demand of and at the expense of the
Company, shall execute proper instruments acknowledging satisfaction and
discharge of this Indenture, when
(1) either
(A) all Securities theretofore authenticated and delivered (other than
(i) Securities which have been destroyed, lost or stolen and which have
been replaced or paid as provided in Section 3.07 and (ii) Securities for
whose payment money has theretofore been deposited in trust or segregated
and held in trust by the Company and thereafter repaid to the Company or
discharged from such trust, as provided in Section 10.03) have been
delivered to the Trustee for cancellation; or
(B) all such Securities not theretofore delivered to the Trustee for
cancellation
(i) have become due and payable, or
(ii) will become due and payable at their Stated Maturity within
one year of the date of deposit,
and the Company, in the case of Clause (B)(i) or (B)(ii) above, has
deposited or caused to be deposited with the Trustee as trust funds in
trust for such purpose an amount in the currency or currencies in which the
Securities of such series are payable sufficient to pay and discharge the
entire indebtedness on such Securities not theretofore delivered to the
Trustee for cancellation, for principal (and premium, if any) and interest
(including any Additional Interest) to the date of such deposit (in the
case of Securities which have become due and payable) or to the Stated
Maturity;
(2) the Company has paid or caused to be paid all other sums payable
hereunder by the Company; and
(3) the Company has delivered to the Trustee an Officers' Certificate
and an Opinion of Counsel each stating that all conditions precedent herein
provided for relating to the satisfaction and discharge of this Indenture
have been complied with.
Notwithstanding the satisfaction and discharge of this Indenture, the
obligations of the Company to the Trustee under Section 6.07 and, if money shall
have been deposited with the Trustee pursuant to subclause (B) of clause (1) of
this Section, the obligations of the Trustee under Section 4.02 and the last
paragraph of Section 10.03 shall survive.
SECTION 4.02. Application of Trust Money. Subject to the provisions of the
last paragraph of Section 10.03, all money deposited with the Trustee pursuant
to Section 4.01, shall be held in trust and applied by the Trustee, in
accordance with the provisions of the Securities and this Indenture, to the
payment, either directly or through any Paying Agent (including the Company
acting as its own Paying Agent) as the Trustee may determine, to the Persons
entitled thereto, of the principal (and premium, if any) and interest for the
payment of which such money or obligations have been deposited with or received
by the Trustee; provided, however, that such moneys need not be segregated from
other funds except to the extent required by law.
ARTICLE V
Remedies
SECTION 5.01. Events of Default. "Event of Default", wherever used herein
with respect to the Securities of any series, means any one of the following
events (whatever the reason for such Event of Default and whether it shall be
voluntary or involuntary or be effected by operation of law or pursuant to any
judgment, decree or order of any court or any order, rule or regulation of any
administrative or governmental body):
(1) default in the payment of any interest upon any Security of that
series, including any Additional Interest in respect thereof, when it
becomes due and payable, and continuance of such default for a period of 30
days (subject to the deferral of any due date in the case of an Extension
Period); or
(2) default in the payment of the principal of (or premium, if any,
on) any Security of that series when due, whether at its Maturity, upon
redemption, by declaration of acceleration or otherwise; or
(3) 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 the performance of which or the breach of which 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 outstanding principal
amount of the Securities of that series a written notice specifying such
default or breach and requiring it to be remedied; or
(4) the entry or a decree or order by a court having jurisdiction in
the premises adjudging the Company a bankrupt or insolvent, or approving as
properly filed a petition seeking reorganization, arrangement, adjustment
or composition of or in respect of the Company under any applicable Federal
or State bankruptcy, insolvency, reorganization or other similar law, or
appointing a receiver, liquidator, assignee, trustee, sequestrator (or
other similar official) of the Company or of any substantial part of its
property or ordering the winding up or liquidation of its affairs, and the
continuance of any such decree or order unstayed and in effect for a period
of 60 consecutive days; or
(5) the institution by the Company of proceedings to be adjudicated a
bankrupt or insolvent, or the consent by it to the institution of
bankruptcy or insolvency proceedings against it, or the filing by it of a
petition or answer or consent seeking reorganization or relief under any
applicable Federal or State bankruptcy, insolvency, reorganization or other
similar law, or the consent by it to the filing of any such petition or to
the appointment of a receiver, liquidator, assignee, trustee, sequestrator
(or other similar official) of the Company or of any substantial part of
its property, or the making by it of an assignment for the benefit for
creditors, or the admission by it in writing of its inability to pay its
debts generally as they become due and its willingness to be adjudicated a
bankrupt, or the taking of corporate action by the Company in furtherance
of any such action; or
(6) in respect of a series issued to a U.S.B.H. Capital Trust, the
voluntary or involuntary dissolution, winding-up or termination of a
U.S.B.H. Capital Trust, except in connection with the distribution of the
Securities to the holders of Trust Securities in liquidation of such
U.S.B.H. Capital Trust, the redemption of all the Trust Securities of a
U.S.B.H. Capital Trust, or certain mergers, consolidations or
amalgamations, each as permitted by the applicable Trust Agreement; or
(7) any other Event of Default with respect to Securities of that
series as may be specified pursuant to Section 3.01 hereof.
SECTION 5.02. Acceleration of Maturity; Rescission and Annulment. If an
Event of Default with respect to Securities of any series at the time
Outstanding occurs and is continuing, then and in every such case the Trustee or
the Holders of not less than 25% in principal amount of the Outstanding
Securities of that series may declare the principal amount (or, if the
Securities of that series are Discount Securities, such portion of the principal
amount as may be specified in the terms of that series) of all the Securities of
that series to be due and payable immediately, by a notice in writing to the
Company (and to the Trustee if given by Holders), provided, however, that, in
the case of the Securities of a series issued to a U.S.B.H. Capital Trust, if,
upon an Event of Default, the Trustee or the Holders of not less than 25% in
principal amount of the Outstanding Securities of that series fail to declare
the principal of all the Securities of that series to be immediately due and
payable, the holders of at least 25% in aggregate Liquidation Amount of the
corresponding series of Capital Securities then outstanding shall have such
right by a notice in writing to the Company and the Trustee. The Holders of a
majority in aggregate principal amount of the Outstanding Securities of these
Securities may annul such declaration and waive the default if the default
(other than the nonpayment of the principal of these Securities which has become
due solely by such acceleration) has been cured and a sum sufficient to pay all
matured installments of interest and principal due otherwise than by
acceleration has been deposited with the Trustee. Should the Holders of these
Securities fail to annul such declaration and waive such default, the holders of
a majority in aggregate Liquidation Amount of the Capital Securities shall have
such right. Upon any such declaration such principal amount (or specified
amount) of and the accrued interest (including any Additional Interest) on all
the Securities of such series shall become immediately due and payable,
provided, however, that the payment of principal and interest (including any
Additional Interest) on such Securities shall remain subordinated to the extent
provided in Article XIII.
At any time after such a declaration of acceleration with respect to
Securities of any series has been made and before a judgment or decree for
payment of the money due has been obtained by the Trustee as hereinafter in this
Article provided, the Holders of a majority in principal amount of the
Outstanding Securities of that series, by written notice to the Company and the
Trustee, may rescind and annul such declaration and its consequences if:
(1) the Company has paid or deposited with the Trustee a sum
sufficient to pay:
(A) all overdue installments of interest (including any
Additional Interest) on all Securities of that series,
(B) the principal of (and premium, if any, on) any Securities of
that series which have become due otherwise than by such declaration
of acceleration and interest thereon at the rate borne by the
Securities, and
(C) all sums paid or advanced by the Trustee hereunder and the
reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel.
(2) all Events of Default with respect to Securities of that series,
other than the nonpayment of the principal of Securities of that series
which has become due solely by such acceleration, have been cured or waived
as provided in Section 5.13.
The Holders of a majority in aggregate outstanding principal amount of the
Securities of a series affected thereby may, on behalf of the Holders of all the
Securities of such series, waive any past default, except a default in the
payment of principal of (or premium, if any) or interest (unless such default
has been cured and a sum sufficient to pay all matured installments of interest
and principal due otherwise than by acceleration has been deposited with the
Trustee) or a default in respect of a covenant or provision which under this
Indenture cannot be modified or amended without the consent of the Holder of
each outstanding Security of such series and, in the case of Securities of a
series issued to a U.S.B.H. Capital Trust, should the holders of such Securities
fail to annul such declaration and waive such default, the holders of a majority
in aggregate Liquidation Amount of the related series of Capital Securities
shall have such right. The Company is required to file annually with the Trustee
a certificate as to whether or not the Company is in compliance with all the
conditions and covenants applicable to it under this Indenture.
No such recession shall affect any subsequent default or impair any right
consequent thereon.
Upon receipt by the Trustee of written notice declaring such an
acceleration, or rescission and annulment thereof, with respect to Securities of
a series all or part of which is represented by a Global Security, a record date
shall be established for determining Holders of Outstanding Securities of such
series entitled to join in such notice, which record date shall be at the close
of business on the day the Trustee receives such notice. The Holders on such
record date, or their duly designated proxies, and only such Persons, shall be
entitled to join in such notice, whether or not such Holders remain Holders
after such record date; provided, however, that, unless such declaration of
acceleration, or rescission and annulment, as the case may be, shall have become
effective by virtue of the requisite percentage having joined in such notice
prior to the day which is 90 days after such record date, such notice of
declaration of acceleration, or rescission and annulment, as the case may be,
shall automatically and without further action by any Holder be canceled and of
no further effect. Nothing in this paragraph shall prevent a Holder, or a proxy
of a Holder, from giving, after expiration of such 90-day period, a new written
notice of declaration of acceleration, or rescission and annulment thereof, as
the case may be, that is identical to a written notice which has been canceled
pursuant to the proviso to the preceding sentence, in which event a new record
date shall be established pursuant to the provisions of this Section 5.02.
SECTION 5.03. Collection of Indebtedness and Suits for Enforcement by
Trustee. The Company covenants that if:
(1) default is made in the payment of any installment of interest
(including any Additional Interest) on any Security when such interest
becomes due and payable and such default continues for a period of 30 days,
or
(2) default is made in the payment of the principal of (and premium,
if any, on) any Security at the Maturity thereof,
the Company will, upon demand of the Trustee, pay to the Trustee, for the
benefit of the Holders of such Securities, the whole amount then due and payable
on such Securities for principal, including any sinking fund payment or
analogous obligations (and premium, if any) and interest (including any
Additional Interest); and, in addition thereto, all amounts owing to the Trustee
under Section 6.07 and Section 10.06.
If the Company fails to pay such amounts forthwith upon such demand, the
Trustee, in its own name and as trustee of an express trust, may institute a
judicial proceeding for the collection of the sums so due and unpaid, and may
prosecute such proceeding to judgment or final decree, and may enforce the same
against the Company or any other obligor upon the Securities and collect the
moneys adjudged or decreed to be payable in the manner provided by law out of
the property of the Company or any other obligor upon the Securities, wherever
situated.
If an Event of Default with respect to Securities of any series occurs and
is continuing, the Trustee may in its discretion proceed to protect and enforce
its rights and the rights of the Holders of Securities of such series by such
appropriate judicial proceedings as the Trustee shall deem most effectual to
protect and enforce any such rights, whether for the specific enforcement of any
covenant or agreement in this Indenture or in aid of the exercise of any power
granted herein, or to enforce any other proper remedy.
SECTION 5.04. Trustee May File Proofs of Claim. In case of the pendency of
any receivership, insolvency, liquidation, bankruptcy, reorganization,
arrangement, adjustment, composition or other judicial proceeding relative to
the Company or any other obligor upon the Securities or the property of the
Company or of such other obligor or their creditors,
(a) the Trustee (irrespective of whether the principal of the
Securities of any series shall then be due and payable as therein expressed
or by declaration or otherwise and irrespective of whether the Trustee
shall have made any demand on the Company for the payment of overdue
principal (and premium, if any) or interest (including any Additional
Interest)) shall be entitled and empowered, by intervention in such
proceeding or otherwise,
(i) to file and prove a claim for the whole amount of principal
(and premium, if any) and interest (including any Additional Interest)
owing and unpaid in respect to the Securities and to file such other
papers or documents as may be necessary or advisable and to take any
and all actions as are authorized under the Trust Indenture Act in
order to have the claims of the Holders and any predecessor to the
Trustee under Section 6.07 and of the Holders allowed in any such
judicial proceedings; and
(ii) in particular, the Trustee shall be authorized to collect
and receive any moneys or other property payable or deliverable on any
such claims and to distribute the same in accordance with Section
5.06; and
(b) any custodian, receiver, assignee, trustee, liquidator,
sequestrator (or other similar official) in any such judicial proceeding is
hereby authorized by each Holder to make such payments to the Trustee for
distribution in accordance with Section 5.06, and in the event that the
Trustee shall consent to the making of such payments directly to the
Holders, to pay to the Trustee any amount due to it and any predecessor
Trustee under Section 6.07.
Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder any plan of
reorganization, arrangement, adjustment or composition affecting the Securities
or the rights of any Holder thereof, or to authorize the Trustee to vote in
respect of the claim of any Holder in any proceeding; provided, however, that
the Trustee may, on behalf of the Holders, vote for the election of a trustee in
bankruptcy or similar official and be a member of a creditors' or other similar
committee.
SECTION 5.05. Trustee May Enforce Claim Without Possession of Securities.
All rights of action and claims under this Indenture or the Securities may be
prosecuted and enforced by the Trustee without the possession of any of the
Securities or the production thereof in any proceeding relating thereto, and any
such proceeding instituted by the Trustee shall be brought in its own name as
trustee of an express trust, and any recovery of judgment shall, after provision
for the payment of all the amounts owing the Trustee and any predecessor Trustee
under Section 6.07, its agents and counsel, be for the ratable benefit of the
Holders of the Securities in respect of which such judgment has been recovered.
SECTION 5.06. Application of Money Collected. Any money or property
collected or to be applied by the Trustee with respect to a series of Securities
pursuant to this Article shall be applied in the following order, at the date or
dates fixed by the Trustee and, in case of the distribution of such money or
property on account of principal (or premium, if any) or interest (including any
Additional Interest), upon presentation of the Securities and the notation
thereon of the payment if only partially paid and upon surrender thereof if
fully paid:
First: to the payment of all amounts due the Trustee and any
predecessor Trustee under Section 6.07;
Second: to the payment of the amounts then due and unpaid upon such
series of Securities for principal (and premium, if any) and interest
(including any Additional Interest), in respect of which or for the benefit
of which such money has been collected, ratably, without preference or
priority of any kind, according to the amounts due and payable on such
series of Securities for principal (and premium, if any) and interest
(including any Additional Interest), respectively; and
Third: the balance, if any, to the Person or Persons entitled thereto.
SECTION 5.07. Limitation on Suits. No Holder of any Securities of any
series shall have any right to institute any proceeding, judicial or otherwise,
with respect to this Indenture or for the appointment of a receiver, assignee,
trustee, liquidator, sequestrator (or other similar official) or for any other
remedy hereunder, unless:
(1) such Holder has previously given written notice to the Trustee of
a continuing Event of Default with respect to the Securities of that
series;
(2) the Holders of not less than 25% in principal amount of the
Outstanding Securities of that series shall have made written request to
the Trustee to institute proceedings in respect of such Event of Default in
its own name as Trustee hereunder;
(3) such Holder or Holders have offered to the Trustee reasonable
indemnity against the costs, expenses and liabilities to be incurred in
compliance with such request;
(4) the Trustee for 60 days after its receipt of such notice, request
and offer of indemnity has failed to institute any such proceeding; and
(5) no direction inconsistent with such written request has been given
to the Trustee during such 60-day period by the Holders of a majority in
principal amount of the Outstanding Securities of that series;
it being understood and intended that no one or more of such Holders shall have
any right in any manner whatever by virtue of, or by availing itself of, any
provision of this Indenture to affect, disturb or prejudice the rights of any
other Holders of Securities, or to obtain or to seek to obtain priority or
preference over any other of such Holders or to enforce any right under this
Indenture, except in the manner herein provided and for the equal and ratable
benefit of all such Holders.
SECTION 5.08. Unconditional Right of Holders to Receive Principal, Premium
and Interest. Notwithstanding any other provision in this Indenture, the Holder
of any Security shall have the right which is absolute and unconditional to
receive payment of the principal of (and premium, if any) and (subject to
Section 3.08) interest (including any Additional Interest) on such Security on
the respective Stated Maturities expressed in such Security and to institute
suit for the enforcement of any such payment, and such right shall not be
impaired without the consent of such Holder. In the case of Securities of a
series issued to a U.S.B.H. Capital Trust, any holder of the corresponding
series of Capital Securities shall have the right, upon the occurrence of an
Event of Default described in Section 5.01(l) or 5.01(2) hereof, to institute a
suit directly against the Company for enforcement of payment to such Holder of
principal of (and premium, if any) and (subject to Section 3.08) interest
(including any Additional Interest) on the Securities having a principal amount
equal to the aggregate Liquidation Amount of the Capital Securities of the
corresponding series held by such Holder. Notwithstanding any payments made to a
holder of Capital Securities by the Company in connection with a suit directly
against the Company, the Company shall remain obligated to pay the principal of
or interest on the Securities, and the Company shall be subrogated to the rights
of the holder of such Capital Securities with respect to payments on the Capital
Securities to the extent of any payments made by the Company to such holder in
any suit directly against the Company.
The holders of the Capital Securities will not be able to exercise directly
any remedies, other than those set forth in this Section 5.08, available to the
holders of the Securities unless there shall have been an Event of Default under
the Trust Agreement.
SECTION 5.09. Restoration of Rights and Remedies. If the Trustee or any
Holder has instituted any proceeding to enforce any right or remedy under this
Indenture and such proceeding has been discontinued or abandoned for any reason,
or has been determined adversely to the Trustee or to such Holder, then and in
every case the Company, the Trustee and the Holders shall, subject to any
determination in such proceeding, be restored severally and respectively to
their former positions hereunder, and thereafter all rights and remedies of the
Trustee and the Holders shall continue as though no such proceeding had been
instituted.
SECTION 5.10. Rights and Remedies Cumulative. Except as otherwise provided
in the last paragraph of Section 3.07, no right or remedy herein conferred upon
or reserved to the Trustee or to the Holders is intended to be exclusive of any
other right or remedy, and every right and remedy shall, to the extent permitted
by law, be cumulative and in addition to every right and remedy given hereunder
or now or hereafter existing at law or in equity or otherwise. The assertion or
employment of any right or remedy hereunder, or otherwise, shall not prevent the
concurrent assertion or employment of any other appropriate right or remedy.
SECTION 5.11. Delay or Omission Not Waiver. Except as otherwise provided in
the last paragraph of Section 3.07, no delay or omission of the Trustee or of
any Holder of any Security to exercise any right or remedy accruing upon any
Event of Default shall impair any such right or remedy or constitute a waiver of
any such Event of Default or an acquiescence therein.
Every right and remedy given by this Article or by law to the Trustee or to
the Holders may be exercised from time to time, and as often as may be deemed
expedient, by the Trustee or by the Holders as the case may be.
SECTION 5.12. Control by Holders. The Holders of a majority in principal
amount of the Outstanding Securities of any series shall have the right to
direct the time, method and place of conducting any proceeding for any remedy
available to the Trustee or exercising any trust or power conferred on the
Trustee, with respect to the Securities of such series, provided that:
(1) such direction shall not be in conflict with any rule of law or
with this Indenture or unduly prejudicial to the rights of other Holders
and would not subject the Trustee to personal liability; and
(2) the Trustee may take any other action deemed proper by the Trustee
which is not inconsistent with such direction.
Upon receipt by the Trustee of any written notice directing the time,
method or place of conducting any such proceeding or exercising any such trust
or power, with respect to Securities of a series all or part of which is
represented by a Global Security, a record date shall be established for
determining Holders of Outstanding Securities of such series entitled to join in
such notice, which record date shall be at the close of business on the day the
Trustee receives such notice. The Holders on such record date, or their duly
designated proxies, and only such Persons, shall be entitled to join in such
notice, whether or not such Holders remain Holders after such record date;
provided, however, that, unless the Holders of a majority in principal amount of
the Outstanding Securities of such series shall have joined in such notice prior
to the day which is 90 days after such record date, such notice shall
automatically and without further action by any Holder be canceled and of no
further effect. Nothing in this paragraph shall prevent a Holder, or a proxy of
a Holder, from giving, after expiration of such 90-day period, a new notice
identical to a notice which has been canceled pursuant to the proviso to the
preceding sentence, in which event a new record date shall be established
pursuant to the provisions of this Section 5.12.
SECTION 5.13. Waiver of Past Defaults. The Holders of not less than a
majority in principal amount of the Outstanding Securities of any series may on
behalf of the Holders of all the Securities of such series waive any past
default hereunder and its consequences with respect to such series except a
default:
(1) in the payment of the principal of (or premium, if any) or
interest (including any Additional Interest) on any Security of such
series; or
(2) in respect of a covenant or provision hereof which under Article
IX cannot be modified or amended without the consent of the Holder or each
Outstanding Security of such series affected.
Upon any such waiver, such default shall cease to exist, and any Event of
Default arising therefrom shall be deemed to have been cured, for every purpose
of this Indenture; but no such waiver shall extend to any subsequent or other
default or impair any right consequent thereon.
SECTION 5.14. Undertaking for Costs. All parties to this Indenture agree,
and each Holder of any Security by his acceptance thereof shall be deemed to
have agreed, that any court may in its discretion require, in any suit for the
enforcement of any right or remedy under this Indenture, or in any suit against
the Trustee for any action taken or omitted by it as Trustee, the filing by any
party litigant in such suit of an undertaking to pay the costs of such suit, and
that such court may in its discretion assess reasonable costs, including
reasonable attorneys' fees, against any party litigant in such suit, having due
regard to the merits and good faith of the claims or defenses made by such party
litigant; but the provisions of this Section shall not apply to any suit
instituted by the Trustee, to any suit instituted by any Holder, or group of
Holders, holding in the aggregate more than 10% in principal amount of the
Outstanding Securities of any series, or to any suit instituted by any Holder
for the enforcement of the payment of the principal of (or premium, if any) or
interest (including any Additional Interest) on any Security on or after the
respective Stated Maturities expressed in such Security.
SECTION 5.15. Waiver of Usury, Stay or Extension Laws. The Company
covenants (to the extent that it may lawfully do so) that it will not at any
time insist upon, or plead, or in any manner whatsoever claim or take the
benefit or advantage of, any usury, stay or extension law wherever enacted, now
or at any time hereafter in force, which may affect the covenants or the
performance of this Indenture; and the Company (to the extent that it may
lawfully do so) hereby expressly waives all benefit or advantage of any such
law, and covenants that it will not hinder, delay or impede the execution of any
power herein granted to the Trustee, but will suffer and permit the execution of
every such power as though no such law had been enacted.
SECTION 5.16. Option to Waive Certain Rights. Any beneficiary of any right
granted under this Indenture shall have the option to waive such right, unless
expressly prohibited under this Indenture.
SECTION 5.17. Tax Treatment of the Junior Subordinated Debt Securities.
Each beneficial owner of a Trust Security by acceptance of a beneficial interest
in the Trust Security agrees to treat the Junior Subordinated Debt Securities as
indebtedness for all U.S. federal, state and local tax purposes.
ARTICLE VI
The Trustee
SECTION 6.01. Certain Duties and Responsibilities. (a) Except during the
continuance of an Event of Default:
(1) the Trustee undertakes to perform such duties and only such duties
as are specifically set forth in this Indenture, and no implied covenants
or obligations shall be read into this Indenture against the Trustee; and
(2) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness of
the opinions expressed therein, upon certificates or opinions furnished to
the Trustee and conforming to the requirements of this Indenture; but in
the case of any such certificates or opinions which by any provisions
hereof are specifically required to be furnished to the Trustee, the
Trustee shall be under a duty to examine the same to determine whether or
not they conform to the requirements of this Indenture.
(b) In case an Event of Default has occurred and is continuing, the
Trustee shall exercise such of the rights and powers vested in it by this
Indenture, and use the same degree of care and skill in their exercise, as a
prudent person would exercise or use under the circumstances in the conduct of
his own affairs.
(c) No provision of this Indenture shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent failure
to act, or its own willful misconduct except that:
(i) this Subsection shall not be construed to limit the effect of
Subsection (a) of this Section;
(ii) the Trustee shall not be liable for any error of judgment made in
good faith by a Responsible Officer, unless it shall be proved that the
Trustee was negligent in ascertaining the pertinent facts; and
(iii) the Trustee shall not be liable with respect to any action taken
or omitted to be taken by it in good faith in accordance with the direction
of Holders pursuant to Section 5.12 hereof.
(d) No provision of this Indenture shall require the Trustee to expend
or risk its own funds or otherwise incur any financial liability in the
performance of any of its duties hereunder, or in the exercise of any of its
rights or powers, if there shall be grounds for believing that repayment of such
funds or indemnity satisfactory to its against such risk or liability is not
assured to it.
(e) Whether or not therein expressly so provided, every provision of
this Indenture relating to the conduct or affecting the liability of or
affording protection to the Trustee shall be subject to the provisions of this
Section.
SECTION 6.02. Notice of Defaults. Within 90 days after actual knowledge by
a Responsible Officer of the Trustee of the occurrence of any default hereunder
with respect to the Securities of any series, the Trustee shall transmit by mail
to all Holders of Securities of such series, as their names and addresses appear
in the Securities Register, notice of such default hereunder known to a
Responsible Officer of the Trustee, unless such default shall have been cured or
waived; provided, however, that, except in the case of a default in the payment
of the principal of (or premium, if any) or interest (including any Additional
Interest) on any Security of such series, the Trustee shall be fully protected
in withholding such notice if and so long as the board of directors, the
executive committee or a trust committee of directors and/or Responsible
Officers of the Trustee in good faith determines that the withholding of such
notice is in the interests of the Holders of Securities of such series; and
provided, further, however, that, in the case of any default of the character
specified in Section 5.01(3), no such notice to Holders of Securities of such
series shall be given until at least 30 days after the occurrence thereof. For
the purpose of this Section, the term "default" means any event which is, or
after notice or lapse of time or both would become, an Event of Default with
respect to Securities of such series.
SECTION 6.03. Certain Rights of Trustee. Subject to the provisions of
Section 6.01:
(a) the Trustee may conclusively rely and shall be fully protected in
acting or refraining from acting upon any resolution, certificate,
statement, instrument, opinion, report, notice, request, direction,
consent, order, bond, debenture, Security or other paper or document
believed by it to be genuine and to have been signed or presented by the
proper party or parties, and, except as provided in Section 6.01(a) hereof,
the Trustee need not investigate any fact or matter stated in the document;
(b) any request or direction of the Company mentioned herein shall be
sufficiently evidenced by a Company Request or Company Order and any
resolution of the Board of Directors may be sufficiently evidenced by a
Board Resolution;
(c) whenever in the administration of this Indenture the Trustee shall
deem it desirable that a matter be proved or established prior to taking,
suffering or omitting any action hereunder, the Trustee (unless other
evidence be herein specifically prescribed) shall be entitled to receive
and may, in the absence of bad faith on its part, conclusively rely upon an
Officers' Certificate;
(d) the Trustee may consult with counsel and the advice of such
counsel or any Opinion of Counsel shall be full and complete authorization
and protection in respect of any action taken, suffered or omitted by it
hereunder in good faith and in reliance thereon;
(e) the Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request or direction
of any of the Holders pursuant to this Indenture, unless such Holders shall
have offered to the Trustee security or indemnity satisfactory to it
against the costs, expenses and liabilities which might be incurred by it
in compliance with such request or direction;
(f) the Trustee shall not be bound to make any investigation into the
facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order,
bond, indenture, Security or other paper or document, but the Trustee in
its discretion may make such inquiry or investigation into such facts or
matters as it may see fit, and, if the Trustee shall determine to make such
inquiry or investigation, it shall be entitled to examine the books,
records and premises of the Company, personally or by agent or attorney;
(g) the Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys and the Trustee shall not be responsible for any misconduct or
negligence on the part of any agent or attorney appointed with due care by
it hereunder;
(h) the Trustee shall not be under any obligation to take any action
that is discretionary under the provisions of this Indenture;
(i) the Trustee shall not be charged with knowledge of any Event of
Default unless either (1) a Responsible Officer of the Trustee shall have
actual knowledge or (2) the Trustee shall have received notice thereof in
accordance with Section 1.05(l) hereof from the Company or a Holder; and
(j) no permissive power or authority available to the Trustee shall be
construed as a duty.
SECTION 6.04. Not Responsible for Recitals or Issuance of Securities. The
recitals contained herein and in the Securities, except the Trustee's
certificates of authentication, shall be taken as the statements of the Company,
and the Trustee assumes no responsibility for their correctness. The Trustee
makes no representations as to the validity or sufficiency of this Indenture or
of the Securities or any offering or disclosure materials prepared in connection
therewith. The Trustee shall not be accountable for the use or application by
the Company of the Securities or the proceeds thereof.
SECTION 6.05. May Hold Securities. The Trustee, any Paying Agent,
Securities Registrar or any other agent of the Company, in its individual or any
other capacity, may become the owner or pledgee of Securities and, subject to
Sections 6.08 and 6.13, may otherwise deal with the Company with the same rights
it would have if it were not Trustee, Paying Agent, Securities Registrar or such
other agent.
SECTION 6.06. Money Held in Trust. Money held by the Trustee in trust
hereunder need not be segregated from other funds except to the extent required
by law. The Trustee shall be under no liability for interest on any money
received by it hereunder except as otherwise agreed with the Company.
SECTION 6.07. Compensation and Reimbursement. The Company, as borrower on
the Securities, agrees:
(1) to pay to the Trustee from time to time reasonable compensation
for all services rendered by it hereunder in such amounts as the Company
and the Trustee shall agree from time to time (which compensation shall not
be limited by any provision of law in regard to the compensation a trustee
of an express trust);
(2) to reimburse the Trustee upon its request for all reasonable
expenses, disbursements and advances incurred or made by the Trustee in
accordance with any provision of this Indenture (including the reasonable
compensation and the expenses and disbursements of its agents and counsel),
except any such expense, disbursement or advance as may be attributable to
its negligence or bad faith; and
(3) to indemnify the Trustee, its officers, agents, directors and
employees for, and to hold them harmless against, any loss, liability or
expense (including the reasonable compensation and the expenses and
disbursements of its agents and counsel) incurred without negligence or bad
faith, arising out of or in connection with the acceptance or
administration of this trust or the performance of its duties hereunder,
including the costs and expenses of defending itself against any claim or
liability in connection with the exercise or performance of any of its
powers or duties hereunder.
To secure the Company's payment obligations in this Section, the Company
and the Holders agree that the Trustee shall have a lien prior to the Securities
on all money or property held or collected by the Trustee. The obligations of
the Company under this Section 6.07 shall survive the satisfaction and discharge
and the termination of this Indenture or the earlier resignation or removal of
the Trustee.
When the Trustee incurs expenses or renders services after an Event of
Default specified in Section 5.01(4) or (5) occurs, the expenses and the
compensation for the services are intended to constitute expenses of
administration under the Bankruptcy Code of 1978, as amended, or any successor
statute.
SECTION 6.08. Disqualification; Conflicting Interests. The Trustee for the
Securities of any series issued hereunder shall be subject to the provisions of
Section 310(b) of the Trust Indenture Act. Nothing herein shall prevent the
Trustee from filing with the Commission the application referred to in the
second-to-last paragraph of Section 301(b) of the Trust Indenture Act.
SECTION 6.09. Corporate Trustee Required, Eligibility. There shall at all
times be a Trustee hereunder which shall be:
(a) a corporation organized and doing business under the laws of the
United States of America or of any state, territory or the District of
Columbia, authorized under such laws to exercise corporate trust powers and
subject to supervision or examination by Federal, state, territorial or
District of Columbia authority, or
(b) a corporation or other Person organized and doing business under
the laws of a foreign government that is permitted to act as Trustee
pursuant to a rule, regulation or order of the Commission, authorized under
such laws to exercise corporate trust powers, and subject to supervision or
examination by authority of such foreign government or a political
subdivision thereof substantially equivalent to the supervision or
examination applicable to United States institutional trustees,
in either case having a combined capital and surplus of at least $50,000,000,
subject to supervision of examination by Federal or state authority. If such
corporation publishes reports of condition at least annually, pursuant to law or
to the requirements of the aforesaid supervising or examination authority, then,
for the purposes of this Section, the combined capital and surplus of such
corporation shall be deemed to be its combined capital and surplus as set forth
in its most recent report of condition so published. If at any time the Trustee
shall cease to be eligible in accordance with the provisions of this Section, it
shall resign immediately in the manner and with the effect hereinafter specified
in this Article. Neither the Company nor any Person directly or indirectly
controlling, controlled by or under common control with the Company shall serve
as Trustee for the Securities of any series issued hereunder.
SECTION 6.10. Resignation and Removal; Appointment of Successor. (a) No
resignation or removal of the Trustee and no appointment of a Successor Trustee
pursuant to this Article shall become effective until the acceptance of
appointment by the Successor Trustee under Section 6.11.
(b) The Trustee may resign at any time with respect to the Securities of
one or more series by giving written notice thereof to the Company. If an
instrument of acceptance by a Successor Trustee shall not have been delivered to
the Trustee within 30 days after the giving of such notice of resignation, the
resigning Trustee may petition any court of competent jurisdiction for the
appointment of a Successor Trustee with respect to the Securities of such
series.
(c) The Trustee may be removed at any time with respect to the Securities
of any series by Act of the Holders of a majority in principal amount of the
Outstanding Securities of such series, delivered to the Trustee and to the
Company.
(d) If at any time:
(i) the Trustee shall fail to comply with Section 6.08 after written
request therefor by the Company or by any Holder who has been a bona fide
Holder of a Security for at least six months, or
(ii) the Trustee shall cease to be eligible under Section 6.09 and
shall fail to resign after written request therefor by the Company or by
any such Holder, or
(iii) the Trustee shall become incapable of acting or shall be
adjudged a bankrupt or insolvent or a receiver of the Trustee or of its
property shall be appointed or any public officer shall take charge or
control of the Trustee or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation, then, in any such case, (i)
the Company, acting pursuant to the authority of a Board Resolution, may
remove the Trustee, or (ii) subject to Section 5.14, any Holder who has
been a bona fide Holder of a Security for at least six months may, on
behalf of himself and all others similarly situated, petition any court of
competent jurisdiction for the removal of the Trustee and the appointment
of a Successor Trustee.
(e) If the Trustee shall resign, be removed or become incapable of acting,
or if a vacancy shall occur in the office of Trustee for any cause with respect
to the Securities of one or more series, the Company, by a Board Resolution,
shall promptly appoint a Successor Trustee with respect to the Securities of
that or those series. If, within one year after such resignation, removal or
incapability, or the occurrence of such vacancy, a Successor Trustee with
respect to the Securities of any series shall be appointed by Act of the Holders
of a majority in principal amount of the Outstanding Securities of such series
delivered to the Company and the retiring Trustee, the Successor Trustee so
appointed shall, forthwith upon its acceptance of such appointment, become the
Successor Trustee with respect to the Securities of such series and supersede
the Successor Trustee appointed by the Company. If no Successor Trustee with
respect to the Securities of any series shall have been so appointed by the
Company or the Holders and accepted appointment in the manner hereinafter
provided, any Holder who has been a bona fide Holder of a Security for at least
six months may, subject to Section 5.14, on behalf of himself and all others
similarly situated, petition any court of competent jurisdiction for the
appointment of a Successor Trustee with respect to the Securities of such
series.
(f) The Company shall give notice of each resignation and each removal of
the Trustee with respect to the Securities of any series and each appointment of
a Successor Trustee with respect to the Securities of any series by mailing
written notice of such event by first-class mail, postage prepaid, to the
Holders of Securities of such series as their names and addresses appear in the
Securities Register. Each notice shall include the name of the Successor Trustee
with respect to the Securities of such series and the address of its Corporate
Trust Office.
SECTION 6.11. Acceptance of Appointment by Successor. (a) In case of the
appointment hereunder of a Successor Trustee with respect to all Securities,
every such Successor Trustee so appointed shall execute, acknowledge and deliver
to the Company and to the retiring Trustee an instrument accepting such
appointment, and thereupon the resignation or removal of the retiring Trustee
shall become effective and such Successor Trustee, without any further act, deed
or conveyance, shall become vested with all the rights, powers trusts and duties
of the retiring Trustee; but, on the request of the Company or the Successor
Trustee, such retiring Trustee shall, upon payment of its charges, execute and
deliver an instrument transferring to such Successor Trustee all the rights,
powers and trusts of the retiring Trustee and shall duly assign, transfer and
deliver to such Successor Trustee all property and money held by such retiring
Trustee hereunder.
(b) In case of the appointment hereunder of the Successor Trustee with
respect to the Securities of one or more (but not all) series, the Company, the
retiring Trustee and each Successor Trustee with respect to the Securities of
one or more series shall execute and deliver an instrument or an indenture
supplemental hereto wherein each Successor Trustee shall accept such appointment
and which (1) shall contain such provisions as shall be necessary or desirable
to transfer and confirm to, and to vest in, each Successor Trustee all the
rights, powers, trusts and duties of the retiring Trustee with respect to the
Securities of that or those series to which the appointment of such Successor
Trustee relates, (2) if the retiring Trustee is not retiring with respect to all
Securities, shall contain such provisions as shall be deemed necessary or
desirable to confirm that all the rights, powers, trusts and duties of the
retiring Trustee with respect to the Securities of that or those series as to
which the retiring Trustee is not retiring shall continue to be vested in the
retiring Trustee, and (3) shall add to or change any of the provisions of this
Indenture as shall be necessary to provide for or facilitate the administration
of the trusts hereunder by more than one Trustee, it being understood that
nothing herein or in such instrument or supplemental indenture shall constitute
such Trustee co-trustees of the same trust and that each such Trustee shall be
trustee of a trust or trusts hereunder separate and apart from any trust or
trusts hereunder administered by any other such Trustee and upon the execution
and delivery of such instrument or supplemental indenture the resignation or
removal of the retiring Trustee shall become effective to the extent provided
therein and each such Successor Trustee, without any further act, deed or
conveyance, shall become vested with all the rights, powers, trusts, and duties
of the retiring Trustee with respect to the Securities of that or those series
to which the appointment of such Successor Trustee relates; but, on request of
the Company or any Successor Trustee, such retiring Trustee shall duly assign,
transfer and deliver to such Successor Trustee all property and money held by
such retiring Trustee hereunder with respect to the Securities of that or those
series to which the appointment of such Successor Trustee relates.
(c) Upon request of any such Successor Trustee, the Company shall execute
any and all instruments for more fully and certainly vesting in and confirming
to such Successor Trustee all rights, powers and trusts referred to in paragraph
(a) or (b) of this Section, as the case may be.
(d) No Successor Trustee shall accept its appointment unless at the time of
such acceptance such Successor Trustee shall be qualified and eligible under
this Article. In the event that the Trust Indenture Act applies to this
Indenture at the time that any Successor Trustee is appointed, such Successor
Trustee shall qualify under such Act.
SECTION 6.12. Merger, Conversion, Consolidation or Succession to Business.
Any corporation into which the Trustee may be merged or converted or with which
it may be consolidated, or any corporation resulting from any merger, conversion
or consolidation to which the Trustee shall be a party, or any corporation
succeeding to all or substantially all of the corporate trust business of the
Trustee, shall be the successor of the Trustee hereunder, provided such
corporation shall be otherwise qualified and eligible under this Article
(including qualification under the Trustee Indenture Act, if applicable),
without the execution or filing of any paper or any further act on the part of
any of the parties hereto. In case any Securities shall have been authenticated,
but not delivered, by the Trustee then in office, any successor by merger,
conversion or consolidation to such authenticating Trustee may adopt such
authentication and deliver the Securities so authenticated, and in case any
Securities shall not have been authenticated, any successor to the Trustee may
authenticate such Securities either in the name of any predecessor Trustee or in
the name of such Successor Trustee, and in all cases the certificate of
authentication shall have the full force which it is provided anywhere in the
Securities or in this Indenture that the certificate of the Trustee shall have.
SECTION 6.13. Preferential Collection of Claims Against Company. If and
when the Trustee shall be or become a creditor of the Company (or any other
obligor upon the Securities), the Trustee shall be subject to the provisions of
the Trust Indenture Act regarding the collection of claims against the Company
(or any such other obligor).
SECTION 6.14. Appointment of Authenticating Agent. The Trustee may appoint
an authenticating agent or agents (each, an "Authenticating Agent") with respect
to one or more series of Securities which shall be authorized to act on behalf
of the Trustee to authenticate Securities of such series issued upon original
issue and upon exchange, registration of transfer or partial redemption thereof,
and Securities so authenticated shall be entitled to the benefits of this
Indenture and shall be valid and obligatory for all purposes as if authenticated
by the Trustee hereunder. Where reference is made in this Indenture to the
authentication and delivery of Securities by the Trustee or the Trustee's
certificate of authentication, such reference shall be deemed to include
authentication and delivery on behalf of the Trustee by an Authenticating Agent.
Each Authenticating Agent shall be acceptable to the Company and shall at all
times be a corporation organized and doing business under the laws of the United
States of America, or of any state, Territory or the District of Columbia,
authorized under such laws to act as Authenticating Agent, having a combined
capital and surplus of not less than $50,000,000 and subject to supervision or
examination by Federal or State authority. If such Authenticating Agent
publishes reports of condition at least annually, pursuant to law or to the
requirements of said supervising or examining authority, then for the purposes
of this Section the combined capital and surplus of such Authenticating Agent
shall be deemed to be its combined capital and surplus as set forth in its most
recent report of condition so published. If at any time an Authenticating Agent
shall cease to be eligible in accordance with the provisions of this Section,
such Authenticating Agent shall resign immediately in the manner and with the
effect specified in this Section.
Any corporation into which an Authenticating Agent may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which such Authenticating Agent
shall be a party, or any corporation succeeding to all or substantially all of
the corporate trust business of an Authenticating Agent shall be the successor
Authenticating Agent hereunder, provided such corporation shall be otherwise
eligible under this Section, without the execution or filing of any paper or any
further act on the part of the Trustee or the Authenticating Agent.
An Authenticating Agent may resign at any time by giving written notice
thereof to the Trustee and to the Company. The Trustee may at any time terminate
the agency of an Authenticating Agent by giving written notice thereof to such
Authenticating Agent and to the Company. Upon receiving such a notice of
resignation or upon such a termination, or in case at any time such
Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section, the Trustee may appoint a successor Authenticating
Agent which shall be acceptable to the Company and shall give notice of such
appointment in the manner provided in Section 1.06 to all Holders of Securities
of the series with respect to which such Authenticating Agent will serve. Any
successor Authenticating Agent upon acceptance of its appointment hereunder
shall become vested with all the rights, powers and duties of its predecessor
hereunder, with like effect as if originally named as an Authenticating Agent.
No successor Authenticating Agent shall be appointed unless eligible under the
provision of this Section.
The Company agrees to pay to each Authenticating Agent from time to time
reasonable compensation for its services under this Section.
If an appointment with respect to one or more series is made pursuant to
this Section, the Securities of each series may have endorsed thereon, in
addition to the Trustee's certificate of authentication, an alternative
certificate of authentication in the following form:
This is one of the Securities referred to in the within mentioned
Indenture.
THE CHASE MANHATTAN BANK
Trustee
by________________________________
As Authenticating Agent
by________________________________
Authorized Signatory
SECTION 6.15. Trustee's Rights and Obligations After Qualification of
Indenture. Following the qualification of this Indenture under the Trust
Indenture Act, the Trustee shall have and be subject to all the duties and
responsibilities specified with respect to an indenture trustee under the Trust
Indenture Act. Subject to such provisions, the Trustee is under no obligation to
exercise any of the powers vested in it by this Indenture at the request of any
holder of the Securities, unless offered indemnity to its satisfaction by such
holder against the costs, expenses and liabilities which might be incurred
thereby. The Trustee will not be required to expend or risk its own funds or
otherwise incur personal financial liability in the performance of its duties if
the Trustee reasonably believes that repayment or adequate indemnity is not
reasonably assured to it. Notwithstanding the foregoing, nothing in this Section
6.15 shall be deemed to abrogate any of the rights, indemnities or protections
otherwise provided to the Trustee under this Indenture.
ARTICLE VII
Holder's Lists and Reports by Trustee and Company
SECTION 7.01. Company to Furnish Trustee Names and Addresses of Holders.
The Company will furnish or cause to be furnished to the Trustee:
(a) semiannually, not more than 15 days after January 15 and July 15,
a list, in such form as the Trustee may reasonably require, of the names
and addresses of the Holders as of such January 1 and July 1, and
(b) at such other times as the Trustee may request in writing, within
30 days after the receipt by the Company of any such request, a list of
similar form and content as of a date not more than 15 days prior to the
time such list is furnished; provided, however, that so long as the Trustee
is the Securities Registrar, no such list need be furnished.
SECTION 7.02. Preservation of Information, Communications to Holders. (a)
The Trustee shall preserve, in as current a form as is reasonably practicable,
the names and addresses of Holders contained in the most recent list furnished
to the Trustee as provided in Section 7.01 and the names and addresses of
Holders received by the Trustee in its capacity as Securities Registrar. The
Trustee may destroy any list furnished to it as provided in Section 7.01 upon
receipt of a new list so furnished.
(b) The rights of Holders to communicate with other Holders with respect to
their rights under this Indenture or under the Securities, and the corresponding
rights and privileges of the Trustee, shall be as provided in the Trust
Indenture Act.
(c) Every Holder of Securities, by receiving and holding the same, agrees
with the Company and the Trustee that neither the Company nor the Trustee nor
any agent of either of them shall be held accountable by reason of the
disclosure of information as to the names and addresses of the Holders made
pursuant to the Trust Indenture Act.
SECTION 7.03. Reports by Trustee. (a) The Trustee shall transmit to Holders
such reports concerning the Trustee and its actions under this Indenture as may
be required pursuant to the Trust Indenture Act, at the times and in the manner
provided pursuant thereto.
(b) Reports so required to be transmitted at stated intervals of not more
than 12 months shall be transmitted within 60 days of May 15 of each calendar
year, commencing with May 15, 1997.
(c) A copy of each such report shall, at the time of such transmission to
Holders, be filed by the Trustee with each securities exchange upon which the
Securities are listed and also with the Commission. The Company will notify the
Trustee whenever the Securities are listed on any securities exchange.
SECTION 7.04. Reports by Company. The Company shall file with the Trustee
and with the Commission, and transmit to Holders, such information, documents
and other reports, and such summaries thereof, as may be required pursuant to
the Trust Indenture Act at the times and in the manner provided in the Trust
Indenture Act; provided that any such information, documents or reports required
to be filed with the Commission pursuant to Section 13 or Section 15(d) of the
Securities Exchange Act of 1934, as amended, shall be filed with the Trustee
within 15 days after the same is required to be filed with the Commission.
Notwithstanding that the Company may not be required to remain subject to the
reporting requirements of Section 13 or 15(d) of the Securities Exchange Act of
1934, as amended, the Company shall continue to file with the Commission and
provide the Trustee with the annual reports and the information, documents and
other reports which are specified in Sections 13 and 15(d) of the Securities
Exchange Act of 1934, as amended. The Company also shall comply with the other
provisions of Trust Indenture Act Section 314(a).
ARTICLE VIII
Consolidation, Merger, Conveyance, Transfer or Lease
SECTION 8.01. Company May Consolidate, etc., Only on Certain Terms. The
Company shall not consolidate with or merge with or into any other Person or
convey, transfer or lease its properties and assets substantially as an entirety
to any Person, and no Person shall consolidate with or merge with or into the
Company or convey, transfer or lease its properties and assets substantially as
an entirety to the Company, unless:
(1) in case the Company shall consolidate with or merge with or into
another Person or convey, transfer or lease its properties and assets
substantially as an entirety to any Person, the corporation formed by such
consolidation or into which the Company is merged or the Person which
acquires by conveyance or transfer, or which leases, the properties and
assets of the Company substantially as an entirety shall be a corporation,
partnership or trust organized and existing under the laws of the United
States of America or any State or the District of Columbia, and shall
expressly assume, by an indenture supplemental hereto, executed and
delivered to the Trustee, in form satisfactory to the Trustee, the due and
punctual payment of the principal of (and premium, if any) and interest
(including any Additional Interest) on all the Securities and the
performance of every covenant and every obligation of this Indenture on the
part of the Company to be performed or observed;
(2) immediately after giving effect to such transaction, no Event of
Default, and no event which, after notice or lapse of time, or both, would
become an Event of Default, shall have occurred and be continuing;
(3) in the case of the Securities of a series issued to a U.S.B.H.
Capital Trust, such consolidation, merger, conveyance, transfer or lease is
permitted under the related Trust Agreement and U.S.B. Holding Co., Inc.
Guarantee and does not give rise to any breach or violation of the related
Trust Agreement or U.S.B. Holding Co., Inc. Guarantee; and
(4) the Company has delivered to the Trustee an Officers' Certificate
and an Opinion of Counsel each stating that such consolidation, merger,
conveyance, transfer or lease and any such supplemental indenture complies
with this Article and that all conditions precedent herein provided for
relating to such transaction have been complied with; and the Trustee,
subject to Section 6.01, may rely upon such Officers' Certificate and
Opinion of Counsel as conclusive evidence that such transaction complies
with this Section 8.01.
SECTION 8.02. Successor Corporation Substituted. Upon any consolidation or
merger by the Company with or into any other Person, or any conveyance, transfer
or lease by the Company of its properties and assets substantially as an
entirety to any Person in accordance with Section 8.01, the successor
corporation formed by such consolidation or into which the Company is merged or
to which such conveyance, transfer or lease is made shall succeed to, and be
substituted for, and may exercise every right and power of, the Company under
this Indenture with the same effect as if such successor Person had been named
as the Company herein; and in the event of any such conveyance, transfer or
lease the Company shall be discharged from all obligations and covenants under
the Indenture and the Securities and may be dissolved and liquidated.
Such successor Person may cause to be signed, and may issue either in its
own name or in the name of the Company, any or all of the Securities issuable
hereunder which theretofore shall not have been signed by the Company and
delivered to the Trustee; and, upon the order of such successor Person instead
of the Company and subject to all the terms, conditions and limitations in this
Indenture prescribed, the Trustee shall authenticate and shall deliver any
Securities which previously shall have been signed and delivered by the officers
of the Company to the Trustee for authentication pursuant to such provisions and
any Securities which such successor Person thereafter shall cause to be signed
and delivered to the Trustee on its behalf for the purpose pursuant to such
provisions. All the Securities so issued shall in all respects have the same
legal rank and benefit under this Indenture as the Securities theretofore or
thereafter issued in accordance with the terms of this Indenture as though all
of such Securities had been issued at the date of the execution hereof.
In case of any such consolidation, merger, sale, conveyance or lease, such
changes in phraseology and form may be made in the Securities thereafter to be
issued as may be appropriate.
ARTICLE IX
Supplemental Indentures
SECTION 9.01. Supplemental Indentures without Consent of Holders. Without
the consent of any Holders, the Company, when authorized by a Board Resolution,
and the Trustee, at any time and from time to time, may enter into one or more
indentures supplemental hereto, in form satisfactory, to the Trustee, for any of
the following:
(1) to evidence the succession of another Person to the Company, and
the assumption by any such successor of the covenants of the Company herein
and in the Securities contained;
(2) to convey, transfer, assign, mortgage or pledge any property to or
with the Trustee or to surrender any right or power herein conferred upon
the Company;
(3) to establish the form or terms of Securities of any series as
permitted by Sections 2.01 or 3.01;
(4) to add to the covenants of the Company for the benefit of the
Holders of all or any series of Securities (and if such covenants are to be
for the benefit of less than all series of Securities, stating that such
covenants are expressly being included solely for the benefit of such
series) or to surrender any right or power herein conferred upon the
Company;
(5) to add any additional Events of Default;
(6) to change or eliminate any of the provisions of this Indenture;
provided that any such change or elimination shall become effective only
when there is no Security Outstanding of any series created prior to the
execution of such supplemental indenture which is entitled to the benefit
of such provision;
(7) to cure any ambiguity, to correct or supplement any provision
herein which may be inconsistent with any other provision herein, or to
make any other provisions with respect to matters or questions arising
under this Indenture; provided that such action pursuant to this clause (7)
shall not materially adversely affect the interest of the Holders of
Securities of any series or, in the case of the Securities of a series
issued to a U.S.B.H. Capital Trust and for so long as any of the
corresponding series of Capital Securities shall remain outstanding, the
holders of such Capital Securities;
(8) to evidence and provide for the acceptance of appointment
hereunder by a Successor Trustee with respect to the Securities of one or
more series and to add to or change any of the provisions of this Indenture
as shall be necessary to provide for or facilitate the administration of
the trusts hereunder by more than one Trustee, pursuant to the requirements
of Section 6.11(b); or
(9) to comply with the requirements of the Commission in order to
effect or maintain the qualification of this Indenture under the Trust
Indenture Act.
SECTION 9.02. Supplemental Indentures with Consent of Holders. With the
consent of the Holders of not less than a majority in principal amount of the
Outstanding Securities of each series affected by such supplemental indenture,
by Act of said Holders delivered to the Company and the Trustee, the Company,
when authorized by a Board Resolution, and the Trustee may enter into an
indenture or indentures supplemental hereto for the purpose of adding any
provisions to or changing in any manner or eliminating any of the provisions of
this Indenture or of modifying in any manner the rights of the Holders of
Securities of such series under this Indenture; provided, however, that no such
supplemental indenture shall, without the consent of the Holder of each
Outstanding Security affected thereby,
(1) except to the extent permitted by Section 3.12 or as otherwise
specified as contemplated by Section 3.01 with respect to the extension of
the interest payment period of the Securities of any series, change the
Stated Maturity of the principal of, or any installment of interest
(including any Additional Interest) on, any Security, or reduce the
principal amount thereof or the rate of interest thereon or reduce any
premium payable upon the redemption thereof, or reduce the amount of
principal of a Discount Security that would be due and payable upon a
declaration of acceleration of the Maturity thereof pursuant to Section
5.02, or change the place of payment where, or the coin or currency in
which, any Security or interest thereon is payable, or impair the right to
institute suit for the enforcement of any such payment on or after the
Stated Maturity thereof (or, in the case of redemption, on or after the
date fixed for redemption thereof);
(2) reduce the percentage in principal amount of the Outstanding
Securities of any series, the consent of whose Holders is required for any
such supplemental indenture, or the consent of whose Holders is required
for any waiver (of compliance with certain provisions of this Indenture or
certain defaults hereunder and their consequences) provided for in this
Indenture;
(3) modify any of the provisions of this Section, Section 5.13 or
Section 10.05, except to increase any such percentage or to provide that
certain other provisions of this Indenture cannot be modified or waived
without the consent of the Holder of each Security affected thereby; or
(4) modify the provisions in Article XIII of this Indenture with
respect to the subordination of Outstanding Securities of any series in a
manner adverse to the Holders thereof;
provided that, in the case of the Securities of a series issued to a U.S.B.H.
Capital Trust, so long as any of the corresponding series of Capital Securities
remains outstanding, no such amendment shall be made that adversely affects the
holders of such Capital Securities, and no termination of this Indenture shall
occur, and no waiver of any Event of Default or compliance with any covenant
under this Indenture shall be effective, without the prior consent of the
holders of at least a majority of the aggregate Liquidation Amount of such
Capital Securities then outstanding unless and until the principal (and premium,
if any) of the Securities of such series and all accrued and, subject to Section
3.08, unpaid interest (including any Additional Interest) thereon have been paid
in full; and provided further, however, that in the case of the Securities of a
series issued to a U.S.B.H. Capital Trust, so long as any of the corresponding
series of Capital Securities remain outstanding, no amendment shall be made to
Section 5.08 of this Indenture without the prior consent of the holders of each
Capital Security then outstanding unless and until the principal (and premium,
if any) of the Securities of such series and all accrued and (subject to Section
3.08) unpaid interest (including any Additional interest) thereon have been paid
in full.
A supplemental indenture that changes or eliminates any covenant or other
provision of this Indenture that has expressly been included solely for the
benefit of one or more particular series of Securities, or which modifies the
rights of the Holders of Securities of such series with respect to such covenant
or other provision, shall be deemed not to affect the rights under this
Indenture of the Holders of Securities of any other series.
It shall not be necessary for any Act of Holders under this Section to
approve the particular form of any proposed supplemental indenture, but it shall
be sufficient if such Act shall approve the substance thereof.
SECTION 9.03. Execution of Supplemental Indentures. In executing or
accepting the additional trusts created by any supplemental indenture permitted
by this Article or the modifications thereby of the trusts created by this
Indenture, the Trustee shall be entitled to receive, and (subject to Section
6.01) shall be fully protected in conclusively relying upon, an Officer's
Certificate and an Opinion of Counsel stating that the execution of such
supplemental indenture is authorized or permitted by this Indenture, and that
all conditions precedent have been complied with. The Trustee may, but shall not
be obligated to, enter into any such supplemental indenture which affects the
Trustee's own rights, duties or immunities under this Indenture or otherwise, or
which may subject it to liability or be contrary to applicable law.
SECTION 9.04. Effect of Supplemental Indentures. Upon the execution of any
supplemental indenture under this Article, this Indenture shall be modified in
accordance therewith, and such supplemental indenture shall form a part of this
Indenture for all purposes; and every Holder of Securities theretofore or
thereafter authenticated and delivered hereunder shall be bound thereby.
SECTION 9.05. Conformity with Trust Indenture Act. No supplemental
indenture will be qualified or executed pursuant to the Trust Indenture Act
unless this Indenture is so qualified, or in connection with Capital Securities
which are registered under the Securities Exchange Act of 1934, as amended, upon
the effectiveness of a registration statement and the consummation of an
exchange offer pursuant to a Registration Rights Agreement as contemplated in
Article XII hereof. Every supplemental indenture so qualified or executed shall
conform to the requirements of the Trust Indenture Act as then in effect.
SECTION 9.06. Reference in Securities to Supplemental Indentures.
Securities authenticated and delivered after the execution of any supplemental
indenture pursuant to this Article may, and shall if required by the Company,
bear a notation in form approved by the Company as to any matter provided for in
such supplemental indenture. If the Company shall so determine, new Securities
of any series so modified as to conform, in the opinion of the Company, to any
such supplemental indenture may be prepared and executed by the Company and
authenticated and delivered by the Trustee in exchange for Outstanding
Securities of such Series.
ARTICLE X
Covenants
SECTION 10.01. Payment of Principal, Premium and Interest. The Company
covenants and agrees for the benefit of each series of securities that it will
duly and punctually pay the principal of (and premium, if any) and interest on
the Securities of that series in accordance with the terms of such Securities
and this Indenture.
SECTION 10.02. Maintenance of Office or Agency. The Company will maintain
in each Place of Payment for any series, an office or agency where Securities of
that series may be presented or surrendered for payment and an office or agency
where Securities may be surrendered for transfer or exchange and where notices
and demands to or upon the Company in respect of the Securities and this
Indenture may be served. The Company initially appoints the Trustee, acting
through its Corporate Trust Office, as its agent for said purposes. The Company
will give prompt written notice to the Trustee of any change in the location of
any such office or agency. If at any time the Company shall fail to maintain
such office or agency or shall fail to furnish the Trustee with the address
thereof, such presentations, surrenders, notices and demands may be made or
served at the Corporate Trust Office of the Trustee, and the Company hereby
appoints the Trustee as its agent to receive all such presentations, surrenders,
notices and demands.
The Company may also from time to time designate one or more other offices
or agencies where the Securities may be presented or surrendered for any or all
of such purposes, and may from time to time rescind such designations; provided,
however, that no such designation or rescission shall in any manner relieve the
Company of its obligation to maintain an office or agency in each Place of
Payment for Securities of any series for such purposes. The Company will give
prompt written notice to the Trustee of any such designation and any change in
the location of any such office or agency.
SECTION 10.03. Money for Security Payments to be Held in Trust. If the
Company shall at any time act as its own Paying Agent with respect to any series
of Securities, it will, on or before each due date of the principal of (and
premium, if any) or interest on any of the Securities of such series, segregate
and hold in trust for the benefit of the Persons entitled thereto a sum
sufficient to pay the principal (and premium, if any) or interest so becoming
due until such sums shall be paid to such Persons or otherwise disposed of as
herein provided, and will promptly notify the Trustee of its failure so to act.
Whenever the Company shall have one or more Paying Agents, it will, prior
to 10:00 a.m. New York City time on each due date of the principal of or
interest on any Securities, deposit with a Paying Agent a sum sufficient to pay
the principal (and premium, if any) or interest so becoming due, such sum to be
held in trust for the benefit of the Persons entitled to such principal and
premium (if any) or interest, and (unless such Paying Agent is the Trustee) the
Company will promptly notify the Trustee of its failure so to act.
The Company will cause each Paying Agent other than the Trustee to execute
and deliver to the Trustee an instrument in which such Paying Agent shall agree
with the Trustee, subject to the provisions of this Section, that such Paying
Agent will:
(1) hold all sums held by it for the payment of the principal of (and
premium, if any) or interest on Securities in trust for the benefit of the
Persons entitled thereto until such sums shall be paid to such Persons or
otherwise disposed of as herein provided;
(2) give the Trustee written notice of any default by the Company (or
any other obligor upon the Securities) in the making of any payment of
principal (and premium, if any) or interest;
(3) at any time during the continuance of any such default, upon the
written request of the Trustee, forthwith pay to the Trustee all sums so
held in trust by such Paying Agent; and
(4) comply with the provisions of the Trust Indenture Act applicable
to it as a Paying Agent.
The Company may at any time, for the purpose of obtaining the satisfaction
and discharge of this Indenture or for any other purpose, pay, or by Company
Order direct any Paying Agent to pay, to the Trustee all sums held in trust by
the Company or such Paying Agent, such sums to be held by the Trustee upon the
same trusts as those upon which such sums were held by the Company or such
Paying Agent; and, upon such payment by the Company or any Paying Agent to the
Trustee, such Paying Agent shall be released from all further liability with
respect to such money.
Any money deposited with the Trustee or any Paying Agent, or then held by
the Company, in trust for the payment of the principal of (and premium, if any)
or interest on any Security and remaining unclaimed for two years after such
principal (and premium, if any) or interest has become due and payable shall
(unless otherwise required by mandatory provision of applicable escheat or
abandoned or unclaimed property law) be paid on Company Request to the Company,
or (if then held by the Company) shall (unless otherwise required by mandatory
provision of applicable escheat or abandoned or unclaimed property law) be
discharged from such trust; and the Holder of such Security shall thereafter, as
an unsecured general creditor, look only to the Company for payment thereof, and
all liability of the Trustee or such Paying Agent with respect to such trust
money, and all liability of the Company as trustee thereof, shall thereupon
cease; provided, however, that the Trustee or such Paying Agent, before being
required to make any such repayment, may at the expense of the Company cause to
be published once, in a newspaper published in the English language, customarily
published on each Business Day and of general circulation in the Borough of
Manhattan, the City of New York, notice that such money remains unclaimed and
that, after a date specified therein, which shall not be less than 30 days from
the date of such publication, any unclaimed balance of such money then remaining
will be repaid to the Company.
SECTION 10.04. Statement as to Compliance. The Company shall deliver to the
Trustee, within 120 days after the end of such calendar year of the Company
ending after the date hereof, an Officers' Certificate executed by authorized
officers at least one of whom shall be the principal executive, financial or
accounting officer of the Company covering the preceding calendar year, stating
whether or not to the best knowledge of the signers thereof the Company is in
default in the performance, observance or fulfillment of or compliance with any
of the terms, provisions, covenants and conditions of this Indenture, and if the
Company shall be in default, specifying all such defaults and the nature and
status thereof of which they may have knowledge. For the purpose of this Section
10.04, compliance shall be determined without regard to any grace period or
requirement of notice provided pursuant to the terms of this Indenture.
SECTION 10.05. Waiver of Certain Covenants. The Company may omit in any
particular instance to comply with any covenant or condition as specified as
contemplated by Section 3.01 with respect to the Securities of any series, if
before or after the time for such compliance the Holders of at least a majority
in principal amount of the Outstanding Securities of such series shall, by Act
of such Holders, either waive such compliance in such instance or generally
waive compliance with such covenant or condition, but no such waiver shall
extend to or affect such covenant or condition except to the extent so expressly
waived, and, until such waiver shall become effective, the obligations of the
Company in respect of any such covenant or condition shall remain in full force
and effect.
SECTION 10.06. Payment of the Trust's Costs and Expenses. Since the
U.S.B.H. Capital Trusts are being formed solely to facilitate the investment in
the Securities, the Company, as borrower on the Securities, hereby covenants to
pay all debts and obligations (other than with respect to the payment of
principal, interest and premium, if any, on the Trust Securities) and all costs
and expenses of such Trusts (including, but not limited to, all costs and
expenses relating to the organization of such Trusts, the fees and expenses of
the Trustees and all costs and expenses relating to the operation of such
Trusts) and to pay any and all taxes, duties, assessments or other governmental
charges of whatever nature (other than United States withholding taxes) imposed
on such Trusts by the United States, or any other taxing authority (such
payments of amounts in connection with taxes being herein referred to as
"Additional Sums"), so that the net amounts received and retained by such Trusts
and their respective Property Trustees after paying such expenses or Additional
Sums will be equal to the amounts such Trusts and Property Trustees would have
received had no such costs, expenses or taxes, duties, assessments or other
governmental charges been incurred by or imposed on such Trusts. The foregoing
obligations of the Company are for the benefit of, and shall be enforceable by,
any person to whom such debts, obligations, costs, expenses and taxes are owed
(a "Creditor") whether or not such Creditor has received notice thereof. Any
such Creditor may enforce such obligations of the Company hereunder directly
against the Company, and the Company hereby irrevocably waives any right or
remedy to require that any such Creditor take any action against any Trust or
any other person before proceeding against the Company. The Company also agrees
hereby to execute such additional agreements as may be necessary or desirable to
give full effect to the foregoing.
SECTION 10.07. Additional Covenants. The Company covenants and agrees with
each Holder of Securities of a series issued to a U.S.B.H. Capital Trust that it
will not (i) declare or pay any dividends or distributions on, or redeem,
purchase, acquire or make a liquidation payment with respect to, any shares of
the Company's capital stock (which includes common and preferred stock), or (ii)
make any payment of principal, interest or premium, if any, on or repay,
repurchase or redeem any debt securities of the Company (including Other
Debentures) that rank pari passu with or junior in interest to the Securities of
such series or (iii) make any guarantee payments with respect to any guarantee
by the Company of debt securities of any subsidiary of the Company (including
Other Guarantees) if such guarantee ranks pari passu with or junior in interest
to the Securities (other than (a) dividends or distributions in Common Stock of
the Company, (b) any declaration of a dividend in connection with the
implementation of a stockholders' rights plan, or the issuance of stock under
any such plan in the future, or the redemption or repurchase of any such rights
pursuant thereto, (c) payments under the U.S.B. Holding Co. Inc. Guarantee, (d)
purchases or acquisitions of shares of the Company's Common Stock in connection
with the satisfaction by the Company of its obligations under any employee
benefit plan or other contractual obligation of the Company (other than a
contractual obligation ranking pari passu with or junior in interest to these
Securities), (e) as a result of a reclassification of the Company's capital
stock or the exchange or conversion of one class or series of the Company's
capital stock for another class or series of the Company's capital stock, or (f)
the purchase of fractional interests in shares of the Company's capital stock
pursuant to the conversion or exchange provisions of such capital stock or the
security being converted or exchanged), if at such time (i) there shall have
occurred an Event of Default, (ii) the Company shall be in default with respect
to its payment of any obligations under the related U.S.B. Holding Co. Inc.
Guarantee or (iii) the Company shall have given notice of its election to begin
an Extension Period as provided herein and shall not have rescinded such notice,
or such Extension Period, or any extension thereof, shall be continuing.
The Company also covenants with each Holder of Securities of a series
issued to a U.S.B.H. Capital Trust (i) to maintain directly 100% ownership of
the Common Securities of such U.S.B.H. Capital Trust; provided, however, that
any permitted successor of the Company hereunder may succeed to the Company's
ownership of such Common Securities, (ii) not to voluntarily terminate, windup
or liquidate such U.S.B.H. Capital Trust, except (a) in connection with a
distribution of the Securities of such series to the holders of Capital
Securities in liquidation of such U.S.B.H. Capital Trust or (b) in connection
with certain mergers, consolidations or amalgamations permitted by the related
Trust Agreement and (iii) to use its reasonable efforts, consistent with the
terms and provisions of such Trust Agreement, to cause such U.S.B.H. Capital
Trust to remain classified as a grantor trust and not an association taxable as
a corporation for United States Federal income tax purposes.
SECTION 10.08. Information Returns. On or before December 15 of each year
during which any Securities are outstanding, the Company shall furnish to each
Paying Agent such information as may be reasonably requested by each Paying
Agent in order that such Paying Agent may prepare the information which it is
required to report for such year on Internal Revenue Service Forms 1096 and
1099. Such information shall include the amount of original issue discount, if
any, includible in income for each $1,000 of principal amount at Stated Maturity
of outstanding Securities during such year.
ARTICLE XI
Redemption or Prepayment of Securities
SECTION 11.01. Applicability of This Article. Redemption of Securities
(whether by operation of a sinking fund or otherwise) as permitted or required
by any form of Security issued pursuant to this Indenture shall be made in
accordance with such form of Security and this Article; provided, however, that
if any provision of any such form of Security shall conflict with any provision
of this Article, the provision of such form of Security shall govern. Except as
otherwise set forth in the form of Security for such series, each Security shall
be subject to partial redemption only in the amount of $1,000 or, in the case of
the Securities of a series issued to a U.S.B.H. Capital Trust, $1,000, or
integral multiples thereof.
SECTION 11.02. Election To Redeem; Notice to Trustee. The election of the
Company to redeem any Securities shall be evidenced by or pursuant to a Board
Resolution. In case of any redemption at the election of the Company of any
Securities of any particular series and having the same terms, the Company
shall, not less than 45 nor more than 60 days prior to the date fixed for
redemption (unless a shorter notice shall be satisfactory to the Trustee),
notify the Trustee and the Property Trustee of such date and of the principal
amount of Securities of that series to be redeemed. In the case of any
redemption of Securities prior to the expiration of any restriction on such
redemption provided in the terms of such Securities, the Company shall furnish
the Trustee with an Officers' Certificate and an Opinion of Counsel evidencing
compliance with such restriction. Any such notice given to the Trustee hereunder
shall include the information required by Section 11.04 hereof.
SECTION 11.03. Selection of Securities to be Redeemed. If less than all the
Securities of any series are to be redeemed (unless all the Securities of such
series and of a specified tenor are to be redeemed or unless such redemption
affects only a single Security all as designated to the Trustee by the Company),
the particular Securities to be redeemed shall be selected not more than 60 days
prior to the Redemption Date by the Trustee, from the Outstanding Securities of
such series not previously called for redemption, by such method as the Trustee
shall deem fair and appropriate and which may provide for the selection for
redemption of a portion of the principal amount of any Security shall be in an
authorized denomination (which shall not be less than the minimum authorized
denomination) for such Security. If less than all the Securities of such series
and of a specified tenor are to be redeemed (unless such redemption affects only
a single Security), the particular Securities to be redeemed shall be selected
not more than 60 days prior to the Redemption Date by the Trustee, from the
Outstanding Securities of such series and specified tenor not previously called
for redemption in accordance with the preceding sentence.
The Trustee shall promptly notify the Company in writing of the Securities
selected for partial redemption and the principal amount thereof to be redeemed.
For all purposes of this Indenture, unless the context otherwise requires, all
provisions relating to the redemption of Securities shall relate, in the case of
any Security redeemed or to be redeemed only in part, to the portion of the
principal amount of such Security which has been or is to be redeemed. If the
Company shall so direct, Securities registered in the name of the Company, any
Affiliate or any Subsidiary thereof shall not be included in the Securities
selected for redemption.
SECTION 11.04. Notice of Redemption. Notice of redemption shall be given by
the Company by first-class mail, postage prepaid, mailed not later than the
thirtieth day, and not earlier than the sixtieth day, prior to the date fixed
for redemption, to each Holder of Securities to be redeemed, at the address of
such Holder as it appears in the Securities Register.
With respect to Securities of each series to be redeemed, each notice of
redemption shall state:
(a) the date fixed for redemption for Securities of such series;
(b) the redemption price at which Securities of such series are to be
redeemed;
(c) if less than all Outstanding Securities of such particular series
and having the same terms are to be redeemed, the identification (and, in
the case of partial redemption, the respective principal amounts) of the
particular Securities to be redeemed;
(d) that on the date fixed for redemption, the redemption price at
which such Securities are to be redeemed will become due and payable upon
each such Security or portion thereof, and that interest thereon, if any,
shall cease to accrue on and after said date;
(e) the place or places where such Securities are to be surrendered
for payment of the redemption price at which such Securities are to be
redeemed;
(f) that the redemption is for a sinking fund, if such is the case;
and
(g) such other provisions as may be required in respect of the terms
of a particular series of Securities.
Notice of redemption of Securities to be redeemed at the election of the
Company shall be given by the Company or, at the Company's request, by the
Trustee in the name and at the expense of the Company and shall not be
irrevocable. The notice if mailed in the manner herein provided shall be
conclusively presumed to have been duly given, whether or not the Holder
receives such notice. In any case, a failure to give such notice by mail or any
defect in the notice to the Holder of any Security designated for redemption as
a whole or in part shall not affect the validity of the proceedings for the
redemption of any other Security.
SECTION 11.05. Deposit of Redemption Price. Prior to 10:00 a.m. New York
City time on the redemption date specified in the notice of redemption given as
provided in Section 11.04, the Company will deposit with the Trustee or with one
or more paying agents an amount of money sufficient to redeem on the redemption
date all the Securities so called for redemption at the applicable redemption
price.
SECTION 11.06. Payment of Securities Called for Redemption. If any notice
of redemption has been given as provided in Section 11.04, the Securities or
portion of Securities with respect to which such notice has been given shall
become due and payable on the date and at the place or places stated in such
notice at the applicable redemption price. On presentation and surrender of such
Securities at a place of payment in said notice specified, the said securities
or the specified portions thereof shall be paid and redeemed by the Company at
the applicable redemption price.
Upon presentation of any Security redeemed in part only, the Company shall
execute and the Trustee shall authenticate and deliver to the Holder thereof, at
the expense of the Company, a new Security or Securities of that same series, of
authorized denominations, in aggregate principal amount equal to the unredeemed
portion of the Security so presented and having the same Original Issue Date,
Stated Maturity and terms. If the Global Security is so surrendered, such new
Security will (subject to Section 3.06) also be a new Global Security.
If any Security called for redemption shall not be so paid upon surrender
thereof for redemption, the principal of and premium, if any, on such Security
shall, until paid, bear interest from the Redemption Date at the rate prescribed
therefor in the Security.
SECTION 11.07. Company's Right of Redemption. Unless otherwise specified as
contemplated by Section 3.01 with respect to the Securities of a particular
series and notwithstanding any additional redemption rights that may be so
specified, the Company may, at its option, redeem the Securities of any series
after their date of issuance in whole at any time or in part from time to time,
subject to the provisions of this clause (a) and the other provisions of this
Article XI. Unless otherwise specified as contemplated by Section 3.01 with
respect to the Securities of a particular series, the redemption price for any
Security so redeemed pursuant to this clause (a) shall be equal to 100% of the
principal amount of such Securities plus any accrued and unpaid interest,
including any Additional Interest, to the date fixed for redemption. The Company
shall not redeem the Securities in part unless all accrued and unpaid interest
(including any Additional Interest) has been paid in full on all Securities
Outstanding for all interest periods terminating on or prior to the date fixed
for redemption.
ARTICLE XII
Exchange and Registration Rights
SECTION 12.01. Exchange. (a) If specified as contemplated by Section 3.01
for Securities for any series, the Company and a U.S.B.H. Capital Trust holding
such Securities shall enter into a registration rights agreement (a
"Registration Rights Agreement") for the benefit of the holders of any Capital
Securities of such U.S.B.H. Capital Trust which are not registered under the
Securities Act providing that such U.S.B.H. Capital Trust use its best efforts
to exchange such Capital Securities for registered securities, by means of an
exchange offer registration statement (an "Exchange Offer Registration
Statement"), issued by the Company and such U.S.B.H. Capital Trust with terms
identical in all material respects to the terms of the Capital Securities (the
"Exchange Capital Securities").
(b) In the event that U.S.B.H. Capital Trust is successful in providing
Exchange Capital Securities to the holders of Capital Securities as described in
clause (a) of this Section 12.01, the Company shall contemporaneously exchange
the Securities held by such U.S.B.H. Capital Trust for new securities issued by
the Company (the "Exchange Securities") with terms identical in all material
respects to the terms of the Securities to such Capital Securities, and shall
further contemporaneously exchange the U.S.B. Holding Co., Inc. Guarantee then
held by the Guarantee Trustee under the Guarantee Agreement for a new guarantee
of the Company (the "Exchange Guarantee") with terms identical in all material
respects to the terms of the U.S.B. Holding Co., Inc. Guarantee.
SECTION 12.02. Registration. If specified as contemplated by Section 3.01
for Securities for any series, the Administrative Trustee of any U.S.B.H.
Capital Trust on behalf of the Company and such U.S.B.H. Capital Trust shall (a)
file a registration statement under the Securities Act covering resales of the
Capital Securities (the "Registration Statement"), (b) use their best efforts to
cause such Registration Statement to be declared effective under the Securities
Act, and (c) use their best efforts to cause such Registration Statement to
remain effective for as long as specified as contemplated by Section 3.01 for
Securities of such series. The Administrative Trustees shall (x) promptly
deliver to the holders and to the Delaware Trustee and the Property Trustee
written notice of their intent to file such Registration Statement. All costs
incurred in connection with the filing and maintenance of such Registration
Statement shall be borne by the Company.
SECTION 12.03. Liquidated Damages. If specified as contemplated by Section
3.01 for Securities of any series, the Company may enter into an agreement
providing that, in the event that (i) an Exchange Offer Registration Statement
or a Registration Statement is not filed, (ii) such Exchange Offer Registration
Statement or Registration Statement does not become effective, or (iii) such
Exchange Offer Registration Statement or Registration Statement does not remain
effective or useable within the time period or for as long as contemplated by
the applicable registration rights agreement, the Company shall pay to the
relevant U.S.B.H. Capital Trust, and such U.S.B.H. Capital Trust shall pay to
the holders of the Capital Securities, an amount of liquidated damages, which
may be either fixed or based on the duration and/or principal amount of the
Securities or the Liquidation Amount of the Capital Securities affected thereby.
SECTION 12.04. Compliance with Law. Any registration rights agreement
entered into hereunder may provide that any Holder of Capital Securities who is
considered to be an affiliate of the Company or the U.S.B.H. Capital Trust or
any underwriter in connection with the issuance and sale of Capital Securities
be barred from participation in the Exchange Offer Registration Statement or
other Registration Statement, in accordance with applicable law or regulation.
ARTICLE XIII
Sinking Funds
SECTION 13.01. Applicability of Article. The provisions of this Article
shall be applicable to any sinking fund for the retirement of Securities of any
series except as otherwise specified as contemplated by Section 3.01 for such
Securities.
The minimum amount of any sinking fund payment provided for by the terms of
any Securities of any series is herein referred to as a "mandatory sinking fund
payment", and any sinking fund payment in excess of such minimum amount which is
permitted to be made by the terms of such Securities of any series is herein
referred to as an "optional sinking fund payment". If provided for by the terms
of any Securities of any series, the case amount of any sinking fund payment may
be subject to reduction as provided in Section 13.02. Each sinking fund payment
shall be applied to the redemption (or purchase by tender or otherwise) of
Securities of any series as provided for by the terms of such Securities.
SECTION 13.02. Satisfaction of Sinking Fund Payments with Securities. In
lieu of making all or any part of a mandatory sinking fund payment with respect
to any Securities of a series in cash, the Company may at its option, at any
time no more than 16 months and no less than 45 days prior to the date on which
such sinking fund payment is due, deliver to the Trustee Securities of such
series (together with the unmatured Coupons, if any, appertaining thereto)
theretofore purchased or otherwise acquired by the Company, except Securities of
such series that have been redeemed through the application of mandatory or
optional sinking fund payments pursuant to the terms of the Securities of such
series, accompanied by a Company Order instructing the Trustee to credit such
obligations and stating that the Securities of such series were originally
issued by the Company by way of bona fide sale or other negotiation for value;
provided that the Securities to be so credited have not been previously so
credited. The Securities to be so credited shall be received and credited for
such purpose by the Trustee at the redemption price for such Securities, as
specified in the Securities so to be redeemed, for redemption through operation
of the sinking fund and the amount of such sinking fund payment shall be reduced
accordingly.
SECTION 13.03. Redemption of Securities for Sinking Fund. Not less than 45
days prior to each sinking fund payment date for any series of securities, the
Company will deliver to the Trustee an Officers' Certificate specifying the
amount of the next ensuing sinking fund payment for such Securities pursuant to
the terms of such Securities, the portion thereof, if any, which is to be
satisfied by payment of cash in the currency in which the Securities of such
series are payable (except as provided pursuant to Section 3.01) and the portion
thereof, if any, which is to be satisfied by delivering and crediting Securities
pursuant to Section 13.02 and will also deliver to the Trustee any Securities to
be so delivered. Such Certificate shall be irrevocable and upon its delivery the
Company shall be obligated to make the cash payment or payments therein referred
to, if any, on or before the succeeding sinking fund payment date. In the case
of the failure of the Company to deliver such Certificate (or, as required by
this Indenture, the Securities and coupons, if any, specified in such
Certificate) by the due date therefor, the sinking fund payment due on the
succeeding sinking fund payment date for such series shall be paid entirely in
cash and shall be sufficient to redeem the principal amount of the Securities of
such series subject to a mandatory sinking fund payment without the right to
deliver or credit securities as provided in Section 13.02 and without the right
to make the optional sinking fund payment with respect to such series at such
time.
Any sinking fund payment or payments (mandatory or optional) made in cash
plus any unused balance of any preceding sinking fund payments made with respect
to the Securities of any particular series shall be applied by the Trustee (or
by the Company if the Company is acting as its own Paying Agent) on the sinking
fund payment date on which such payment is made (or, if such payment is made
before a sinking fund payment date, on the sinking fund payment date immediately
following the date of such payment) to the redemption of Securities of such
series at the redemption price specified in such Securities with respect to the
sinking fund. Any sinking fund moneys not so applied or allocated by the Trustee
(or by the Company if the Company is acting as its own Paying Agent, segregated
and held in trust as provided in Section 10.03) for such series and together
with such payment (or such amount so segregated) shall be applied in accordance
with the provisions of this Section 13.03. Any and all sinking fund moneys with
respect to the Securities of any particular series held by the Trustee (or if
the Company is acting as its own Paying Agent, segregated and held in trust as
provided in Section 10.03) on the last sinking fund payment date with respect to
Securities of such series and not held for the payment or redemption of
particular Securities of such series shall be applied by the Trustee (or by the
Company if the Company is acting as its own Paying Agent), together with other
moneys, if necessary, to be deposited (or segregated) sufficient for the
purpose, to the payment of the principal of the Securities of such series at
Maturity. The Trustee shall select the Securities to be redeemed upon such
sinking fund payment date in the manner specified in Section 11.03 and cause
notice of the redemption thereof to be given in the name of and at the expense
of the Company in the manner provided in Section 11.04. Such notice having been
duly given, the redemption of such Securities shall be made upon the terms and
in the manner stated in Section 11.06. On or before each sinking fund payment
date, the Company shall pay to the Trustee (or, if the Company is acting as its
own Paying Agent, the Company shall segregate and hold in trust as provided in
Section 10.03) in cash a sum in the currency in which Securities of such series
are payable (except as provided pursuant to Section 3.01) equal to the
principal, premium, if any, and any interest accrued to the redemption date for
Securities or portions thereof to be redeemed on such sinking fund payment date
pursuant to this Section 13.03.
Neither the Trustee nor the Company shall redeem any Securities of a series
with sinking fund moneys or mail any notice of redemption of Securities of such
series by operation of the sinking fund for such series during the continuance
of a default in payment of interest, if any, on any Securities of such series or
of any Event of Default (other than an Event of Default occurring as a
consequence of this paragraph) with respect to the Securities of such series,
except that if the notice of redemption shall have been provided in accordance
with the provisions hereof, the Trustee (or the Company if the Company is then
acting as its own Paying Agent) shall redeem such Securities if cash sufficient
for that purpose shall be deposited with the Trustee (or segregated by the
Company) for that purpose in accordance with the terms of this Article XII.
Except as aforesaid, any moneys in the sinking fund for such series at the time
when any such default or Event of Default shall occur and any moneys thereafter
paid into such sinking fund shall, during the continuance of such default or
Event of Default, be held as security for the payment of the Securities and
coupons, if any, of such series; provided, however, that in case such default or
Event of Default shall have been cured or waived herein, such moneys shall
thereafter be applied on the next sinking fund payment date for the Securities
of such series on which such moneys may be applied pursuant to the provisions of
this Section 13.03.
ARTICLE XIV
Subordination of Securities
SECTION 14.01. Securities Subordinate to Senior Debt. The Company covenants
and agrees, and each Holder of a Security, by its acceptance thereof, likewise
covenants and agrees, that, to the extent and in the manner hereinafter set
forth in this Article, the payment of the principal of (and premium, if any) and
interest (including any Additional Interest) on each and all of the Securities
are hereby expressly made subordinate and junior in right of payment to the
prior payment in full of all amounts then due and payable in respect of all
Senior Debt.
SECTION 14.02. Payment Over of Proceeds Upon Dissolution, etc. In the event
of (a) any receivership, insolvency, liquidation, bankruptcy, reorganization,
arrangement, adjustment, composition or other judicial proceeding relative to
the Company, its creditors or its property, (b) any proceeding for the
liquidation, dissolution, or other winding up of the Company, voluntary or
involuntary, whether or not involving insolvency or bankruptcy proceedings, (c)
any assignment by the Company for the benefit of creditors or (d) any other
marshaling of the assets of the Company (each such event, if any, herein
sometimes referred to as a "Proceeding"), then the holders of Senior Debt shall
be entitled to receive payment in full of principal of (and premium, if any) and
interest, if any, on such Senior Debt, or provision shall be made for such
payment in cash or cash equivalents or otherwise in a manner satisfactory to the
holders of Senior Debt, before the Holders of the Securities are entitled to
receive or retain any payment or distribution of any kind or character, whether
in cash, property or securities (including any payment or distribution which may
be payable or deliverable by reason of the payment of any other Debt of the
Company (including any series of the Securities) subordinated to the payment of
the Securities, such payment or distribution being hereinafter referred to as a
"Junior Subordinated Payment"), on account of principal of (or premium, if any)
or interest (including any Additional Interest) on the Securities or on account
of the purchase or other acquisition of Securities by the Company or any
Subsidiary and to that end the holders of Senior Debt shall be entitled to
receive, for application to the payment thereof, any payment or distribution of
any kind or character, whether in cash, property or securities, including any
Junior Subordinated Payment, which may be payable or deliverable in respect of
the Securities in any such Proceeding; provided, however, that holders of Senior
Debt shall not be entitled to receive payment of any such amounts to the extent
that such holders would be required by the subordination provisions of such
Senior Debt to pay such amounts over to the obligees on trade accounts payable
or other liabilities arising in the ordinary course of business.
In the event that, notwithstanding the foregoing provisions of this
Section, the Trustee or the Holder of any Security shall have received any
payment or distribution of assets of the Company of any kind or character,
whether in cash, property or securities, including any Junior Subordinated
Payment, before all Senior Debt is paid in full or payment thereof is provided
for in cash or cash equivalents or otherwise in a manner satisfactory to the
holders of Senior Debt, and if such fact shall, at or prior to the time of such
payment or distribution, have been made known to a Responsible Officer of the
Trustee or, as the case may be, such Holder, then and in such event such payment
or distribution shall be paid over or delivered forthwith to the trustee in
bankruptcy, receiver, liquidating trustee, custodian, assignee, agent or other
Person making payment or distribution of assets of the Company for application
to the payment of all Senior Debt remaining unpaid, to the extent necessary to
pay all Senior Debt in full, after giving effect to any concurrent payment or
distribution to or for the holders of Senior Debt.
For purposes of this Article only, the words "any payment or distribution
of any kind or character, whether in cash, property or securities" shall not be
deemed to include shares of stock of the Company as reorganized or readjusted,
or securities of the Company or any other corporation provided for by a plan or
reorganization or readjustment which securities are subordinated in right of
payment to all then outstanding Senior Debt to substantially the same extent as
the Securities are so subordinated as provided in this Article. The
consolidation of the Company with, or the merger of the Company into, another
Person or the liquidation or dissolution of the Company following the sale of
all or substantially all of its properties and assets as an entirety to another
Person or the liquidation or dissolution of the Company following the sale of
all or substantially all of its properties and assets as an entirety to another
Person upon the terms and conditions set forth in Article VIII shall not be
deemed a Proceeding for the purposes of this Section if the Person formed by
such consolidation or into which the Company is merged or the Person which
acquires by sale such properties and assets as an entirety, as the case may be,
shall, as a part of such consolidation, merger, or sale comply with the
conditions set forth in Article VIII.
SECTION 14.03. Prior Payment to Senior Debt Upon Acceleration of
Securities. In the event that any Securities are declared due and payable before
their Stated Maturity, then and in such event the holders of the Senior Debt
outstanding at the time such Securities so become due and payable shall first be
entitled to receive payment in full of all amounts due on or in respect of such
Senior Debt (including any amounts due upon acceleration), or provision shall be
made for such payment in cash or cash equivalents or otherwise in a manner
satisfactory to the holders of Senior Debt, before the Holders of the Securities
will be entitled to receive or retain any payment or distribution of any kind or
character, whether in cash, property or securities (including any Junior
Subordinated Payment) by the Company on account of the principal of (or premium,
if any) or interest (including any Additional Interest) on the Securities or on
account of the purchase or other acquisition of Securities by the Company or any
Subsidiary; provided, however, that nothing in this Section shall prevent the
satisfaction of any sinking fund payment in accordance with this Indenture or as
otherwise specified as contemplated by Section 3.01 for the Securities of any
series by delivering and crediting pursuant to Section 13.02 or as otherwise
specified as contemplated by Section 3.01 for the Securities of any series
Securities which have been acquired (upon redemption or otherwise) prior to such
declaration of acceleration; provided further, however, that holders of Senior
Debt shall not be entitled to receive payment of any such amounts to the extent
that such holders would be required by the subordination provisions of such
Senior Debt to pay such amounts over to the obligees on trade accounts payable
or other liabilities arising in the ordinary course of business.
In the event that, notwithstanding the foregoing, the Company shall make
any payment to the Trustee or the Holder of any Security prohibited by the
foregoing provisions of this Section, and if such fact shall, at or prior to the
time of such payment, have been made known to a Responsible Officer of Trustee
or, as the case may be, such Holder, then and in such event such payment shall
be paid over and delivered forthwith to the Company.
The provisions of this Section shall not apply to any payment with respect
to which Section 14.02 would be applicable.
SECTION 14.04. No Payment When Senior Debt in Default. (a) In the event and
during the continuation of any default by the Company in the payment of
principal of (or premium, if any) or interest, if any, on any Senior Debt, or in
the event that any event of default with respect to any Senior Debt shall have
occurred and be continuing and shall have resulted in such Senior Debt becoming
or being declared due and payable prior to the date on which it would otherwise
have become due and payable, unless and until such event of default shall have
been cured or waived or shall have ceased to exist and such acceleration shall
have been rescinded or annulled, or (b) in the event any judicial proceeding
shall be pending with respect to any such default in payment or such event or
default, then no direct or indirect payment or distribution of any kind or
character, whether in cash, property or securities (including any Junior
Subordinated Payment) shall be made or agreed to be made by the Company on
account of principal of (or premium, if any) or interest (including any
Additional Interest), if any, on the Securities or on account of any redemption,
repayment, retirement, purchase or other acquisition of any Securities by the
Company or any Subsidiary; provided, however, that nothing in this Section shall
prevent the satisfaction of any sinking fund payment in accordance with this
Indenture or as otherwise specified as contemplated by Section 3.01 for the
Securities of any series by delivering and crediting pursuant to Section 13.02
or as otherwise specified as contemplated by Section 3.01 for the Securities of
any series Securities which have been acquired (upon redemption or otherwise)
prior to such default in payment or event of default.
In the event that, notwithstanding the foregoing, the Company shall make
any payment to the Trustee or the Holder of any Security prohibited by the
foregoing provisions of this Section, and if such fact shall, at or prior to the
time of such payment, have been made known to a Responsible Officer of the
Trustee or, as the case may be, such Holder, then and in such event such payment
shall be paid over and delivered forthwith to the Company.
The provisions of this Section shall not apply to any payment with respect
to which Section 14.02 would be applicable.
SECTION 14.05. Payment Permitted If No Default. Nothing contained in this
Article or elsewhere in this Indenture or in any of the Securities shall prevent
(a) the Company, at any time except during the pendency of any Proceeding
referred to in Section 14.02 or under the conditions described in Sections 14.03
and 14.04, from making payments at any time of principal of (and premium, if
any) or interest (including Additional Interest) on the Securities, or (b) the
application by the Trustee of any money deposited with it hereunder to the
payment of or on account of the principal of (and premium, if any) or interest
(including any Additional Interest) on the Securities or the retention of such
payment by the Holders, if, at the time of such payment by the Company or
application by the Trustee, as the case may be, it did not have knowledge that
such payment or application, as the case may be, would have been prohibited by
the provisions of this Article.
SECTION 14.06. Subrogation to Rights of Holders of Senior Debt. Subject to
the payment of all Senior Debt to the extent required under Sections 14.02 and
14.03 of this Indenture, or the provision for such payment in cash or cash
equivalents or otherwise in a manner satisfactory to the holders of Senior Debt,
the Holders of the Securities shall be subrogated to the extent of the payments
or distributions made to the holders of such Senior Debt pursuant to the
provisions of this Article (equally and ratably with the holders of all
indebtedness of the Company which by its express terms is subordinated to Senior
Debt of the Company to substantially the same extent as the Securities are
subordinated to the Senior Debt and is entitled to like rights of subrogation by
reason of any payments or distributions made to holders of such Senior Debt) to
the rights of the holders of such Senior Debt to receive payments and
distributions of cash, property and securities applicable to the Senior Debt
until the principal of (and premium, if any) and interest on the Securities
shall be paid in full. For purposes of such subrogation or assignment, no
payments or distributions to the holders of the Senior Debt of any cash,
property or securities to which the Holders of the Securities or the Trustee
would be entitled except for the provisions of this Article, and no payments
over pursuant to the provisions of this Article to the holders of Senior Debt by
Holders of the Securities or the Trustee, shall, as among the Company, its
creditors other than holders of Senior Debt, and the Holders of the Securities,
be deemed to be a payment or distribution by the Company to or on account of the
Senior Debt.
SECTION 14.07. Provisions Solely to Define Relative Rights. The provisions
of this Article are and are intended solely for the purpose of defining the
relative rights of the Holders of the Securities on the one hand and the holders
of Senior Debt on the other hand. Nothing contained in this Article or elsewhere
in this Indenture or in the Securities is intended to or shall (a) impair, as
between the Company and the Holders of the Securities, the obligations of the
Company, which are absolute and unconditional, to pay to the Holders of the
Securities the principal of (and premium, if any) and interest (including any
Additional Interest) on the Securities as and when the same shall become due and
payable in accordance with their terms; or (b) affect the relative rights
against the Company of the Holders of the Securities and creditors of the
Company other than their rights in relation to the holders of Senior Debt; or
(c) prevent the Trustee or the Holder of any Security from exercising all
remedies otherwise permitted by applicable law upon default under this Indenture
including, without limitation, filing and voting claims in any Proceeding,
subject to the rights, if any, under this Article of the holders of Senior Debt
to receive cash, property and securities otherwise Payable or deliverable to the
Trustee or such Holder.
SECTION 14.08. Trustee to Effectuate Subordination. Each Holder of a
Security by his or her acceptance thereof authorizes and directs the Trustee on
his or her behalf to take such action as may be necessary or appropriate to
acknowledge or effectuate the subordination provided in this Article and
appoints the Trustee his or her attorney-in-fact for any and all such purposes.
SECTION 14.09. No Waiver of Subordination Provisions. No right of any
present or future holder of any Senior Debt to enforce subordination as herein
provided shall at any time in any way be prejudiced or impaired by any act or
failure to act on the part of the Company or by any act or failure to act, in
good faith, by any such holder, or by any noncompliance by the Company with the
terms, provisions and covenants of this Indenture, regardless of any knowledge
thereof that any such holder may have or be otherwise charged with.
SECTION 14.10. Notice to Trustee. The Company shall give prompt written
notice to the Trustee of any fact known to the Company which would prohibit the
making of any payment to or by the Trustee in respect of the Securities.
Notwithstanding the provisions of this Article or any other provision of this
Indenture, the Trustee shall not be charged with knowledge of the existence of
any facts which would prohibit the making of any payment to or by the Trustee in
respect of the Securities, unless and until the Trustee shall have received
written notice thereof from the Company or a holder of Senior Debt or from any
trustee, agent or representative therefor (whether or not the facts contained in
such notice are true); provided, however, that if the Trustee shall not have
received the notice provided for in this Section at least two Business Days
prior to the date upon which by the terms hereof any monies may become payable
for any purpose (including, without limitation, the payment of the principal of
(and premium, if any) or interest (including any Additional Interest) on any
Security), then, anything herein contained to the contrary notwithstanding, the
Trustee shall have full power and authority to receive such monies and to apply
the same to the purpose for which they were received and shall not be affected
by any notice to the contrary which may be received by it within two Business
Days prior to such date.
SECTION 14.11. Reliance on Judicial Order or Certificate of Liquidating
Agent. Upon any payment or distribution of assets of the Company referred to in
this Article, the Trustee, subject to the provisions of Article VI, and the
Holders of the Securities shall be entitled to conclusively rely upon any order
or decree entered by any court of competent jurisdiction in which such
Proceeding is pending, or a certificate of the trustee in bankruptcy, receiver,
liquidating trustee, custodian, assignee for the benefit of creditors, agent or
other Person making such payment or distribution, delivered to the Trustee or to
the Holders of Securities, for the purpose of ascertaining the Persons entitled
to participate in such payment or distribution, the holders of the Senior Debt
and other indebtedness of the Company, the amount thereof or payable thereon,
the amount or amounts paid or distributed thereon and all other facts pertinent
thereto or to this Article.
SECTION 14.12. Trustee Not Fiduciary for Holders of Senior Debt. The
Trustee, in its capacity as trustee under this Indenture, shall not be deemed to
owe any fiduciary duty to the holders of Senior Debt and shall not be liable to
any such holders if it shall in good faith mistakenly pay over or distribute to
Holders of Securities or to the Company or to any other Person cash, property or
securities to which any holders of Senior Debt shall be entitled by virtue of
this Article or otherwise.
SECTION 14.13. Rights of Trustee as Holder of Senior Debt; Preservation of
Trustee's Rights. The Trustee in its individual capacity shall be entitled to
all the rights set forth in this Article with respect to any Senior Debt which
may at any time be held by it, to the same extent as any other holder of Senior
Debt, and nothing in this Indenture shall deprive the Trustee of any of its
rights as such holder.
SECTION 14.14. Article Applicable to Paying Agents. In case at any time any
Paying Agent other than the Trustee shall have been appointed by the Company and
be then acting hereunder, the term "Trustee" as used in this Article shall in
such case (unless the context otherwise requires) be construed as extending to
and including such Paying Agent within its meaning as fully for all intents and
purposes as if such Paying Agent were named in this Article in addition to or in
place of the Trustee.
SECTION 14.15. Certain Conversions or Exchanges Deemed Payment. For
purposes of this Article only, (a) the issuance and delivery of junior
securities upon conversion or exchange of Securities shall not be deemed to
constitute a payment or distribution on account of the principal of (or premium,
if any) or interest (including any Additional Interest) on Securities or on
account of the purchase or other acquisition of Securities, and (b) the payment,
issuance or delivery of cash, property or securities (other than junior
securities) upon conversion or exchange of a Security shall be deemed to
constitute payment on account of the principal of such Security. For the
purposes of this Section, the term "junior securities" means (i) shares of any
stock of any class of the Company and (ii) securities of the Company which are
subordinated in right of payment to all Senior Debt which may be outstanding at
the time of issuance or delivery of such securities to substantially the same
extent as, or to a greater extent than, the Securities are so subordinated as
provided in this Article.
<PAGE>
This instrument may be executed in any number of counterparts, each of
which when so executed shall be deemed to be an original, but all such
counterparts shall together constitute but one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed as of the day and year first written above.
U.S.B. HOLDING CO., INC.,
by /s/ Thomas E. Hales
--------------------
Name:Thomas E. Hales
Title:
THE CHASE MANHATTAN BANK, as Trustee,
by /s/ Sheik Wiltshire
---------------------
Name: Sheik Wiltshire
Title:
<PAGE>
EXHIBIT A
[Form of Restricted Securities Certificate]
RESTRICTED SECURITIES CERTIFICATE
(For transfers pursuant to ss. 3.05 and ss. 3.06
of the Junior Subordinated Indenture)
[__________________________],
as Security Registrar
[address]
Re: ____ % Junior Subordinated Securities of
U.S.B. Holding Co., Inc. (the "Company")
(the "Securities")
----------------------------------------
Reference is made to the Junior Subordinated Indenture, dated as of _____
__, 1997 (the "Indenture"), between U.S.B. Holding Co., Inc. and The Chase
Manhattan Bank, as trustee (the "Trustee"). Terms used herein and defined in the
Indenture or in Regulation D, Rule 144A or Rule 144 under the U.S. Securities
Act of 1933, as amended (the "Securities Act") are used herein as so defined.
This certificate relates to $____________ aggregate principal amount of
Securities, which are evidenced by the following certificate(s) (the "Specified
Securities"):
CUSIP No(s)._________________________________________________________
CERTIFICATE No(s).___________________________________________________
CURRENTLY IN BOOK-ENTRY FORM: __Yes __No (check one)
The person in whose name this certificate is executed below (the "Undersigned")
hereby certifies that either (i) it is the sole beneficial owner of the
Specified Securities or (ii) it is acting on behalf of all the beneficial owners
of the Specified Securities and is duly authorized by them to do so. Such
beneficial owner or owners are referred to herein collectively as the "Owner".
If the Specified Securities are represented by a Global Security, they are held
through the Depositary in the name of the Undersigned, as or on behalf of the
Owner. If the Specified Securities are not represented by a Global Security,
they are registered in the name of the Undersigned, as or on behalf of the
Owner.
The Owner has requested that the Specified Securities be transferred to a
person (the "Transferee") who will take delivery in the form of a Restricted
Security. In connection with such transfer, the Owner hereby certifies that,
unless such transfer is being effected pursuant to an effective registration
statement under the Securities Act, it is being effected in accordance with one
of the following as indicated (check one):
___ (1) transferred to the Company; or
___ (2) exchanged for the undersigned's own account without
transfer; or
___ (3) transferred pursuant to and in compliance with Rule 144A
under the Securities Act; or
___ (4) to an institutional "accredited investor" within the meaning
of subparagraph (a)(1), (2), (3) or (7) of Rule 501 under
the Securities Act that is acquiring the Securities for its
own account, or for the account of such an institutional
"accredited investor," for investment purposes and not with
a view to, or for offer or sale in connection with, any
distribution in violation of the Securities Act; or
___ (5) transferred pursuant to another available exemption from the
registration requirements of the Securities Act.
Unless such transfer is being effected in accordance with one of the above, the
Securities Registrar will refuse to register any of the Securities evidenced by
this certificate in the name of any person other than the Holder thereof;
provided, however, that if (4) or (5) is applicable, the Securities Registrar
may require, prior to registering any such transfer of the Securities such legal
opinions, certifications and other information as the Company has reasonably
requested to confirm that such transfer is being made pursuant to an exemption
from, or in a transaction not subject to, the registration requirements of the
Securities Act, such as the exemption provided by Rule 144 under such Act;
provided, further, that if box (3) is checked, the transferee must also certify
that it is a qualified institutional buyer as defined in Rule 144A.
This certificate and the statements contained herein are made for your
benefit and the benefit of the Company and the Initial Purchasers.
Dated:
________________________________________________
(Print the name of the Undersigned, as such term
is defined in the second paragraph of this
certificate.)
By:______________________________________________
Name:
Title:
(If the Undersigned is a corporation, partnership
or fiduciary, the title of the person signing on
behalf of the Undersigned must be stated.)
Face of Security
THESE SECURITIES ARE ISSUED, AND MAY BE TRANSFERRED, ONLY IN BLOCKS HAVING
A LIQUIDATION AMOUNT OF NOT LESS THAN $100,000. ANY TRANSFER, SALE OR OTHER
DISPOSITION OF THESE 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 SECURITIES FOR ANY
PURPOSE, INCLUDING BUT NOT LIMITED TO THE RECEIPT OF DISTRIBUTIONS ON SUCH
SECURITIES, AND SUCH TRANSFEREE SHALL BE DEEMED TO HAVE NO INTEREST WHATSOEVER
IN SUCH SECURITIES.
NO EMPLOYEE BENEFIT OR OTHER PLAN SUBJECT TO TITLE I OF THE EMPLOYEE
RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR SECTION 4975 OF
THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (EACH, A "PLAN"), NO ENTITY WHOSE
UNDERLYING ASSETS INCLUDE "PLAN ASSETS" BY REASON OF ANY PLAN'S INVESTMENT IN
THE ENTITY (A "PLAN ASSET ENTITY"), AND NO PERSON INVESTING "PLAN ASSETS" OF ANY
PLAN, MAY ACQUIRE OR HOLD THIS SECURITIES CERTIFICATE OR ANY INTEREST HEREIN,
UNLESS SUCH PURCHASER OR HOLDER IS COVERED BY THE EXEMPTIVE RELIEF AVAILABLE
UNDER U.S. DEPARTMENT OF LABOR PROHIBITED TRANSACTION CLASS EXEMPTION ("PTCE")
96-23, 95-60, 91-38, 90-1 OR 84-14 WITH RESPECT TO SUCH PURCHASE OR HOLDING. ANY
PURCHASER OR HOLDER OF THIS SECURITIES CERTIFICATE OR ANY INTEREST HEREIN WILL
BE DEEMED TO HAVE REPRESENTED BY ITS PURCHASE AND HOLDING HEREOF THAT IT EITHER
(A) IS NOT A PLAN OR A PLAN ASSET ENTITY AND IS NOT PURCHASING SUCH SECURITIES
ON BEHALF OF OR WITH "PLAN ASSETS" OF ANY PLAN, OR (B) IS ELIGIBLE FOR THE
EXEMPTIVE RELIEF AVAILABLE UNDER PTCE 96-23, 95-60, 91-38, 90-1 OR 84-14 WITH
RESPECT TO SUCH PURCHASE OR HOLDING.
U.S.B. HOLDING CO., INC.
9.58% New Junior Subordinated Debt Securities, Series B
due February 1, 2027
No. R-1 $---------------
U.S.B. HOLDING CO., INC., a corporation organized and existing under the
laws of Delaware (hereinafter called the "Company", which term includes any
successor corporation under the Indenture hereinafter referred to), for value
received, hereby promises to pay to The Chase Manhattan Bank as Property Trustee
of Union State Capital Trust I, or its registered assigns, the principal sum of
$------------ (-----------------------------------------) on February 1, 2027.
The Company further promises to pay interest on said principal sum from February
5 1997, or from the most recent interest payment date (each such date, an
"Interest Payment Date") on which interest has been paid or duly provided for,
semi-annually, subject to deferral as set forth herein, in arrears on February 1
and August 1 of each year, commencing August 1, 1997, at the rate of 9.58% per
annum, until the principal hereof shall have become due and payable, plus
Additional Interest, if any, until the principal hereof is paid or duly provided
for or made available for payment and on any overdue principal and (without
duplication and to the extent that payment of such interest is enforceable under
applicable law) on any overdue installment on interest at the rate of 9.58% per
annum, compounded semi-annually as Additional Interest. The amount of interest
payable for any period shall be computed on the basis of twelve 30-day months
and a 360-day year. The amount of interest payable for any partial period shall
be computed on the basis of the number of days elapsed in a 360-day year of
twelve 30-day months. In the event that any date on which interest is payable on
this Security is not a Business Day, then a 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 the payment was originally payable.
A "Business Day" shall mean any day other than (i) a Saturday or Sunday, (ii) a
day on which banking institutions in The City of New York are authorized or
required by law or executive order to remain closed or (iii) a day on which the
Corporate Trustee Administration Department of the Trustee or the Corporate
Trustee Administration Department of the Property Trustee under the Trust
Agreement hereinafter referred to for Union State Capital Trust I (the "Trust")
is closed for business. The interest installment so payable, and punctually paid
or duly provided for, on any Interest Payment Date, will, as provided in the
Indenture, be paid to the Person in whose name this Security (or one or more
Predecessor Securities, as defined in the Indenture) is registered at the close
of business on the Regular Record Date for such interest installment, which
shall be the fifteenth day of the month immediately preceding the month in which
an Interest Payment Date occurs. Any such interest installment not so punctually
paid or duly provided for shall forthwith cease to be payable to the Holder on
such Regular Record Date and may either be paid to the Person in whose name this
Security (or one or more Predecessor Securities) is registered at the close of
business on a Special Record Date for the payment of such Defaulted Interest to
be fixed by the Trustee, notice whereof shall be given to Holders of Securities
of this series not less than 10 days prior to such Special Record Date, or be
paid at any time in any other lawful manner not inconsistent with the
requirements of any securities exchange on which the Securities of this series
may be listed, and upon such notice as may be required by such exchange, all as
more fully provided in said Indenture.
So long as no Event of Default has occurred and is continuing, the Company
shall have the right at any time during the term of this Security, or from time
to time, to defer payment of interest on such Security for up to 10 consecutive
semi-annual interest payment periods with respect to each deferral period (each
an "Extension Period"), during which Extension Periods the Company shall have
the right to make partial payments of interest on any Interest Payment Date, and
at the end of which the Company shall pay all interest then accrued and unpaid
(together with Additional Interest thereon to the extent permitted by applicable
law); provided, however, that no Extension Period may extend beyond the Maturity
of this Security. During any such Extension Period, 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
of, interest or premium, if any, on or repay, repurchase or redeem any debt
securities of the Company (including Other Debentures) that rank pari passu with
or junior in interest to this Security or (iii) make any guarantee payments with
respect to any guarantee by the Company of the debt securities of any Subsidiary
of the Company (including Other Guarantees) if such guarantee ranks pari passu
with or junior in interest to this Security (other than (a) dividends or
distributions in Common Stock of the Company, (b) any declaration of a dividend
in connection with the implementation of a stockholders' rights plan, or the
issuance of stock under any such plan in the future, or the redemption or
repurchase of any such rights pursuant thereto, (c) payments under the Company's
Guarantee, (d) purchases or acquisitions of shares of the Company's Common Stock
in connection with the satisfaction by the Company of its obligations under any
employee benefit plan or other contractual obligation of the Company (other than
a contractual obligation ranking pari passu with or junior to these Securities),
(e) as a result of a reclassification of the Company's capital stock or the
exchange or conversion of one class or series of the Company's capital stock for
another class or series of the Company's capital stock, or (f) the purchase of
fractional interests in shares of the Company's capital stock pursuant to the
conversion or exchange provisions of such capital stock of the security being
converted or exchanged). Prior to the termination of any such Extension Period,
the Company may further extend such Extension Period, provided, however, that
such extension does not cause such Extension Period to exceed 10 consecutive
semi-annual interest payment periods or extend beyond the Maturity of this
Security. Upon the termination of any such Extension Period and upon the payment
of all accrued and unpaid interest and any Additional Interest then due, 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 shall give the Holder of this Security
and the Trustee notice of its election to begin any Extension Period at least
five Business Days prior to the Interest Payment Date, or with respect to the
Securities issued to Union State Capital Trust I, prior to the earlier of (i)
the date the Distributions on the Capital Securities would have been payable
except for the election to begin or extend such Extension Period or (ii) the
date the Administrative Trustees are required to give notice to any automated
quotation system or to holders of such Capital Securities of the record date or
the date such Distributions are payable, but in any event not less than five
Business Days prior to such record date. There is no limitation on the number of
times the Company may elect to begin an Extension Period.
Payment of the principal of (and premium, if any) and interest on this
Security will be made at the office or agency of the Company maintained for that
purpose in the United States, in such coin or currency of the United States of
America as at the time of payment is legal tender for payment of public and
private debts; provided, however, that at the option of the Company payment of
any interest may be made (except Securities in Global form) (i) by check mailed
to the address of the Person entitled thereto as such address shall appear in
the Securities Register or (ii) by wire transfer in immediately available funds
at such place and to such account as may be designated by the Person entitled
thereto as specified in the Securities Register.
The indebtedness evidenced by this Security is, to the extent provided in
the Indenture, subordinate and junior in right of payment to the prior payment
in full of all Senior Debt, and this Security is issued subject to the
provisions of the Indenture with respect thereto. Each Holder of this Security,
by accepting the same, (a) agrees to and shall be bound by such provisions, (b)
authorizes and directs the Trustee on its behalf to take such actions as may be
necessary or appropriate to effectuate the subordination so provided and (c)
appoints the Trustee as its attorney-in-fact for any and all such purposes. Each
Holder hereof, by its acceptance hereof, waives all notice of the acceptance of
the subordination provisions contained herein and in the Indenture by each
holder of Senior Debt, whether now outstanding or hereinafter incurred, and
waives reliance by each such Holder upon said provisions.
Reference is hereby made to the further provisions of this Security set
forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been executed by the
Trustee referred to on the reverse hereof by manual signature, this Security
shall not be entitled to any benefit under the Indenture or be valid or
obligatory for any purpose.
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed.
Dated: --------------, 1997 U.S.B. HOLDING CO., INC.
By:-------------------------------------
Chairman, President and
Chief Executive Officer
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
THIS IS ONE OF THE SECURITIES REFERRED TO IN THE WITHIN-MENTIONED INDENTURE.
THE CHASE MANHATTAN BANK, AS TRUSTEE
BY ----------------------------------------
AUTHORIZED SIGNATORY
Reverse of Security
This Security is one of a duly authorized issue of securities of the
Company (herein called the "Securities"), issued and to be issued in one or more
series under a Junior Subordinated Indenture, dated as of February 5, 1997, as
supplemented by an Officers Certificate dated as of February 5, 1997 (herein
called the "Indenture", between the Company and The Chase Manhattan Bank, as
Trustee (herein called the "Trustee", which term includes any successor trustee
under the Indenture), to which Indenture and all indentures supplemental thereto
reference is hereby made for a statement of the respective rights, limitations
of rights, duties and immunities thereunder of the Trustee, the Company and the
Holders of the Securities, and of the terms upon which the Securities are, and
are to be, authenticated and delivered. This Security is one of the series
designated on the face hereof, limited in aggregate principal amount to
$20,619,000.
All terms used in this Security that are defined in the Indenture and in
the Amended and Restated Declaration of Trust of Union State Capital Trust I,
dated as of February 5, 1997, as amended (the "Amended and Restated Declaration
of Trust"), among the Company, as Depositor, and the Trustees named therein,
shall have the meanings assigned to them in the Indenture or, to the extent not
defined in the Indenture, the Amended and Restated Declaration of Trust, as the
case may be.
On or after February 1, 2007, the Company may at any time, at its option,
subject to the terms and conditions of Article XI of the Indenture and subject
to the Company having received prior approval of the Federal Reserve if then
required under applicable capital guidelines of the Federal Reserve, redeem this
Security in whole or in part at any time or from time to time prior to maturity,
at a redemption price (the "Optional Prepayment Price") equal to the following
prices, expressed in percentages of the principal amount of the Securities
together with accrued but unpaid interest to but excluding the date fixed for
redemption. If redeemed during the 12-month period beginning February 1:
Year Redemption
Price
2007 104.790%
2008 104.311%
2009 103.832%
2010 103.353%
2011 102.874%
2012 102.395%
2013 101.916%
2014 101.437%
2015 100.958%
2016 100.479%
and at 100% on or after February 1, 2017.
If a Tax Event or a Regulatory Capital Event (each a "Special Event") shall
occur and be continuing, the Company may, 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 and subject to the
provisions of Article XI of the Indenture, prepay the Securities prior to
February 1, 2007 and within 90 days after the occurrence of such Special Event,
in whole (but not in part), at a prepayment price (the "Special Event Prepayment
Price") equal to the greater of (i) 100% of the principal amount of such
Securities and (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 Securities on
February 1, 2007, together with scheduled payments of interest accruing from the
prepayment date to February 1, 2007 (the "Remaining Life"), 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
each case, accrued interest thereon to the date of prepayment. In the case of
redemption on or after February 1, 2007 following a Special Event, the Special
Event Prepayment Price shall equal the Optional Prepayment Price then applicable
to a redemption as described above.
In the event of redemption of this Security in part only, a new Security or
Securities of this series for the unredeemed portion hereof will be issued in
the name of the Holder hereof upon the cancellation hereof.
If an Event of Default with respect to Securities of this series shall
occur and be continuing, the principal of this Security may be declared due and
payable in the manner, with the effect and subject to the conditions provided in
the Indenture.
The Indenture permits, with certain exceptions as therein provided, the
Company and the Trustee at any time to enter into a supplemental indenture or
indentures for the purpose of modifying in any manner the rights and obligations
of the Company and of the Holders of the Securities, with the consent of the
Holders of not less than a majority in principal amount of the Outstanding
Securities of each series to be affected by such supplemental indenture. The
Indenture also contains provisions permitting Holders of specified percentages
in principal amount of the Securities of each series at the time Outstanding, on
behalf of the Holders of all Securities of such series, to waive compliance by
the Company with certain provisions of the Indenture and certain past defaults
under the Indenture and their consequences. Any such consent or waiver by the
Holder of this Security shall be conclusive and binding upon such Holder and
upon all future Holders of this Security and of any Security issued upon the
registration of transfer hereof or in exchange herefor or in lieu hereof,
whether or not notation of such consent or waiver is made upon this Security.
As provided in and subject to the provisions of the Indenture, if an Event
of Default with respect to the Securities of this series at the time Outstanding
occurs and is continuing, then and in every such case the Trustee or the Holders
of not less than 25% in principal amount of the Outstanding Securities of this
series may declare the principal amount of all the Securities of this series to
be due and payable immediately, by a notice in writing to the Company (and to
the Trustee if given by Holders), provided, however, that, in the case of the
Securities of this series issued to Union State Capital Trust I, if upon an
Event of Default, the Trustee or the Holders of not less than 25% in principal
amount of the Outstanding Securities of this series fails to declare the
principal of all of the Securities of this series to be immediately due and
payable, the holders of at least 25% in aggregate Liquidation Amount of the
Capital Securities of Union State Capital Trust I then outstanding shall have
such right by a notice in writing to the Company and the Trustee. The Holders of
a majority in aggregate principal amount of the Outstanding Securities of these
Securities may annul such declaration and waive the default if the default
(other than the nonpayment of the principal of these Securities which has become
due solely by such acceleration) has been cured and a sum sufficient to pay all
matured installments of interest and principal due otherwise than by
acceleration has been deposited with the Trustee. Should the Holders of these
Securities fail to annul such declaration and waive such default, the holders of
a majority in aggregate Liquidation Amount of the Capital Securities of Union
State Capital Trust I shall have such right. Upon any such declaration such
specified amount of and the accrued interest (including any Additional Interest)
on all the Securities of this series shall become immediately due and payable,
provided that the payment of principal and interest (including any Additional
Interest) on such Securities shall remain subordinated to the extent provided in
Article XIV of the Indenture.
No reference herein to the Indenture and no provision of this Security or
of the Indenture shall alter or impair the obligation of the Company, which is
absolute and unconditional, to pay the principal of (and premium, if any) and
interest on this Security at the times, place and rate, and in the coin or
currency, herein prescribed.
As provided in the Indenture and subject to certain limitations therein set
forth, the transfer of this Security is registrable in the Securities Register,
upon surrender of this Security for registration of transfer at the office or
agency of the Company maintained pursuant to Section 10.02 of the Indenture duly
endorsed by, or accompanied by a written instrument of transfer in form
satisfactory to the Company and the Securities Registrar duly executed by, the
Holder hereof or his attorney duly authorized in writing and thereupon one or
more new Securities of this series, of authorized denominations and for the same
aggregate principal amount, will be issued to the designated transferee or
transferees. No service charge shall be made for any such registration of
transfer or exchange, but the Company may require payment of a sum sufficient to
cover any tax or other governmental charge payable in connection therewith.
Prior to due presentment of this Security for registration of transfer, the
Company, the Trustee and any agent of the Company or the Trustee shall treat the
Person in whose name this Security is registered as the owner hereof for all
purposes, whether or not this Security be overdue, and neither the Company, the
Trustee nor any such agent shall be affected by notice to the contrary.
The Securities of this series are issuable only in registered form without
coupons in blocks having minimum aggregate denominations of $100,000 and
integral multiples of $1,000 in excess thereof. As provided in the Indenture and
subject to certain limitations therein set forth, the Securities of this series
are exchangeable for a like aggregate principal amount of Securities of such
series of a different authorized denomination, as requested by the Holder
surrendering the same.
The Company and, by its acceptance of this Security or a beneficial
interest therein, the Holder of, and any person that acquires a beneficial
interest in, this Security intend that such Security constitutes indebtedness
and agree to treat such Security as indebtedness for all United States federal,
state and local tax purposes.
THE INDENTURE AND THIS SECURITY SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO THE CONFLICT
OF LAWS PRINCIPLES THEREOF.
Exhibit 4.3
CERTIFICATE OF TRUST
The undersigned, the trustees of Union State Capital Trust I, desiring to
form a business trust pursuant to Delaware Business Trust Act, 12 Del. C. ss.
3810, hereby certify as follows:
(a) The name of the business trust being formed hereby is "Union State
Capital Trust I" (the "Trust").
(b) The name and business address of the trustee of the Trust that has its
principal place of business in the State of Delaware is a follows:
Chase Manhattan Bank Delaware
1201 Market Street, 9th Floor
Wilmington, Delaware 19801
(c) This Certificate of Trust shall be effective as of the date of filing.
Dated: January 27, 1997
/s/ Thomas E. Hales
Name: Thomas E. Hales, as Administrative Trustee
/s/ Michael H. Fury
Name: Michael H. Fury, as Administrative Trustee
/s/ Raymond J. Crotty
Name: Raymond J. Crotty, as Administrative Trustee
/s/ Steven T. Sabatini
Name: Steven T. Sabatini, as Administrative Trustee
CHASE MANHATTAN BANK DELAWARE, as Trustee
By: /s/ John J. Cashin
Name: John J. Cashin
Title:
DECLARATION OF TRUST
This DECLARATION OF TRUST, dated as of January 27, 1997, among (i) U.S.B.
Holding Co., Inc., a Delaware corporation, as "Depositor", (ii) Chase Manhattan
Bank Delaware, not in its individual capacity but solely as trustee of the Trust
(the "Delaware Trustee"), (iii) Thomas E. Hales, an individual employed by the
Depositor, not in his individual capacity but solely as an administrative
trustee of the trust, (iv) Michael H. Fury, an individual employed by the
Depositor, not in his individual capacity but solely as an administrative
trustee of the trust, (v) Raymond J. Crotty, an individual employed by the
Depositor, not in his individual capacity but solely as an administrative
trustee of the trust, and (vi) Steven T. Sabatini, an individual employed by the
Depositor, not in his individual capacity but solely as an administrative
trustee of the trust (each of such trustees in (ii), (iii), (iv), (v) and (vi) a
"Trustee" and collectively, "Trustees"). The Depositor and the Trustees hereby
agree as follows:
1. The trust created hereby shall be known as Union State Capital Trust I,
(the "Trust") in which name the Trustees, or the Depositor to the extent
provided herein, may conduct the business of the Trust, make and execute
contracts, and sue and be sued.
2. The Depositor hereby assigns, transfers, conveys and sets over to the
Trustees the sum of $10. The Trustees hereby acknowledge receipt of such amount
in trust from the Depositor, which amount shall constitute the initial trust
estate. The Trustees hereby declare that they will hold the trust estate in
trust for the Depositor. It is the intention of the parties hereto that the
Trust created hereby constitute a business trust under Chapter 38 of Title 12 of
the Delaware Code, 12 Del. C. (S) 3801 et seq. (the "Business Trust Act"), and
that this document constitutes the governing instrument of the Trust. The
Trustees hereby are authorized and directed to execute and file a certificate of
trust with the Secretary of State of the State of Delaware in accordance with
the provisions of the Business Trust Act.
3. The Depositor and the Trustees will enter into an amended and restated
Declaration of Trust (the "Amended and Restated Declaration of Trust"),
satisfactory to each such party, to provide for the contemplated operation of
the Trust created hereby and the issuance of the Capital Securities and Common
Securities referred to and defined therein. Prior to the execution and delivery
of such amended and restated Declaration of Trust, the Trustees shall not have
any duty or obligation hereunder or with respect to the trust estate, except as
otherwise required by applicable law or as may be necessary to obtain prior to
such execution and delivery any licenses, consents or approvals required by
applicable law or otherwise.
4. The Depositor and the Trustees hereby authorize and direct the
Depositor, as the sponsor of the Trust, (i) to prepare a final offering
memorandum (the "Offering Memorandum") in relation to the offering and sale of
the Capital Securities (a) to qualified institutional buyers in reliance on Rule
144A under the Securities Act of 1933, as amended (the "Securities Act"), and
(b) to institutional "accredited investors" (as defined in Rule 501(a)(1), (2),
(3) or (7) under the Securities Act); (ii) to make all necessary filings and
applications to have the Capital Securities eligible for trading in the Private
Offering, Resales, and Trading through Automated Linkages Market of the National
Association of Securities Dealers, Inc.; (iii) to file and execute on behalf of
the Trust such applications, reports, surety bonds, irrevocable consents,
appointments of attorney for service of process and other papers and documents
as the Depositor, on behalf of the Trust, may deem necessary or desirable to
register the Capital Securities under the securities or "Blue Sky" laws; and
(iv) to execute on behalf of the Trust such purchase agreement with one or more
initial purchasers relating to the offering of the Capital Securities as the
Depositor, on behalf of the Trust, may deem necessary or desirable.
5. This Declaration of Trust may be executed in one or more counterparts,
each of which shall be deemed as original, but all of which together shall
constitute one and the same instrument.
6. The number of Trustees initially shall be five (5) and thereafter the
number of Trustees may be determined from time to time by a written instrument
signed by the Depositor that may increase or decrease the number of Trustees;
provided, however, that to the extent required by the Business Trust Act, one
Trustee shall either be a natural person who is a resident of the State of
Delaware or, if not a natural person, an entity that has its principal place of
business in the State of Delaware and otherwise meets the requirements of
applicable Delaware law. Subject to the foregoing, the Depositor is entitled to
appoint or remove without cause any Trustee at any time. Any Trustee may resign
upon thirty (30) days' prior notice to the Depositor.
7. 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 of Trust.
8. (a) The Delaware Trustee shall not be liable, responsible or accountable
for damages or otherwise to the Trust, the Depositor, the other Trustees or any
holder of the Capital Securities for a loss, damage or claim incurred by reason
of any act or omission performed or omitted by the Delaware Trustee in good
faith on behalf of the Trust and in a manner the Delaware Trustee reasonably
believed to be within the scope of authority conferred on the Delaware Trustee
by this Declaration of Trust or by law, except that the Delaware Trustee shall
be liable for any such loss, damage or claim incurred by reason of the Delaware
Trustee's gross negligence or willful misconduct with respect to such acts or
omissions.
(b) The Delaware Trustee 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 Delaware
Trustee reasonably believes are within such other person's professional or
expert competence and who has been selected with reasonable care by or on behalf
of the Trust, including information, opinions, reports or statements as to the
care by or on behalf of the Trust, including information, opinions, reports or
statements as to the value and amount of the assets, liabilities, profits,
losses, or any other facts pertinent to the existence and amount of assets from
which distributions to holders of Capital Securities might properly be paid.
9. The Depositor agrees, to the fullest extent permitted by applicable law,
from the date hereof until the Depositor and the Trustees enter into the Amended
and Restated Declaration of Trust:
(a) to indemnify and hold harmless the Delaware Trustee, or any of its
officers, directors, stockholders, employees, representatives or agents, from
and against any loss, damage, liability, tax penalty, expense or claim of any
kind or nature whatsoever incurred by reason of the creation, operation or
termination of the Trust or any act or omission performed or omitted by the
Delaware Trustee in good faith on behalf of the Trust in a manner reasonably
believed to be within the scope of authority conferred on the Delaware Trustee
by this Declaration of Trust, except that the Delaware Trustee shall not be
entitled to be indemnified in respect of any loss, damage or claim incurred by
reason of its gross negligence or willful misconduct with respect to such acts
or omissions; and
(b) to advance expenses (including the fees and expenses of counsel)
incurred by the Delaware Trustee in defending any claim, demand, action, suit or
proceeding from time to time, prior to the final disposition of such claim,
demand, action, suit or proceeding.
10. The provisions of Section 9 hereof shall survive the termination of
this Declaration of Trust or the earlier resignation or removal of the Delaware
Trustee.
11. The Trust may terminate without issuing any Capital Securities at the
election of the Depositor.
12. This Declaration of Trust shall be governed by, and construed in
accordance with, the laws of the State of Delaware (without regard to conflict
of laws principles).
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Declaration of
Trust to be duly exercised as of the day and year first written above.
U.S.B. HOLDING CO., INC.,
as Depositor
By: /s/ Thomas E. Hales
Name:Thomas E. Hales
Title:
CHASE MANHATTAN BANK
DELAWARE, not in its individual
capacity but solely as Trustee
By: /s/ John J. Cashin
Name: John J. Cashin
Title:
Thomas E. Hales,
not in his individual capacity
but solely as Administrative Trustee
/s/ Thomas E. Hales
Michael H. Fury,
not in his individual capacity
but solely as Administrative Trustee
/s/ Michael H. Fury
<PAGE>
Raymond J. Crotty,
not in his individual capacity
but solely as Administrative Trustee
/s/ Raymond J. Crotty
Steven T. Sabatini,
not in his individual capacity
but solely as Administrative Trustee
/s/ Steven T. Sabatini
Exhibit 4.5
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AMENDED AND RESTATED
DECLARATION OF TRUST
among
U.S.B. HOLDING CO., INC., as Depositor,
THE CHASE MANHATTAN BANK,
as Property Trustee,
CHASE MANHATTAN BANK DELAWARE,
as Delaware Trustee,
and
THE ADMINISTRATIVE TRUSTEES NAMED HEREIN
Dated as of February 5, 1997
UNION STATE CAPITAL TRUST I
================================================================================
<PAGE>
UNION STATE CAPITAL TRUST I
Certain Sections of this Amended and Restated Declaration of Trust relating
to Sections 310 through 318 of the Trust Indenture Act of 1939:
Trust Indenture Declaration of
Act Section Trust Section
- --------------- --------------
ss.310(a)(1)........................................ 8.07
(a)(2)........................................ 8.07
(a)(3)........................................ 8.09
(a)(4)........................................ 2.07(a)(ii)
(b)........................................... 8.08
ss.311(a)........................................... 8.13
(b)........................................... 8.13
ss.312(a)........................................... 5.08
(b)........................................... 5.08
(c)........................................... 5.08
ss.313(a)........................................... 8.14
(a)(4)........................................ 8.14
(b)........................................... 8.14
(c)........................................... 10.09
(d)........................................... 8.14
ss.314(a)........................................... 8.14, 8.15
(b)........................................... Not Applicable
(c)(1)........................................ 8.16
(c)(2)........................................ 8.16
(c)(3)........................................ Not Applicable
(d)........................................... Not Applicable
(e)........................................... 1.01, 8.16, 8.01(a)
ss.315(a)........................................... 8.03(a)
(b)........................................... 8.02, 10.09
(c)........................................... 8.01(a)
(d)........................................... 8.01, 8.03
(e)........................................... Not Applicable
ss.316(a)........................................... Not Applicable
(a)(1)(A)..................................... Not Applicable
(a)(1)(B)..................................... Not Applicable
(a)(2)........................................ Not Applicable
(b)........................................... 5.13
(c)........................................... 6.07
ss.317(a)(1)........................................ Not Applicable
(a)(2)........................................ Not Applicable
(b)........................................... 5.10
ss.318(a)........................................... 10.11
- --------------------
Note: This reconciliation and tie shall not, for any purpose, be deemed to be
a part of this Amended and Restated Declaration of Trust.
<PAGE>
TABLE OF CONTENTS
ARTICLE I
DEFINED TERMS
SECTION 1.01. DEFINITIONS
ARTICLE II
CONTINUATION OF THE TRUST
SECTION 2.01. NAME
SECTION 2.02. OFFICE OF THE DELAWARE TRUSTEE; PRINCIPAL PLACE OF BUSINESS
SECTION 2.03. ORGANIZATIONAL EXPENSES
SECTION 2.04. ISSUANCE OF THE CAPITAL SECURITIES
SECTION 2.05. ISSUANCE OF THE COMMON SECURITIES; SUBSCRIPTION
AND PURCHASE OF JUNIOR DEBT SECURITIES
SECTION 2.06. DECLARATION OF TRUST
SECTION 2.07. AUTHORIZATION TO ENTER INTO CERTAIN TRANSACTIONS
SECTION 2.08. ASSETS OF TRUST
SECTION 2.09. TITLE TO TRUST PROPERTY
ARTICLE III
PAYMENT ACCOUNT
SECTION 3.01. PAYMENT ACCOUNT
ARTICLE IV
DISTRIBUTIONS; REDEMPTION
SECTION 4.01. DISTRIBUTIONS
SECTION 4.02. REDEMPTION
SECTION 4.03. SUBORDINATION OF COMMON SECURITIES
SECTION 4.04. PAYMENT PROCEDURES
SECTION 4.05. TAX RETURNS AND REPORTS
SECTION 4.06. PAYMENT OF TAXES; DUTIES, ETC. OF THE TRUST
SECTION 4.07. PAYMENTS UNDER INDENTURE
ARTICLE V
TRUST SECURITIES CERTIFICATES
SECTION 5.01. INITIAL OWNERSHIP
SECTION 5.02. TRUST SECURITIES CERTIFICATES
SECTION 5.03. EXECUTION AND DELIVERY OF TRUST SECURITIES CERTIFICATES
SECTION 5.04. GLOBAL CAPITAL SECURITY
SECTION 5.05. REGISTRATION OF TRANSFER AND EXCHANGE GENERALLY;
CERTAIN TRANSFERS AND EXCHANGES; CAPITAL
SECURITIES CERTIFICATES; SECURITIES ACT LEGENDS
SECTION 5.06. MUTILATED, DESTROYED, LOST OR STOLEN TRUST
SECURITIES CERTIFICATES
SECTION 5.07. PERSONS DEEMED SECURITYHOLDERS
SECTION 5.08. ACCESS TO LIST OF SECURITYHOLDERS, NAMES AND ADDRESSES
SECTION 5.09. MAINTENANCE OF OFFICE OR AGENCY
SECTION 5.10. APPOINTMENT OF PAYING AGENT
SECTION 5.11. OWNERSHIP OF COMMON SECURITIES BY DEPOSITOR
SECTION 5.12. NOTICES TO CLEARING AGENCY
SECTION 5.13. RIGHTS OF SECURITYHOLDERS
ARTICLE VI
ACTS OF SECURITYHOLDERS; MEETINGS; VOTING
SECTION 6.01. LIMITATIONS ON CAPITAL SECURITYHOLDER'S VOTING RIGHTS
SECTION 6.02. NOTICE OF MEETINGS
SECTION 6.03. MEETINGS OF SECURITYHOLDERS
SECTION 6.04. VOTING RIGHTS
SECTION 6.05. PROXIES
SECTION 6.06. SECURITYHOLDER ACTION BY WRITTEN CONSENT
SECTION 6.07. RECORD DATE FOR VOTING AND OTHER PURPOSES
SECTION 6.08. ACTS OF SECURITYHOLDERS
SECTION 6.09. INSPECTION OF RECORDS
ARTICLE VII
REPRESENTATIONS AND WARRANTIES
SECTION 7.01. REPRESENTATIONS AND WARRANTIES OF THE PROPERTY TRUSTEE
SECTION 7.02. REPRESENTATIONS AND WARRANTIES OF THE DELAWARE TRUSTEE
SECTION 7.03. REPRESENTATIONS AND WARRANTIES OF DEPOSITOR
ARTICLE VIII
THE TRUSTEES
SECTION 8.01. CERTAIN DUTIES AND RESPONSIBILITIES
SECTION 8.02. EVENTS OF DEFAULT NOTICES; DEFERRAL OF INTEREST PAYMENT NOTICES
SECTION 8.03. CERTAIN RIGHTS OF PROPERTY TRUSTEE
SECTION 8.04. NOT RESPONSIBLE FOR RECITALS
SECTION 8.05. MAY HOLD SECURITIES
SECTION 8.06. COMPENSATION, INDEMNITY, FEES
SECTION 8.07. CORPORATE PROPERTY TRUSTEE REQUIRED; ELIGIBILITY OF TRUSTEES
SECTION 8.08. CONFLICTING INTERESTS
SECTION 8.09. CO-TRUSTEES AND SEPARATE TRUSTEE
SECTION 8.10. RESIGNATION AND REMOVAL; APPOINTMENT OF SUCCESSOR
SECTION 8.11. ACCEPTANCE OF APPOINTMENT BY SUCCESSOR
SECTION 8.12. MERGER, CONVERSION, CONSOLIDATION OR SUCCESSION TO BUSINESS
SECTION 8.13. PREFERENTIAL COLLECTION OF CLAIMS AGAINST DEPOSITOR OR TRUST
SECTION 8.14. REPORTS BY PROPERTY TRUSTEE
SECTION 8.15. REPORTS TO THE PROPERTY TRUSTEE
SECTION 8.16. EVIDENCE OF COMPLIANCE WITH CONDITIONS PRECEDENT
SECTION 8.17. NUMBER OF TRUSTEES
SECTION 8.18. DELEGATION OF POWER
ARTICLE IX
TERMINATION, LIQUIDATION AND MERGER
SECTION 9.01. TERMINATION UPON EXPIRATION DATE; TERMINATION UPON SPECIAL EVENT
SECTION 9.02. EARLY TERMINATION
SECTION 9.03. TERMINATION
SECTION 9.04. LIQUIDATION
SECTION 9.05. MERGERS, CONSOLIDATIONS, AMALGAMATIONS OR
REPLACEMENTS OF THE TRUST
ARTICLE X
MISCELLANEOUS PROVISIONS
SECTION 10.01. LIMITATION OF RIGHTS OF SECURITYHOLDERS
SECTION 10.02. LIABILITY OF THE DEPOSITOR
SECTION 10.03. AMENDMENT
SECTION 10.04. SEPARABILITY
SECTION 10.05. GOVERNING LAW
SECTION 10.06. PAYMENTS DUE ON NON-BUSINESS DAY
SECTION 10.07. SUCCESSORS
SECTION 10.08. HEADINGS
SECTION 10.09. REPORTS, NOTICES AND DEMANDS
SECTION 10.10. AGREEMENT NOT TO PETITION
SECTION 10.11. TRUST INDENTURE ACT; CONFLICT WITH TRUST INDENTURE ACT
SECTION 10.12. ACCEPTANCE OF TERMS OF DECLARATION OF TRUST,
GUARANTEE AND INDENTURE
<PAGE>
AMENDED AND RESTATED DECLARATION OF TRUST, dated as
of February 5, 1997, among (i) U.S.B. HOLDING CO.,
INC., a Delaware corporation (including any
successors or assigns, the "Depositor"), (ii) THE
CHASE MANHATTAN BANK, a New York banking corporation,
as property trustee (in such capacity, the "Property
Trustee" and, in its separate corporate capacity and
not in its capacity as Property Trustee, the "Bank"),
(iii) CHASE MANHATTAN BANK Delaware, a Delaware
banking corporation, as Delaware trustee (the
"Delaware Trustee"), (iv) Thomas E. Hales, an
individual, (v) Michael H. Fury an individual, (vi)
Raymond J. Crotty, an individual, and (vii) Steven T.
Sabatini, an individual, each of whose address is c/o
U.S.B. Holding Co., Inc. (each an "Administrative
Trustee" and collectively, the "Administrative
Trustees") (the Property Trustee, the Delaware
Trustee and the Administrative Trustees are referred
to collectively herein as the "Trustees") and (viii)
the several Holders, as hereinafter defined.
W I T N E S S E T H :
WHEREAS the Depositor, the Delaware Trustee and the Administrative Trustees
have heretofore duly declared and established a business trust pursuant to the
Business Trust Act of the State of Delaware by entering into a certain
Declaration of Trust, dated as of January 27, 1997 (the "Original Declaration of
Trust"), and by the execution and filing by the Delaware Trustee and the
Administrative Trustees with the Secretary of State of the State of Delaware of
a Certificate of Trust, filed on January 27, 1997 (the "Certificate of Trust"),
a copy of which is attached hereto as Exhibit A; and
WHEREAS the Depositor, the Delaware Trustee and the Administrative Trustees
desire to amend and restate the Original Declaration of Trust in its entirety as
set forth herein to provide for, among other things, (i) the issuance and sale
of the Common Securities, as hereinafter defined, by Union State Capital Trust I
(the "Trust") to the Depositor, (ii) the issuance and sale of the 9.58% Capital
Securities (the "Initial Capital Securities") by the Trust pursuant to the
Purchase Agreement, as hereinafter defined, (iii) the issuance pursuant to a
registered exchange for the Initial Capital Securities of 9.58% Capital
Securities (the "Exchange Capital Securities"), (iv) the acquisition by the
Trust from the Depositor of all of the right, title and interest in the Junior
Subordinated Debt Securities, and (v) the appointment of the Bank as the
Property Trustee.
NOW, THEREFORE, in consideration of the agreements and obligations set
forth herein and for other good and valuable consideration, the sufficiency of
which is hereby acknowledged, each party, for the benefit of the other parties
and for the benefit of the Securityholders, hereby amends and restates the
Original Declaration of Trust in its entirety and agrees as follows:
ARTICLE I
Defined Terms
SECTION 1.01. Definitions. For all purposes of this Declaration of Trust,
except as otherwise expressly provided or unless the context otherwise requires:
(a) the terms defined in this Article I have the meanings assigned to
them in this Article I and include the plural as well as the singular;
(b) all other terms used herein that are defined in the Trust
Indenture Act, either directly or by reference therein, have the meanings
assigned to them therein;
(c) unless the context otherwise requires, any reference to an
"Article" or a "Section" refers to an Article or a Section, as the case may
be, of this Declaration of Trust;
(d) the words "herein", "hereof" and "hereunder" and other words of
similar import refer to this Declaration of Trust as a whole and not to any
particular Article, Section or other subdivision; and
(e) all references to the date the Capital Securities were originally
issued shall refer to the date the Initial Capital Securities were
originally issued.
"Act" has the meaning specified in Section 6.08.
"Additional Distribution" has the meaning specified in Section 4.01(c).
"Administrative Trustee" means each of Thomas E. Hales, Michael H. Fury,
Raymond J. Crotty, and Steven T. Sabatini solely in such Person's capacity as
Administrative Trustee of the Trust continued hereunder and not in such Person's
individual capacity, or such Administrative Trustee's successor in interest in
such capacity, or any successor trustee appointed as herein provided.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"Applicable Procedures" means, with respect to any transfer or transaction
involving a beneficial interest in a Global Capital Security, the rules and
procedures of the Depositary for such Capital Security, in each case to the
extent applicable to such transaction and as in effect from time to time.
"Bank" has the meaning specified in the preamble to this Declaration of
Trust.
"Bankruptcy Event" means, with respect to any Person:
(a) the entry of a decree or order by a court having jurisdiction
in the premises judging such Person a bankrupt or insolvent, or approving
as properly filed a petition seeking reorganization, arrangement,
adjudication or composition of or in respect of such Person under any
applicable federal or state bankruptcy, insolvency, reorganization or other
similar law, or appointing a receiver, liquidator, assignee, trustee,
sequestrator (or other similar official) of such Person or of any
substantial part of its property or ordering the winding up or liquidation
of its affairs, and the continuance of any such decree or order unstayed
and in effect for a period of 60 consecutive days; or
(b) the institution by such Person of proceedings to be
adjudicated a bankrupt or insolvent, or the consent by it to the
institution of bankruptcy or insolvency proceedings against it, or the
filing by it of a petition or answer or consent seeking reorganization or
relief under any applicable federal or state bankruptcy, insolvency,
reorganization or other similar law, or the consent by it to the filing of
any such petition or to the appointment of a receiver, liquidator,
assignee, trustee, sequestrator (or similar official) of such Person or of
any substantial part of its property or the making by it of an assignment
for the benefit of creditors, or the admission by it in writing of its
inability to pay its debts generally as they become due and its willingness
to be adjudicated a bankrupt, or the taking of corporate action by such
Person in furtherance of any such action.
"Board Resolution" means a copy of a resolution certified by the Secretary
of an Assistant Secretary of the Depositor to have been duly adopted by the
Depositor's Board of Directors, or such committee of the Board of Directors or
officers of the Depositor to which authority to act on behalf of the Board of
Directors has been delegated, and to be in full force and effect on the date of
such certification, and delivered to the Trustees.
"Business Day" means a day other than (a) a Saturday or Sunday, (b) a day
on which banking institutions in the City of New York are authorized or required
by law or executive order to remain closed or (c) a day on which the Property
Trustee's Corporate Trust Office or the Corporate Trust Office of the Debenture
Trustee is closed for business.
"Capital Securities" means, at any given time, the Initial Capital
Securities and the Exchange Capital Securities issued and outstanding at such
time, treated together as a single class hereunder.
"Capital Securities Certificate" means a certificate evidencing ownership
of Capital Securities, substantially in the form attached as Exhibit B.
"Capital Securityholder" means a Person in whose name a Capital Security or
Capital Securities is registered in the Securities Register; and any such Person
shall be deemed to be a beneficial owner within the meaning of the Delaware
Business Trust Act.
"Certificate of Trust" has the meaning specified in the preamble to this
Declaration of Trust.
"Clearing Agency" means an organization registered as a "clearing agency"
pursuant to Section 17A of the Securities Exchange Act of 1934, as amended. The
Depository Trust Company shall be the initial Clearing Agency.
"Clearing Agency Participant" means a broker, dealer, bank, other financial
institution or other Person for whom from time to time a Clearing Agency effects
book-entry transfers and pledges of securities deposited with the Clearing
Agency.
"Closing Date" means February 5, 1997.
"Commission" means the Securities and Exchange Commission, as from time to
time constituted, created under the Securities Exchange Act of 1934, as amended,
or, if at any time after the execution of this instrument such Commission is not
existing and performing the duties now assigned to it under the Trust Indenture
Act, then the body performing such duties at such time.
"Common Securities" means the 9.58% Common Securities, each representing an
undivided beneficial interest in the assets of the Trust, having a Liquidation
Amount of $1,000 and having the rights provided therefor in this Declaration of
Trust, including the right to receive Distributions and a Liquidation
Distribution as provided herein.
"Common Securities Certificate" means a certificate evidencing ownership of
Common Securities, substantially in the form attached as Exhibit C.
"Corporate Trust Office" means the principal office of the Property Trustee
located in New York City which at the time of the execution of this Declaration
of Trust is located at 450 West 33rd Street, 15th Floor, New York, NY
10001-2697, Attention: Corporate Trustee Administration Department.
"Debenture Event of Default" means an "Event of Default" as defined in the
Indenture.
"Debenture Trustee" means The Chase Manhattan Bank, a New York banking
corporation, as trustee under the Indenture, and any successor trustee under the
Indenture.
"Declaration of Trust" means this Amended and Restated Declaration of
Trust, as the same may be modified, amended or supplemented in accordance with
the applicable provisions hereof, including all exhibits hereto, including, for
all purposes of this Amended and Restated Declaration of Trust, the provisions
of the Trust Indenture Act that are deemed to be a part of and govern this
Amended and Restated Declaration of Trust and any modification, amendment or
supplement of either, respectively.
"Definitive Capital Securities Certificate" means a Capital Securities
Certificate issued in certificated, fully registered form.
"Delaware Business Trust Act" means Chapter 38 of Title 12 of the Delaware
Code, 12 Del.C. sections 3801, et seq., as it may be amended from time to time.
"Delaware Trustee" means the corporation identified as the "Delaware
Trustee" in the preamble to this Declaration of Trust solely in its capacity as
Delaware Trustee of the Trust continued hereunder and not in its individual
capacity, or its successor in interest in such capacity, or any successor
trustee appointed in such capacity as herein provided.
"Depositor" has the meaning specified in the preamble to this Declaration
of Trust.
"Distribution Date" has the meaning specified in Section 4.01(a).
"Distributions" means amounts payable in respect of the Trust Securities as
provided in Section 4.01.
"Early Termination Event" has the meaning specified in Section 9.02.
"Event of Default" means any one of the following events (whatever the
reason for such Event of Default and whether it shall be voluntary or
involuntary or be effected by operation of law or pursuant to any judgment,
decree or order of any court or any order, rule or regulation of any
administrative or governmental body):
(a) the occurrence of a Debenture Event of Default; or
(b) default by the Trust in the payment of any Distribution when
it becomes due and payable, and continuation of such default for a period
of 30 days; or
(c) default by the Trust in the payment of any Redemption Price
of any Trust Security when it becomes due and payable; or
(d) default in the performance, or breach of any covenant or
warranty of any Trustee in this Declaration of Trust (other than a covenant
or warranty, a default in the performance or breach of which is addressed
in clause (b) or (c) above), and continuation of such default or breach for
a period of 60 days after there has been given, by registered or certified
mail, to the defaulting Trustee or Trustees by the Holders of at least 25%
in aggregate Liquidation Amount of the Outstanding Capital Securities, a
written notice specifying such default or breach and requiring it to be
remedied and stating that such notice is a "Notice of Default" hereunder;
or
(e) the occurrence of a Bankruptcy Event with respect to the
Property Trustee and the failure by the Depositor to appoint a successor
Property Trustee within 60 days thereof.
"Exchange Act" means the Securities and Exchange Act of 1934, as amended.
"Exchange Capital Securities" means the 9.58% Capital Securities, Series B,
issued in exchange for the Initial Capital Securities in an Exchange Offer in
accordance with the Registration Rights Agreement, each representing an
undivided beneficial interest in the assets of the Trust, having a Liquidation
Amount of $1,000 per Exchange Capital Security and having the rights provided
therefor in this Declaration of Trust, including the right to receive
Distributions and a Liquidation Distribution.
"Exchange Offer" has the meaning set forth in Section 5.05(d).
"Expiration Date" has the meaning specified in Section 9.01.
"Federal Reserve" means the Board of Governors of the Federal Reserve
System.
"Global Capital Securities" means a Capital Security registered in the name
of a Clearing Agency, beneficial ownership and transfers of which shall be made
through book entries by such Clearing Agency as described in Section 5.04.
"Global Capital Securities Certificate" means a certificate evidencing
ownership of Global Capital Securities, substantially in the form attached as
Exhibit B.
"Guarantee" means the Guarantee Agreement executed and delivered by the
Depositor and The Chase Manhattan Bank, as trustee, contemporaneously with the
execution and delivery of this Declaration of Trust, for the benefit of the
Holders of the Trust Securities, as amended from time to time, provided, that
following the consummation of the Exchange Offer, such term shall be deemed to
refer to the Exchange Guarantee (as defined in the Registration Rights
Agreement).
"Indenture" means the Indenture, dated as of February 5, 1997, between the
Depositor and the Debenture Trustee (as amended or supplemented from time to
time), relating to the issuance of the Junior Subordinated Debt Securities.
"Initial Capital Securities" means the 9.58% Capital Securities, Series A,
of the Trust issued on the date hereof, each representing an undivided
beneficial interest in the assets of the Trust, having a Liquidation Amount of
$1,000 per Capital Security and having the rights provided therefor in this
Declaration of Trust, including the right to receive Distributions and a
Liquidation Distribution.
"Initial Purchaser" means Keefe, Bruyette & Woods, Inc.
"Institutional Accredited Investor" means an institutional accredited
investor within the meaning of Rule 501(a)(1), (2), (3) or (7) of Regulation D
under the Securities Act.
"Junior Subordinated Debt Securities" means the aggregate principal amount
of the Depositor's 9.58% Junior Subordinated Debt Securities due February 1,
2027, issued pursuant to the Indenture.
"Junior Subordinated Debt Securities Redemption Date" means, with respect
to any Junior Subordinated Debt Securities to be redeemed under the Indenture,
the date fixed for redemption under the Indenture.
"Letter of Representations" means the agreement among the Trust, the
Property Trustee and The Depository Trust Company ("DTC"), as the initial
Clearing Agency, dated as of the Closing Date.
"Lien" means any lien, pledge, charge, encumbrance, mortgage, deed of
trust, adverse ownership interest, hypothecation, assignment, security interest
or preference, priority or other security agreement or preferential arrangement
of any kind or nature whatsoever.
"Like Amount" means (a) with respect to a redemption of Trust Securities,
Trust Securities having an aggregate Liquidation Amount equal to the principal
amount of Junior Subordinated Debt Securities to be contemporaneously redeemed
in accordance with the Indenture, allocated to the Trust Securities based upon
their relative Liquidation Amounts and the proceeds of which will be used to pay
the Redemption Price of such Trust Securities, and (b) with respect to a
distribution of Junior Subordinated Debt Securities to Holders in connection
with a dissolution or liquidation of the Trust, Junior Subordinated Debt
Securities having an aggregate principal amount equal to the aggregate
Liquidation Amount of the Trust Securities of the Holder to whom such Junior
Subordinated Debt Securities are distributed.
"Liquidation Amount" means the stated amount of $1,000 per Trust Security.
"Liquidation Date" means the date on which Junior Subordinated Debt
Securities are to be distributed to Holders of Trust Securities in connection
with a termination and liquidation of the Trust pursuant to Section 9.04(a).
"Liquidation Distribution" has the meaning specified in Section 9.04(d).
"1940 Act" means the Investment Company Act of 1940, as amended.
"Officers' Certificate" means a certificate signed by the Chairman, the
Chief Executive Officer, President or a Vice President, and by the Treasurer, an
Associate Treasurer, an Assistant Treasurer, the Controller, the Secretary or an
Assistant Secretary, of the Depositor, and delivered to the appropriate Trustee.
One of the officers signing an Officers' Certificate given pursuant to Section
8.16 shall be the principal executive, financial or accounting officer of the
Depositor. Any Officers' Certificate delivered with respect to compliance with a
condition or covenant provided for in this Declaration of Trust shall include:
(a) a statement that each officer signing the Officers'
Certificate has read the covenant or condition and the definitions relating
thereto;
(b) a brief statement of the nature and scope of the examination
or investigation undertaken by each officer in rendering the Officers'
Certificate;
(c) a statement that each such officer has made such examination
or investigation as, in such officer's opinion is necessary to enable such
officer to express an informed opinion as to whether or not such covenant
or condition has been complied with; and
(d) a statement as to whether, in the opinion of each such
officer, such condition or covenant has been complied with.
"Opinion of Counsel" means a written opinion of counsel, who may be counsel
for the Trust, the Property Trustee or the Depositor, but not an employee of any
thereof, and which opinion shall be reasonably acceptable to the Property
Trustee.
"Original Declaration of Trust" has the meaning specified in the preamble
to this Declaration of Trust.
"Other Capital Securities" means the Capital Securities sold by the Initial
Purchaser in the initial offering contemplated by the Purchase Agreement to
Institutional Accredited Investors in reliance on an exemption from the
registration requirements of the Securities Act other than Rule 144A.
"Outstanding", with respect to Capital Securities, means, as of the date of
determination, all Capital Securities theretofore executed and delivered under
this Declaration of Trust, except:
(a) Capital Securities theretofore canceled by the Property
Trustee or delivered to the Property Trustee for cancellation;
(b) Capital Securities for whose payment or redemption money in
the necessary amount has been theretofore deposited with the Property
Trustee or any Paying Agent for the benefit of the Holders of such Capital
Securities; provided that if such Capital Securities are to be redeemed,
notice of such redemption has been duly given pursuant to this Declaration
of Trust; and
(c) Capital Securities which have been paid or in exchange for or
in lieu of which other Capital Securities have been executed and delivered
pursuant to Sections 5.02, 5.04, 5.05, 5.11 or 5.13;
provided, however, that in determining whether the Holders of the requisite
Liquidation Amount of the Outstanding Capital Securities have given any request,
demand, authorization, direction, notice, consent or waiver hereunder, Capital
Securities owned by the Depositor, any Trustee or any Affiliate of the Depositor
or any Trustee shall be disregarded and deemed not to be Outstanding, except
that (a) in determining whether any Trustee shall be protected in relying upon
any such request, demand, authorization, direction, notice, consent or waiver,
only Capital Securities that a Responsible Officer of such Trustee actually
knows to be so owned shall be so disregarded and (b) the foregoing shall not
apply at any time when all of the outstanding Capital Securities are owned by
the Depositor, one or more of the Trustees and/or any such Affiliate. Capital
Securities so owned which have been pledged in good faith may be regarded as
Outstanding if the pledgee establishes to the satisfaction of the Administrative
Trustees the pledgee's right so to act with respect to such Capital Securities
and that the pledgee is not the Depositor or any Affiliate of the Depositor.
"Owner" means each Person who is the beneficial owner of a Global Capital
Security as reflected in the records of the Clearing Agency or, if a Clearing
Agency Participant is not the Owner, then as reflected in the records of a
Person maintaining an account with such Clearing Agency (directly or
indirectly), in accordance with the rules of such Clearing Agency.
"Paying Agent" means any paying agent or co-paying agent appointed pursuant
to Section 5.09 and shall initially be the Property Trustee.
"Payment Account" means a segregated noninterest-bearing corporate trust
account maintained by the Property Trustee with the Bank in its trust department
for the benefit of the Securityholders in which all amounts paid in respect of
the Junior Subordinated Debt Securities will be held and from which the Property
Trustee shall make payments to the Securityholders in accordance with Sections
4.01 and 4.02.
"Person" means any individual, corporation, partnership, joint venture,
trust, limited liability company or corporation, unincorporated organization or
government or any agency or political subdivision thereof.
"Property Trustee" means the commercial bank or trust company identified as
the "Property Trustee" in the preamble to this Declaration of Trust solely in
its capacity as Property Trustee of the Trust continued hereunder and not in its
individual capacity, or its successor in interest in such capacity, or any
successor property trustee appointed as herein provided.
"Purchase Agreement" means the Purchase Agreement, dated as of January 31,
1997, among the Trust, the Depositor and the Initial Purchaser.
"Redemption Date" means, with respect to any Trust Security to be redeemed,
the date fixed for such redemption by or pursuant to this Declaration of Trust,
provided, however, that each Junior Subordinated Debt Securities Redemption Date
and the Stated Maturity of the Junior Subordinated Debt Securities shall be a
Redemption Date for a Like Amount of Trust Securities.
"Redemption Price" means, with respect to any Trust Security, the
Liquidation Amount of such Trust Security, plus accumulated and unpaid
Distributions to the Redemption Date, plus the related amount of the premium, if
any, paid by the Depositor upon the concurrent redemption of a Like Amount of
Junior Subordinated Debt Securities, allocated on a pro rata basis (based on
Liquidation Amounts) among the Trust Securities.
"Registration Agreement" means the Registration Rights Agreement dated as
of February 5, 1997, among the Trust, the Depositor and the Initial Purchaser.
"Registration Statement" has the meaning specified in the Registration
Agreement.
"Regulation D" means Regulation D under the Securities Act (or any
successor provision), as it may be amended from time to time.
"Regulatory Capital Event" has the meaning specified in Section 1.01 of the
Indenture.
"Relevant Trustee" has the meaning specified in Section 8.10.
"Responsible Officer" means, when used with respect to the Property
Trustee, any officer of the Property Trustee having direct responsibility for
the administration for this Declaration of Trust, and also means, with respect
to a particular matter, any other officer of the Property Trustee, to whom such
matter is referred because of such officer's knowledge of and familiarity with
the particular subject.
"Restricted Capital Securities" means all Capital Securities required
pursuant to Section 5.05(c) to bear a Restricted Capital Securities Legend,
including the Global Capital Securities.
"Restricted Capital Securities Certificate" means a certificate
substantially in the form set forth in Exhibit D.
"Restricted Capital Securities Legend" means a legend substantially in the
form of the legend required in Section 5.05(c).
"Rule 144A" means Rule 144A under the Securities Act (or any successor
provision), as it may be amended from time to time.
"Rule 144A Capital Securities" means the Capital Securities purchased by
the Initial Purchaser from the Trust pursuant to the Purchase Agreement, other
than the Other Capital Securities.
"Securities Act" means the Securities Act of 1933, as amended.
"Securities Register" and "Securities Registrar" have the respective
meanings specified in Section 5.05.
"Securityholder" or "Holder" means a Person in whose name a Trust Security
or Trust Securities is registered in the Securities Register; any such Person
shall be deemed to be a beneficial owner within the meaning of the Delaware
Business Trust Act.
"Special Event" means either a Tax Event or a Regulatory Capital Event.
"Stated Maturity" has the meaning specified in Section 1.01 of the
Indenture.
"Tax Event" has the meaning specified in Section 1.01 of the Indenture.
"Trust" means Union State Capital Trust I.
"Trust Indenture Act" has the meaning specified in Section 1.01 of the
Indenture.
"Trust Property" means (a) the Junior Subordinated Debt Securities, (b) the
rights of the Property Trustee under the Guarantee, (c) any cash or deposit in,
or owing to, the Payment Account and (d) all proceeds and rights in respect of
the foregoing.
"Trust Securities Certificate" means any one of the Common Securities
Certificates or the Capital Securities Certificates.
"Trust Security" means any one of the Common Securities or the Capital
Securities.
"Trustees" means, collectively, the Property Trustee, the Delaware Trustee
and the Administrative Trustees.
ARTICLE II
Continuation of the Trust
SECTION 2.01. Name. The Trust continued hereby shall be known as "Union
State Capital Trust I," as such name may be modified from time to time by the
Administrative Trustees following written notice to the Holders and the other
Trustees, in which name the Trustees may conduct the business of the Trust, make
and execute contracts and other instruments on behalf of the Trust and sue and
be sued.
SECTION 2.02. Office of the Delaware Trustee; Principal Place of Business.
The address of the Delaware Trustee in the State of Delaware is Chase Manhattan
Bank Delaware, 1201 Market Street, 9th Floor, Wilmington, DE 19801, Attention:
Corporate Trustee Administration Department, or such other address in the State
of Delaware as the Delaware Trustee may designate by written notice to the
Securityholders and the Depositor. The principal executive office of the Trust
is in care of U.S.B. Holding Co., Inc., 100 Dutch Hill Road, Orangeburg, New
York 10962, Attention: Steven T. Sabatini, Executive Vice President and Chief
Financial Officer.
SECTION 2.03. Organizational Expenses. The Depositor, as issuer of the
Junior Subordinated Debt Securities, shall pay all expenses of the Trust as they
arise or shall, upon request of any Trustee, promptly reimburse such Trustee for
any such expenses paid by such Trustee. The Depositor shall make no claim upon
the Trust Property for the payment of such expenses.
SECTION 2.04. Issuance of the Capital Securities. The Capital Securities to
be issued will be limited to $20 million aggregate Liquidation Amount
outstanding at any one time.
On January 31, 1997, the Depositor and an Administrative Trustee, on behalf
of the Trust, and pursuant to the Original Declaration of Trust, and the Initial
Purchaser executed and delivered the Purchase Agreement. Contemporaneously with
the execution and delivery of this Declaration of Trust, an Administrative
Trustee, on behalf of the Trust, shall execute or cause to be executed in
accordance with Section 5.02 and the Property Trustee shall upon the written
order of the Depositor, countersign and deliver to the initial Clearing Agency
or its custodian on behalf of the Initial Purchaser, a Global Capital Securities
Certificate registered in the name of the nominee of the initial Clearing
Agency, in an aggregate amount of Capital Securities having an aggregate
Liquidation Amount of $20 million against receipt by the Administrative Trustees
of the aggregate purchase price of such Capital Securities equal to 100% of the
Liquidation Amount multiplied by the number of Capital Securities being
purchased.
SECTION 2.05. Issuance of the Common Securities; Subscription and Purchase
of Junior Debt Securities. Contemporaneously with the execution and delivery of
this Declaration of Trust, an Administrative Trustee, on behalf of the Trust,
shall execute or cause to be executed in accordance with Section 5.02(a) and
delivered to the Depositor Common Securities Certificates, registered in the
name of the Depositor, in an aggregate amount of 619 Common Securities having an
aggregate Liquidation Amount of $619,000 against payment by the Depositor of
$619,000, which amount the Administrative Trustees shall promptly deliver to the
Property Trustee. Contemporaneously therewith, an Administrative Trustee, on
behalf of the Trust, shall subscribe to and purchase from the Depositor Junior
Subordinated Debt Securities, registered in the name of the Trust and having an
aggregate principal amount equal to $20,619,000, and, in satisfaction of the
purchase price for such Junior Subordinated Debt Securities, the Property
Trustee, on behalf of the Trust, shall deliver to the Depositor the sum of
$20,619,000.
SECTION 2.06. Declaration of Trust. The exclusive purposes and functions of
the Trust are to (a) issue and sell Trust Securities, (b) use the proceeds from
the sale of Trust Securities to acquire the Junior Subordinated Debt Securities,
(c) receive payments to be made with respect to the Junior Subordinated Debt
Securities, and (d) engage in only those other activities necessary, advisable
or incidental thereto, such as registering the transfer of the Capital
Securities and complying with the terms of the Registration Agreement. The
Depositor hereby appoints the Trustees as trustees of the Trust, to have all the
rights, powers and duties to the extent set forth herein, and the Trustees
hereby accept such appointment subject to the terms hereof. The Property Trustee
hereby declares that it will hold the Trust Property in trust upon and subject
to the conditions set forth herein for the benefit of the Trust and the
Securityholders. The Administrative Trustees shall have all rights, powers and
duties set forth herein and in accordance with applicable law with respect to
accomplishing the purposes of the Trust. The Delaware Trustee shall not be
entitled to exercise any powers, nor shall the Delaware Trustee have any of the
duties and responsibilities, of the Property Trustee or the Administrative
Trustees set forth herein. The Delaware Trustee shall be one of the Trustees of
the Trust for the sole and limited purpose of fulfilling the requirements of
Section 3807 of the Delaware Business Trust Act.
SECTION 2.07. Authorization to Enter into Certain Transactions. (a) The
Trustees shall conduct the affairs of the Trust in accordance with the terms of
this Declaration of Trust. Subject to the limitations set forth in paragraph (b)
of this Section and in accordance with the following provisions (i) and (ii),
the Trustees shall have the authority to enter into all transactions and
agreements necessary to exercise the authority granted to the Trustees under
this Declaration of Trust, including, without limitation, the following acts:
(i) As among the Trustees, each Administrative Trustee shall have
the power and authority to act on behalf of the Trust with respect to the
following matters:
(A) the issuance and sale of the Trust Securities;
(B) to cause the Trust to enter into, and to execute, deliver and
perform on behalf of the Trust, the Purchase Agreement, the
Registration Agreement, the Letter of Representations and such other
agreements as may be necessary or desirable in connection with the
purposes and function of the Trust;
(C) assisting the Depositor in the registration of the Capital
Securities under the Securities Act and under state securities or blue
sky laws, and the qualification of this Declaration of Trust as a
trust indenture under the Trust Indenture Act;
(D) assisting the Depositor in the listing, if any, of the
Capital Securities upon such securities exchange or exchanges as shall
be determined by the Depositor and the registration of the Capital
Securities under the Exchange Act, and the preparation and filing of
all periodic and other reports and other documents pursuant to the
foregoing;
(E) the sending of notices (other than notices of default) and
other information regarding the Trust Securities and the Junior
Subordinated Debt Securities to the Securityholders in accordance with
this Declaration of Trust;
(F) the appointment of a Paying Agent, Transfer Agent and
Securities Registrar in accordance with this Declaration of Trust;
(G) registering transfer of the Trust Securities in accordance
with this Declaration of Trust;
(H) to the extent provided in this Declaration of Trust, the
winding up of the affairs and liquidation of the Trust and the
preparation, execution and filing of the certificate of cancellation
with the Secretary of State of the State of Delaware;
(I) unless otherwise determined by the Depositor, the Property
Trustee or the Administrative Trustees or as otherwise required by the
Delaware Business Trust Act or the Trust Indenture Act, to execute on
behalf of the Trust (either acting alone or together with any or all
of the Administrative Trustees) any documents that the Administrative
Trustees have the power to execute pursuant to this Declaration of
Trust; and
(J) the taking of any action incidental to the foregoing as the
Trustees may from time to time determine is necessary or advisable to
give effect to the terms of this Declaration of Trust for the benefit
of the Securityholders (without consideration of the effect of any
such action on any particular Securityholders).
(ii) As among the Trustees, the Property Trustee shall have the
power, duty and authority to act on behalf of the Trust with respect to the
following matters:
(A) the establishment of the Payment Account;
(B) the receipt of the Junior Subordinated Debt Securities;
(C) the collection of interest, principal and any other payments
made in respect of the Junior Subordinated Debt Securities in the
Payment Account;
(D) so long as it is acting as Paying Agent, the distribution of
amounts owed to the Securityholders in respect of the Trust
Securities;
(E) the exercise of all of the rights, powers and privileges of a
holder of the Junior Subordinated Debt Securities, provided, however,
that the Property Trustee shall not exercise such rights unless it
shall have received an Opinion of Counsel to the effect that such
exercise would not cause more than an insubstantial risk that the
Trust fails to be treated as a grantor trust for federal income tax
purposes;
(F) the sending of notices of default and other information
regarding the Trust Securities and the Junior Subordinated Debt
Securities to the Securityholders in accordance with this Declaration
of Trust;
(G) the distribution of the Trust Property in accordance with the
terms of this Declaration of Trust;
(H) to the extent provided in this Declaration of Trust, the
winding up of the affairs of and liquidation of the Trust and the
execution of the certificate of cancellation with the Secretary of
State of the State of Delaware;
(I) after an Event of Default, the taking of any action
incidental to the foregoing as the Property Trustee may from time to
time determine is necessary or advisable to give effect to the terms
of this Declaration of Trust and protect and conserve the Trust
Property for the benefit of the Securityholders (without consideration
of the effect of any such action on any particular Securityholder);
and
(J) except as otherwise provided in this Section 2.07(a)(ii), the
Property Trustee shall have none of the duties, liabilities, powers or
the authority of the Administrative Trustees set forth in Section
2.07(a)(i).
(b) So long as this Declaration of Trust remains in effect, the Trust (or
the Trustees acting on behalf of the Trust) shall not undertake any business,
activities or transactions except as expressly provided herein or contemplated
hereby. In particular, but without limitation, the Trustees shall not (i)
acquire any investments or engage in any activities not authorized by this
Declaration of Trust, (ii) sell, assign, transfer, exchange, mortgage, pledge,
set-off or otherwise dispose of any of the Trust Property or interests therein,
including to Securityholders, except as expressly provided herein, (iii)
knowingly take any action that would cause the Trust to fail or cease to qualify
as a "grantor trust" for United States federal income tax purposes, (iv) incur
any indebtedness for borrowed money or issue any other debt, (v) take or consent
to any action that would result in the placement of a Lien on any of the Trust
Property, (vi) invest any proceeds received by the Trust from holding the Junior
Subordinated Debt Securities, but shall distribute all such proceeds to Holders
pursuant to the terms of this Declaration of Trust and of the Trust Securities,
(vii) acquire any assets other than the Trust Property, (viii) possess any power
or otherwise act in such a way as to vary the Trust Property, (ix) possess any
power or otherwise act in such a way as to vary the terms of the Trust
Securities in any way whatsoever (except to the extent expressly authorized in
this Declaration of Trust or by the terms of the Trust Securities), (x) issue
any securities or other evidences of beneficial ownership of, or beneficial
interest in, the Trust other than the Trust Securities, or (xi) other than as
provided in this Declaration of Trust or by the terms of the Trust Securities,
(A) direct the time, method and place of exercising any trust or power conferred
upon the Debenture Trustee with respect to the Junior Subordinated Debt
Securities, (B) waive any past default that is waivable under the Indenture, (C)
exercise any right to rescind or annul any declaration that the principal of all
Junior Subordinated Debt Securities shall be due and payable, or (D) consent to
any amendment, modification, or termination of the Indenture or the Junior
Subordinated Debt Securities where such consent shall be required unless the
Trust shall have received an Opinion of Counsel to the effect that such
amendment, modification or termination will not cause more than an insubstantial
risk that the Trust will be deemed an Investment Company required to be
registered under the Investment Company Act, the Trust will not be classified as
a grantor trust for United States federal income tax purposes or the Junior
Subordinated Debt Securities will not be classified as indebtedness for such
purposes. The Administrative Trustees shall defend all claims and demands of all
Persons at any time claiming any Lien on any of the Trust Property adverse to
the interest of the Trust or the Securityholders in their capacity as
Securityholders.
(c) In connection with the issue and sale of the Trust Securities, the
Depositor shall have the right and responsibility to assist the Trust with
respect to, or effect on behalf of the Trust, the following (and any actions
taken by the Depositor in furtherance of the following prior to the date of this
Declaration of Trust are hereby ratified and confirmed in all respects):
(i) the preparation and filing by the Trust with the Commission and
the execution on behalf of the Trust of a registration statement on the
appropriate form in relation to the Trust Securities, including any
amendments thereto;
(ii) the determination of the states in which to take appropriate
action to qualify or register for sale all or part of the Trust Securities
and the determination of any and all such acts, other than actions which
must be taken by or on behalf of the Trust, and the advice to the Trustees
of actions they must take on behalf of the Trust, and the preparation for
execution and filing of any documents to be executed and filed by the Trust
or on behalf of the Trust, as the Depositor deems necessary or advisable in
order to comply with the applicable laws of any such states;
(iii) the preparation for filing by the Trust and execution on behalf
of the Trust of an application to permit the Capital Securities to trade as
quoted or listed in or on the Private Offering, Resales and Trading through
Automated Linkages ("PORTAL") Market of the National Association of
Securities Dealers, Inc. or any other securities exchange quotation system
or the NASDAQ National Market;
(iv) the negotiation of the terms of, and the execution and delivery
of, the Purchase Agreement providing for the sale of the Capital
Securities; and
(v) the taking of any other actions necessary or desirable to carry
out any of the foregoing activities.
(d) Notwithstanding anything herein to the contrary, the Administrative
Trustees are authorized and directed to conduct the affairs of the Trust and to
operate the Trust so that the Trust will not (i) be deemed to be an "investment
company" required to be registered under the Investment Company Act of 1940, as
amended, or (ii) fail to be classified as a grantor trust for United States
federal income tax purposes and so that the Junior Subordinated Debt Securities
will be treated as indebtedness of the Depositor for United States federal
income tax purposes. In this connection, the Depositor and the Administrative
Trustees are authorized to take any action, not inconsistent with applicable
law, the Certificate of Trust or this Declaration of Trust, that each of the
Depositor and the Administrative Trustees determines in their discretion to be
necessary or desirable for such purposes, as long as such action does not
adversely affect in any material respect the interests of the Holders of the
Trust Securities.
SECTION 2.08. Assets of Trust. The assets of the Trust shall consist solely
of the Trust Property.
SECTION 2.09. Title to Trust Property. Legal title to all Trust Property
shall be vested at all times in the Property Trustee (in its capacity as such)
and shall be held and administered by the Property Trustee for the benefit of
the Trust and the Securityholders in accordance with this Declaration of Trust.
ARTICLE III
Payment Account
SECTION 3.01. Payment Account. (a) On or prior to the Closing Date, the
Property Trustee shall establish the Payment Account. The Property Trustee and
any agent of the Property Trustee shall have exclusive control and sole right of
withdrawal with respect to the Payment Account for the purpose of making
deposits in and withdrawals from the Payment Account in accordance with this
Declaration of Trust. All moneys and other property deposited or held from time
to time in the Payment Account shall be held by the Property Trustee in the
Payment Account for the exclusive benefit of the Securityholders and for
distribution as herein provided, including (and subject to) any priority of
payments provided for herein or by applicable law.
(b) The Property Trustee shall deposit in the Payment Account, promptly
upon receipt, all payments of principal of or interest on, and any other
payments or proceeds with respect to, the Junior Subordinated Debt Securities.
Amounts held in the Payment Account shall not be invested by the Property
Trustee pending distribution thereof.
ARTICLE IV
Distributions; Redemption
SECTION 4.01. Distributions. (a) Distributions on the Trust Securities
shall be cumulative and will accumulate whether or not there are funds of the
Trust available for the payment of Distributions. Distributions shall accrue
from February 5, 1997, and, except in the event (and to the extent) that the
Depositor exercises its right to defer the payment of interest on the Junior
Subordinated Debt Securities pursuant to the Indenture, shall be payable
semiannually in arrears on February 1 and August 1 of each year, commencing on
August 1, 1997. If any date on which a Distribution is otherwise payable is not
a Business Day, then the payment of such Distribution shall be made on the next
succeeding day that is a Business Day (and without any interest or other payment
in respect of any such delay), in each case with the same force and effect as if
made on such date (each date on which distributions are payable in accordance
with this Section 4.01(a), a "Distribution Date"). Accrued Distributions that
are not paid on the applicable Distribution Date will bear interest on the
amount thereof (to the extent permitted by law) at the rate per annum of 9.58%
thereof, compounded semiannually from the relevant Distribution Date.
(b) The Trust Securities represent undivided beneficial ownership interests
in the Trust Property, and, assuming payments of interest on the Junior
Subordinated Debt Securities are made when due (and before giving effect to
Additional Distributions, as defined below, if applicable), Distributions on the
Trust Securities shall be payable at a rate of 9.58% per annum of the
Liquidation Amount of the Trust Securities. The amount of Distributions payable
for any full period shall be computed on the basis of a 360-day year of twelve
30-day months. The amount of Distributions for any partial period shall be
computed on the basis of the number of days elapsed in a 360-day year of twelve
30-day months. The amount of Distributions payable for any period shall include
the Additional Distributions, if any.
(c) So long as no Debenture Event of Default has occurred and is
continuing, the Depositor has the right under the Indenture to defer the payment
of interest on the Junior Subordinated Debt Securities at any time and from time
to time for a period not exceeding 10 consecutive semiannual periods (an
"Extension Period"), provided that no Extension Period may extend beyond the
Stated Maturity of the Junior Subordinated Debt Securities. As a consequence of
any such deferral, semiannual Distributions on the Trust Securities by the Trust
will also be deferred (and the amount of Distributions to which Holders are
entitled will accumulate additional Distributions thereon at the rate of 9.58%
per annum, compounded semiannually) from the relevant payment date for such
Distributions, but not exceeding the interest rate then accruing on the Junior
Subordinated Debt Securities. In addition, in certain circumstances as provided
in the Registration Agreement, an additional amount will be payable, as
liquidated damages on the Junior Subordinated Debt Securities and as additional
distributions on the Trust Securities, respectively, at a rate of 0.25% per
annum of the Liquidation Amount. The aggregate amount of such additional amounts
payable with respect to the preceding sentence shall not exceed 0.25% per annum
(each type of increase in Distributions, described in this Section 4.01(c), an
"Additional Distribution").
(d) Distributions on the Trust Securities shall be made by the Property
Trustee from the Payment Account and shall be payable on each Distribution Date
only to the extent that the Trust has funds then on hand and available in the
Payment Account for the payment of such Distributions.
(e) Distributions on the Trust Securities with respect to a Distribution
Date shall be payable to the Holders of record as they appear on the Securities
Register for the Trust Securities on each January 15 and July 15.
SECTION 4.02. Redemption. (a) On each Junior Subordinated Debt Securities
Redemption Date and on the Stated Maturity of the Junior Subordinated Debt
Securities, the Trust will be required to redeem a Like Amount of Trust
Securities at the applicable Redemption Price.
(b) Notice of redemption shall be given by the Property Trustee by
first-class mail, postage prepaid, mailed not less than 30 nor more than 60 days
prior to the Redemption Date to each Holder of Trust Securities to be redeemed,
at such Holder's address appearing in the Security Register. All notices of
redemption shall identify the Trust Securities to be redeemed (including CUSIP
numbers) and shall state:
(i) the Redemption Date;
(ii) the applicable Redemption Price;
(iii) if less than all the Outstanding Trust Securities are to be
redeemed, the identification and the total Liquidation Amount of the
particular Trust Securities to be redeemed; and
(iv) that on the Redemption Date the Redemption Price will become due
and payable upon each such Trust Security to be redeemed and that
Distributions thereon will cease to accrue on and after said date.
The Trust in issuing the Trust Securities may use "CUSIP", and/or "private
placement" numbers (if then generally in use), and, if so, the Property Trustee
shall indicate the "CUSIP" or "private placement" numbers of the Trust
Securities in notices of redemption and related materials as a convenience to
Securityholders; provided that any such notice may state that no representation
is made as to the correctness of such numbers either as printed on the Trust
Securities or as contained in any notice of redemption and related material. The
Depositor shall promptly notify the Property Trustee of any change in such
numbers.
(c) The Trust Securities redeemed on each Redemption Date shall be redeemed
at the applicable Redemption Price with the proceeds from the contemporaneous
redemption of Junior Subordinated Debt Securities. Redemptions of the Trust
Securities shall be made and the applicable Redemption Price shall be payable on
each Redemption Date only to the extent that the Trust has funds then on hand
and available in the Payment Account for the payment of such Redemption Price.
(d) If the Property Trustee gives a notice of redemption in respect of any
Trust Securities, then, by 12:00 noon, New York City time, on the Redemption
Date, subject to Section 4.02(c), the Property Trustee will, so long as the
Capital Securities are in book-entry-only form, irrevocably deposit with the
Clearing Agency for the Capital Securities funds sufficient to pay the
applicable Redemption Price. With respect to Capital Securities held in
certificated form, the Property Trustee, subject to Section 4.02(c), will
irrevocably deposit with the Paying Agent funds sufficient to pay the applicable
Redemption Price and will give the Paying Agent irrevocable instructions and
authority to pay the Redemption Price to the Holders thereof upon surrender of
their Capital Securities Certificates. Notwithstanding the foregoing,
Distributions payable on or prior to the Redemption Date for any Trust
Securities called for redemption shall be payable to the Holders of such Trust
Securities as they appear on the Securities Register on the relevant record
dates for the related Distribution Dates. If notice of redemption shall have
been given and funds deposited as required, then upon the date of such deposit,
all rights of Securityholders holding Trust Securities so called for redemption
will cease, except the right of such Securityholders to receive the applicable
Redemption Price and any Distribution payable on or prior to the Redemption
Date, but without interest, and such Capital Securities will cease to be
outstanding. In the event that any date on which any applicable Redemption Price
is payable is not a Business Day, then payment of the applicable Redemption
Price payable on such date will be made on the next succeeding day that is a
Business Day (and without any interest or other payment in respect of any such
delay), except that, if such Business Day falls in the next calendar year, such
payment will be made on the immediately preceding Business Day, in each case,
with the same force and effect as if made on such date. In the event that
payment of the applicable Redemption Price in respect of any Trust Securities
called for redemption is improperly withheld or refused and not paid either by
the Trust or by the Depositor pursuant to the Guarantee, Distributions on such
Trust Securities will continue to accrue, at the then applicable rate, from the
Redemption Date originally established by the Trust for such Trust Securities to
the date such applicable Redemption Price is actually paid, in which case the
actual payment date will be the date fixed for redemption for purposes of
calculating the applicable Redemption Price.
(e) Payment of the applicable Redemption Price on, and any distributions of
Junior Subordinated Debt Securities to Holders of, the Trust Securities shall be
made to the Holders thereof as they appear on the Securities Register on the
relevant record date, and, with respect to Trust Securities held in certificated
form, upon surrender of such certificated Trust Securities to the Paying Agent.
(f) Subject to Section 4.03(a), if less than all the Outstanding Trust
Securities are to be redeemed on a Redemption Date, then the aggregate
Liquidation Amount of Trust Securities to be redeemed shall be allocated on a
pro rata basis (based on Liquidation Amounts) among the Trust Securities. The
particular Trust Securities to be redeemed shall be selected not more than 60
days prior to the Redemption Date by the Property Trustee from the Outstanding
Trust Securities not previously called for redemption, on a pro rata basis
(based upon Liquidation Amounts) or by such other method as the Property Trustee
shall deem fair and appropriate and which may provide for the selection for
redemption of portions (equal to $1,000 or an integral multiple of $1,000 in
excess thereof) of the Liquidation Amount of Trust Securities of a denomination
larger than $1,000. The Property Trustee shall promptly notify the Security
Registrar in writing of the Trust Securities selected for redemption and, in the
case of any Trust Securities selected for partial redemption, the Liquidation
Amount thereof to be redeemed. For all purposes of this Declaration of Trust,
unless the context otherwise requires, all provisions relating to the redemption
of Trust Securities shall relate in the case of any Trust Securities redeemed or
to be redeemed only in part, to the portion of the Liquidation Amount of Trust
Securities that has been or is to be redeemed.
SECTION 4.03. Subordination of Common Securities. (a) Payment of
Distributions (including Additional Distributions, if applicable) on, and the
Redemption Price of the Trust Securities, as applicable, shall be made, subject
to Section 4.02(f), pro rata to the Holders of the Trust Securities based on the
Liquidation Amount of the Trust Securities; provided, however, that if on any
Distribution Date or Redemption Date any Event of Default resulting from a
Debenture Event of Default or other Event of Default shall have occurred and be
continuing, no payment of any Distribution (including Additional Distributions,
if applicable) on, or Redemption Price of, any of the Common Securities, and no
other payment on account of the redemption, liquidation or other acquisition of
such Common Securities, shall be made unless payment in full in cash of all
accumulated and unpaid Distributions (including Additional Distributions, if
applicable) on all outstanding Capital Securities for all Distribution Dates
occurring on or prior thereto, or, in the case of payment of the applicable
Redemption Price, the full amount of such Redemption Price on all outstanding
Capital Securities, shall have been made or provided for, and all funds
immediately available to the Property Trustee shall first be applied to the
payment in full in cash of all Distributions (including Additional
Distributions, if applicable) on, or the Redemption Price of, Capital Securities
then due and payable.
(b) In the case of the occurrence of any Event of Default resulting from
any Debenture Event of Default, the Holder of Common Securities will be deemed
to have waived any right to act with respect to any such Event of Default under
this Declaration of Trust until the effect of all such Events of Default with
respect to the Capital Securities have been cured, waived or otherwise
eliminated. Until all such Events of Default under this Declaration of Trust
with respect to the Capital Securities have been so cured, waived or otherwise
eliminated, the Property Trustee shall act solely on behalf of the Holders of
the Capital Securities and not on behalf of the Holder of the Common Securities,
and only the Holders of the Capital Securities will have the right to direct the
Property Trustee to act on their behalf.
SECTION 4.04. Payment Procedures. In the event Definitive Capital
Securities Certificates are issued, payments of Distributions (including
Additional Distributions, if applicable) in respect of the Capital Securities
shall be made by check mailed to the address of the Person entitled thereto at
such address as shall appear on the Securities Register. If the Capital
Securities are held by a Clearing Agency, such Distributions shall be made to
the Clearing Agency in immediately available funds, which shall credit the
relevant Persons' accounts at such Clearing Agency on the applicable
Distribution Dates. Payments in respect of the Common Securities shall be made
in such manner as shall be mutually agreed between the Property Trustee and the
Common Securityholder.
SECTION 4.05. Tax Returns and Reports. The Administrative Trustees shall
prepare (or cause to be prepared), at the Depositor's expense, and file all
United States federal, state and local tax and information returns and reports
required to be filed by or in respect of the Trust. In this regard, the
Administrative Trustees shall (a) prepare and file (or cause to be prepared and
filed) the appropriate Internal Revenue Service form required to be filed in
respect of the Trust in each taxable year of the Trust and (b) prepare and
furnish (or cause to be prepared and furnished) to each Securityholder the
appropriate Internal Revenue Service form required to be provided pursuant to
the form referenced in clause (a) hereof. The Administrative Trustees shall
provide the Depositor and the Property Trustee with a copy of all such returns
and reports promptly after such filing or furnishing. The Administrative
Trustees shall comply with United States federal withholding and backup
withholding tax laws and information reporting requirements with respect to any
payments to Securityholders.
SECTION 4.06. Payment of Taxes; Duties, etc. of the Trust. Pursuant to
Section 10.06 of the Indenture, the Depositor, as issuer of the Junior
Subordinated Debt Securities, has agreed to, and it shall, promptly pay any
taxes, duties or governmental charges of whatever nature imposed on the Trust
(but not including any taxes, duties or governmental charges imposed on Holders
including, without limitation, withholding taxes) by the United States or any
other taxing authority.
SECTION 4.07. Payments Under Indenture. Any amount payable hereunder to any
Holder (and any Owner with respect thereto) shall be reduced by the amount of
any corresponding payment such Holder (and Owner) has directly received pursuant
to Section 5.08 of the Indenture.
ARTICLE V
Trust Securities Certificates
SECTION 5.01. Initial Ownership. Upon the formation of the Trust and until
the issuance of the Trust Securities, and at any time during which no Trust
Securities are outstanding, the Depositor shall be the sole beneficial owner of
the Trust.
SECTION 5.02. Trust Securities Certificates. (a) The Capital Securities
Certificates shall be issued in blocks having minimum denominations of $100,000
aggregate Liquidation Amount (100 Capital Securities) and integral multiples of
$1,000 in excess thereof, and the Common Securities Certificates shall be issued
in denominations of $1,000 Liquidation Amount and integral multiples thereof.
The Trust Securities Certificates shall be executed on behalf of the Trust by
the manual or facsimile signature of at least one Administrative Trustee. Trust
Securities Certificates bearing the manual or facsimile signatures of
individuals who were, at the time when such signatures shall have been affixed,
authorized to sign on behalf of the Trust, shall be validly issued and entitled
to the benefits of this Declaration of Trust, notwithstanding that such
individuals or any of them shall have ceased to be so authorized prior to the
delivery of such Trust Securities Certificates or did not hold such offices at
the date of delivery of such Trust Securities Certificates. A transferee of a
Trust Securities Certificate shall become a Securityholder, and shall be
entitled to the rights and subject to the obligations of a Securityholder
hereunder, upon due registration of such Trust Securities Certificate in such
transferee's name pursuant to Sections 5.04, 5.05 and 5.06.
(b) Upon their original issuance, Capital Securities Certificates
representing Rule 144A Capital Securities shall be issued in the form of a
Global Capital Securities Certificate registered in the name of Cede & Co.
("Cede") as DTC's nominee and deposited with or on behalf of DTC for credit by
DTC to the respective accounts of the Owners thereof (or such other accounts as
they may direct). Except as set forth herein, record ownership of the Global
Capital Security may be transferred, in whole or in part, only to another
nominee of DTC or to a successor of DTC or its nominee.
(c) Upon their original issuance, Capital Securities Certificates
representing Other Capital Securities shall be issued in definitive form and may
not be represented by the Global Security.
(d) A single Common Securities Certificate representing the Common
Securities shall be issued to the Depositor in the form of a definitive Common
Securities Certificate.
SECTION 5.03. Execution and Delivery of Trust Securities Certificates. On
the Closing Date, the Administrative Trustees shall cause Trust Securities
Certificates, in an aggregate Liquidation Amount as provided in Sections 2.04
and 2.05, to be executed on behalf of the Trust and delivered to the Property
Trustee and upon such delivery the Property Trustee shall countersign such Trust
Securities Certificates and deliver such Trust Securities Certificates upon the
written order of the Depositor, signed by its chairman of the board and
president, any executive vice president or any vice president, treasurer or
assistant treasurer or controller without further corporate action by the
Depositor, in authorized denominations.
SECTION 5.04. Global Capital Security. (a) The Global Capital Security
issued under this Declaration of Trust shall be registered in the name of Cede
as nominee of the Clearing Agency and delivered to its custodian therefor, and
such Global Capital Security shall constitute a single Capital Security for all
purposes of this Declaration of Trust.
(b) Notwithstanding any other provision in this Declaration of Trust, the
Global Capital Security may not be exchanged in whole or in part for Capital
Securities registered, and no transfer of the Global Capital Security in whole
or in part may be registered, in the name of any Person other than the Clearing
Agency for such Global Capital Security, Cede, or other nominee thereof unless
(i) such Clearing Agency advises the Property Trustee in writing that such
Clearing Agency is no longer willing or able to properly discharge its
responsibilities as Clearing Agency with respect to such Global Capital
Security, and the Depositor is unable to locate a qualified successor, (ii) the
Trust at its option advises DTC in writing that it elects to terminate the
book-entry system through the Clearing Agency, or (iii) there shall have
occurred and be continuing a Debenture Event of Default. In addition, beneficial
interests in a Global Capital Security may be exchanged by or on behalf of DTC
for certificated Capital Securities upon request by DTC, but only upon at least
20 days prior written notice given to the Property Trustee in accordance with
the Applicable Procedures.
(c) If the Global Capital Security is to be exchanged for Other Capital
Securities or cancelled in whole, it shall be surrendered by or on behalf of the
Clearing Agency or its nominee to the Securities Registrar for exchange or
cancellation as provided in this Article V. If the Global Capital Security is to
be exchanged for Other Capital Securities or cancelled in part, or if another
Capital Security is to be exchanged in whole or in part for a beneficial
interest in the Global Capital Security, then either (i) such Global Capital
Security shall be so surrendered for exchange or cancellation as provided in
this Article V or (ii) the Liquidation Amount thereof shall be reduced, subject
to Section 5.02, or increased by an amount equal to the portion thereof to be so
exchanged or cancelled, or equal to the Liquidation Amount of such other Capital
Security to be so exchanged for a beneficial interest therein, as the case may
be, by means of an appropriate adjustment made on the records of the Security
Registrar, whereupon the Property Trustee, in accordance with the Applicable
Procedures, shall instruct the Clearing Agency or its authorized representative
to make a corresponding adjustment to its records. Upon any such surrender or
adjustment of the Global Capital Security by the Clearing Agency and Clearing
Agency Participants, accompanied by registration instructions executed by an
Administrative Trustee on behalf of the Trust and, to the extent required in
Section 5.05(c), a Restricted Capital Securities Certificate in a form
substantially similar to that attached hereto as Exhibit D, the Property Trustee
shall, subject to this Article V, countersign and deliver any executed Capital
Securities delivered to it issuable in exchange for such Global Capital Security
(or any portion thereof) in accordance with the instructions of the Clearing
Agency. The Property Trustee shall not be liable for any delay in delivery of
such instructions and may conclusively rely on, and shall be fully protected in
relying on, such instructions.
(d) The Clearing Agency or its nominee, as the registered owner of the
Global Capital Security, shall be considered the Holder of the Capital
Securities represented by the Global Capital Security for all purposes under
this Declaration of Trust and the Capital Securities, and the Owners shall hold
such interests pursuant to the Applicable Procedures and, except as otherwise
provided herein, shall not be entitled to have any of the individual Capital
Securities represented by the Global Capital Security registered in their names,
shall not receive nor be entitled to receive physical delivery of any such
Capital Securities in definitive form and shall not be considered the Holders
thereof under this Declaration of Trust. Accordingly, any such Owner's
beneficial interest in the Global Capital Security shall be shown only on, and
the transfer of such interest shall be effected only through, records maintained
by the Clearing Agency or its nominee. The Securities Registrar and the Trustees
shall be entitled to deal with the Clearing Agency for all purposes of this
Declaration of Trust relating to the Global Capital Securities (including the
payment of the Liquidation Amount of and Distributions on the Global Capital
Securities and the giving of instructions or directions to Owners of Global
Capital Securities) as the sole Holder of Global Capital Securities and shall
have no obligations to the Owners thereof. Neither the Property Trustee nor the
Securities Registrar shall have any liability in respect of any transfers
effected by the Clearing Agency.
(e) The rights of Owners of beneficial interests in the Global Capital
Security shall be exercised only through the Clearing Agency and shall be
limited to those established by law and agreements between such Owners and the
Clearing Agency.
SECTION 5.05. Registration of Transfer and Exchange Generally; Certain
Transfers and Exchanges; Capital Securities Certificates; Securities Act
Legends. (a) The Property Trustee shall keep or cause to be kept at its
Corporate Trust Office a register or registers for the purpose of registering
Capital Securities Certificates and Common Securities Certificates and transfers
and exchanges of Capital Securities Certificates and Common Securities
Certificates in which the registrar and transfer agent with respect to the
Capital Securities (the "Securities Registrar"), subject to such reasonable
regulations as it may prescribe, shall provide for the registration of Capital
Securities Certificates and Common Securities Certificates (subject to Section
5.11 in the case of Common Securities Certificates) and registration of
transfers and exchanges of Capital Securities Certificates and Common Securities
Certificates as herein provided. Such register is herein sometimes referred to
as the "Securities Register." The Property Trustee is hereby appointed
"Securities Registrar" for the purpose of registering Capital Securities and
transfers of Capital Securities as herein provided. The provisions of Sections
8.01, 8.03 and 8.06 hereunder shall apply to the Property Trustee also in its
role as Securities Registrar.
Upon surrender for registration of transfer of any Capital Security at the
offices or agencies of the Property Trustee designated for that purpose, the
Administrative Trustees shall execute, and the Property Trustee shall
countersign and deliver, in the name of the designated transferee or
transferees, one or more new Capital Securities of any authorized denominations
of like tenor and aggregate liquidation amount and bearing such restrictive
legends as may be required by this Declaration of Trust.
At the option of the Holder, Capital Securities may be exchanged for other
Capital Securities of any authorized denominations, of like tenor and aggregate
Liquidation Amount and bearing such restrictive legends as may be required by
this Declaration of Trust, upon surrender of the Capital Securities to be
exchanged at such office or agency. Whenever any securities are so surrendered
for exchange, the Depositor shall execute and the Property Trustee shall
countersign and deliver the Capital Securities that the Holder making the
exchange is entitled to receive.
All Capital Securities issued upon any registration of transfer or exchange
of Capital Securities shall be the valid obligations of the Trust, entitled to
the same benefits under this Declaration of Trust as the Capital Securities
surrendered upon such registration of transfer or exchange.
Every Capital Security presented or surrendered for registration of
transfer or exchange shall (if so required by the Property Trustee) be duly
endorsed, or be accompanied by a written instrument of transfer in form
satisfactory to the Property Trustee and the Securities Registrar, duly executed
by the Holder thereof or such Holder's attorney duly authorized in writing.
No service charge shall be made to a Holder for any registration of
transfer or exchange of Capital Securities, but the Property Trustee or the
Securities Registrar may require payment of a sum sufficient to cover any tax or
other governmental charge that may be imposed in connection with any transfer or
exchange of Capital Securities.
Neither the Trust nor the Property Trustee shall be required, pursuant to
the provisions of this Section, (i) to issue, register the transfer of or
exchange any Capital Security during a period beginning at the opening of
business 15 days before the day of mailing of a notice of redemption of Capital
Securities pursuant to Article IV and ending at the close of business on the day
of such mailing of the notice of redemption, or (ii) to register the transfer of
or exchange any Capital Security so selected for redemption in whole or in part,
except, in the case of any such Capital Security to be redeemed in part, any
portion thereof not to be redeemed.
(b) Certain Transfers and Exchanges. Subject to Section 5.04(c), but
notwithstanding any other provision of this Declaration of Trust, transfers and
exchanges of Capital Securities and beneficial interests in a Global Capital
Security shall be made only in accordance with this Section 5.05(b) and Section
5.04(c).
(i) Non-Global Capital Security to Global Security. If the Holder of a
Restricted Capital Security (other than the Global Security) wishes at any
time to transfer all or any portion of such Capital Security to a Person
who wishes to take delivery thereof in the form of a beneficial interest in
the Global Security, such transfer may be effected only in accordance with
the provisions of this Clause (b)(i) and subject to the Applicable
Procedures. Upon receipt by the Securities Registrar of (A) such Capital
Security as provided in Section 5.05(a) and instructions satisfactory to
the Securities Registrar directing that a beneficial interest in the Global
Security in a specified Liquidation Amount not greater than the Liquidation
Amount of such Capital Security to be credited to a specified Clearing
Agency Participant's account and (B) a Capital Securities Certificate duly
executed by such Holder or such Holder's attorney duly authorized in
writing, then the Securities Registrar shall cancel such Capital Security
(and issue a new Capital Security in respect of any untransferred portion
thereof) as provided in Section 5.01(a) and increase the aggregate
Liquidation Amount of the Global Capital Security by the specified
Liquidation Amount as provided in Section 5.04(c).
(ii) Non-Global Security to Non-Global Security. A Capital Security
that is not a Global Capital Security may be transferred, in whole or in
part, to a Person who takes delivery in the form of another Capital
Security that is not a Global Security as provided in Section 5.05(a),
provided that if the Capital Security to be transferred in whole or in part
is a Restricted Capital Security, the Securities Registrar shall have
received a Restricted Capital Securities Certificate duly executed by the
transferor Holder or such Holder's attorney duly authorized in writing.
(iii) Exchanges Between Global Capital Security and Non-Global Capital
Security. A beneficial interest in the Global Capital Security may be
exchanged for a Capital Security that is not a Global Capital Security as
provided in Section 5.04.
(iv) Limitations Relating to Liquidation Amount. Notwithstanding any
other provision of this Declaration of Trust and unless otherwise specified
as permitted by this Declaration of Trust, Capital Securities or portions
thereof may be transferred or exchanged only in blocks having aggregate
Liquidation Amounts of not less than $100,000. Any transfer, exchange or
other disposition of Capital Securities in contravention of this Section
5.05(b)(iv) shall be deemed to be void and of no legal effect whatsoever,
any such transferee shall be deemed not to be the Holder or Owner of any
beneficial interest in 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.
(c) Restricted Securities Legend. (i) Except as set forth in this Section
5.05(c), all Capital Securities shall bear a Restricted Capital Securities
Legend substantially in the following form:
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS.
NEITHER THIS SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE
REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR
OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION UNLESS SUCH
TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT. THE HOLDER OF THIS SECURITY BY ITS
ACCEPTANCE HEREOF AGREES TO OFFER, SELL OR OTHERWISE TRANSFER SUCH
SECURITY PRIOR TO THE DATE WHICH IS THREE YEARS AFTER THE LATER OF THE
ORIGINAL ISSUE DATE HEREOF AND THE LAST DATE ON WHICH U.S.B. HOLDING
CO., INC. (THE "CORPORATION") OR ANY AFFILIATE OF THE CORPORATION WAS
THE OWNER OF THIS SECURITY (OR ANY PREDECESSOR OF THIS SECURITY) (THE
"RESALE RESTRICTIONS TERMINATION DATE") ONLY (A) TO THE CORPORATION,
(B) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
SECURITIES ACT, (C) FOR SO LONG AS THE SECURITIES ARE ELIGIBLE FOR
RESALE PURSUANT TO RULE 144A UNDER THE SECURITIES ACT ("RULE 144A"),
TO A PERSON IT REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL
BUYER" AS DEFINED IN RULE 144A THAT PURCHASES FOR ITS OWN ACCOUNT OR
FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS
GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (D) TO
AN INSTITUTIONAL "ACCREDITED INVESTOR" WITHIN THE MEANING OF
SUBPARAGRAPH (a)(1), (2), (3) OR (7) OF RULE 501 UNDER THE SECURITIES
ACT ACQUIRING THE SECURITY FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF
SUCH AN INSTITUTIONAL "ACCREDITED INVESTOR," FOR INVESTMENT PURPOSES
AND NOT WITH A VIEW TO, OR FOR OFFER OR SALE IN CONNECTION WITH, ANY
DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT, OR (E) PURSUANT TO
ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT, SUBJECT TO THE TRUST'S AND THE PROPERTY TRUSTEE'S
RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER PURSUANT TO CLAUSES
(D) OR (E) TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL,
CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO EACH OF THEM IN
ACCORDANCE WITH THE DECLARATION OF TRUST, A COPY OF WHICH MAY BE
OBTAINED FROM THE CORPORATION OR THE PROPERTY TRUSTEE. THIS LEGEND
WILL BE REMOVED UPON THE REQUEST OF A HOLDER AFTER THE RESALE
RESTRICTIONS TERMINATION DATE.
(ii) Subject to the following paragraphs of this Section 5.05(c), a
new Capital Security (other than a Global Capital Security) that does not
bear a Restricted Capital Securities Legend may be issued in exchange for
or in lieu of a Restricted Capital Security or any portion thereof that
bears such a legend if, in the Depositor's judgment, placing such a legend
upon such new Capital Security is not necessary to ensure compliance with
the registration requirements of the Securities Act, and the Property
Trustee, at the written direction of the Trust in the form of an Officers'
Certificate, shall countersign and deliver such a new Capital Security as
provided in this Article V.
(iii) Notwithstanding the foregoing provisions of this Section
5.05(c), a successor Capital Security of a Capital Security that does not
bear a Restricted Capital Securities Legend shall not bear such form of
legend unless the Depositor has reasonable cause to believe that such
successor Capital Security is a "restricted security" within the meaning of
Rule 144 under the Securities Act, in which case the Property Trustee, at
the written direction of the Trust in the form of an Officers' Certificate,
shall countersign and deliver a new Capital Security bearing a Restricted
Capital Securities Legend in exchange for such Successor Capital Security
as provided in this Article V.
(iv) Upon any sale or registration of transfer of a Restricted Capital
Security (including any Restricted Capital Security represented by a Global
Capital Security) pursuant to an effective registration statement under the
Securities Act or pursuant to Rule 144 under the Securities Act after such
registration ceases to be effective: (A) in the case of any Restricted
Capital Security that is a definitive Capital Security, the Securities
Registrar shall permit the Holder thereof to exchange such Restricted
Capital Security for a definitive Capital Security that does not bear the
Restricted Securities Legend and rescind any restriction on the transfer of
such Restricted Capital Security; and (B) in the case of any Restricted
Capital Security that is represented by a Global Capital Security, the
Securities Registrar shall permit the Holder of such Global Capital
Security to exchange such Global Capital Security for another Global
Capital Security that does not bear the Restricted Securities Legend.
(v) If Restricted Capital Securities are being presented or
surrendered for registration of transfer or exchange then there shall be
(if so required by the Property Trustee), (A) if such Restricted Capital
Securities are being delivered to the Securities Registrar by a Holder for
registration in the name of such Holder, without transfer, a certification
from such Holder to that effect; or (B) if such Restricted Capital
Securities are being transferred, (i) a certification from the transferor
in a form substantially similar to that attached hereto as Exhibit D, and
(ii) if the Trust or Securities Registrar so requests, evidence reasonably
satisfactory to them as to the compliance with the restrictions set forth
in the Restricted Capital Securities Legend.
(d) Exchange Offer. The Initial Capital Securities may be exchanged for
Exchange Capital Securities (as defined in the Indenture) pursuant to the terms
set forth in the Registration Agreement and Article XII of the Indenture (the
"Exchange Offer"). The Property Trustee shall make the exchange as follows:
The Depositor shall present the Property Trustee with an Officers'
Certificate certifying the following:
(i) upon issuance of the Exchange Capital Securities, the
transactions contemplated by the Exchange Offer have been
consummated; and
(ii) the number of Initial Capital Securities properly tendered in the
Exchange Offer that are represented by a Global Capital Security
and the number of Initial Capital Securities properly tendered in
the Exchange Offer that are represented by Other Capital
Securities, the name of such Holder of such Other Capital
Securities, the liquidation amount of Initial Capital Securities
properly tendered in the Exchange Offer by each such Holder and
the name and address to which Other Capital Securities for
Exchange Capital Securities shall be registered and sent for each
such Holder.
The Property Trustee, upon receipt of (i) such Officers' Certificate, (ii)
an Opinion of Counsel (x) to the effect that the Exchange Capital Securities
have been registered under Section 5 of the Securities Act and the Indenture,
Declaration of Trust and Guarantee have been qualified under the Trust Indenture
Act and (y) with respect to the matters set forth in Section 4(s) of the
Registration Agreement and (iii) a written order of the Depositor shall
authenticate (A) a Global Capital Security for Exchange Capital Securities in
aggregate Liquidation Amount equal to the aggregate Liquidation Amount of
Initial Capital Securities represented by a Global Capital Security indicated in
such Officers' Certificate as having been properly tendered and (B) Capital
Securities Certificates representing Exchange Capital Securities registered in
the names of, and in the Liquidation Amounts indicated in such Officers'
Certificate.
If, upon consummation of the Exchange Offer, less than all the outstanding
Initial Capital Securities shall have been properly tendered and not withdrawn,
the Property Trustee shall make an endorsement on the Global Capital Security
for Capital Securities indicating that reduction in the number and aggregate
Liquidation Amount represented thereby as a result of the Exchange Offer.
The Trust shall deliver such Capital Securities Certificates for Exchange
Capital Securities to the Holders thereof as indicated in such Officers'
Certificate.
SECTION 5.06. Mutilated, Destroyed, Lost or Stolen Trust Securities
Certificates. Provided Definitive Capital Securities Certificates are issued, if
(a) any mutilated Trust Securities Certificate shall be surrendered to the
Securities Registrar, or if the Securities Registrar shall receive evidence to
its satisfaction of the destruction, loss or theft of any Trust Securities
Certificate and (b) there shall be delivered to the Securities Registrar and the
Administrative Trustees such security or indemnity as may be required by them to
save each of the Trustees harmless, then in the absence of notice that such
Trust Securities Certificate shall have been acquired by a bona fide purchaser,
the Administrative Trustees, or any one of them, on behalf of the Trust shall
execute and make available for delivery, in exchange for or in lieu of any such
mutilated, destroyed, lost or stolen Trust Securities Certificate, a new Trust
Securities Certificate of like class, tenor and denomination. In connection with
the issuance of any new Trust Securities Certificate under this Section, the
Administrative Trustees or the Securities Registrar may require the payment of a
sum sufficient to cover any tax or other governmental charge that may be imposed
in connection therewith. Any duplicate Trust Securities Certificate issued
pursuant to this Section shall constitute conclusive evidence of an undivided
beneficial interest in the assets of the Trust, as if originally issued, whether
or not the lost, stolen or destroyed Trust Securities Certificate shall be found
at any time.
SECTION 5.07. Persons Deemed Securityholders. The Trustees or the
Securities Registrar shall treat the Person in whose name any Trust Securities
are issued as the owner of such Trust Securities for the purpose of receiving
distributions and for all other purposes whatsoever, and neither the Trustees
nor the Securities Registrar shall be bound by any notice to the contrary.
SECTION 5.08. Access to List of Securityholders' Names and Addresses. Each
Holder or Owner of Trust Securities acknowledges that the Depositor, the
Property Trustee, the Delaware Trustee or the Administrative Trustees may from
time to time make reasonable use of information consisting of such Holder's or
Owner's name and address, including the furnishing of a list of such names and
addresses as contemplated hereunder, and each Owner shall be deemed to have
agreed not to hold the Depositor, the Property Trustee or the Administrative
Trustees accountable by reason of the disclosure of its name and address,
regardless of the source from which such information was derived.
SECTION 5.09. Maintenance of Office or Agency. The Administrative Trustees
shall maintain an office or offices or agency or agencies where Definitive
Capital Securities Certificates, if issued, may be surrendered for registration
of transfer or exchange and where notices and demands to or upon the Trustees in
respect of the Trust Securities may be served. The Administrative Trustees
initially designate the Corporate Trust Office of the Property Trustee as its
office for such purposes. The Administrative Trustees shall give prompt written
notice to the Depositor and to the Securityholders of any change in the location
of the Securities Register or any such office or agency.
SECTION 5.10. Appointment of Paying Agent. The Paying Agent shall make
Distributions to Securityholders from the Payment Account and shall report the
amounts of such Distributions to the Property Trustee and the Administrative
Trustees. Any Paying Agent shall have the revocable power to withdraw funds from
the Payment Account for the purpose of making the Distributions referred to
above. The Administrative Trustees may revoke such power and remove any Paying
Agent if such Administrative Trustees determine in their sole discretion that
such Paying Agent shall have failed to perform its obligations under this
Declaration of Trust in any material respect. The Paying Agent shall initially
be the Property Trustee , and any co-paying agent chosen by the Property Trustee
, and acceptable to the Administrative Trustees and the Depositor. Any Person
acting as Paying Agent shall be permitted to resign as Paying Agent upon 30
days' written notice to the Administrative Trustees, the Property Trustee and
the Depositor. In the event that the Property Trustee shall no longer be the
Paying Agent or a successor Paying Agent shall resign or its authority to act be
revoked, the Administrative Trustees shall appoint a successor that is
acceptable to the Property Trustee and the Depositor to act as Paying Agent
(which shall be a bank or trust company). The Administrative Trustees shall
cause such successor Paying Agent or any additional Paying Agent appointed by
the Administrative Trustees to execute and deliver to the Trustees an instrument
in which such successor Paying Agent or additional Paying Agent shall agree with
the Trustees that as Paying Agent, such successor Paying Agent or additional
Paying Agent will hold all sums, if any, held by it for payment to the
Securityholders in trust for the benefit of the Securityholders entitled thereto
until such sums shall be paid to such Securityholders. The Paying Agent shall
return all unclaimed funds to the Property Trustee and upon removal of a Paying
Agent such Paying Agent shall also return all funds in its possession to the
Property Trustee. The provisions of Sections 8.01, 8.03 and 8.06 herein shall
apply to the Property Trustee also in its role as Paying Agent, for so long as
the Property Trustee shall act as Paying Agent and, to the extent applicable, to
any other paying agent appointed hereunder. Any reference in this Declaration of
Trust to the Paying Agent shall include any co-paying agent unless the context
requires otherwise.
SECTION 5.11. Ownership of Common Securities by Depositor. For so long as
the Trust Securities remain outstanding, the Depositor will covenant (i) to
maintain 100% direct or indirect ownership of the Common Securities; provided,
however, that any permitted successor of the Depositor under the Indenture may
succeed to the Depositor's ownership of the Common Securities, (ii) not to
cause, as Depositor of the Trust, or to permit, as holder of the Common
Securities, the dissolution, winding-up or termination of the Trust, except in
connection with a distribution of the Junior Subordinated Debt Securities as
provided in this Declaration of Trust and in connection with certain mergers,
consolidations or amalgamations, each as permitted by this Declaration of Trust,
and (iii) to use its reasonable efforts to cause the Trust to (a) remain a
business trust, except in connection with the distribution of Junior
Subordinated Debt Securities to the Holders of Trust Securities in the
liquidation of the Trust, the redemption of all of the Trust Securities of the
Trust, or certain mergers, consolidations, amalgamations, each as permitted by
this Declaration of Trust, and (b) otherwise continue to be classified as a
grantor trust for United States federal income tax purposes.
SECTION 5.12. Notices to Clearing Agency. To the extent that a notice or
other communication to the Owners is required under this Declaration of Trust,
for so long as Capital Securities are represented by a Global Securities
Certificate, the Trustees shall give all such notices and communications
specified herein to be given to Owners to the Clearing Agency, and shall have no
obligations to give duplicates thereof to the Owners.
SECTION 5.13. Rights of Securityholders. (a) The legal title to the Trust
Property is vested exclusively in the Property Trustee (in its capacity as such)
in accordance with Section 2.09, and the Securityholders shall not have any
right or title therein other than the undivided beneficial ownership interest in
the assets of the Trust conferred by their Trust Securities and they shall have
no right to call for any partition or division of property, profits or rights of
the Trust except as described below. The Trust Securities shall be personal
property giving only the rights specifically set forth therein and in this
Declaration of Trust. The Trust Securities shall have no preemptive or singular
rights and when issued and delivered to Securityholders against payment of the
purchase price therefor will be fully paid and nonassessable. The Holders, in
their capacities as such, shall be entitled to the same limitation of personal
liability extended to stockholders of private corporations for profit organized
under the General Corporation Law of the State of Delaware.
(b) For so long as any Capital Securities remain Outstanding, if, upon a
Debenture Event of Default, the Debenture Trustee fails or the holders of not
less than 25% in liquidation amount of the outstanding Junior Subordinated Debt
Securities fail to declare the principal amount of all of the Junior
Subordinated Debt Securities to be immediately due and payable, the Holders of
at least 25% in Liquidation Amount of the Capital Securities then Outstanding
shall have such right by a notice in writing to the Depositor and the Debenture
Trustee with a copy to the Property Trustee; and upon any such declaration such
principal amount of and the accrued interest on all of the Junior Subordinated
Debt Securities shall become immediately due and payable; provided that the
payment of principal and interest on such Junior Subordinated Debt Securities
shall remain subordinated to the extent provided in the Indenture.
At any time after such a declaration of acceleration with respect to the
Junior Subordinated Debt Securities has been made and before a judgment or
decree for payment of the money due has been obtained by the Debenture Trustee
as provided in the Indenture, the Holders of a majority in Liquidation Amount of
the Capital Securities, by written notice to the Property Trustee, the Depositor
and the Debenture Trustee, may rescind and annul such declaration and its
consequences if:
(i) the Depositor has paid or deposited with the Debenture Trustee a
sum sufficient to pay
(A) all overdue installments of interest (including any
Additional Interest (as defined in the Indenture)) on all of the
Junior Subordinated Debt Securities,
(B) the principal of (and premium, if any, on) any Junior
Subordinated Debt Securities which have become due otherwise than by
such declaration of acceleration and interest thereon at the rate
borne by the Junior Subordinated Debt Securities, and
(C) all sums paid or advanced by the Debenture Trustee under the
Indenture and the reasonable compensation, expenses, disbursements and
advances of the Debenture Trustee and the Property Trustee, their
agents and counsel, and all other amounts due to the Debenture Trustee
under the Indenture and the Property Trustee pursuant to Section 8.06
hereof; and
(ii) all Events of Default with respect to the Junior Subordinated
Debt Securities, other than the non-payment of the principal of the Junior
Subordinated Debt Securities which has become due solely by such
acceleration, have been cured or waived as provided in Section 5.13 of the
Indenture.
If the Property Trustee fails to annul any such declaration and waive such
default, the Holders of Capital Securities representing a majority in aggregate
Liquidation Amount of all the Outstanding Capital Securities shall also have the
right to rescind and annul such declaration and its consequences by written
notice to the Depositor, the Property Trustee and the Debenture Trustee, subject
to the satisfaction of the conditions set forth in Clause (i) and (ii) of this
Section 5.13(b).
The Holders of a majority in aggregate Liquidation Amount of the Capital
Securities may, on behalf of the Holders of all the Capital Securities, waive
any past default under the Indenture, except a default in the payment of
principal or interest (unless such default has been cured and a sum sufficient
to pay all matured installments of interest and principal due otherwise than by
acceleration has been deposited with the Debenture Trustee) or a default in
respect of a covenant or provision which under the Indenture cannot be modified
or amended without the consent of the holder of each Junior Subordinated Debt
Securities. No such rescission shall affect any subsequent default or impair any
right consequent thereon.
Upon receipt by the Property Trustee of written notice declaring such an
acceleration, or rescission and annulment thereof, by Holders of the Capital
Securities all or part of which is represented by Global Capital Securities, a
record date shall be established for determining Holders of Outstanding Capital
Securities entitled to join in such notice, which record date shall be at the
close of business on the day the Property Trustee receives such notice. The
Holders on such record date, or their duly designated proxies, and only such
Persons, shall be entitled to join in such notice, whether or not such Holders
remain Holders after such record date; provided that, unless such acclamation of
acceleration, or rescission and annulment, as the case may be, shall have become
effective by virtue of the requisite percentage having joined in such notice
prior to the day which is 90 days after such record date, such notice of
declaration of acceleration, or rescission and annulment, as the case may be,
shall automatically and without further action by any Holder be canceled and of
no further effect. Nothing in this paragraph shall prevent a Holder, or a proxy
of a Holder, from giving, after expiration of such 90 day period, a new written
notice of declaration of acceleration, or rescission and annulment thereof, as
the case may be, that is identical to a written notice which has been canceled
pursuant to the proviso to the preceding sentence, in which event a new record
date shall be established pursuant to the provisions of this Section 5.13(b).
(c) For so long as any Capital Securities remain Outstanding, to the
fullest extent permitted by law and subject to the terms of this Declaration of
Trust and the Indenture, upon a Debenture Event of Default specified in Section
5.01(l) or 5.01(2) of the Indenture, any Holder of Capital Securities shall have
the right to institute a proceeding directly against the Depositor, pursuant to
Section 5.08 of the Indenture, for enforcement of payment to such Holder of the
principal amount of or interest on Junior Subordinated Debt Securities having a
principal amount equal to the Liquidation Amount of the Capital Securities of
such Holder (a "Direct Action"). Except as set forth in Sections 5.13(b) and
5.13(c), the Holders of Capital Securities shall have no right to exercise
directly any right or remedy available to the holders of, or in respect of, the
Junior Subordinated Debt Securities.
(d) A Securityholder may institute a legal proceeding directly against the
Guarantor under the Guarantee to enforce its rights under the Guarantee without
first instituting a legal proceeding against the Trust or any person or entity.
ARTICLE VI
Acts of Securityholders; Meetings; Voting
SECTION 6.01. Limitations on Capital Securityholder's Voting Rights. (a)
Except as provided in this Declaration of Trust and in the Indenture and as
otherwise required by law, no Holder of Capital Securities shall have any right
to vote or in any manner otherwise control the administration, operation and
management of the Trust or the obligations of the parties hereto, nor shall
anything herein set forth, or contained in the terms of the Trust Securities
Certificates, be construed so as to constitute the Holders of Capital Securities
from time to time as partners or members of an association. Unless a Debenture
Event of Default shall have occurred and be continuing, any Trustee may be
removed at any time by the vote of the Common Securityholder. The right to vote
to appoint, remove or replace the Administrative Trustees is vested exclusively
in the Depositor as the Holder of the Common Securities.
(b) So long as any Junior Subordinated Debt Securities are held by the
Property Trustee, the Trustees shall not (i) direct the time, method and place
of conducting any proceeding for any remedy available to the Debenture Trustee,
or executing any trust or power conferred on the Property Trustee with respect
to such Junior Subordinated Debt Securities, (ii) waive any past default which
is waivable under Section 5.13 of the Indenture, (iii) exercise any right to
rescind or annul a declaration that the principal of all the Junior Subordinated
Debt Securities shall be due and payable or (iv) consent to any amendment,
modification or termination of the Indenture or the Junior Subordinated Debt
Securities, where such consent shall be required, without, in each case,
obtaining the prior approval of the Holders of at least a majority in aggregate
Liquidation Amount of all Outstanding Capital Securities; provided, however,
that where a consent under the Indenture would require the consent of each
holder of Junior Subordinated Debt Securities affected thereby, no such consent
shall be given by the Property Trustee without the prior written consent of each
Holder of Capital Securities. The Trustees shall not revoke any action
previously authorized or approved by a vote of the Holders of Capital
Securities, except by a subsequent vote of the Holders of Capital Securities. In
addition to obtaining the foregoing approvals of the Holders of the Capital
Securities, prior to taking any of the foregoing actions, the Trustees shall, at
the expense of the Depositor, obtain an Opinion of Counsel experienced in such
matters to the effect that the Trust will not fail to be classified as a grantor
trust for United States federal income tax purposes on account of such action.
(c) If any proposed amendment to the Declaration of Trust provides for, or
the Trustees otherwise propose to effect, (i) any action that would adversely
affect in any material respect the interests, powers, preferences or special
rights of the Trust Securities, whether by way of amendment to the Declaration
of Trust or otherwise, or (ii) the dissolution, winding-up or termination of the
Trust, other than pursuant to the terms of this Declaration of Trust, then the
Holders of Outstanding Trust Securities as a class will be entitled to vote on
such amendment or proposal.
SECTION6.02. Notice of Meetings. Notice of all meetings of the
Securityholders, stating the time, place and purpose of the meeting, shall be
given by the Property Trustee pursuant to Section 10.09 to each Securityholder
of record, at his registered address, at least 15 days and not more than 90 days
before the meeting. At any such meeting, any business properly before the
meeting may be so considered whether or not stated in the notice of the meeting.
Any adjourned meeting may be held as adjourned without further notice.
SECTION 6.03. Meetings of Securityholders. (a) No annual meeting of
Securityholders is required to be held. The Administrative Trustees, however,
shall call a meeting of Securityholders to vote on any matter upon the written
request of the Securityholders of record of 25% of the Securities (based upon
their Liquidation Amount) and the Administrative Trustees or the Property
Trustee may, at any time in their discretion, call a meeting of Securityholders
to vote on any matters as to which Securityholders are entitled to vote.
(b) Securityholders of record of 50% of the Outstanding Securities (based
upon their Liquidation Amount), present in person or represented by proxy, shall
constitute a quorum at any meeting of Securityholders.
(c) If a quorum is present at a meeting, an affirmative vote by the
Securityholders of record present, in person or by proxy, holding more than a
majority of the Securities (based upon their Liquidation Amount) held by the
Securityholders of record present, either in person or by proxy, at such meeting
shall constitute the action of the Securityholders, unless this Declaration of
Trust requires a greater number of affirmative votes.
SECTION 6.04. Voting Rights. Securityholders shall be entitled to one vote
for each $1,000 of Liquidation Amount represented by their outstanding Trust
Securities in respect of any matter as to which such Securityholders are
entitled to vote.
SECTION 6.05. Proxies, etc. At any meeting of Securityholders, any
Securityholder entitled to vote thereat may vote by proxy; provided that no
proxy shall be voted at any meeting unless it shall have been placed on file
with the Administrative Trustees, or with such other officer or agent of the
Trust as the Administrative Trustees may direct, for verification prior to the
time at which such vote shall be taken. Proxies may be solicited in the name of
the Property Trustee or one or more officers of the Property Trustee. Only
Securityholders of record shall be entitled to vote. When Trust Securities are
held jointly by several Persons, any one of them may vote at any meeting in
person or by proxy in respect of such Securities, but the proxy card shall be
signed by all of the Holders, unless explicitly agreed to the contrary. A proxy
purporting to be executed by or on behalf of a Securityholder shall be deemed
valid unless challenged at or prior to its exercise, and the burden of proving
invalidity shall rest on the challenger. No proxy shall be valid more than three
years after its date of execution.
SECTION 6.06. Securityholder Action by Written Consent. Any action which
may be taken by Securityholders at a meeting may be taken without a meeting if
Securityholders holding more than a majority of all Outstanding Securities
(based upon their Liquidation Amount) entitled to vote in respect of such action
(or such larger proportion thereof as shall be required by any express provision
of this Declaration of Trust) shall consent to the action in writing.
SECTION 6.07. Record Date for Voting and Other Purposes. For the purposes
of determining the Securityholders who are entitled to notice of and to vote at
any meeting or by written consent, or to participate in any Distribution in
respect of which a record date is not otherwise provided for in this Declaration
of Trust, or for the purpose of any other action, the Administrative Trustees
may from time to time fix a date, not more than 90 days prior to the date of any
meeting of Securityholders or the payment of a distribution or other action, as
the case may be, as a record date for the determination of the identity of the
Securityholders of record for such purposes.
SECTION 6.08. Acts of Securityholders. Any request, demand, authorization,
direction, notice, consent, waiver or other action provided or permitted by this
Declaration of Trust to be given, made or taken by Securityholders or Owners may
be embodied in and evidenced by one or more instruments of substantially similar
tenor signed by such Securityholders or Owners in person or by an agent duly
appointed in writing; and, except as otherwise expressly provided herein, such
action shall become effective when such instrument or instruments are delivered
to an Administrative Trustee. Such instrument or instruments (and the action
embodied therein and evidenced thereby) are herein sometimes referred to as the
"Act" of the Securityholders or Owners signing such instrument or instruments.
Proof of execution of any such instrument or of a writing appointing any such
agent shall be sufficient for any purpose of this Declaration of Trust and
(subject to Section 8.01) conclusive in favor of the Trustees, if made in the
manner provided in this Section 6.08.
The fact and date of the execution by any Person of any such instrument or
writing may be provided by the affidavit of a witness of such execution or by a
certificate of a notary public or other officer authorized by law to take
acknowledgments of deeds, certifying that the individual signing such instrument
or writing acknowledged to him the execution thereof. Where such execution is by
a signer acting in a capacity other than his individual capacity, such
certificate or affidavit shall also constitute sufficient proof of his
authority. The fact and date of the execution of any such instrument or writing,
or the authority of the Person executing the same, may also be proved in any
other manner which any Trustee receiving the same deems sufficient.
The ownership of Trust Securities shall be proved by the Securities
Registrar.
Any request, demand, authorization, direction, notice, consent, waiver or
other Act of the Securityholder of any Trust Security shall bind every future
Securityholder of the same Trust Security and the Securityholder of every Trust
Security issued upon the registration of transfer thereof or in exchange
therefor or in lieu thereof in respect of anything done, omitted or suffered to
be done by the Trustees or the Trust in reliance thereon, whether or not
notation of such action is made upon such Trust Security.
Without limiting the foregoing, a Securityholder entitled hereunder to take
any action hereunder with regard to any particular Trust Security may do so with
regard to all or any part of the Liquidation Amount of such Trust Security or by
one or more duly appointed agents each of which may do so pursuant to such
appointment with regard to all or any part of such Liquidation Amount.
If any dispute shall arise between the Securityholders and the
Administrative Trustees or among such Securityholders or Trustees with respect
to the authenticity, validity or binding nature of any request, demand,
authorization, direction, consent, waiver or other Act of such Securityholder or
Trustee under this Article VI, then the determination of such matter by the
Property Trustee shall be conclusive with respect to such matter.
A Holder may institute a legal proceeding directly against the Depositor
under the Guarantee Agreement to enforce its rights under the Guarantee
Agreement without first instituting a legal proceeding against the Guarantee
Trustee (as defined in the Guarantee Agreement), the Trust, any Trustee or any
other Person.
SECTION 6.09. Inspection of Records. Upon reasonable notice to the
Administrative Trustees and the Property Trustee, the records of the Trust shall
be open to inspection by Securityholders during normal business hours for any
purpose reasonably related to such Securityholder's interest as a
Securityholder.
ARTICLE VII
Representations and Warranties
SECTION 7.01. Representations and Warranties of the Property Trustee. The
Property Trustee hereby represents and warrants for the benefit of the Depositor
and the Securityholders that:
(a) The Property Trustee is a banking corporation with trust powers,
duly organized, validly existing and in good standing under the laws of New
York, with trust power and authority to execute and deliver, and to carry
out and perform its obligations under the terms of this Declaration of
Trust.
(b) The execution, delivery and performance by the Property Trustee of
this Declaration of Trust has been duly authorized by all necessary
corporate action on the part of the Property Trustee; and this Declaration
of Trust has been duly executed and delivered by the Property Trustee, and
constitutes a legal, valid and binding obligation of the Property Trustee,
enforceable against it in accordance with its terms, subject to applicable
bankruptcy, reorganization, moratorium, insolvency, and other similar laws
affecting creditors' rights generally and to general principles of equity
and the discretion of the court (regardless of whether the enforcement of
such remedies is considered in a proceeding in equity or at law).
(c) The execution, delivery and performance of this Declaration of
Trust by the Property Trustee does not conflict with or constitute a breach
of the certificate of incorporation or by-laws of the Property Trustee.
(d) At the Closing Date, the Property Trustee has not knowingly
created any liens or encumbrances on such Trust Securities.
(e) No consent, approval or authorization of, or registration with or
notice to, any New York State or federal banking authority is required for
the execution, delivery or performance by the Property Trustee, of this
Declaration of Trust.
SECTION 7.02. Representations and Warranties of the Delaware Trustee. The
Delaware Trustee hereby represents and warrants for the benefit of the Depositor
and the Securityholders that:
(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 of Trust.
(b) The execution, delivery and performance by the Delaware Trustee of
this Declaration of Trust has been duly authorized by all necessary
corporate action on the part of the Delaware Trustee; and this Declaration
of Trust has been duly executed and delivered by the Delaware Trustee, and
constitutes a legal, valid and binding obligation of the Delaware Trustee,
enforceable against it in accordance with its terms, subject to applicable
bankruptcy, reorganization, moratorium, insolvency, and other similar laws
affecting creditors' right generally and to general principles of equity
and the discretion of the court regardless of whether the enforcement of
such remedies is considered in a proceeding in equity or at law.
(c) The execution, delivery and performance of this Declaration of
Trust by the Delaware Trustee does not conflict with or constitute a breach
of the certificate of incorporation or by-laws of the Delaware Trustee.
(d) No consent, approval or authorization of, or registration with or
notice to, any state or federal banking authority is required for the
execution, delivery or performance by the Delaware Trustee of this
Declaration of Trust.
(e) The Delaware Trustee is an entity which has its principal place of
business in the State of Delaware.
SECTION 7.03. Representations and Warranties of Depositor. The Depositor
hereby represents and warrants for the benefit of the Securityholders that the
Trust Securities Certificates issued at the Closing Date on behalf of the Trust
have been duly authorized and will have been duly and validly executed, issued
and delivered by the Trustees pursuant to the terms and provisions of, and in
accordance with the requirements of, this Declaration of Trust, and the
Securityholders will be, as of each such date, entitled to the benefits of this
Declaration of Trust.
ARTICLE VIII
The Trustees
SECTION 8.01. Certain Duties and Responsibilities. (a) The duties and
responsibilities of the Trustees shall be as provided by this Declaration of
Trust and, in the case of the Property Trustee, by the Trust Indenture Act;
provided, however, that the Property Trustee shall not be subject to the
provisions of the Trust Indenture Act until such time as this Declaration of
Trust becomes qualified under the Trust Indenture Act upon the effectiveness of
a registration statement pursuant to the Registration Agreement. Notwithstanding
the foregoing, no provisions of this Declaration of Trust shall require the
Trustees to expend or risk their own funds or otherwise incur any financial
liability in the performance of any of their duties hereunder, or in the
exercise of any of their rights or powers, if they shall have reasonable grounds
for believing that repayment of such funds or indemnity satisfactory to it
against such risk or liability is not reasonably assured to it. Whether or not
herein expressly so provided, every provision of this Declaration of Trust
relating to the conduct or affecting the liability of or affording protection to
the Trustees shall be subject to the provisions of this Article. Nothing in this
Declaration of Trust shall be construed to release an Administrative Trustee
from liability for his own grossly negligent action, his own grossly negligent
failure to act, or his own willful misconduct. To the extent that, at law or in
equity, an Administrative Trustee has duties (including fiduciary duties) and
liabilities relating thereto to the Trust or to the Securityholders, such
Administrative Trustee shall not be liable to the Trust or to any Securityholder
for such Trustee's good faith reliance on the provisions of this Declaration of
Trust. The provisions of this Declaration of Trust, to the extent that they
restrict the duties and liabilities of the Administrative Trustees otherwise
existing at law or in equity, are agreed by the Depositor and the
Securityholders to replace such other duties and liabilities of the
Administrative Trustees.
(b) All payments made by the Property Trustee or a Paying Agent in respect
of the Trust Securities shall be made only from the revenue and proceeds from
the Trust Property and only to the extent that there shall be sufficient revenue
or proceeds from the Trust Property to enable the Property Trustee or a Paying
Agent to make payments in accordance with the terms hereof. Each Securityholder,
by its acceptance of a Trust Security, agrees that it will look solely to the
revenue and proceeds from the Trust Property to the extent legally available for
distribution to it as herein provided and that the Trustees are not personally
liable to it for any amount distributable in respect of any Trust Security or
for any other liability in respect of any Trust Security. This Section 8.01(b)
does not limit the liability of the Trustees expressly set forth elsewhere in
this Declaration of Trust or, in the case of the Property Trustee, in the Trust
Indenture Act, if applicable.
(c) No provision of this Declaration of Trust shall be construed to relieve
the Property Trustee from liability for its own negligent action, its own
negligent failure to act, or its own willful misconduct, except that:
(i) the Property Trustee shall not be liable for any error of judgment
made in good faith by an authorized officer of the Property Trustee, unless
it shall be proved that the Property Trustee was negligent in ascertaining
the pertinent facts;
(ii) the Property Trustee shall not be liable with respect to any
action taken or omitted to be taken by it in good faith in accordance with
the direction of the Holders of not less than a majority in Liquidation
Amount of the Trust Securities relating to the time, method and place of
conducting any proceeding for any remedy available to the Property Trustee,
or exercising any trust or power conferred upon the Property Trustee under
this Declaration of Trust;
(iii) the Property Trustee's sole duty with respect to the custody,
safe keeping and physical preservation of the Junior Subordinated Debt
Securities and the Payment Account shall be to deal with such Property in a
similar manner as the Property Trustee deals with similar property for its
own account, subject to the projections and limitations on liability
afforded to the Property Trustee under this Declaration of Trust and the
Trust Indenture Act;
(iv) the Property Trustee shall not be liable for any interest on any
money received by it except as it may otherwise agree in writing with the
Depositor; and money held by the Property Trustee need not be segregated
from other funds held by it except in relation to the Payment Account
maintained by the Property Trustee pursuant to Section 3.01 and except to
the extent otherwise required by law; and
(v) the Property Trustee shall not be responsible for monitoring the
compliance by the Administrative Trustees or the Depositor with their
respective duties under this Declaration of Trust nor shall the Property
Trustee be liable for the default or misconduct of the Administrative
Trustees or the Depositor.
SECTION 8.02. Events of Default Notices; Deferral of Interest Payment
Notices. Within 10 Business Days after the occurrence of any Event of Default
actually known to a Responsible Officer of the Property Trustee, the Property
Trustee shall transmit, in the manner and to the extent provided in Section
10.09, notice of such Event of Default to the Securityholders, the
Administrative Trustees and the Depositor, unless such Event of Default shall
have been cured or waived; provided, however, that, except in the case of a
default in the payment of the principal of (or premium, if any) or interest
(including any interest) on the Trust Security, the Property Trustee shall be
fully protected in withholding such notice if and so long as the board of
directors, the executive committee or a trust committee of directors and/or
Responsible Officers of the Property Trustee in good faith determine that the
withholding of such notice is in the interests of the Holders of Securities; and
provided, further, however, that, in the case of any default of the character
specified in Section 5.01(3) of the Indenture, no such notice to Holders of
Securities shall be given until at least 30 days after the occurrence thereof.
For the purpose of this Section 8.02, the term "default" means any event which
is, or after notice or lapse of time or both would become, an Event of Default
with respect to the Securities.
Within five Business Days after the receipt of notice of the Depositor's
exercise of its right to defer the payment of interest on the Junior
Subordinated Debt Securities pursuant to the Indenture, the Administrative
Trustee shall transmit, in the manner and to the extent provided in Section
10.09, notice of such exercise to the Securityholders and the Property Trustee,
unless such exercise shall have been revoked.
The Property Trustee shall notify all Holders of the Capital Securities of
any notice of default received from the Debenture Trustee with respect to the
Junior Subordinated Debt Securities. The Depositor and the Administrative
Trustees are required to file within 60 days of each December 31 of each
calendar year commencing December 31, 1997 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 this Declaration of Trust.
SECTION 8.03. Certain Rights of Property Trustee. Subject to the provisions
of Section 8.01:
(a) the Property Trustee may conclusively rely and shall be fully
protected in acting or refraining from acting in good faith upon any
resolution, Opinion of Counsel, certificate, written representation of a
Holder or transferee, certificate of auditors or any other certificate,
statement, instrument, opinion, report, notice, request, consent, order,
appraisal, bond, debenture, note, other evidence of indebtedness or other
paper or document believed by it to be genuine and to have been signed or
presented by the proper party or parties;
(b) if (i) in performing its duties under this Declaration of Trust
the Property Trustee is required to decide between alternative courses of
action or (ii) in construing any of the provisions of this Declaration of
Trust the Property Trustee finds the same ambiguous or inconsistent with
any other provisions contained herein or (iii) the Property Trustee is
unsure of the application of any Provision of this Declaration of Trust,
then, except as to any matter as to which the Securityholders are entitled
to vote under the terms of this Declaration of Trust, the Property Trustee
shall deliver a notice to the Depositor requesting written instructions of
the Depositor as to the course of action to be taken and the Property
Trustee shall take such action, or refrain from taking such action, as the
Property Trustee shall be instructed in writing to take, or to refrain from
taking, by the Depositor; provided, however, that if the Property Trustee
does not receive such instructions of the Depositor within ten Business
Days after it has delivered such notice, or such reasonably shorter period
of time set forth in such notice (which to the extent practicable shall not
be less than two Business Days), it may, but shall be under no duty to,
take or refrain from taking such action not inconsistent with this
Declaration of Trust as it shall deem advisable and in the best interests
of the Securityholders, in which event the Property Trustee shall have no
liability except for its own bad faith, negligence or willful misconduct;
(c) any direction or act of the Depositor or the Administrative
Trustee contemplated by this Declaration of Trust shall be sufficiently
evidenced by an Officers' Certificate;
(d) whenever in the administration of this Declaration of Trust, the
Property Trustee shall deem it desirable that a matter be established
before undertaking, suffering or omitting any action hereunder, the
Property Trustee (unless other evidence is herein specifically prescribed)
may, in the absence of bad faith on its part, request and conclusively rely
upon an Officers' Certificate which, upon receipt of such request, shall be
promptly delivered by the Depositor or the Administrative Trustees (which
Officers' Certificate will be evidence only for purposes of determining
entitlement to indemnification of the Property Trustee from the Depositor
but not with respect to any liability to Securityholders);
(e) the Property Trustee shall have no duty to see to any recording,
filing or registration of any instrument (including any financing or
continuation statement or any filing under tax or securities laws) or any
rerecording, refiling or reregistration thereof;
(f) the Property Trustee may consult with counsel of its selection
(which counsel may be counsel to the Depositor or any of its Affiliates,
and may include any of its employees) and the advice of such counsel shall
be full and complete authorization and protection in respect of any action
taken, suffered or omitted by it hereunder in good faith and in reliance
thereon and in accordance with such advice; the Property Trustee shall have
the right at any time to seek instructions concerning the administration of
this Declaration of Trust from any court of competent jurisdiction;
(g) the Property Trustee shall be under no obligation to exercise any
of the rights or powers vested in it by this Declaration of Trust at the
request or direction of any of the Securityholders pursuant to this
Declaration of Trust, unless such Securityholders shall have offered to the
Property Trustee security or indemnity satisfactory to it against the
costs, expenses and liabilities which might be incurred by it in compliance
with such request or direction;
(h) the Property Trustee shall not be bound to make any investigation
into the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, consent, order, approval,
bond, debenture, note or other evidence of indebtedness or other paper or
document, unless requested in writing to do so by one or more
Securityholders, but the Property Trustee may make such further inquiry or
investigation into such facts or matters as it may see fit;
(i) the Property Trustee may execute any of its trusts or powers
hereunder or perform any of its duties hereunder either directly or by or
through its agents or attorneys, and the Property Trustee shall not be
responsible for any misconduct or negligence on the part of or for the
supervision of any such agent or attorney appointed by it with due care
hereunder;
(j) whenever in the administration of this Declaration of Trust the
Property Trustee shall deem it desirable to receive instructions with
respect to enforcing any remedy or right or taking any other action
hereunder, the Property Trustee (i) may request instructions from the
Holders of the Trust Securities which instructions may only be given by the
Holders of the same proportion in Liquidation Amount of the Trust
Securities as would be entitled to direct the Property Trustee under the
terms of the Trust Securities in respect of such remedy, right or action,
(ii) may refrain from enforcing such remedy or right or taking such other
action until such instructions are received, and (iii) shall be fully
protected in acting in accordance with such instructions;
(k) except as otherwise expressly provided by this Declaration of
Trust, the Property Trustee shall not be under any obligation to take any
action that is discretionary under the provisions of this Declaration of
Trust;
(1) when the Property Trustee incurs expenses or renders services in
connection with a Bankruptcy Event, such expenses (including the fees and
expenses of its counsel) and the compensation for such services are
intended to constitute expenses of administration under any bankruptcy law
or law relating to creditors rights generally; and
(m) the Property Trustee shall not be charged with knowledge of an
Event of Default unless a Responsible Officer of the Property Trustee
obtains actual knowledge of such event or the Property Trustee receives
written notice of such event from Securityholders holding at least 25% of
the Outstanding Trust Securities (based upon Liquidation Amount).
No provision of this Declaration of Trust shall be deemed to impose any
duty or obligation on the Property Trustee to perform any act or acts or
exercise any right, power, duty or obligation conferred or imposed on it, in any
jurisdiction in which it shall be illegal, or in which the Property Trustee
shall be unqualified or incompetent in accordance with applicable law, to
perform any such act or acts, or to exercise any such right, power, duty or
obligation. No permissive power or authority available to the Property Trustee
shall be construed to be a duty.
SECTION 8.04. Not Responsible for Recitals. The recitals contained herein
and in the Trust Securities Certificates shall be taken as the statements of
Trust, and the Trustees do not assume any responsibility for their correctness.
The Trustees shall not be accountable for the use or application by the
Depositor of the proceeds of the Junior Subordinated Debt Securities.
SECTION 8.05. May Hold Securities. Except as provided in the definition of
the term "Outstanding" in Article I, any Trustee or any other agent of any
Trustee or the Trust, in its individual or any other capacity, may become the
owner or pledgee of Trust Securities and, subject to Sections 8.08 and 8.13, may
otherwise deal with the Trust with the same rights it would if it were not a
Trustee or such other agent.
SECTION 8.06. Compensation, Indemnity, Fees. Pursuant to Section 10.02 of
the Indenture, the Depositor, as issuer of the Junior Subordinated Debt
Securities, 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);
(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 of Trust (including the reasonable compensation and the
expenses and disbursements of its agents and counsel), except any such
expense, disbursement or advance as may be attributable to its negligence
or willful misconduct;
(c) to the fullest extent permitted by applicable law, to indemnify
and hold harmless (i) each Trustee, (ii) any Affiliate of any Trustee,
(iii) any officer, director, shareholder, employee, representative or agent
of any Trustee, and (iv) any employee or agent of the Trust or its
Affiliates (referred to herein as an "Indemnified Person") from and against
any loss, damage, liability, tax, penalty, expense or claim of any kind or
nature whatsoever incurred by such Indemnified Person by reason of the
creation, operation or termination of the Trust or any act or omission
performed or omitted by such Indemnified Person in good faith on behalf of
the Trust and in a manner such Indemnified Person reasonably believed to be
within the scope of authority conferred on such Indemnified Person by this
Declaration of Trust, except that no Indemnified Person shall be entitled
to be indemnified in respect of any loss, damage or claim incurred by such
Indemnified Person by reason of such Indemnified Person's negligence or
willful misconduct with respect to such acts or omissions; and
(d) to the fullest extent permitted by applicable law, to advance
expenses (including legal fees) incurred by an Indemnified Person in
defending any claim, demand, action, suit or proceeding, from time to time,
prior to the final disposition of such claim, demand, action, suit or
proceeding upon receipt by the Depositor of (i) a written affirmation by or
on behalf of the Indemnified Person of its or his good faith belief that it
or he has met the standard of conduct set forth in this Section 8.06 and
(ii) an undertaking by or on behalf of the Indemnified Person to repay such
amount if it shall be determined that the Indemnified Person is not
entitled to be indemnified as authorized in the preceding subsection.
The provisions of this Section 8.06 shall survive the termination of this
Declaration of Trust or the earlier resignation or removal of any Trustee.
No Trustee may claim any lien or charge on any Trust Property as a result
of any amount due pursuant to this Section 8.06.
The Depositor and any Trustee (in the case of the Property Trustee, subject
to Section 8.08 hereof) may engage in or possess an interest in other business
ventures of any nature or description, independently or with others, similar or
dissimilar to the business of the Trust, and none of the Trust, the Holders, the
Depositor or any such Trustee shall have any rights by virtue of this
Declaration of Trust in and to such independent ventures or the income or
profits derived therefrom, and the pursuit of any such venture, even if
competitive with the business of the Trust, shall not be deemed wrongful or
improper. Neither the Depositor, nor any Trustee, shall be obligated to present
any particular investment or other opportunity to the Trust even if such
opportunity is of a character that, if presented to the Trust, could be taken by
the Trust, and the Depositor or any Trustee shall have the right to take for its
own account (individually or as a partner or fiduciary) or to recommend to
others any such particular investment or other opportunity. Any Trustee may
engage or be interested in any financial or other transaction with the Depositor
or any Affiliate of the Depositor, or may act as depository for, trustee or
agent for, or act on any committee or body of holders of, securities or other
obligations of the Depositor or its Affiliates.
SECTION 8.07. Corporate Property Trustee Required; Eligibility of Trustees.
(a) There shall at all times be a Property Trustee hereunder with respect to the
Trust Securities. The Property Trustee shall be a Person that is a national or
state chartered bank and eligible pursuant to the Trust Indenture Act to act as
such and has a combined capital and surplus of at least $50 million. If any such
Person publishes reports of condition at least annually, pursuant to law or to
the requirements of its supervising or examining authority, then for the
purposes of this Section, the combined capital and surplus of such Person shall
be deemed to be its combined capital and surplus as set forth in its most recent
report of condition so published. If at any time the Property Trustee with
respect to the Trust Securities shall cease to be eligible in accordance with
the provisions of this Section 8.07, it shall resign immediately in the manner
and with the effect hereinafter specified in this Article; provided, however,
that the Property Trustee need not qualify under the Trust Indenture Act until
such time as this Declaration of Trust is qualified under the Trust Indenture
Act.
(b) There shall at all times be one or more Administrative Trustees
hereunder. Each Administrative Trustee shall be either a natural person who
is at least 21 years of age or a legal entity that shall act through one or
more persons authorized to bind that entity.
(c) There shall at all times be a Delaware Trustee. The Delaware
Trustee shall either be (i) a natural person who is at least 21 years of
age and a resident of the State of Delaware or (ii) a legal entity with its
principal place of business in the State of Delaware and that otherwise
meets the requirements of applicable Delaware law that shall act through
one or more persons authorized to bind such entity.
SECTION 8.08. Conflicting Interests. If the Property Trustee has or shall
acquire a conflicting interest within the meaning of the Trust Indenture Act,
the Property Trustee shall either eliminate such interest or resign, to the
extent and in the manner provided by, and subject to the provisions of, the
Trust Indenture Act and this Declaration of Trust.
SECTION 8.09. Co-Trustees and Separate Trustee. Unless an Event of Default
shall have occurred and be continuing, at any time or times, for the purpose of
meeting the legal requirements of the Trust Indenture Act or of any jurisdiction
in which any part of the Trust Property may at the time be located, the
Depositor and the Administrative Trustees, by agreed action of the majority of
such Trustees, shall have power to appoint, and upon the written request of the
Administrative Trustees, the Depositor shall for such purpose join with the
Administrative Trustees in the execution, delivery, and performance of all
instruments and agreements necessary or proper to appoint, one or more Persons
approved by the Property Trustee either to act as co-trustee, jointly with the
Property Trustee, of all or any part of such Trust Property, or to the extent
required by law to act as separate trustee of any such property, in either case
with such powers as may be provided in the instrument of appointment, and to
vest in such Person or Persons in the capacity aforesaid, any property, title,
right or power deemed necessary or desirable, subject to the other provisions of
this Section. If the Depositor does not join in such appointment within 15 days
after the receipt by it of a request so to do, or in case a Debenture Event of
Default has occurred and is continuing, the Property Trustee alone shall have
power to make such appointment. Any co-trustee or separate trustee appointed
pursuant to this Section shall either be (i) a natural person who is at least 21
years of age and a resident of the United States or (ii) a legal entity with its
principal place of business in the United States that shall act through one or
more persons authorized to bind such entity.
Should any written instrument from the Depositor be required by any
co-trustee or separate trustee so appointed for more fully confirming to such
co-trustee or separate trustee such property, title, right or power, any and all
such instruments shall, on request, be executed, acknowledged and delivered by
the Depositor.
Every co-trustee or separate trustee shall, to the extent permitted by law,
but to such extent only, be appointed subject to the following terms, namely:
(a) The Trust Securities shall be executed and delivered and all
rights, powers, duties, and obligations hereunder in respect of the custody
of securities, cash and other personal property held by, or required to be
deposited or pledged with, the Trustees specified hereunder, shall be
exercised solely by such Trustees and not by such co-trustee or separate
trustee.
(b) The rights, powers, duties, and obligations hereby conferred or
imposed upon the Property Trustee in respect of any property covered by
such appointment shall be conferred or imposed upon and exercised or
performed by the Property Trustee or by the Property Trustee and such
co-trustee or separate trustee jointly, as shall be provided in the
instrument appointing such co-trustee or separate trustee, except to the
extent that under any law of any jurisdiction in which any particular act
is to be performed, the Property Trustee shall be incompetent or
unqualified to perform such act, in which event such rights, powers, duties
and obligations shall be exercised and performed by such co-trustee or
separate trustee.
(c) The Property Trustee at any time, by an instrument in writing
executed by it, with the written concurrence of the Depositor, may accept
the resignation of or remove any co-trustee or separate trustee appointed
under this Section, and, in case a Debenture Event of Default has occurred
and is continuing, the Property Trustee shall have power to accept the
resignation of, or remove, any such co-trustee or separate trustee without
the concurrence of the Depositor. Upon the written request of the Property
Trustee, the Depositor shall join with the Property Trustee in the
execution, delivery and performance of all instruments and agreements
necessary or proper to effectuate such resignation or removal. A successor
to any co-trustee or separate trustee so resigned or removed may be
appointed in the manner provided in this Section.
(d) No co-trustee or separate trustee hereunder shall be personally
liable by reason of any act or omission of the Property Trustee or any
other trustee hereunder.
(e) The Property Trustee shall not be required to supervise any
co-trustee or separate trustee nor shall it be liable by reason of any act
of a co-trustee or separate trustee or any employees or agents of a
co-trustee or separate trustee.
(f) Any Act of Holders delivered to the Property Trustee shall be
deemed to have been delivered to each such co-trustee and separate trustee.
SECTION 8.10. Resignation and Removal; Appointment of Successor. No
resignation or removal of any Trustee (the "Relevant Trustee") and no
appointment of a successor Trustee pursuant to this Article VIII shall become
effective until the acceptance of appointment by the successor Trustee in
accordance with the applicable requirements of Section 8.11.
Subject to the immediately preceding paragraph, a Relevant Trustee may
resign at any time by giving written notice thereof to the Securityholders. If
the instrument of acceptance by the successor Trustee required by Section 8.11
shall not have been delivered to the Relevant Trustee within 30 days after the
giving of such notice of resignation, the Relevant Trustee may petition, at the
expense of the Trust, any court of competent jurisdiction for the appointment of
a successor Relevant Trustee.
Unless a Debenture Event of Default shall have occurred and be continuing,
any Trustee may be removed at any time by Act of the Holder of Common
Securities. If a Debenture Event of Default shall have occurred and be
continuing, the Property Trustee or the Delaware Trustee, or both of them, may
be removed at such time by Act of the Holders of a majority in Liquidation
Amount of the Outstanding Capital Securities, delivered to the Relevant Trustee
(in its individual capacity and on behalf of the Trust). An Administrative
Trustee may be removed by Act of the Holder of Common Securities at any time.
If any Trustee shall resign, be removed or become incapable of acting as
Trustee, or if a vacancy shall occur in the office of any Trustee for any cause,
at a time when no Debenture Event of Default shall have occurred and be
continuing, the Holder of Common Securities, by Act of the Holder of Common
Securities delivered to the retiring Trustee, shall promptly appoint a successor
Trustee or Trustees and the retiring Trustee shall comply with the applicable
requirements of Section 8.11. If the Property Trustee or the Delaware Trustee
shall resign, be removed or become incapable of continuing to act as the
Property Trustee or the Delaware Trustee, as the case may be, at a time when a
Debenture Event of Default shall have occurred and be continuing, the Holders of
Capital Securities, by Act of the Holders of a majority in Liquidation Amount of
the Capital Securities then Outstanding delivered to the retiring Relevant
Trustee, shall promptly appoint a successor Relevant Trustee or Trustees, and
such successor Trustee shall comply with the applicable requirements of Section
8.11. If an Administrative Trustee shall resign, be removed or become incapable
of acting as Administrative Trustee, at a time when a Debenture Event of Default
shall have occurred and be continuing, the Holder of Common Securities, by Act
of the Holder of Common Securities delivered to the Administrative Trustee,
shall promptly appoint a successor Administrative Trustee or Administrative
Trustees and such successor Administrative Trustee or Trustees shall comply with
the applicable requirements of Section 8.11. If no successor Relevant Trustee
shall have been so appointed by the Holder of Common Securities or the Holders
of Capital Securities and accepted appointment in the manner required by Section
8.11, any Securityholder who has been a Securityholder of Trust Securities for
at least six months may, on behalf of himself and all others similarly situated,
petition any court of competent jurisdiction for the appointment of a successor
Relevant Trustee.
The Property Trustee shall give notice of each resignation and each removal
of a Trustee and each appointment of a successor Trustee to all Securityholders
in the manner provided in Section 10.08 and shall give notice to the Depositor.
Each notice shall include the name of the successor Relevant Trustee and the
address of its Corporate Trust Office if it is the Property Trustee.
Notwithstanding the foregoing or any other provision of this Declaration of
Trust, in the event any Administrative Trustee or a Delaware Trustee who is a
natural person dies or becomes, in the opinion of the Depositor, incompetent or
incapacitated, the vacancy created by such death, incompetence or incapacity may
be filled by (a) the unanimous act of remaining Administrative Trustees if there
are at least two of them or (b) otherwise by the Depositor (with the successor
in each case being a Person who satisfies the eligibility requirement for
Administrative Trustees or Delaware Trustee, as the case may be, set forth in
Section 8.07).
SECTION 8.11. Acceptance of Appointment by Successor. In the case of the
appointment hereunder of a successor Trustee, such successor Trustee so
appointed shall execute, acknowledge and deliver to the Trust and to the
retiring Trustee any instrument accepting such appointment, and thereupon the
resignation or removal of the retiring Trustee shall become effective and such
successor Trustee, without any further act, deed or conveyance, shall become
vested with the rights, powers, trusts and duties of the retiring Trustee, but,
on the request of the Depositor or the successor Trustee, such retiring Trustee
shall, upon payment of its charges, execute and deliver an instrument
transferring to such successor Trustee all the rights, powers and trusts of the
retiring Trustee and if the Property Trustee is the resigning Trustee the
Property Trustee shall duly assign, transfer and deliver to the successor
Property Trustee all Trust Property and money held by such retiring Property
Trustee hereunder.
In case of the appointment hereunder of a successor Relevant Trustee, the
retiring Relevant Trustee and each successor Relevant Trustee with respect to
the Trust Securities shall execute and deliver an amendment hereto wherein each
successor Relevant Trustee shall accept such appointment and which (a) shall
contain such provisions as shall be necessary or desirable to transfer and
confirm to, and to vest in, each successor Relevant Trustee all the rights,
powers, trusts and duties of the retiring Relevant Trustee with respect to the
Trust Securities and the Trust and (b) shall add to or change any of the
provisions of this Declaration of Trust as shall be necessary to provide for or
facilitate the administration of the Trust by more than one Relevant Trustee, it
being understood that nothing herein or in such amendment shall constitute such
Relevant Trustees co-trustees if the same trust and that each such Relevant
Trustee shall be Trustee of a trust or trusts hereunder separate and apart from
any trust or trusts hereunder administered by any other such Relevant Trustee;
and upon the execution and delivery of such amendment the resignation or removal
of the retiring Relevant Trustee shall become effective to the extent provided
therein and each such successor Relevant Trustee, without any further act, deed
or conveyance, shall become vested with all the rights, powers, trusts and
duties of the retiring Relevant Trustee; but, on request of the Trust or any
successor Relevant Trustee such retiring Relevant Trustee shall duly assign,
transfer and deliver to such successor Relevant Trustee all Trust Property, all
proceeds thereof and money held by such retiring Relevant Trustee hereunder with
respect to the Trust Securities and the Trust.
Upon request of any such successor Relevant Trustee, the Trust shall
execute any and all instruments for more fully and certainly vesting in and
confirming to such successor Relevant Trustee all such rights, powers and trusts
referred to in the first or second preceding paragraph, as the case may be.
No successor Relevant Trustee shall accept its appointment unless at the
time of such acceptance such successor Relevant Trustee shall be qualified and
eligible under this Article.
SECTION 8.12. Merger, Conversion, Consolidation or Succession to Business.
Any Person into which the Property Trustee, the Delaware Trustee or any
Administrative Trustee that is not a natural person may be merged or converted
or with which it may be consolidated, or any corporation resulting from any
merger, conversion or consolidation to which such Relevant Trustee shall be a
party, or any Person succeeding to all or substantially all the corporate trust
business of such Relevant Trustee, shall be the successor of such Relevant
Trustee hereunder, provided such Person shall be otherwise qualified and
eligible under this Article VIII, without the execution or filing of any paper
or any further act on the part of any of the parties hereto.
SECTION 8.13. Preferential Collection of Claims Against Depositor or Trust.
In case of the pendency of any receivership, insolvency, liquidation,
bankruptcy, reorganization, arrangement, adjustment, composition or other
similar judicial proceeding relative to the Trust or any other obligor upon the
Trust Securities or the property of the Trust or of such other obligor or their
creditors, the Property Trustee (irrespective of whether any Distributions on
the Trust Securities shall then be due and payable as therein expressed or by
declaration or otherwise and irrespective of whether the Property Trustee shall
have made any demand on the Trust for the payment of any past due Distributions)
shall be entitled and empowered, to the fullest extent permitted by law, by
intervention in such proceeding or otherwise:
(a) to file and prove a claim for the whole amount of any
Distributions owing and unpaid in respect of the Trust Securities and to
file such other papers or documents as may be necessary or advisable in
order to have the claims of the Property Trustee (including any claim for
the reasonable compensation, expenses, disbursements and advances of the
Property Trustee, its agents and counsel) and of the Holders allowed in
such judicial proceeding, and
(b) to collect and receive any moneys or other property payable or
deliverable on any such claims and to distribute the same; and any
custodian, receiver, assignee, trustee, liquidator, sequestrator or other
similar official in any such judicial proceeding is hereby authorized by
each Holder to make such payments to the Property Trustee and, in the event
the Property Trustee shall consent to the making of such payments directly
to the Holders, to pay to the Property Trustee any amount due it for the
reasonable compensation, expenses, disbursements and advances of the
Property Trustee, its agents and counsel, and any other amounts due the
Property Trustee.
Nothing herein contained shall be deemed to authorize the Property Trustee
to authorize or consent to or accept or adopt on behalf of any Holder any plan
of reorganization, arrangement, adjustment or compensation affecting the Trust
Securities or the rights of any Holder thereof or to authorize the Property
Trustee to vote in respect of the claim of any Holder in any such proceeding.
SECTION 8.14. Reports by Property Trustee. Upon qualification of this
Declaration of Trust under the Trust Indenture Act, within 60 days after May 15
of each year, commencing May 15, 1997, the Property Trustee shall provide to the
Holders of the Capital Securities such reports as are required by Section 313 of
the Trust Indenture Act, if any, in the form and in the manner provided by
Section 313 of the Trust Indenture Act. The Property Trustee shall also comply
with the requirements of Section 313(d) of the Trust Indenture Act.
SECTION 8.15. Reports to the Property Trustee. Upon Qualification of this
Indenture under the Trust Indenture Act, the Depositor and the Administrative
Trustees on behalf of the Trust shall provide to the Property Trustee such
documents, reports and information as required by Section 314 of the Trust
Indenture Act (if any) and the compliance certificate required by Section 314
(a) of the Trust Indenture Act in the form, in the manner and at the times
required by Section 314 of the Trust Indenture Act.
SECTION 8.16. Evidence of Compliance with Conditions Precedent. Upon
qualification of this Indenture under the Trust Indenture Act, each of the
Depositor and the Administrative Trustees on behalf of the Trust shall provide
to the Property Trustee such evidence of compliance with any conditions
precedent, if any, provided for in this Declaration of Trust that relate to any
of the matters set forth in Section 314(c) of the Trust Indenture Act. Any
certificate or opinion required to be given by an officer pursuant to Section
314(c)(1) of the Trust Indenture Act shall be given in the form of an Officers'
Certificate.
SECTION 8.17. Number of Trustees. (a) The number of Trustees shall be six;
provided that the Holder of all of the Common Securities by written instrument
may increase or decrease the number of Administrative Trustees. The Property
Trustee and the Delaware Trustee may be the same Person.
(b) If a Trustee ceases to hold office for any reason and the number
of Administrative Trustees is not reduced pursuant to Section 8.17(a), or
if the number of Trustees is increased pursuant to Section 8.17(a), a
vacancy shall occur. The vacancy shall be filed with a Trustee appointed in
accordance with Section 8.10.
(c) The death, resignation, retirement, removal, bankruptcy,
incompetence or incapacity to perform the duties of a Trustee shall not
operate to annul the Trust. Whenever a vacancy in the number of
Administrative Trustees shall occur, until such vacancy is filled by the
appointment of an Administrative Trustee in accordance with Section 8.10,
the Administrative Trustees in office, regardless of their number (and
notwithstanding any other provision of this Agreement), shall have all the
powers granted to the Administrative Trustees and shall discharge all the
duties imposed upon the Administrative Trustees by this Declaration of
Trust.
SECTION 8.18. Delegation of Power. (a) Any Administrative Trustee may, by
power of attorney consistent with applicable law, delegate to any other natural
person over the age of 21 his or her power for the purpose of executing any
documents contemplated in Section 2.07(a), including any registration statement
or amendment thereto filed with the Commission, or making any other governmental
filing; and
(b) The Administrative Trustees shall have power to delegate from time
to time to such of their number or to the Depositor the doing of such
things and the execution of such instruments either in the name of the
Trust or the names of the Administrative Trustees or otherwise as the
Administrative Trustees may deem expedient, to the extent such delegation
is not prohibited by applicable law or contrary to the provisions of this
Declaration of Trust, as set forth herein.
ARTICLE IX
Termination, Liquidation and Merger
SECTION 9.01. Termination Upon Expiration Date; Termination Upon Special
Event. Unless earlier terminated, the Trust shall automatically terminate on
January 27, 2037 (the "Expiration Date"), following the distribution of the
Trust Property in accordance with Section 9.04.
SECTION 9.02. Early Termination. The first to occur of any of the following
events is an "Early Termination Event":
(a) the occurrence of a Bankruptcy Event in respect of, or the
dissolution or liquidation of, the Depositor or the Holder of the Common
Securities;
(b) the written direction to the Property Trustee from the Depositor,
as issuer of the Junior Subordinated Debt Securities, at any time (which
direction is optional and wholly within the discretion of the Depositor
subject to (i) receipt by the Depositor of the Opinion of Counsel to the
effect that such distribution will not be a taxable event to Holders of the
Capital Securities and (ii) receipt of prior approval of the Federal
Reserve if then required under applicable capital guidelines or policies of
the Federal Reserve (including upon the occurrence and continuation of a
Special Event in respect of the Trust) to terminate the Trust and, after
satisfaction of liabilities to creditors of the Trust as provided by
applicable law, distribute a Like Amount of the Junior Subordinated Debt
Securities to Securityholders;
(c) the redemption of all of the Trust Securities in connection with
the redemption of all the Junior Subordinated Debt Securities (including
upon the occurrence and continuation of a Special Event pursuant to Section
11.07(b) of the Indenture); and
(d) the entry of an order for dissolution of the Trust by a court of
competent jurisdiction.
SECTION 9.03. Termination. The respective obligations and responsibilities
of the Trustees and the Trust created and continued hereby shall terminate upon
the latest to occur of the following: (a) the payment of any expenses owed by
the Trust, (b) the distribution by the Property Trustee to Securityholders upon
the liquidation of the Trust pursuant to Section 9.04, or upon the redemption of
all of the Trust Securities pursuant to Section 4.02, of all amounts required to
be distributed hereunder upon the final payment of the Trust Securities, and (c)
the discharge of all administrative duties of the Administrative Trustees,
including the performance of any tax reporting obligations with respect to the
Trust or the Securityholders.
SECTION 9.04. Liquidation. (a) If an Early Termination Event specified in
clause (a), (b) or (d) of Section 9.02 occurs or upon the Expiration Date, the
Trust shall be liquidated by the Trustees as expeditiously as the Trustees
determine to be possible by distributing, after satisfaction of liabilities to
creditors of the Trust as provided by applicable law, to each Securityholder a
Like Amount of Junior Subordinated Debt Securities, subject to Section 9.04(d).
Upon the written direction of any Administrative Trustee, notice of liquidation
shall be given by the Property Trustee by first-class mail, postage prepaid,
mailed not later than 30 nor more than 90 days prior to the Liquidation Date to
each Holder at such Holder's address appearing in the Securities Register. All
notices of liquidation shall:
(i) state the Liquidation Date (which in the case of any liquidation
following the occurrence of a Special Event shall not be more
than 90 days following such occurrence);
(ii) state that from and after the Liquidation Date the Trust
Securities will no longer be deemed to be Outstanding and any
Trust Securities Certificates not surrendered for exchange will
be deemed to represent a Like Amount of Junior Subordinated Debt
Securities; and
(iii) provide such information with respect to the mechanics by which
Holders may exchange Trust Securities Certificates for Junior
Subordinated Debt Securities, or, if Section 9.04(d) applies,
receive a Liquidation Distribution, as the Administrative
Trustees or the Property Trustee shall deem appropriate.
(b) Except where Section 9.02(c) or 9.04(d) applies, in order to
effect the liquidation of the Trust and distribution of the Junior
Subordinated Debt Securities to Securityholders, the Property Trustee shall
establish a record date for such distribution (which shall be not more than
45 days prior to the Liquidation Date) and, either itself acting as
exchange agent or through the appointment of a separate exchange agent,
shall establish such procedures as it shall deem appropriate to effect the
distribution of Junior Subordinated Debt Securities in exchange for the
Outstanding Trust Securities Certificate.
(c) Except where Section 9.02(c) or 9.04(d) applies, after the
Liquidation Date, (i) the Trust Securities will no longer be deemed to be
Outstanding, (ii) certificates representing a Like Amount of Junior
Subordinated Debt Securities will be issued to Holders, upon surrender of
Trust Securities Certificates to the Administrative Trustees or their agent
for exchange, (iii) any Trust Securities Certificates not so surrendered
for exchange will be deemed to represent a Like Amount of Junior
Subordinated Debt Securities accruing interest at the rate provided for in
the Junior Subordinated Debt Securities from the last Distribution Date on
which a Distribution was made on such Trust Securities Certificates until
such certificates are so surrendered (until such certificates are so
surrendered, no payments of interest or principal will be made to the
Holders of Trust Securities Certificates with respect to such Junior
Subordinated Debt Securities) and (iv) all rights of Securityholders
holding Trust Securities will cease, except the right of such
Securityholders to receive Junior Subordinated Debt Securities upon
surrender of Trust Securities Certificates.
(d) In the event that, notwithstanding the other provisions of this
Section 9.04, whether because of an order for dissolution entered by a
court of competent jurisdiction or otherwise, distribution of the Junior
Subordinated Debt Securities in the manner provided herein is determined by
the Property Trustee not to be practical, the Trust Property shall be
liquidated, and the Trust shall be dissolved, wound-up or terminated, by
the Property Trustee in such manner as the Property Trustee determine. In
such event, on the date of the dissolution, winding-up or other termination
of the Trust, Securityholders will be entitled to receive out of the assets
of the Trust available for distribution to Securityholders after
satisfaction of liabilities to creditors of the Trust as provided by
applicable law, an amount equal to the aggregate of Liquidation Amount of
such Holders of Trust Securities plus accumulated and unpaid Distributions
thereon to the date of payment (such amount being the "Liquidation
Distribution"). If, upon any such dissolution, winding up or termination,
the Liquidation Distribution can be paid only in part because the Trust has
insufficient assets available to pay in full the aggregate Liquidation
Distribution, then, subject to the next succeeding sentence, the amounts
payable by the Trust on the Trust Securities shall be paid on a pro rata
basis (based upon Liquidation Amounts). Holders of the Common Securities
will be entitled to receive Liquidation Distributions upon any such
dissolution, winding-up or termination pro rata (determined as aforesaid)
with Holders of Capital Securities, except that, if a Debenture Event of
Default has occurred and is continuing, the Capital Securities shall have a
priority over the Common Securities, and no payments shall be made with
respect to the Common Securities until Holders of Capital Securities have
been paid in full. Any such determination and liquidation by the Property
Trustee shall be conclusive upon the Securityholders and the Property
Trustee shall have no liability in connection therewith.
SECTION 9.05. Mergers, Consolidations, Amalgamations or Replacements of the
Trust. The Trust may not merge with or into, consolidate, amalgamate, or be
replaced by, or convey, transfer or lease its properties and assets
substantially as an entirety to any corporation or other Person, except pursuant
to this Section 9.05. At the request of the Depositor, with the consent of the
Administrative Trustees and without the consent of the Holders of the Capital
Securities, the Property Trustee or the Delaware Trustee, the Trust may merge
with or into, consolidate, amalgamate, or be replaced by or convey, transfer or
lease its properties and assets substantially as an entirety to a trust
organized as such under the laws of any State; provided, however, that (i) such
successor entity either (a) expressly assumes all of the obligations of the
Trust with respect to the Trust Securities or (b) substitutes for the Trust
Securities other securities having substantially the same terms as the Trust
Securities (the "Successor Securities") so long as the Successor Securities rank
the same as the Trust Securities rank in priority with respect to distributions
and payments upon liquidation, redemption and otherwise, (ii) the Depositor
expressly appoints a trustee of such successor entity possessing the same powers
and duties as the Property Trustee as the holder of the Junior Subordinated Debt
Securities, (iii) the Successor Securities (if Capital Securities) are listed or
traded, or any Successor Securities will be listed or traded upon notification
of issuance, on any national securities exchange or other organization on which
the Capital Securities are then listed or traded, if any, (iv) if the Capital
Securities, including any successor Securities, are rated by any nationally
recognized statistical rating organization prior to such transaction, such
merger, consolidation, amalgamation, replacement, conveyance, transfer or lease
does not cause the Trust Securities (including any Successor Securities) or, if
so rated, the Junior Subordinated Debt Securities, to be downgraded by such
nationally recognized statistical rating organization, (v) such merger,
consolidation, amalgamation, replacement, conveyance, transfer or lease does not
adversely affect the rights, preferences and privileges of the holders of the
Trust Securities (including any Successor Securities) in any material respect,
(vi) such successor entity has a purpose identical to that of the Trust, (vii)
prior to such merger, consolidation, amalgamation, replacement, conveyance,
transfer or lease, the Depositor has received an Opinion of Counsel to the
effect that (a) such merger, consolidation, amalgamation, replacement,
conveyance, transfer or lease does not adversely affect the rights, preferences
and privileges of the Holders of the Trust Securities (including any Successor
Securities) in any material respect, and (b) following such merger,
consolidation, amalgamation, replacement, conveyance, transfer or lease, neither
the Trust nor such successor entity will be required to register as an
investment company under the 1940 Act, (viii) the Depositor or any permitted
successor or assignee owns all of the Common Securities of such successor entity
and guarantees the obligations of such successor entity under the Successor
Securities at least to the extent provided by the Guarantee, and (ix) the
Depositor delivers to the Property Trustee an Officer's Certificate and an
Opinion of Counsel, each to the effect that all conditions precedent in this
Section 9.05 to such transaction have been satisfied. Notwithstanding the
foregoing, the Trust shall not, except with the consent of holders of 100% in
Liquidation Amount of the Trust Securities, consolidate, amalgamate, merge with
or into, or be replaced by or convey, transfer or lease its properties and
assets substantially as an entirety to any other entity or permit any other
entity to consolidate, amalgamate, merge with or into, or replace it if such
consolidation, amalgamation, merger, replacement, conveyance, transfer or lease
would cause the Trust or the successor entity to be classified as other than a
grantor trust for United States federal income tax purposes.
ARTICLE X
Miscellaneous Provisions
SECTION 10.01. Limitation of Rights of Securityholders. The death,
dissolution or incapacity of any Person having an interest, beneficial or
otherwise, in Trust Securities shall not operate to terminate this Declaration
of Trust, nor entitle the legal representatives or heirs of such Person or any
Securityholder for such Person, to claim an accounting, take any action or bring
any proceeding in any court for a partition or winding-up of the arrangements
contemplated hereby, nor otherwise affect the rights, obligations and
liabilities of the parties hereto or any of them.
SECTION 10.02. Liability of the Depositor. The Depositor, as issuer of the
Junior Subordinated Debt Securities, shall be liable for all the debts and
obligations of the Trust (other than with respect to payments of principal,
interest, or premium, if any, on the Trust Securities) to the extent not
satisfied out of the Trust's assets.
SECTION 10.03. Amendment. (a) This Declaration of Trust may be amended from
time to time by the Property Trustee, the Administrative Trustees and the
Depositor, without the consent of any Securityholders (i) to cure any ambiguity,
correct or supplement any provision herein which may be inconsistent with any
other provision herein, or to make any other provisions with respect to matters
or questions arising under this Declaration of Trust, which shall not be
inconsistent with the other provisions of this Declaration of Trust or (ii) to
modify, eliminate or add to any provisions of this Declaration of Trust to such
extent as shall be necessary to ensure that the Trust will be classified for
United States federal income tax purposes as a grantor trust at all times that
any Trust Securities are Outstanding or to ensure that the Trust will not be
required to register as an investment company under the 1940 Act; or (iii) to
modify, correct or supplement in any respect the provisions relating to the
exchange of the Trust Securities for identical securities pursuant to the
Registration Rights Agreement; provided, however, that in the case of clauses
(i) and (iii), such action shall not adversely affect in any material respect
the interests of any Securityholder, and any amendments of this Declaration of
Trust shall become effective when notice thereof is given to the
Securityholders.
(b) Except as provided in Section 10.03(c) hereof, any provision of
this Declaration of Trust may be amended by the Trustees and the Depositor
with (i) the consent of Securityholders representing not less than a
majority (based upon Liquidation Amounts) of the Trust Securities then
Outstanding and (ii) receipt by the Trustees of an Opinion of Counsel to
the effect that such amendment or the exercise of any power granted to the
Trustees in accordance with such amendment will not affect the Trust's
status as a grantor trust for United States federal income tax purposes or
the Trust's exemption from status of an investment company under the 1940
Act.
(c) In addition to and notwithstanding any other provision in this
Declaration of Trust, without the consent of each affected Securityholder
(such consent being obtained in accordance with Section 6.03 or 6.08
hereof), this Declaration of Trust may not be amended to (i) change the
amount or timing of any Distribution on the Trust Securities or otherwise
adversely affect the amount of any Distribution required to be made in
respect of the Trust Securities as of a specified date or (ii) restrict the
right of a Securityholder to institute suit for the enforcement of any such
payment on or after such date. Notwithstanding any other provision herein,
without the unanimous consent of the Securityholders (such consent being
obtained in accordance with Section 6.03 or 6.08 hereof), this paragraph
(c) of this Section 10.03 may not be amended.
(d) Notwithstanding any other provisions of this Declaration of Trust,
no Trustee shall enter into or consent to any amendment to this Declaration
of Trust which would cause the Trust to fail or cease to qualify for the
exemption from status of an investment company under the 1940 Act or fail
or cease to be classified as a grantor trust for United States federal
income tax purposes.
(e) Notwithstanding anything in this Declaration of Trust to the
contrary, without the consent of the Depositor this Declaration of Trust
may not be amended in a manner which imposes any additional obligation on
the Depositor.
(f) Notwithstanding any other provision of this Declaration of Trust,
no amendment to this Declaration of Trust may be made if, as a result of
such amendment, it would cause the Trust to fail to be classified as a
grantor trust for United States federal income tax purposes.
(g) In the event that any amendment to this Declaration of Trust is
made, the Administrative Trustees shall promptly provide to the Depositor a
copy of such amendment.
(h) Neither the Property Trustee nor the Delaware Trustee shall be
required to enter into any amendment to this Declaration of Trust which
affects its own rights, duties or immunities under this Declaration of
Trust or would otherwise expose the Property Trustee to any liability or be
contrary to applicable law. The Property Trustee shall be entitled to
receive an Opinion of Counsel and an Officers' Certificate stating that any
amendment to this Declaration of Trust is in compliance with this
Declaration of Trust and that all conditions precedent, if any, to the
execution and delivery of such amendment have been satisfied.
SECTION 10.04. Separability. In case any provision in this Declaration of
Trust or in the Trust Securities Certificates shall be invalid, illegal or
unenforceable, the validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby.
SECTION 10.05. Governing Law. This Declaration of Trust and the rights and
obligations of each of the Securityholders, the Trust and the Trustees with
respect to this Declaration of Trust and the Trust Securities shall be construed
in accordance with and governed by the laws of the State of Delaware without
regard to its conflict of laws principles. The provisions of Sections 3540 and
3561 of Title 12 of the Delaware Code shall not apply to this Trust.
SECTION 10.06. Payments Due on Non-Business Day. If the date fixed for any
payment on any Trust Security shall be a day that is not a Business Day, then
such payment need not be made on such date but may be made on the next
succeeding day that is a Business Day (except as otherwise provided in Section
4.02(d)), with the same force and effect as though made on the date fixed for
such payment, and no interest shall accrue thereon for the period after such
date.
SECTION 10.07. Successors. This Declaration of Trust shall be binding upon
and shall inure to the benefit of any successor to the Depositor, the Trust or
the Relevant Trustee, including any successor by operation of law. Except in
connection with a consolidation, merger or sale involving the Depositor that is
permitted under Article VI of the Indenture and pursuant to which the assignee
agrees in writing to perform the Depositor's obligations hereunder, the
Depositor shall not assign its obligations hereunder.
SECTION 10.08. Headings. The Article and Section headings are for
convenience only and shall not affect the construction of this Declaration of
Trust.
SECTION 10.09. Reports, Notices and Demands. Any report, notice, demand or
other communication which by any provision of this Declaration of Trust is
required or permitted to be given or served to or upon any Securityholder or the
Depositor may be given or served in writing by deposit thereof, first class
postage prepaid, in the United States mail, hand delivery or facsimile
transmission, in each case, addressed, (a) in the case of a Capital
Securityholder, to such Capital Securityholder as such Securityholder's name and
address may appear on the Securities Register, and (b) in the case of the Holder
of Common Securities or the Depositor, to U.S.B. Holding Co., Inc., 100 Dutch
Hill Road, Orangeburg, New York 10961, Attention: Steven T. Sabatini, Executive
Vice President and Chief Financial Officer, facsimile no.: (914) 365-4600. Any
notice to Holders of Capital Securities may also be given to such Owners as
have, within two years preceding the giving of such notice, filed their names
and addresses with the Property Trustee for that purpose. Such notice, demand or
other communication to or upon a Securityholder shall be deemed to have been
sufficiently given or made, for all purposes, upon hand delivery, mailing or
transmission.
Any notice, demand or other communication which by any provision of this
Declaration of Trust is required or permitted to be given or served to or upon
the Trust, the Property Trustee, the Delaware Trustee or the Administrative
Trustees shall be given in writing addressed (until another address is published
by the Trust) as follows: (a) with respect to the Property Trustee to The Chase
Manhattan Bank, 450 West 33rd Street, 15th Floor, New York, NY 10001-2697,
Attention: Corporate Trustee Administration Department; (b) with respect to the
Delaware Trustee to Chase Manhattan Bank Delaware, 1201 Market Street, 8th
Floor, Wilmington, DE 19801, Attention: Corporate Trustee Administration
Department; and (c) with respect to the Administrative Trustees, to them at the
address above for notices to the Depositor, marked "Attention: Office of the
Executive Vice President". Such notice, demand or other communication to or upon
the Trust or the Property Trustee shall be deemed to have been sufficiently
given or made only upon actual receipt of the writing by the Trust or the
Property Trustee.
SECTION 10.10. Agreement Not to Petition. Each of the Trustees and the
Depositor agree for the benefit of the Securityholders that, until at least one
year and one day after the Trust has been terminated in accordance with Article
IX, they shall not file, or join in the filing of, a petition against the Trust
under any bankruptcy, insolvency, reorganization or other similar law
(including, without limitation, the United States Bankruptcy Code)
(collectively, "Bankruptcy Laws") or otherwise join in the commencement of any
proceeding against the Trust under any Bankruptcy Laws. In the event the
Depositor takes action in violation of this Section 10.10, the Property Trustee
agrees, for the benefit of Securityholders, that at the expense of the
Depositor, it shall file an answer with the bankruptcy court or otherwise
properly contest the filing of such petition by the Depositor against the Trust
or the commencement of such action and raise the defense that the Depositor has
agreed in writing not to take such action and should be estopped and precluded
therefrom and such other defenses, if any, as counsel for the Trustee or the
Trust may assert. The provisions of this Section 10.10 shall survive the
termination of this Declaration of Trust.
SECTION 10.11. Trust Indenture Act; Conflict with Trust Indenture Act. This
Declaration of Trust will not be qualified under the Trust Indenture Act except
upon the effectiveness of a registration statement and the consummation of an
exchange offer pursuant to the Registration Rights Agreement. By its terms,
however, this Declaration of Trust incorporates certain provisions of the Trust
Indenture Act. Upon the effectiveness of any such registration statement,
clauses (a), (b), (c) and (d), below, shall apply to this Declaration of Trust.
(a) This Declaration of Trust is subject to the provisions of the
Trust Indenture Act that are required to be part of this Declaration of
Trust and shall, to the extent applicable, be governed by such provisions.
(b) The Property Trustee shall be the only Trustee which is a trustee
for the purposes of the Trust Indenture Act.
(c) If any provision hereof limits, qualifies or conflicts with
another provision hereof which is required to be included in this
Declaration of Trust by any of the provisions of the Trust Indenture Act,
such required provision shall control. If any provision of this Declaration
of Trust modifies or excludes any provision of the Trust Indenture Act
which may be so modified or excluded, the latter provision shall be deemed
to apply to this Declaration of Trust as so modified or excluded, as the
case may be.
(d) The application of the Trust Indenture Act to this Declaration of
Trust shall not affect the nature of the Securities as securities
representing undivided beneficial interests in the assets of the Trust.
SECTION 10.12. Acceptance of Terms of Declaration of Trust, Guarantee and
Indenture. THE RECEIPT AND ACCEPTANCE OF A TRUST SECURITY OR ANY INTEREST
THEREIN BY OR ON BEHALF OF A SECURITYHOLDER OR ANY BENEFICIAL OWNER, WITHOUT ANY
SIGNATURE OR FURTHER MANIFESTATION OF ASSENT, SHALL CONSTITUTE THE UNCONDITIONAL
ACCEPTANCE BY THE SECURITYHOLDER AND ALL OTHERS HAVING A BENEFICIAL INTEREST IN
SUCH TRUST SECURITY OF ALL THE TERMS AND PROVISIONS OF THIS DECLARATION OF TRUST
AND AGREEMENT TO THE SUBORDINATION PROVISIONS AND OTHER TERMS OF THE GUARANTEE
AND THE INDENTURE, AND SHALL CONSTITUTE THE AGREEMENT OF THE TRUST, SUCH
SECURITYHOLDER AND SUCH OTHERS THAT THE TERMS AND PROVISIONS OF THIS DECLARATION
OF TRUST SHALL BE BINDING, OPERATIVE AND EFFECTIVE AS BETWEEN THE TRUST AND SUCH
SECURITYHOLDER AND SUCH OTHERS.
<PAGE>
U.S.B. HOLDING CO., INC.,
Depositor
by /s/ Thomas E. Hales
-----------------------------------------
Name: Thomas E. Hales
Title: Administrative Trustee
THE CHASE MANHATTAN BANK,
as Property Trustee
by /s/ Sheik Wiltshire
------------------------------------------
Name: Sheik Wiltshire
Title:
CHASE MANHATTAN BANK DELAWARE, as Delaware
Trustee and not in its individual capacity
by /s/ John J. Cashin
-----------------------------------------
Name: John J. Cashin
Title:
<PAGE>
/s/ Thomas E. Hales
---------------------------------------
Thomas E. Hales
as Administrative Trustee
/s/ Michael H. Fury
---------------------------------------
Michael H. Fury
as Administrative Trustee
/s/ Raymond J. Crotty
--------------------------------------
Raymond J. Crotty
as Administrative Trustee
/s/ Steven T. Sabatini
-------------------------------------
Steven T. Sabatini
as Administrative Trustee
<PAGE>
EXHIBIT A
CERTIFICATE OF TRUST
The undersigned, the trustee of Union State Capital Trust I, desiring to
form a business trust pursuant to the Delaware Business Trust Act, 12 Del. C.
Section 3801, hereby certify as follows:
(a) The name of the business trust formed hereby is "Union
State Capital Trust I" (the "Trust").
(B) The name and business address of the trustee of the Trust
that has its principal place of business in the State of Delaware are
as follows:
Chase Manhattan Bank Delaware
1201 Market Street, 9th Floor, Wilmington, DE 19801.
(C) This Certificate of Trust shall be effective as of the
date of filing.
Dated: January , 1997
CHASE MANHATTAN BANK DELAWARE, not in its
individual capacity but solely as trustee
by----------------------------------------
Name:
Title:
Thomas E. Hales, not in his individual
capacity but solely as trustee
------------------------------------------
Michael H. Fury, not in his individual
capacity but solely as trustee
------------------------------------------
Raymond J. Crotty, not in his individual
capacity but solely as trustee
------------------------------------------
Steven T. Sabatini, not in his individual
capacity but solely as trustee
<PAGE>
EXHIBIT B
IF THE CAPITAL SECURITY IS A RESTRICTED SECURITY,
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS. NEITHER THIS
SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD,
ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE
ABSENCE OF SUCH REGISTRATION UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT
SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. THE HOLDER
OF THIS SECURITY BY ITS ACCEPTANCE HEREOF AGREES TO OFFER, SELL OR
OTHERWISE TRANSFER SUCH SECURITY PRIOR TO THE DATE WHICH IS THREE YEARS
AFTER THE LATER OF THE ORIGINAL ISSUE DATE HEREOF AND THE LAST DATE ON
WHICH U.S.B. HOLDING CO., INC. (THE "CORPORATION") OR ANY AFFILIATE OF THE
CORPORATION WAS THE OWNER OF THIS SECURITY (OR ANY PREDECESSOR OF THIS
SECURITY) (THE "RESALE RESTRICTIONS TERMINATION DATE") ONLY (A) TO THE
CORPORATION, (B) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
SECURITIES ACT, (C) FOR SO LONG AS THE SECURITIES ARE ELIGIBLE FOR RESALE
PURSUANT TO RULE 144A UNDER THE SECURITIES ACT ("RULE 144A"), TO A PERSON
IT REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER" AS DEFINED IN
RULE 144A THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A
QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS
BEING MADE IN RELIANCE ON RULE 144A, (D) TO AN INSTITUTIONAL "ACCREDITED
INVESTOR" WITHIN THE MEANING OF SUBPARAGRAPH (a)(1), (2), (3) OR (7) OF
RULE 501 UNDER THE SECURITIES ACT ACQUIRING THE SECURITY FOR ITS OWN
ACCOUNT OR FOR THE ACCOUNT OF SUCH AN INSTITUTIONAL "ACCREDITED INVESTOR"
FOR INVESTMENT PURPOSES AND NOT WITH A VIEW TO, OR FOR OFFER OR SALE IN
CONNECTION WITH, ANY DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT, OR
(E) PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO THE TRUST'S AND THE PROPERTY
TRUSTEE'S RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER PURSUANT TO
CLAUSES (D) OR (E) TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL,
CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO EACH OF THEM IN
ACCORDANCE WITH THE DECLARATION OF TRUST, A COPY OF WHICH MAY BE OBTAINED
FROM THE TRUST OR THE PROPERTY TRUSTEE. THIS LEGEND WILL BE REMOVED UPON
THE REQUEST OF A HOLDER AFTER THE RESALE RESTRICTIONS TERMINATION DATE."
IF THE CAPITAL SECURITIES CERTIFICATE IS TO BE A GLOBAL SECURITIES
CERTIFICATE, INSERT--[This Capital Securities Certificate is a Global
Capital Securities Certificate within the meaning of the Declaration of
Trust hereinafter referred to and is registered in the name of The
Depository Trust Company (the "Depositary") or a nominee of the Depositary.
This Capital Securities Certificate is exchangeable for Capital Securities
Certificates registered in the name of a person other than the Depositary
or its nominee only in the limited circumstances described in the
Declaration of Trust and no transfer of this Capital Securities Certificate
(other than a transfer of this Capital Securities Certificate as a whole by
the Depositary to a nominee of the Depositary or by a nominee of the
Depositary to the Depositary or another nominee of the Depositary) may be
registered except in the limited circumstances described in the Declaration
of Trust.
Unless this Capital Securities Certificate is presented by an
authorized representative of The Depositary Trust Company, 55 Water Street,
New York, to Union State Capital Trust I or its agent for registration of
transfer, exchange or payment, and any Capital Securities Certificate
issued is registered in the name of Cede & Co. or such other name as
requested by an authorized representative of The Depositary Trust Company
and any payment hereon is made to Cede & Co., ANY TRANSFER, PLEDGE OR OTHER
USE HEREOF FOR VALUE OR OTHERWISE BY A PERSON IS WRONGFUL inasmuch as the
registered owner hereof, Cede & Co., has an interest herein.]
The Capital Securities are issued, and may be transferred, only in
blocks having an aggregate 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 ("ERISA"), OR SECTION
4975 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (EACH, A "PLAN"), NO
ENTITY WHOSE UNDERLYING ASSETS INCLUDE "PLAN ASSETS" BY REASON OF ANY
PLAN'S INVESTMENT IN THE ENTITY (A "PLAN ASSET ENTITY"), AND NO PERSON
INVESTING "PLAN ASSETS" OF ANY PLAN, MAY ACQUIRE OR HOLD THIS CAPITAL
SECURITIES CERTIFICATE OR ANY INTEREST HEREIN, UNLESS SUCH PURCHASER OR
HOLDER IS COVERED BY THE EXEMPTIVE RELIEF AVAILABLE UNDER U.S. DEPARTMENT
OF LABOR PROHIBITED TRANSACTION CLASS EXEMPTION ("PTCE") 96-23, 95-60,
91-38, 90-1 OR 84-14 WITH RESPECT TO SUCH PURCHASE OR HOLDING. ANY
PURCHASER OR HOLDER OF THIS CAPITAL SECURITIES CERTIFICATE OR ANY INTEREST
HEREIN WILL BE DEEMED TO HAVE REPRESENTED BY ITS PURCHASE AND HOLDING
HEREOF THAT IT EITHER (A) IS NOT A PLAN OR A PLAN ASSET ENTITY AND IS NOT
PURCHASING SUCH SECURITIES ON BEHALF OF OR WITH "PLAN ASSETS" OF ANY PLAN,
OR (B) IS ELIGIBLE FOR THE EXEMPTIVE RELIEF AVAILABLE UNDER PTCE 96-23,
95-60, 91-38, 90-1 OR 84-14 WITH RESPECT TO SUCH PURCHASE OR HOLDING.
<PAGE>
Liquidation Amount of
Certificate Num Capital Securities
CUSIP NO. [ ]
Certificate Evidencing Capital Securities
of
Union State Capital Trust I
[---------]% Capital Securities
(Liquidation Amount $1,000 per Capital Security)
Union State Capital Trust I, a statutory business trust formed under the
laws of the State of Delaware (the "Trust"), hereby certifies that Cede & Co.
(the "Holder") is the registered owner of -------- ( ) Capital Securities of the
Trust representing an undivided beneficial interest in the assets of Trust and
designated Union State Capital Trust I ----% 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 as provided in Section 5.05 of the Declaration
of Trust (as defined below). The designations, rights, privileges, restrictions,
preferences and other terms and provisions of the Capital Securities are set
forth in, and this certificate and the Capital Securities presented hereby are
issued and shall in all respects be subject to the terms and provisions of, the
Amended and Restated Declaration of Trust of the Trust dated as of ----- --,
1997, as the same may be amended from time to time (the "Declaration of Trust")
among U.S.B. Holding Co., Inc., as Depositor, The Chase Manhattan Bank, as
Property Trustee, Chase Manhattan Bank Delaware, as Delaware Trustee and the
Administrative Trustees named therein, including the designation of the terms of
Capital Securities as set forth therein. The Holder is entitled to the benefits
of the Guarantee Agreement entered into by U.S.B. Holding Co., Inc., a
corporation, and The Chase Manhattan Bank, as Guarantee trustee, dated as of
- ------, --, 1997, (the "Guarantee"), to the extent provided therein. The Trust
will furnish a copy of the Declaration of Trust and the Guarantee to the Holder
without charge upon written request to the Trust at its principal place of
business or registered office.
Terms used but not defined herein have the meanings set forth in the
Declaration of Trust.
Upon receipt of this certificate, the Holder is bound by the Declaration of
Trust and is entitled to benefits thereunder.
IN WITNESS WHEREOF, one of the Administrative Trustees of the Trust has
executed this Certificate this --- day of --------, ---.
UNION STATE CAPITAL TRUST I
by-----------------------------------
Name:
Title: Administrative Trustee
COUNTERSIGNED AND REGISTERED:
THE CHASE MANHATTAN BANK,
as Property Trustee
by-----------------------------------
Authorized Officer
<PAGE>
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this Capital
Security to:
(Insert assignee's social security or tax identification number)
(Insert address and zip code of assignee)
and irrevocably appoints agent to transfer this Capital Security Certificate on
the books of the Trust. The agent may substitute another to act for him or her.
Date:------------------------
Signature:----------------------------------------------------------------------
(Sign exactly as your name appears on the other side
of this Capital Security Certificate)
The signatures should be guaranteed by an eligible guarantor
institution (banks, stockbrokers, savings and loan associations and
credit unions with membership in an approved signature guarantee
medallion program), pursuant to SEC Rule 17Ad-15.
<PAGE>
EXHIBIT C
THIS CERTIFICATE IS NOT TRANSFERABLE
Liquidation Amount of
Certificate Number Capital Securities
Certificate Evidencing Common Securities
of
Union State Capital Trust I
[----]% Common Securities
(Liquidation Amount $1,000 per Common Security)
Union State Capital Trust I, a statutory business trust formed under the
laws of the State of Delaware (the "Trust"), hereby certifies that U.S.B.
Holding Co., Inc. (the "Holder") is the registered owner of ----- ( ) common
securities of the Trust representing beneficial interests of the Trust and
designated the [----]% Common Securities (Liquidation Amount $1,000 per Common
Security) (the "Common Securities"). Except as provided in Section 5.11 of the
Declaration of Trust (as defined below), the Common Securities are not
transferable and any attempted transfer hereof shall be void. The designations,
rights, privileges, restrictions, preferences and other terms and provisions of
the Common Securities are set forth in, and this certificate and the Common
Securities represented hereby are issued and shall in all respects be subject to
the terms and provisions of, the Amended and Restated Declaration of Trust of
the Trust dated as of ----- --, 1997, as the same may be amended from time to
time (the "Declaration of Trust") among U.S.B. Holding Co., Inc., as Depositor,
The Chase Manhattan Bank, as Property Trustee, Chase Manhattan Bank Delaware, as
Delaware Trustee, and the Administrative Trustees named therein, including the
designation of the terms of the Common Securities as set forth therein. The
Trust will furnish a copy of the Declaration of Trust to the Holder without
charge upon written request to the Trust at its principal place of business or
registered office.
Upon receipt of this certificate, the Holder is bound by the Declaration of
Trust and is entitled to the benefits thereunder.
Terms used but not defined herein have the meanings set forth in the
Declaration of Trust.
IN WITNESS WHEREOF, one of the Administrative Trustees of the Trust has
executed this certificate this --- day of --------, ---.
UNION STATE CAPITAL TRUST I
by---------------------------------
Name:
Title: Administrative Trustee
COUNTERSIGNED AND REGISTERED:
THE CHASE MANHATTAN BANK,
as Property Trustee
by----------------------------------
Authorized Officer
<PAGE>
EXHIBIT D
[Form of Restricted Securities Certificate]
RESTRICTED CAPITAL SECURITIES CERTIFICATE
(For transfers pursuant to Section 5.05(b)
of the Declaration of Trust)
[----------------------------------],
as Security Registrar
[address]
Re: 9.58% Capital Securities of
Union State Capital Trust I (the "Trust")
(the "Capital Securities")
-----------------------------------------
Reference is made to the Amended and Restated Declaration of Trust, dated
as of February 5, 1997 (the "Declaration of Trust"), among U.S.B. Holding Co.,
Inc., as Depositor, The Chase Manhattan Bank, as Property Trustee, Chase
Manhattan Bank Delaware, as Delaware Trustee, and the Administrative Trustees
named therein. Terms used herein and defined in the Declaration of Trust or in
Regulation D, Rule 144A or Rule 144 under the U.S. Securities Act of 1933, as
amended (the "Securities Act"), are used herein as so defined.
This certificate relates to $-------------- aggregate
Liquidation Amount of Capital Securities, which are evidenced by the following
certificate(s) (the "Specified Securities"):
CUSIP No(s).---------------------------------------
CERTIFICATE No(s).---------------------------------
CURRENTLY IN BOOK-ENTRY FORM: ----Yes ----No (check one)
The person in whose name this certificate is executed below (the "Undersigned")
hereby certifies that either (i) it is the sole beneficial owner of the
Specified Securities or (ii) it is acting on behalf of all the beneficial owners
of the Specified Securities and is duly authorized by them to do so. Such
beneficial owner or owners are referred to herein collectively as the "Owner".
If the Specified Securities are represented by a Global Capital Securities
Certificate, they are held through the Clearing Agency or a Clearing Agency
Participant in the name of the Undersigned, as or on behalf of the Owner. If the
Specified Securities are not represented by a Global Capital Securities
Certificate, they are registered in the name of the Undersigned, as or on behalf
of the Owner.
The Owner has requested that the Specified Securities be transferred to a
person (the "Transferee") who will take delivery in the form of a Restricted
Capital Security. In connection with such transfer, the Owner hereby certifies
that, unless such transfer is being effected pursuant to an effective
registration statement under the Securities Act, it is being effected in
accordance with one of the following (CHECK ONE):
___ (1) transferred to the Corporation; or
___ (2) exchanged for the undersigned's own account without transfer; or
___ (3) transferred pursuant to and in compliance with Rule 144A under the
Securities Act; or
___ (4) to an institutional "accredited investor" within the meaning of
subparagraph (a)(1), (2), (3) or (7) of Rule 501 under the Securities
Act of 1933 that is acquiring the Capital Securities for its own
account, or for the account of such an institutional "accredited
distribution in violation of the Securities Act; or
___ (5) transferred pursuant to another available exemption from the
registration requirements of the Securities Act.
Unless such transfer is being effected in accordance with one of the above, the
Transfer Agent will refuse to register any of the Capital Securities evidenced
by this certificate in the name of any person other than the Holder thereof;
provided, however, that if (4) or (5) is applicable, the Securities Registrar
may require, prior to registering any such transfer of the 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, such as the exemption provided by Rule 144
under such Act; provided, further, that if (3) is applicable, the transferee
must also certify that it is a qualified institutional buyer as defined in Rule
144A.
This certificate and the statements contained herein are made for your
benefit and the benefit of the Depositor, the Trust and the Initial Purchaser.
Dated: -----------------------------------------------
print the name of the Undersigned, as such term
is defined in the second paragraph of this
certificate.)
By:--------------------------------------------
Name:
Title:
(If the Undersigned is a corporation,
partnership or fiduciary, the title of the
person signing on behalf of the Undersigned
must be stated.)
THIS CAPITAL SECURITIES CERTIFICATE IS A GLOBAL CAPITAL SECURITIES
CERTIFICATE WITHIN THE MEANING OF THE DECLARATION OF TRUST HEREINAFTER REFERRED
TO AND IS REGISTERED IN THE NAME OF THE DEPOSITORY TRUST COMPANY (THE
"DEPOSITARY") OR A NOMINEE OF THE DEPOSITARY. THIS CAPITAL SECURITIES
CERTIFICATE IS EXCHANGEABLE FOR CAPITAL SECURITIES CERTIFICATES REGISTERED IN
THE NAME OF A PERSON OTHER THAN THE DEPOSITARY OR ITS NOMINEE ONLY IN THE
LIMITED CIRCUMSTANCES DESCRIBED IN THE DECLARATION OF TRUST AND NO TRANSFER OF
THIS CAPITAL SECURITIES CERTIFICATE (OTHER THAN A TRANSFER OF THIS CAPITAL
SECURITIES CERTIFICATE AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE
DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER
NOMINEE OF THE DEPOSITARY) MAY BE REGISTERED EXCEPT IN THE LIMITED CIRCUMSTANCES
DESCRIBED IN THE DECLARATION OF TRUST.
UNLESS THIS CAPITAL SECURITIES CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (55 WATER STREET, NEW YORK) TO
UNION STATE CAPITAL TRUST I OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE
OR PAYMENT, AND ANY CAPITAL SECURITIES CERTIFICATE ISSUED IS REGISTERED IN THE
NAME OF CEDE & CO. OR SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY AND ANY PAYMENT HEREON IS MADE TO
CEDE & CO., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY A
PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN
INTEREST HEREIN.
THE CAPITAL SECURITIES ARE ISSUED, AND 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 ("ERISA"), OR SECTION 4975 OF
THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (EACH, A "PLAN"), NO ENTITY WHOSE
UNDERLYING ASSETS INCLUDE "PLAN ASSETS" BY REASON OF ANY PLAN'S INVESTMENT IN
THE ENTITY (A "PLAN ASSET ENTITY"), AND NO PERSON INVESTING "PLAN ASSETS" OF ANY
PLAN, MAY ACQUIRE OR HOLD THIS CAPITAL SECURITIES CERTIFICATE OR ANY INTEREST
HEREIN, UNLESS SUCH PURCHASER OR HOLDER IS COVERED BY THE EXEMPTIVE RELIEF
AVAILABLE UNDER U.S. DEPARTMENT OF LABOR PROHIBITED TRANSACTION CLASS EXEMPTION
("PTCE") 96-23, 95-60, 91-38, 90-1 OR 84-14 WITH RESPECT TO SUCH PURCHASE OR
HOLDING. ANY PURCHASER OR HOLDER OF THIS CAPITAL SECURITIES CERTIFICATE OR ANY
INTEREST HEREIN WILL BE DEEMED TO HAVE REPRESENTED BY ITS PURCHASE AND HOLDING
HEREOF THAT IT EITHER (A) IS NOT A PLAN OR A PLAN ASSET ENTITY AND IS NOT
PURCHASING SUCH SECURITIES ON BEHALF OF OR WITH "PLAN ASSETS" OF ANY PLAN, OR
(B) IS ELIGIBLE FOR THE EXEMPTIVE RELIEF AVAILABLE UNDER PTCE 96-23, 95-60,
91-38, 90-1 OR 84-14 WITH RESPECT TO SUCH PURCHASE OR HOLDING.
<PAGE>
Certificate Number Liquidation Amount of New Capital Securities
CUSIP NO. _______________
Certificate Evidencing New Capital Securities
of
Union State Capital Trust I
9.58% Series B Capital Securities
(Liquidation Amount $1,000 per Capital Security)
Union State Capital Trust I, a statutory business trust formed under the
laws of the State of Delaware (the "Trust"), hereby certifies that Cede & Co.
(the "Holder") is the registered owner of $__________ aggregate Liquidation
Amount of 9.58% Series B Capital Securities (______ Capital Securities) of the
Trust representing an undivided beneficial interest in the assets of the Trust
and designated Union State Capital Trust I 9.58% Series B Capital Securities
(Liquidation Amount $1,000 per Capital Security) (the "New Capital Securities").
The New Capital Securities are transferable on the books and records of the
Trust, in person or by a duly authorized attorney, upon surrender of this
certificate duly endorsed and in proper form for transfer as provided in Section
5.05 of the Declaration of Trust (as defined below). The designation, rights,
privileges, restrictions, preferences and other terms and provisions of the New
Capital Securities are set forth in, and this certificate and the New Capital
Securities represented hereby are issued and shall in all respects be subject to
the terms and provisions of, the Amended and Restated Declaration of Trust of
the Trust dated as of February 5, 1997, as the same may be amended from time to
time (the "Declaration of Trust"), among U.S.B. Holding Co., Inc., as Depositor,
The Chase Manhattan Bank, as Property Trustee, Chase Manhattan Bank Delaware, as
Delaware Trustee, and the Administrative Trustees named therein, including the
designation of the terms of Capital Securities as set forth therein. The Holder
is entitled to the benefits of the Guarantee Agreement entered into by U.S.B.
Holding Co., Inc., a Delaware corporation, and The Chase Manhattan Bank, as
Guarantee Trustee, dated as of ________ __, 1997 (the "Guarantee"), to the
extent provided therein. The Trust will furnish copies of the Declaration of
Trust and the Guarantee to the Holder without charge upon written request to the
Trust at its principal place of business or registered office.
Terms used but not defined herein have the meanings set forth in the
Declaration of Trust.
Upon receipt of this certificate, the Holder is bound by the Declaration of
Trust and is entitled to the benefits thereunder and to the benefits of the
Guarantee to the extent provided therein.
IN WITNESS WHEREOF, one of the Administrative Trustees of the Trust has
executed this Certificate.
Dated: ___ day of _________, 1997
UNION STATE CAPITAL TRUST I
By---------------------------------
Name: Thomas E. Hales
Administrative Trustee
COUNTERSIGNED AND REGISTERED:
THE CHASE MANHATTAN BANK, AS
PROPERTY TRUSTEE
By----------------------------------
Authorized Officer
<PAGE>
[REVERSE OF SECURITY]
Distributions payable on each New Capital Security will be fixed at a rate
per annum of 9.58% (the "Coupon Rate") of the liquidation amount of $1,000 per
New Capital Security, such rate being the rate of interest payable on the New
Junior Subordinated Debt Securities 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 Depositor will be required to pay Liquidated Damages
(as defined in the Registration Rights Agreement) with respect to the New Junior
Subordinated Debt Securities. 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 New Junior Subordinated Debt Securities
held by the Property Trustee and to the extent the Property Trustee has funds on
hand legally available therefor.
Distributions on the New Capital Securities will be cumulative, will
accumulate from the most recent date to which Distributions have been paid or,
if no Distributions have been paid, from February 5, 1997, and will be payable
semi-annually in arrears, on February 1 and August 1 of each year, commencing on
August 1, 1997, to the holders of record on the relevant record dates, except as
otherwise described below. The record dates will be the fifteenth day of the
month prior to the month in which the relevant Distribution date falls.
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 Depositor 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 New Junior Subordinated
Debt Securities 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
extend beyond the Maturity Date of the New Junior Subordinated Debt Securities.
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 New Junior Subordinated Debt
Securities) at the Coupon Rate compounded semi-annually during any such
Extension Period. Prior to the termination of any such Extension Period, the
Depositor 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 New Junior
Subordinated Debt Securities. Payments of accumulated Distributions will be
payable to Holders as they appear on the books and records of the Trust on the
first record date after the end of the Extension Period. Upon the termination of
any Extension Period and the payment of all amounts then due, the Depositor may
commence a new Extension Period, subject to the above requirements.
Subject to the prior approval of the Federal Reserve Board if such approval
is then required under applicable law or capital guidelines or policies of the
Federal Reserve Board and to certain other conditions set forth in the
Declaration of Trust and the Indenture, the Property Trustee may, at the
direction of the Depositor, at any time liquidate the Trust and cause the New
Junior Subordinated Debt Securities to be distributed to the holders of the
Securities in liquidation of the Trust or, simultaneous with any redemption of
the New Junior Subordinated Debt Securities, cause a Like Amount of the
Securities to be redeemed by the Trust.
The New Capital Securities shall be redeemable as provided in the
Declaration of Trust.
<PAGE>
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this New Capital
Security to:
(Insert assignee's social security or tax identification number)
(Insert address and zip code of assignee)
and irrevocably appoints
agent to transfer this New 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
New Capital Security Certificate)
Signature must be guaranteed by an "eligible guarantor
institution" (a bank, stockbroker, savings and loan association
or credit union with membership in an approved signature
guarantee medallion program) pursuant to SEC Rule 17Ad-15.
EXCHANGE GUARANTEE AGREEMENT
Between
U.S.B. HOLDING CO., INC.
(as Guarantor)
and
THE CHASE MANHATTAN BANK
(as Trustee)
Dated as of ____________ ___, 1997
<PAGE>
TABLE OF CONTENTS
ARTICLE I
Definitions
<TABLE>
<CAPTION>
<S> <C>
SECTION 1.1. Definitions...................................................................................1
ARTICLE II
Trust Indenture Act
SECTION 2.1. Trust Indenture Act; Application..............................................................4
SECTION 2.2. List of Holders...............................................................................4
SECTION 2.3. Reports by the Guarantee Trustee..............................................................4
SECTION 2.4. Periodic Reports to the Guarantee Trustee.....................................................5
SECTION 2.5. Evidence of Compliance with Conditions Precedent..............................................5
SECTION 2.6. Events of Default; Waiver....................................................................5
SECTION 2.7. Event of Default; Notice......................................................................5
SECTION 2.8. Conflicting Interests.........................................................................5
ARTICLE III
Powers, Duties and Rights of the Guarantee Trustee
SECTION 3.1. Powers and Duties of the Guarantee Trustee....................................................6
SECTION 3.2. Certain Rights of Guarantee Trustee...........................................................7
SECTION 3.3. Indemnity.....................................................................................9
SECTION 3.4. Expenses......................................................................................9
ARTICLE IV
Guarantee Trustee
SECTION 4.1. Guarantee Trustee; Eligibility................................................................9
SECTION 4.2. Appointment, Removal and Resignation of the Guarantee Trustee................................10
ARTICLE V
Guarantee
SECTION 5.1. Guarantee....................................................................................11
SECTION 5.2. Waiver of Notice and Demand..................................................................11
SECTION 5.3. Obligations Not Affected.....................................................................11
SECTION 5.4. Rights of Holders............................................................................12
SECTION 5.5. Guarantee of Payment.........................................................................12
SECTION 5.6. Subrogation..................................................................................12
SECTION 5.7. Independent Obligations......................................................................13
ARTICLE VI
Covenants and Subordination
SECTION 6.1. Subordination................................................................................13
SECTION 6.2. Pari Passu Guarantees........................................................................13
SECTION 6.3 Limitation on Transactions....................................................................13
ARTICLE VII
Termination
SECTION 7.1. Termination..................................................................................14
ARTICLE VIII
Miscellaneous
SECTION 8.1. Successors and Assigns.......................................................................14
SECTION 8.2. Amendments...................................................................................14
SECTION 8.3. Notices......................................................................................15
SECTION 8.4. Benefit......................................................................................16
SECTION 8.5. Interpretation...............................................................................16
SECTION 8.6. Governing Law................................................................................17
</TABLE>
<PAGE>
CROSS-REFERENCE TABLE*-/
Section of
Trust Indenture Act Section of
of 1939, as amended Guarantee Agreement
310(a) .............................................. 4.1(a)
310(b) .............................................. 4.1(c), 2.8
310(c) .............................................. Inapplicable
311(a) .............................................. 2.2(b)
311(b) .............................................. 2.2(b)
311(c) .............................................. Inapplicable
312(a) .............................................. 2.2(a)
312(b) .............................................. 2.2(b)
313. .............................................. 2.3
314(a) .............................................. 2.4
314(b) .............................................. Inapplicable
314(c) .............................................. 2.5
314(d) .............................................. Inapplicable
314(e) .............................................. 1.1, 2.5,
3.2
314(f) .............................................. 2.1, 3.2
315(a) .............................................. 3.1(d)
315(b) .............................................. 2.7
315(c) .............................................. 3.1
315(d) .............................................. 3.1(d)
316(a) .............................................. 1.1, 2.6,
5.4
316(b) .............................................. 5.3
316(c) .............................................. Inapplicable
317(a) .............................................. Inapplicable
317(b) .............................................. Inapplicable
318(a) .............................................. 2.1(b)
- --------
*-/ This Cross-Reference Table does not constitute part of the Guarantee
Agreement and shall not affect the interpretation of any of its terms of
provisions.
<PAGE>
EXCHANGE GUARANTEE AGREEMENT, dated as of ______ 1997 (the "Exchange
Guarantee"), executed and delivered by U.S.B. HOLDING CO., INC., a Delaware
corporation (the "Guarantor") having its principal office at 100 Dutch Hill
Road, Orangeburg, New York 10962, and THE CHASE MANHATTAN BANK, a New York
banking corporation, as trustee (the "Guarantee Trustee"), for the benefit of
the Holders (as defined herein) from time to time of the Trust Securities (as
defined herein) of UNION STATE CAPITAL TRUST I, a Delaware statutory business
trust (the "Issuer").
WHEREAS, pursuant to an Amended and Restated Declaration of Trust (the
"Declaration of Trust"), dated as of February 5, 1997, among the trustees of the
Issuer, the Guarantor, as sponsor, Chase Manhattan Bank Delaware, as Delaware
trustee, 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 capital
securities, having an aggregate liquidation amount of $20,000,000, such capital
securities being designated the 9.58% Series B Capital Securities (the "Exchange
Capital Securities") in connection with the consummation of the Exchange Offer
(as defined in the Registration Agreement dated as of February 5, 1997 by and
among the Guarantor, the Issuer and the initial purchaser named therein).
WHEREAS, as incentive for the Holders to exchange the Initial Capital
Securities (as defined in the Declaration of Trust) issued on the date of the
Declaration of Trust for the Exchange Capital Securities, the Guarantor desires
irrevocably and unconditionally to agree, to the extent set forth in this
Exchange Guarantee, to pay to the Holders of the Exchange Capital Securities and
the Common Securities (as defined in the Declaration of Trust) the Guarantee
Payments (as defined herein). The Guarantor agrees to make certain other
payments on the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the purchase by each Holder, which
purchase the Guarantor hereby agrees shall benefit the Guarantor, the Guarantor
executes and delivers this Exchange Guarantee for the benefit of the Holders
from time to time of the Trust Securities.
ARTICLE I
Definitions
SECTION 1.1. Definitions. As used in this Exchange Guarantee, the terms set
forth below shall, unless the context otherwise requires, have the following
meanings. Capitalized or otherwise defined terms used but not otherwise defined
herein shall have the meanings assigned to such terms in the Declaration of
Trust as in effect on the date hereof.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person; provided, however, that an Affiliate of the
Guarantor shall not be deemed to include the Issuer. For the purposes of this
definition, "control" when used with respect to any specified Person means the
power to direct the management and policies of such Person, directly or
indirectly, whether through the ownership of voting securities, by contract or
otherwise; and the terms "controlling" and "controlled" have meanings
correlative to the foregoing.
"Capital Securities" shall have the meaning specified in the first recital
of this Exchange Guarantee.
"Debt" shall have the meaning specified in the Indenture.
"Declaration of Trust" shall have the meaning specified in the first
recital of this Exchange Guarantee.
"Event of Default" means a default by the Guarantor on any of its payment
or other obligations under this Exchange Guarantee; provided, however, that,
except with respect to a default in payment of any Guarantee Payments, the
Guarantor shall have received notice of default and shall not have cured such
default within 60 days after receipt of such notice; provided, further, that no
Event of Default shall occur unless an Event of Default (as defined in the
Indenture or the Declaration) shall have occurred and be continuing.
"Guarantee Payments" means the following payments or distributions, without
duplication, with respect to the Trust Securities, to the extent not paid or
made by or on behalf of the Issuer: (i) any accrued and unpaid Distributions
required to be paid on the Trust Securities, to the extent the Issuer shall have
funds on hand available therefor at such time, (ii) the redemption price,
including all accrued and unpaid Distributions to the date of redemption (the
"Redemption Price"), with respect to the Trust Securities called for redemption
by the Issuer to the extent the Issuer shall have funds on hand available
therefor at such time, and (iii) upon a voluntary or involuntary termination,
winding-up or liquidation of the Issuer, unless Junior Subordinated Debt
Securities are distributed to the Holders, the lesser of (a) the aggregate of
the liquidation amount of $1,000 per Trust Security plus accrued and unpaid
Distributions to the date of payment to the extent the Issuer shall have funds
on hand available to make such payment at such time and (b) the amount of assets
of the Issuer remaining available for distribution to Holders in liquidation of
the Issuer (in either case, the "Liquidation Distribution"). If an Event of
Default under the Declaration has occurred and is continuing, no Guarantee
Payments with respect to the Common Securities or any guarantee payment under
any Other Guarantees (as defined in the Indenture) with respect to Common
Securities of any other U.S.B.H. Capital Trust (as defined in the Indenture), if
any, shall be made until the Holders of Capital Securities shall be paid in full
the Guarantee Payments to which they are entitled under this Exchange Guarantee.
Subordination of Guarantee Payments on the Common Securities following such an
Event of Default under the Declaration shall be analogous to the subordination
of the Common Securities provided for in Section 4.03 of the Declaration.
"Guarantee Trustee" means The Chase Manhattan Bank, until a Successor
Guarantee Trustee has been appointed and has accepted such appointment pursuant
to the terms of this Exchange Guarantee and thereafter means each such Successor
Guarantee Trustee.
"Guarantor" shall have the meaning specified in the preamble of this
Exchange Guarantee.
"Holder" means any holder, as registered on the books and records of the
Issuer, of any Trust Securities; provided, however, that in determining whether
the holders of the requisite percentage of Trust Securities have given any
request, notice, consent or waiver hereunder, "Holder" shall not include the
Guarantor, the Guarantee Trustee, or any Affiliate of the Guarantor or the
Guarantee Trustee.
"Indenture" means the Junior Subordinated Indenture, dated as of February
5, 1997, as supplemented and amended between the Guarantor and The Chase
Manhattan Bank, as trustee, relating to the issuance of the Junior Subordinated
Debt Securities.
"Issuer" shall have the meaning specified in the first recital of this
Exchange Guarantee.
"List of Holders" has the meaning specified in Section 2.2(a).
"Majority in Liquidation Amount of the Securities" means a vote by the
Holder(s), voting separately as a class, of more than 50% of the aggregate
Liquidation Amount of all then Outstanding Trust Securities.
"Officers' Certificate" means, with respect to any Person, a certificate
signed by the Chairman, the Chief Executive Officer, the President or a Vice
President, and by the Chief Financial Officer, the Treasurer, an Associate
Treasurer, an Assistant Treasurer, the Controller, the Secretary or an Assistant
Secretary of such Person, and delivered to the Guarantee Trustee. Any Officers'
Certificate delivered with respect to compliance with a condition or covenant
provided for in this Exchange Guarantee shall include:
(a) a statement that each officer signing the Officers' Certificate
has read the covenant or condition and the definitions relating
thereto;
(b) a brief statement of the nature and scope of the examination or
investigation undertaken by each officer in rendering the
Officers' Certificate;
(c) a statement that each officer has made such examination or
investigation as, in such officer's opinion, is necessary to
enable such officer to express an informed opinion as to whether
or not such covenant or condition has been complied with; and
(d) a statement as to whether, in the opinion of each officer, such
condition or covenant has been complied with.
"Other Debentures" shall have the meaning specified in the Indenture.
"Other Guarantees" shall have the meaning specified in the Indenture.
"Responsible Officer" when used with respect to the Guarantee Trustee means
any officer of the the Trustee with direct responsibility for the administration
of this Exchange Guarantee, and also means, with respect to a particular matter,
any other officer of the Trustee to whom such matter is referred because of such
officer's knowledge of and familiarity with the particular subject.
"Senior Debt" shall have the meaning specified in the Indenture.
"Successor Guarantee Trustee" means a successor Guarantee Trustee
possessing the qualifications to act as Guarantee Trustee under Section 4.1.
"Trust Securities" shall have the meaning specified in the Declaration of
Trust.
ARTICLE II
Trust Indenture Act
SECTION 2.1. Trust Indenture Act; Application. (a) This Exchange Guarantee
will not be qualified under the Trust Indenture Act except upon the
effectiveness of a registration statement with respect to this Exchange
Guarantee.
(b) Upon qualification under the Trust Indenture Act as contemplated in
clause (a) above, if and to the extent that any provision of this Exchange
Guarantee limits, qualifies or conflicts with the duties imposed by Sections 310
to 317, inclusive, of the Trust Indenture Act, such imposed duties shall
control.
SECTION 2.2. List of Holders. (a) The Guarantor shall furnish or cause to
be furnished to the Guarantee Trustee (i) semiannually, not more than 15 days
after May 15 and November 15 of each year, a list, in such form as the Guarantee
Trustee may reasonably require, of the names and addresses of the Holders ("List
of Holders") as of a date not more than 15 days prior to the delivery thereof,
and (ii) at such other times as the Guarantee Trustee may request in writing,
within 30 days after the receipt by the Guarantor of any such request, a List of
Holders as of a date not more than 15 days prior to the time such list is
furnished, in each case to the extent such information is in the possession or
control of the Guarantor and is not identical to a previously supplied list of
Holders or has not otherwise been received by the Guarantee Trustee in its
capacity as such. The Guarantee Trustee may destroy any List of Holders
previously given to it on receipt of a new List of Holders.
(b) The Guarantee Trustee shall comply with its obligations under Section
311(a), Section 311(b) and Section 312(b) of the Trust Indenture Act.
SECTION 2.3. Reports by the Guarantee Trustee. Within 60 days of May of
each calendar year, commencing with May 15, 1997, the Guarantee Trustee shall
provide to the Holders such reports, if any, as are required by Section 313 of
the Trust Indenture Act in the form and in the manner provided by Section 313 of
the Trust Indenture Act. The Guarantee Trustee shall also comply with the
requirements of Section 313(d) of the Trust Indenture Act.
SECTION 2.4. Periodic Reports to the Guarantee Trustee. The Guarantor shall
provide to the Guarantee Trustee, the Securities and Exchange Commission and the
Holders such documents, reports and information, if any, as required by Section
314 of the Trust Indenture Act and the compliance certificate required by
Section 314 of the Trust Indenture Act, in the form, in the manner and at the
times required by Section 314 of the Trust Indenture Act.
SECTION 2.5. Evidence of Compliance with Conditions PrecedentMERGEFORMAT.
The Guarantor shall provide to the Guarantee Trustee such evidence of compliance
with such conditions precedent, if any, provided for in this Exchange 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 any officer
pursuant to Section 314(c)(1) may be given in the form of an Officers'
Certificate.
SECTION 2.6. Events of Default; Waiver. The Holders of a Majority in
Liquidation Amount of the Securities may, by vote, on behalf of the Holders,
waive any past Event of Default and its consequences. Upon such waiver, any such
Event of Default shall cease to exist, and any such Event of Default shall be
deemed to have been cured, for every purpose of this Exchange Guarantee, but no
such waiver shall extend to any subsequent or other default or Event of Default
or impair any right consequent therefrom.
SECTION 2.7. Event of Default; Notice. (a) The Guarantee Trustee shall,
within 90 days after the occurrence of an Event of Default known to a
Responsible Officer of the Trustee, transmit by mail, first class postage
prepaid, to the Holders, notices of all Events of Default known to the Guarantee
Trustee, unless such Events of Default have been cured before the giving of such
notice; provided, that, except in the case of a default in the payment of a
Guarantee Payment, the Guarantee Trustee shall be protected in withholding such
notice if and so long as the Board of Directors, the executive committee or a
trust committee of directors and/or a Responsible Officer in good faith
determines that the withholding of such notice is in the interests of the
Holders.
(b) The Guarantee Trustee shall not be deemed to have knowledge of any
Event of Default unless a Responsible Officer charged with the administration of
the Declaration of Trust shall have received written notice of such Event of
Default.
SECTION 2.8. Conflicting Interests. The Declaration of Trust shall be
deemed to be specifically described in this Exchange 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 the Guarantee Trustee
SECTION 3.1. Powers and Duties of the Guarantee Trustee67. (a) This
Exchange Guarantee shall be held by the Guarantee Trustee for the benefit of the
Holders, and the Guarantee Trustee shall not transfer this Exchange Guarantee to
any Person except a Holder exercising his or her rights pursuant to Section
5.4(iv) or to a Successor Guarantee Trustee on acceptance by such Successor
Guarantee Trustee of its appointment to act as Successor Guarantee Trustee. The
right, title and interest of the Guarantee Trustee shall automatically vest in
any Successor Guarantee Trustee, upon acceptance by such Successor Guarantee
Trustee of its appointment hereunder, and such vesting and cessation of title
shall be effective whether or not conveyancing documents have been executed and
delivered pursuant to the appointment of such Successor Guarantee Trustee.
(b) If an Event of Default has occurred and is continuing, the Guarantee
Trustee shall enforce this Exchange Guarantee for the benefit of the Holders.
(c) The Guarantee Trustee, before the occurrence of any Event of Default
and after the curing of all Events of Default that may have occurred, shall
undertake to perform only such duties as are specifically set forth in this
Exchange Guarantee, and no implied covenants shall be read into this Exchange
Guarantee against the Guarantee Trustee. In case an Event of Default has
occurred (that has not been cured or waived pursuant to Section 2.6), the
Guarantee Trustee shall exercise such of the rights and powers vested in it by
this Exchange 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 Exchange Guarantee shall be construed to relieve
the Guarantee Trustee from liability for its own negligent action, its own
negligent failure to act or its own willful misconduct, except that:
(i) prior to the occurrence of any Event of Default and after the
curing or waiving of all such Events of Default that may have
occurred:
(A) the duties and obligations of the Guarantee Trustee shall be
determined solely by the express provisions of this Exchange
Guarantee, and the Guarantee Trustee shall not be liable
except for the performance of such duties and obligations as
are specifically set forth in this Exchange Guarantee; and
(B) in the absence of bad faith on the part of the Guarantee
Trustee, the Guarantee Trustee may conclusively rely, as to
the truth of the statements and the correctness of the
opinions expressed therein, upon any certificates or
opinions furnished to the Guarantee Trustee and conforming
to the requirements of this Exchange Guarantee; but in the
case of any such certificates or opinions that by any
provision hereof or of the Trust Indenture Act are
specifically required to be furnished to the Guarantee
Trustee, the Guarantee Trustee shall be under a duty to
examine the same to determine whether or not they conform to
the requirements of this Exchange Guarantee;
(ii) the Guarantee Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer of the
Guarantee Trustee, unless it shall be proved that the Guarantee
Trustee was negligent in ascertaining the pertinent facts upon
which such judgment was made;
(iii)the Guarantee Trustee shall not be liable with respect to any
action taken or omitted to be taken by it in good faith in
accordance with the direction of the Holders of not less than a
Majority in Liquidation Amount of the Securities relating to the
time, method and place of conducting any proceeding for any
remedy available to the Guarantee Trustee, or exercising any
trust or power conferred upon the Guarantee Trustee under this
Exchange Guarantee; and
(iv) no provision of this Exchange Guarantee shall require the
Guarantee Trustee to expend or risk its own funds or otherwise
incur personal financial liability in the performance of any of
its duties or in the exercise of any of its rights or powers if
the Guarantee Trustee shall have reasonable grounds for believing
that the repayment of such funds or liability is not assured to
it under the terms of this Exchange Guarantee or indemnity
satisfactory to it against such risk or liability is not
reasonably assured to it.
SECTION 3.2. Certain Rights of Guarantee TrusteeMERGEFORMAT. (a) Subject to
the provisions of Section 3.1:
(i) The Guarantee Trustee may conclusively rely and shall be fully
protected in acting or refraining from acting upon any
resolution, certificate, statement, instrument, opinion, report,
notice, request, direction, consent, order, bond, debenture,
note, other evidence of indebtedness or other paper or document
reasonably believed by it to be genuine and to have been signed,
sent or presented by the proper party or parties.
(ii) Any direction or act of the Guarantor contemplated by this
Exchange Guarantee shall be sufficiently evidenced by all
Officers' Certificate unless otherwise prescribed herein.
(iii)Whenever, in the administration of this Exchange Guarantee, the
Guarantee Trustee shall deem it desirable that a matter be proved
or established before taking, suffering or omitting to take any
action hereunder, the Guarantee Trustee (unless other evidence is
herein specifically prescribed) may, in the absence of bad faith
on its part, request and conclusively rely upon an Officers'
Certificate which, upon receipt of such request from the
Guarantee Trustee, shall be promptly delivered by the Guarantor.
(iv) The Guarantee Trustee may consult with legal counsel, and the
advice or written opinion of such legal counsel with respect to
legal matters shall be full and complete authorization and
protection in respect of any action taken, suffered or omitted to
be taken by it hereunder in good faith and in accordance with
such advice or opinion. Such legal counsel may be legal counsel
to the Guarantor or any of its Affiliates and may be one of its
employees. The Guarantee Trustee shall have the right at any time
to seek instructions concerning the administration of this
Exchange Guarantee from any court of competent jurisdiction.
(v) The Guarantee Trustee shall be under no obligation to exercise
any of the rights or powers vested in it by this Exchange
Guarantee at the request or direction of any Holder, unless such
Holder shall have provided to the Guarantee Trustee such security
and indemnity reasonably satisfactory to it, against the costs,
expenses (including attorneys' fees and expenses) and liabilities
that might be incurred by it in complying with such request or
direction, including such reasonable advances as may be requested
by the Guarantee Trustee; provided, that nothing contained in
this Section 3.2(a)(v) shall be taken to relieve the Guarantee
Trustee, upon the occurrence of an Event of Default, of its
obligation to exercise the rights and powers vested in it by this
Exchange Guarantee.
(vi) The Guarantee Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice,
request, direction, consent, order, bond, debenture, note, other
evidence of indebtedness or other paper or document, but the
Guarantee Trustee, in its discretion, may make such further
inquiry or investigation into such facts or matters as it may see
fit.
(vii)The Guarantee Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by
or through its agents or attorneys, and the Guarantee Trustee
shall not be responsible for any misconduct or negligence on the
part of any such agent or attorney appointed with due care by it
hereunder.
(viii) Whenever in the administration of this Exchange Guarantee the
Guarantee Trustee shall deem it desirable to receive instructions
with respect to enforcing any remedy or right or taking any other
action hereunder, the Guarantee Trustee (A) may request
instructions from the Holders, (B) may refrain from enforcing
such remedy or right or taking such other action until such
instructions are received and (C) shall be fully protected in
acting in accordance with such instructions.
(b) No provision of this Exchange Guarantee shall be deemed to impose any
duty or obligation on the Guarantee Trustee to perform any act or acts or
exercise any right, power, duty or obligation conferred or imposed on it in any
jurisdiction in which it shall be illegal, or in which the Guarantee Trustee
shall be unqualified or incompetent in accordance with applicable law, to
perform any such act or acts or to exercise any such right, power, duty or
obligation. No permissive power or authority available to the Guarantee Trustee
shall be construed to be a duty to act in accordance with such power and
authority.
SECTION 3.3. Indemnity. The Guarantor agrees to indemnify the Guarantee
Trustee and its directors, officers, agents and employees for, and to hold them
harmless against, any loss, liability or expense incurred without negligence or
bad faith on the part of the Guarantee Trustee, arising out of or in connection
with the acceptance or administration of this Exchange Guarantee, including the
costs and expenses of defending itself against any claim or liability in
connection with the exercise or performance of any of its powers or duties
hereunder. The Guarantee Trustee will not claim or exact any lien or charge on
any Guarantee Payments as a result of any amount due to it under this Exchange
Guarantee. This indemnity shall survive the termination of this Exchange
Guarantee or the resignation or removal of the Guarantee Trustee.
SECTION 3.4. Expenses. The Guarantor, as obligor on the Junior Subordinated
Debt Securities, shall from time to time reimburse the Guarantee Trustee for its
reasonable expenses and costs incurred in connection with the performance of its
duties hereunder. The provisions of this Section 3.4 shall survive the
termination of this Exchange Guarantee or the removal of the Guarantee Trustee.
ARTICLE IV
Guarantee Trustee
SECTION 4.1. Guarantee Trustee; Eligibility. (a) There shall at all times
be a Guarantee Trustee which shall:
(i) not be an Affiliate of the Guarantor; and
(ii) be a Person that is eligible pursuant to the Trust Indenture Act
to act as such and has a combined capital and surplus of at least
$50,000,000, and shall be a corporation meeting the requirements
of Section 310(c) of the Trust Indenture Act. If such corporation
publishes reports of condition at least annually, pursuant to law
or to the requirements of the supervising or examining authority,
then, for the purposes of this Section and to the extent
permitted by the Trust Indenture Act, the combined capital and
surplus of such corporation shall be deemed to be its combined
capital and surplus as set forth in its most recent report of
condition so published.
(b) If at any time the Guarantee Trustee shall cease to be eligible to so
act under Section 4.1(a), the Guarantee Trustee shall immediately resign in the
manner and with the effect set out in Section 4.2(c).
(c) If the Guarantee Trustee has or shall acquire any "conflicting
interest" within the meaning of Section 310(b) of the Trust Indenture Act, the
Guarantee Trustee and Guarantor shall in all respects comply with the provisions
of Section 310(b) of the Trust Indenture Act.
SECTION 4.2. Appointment, Removal and Resignation of the Guarantee Trustee.
(a) Subject to Section 4.02(b), in the absence of the existence of an Event of
Default, the Guarantee Trustee may be appointed or removed without cause at any
time by the Guarantor.
(b) The Guarantee Trustee shall not be removed until a Successor Guarantee
Trustee has been appointed and has accepted such appointment by written
instrument executed by such Successor Guarantee Trustee and delivered to the
Guarantor.
(c) The Guarantee Trustee appointed hereunder shall hold office until a
Successor Guarantee Trustee shall have been appointed or until its removal or
resignation. The Guarantee Trustee may resign from office (without need for
prior or subsequent accounting) by an instrument in writing executed by the
Guarantee Trustee and delivered to the Guarantor, which resignation shall not
take effect until a Successor Guarantee Trustee has been appointed and has
accepted such appointment by instrument in writing executed by such Successor
Guarantee Trustee and delivered to the Guarantor and the resigning Guarantee
Trustee.
(d) If no Successor Guarantee Trustee shall have been appointed and
accepted appointment as provided in this Section 4.2 within 60 days after
delivery to the Guarantor of an instrument of resignation, the resigning
Guarantee Trustee may petition, at the expense of the Guarantor, any court of
competent jurisdiction for appointment of a Successor Guarantee Trustee. Such
court may thereupon, after prescribing such notice, if any, as it may deem
proper, appoint a Successor Guarantee Trustee.
ARTICLE V
Guarantee
SECTION 5.1. Guarantee. The Guarantor irrevocably and unconditionally
agrees to pay in full to the Holders the Guarantee Payments (without duplication
of amounts theretofore paid by or on behalf of the Issuer), as and when due,
regardless of any defense, right of set-off or counterclaim which the Issuer may
have or assert. The Guarantor's obligation to make a Guarantee Payment may be
satisfied by direct payment of the required amounts by the Guarantor to the
Holders or by causing the Issuer to pay such amounts to the Holders. The
Guarantor shall give prompt written notice to the Guarantee Trustee in the event
it makes any direct payment hereunder.
SECTION 5.2. Waiver of Notice and Demand. The Guarantor hereby waives
notice of acceptance of the Exchange 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 Guarantee Trustee, Issuer or any other Person
before proceeding against the Guarantor, protest, notice of nonpayment, notice
of dishonor, notice of redemption and all other notices and demands.
SECTION 5.3. Obligations Not Affected. The obligations, covenants,
agreements and duties of the Guarantor under this Exchange 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 any express or implied
agreement, covenant, term or condition relating to the Trust
Securities to be performed or observed by the Issuer;
(b) the extension of time for the payment by the Issuer of all or any
portion of the Distributions (other than any extension of time
for payment of Distributions that results from the extension of
any interest payment period on the Junior Subordinated Debt
Securities as so provided in the Indenture), Redemption Price,
Liquidation Distribution or any other sums payable under the
terms of the Trust Securities or the extension of time for the
performance of any other obligation under, arising out of, or in
connection with, the Trust Securities;
(c) any failure, omission, delay or lack of diligence on the part of
the Holders to enforce, assert or exercise any right, privilege,
power or remedy conferred on the Holders pursuant to the terms of
the Trust Securities, or any action on the part of the Issuer
granting indulgence or extension of any kind;
(d) the voluntary or involuntary liquidation, dissolution, sale of
any collateral, receivership, insolvency, bankruptcy, assignment
for the benefit of creditors, reorganization, arrangement,
composition or readjustment of debt of, or other similar
proceedings affecting, the Issuer or any of the assets of the
Issuer;
(e) any invalidity of, or defect or deficiency in, the Trust
Securities;
(f) the settlement or compromise of any obligation guaranteed hereby
or hereby incurred;
(g) the consummation of the Exchange Offer; or
(h) 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 hereunder shall be absolute and unconditional under any
and all circumstances.
There shall be no obligation of the Holders to give notice to, or obtain
the consent of, the Guarantor with respect to the happening of any of the
foregoing.
SECTION 5.4. Rights of Holders. The Guarantor expressly acknowledges that:
(i) this Exchange Guarantee will be deposited with the Guarantee Trustee to be
held for the benefit of the Holders; (ii) the Guarantee Trustee has the right to
enforce this Exchange Guarantee on behalf of the Holders; (iii) subject to
Section 3.2(v), the Holders of a Majority in Liquidation Amount of the
Securities have the right to direct the time, method and place of conducting any
proceeding for any remedy available to the Guarantee Trustee in respect of this
Exchange Guarantee or exercising any trust or power conferred upon the Guarantee
Trustee under this Exchange Guarantee; and (iv) any Holder may institute a legal
proceeding directly against the Guarantor to enforce its rights under this
Exchange Guarantee, without first instituting a legal proceeding against the
Issuer or any other Person.
SECTION 5.5. Guarantee of Payment. This Exchange Guarantee creates a
guarantee of payment and not of collection. This Exchange Guarantee will not be
discharged except by payment of the Guarantee Payments in full (without
duplication of amounts theretofore paid by the Issuer) or upon distribution of
Junior Subordinated Debt Securities to Holders as provided in the Declaration of
Trust.
SECTION 5.6. Subrogation. The Guarantor shall be subrogated to all (if any)
rights of the Holders against the Issuer in respect of any amounts paid to the
Holders by the Guarantor under this Exchange Guarantee and shall have the right
to waive payment by the Issuer pursuant to Section 5.1; provided, however, that
the Guarantor shall not (except to the extent required by mandatory provisions
of law) be entitled to enforce or exercise any rights which it may acquire by
way of subrogation or any indemnity, reimbursement or other agreement, in all
cases as a result of payment under this Exchange Guarantee, if at the time of
any such payment, any amounts are due and unpaid under this Exchange Guarantee.
If any amount shall be paid to the Guarantor in violation of the preceding
sentence, the Guarantor agrees to hold such amount in trust for the Holders and
to pay over such amount to the Holders.
SECTION 5.7. Independent Obligations. The Guarantor acknowledges that its
obligations hereunder are independent of the obligations of the Issuer with
respect to the Trust Securities and that the Guarantor shall be liable as
principal and as debtor hereunder to make Guarantee Payments pursuant to the
terms of this Exchange Guarantee notwithstanding the occurrence of any event
referred to in subsections (a) through (g), inclusive, of Section 5.3 hereof.
ARTICLE VI
Covenants and Subordination
SECTION 6.1. Subordination. This Exchange Guarantee will constitute an
unsecured obligation of the Guarantor and will rank subordinate and junior in
right of payment to all Senior Debt of the Guarantor, to the same extent and in
the same manner that the Junior Subordinated Debt Securities are subordinated to
Senior Debt pursuant to the Indenture, and (b) senior to all capital stock of
the Guarantor.
SECTION 6.2. Pari Passu Guarantees. This Exchange Guarantee shall rank pari
passu with any similar guarantee agreements issued by the Guarantor on behalf of
the holders of trust securities issued by a trust created by the Guarantor
similar to the Issuer.
SECTION 6.3. Limitation on Transactions. The Guarantor covenants and agrees
with each Holder that it will not (i) declare or pay any dividends or
distributions on, or redeem, purchase, acquire or make a liquidation payment
with respect to, any shares of the 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, repurchase or redeem any debt securities of the
Guarantor (including Other Debentures) that rank pari passu with or junior in
interest to the Securities or (iii) make any guarantee payments with respect to
any guarantee by the Guarantor of debt securities of any subsidiary of the
Guarantor (including Other Guarantees) if such guarantee ranks pari passu with
or junior in interest to the Securities (other than (a) dividends or
distributions in common stock of the Guarantor, (b) any declaration of a
dividend in connection with the implementation of a stockholders' rights plan,
or the issuance of stock under any such plan in the future, or the redemption or
repurchase of any such rights pursuant thereto, (c) payments under this Exchange
Guarantee, (d) purchases or acquisitions of shares of the Guarantor's common
stock in connection with the satisfaction by the Guarantor of its obligations
under any employee benefit plan or other contractual obligation of the Guarantor
(other than a contractual obligation ranking pari passu with or junior in
interest to the Securities), (e) as a result of a reclassification of the
Guarantor's capital stock or the exchange or conversion of one class or series
of the Guarantor's capital stock for another class or series of the Guarantor's
capital stock, or (f) 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), if at such
time (i) there shall have occurred an Event of Default (as defined in the
Indenture), (ii) the Guarantor shall be in default with respect to its payment
of any obligations under this Guarantee or (iii) the Guarantor shall have given
notice of its election to begin an Extension Period (as defined in the
Indenture) and shall not have rescinded such notice, or such Extension Period,
or any extension thereof, shall be continuing.
The Guarantor also covenants with each Holder for so long as the Securities
remain outstanding (i) to maintain 100% direct or indirect ownership of the
Common Securities; provided, however, that any permitted successor of the
Guarantor under the Indenture may succeed to the Guarantor's ownership of such
Common Securities, (ii) not to cause or permit the dissolution, winding-up or
termination of the Issuer, except (a) in connection with a distribution of the
Junior Subordinated Debt Securities to the holders of Capital Securities or (b)
in connection with certain mergers, consolidations or amalgamations permitted by
the Declaration of Trust and (iii) to use its reasonable efforts, consistent
with the terms and provisions of such Declaration of Trust, to cause the Trust
to remain classified as a grantor trust and not an association taxable as a
corporation for United States Federal income tax purposes.
ARTICLE VII
SECTION 7.1. Termination. This Exchange Guarantee shall terminate and be of
no further force and effect upon (i) full payment of the Redemption Price of all
Trust Securities, (ii) the distribution of Junior Subordinated Debt Securities
to the Holders in exchange for all of the Trust Securities or (iii) full payment
of the amounts payable in accordance with the Declaration of Trust upon
liquidation of the Issuer. Notwithstanding the foregoing, this Exchange
Guarantee will continue to be effective or will be reinstated, as the case may
be, if at any time any Holder must repay any sums paid with respect to Trust
Securities or this Exchange Guarantee. The provisions of Sections 3.3 and 3.4
shall survive termination of this Exchange Guarantee as provided therein.
ARTICLE VIII
Miscellaneous
SECTION 8.1. Successors and Assigns. All guarantees and agreements
contained in this Exchange Guarantee shall bind the successors, assigns,
receivers, trustees and representatives of the Guarantor and shall inure to the
benefit of the Holders then outstanding. Except in connection with a
consolidation, merger or sale involving the Guarantor that is permitted under
Article VIII of the Indenture and pursuant to which the assignee agrees in
writing to perform the Guarantor's obligations hereunder, the Guarantor shall
not assign its obligations hereunder.
SECTION 8.2. Amendments. Except with respect to any changes which do not
adversely affect the rights of the Holders in any material respect (in which
case no consent of the Holders will be required), this Exchange Guarantee may
only be amended with the prior approval of the Holders of not less than a
Majority in Liquidation Amount of the Securities. The provisions of Article VI
of the Declaration of Trust concerning meetings of the Holders shall apply to
the giving of such approval.
SECTION 8.3. Notices. Any notice, request or other communication required
or permitted to be given hereunder shall be in writing, duly signed by the party
giving such notice, and delivered, telecopied (confirmed by delivery of the
original) or mailed by first class mail as follows:
(a) if given to the Guarantor, to the address set forth below or such
other address, facsimile number or to the attention of such other
Person as the Guarantor may give notice to the Holders:
U.S.B. HOLDING CO., INC.
100 Dutch Hill Road
Orangeburg, New York 10962
Facsimile No.: (914) 365-4695
Attention: Steven T. Sabatini, Executive Vice President,
Chief Financial Officer and Assistant Secretary
(b) if given to the Issuer, in care of the Guarantee Trustee, at the
Issuer's (and the Guarantee Trustee's) address set forth below or
such other address as the Guarantee Trustee on behalf of the
Issuer may give notice to the Holders:
U.S.B. CAPITAL TRUST I
c/o U.S.B. HOLDING CO., INC.
100 Dutch Hill Road
Orangeburg, New York 10962
Facsimile No.: (914) 365-4695
Attention: Steven T. Sabatini, Executive Vice President,
Chief Financial Officer and Assistant Secretary
with a copy to:
The Chase Manhattan Bank
450 West 33rd Street
15th Floor
New York, New York 10001
Attention: Corporate Trustee Administration Department
Facsimile No.: (212) 946-8158
(c) if given to the Guarantee Trustee:
The Chase Manhattan Bank
450 West 33rd Street
15th Floor
New York, New York 10001-2697
Attention: Corporate Trustee Administration Department
Facsimile No.: (212) 946-8158
(d) if given to any Holder, at the address set forth on the books and
records of the Issuer.
All notices hereunder shall be deemed to have been given when received in
person, telecopied with receipt confirmed, or mailed by first class mail,
postage prepaid, except that if a notice or other document is refused delivery
or cannot be delivered because of a changed address of which no notice was
given, such notice or other document shall be deemed to have been delivered on
the date of such refusal or inability to deliver.
SECTION 8.4. Benefit. This Exchange Guarantee is solely for the benefit of
the Holders and is not separately transferable from the Trust Securities.
SECTION 8.5. Interpretation. In this Exchange Guarantee, unless the context
otherwise requires:
(a) capitalized terms used in this Exchange Guarantee but not defined
in the preamble hereto have the respective meanings assigned to
them in Section 1.1;
(b) a term defined anywhere in this Exchange Guarantee has the same
meaning throughout;
(c) all references to "the Exchange Guarantee" or "this Exchange
Guarantee" are to this Exchange Guarantee as modified,
supplemented or amended from time to time;
(d) all references in this Exchange Guarantee to Articles and
Sections are to Articles and Sections of this Exchange Guarantee
unless otherwise specified;
(e) a term defined in the Trust Indenture Act has the same meaning
when used in this Exchange Guarantee unless otherwise defined in
this Exchange Guarantee or unless the context otherwise requires;
(f) a reference to the singular includes the plural and vice versa;
and
(g) the masculine, feminine or neuter genders used herein shall
include the masculine, feminine and neuter genders.
SECTION 8.6. Governing Law. THIS EXCHANGE GUARANTEE SHALL BE GOVERNED BY
AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW
YORK WITHOUT REGARD TO THE CONFLICT OF LAW PRINCIPLES THEREOF.
This instrument may be executed in any number of counterparts, each of
which so executed shall be deemed to be an original, but all such counterparts
shall together constitute but one and the same instrument.
THIS EXCHANGE GUARANTEE is executed as of the day and year first above
written.
U.S.B. HOLDING CO., INC.
By_____________________________________
Name:
Title:
THE CHASE MANHATTAN BANK, as
Guarantee Trustee,
By______________________________________
Name:
Title:
UNION STATE CAPITAL TRUST I
$20,000,000
9.58% Capital Securities
(Liquidation Amount $1,000 per Capital Security)
Fully and Unconditionally Guaranteed
by
U.S.B. HOLDING CO., INC.
REGISTRATION AGREEMENT
New York, New York
February 5, 1997
Keefe, Bruyette & Woods, Inc.
Two World Trade Center, 85th Floor
New York, New York 10048
Dear Sirs:
Union State Capital Trust I, a Delaware statutory business trust (the "Trust"),
and U.S.B. Holding Co., Inc., a Delaware corporation (the "Company"), as
guarantor, propose to issue and sell to Keefe, Bruyette & Woods, Inc. (the
"Purchaser"), upon the terms set forth in a purchase agreement dated as of
January 31, 1997 by and among the parties hereto (the "Purchase Agreement"),
20,000 of the Trust's 9.58% Capital Securities, liquidation amount $1,000 per
Capital Security (the "Capital Securities" and together with the guarantee by
the Company of the payment of the Capital Securities to the extent set forth in
the Guarantee (as defined herein), the "Pass-through Securities") (the "Initial
Placement"). The proceeds of the sale by the Trust of the Pass-through
Securities and its 9.58% Common Securities, liquidation amount $1,000 per Common
Security (the "Common Securities"), are to be invested in the 9.58% Junior
Subordinated Debt Securities of the Company having an aggregate principal amount
equal to the aggregate liquidation amount of the Capital Securities and the
Common Securities (the "Junior Subordinated Debt Securities"). As an inducement
to you to enter into the Purchase Agreement and in satisfaction of a condition
to your obligations thereunder, the Trust and the Company agree with you, (i)
for your benefit and (ii) for the benefit of the holders from time to time (each
of the foregoing a "Holder" and together the "Holders") of the Securities (as
defined herein) or the Exchange Securities (as defined herein), as follows:
1. Definitions. Capitalized terms used herein without definition shall have
their respective meanings set forth in the Purchase Agreement. As used in this
Agreement, the following capitalized defined terms shall have the following
meanings:
"Act" means the Securities Act of 1933, as amended, and the rules and
regulations of the Commission promulgated thereunder.
"Additional Distributions" has the meaning given such term in Section7
hereof.
"Affiliate" of any specified person means any other person that, directly
or indirectly, is in control of, is controlled by, or is under common control
with, such specified person.
"Closing Date" has the meaning given such term in the Purchase Agreement.
"Commission" means the Securities and Exchange Commission.
"Declaration" means the Amended and Restated Declaration of Trust relating
to the Capital Securities and the Exchange Capital Securities dated as of
February 5, 1996, among the Company, as Depositor, Thomas E. Hales, Michael H.
Fury, Raymond J. Crotty and Steven J. Sabatini, as administrative trustees, the
Property Trustee and Chase Manhattan Bank Delaware, a Delaware banking
corporation, as Delaware trustee, as the same may be amended from time to time
in accordance with the terms thereof.
"Distribution Event" shall mean the distribution of Junior Subordinated
Debt Securities or Exchange Junior Subordinated Debt Securities, as the case may
be, to the holders of Capital Securities or Exchange Capital Securities, as the
case may be, as provided in the Declaration.
"Exchange Act" means the Securities Exchange Act of 1934, as amended, and
the rules and regulations of the Commission promulgated thereunder.
"Exchange Capital Securities" means securities of the Trust to be issued
under the Declaration and which are identical in all material respects to the
Capital Securities (except that the distribution rate step-up provisions and the
transfer restrictions will be modified or eliminated, as appropriate).
"Exchange Guarantee" means the guarantee by the Company of the Exchange
Capital Securities, identical in all material respects to the Guarantee.
"Exchange Junior Subordinated Debt Securities" means debt securities of the
Company to be issued under the Junior Subordinated Indenture and which are
identical in all material respects to the Junior Subordinated Debt Securities
(except that the interest rate step-up provisions and the transfer restrictions
will be modified or eliminated, as appropriate).
"Exchange Offer Registration Period" means the 180-day period following the
consummation of the Registered Exchange Offer, exclusive of any period during
which any stop order shall be in effect suspending the effectiveness of the
Exchange Offer Registration Statement.
"Exchange Offer Registration Statement" means a registration statement of
the Trust and the Company on an appropriate form under the Act with respect to
the Registered Exchange Offer (and, if a Distribution Event shall not have
occurred prior to the effectiveness of such Exchange Offer Registration
Statement and the Company shall not have elected to include the Junior
Subordinated Debt Securities held by the Trust in the Registered Exchange Offer
pursuant to Section 2(g) hereof, with respect to the distribution of the Junior
Subordinated Debt Securities upon the occurrence of a Distribution Event), 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.
"Exchange Pass-through Securities" means the Exchange Capital Securities
together with the Exchange Guarantee.
"Exchange Securities" means (i) if a Distribution Event shall not have
occurred prior to the Registered Exchange Offer, (a) the Exchange Pass-through
Securities and (b) if the Company shall elect to include the Junior Subordinated
Debt Securities held by the Trust in the Registered Exchange Offer pursuant to
Section 2(g) hereof, the Exchange Junior Subordinated Debt Securities or (ii) if
a Distribution Event shall have occurred prior to the Registered Exchange Offer,
the Exchange Junior Subordinated Debt Securities.
"Exchanging Dealer" means any Holder (which may include the Purchaser)
which is a broker-dealer electing to exchange Securities acquired for its own
account as a result of market-making activities or other trading activities for
Exchange Securities.
"Final Memorandum" has the meaning set forth in the Purchase Agreement.
"Guarantee" means the guarantee by the Company of certain obligations of
the Trust with respect to the Capital Securities and the Common Securities
pursuant to the Guarantee Agreement dated as of February 5, 1997 between the
Company and the Guarantee Trustee.
"Guarantee Trustee", "Indenture Trustee" and "Property Trustee" each mean
The Chase Manhattan Bank, a New York banking corporation.
"Holder" has the meaning set forth in the preamble hereto.
"Initial Placement" has the meaning set forth in the preamble hereto.
"Junior Subordinated Indenture" means the Junior Subordinated Indenture
relating to the Junior Subordinated Debt Securities and the Exchange Junior
Subordinated Debt Securities dated as of February 5, 1997 between the Company
and the Indenture Trustee.
"Liquidated Damages"has the meaning given such term in Section 7 hereof.
"Majority Holders" means the Holders of a majority of the aggregate
liquidation amount or of the aggregate principal amount, as applicable, of
securities registered under a Registration Statement.
"Managing Underwriters" means the investment banker or investment bankers
and manager or managers that shall administer an underwritten offering.
"Prospectus" means the prospectus included in any Registration Statement
(including a prospectus that discloses information previously omitted from a
prospectus filed as part of an effective registration statement in reliance upon
Rule 430A under the Act), as amended or supplemented by any prospectus
supplement, with respect to the terms of the offering of any portion of the
Securities or the Exchange Securities, covered by such Registration Statement,
and all amendments and supplements to the Prospectus, including post-effective
amendments.
"Registered Exchange Offer" means the proposed offer to the Holders to
issue and deliver to such Holders a like liquidation amount or principal amount,
as the case may be, of the Exchange Securities, in exchange for (i) if a
Distribution Event shall not have occurred, (a) the Pass-Through Securities and
(b) if the Company shall elect to include the Junior Subordinated Debt
Securities held by the Trust in the Registered Exchange Offer pursuant to
Section 2(g) hereof, the Junior Subordinated Debt Securities or (ii) if a
Distribution Event shall have occurred, the Junior Subordinated Debt Securities.
"Registration Statement" means any Exchange Offer Registration Statement or
Shelf Registration Statement that covers any of the Securities or the Exchange
Securities pursuant to the provisions of this Agreement, and 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.
"Securities" means (i) if a Distribution Event shall not have occurred, the
Pass-through Securities and the Junior Subordinated Debt Securities or (ii) if a
Distribution Event shall have occurred, the Junior Subordinated Debt Securities.
"Shelf Registration" means a registration effected pursuant to Section 3
hereof.
"Shelf Registration Period" has the meaning given such term in Section 3(b)
hereof.
"Shelf Registration Statement" means a "shelf" registration statement of the
Trust and the Company pursuant to the provisions of Section 3 hereof that covers
some or all of the Securities or the Exchange Securities, as applicable, on an
appropriate form under Rule 415 under the Act, or any similar rule that may be
adopted by the Commission, and 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.
"Trustee" means the Guarantee Trustee, the Indenture Trustee or the
Property Trustee, as applicable.
"Underwriter" means any underwriter of Securities in connection with an
offering thereof under a Shelf Registration Statement.
2. Registered Exchange Offer; Resales of Exchange Securities by Exchanging
Dealers. (a) The Trust and the Company shall prepare and, not later than 150
days following the Closing Date, shall file with the Commission the Exchange
Offer Registration Statement. The Trust and the Company shall use their best
efforts to cause the Exchange Offer Registration Statement to become effective
under the Act within 180 days of the Closing Date.
(b) Upon the effectiveness of the Exchange Offer Registration Statement,
the Trust and the Company shall promptly commence the Registered Exchange Offer,
it being the objective of such Registered Exchange Offer to enable each Holder
electing to exchange Securities for Exchange Securities (assuming that such
Holder is not an affiliate of the Trust or the Company within the meaning of the
Act, acquires the Exchange Securities in the ordinary course of such Holder's
business and has no arrangements with any person to participate in the
distribution (within the meaning of the Act) of the Exchange Securities) to
transfer such Exchange Securities from and after their receipt without any
limitations or restrictions under the Act and without material restrictions
under the securities laws of a substantial proportion of the several states of
the United States.
(c) In connection with the Registered Exchange Offer, the Trust and the
Company 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 Registered Exchange Offer open for not less than 30 days
after the date notice thereof is mailed to the Holders (or longer if required by
applicable law);
(iii) utilize the services of a depositary for the Registered Exchange
Offer with an address in the Borough of Manhattan, The City of New York; and
(iv) comply in all respects with all applicable laws.
(d) As soon as practicable after the close of the Registered Exchange
Offer, the Trust and the Company shall:
(i) accept for exchange all Securities validly tendered and not withdrawn
pursuant to the Registered Exchange Offer;
(ii) deliver to the Trustee for cancellation all Securities so accepted for
exchange; and
(iii) cause the Trustee promptly to authenticate and deliver to each Holder
of tendered Securities, Exchange Securities equal in liquidation amount or
principal amount, as the case may be, to the Securities of such Holder so
accepted for exchange therefor.
(e) The Purchaser and the Trust and the Company acknowledge that, pursuant
to interpretations by the Commission's staff of Section 5 of the Act, and in the
absence of an applicable exemption therefrom, each Exchanging Dealer is required
to deliver a Prospectus in connection with a sale of any Exchange Securities
received by such Exchanging Dealer pursuant to the Registered Exchange Offer in
exchange for Securities acquired for its own account as a result of
market-making activities or other trading activities. Accordingly, the Trust
and the Company shall:
(i) include the information set forth in Annex A hereto on the cover of the
Exchange Offer Registration Statement, in Annex B hereto in the forepart of the
Exchange Offer Registration Statement in a section setting forth details of the
Registered Exchange Offer, and in Annex C hereto in the underwriting or plan of
distribution section of the Prospectus forming a part of the Exchange Offer
Registration Statement, and include the information set forth in Annex D hereto
in the Letter of Transmittal delivered pursuant to the Registered Exchange
Offer; and
(ii) use their best efforts to keep the Exchange Offer Registration
Statement continuously effective under the Act during the Exchange Offer
Registration Period for delivery of the Prospectus forming a part thereof by
Exchanging Dealers in connection with sales of Exchange Securities received
pursuant to the Registered Exchange Offer, as contemplated by Section 4(h)
below.
(f) In the event that the Purchaser determines that it is not eligible to
participate in the Registered Exchange Offer with respect to the exchange of
Securities constituting any portion of unsold Securities purchased by it in the
Initial Placement, at the request of the Purchaser, the Company shall issue and
deliver to the Purchaser, in exchange for such Securities, a like principal
amount of Exchange Securities (provided that such Exchange Securities shall
include legends with respect to restrictions on transfer), and the Company
shall, starting on the date of effectiveness of the Exchange Offer Registration
Statement and ending on the close of business on the 180th day following such
date, make available as many copies of the Exchange Offer Registration Statement
prospectus, as amended or supplemented, as reasonably requested by the
Purchaser. The Trust and the Company shall seek to cause the CUSIP Service
Bureau to issue the same CUSIP number for such Exchange Securities as for
Exchange Securities issued pursuant to the Registered Exchange Offer. The
Purchaser agrees to promptly notify the Company in writing following its resale
of the Securities purchased in the Initial Placement.
(g) Notwithstanding anything in this Agreement to the contrary, if a
Distribution Event shall not have occurred prior to the Registered Exchange
Offer, the Company may offer to, and the Trust shall agree to, exchange the
Junior Subordinated Debt Securities held by the Trust for an identical principal
amount of Exchange Junior Subordinated Debt Securities as part of the Registered
Exchange Offer; provided, however that, until a Distribution Event shall have
occurred, such Exchange Junior Subordinated Debt Securities shall include
appropriate legends with respect to transfer restrictions.
3. Shelf Registration. If, (i) because of any change in law or applicable
interpretations thereof by the Commission's staff, the Trust and the Company
determine upon advice of their outside counsel that they are not permitted to
effect the Registered Exchange Offer as contemplated by Section 2 hereof, or
(ii) the Company shall determine in good faith that there is a reasonable
likelihood, or that a material uncertainty exists as to whether, consummation of
the Exchange Offer would result in a material adverse tax consequence to the
Company, or (iii) for any reason the Exchange Offer Registration Statement is
not declared effective within 180 days of the Closing Date, the following
provisions shall apply:
(a) The Trust and the Company shall, as promptly as practicable (but in no
event more than 60 days after the earliest of a Company determination pursuant
to clause (i) or (ii) above or the 180th day after the Closing Date), file with
the Commission and thereafter use their best efforts to cause to be declared
effective under the Act a Shelf Registration Statement relating to the offer and
sale of the Securities by the Holders from time to time in accordance with the
methods of distribution elected by such Holders and set forth in such Shelf
Registration Statement.
(b) The Trust and the Company shall use their best efforts to keep the
Shelf Registration Statement continuously effective in order to permit the
Prospectus forming part thereof to be usable by Holders for a period of three
years (or, if Rule144(k) is amended to provide a shorter restrictive period,
such shorter period) from the Closing Date, or such shorter period that will
terminate when all the Securities or Exchange Securities, as applicable, covered
by the Shelf Registration Statement have been sold pursuant to the Shelf
Registration Statement (in anysuch case, such period being called the "Shelf
Registration Period").
4.Registration Procedures. In connection with any Shelf Registration
Statement and, to the extent specified, any Exchange Offer Registration
Statement, the following provisions shall apply:
(a) The Trust and the Company shall furnish to you, prior to the filing
thereof with the Commission, a copy of any Shelf Registration Statement and any
Exchange Offer Registration Statement, and each amendment thereof and each
amendment or supplement, if any, to the Prospectus included therein and shall
use their best efforts to reflect in each such document, when so filed with the
Commission, such comments as you reasonably may propose.
(b) The Trust and the Company shall ensure that (i)any Registration
Statement and any amendment there to and any Prospectus forming part thereof and
any amendment or supplement thereto complies in all material respects with the
Act, (ii)any Registration Statement and any amendment thereto does not, when it
becomes effective, contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading and (iii) any Prospectus forming part of any
Registration Statement, and any amendment or supplement to such Prospectus, does
not, during the period when delivery thereof is required, include an untrue
statement of a material fact or omit to state a material fact necessary in order
to make the statements, in the light of the circumstances under which they were
made, not misleading.
(c) (1) The Trust and the Company shall advise the Purchaser and, in the
case of a Shelf Registration Statement, the Holders of securities covered
thereby to the extent specified in (i) below, and, if requested by you or any
such Holder, confirm such advice in writing:
(i) when a Registration Statement and any amendment thereto has been filed
with the Commission and when the Registration Statement or any post-effective
amendment thereto has become effective; and
(ii) of any request by the Commission for amendments or supplements to the
Registration Statement or the Prospectus included therein or for additional
information.
(2) The Trust and the Company shall advise the Purchaser and, in the case
of a Shelf Registration Statement, the Holders of securities covered thereby,
and, in the case of an Exchange Offer Registration Statement, any Exchanging
Dealer which has provided in writing to the Trust and the Company a telephone or
facsimile number and address for notices, and, if requested by you or any such
Holder or Exchanging Dealer, confirm such advice in writing of:
(i)the issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement or the initiation of any proceedings
for that purpose;
(ii) the receipt by the Company or the Trust of any notification with
respect to the suspension of the qualification of the securities included
therein for sale in any jurisdiction or the initiation or threatening of any
proceeding for such purpose; and
(iii) the suspension of the use of the Prospectus.
(d) The Trust and the Company shall use their best efforts to obtain the
withdrawal of any order suspending the effectiveness or use of any Registration
Statement at the earliest possible time.
(e) The Trust and the Company shall furnish to each Holder of securities
included within the coverage of any Shelf Registration Statement, without
charge, at least one copy of such Shelf Registration Statement and any
post-effective amendment thereto, including financial statements and schedules,
and, if the Holder so requests in writing, all exhibits (including those
incorporated by reference).
(f)The Trust and the Company shall, during the Shelf Registration Period,
deliver to each Holder of securities included within the coverage of any Shelf
Registration Statement, without charge, as many copies of the Prospectus
(including each preliminary Prospectus) included in such Shelf Registration
Statement and any amendment or supplement thereto as such Holder may reasonably
request; and the Trust and the Company consent to the use of the Prospectus or
any amendment or supplement thereto as to which no notice has been given
pursuant to paragraph 4(c)(2) by each of the Holders selling securities in
connection with the offering and sale of the securities covered by the
Prospectus or any amendment or supplement thereto.
(g) The Trust and the Company shall furnish to each Exchanging Dealer which
so requests, without charge, at least one copy of the Exchange Offer
Registration Statement and any post-effective amendment thereto, including
financial statements and schedules, any documents incorporated by reference
therein, and, if the Exchanging Dealer so requests in writing, all exhibits
(including those incorporated by reference).
(h) The Trust and the Company shall, during the Exchange Offer Registration
Period, promptly deliver to each Exchanging Dealer, without charge, as many
copies of the Prospectus included in such Exchange Offer Registration Statement
and any amendment or supplement thereto as such Exchanging Dealer may reasonably
request for delivery by such Exchanging Dealer in connection with a sale of
Exchange Securities received by it pursuant to the Registered Exchange Offer;
and the Trust and the Company consent to the use of the Prospectus or any
amendment or supplement thereto as to which no notice has been given pursuant to
paragraph 4(c)(2) by any such Exchanging Dealer, as aforesaid.
(i) Prior to the Registered Exchange Offer or the effectiveness of a
Registration Statement with respect to any other offering of securities, the
Trust and the Company shall, if required by applicable law, register or qualify
or cooperate with the Holders of securities included therein and their
respective counsel in connection with the registration or qualification of such
securities for offer and sale under the securities or blue sky laws of such
jurisdictions as any such Holders reasonably request in writing and do any and
all other acts or things necessary or advisable to enable the offer and sale in
such United States jurisdictions of the securities covered by such Registration
Statement; provided, however, that neither the Trust nor the Company will be
required to qualify generally to do business in any jurisdiction where it is not
then so qualified or to take any action that would subject it to general service
of process or to taxation in any such jurisdiction where it is not then so
subject.
(j) Unless the applicable securities shall be in book-entry only form, the
Trust and the Company shall cooperate with the Holders of Securities to
facilitate the timely preparation and delivery of certificates representing
Securities to be sold pursuant to any Registration Statement free of any
restrictive legends and in such denominations and registered in such names as
Holders may request prior to sales of securities pursuant to such Registration
Statement.
(k) Upon the occurrence of any event contemplated by paragraphs c(1)(ii) or
(c)(2)(iii) above, the Trust and the Company shall prepare as soon as possible a
post-effective amendment to any Registration Statement or an amendment or
supplement to the related Prospectus or file any other required document so
that, as thereafter delivered to purchasers of the securities included therein,
the Prospectus will not include an untrue statement of a material fact or omit
to state any material fact necessary to make the statements therein, in the
light of the circumstances under which they were made, not misleading.
(l) The Trust and the Company shall use their best efforts to cause The
Depository Trust Company ("DTC") on the first business day following the
effective date of any Shelf Registration Statement hereunder or as soon as
possible thereafter to remove (i)from any existing CUSIP number assigned to the
Pass-through Securities or Junior Subordinated Debt Securities, as the case may
be, any designation indicating that such securities are "restricted securities",
which efforts shall include delivery to DTC of a letter executed by the Trust
and the Company substantially in the form of Annex E hereto and (ii) any other
stop or restriction on DTC's system with respect to such securities. In the
event the Trust and the Company are unable to cause DTC to take the actions
described in the immediately preceding sentence, the Company shall take such
actions as you may reasonably request to provide, as soon as practicable, a
CUSIP number for the Pass-through Securities or Junior Subordinated Debt
Securities, as the case may be, registered under such Registration Statement and
to cause such CUSIP number to be assigned to such securities (or to the maximum
aggregate principal amount of such securities to which such number may be
assigned). Upon compliance with the foregoing requirements of this Section 4(l),
the Trust and the Company shall provide the Trustee with printed certificates
for such securities, in a form eligible for deposit with DTC.
(m) The Trust and the Company shall use their best efforts to comply with
all applicable rules and regulations of the Commission and shall make generally
available to its security holders as soon as practicable after the effective
date of the applicable Registration Statement an earnings statement satisfying
the provisions of Section 11(a) of the Act.
(n) The Trust and the Company shall cause the Junior Subordinated
Indenture, the Declaration and the Guarantee to be qualified under the Trust
Indenture Act in a timely manner.
(o) The Trust and the Company may require each Holder of securities to be
sold pursuant to any Shelf Registration Statement to furnish to the Trust and
the Company such information regarding such Holder and the distribution of such
securities by such Holder as the Trust and the Company may from time to time
reasonably require for inclusion in such Registration Statement, and securities
of a holder that does not provide information necessary for inclusion in such
Registration Statement may be omitted from any Shelf Registration Statement.
(p) The Trust and the Company shall, if reasonably requested, and in no
event more than three times, promptly incorporate in a Prospectus supplement or
post-effective amendment to a Shelf Registration Statement, such information as
the Managing Underwriters and Majority Holders reasonably agree should be
included therein and shall make all required filings of such Prospectus
supplement or post-effective amendment as soon as notified of the matters to be
incorporated in such Prospectus supplement or post-effective amendment.
(q) In the case of any Shelf Registration Statement, the Trust and the
Company shall enter into such agreements (including underwriting agreements) and
take all other appropriate actions in order to expedite or facilitate the
registration or the disposition of the Securities or the Exchange Securities, as
the case may be, and in connection therewith, if an underwriting agreement is
entered into, cause the same to contain indemnification provisions and
procedures no less favorable than those set forth in Section 6 (or such other
provisions and procedures acceptable to the Majority Holders and the Managing
Underwriters, if any) with respect to all parties to be indemnified pursuant to
Section 6.
(r) In the case of any Shelf Registration Statement, the Trust and the
Company shall (i) make reasonably available for inspection by the Holders of
securities to be registered thereunder, subject to their acceptance of the
provisions of this Section 4(r), any underwriter participating in any
distribution pursuant to such Registration Statement, and any attorney,
accountant or other agent retained by the Holders or any such underwriter all
relevant financial and other records, pertinent corporate documents and
properties of the Trust or the Company and its subsidiaries as shall reasonably
be required in connection with the discharge of their due diligence obligations;
(ii)cause the Company's officers, directors and employees and any relevant
trustee to supply all relevant information reasonably requested by the Holders
or any such underwriter, attorney, accountant or agent in connection with any
such Registration Statement as is customary for similar due diligence
examinations; provided, however, that, in the case of clause(i) and(ii) above,
any information that is designated in writing by the Trust or the Company, in
good faith, as confidential at the time of delivery of such information shall be
kept confidential by the Holders and any such underwriter, attorney, accountant
or agent and any person acting on behalf of any of them, unless such disclosure
is made in connection with a court proceeding or required by law, or such
information becomes available to the public generally or through a third party
without an accompanying obligation of confidentiality; and provided further,
however, that the foregoing inspection and information gathering shall be
coordinated on behalf of the Holders and the other parties entitled thereto by
one counsel designated by and on behalf of such Holders and other parties; (iii)
make such representations and warranties to the Holders of securities registered
thereunder and the underwriters, if any, in form, substance and scope as are
customarily made by issuers to underwriters in primary underwritten offerings
and covering such matters as are customarily covered in representations and
warranties requested in primary underwritten offerings; (iv) obtain opinions of
counsel to the Trust and the Company and updates thereof (which counsel and
opinions (in form, scope and substance) shall be reasonably satisfactory to the
Managing Underwriters, if any) addressed to each selling Holder and the
underwriters, if any, covering such matters and with such exceptions as are
customarily covered or taken in opinions requested in underwritten offerings and
such other matters as may be reasonably requested by such Holders and
underwriters (it being agreed that the matters to be covered by such counsel
shall include, without limitation, as of the date of the opinions and as of the
effective date of the Registration Statement or most recent post-effective
amendment thereto, as the case may be, a statement by such counsel regarding the
absence from such Registration Statement and the Prospectus included therein, as
then amended or supplemented, including the documents incorporated by reference
therein, of an untrue statement of a material fact or the omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading); (v) obtain "cold comfort" letters and
updates thereof from the independent certified public accountants of the Company
(and, if necessary, any other independent certified public accountants of any
subsidiary of the Company or of any business acquired by the Company for which
financial statements and financial data are, or are required to be, included in
the Registration Statement), addressed to each selling Holder of securities
registered thereunder and the underwriters, if any, in customary form and
covering matters of the type customarily covered in "cold comfort" letters in
connection with primary underwritten offerings; and (vi) deliver such documents
and certificates as may be reasonably requested by the Majority Holders and the
Managing Underwriters, if any, including those to evidence compliance with
Section 4(k) and with any customary conditions contained in the underwriting
agreement or other agreement entered into by the Trust and the Company. The
foregoing actions set forth in clauses (iii), (iv), (v) and (vi) of this Section
4(r) shall be performed at (A) the effectiveness of such Registration Statement
and each post-effective amendment thereto and (B) each closing under any
underwriting or similar agreement as and to the extent required thereunder.
(s) In the case of any Exchange Offer Registration Statement, if requested by
the Purchaser, the Trust and the Company shall (i) make reasonably available for
inspection by the Purchaser, and any attorney, accountant or other agent
retained by the Purchaser, all relevant financial and other records, pertinent
corporate documents and properties of the Company and its subsidiaries or the
Trust as shall reasonably be required in connection with the discharge of their
due diligence obligations; (ii) cause the Company's officers, directors and
employees and any relevant trustee to supply all relevant information reasonably
requested by the Purchaser or any such attorney, accountant or agent in
connection with any such Registration Statement as is customary for similar due
diligence examinations; provided, however, that, in the case of clause (i) and
(ii) above, any information that is designated in writing by the Company or the
Trust, in good faith, as confidential at the time of delivery of such
information shall be kept confidential by the Purchaser and any such attorney,
accountant or agent, unless such disclosure is made in connection with a court
proceeding or required by law, or such information becomes available to the
public generally or through a third party without an accompanying obligation of
confidentiality; (iii) make such representations and warranties to the
Purchaser, in form, substance and scope as are customarily made by issuers to
underwriters in primary underwritten offerings and covering such matters; (iv)
obtain opinions of counsel to the Trust and the Company and updates thereof
(which counsel and opinions (in form, scope and substance) shall be reasonably
satisfactory to the Purchaser and its counsel, addressed to the Purchaser,
covering such matters as are customarily covered in opinions request ed in
underwritten offerings and such other matters as may be reasonably requested by
the Purchaser or its counsel (it being agreed that the matters to be covered by
such counsel shall include, without limitation, as of the date of the opinions
and as of the effective date of the Registration Statement or most recent
posteffective amendment thereto, as the case may be, a statement by such counsel
regarding the absence from such Registration Statement and the Prospectus
included therein, as then amended or supplemented, including the documents
incorporated by reference therein, of an untrue statement of a material fact or
the omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading); (v) obtain "cold
comfort" letters and updates thereof from the independent certified public
accountants of the Company (and, if necessary, any other independent certified
public accountants of any subsidiary of the Company or of any business acquired
by the Company for which financial statements and financial data are, or are
required to be, included in the Registration Statement), addressed to the
Purchas er, in customary form and covering matters of the type customarily
covered in "cold comfort" letters in connection with primary underwritten
offerings, or if requested by the Purchaser or its counsel in lieu of a "cold
comfort" letter, an agreed-upon procedures letter under Statement on Auditing
Standards No. 35, covering matters requested by the Purchaser or its counsel;
and (vi) deliver such documents and certificates as may be reasonably requested
by the Purchaser or its counsel, including those to evidence compliance with
Section 4(k) and with conditions customarily contained in underwriting
agreements. The foregoing actions set forth in clauses (iii), (iv), (v), and
(vi) of this Section 4(s) shall be performed, if requested by the Purchaser, at
the closing of the Registered Exchange Offer and the effective date of any
post-effective amendment to the Exchange Offer Registration Statement.
5. Registration Expenses. The Trust and the Company shall bear all expenses
incurred in connection with the performance of their obligations under Sections
2, 3 and 4 hereof and, in the event of any Shelf Registration Statement, will
reimburse the Holders for the reasonable fees and disbursements of one firm or
counsel designated by the Majority Holders to act as counsel for the Holders in
connection therewith, and, in the case of any Exchange Offer Registration
Statement, will reimburse the Purchaser for the reasonable fees and
disbursements of counsel acting in connection therewith.
6. Indemnification and Contribution. (a) In connection with any
Registration Statement, the Company agrees to indemnify and hold harmless each
Holder of securities covered thereby (including the Purchaser and, with respect
to any Prospectus delivery as contemplated in Section 4(h) hereof, each
Exchanging Dealer), the directors, officers, employees and agents of each such
Holder and each person who controls any such Holder within the meaning of either
the Act or the Exchange Act against any and all losses, claims, damages or
liabilities, joint or several, to which they or any of them may become subject
under the Act, the Exchange Act or other Federal or state statutory law or
regulation, at common law or otherwise, insofar as such losses, claims, damages
or liabilities (or actions in respect thereof) arise out of or are based upon
any untrue statement or alleged untrue statement of a material fact contained in
the Registration Statement as originally filed or in any amendment thereof, or
in any preliminary Prospectus or Prospectus, or in any amendment thereof or
supplement thereto, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, and agrees to reimburse
each such indemnified party, as incurred, for any legal or other expenses
reasonably incurred by them in connection with investigating or defending any
such loss, claim, damage, liability or action; provided, however, that (i) the
Company will not be liable in any case to the extent that any such loss, claim,
damage or liability arises out of or is based upon any such untrue statement or
alleged untrue statement or omission or alleged omission made therein in
reliance upon and in conformity with written information furnished to the Trust
and the Company by or on behalf of any such Holder specifically for inclusion
therein and (ii) such indemnity with respect to any untrue statement or omission
in any preliminary Prospectus relating to a Shelf Registration Statement shall
not inure to the benefit of any Holder from whom the person asserting any such
loss, claim, damage or liability purchased the securities that are the subject
thereof, to the extent that any such loss, claim, damage or liability of such
Holder occurs under the circumstances where it shall have been determined by a
court of competent jurisdiction by final and nonappealable judgment that (w) the
Trust and the Company had previously furnished copies of the final Prospectus to
such Holder, (x) delivery of the final Prospectus was required by the Act to be
made to such person, (y) the untrue statement or omission of a material fact
contained in the preliminary Prospectus was completely corrected in the final
Prospectus and (z) there was not sent or given to such person, at or prior to
the written confirmation of the sale of such securities to such person, a copy
of the final Prospectus. This indemnity agreement will be in addition to any
liability which the Trust and the Company may otherwise have.
The Company also agrees to indemnify or contribute to Losses (as defined
below) of, as provided in Section 6(d) hereof, any underwriters of securities
registered under a Shelf Registration Statement, their officers and directors
and each person who controls such underwriters on substantially the same basis
as that of the indemnification of the Purchasers and the selling Holders
provided in this Section 6(a) and shall, if requested by any underwriter, enter
into an underwriting agreement reflecting such agreement, as provided in Section
4(q) hereof.
(b) Each Holder of securities covered by a Registration Statement
(including the Purchaser and, with respect to any Prospectus delivery as
contemplated in Section 4(h) hereof, each Exchanging Dealer) shall be required
to severally agree to indemnify and hold harmless (i) the Trust and the Company,
(ii) each of the Company's directors, (iii) each of the Company's officers or
any trustee of the Trust who signs such Registration Statement and (iv) each
person who controls the Company or the Trust within the meaning of either the
Act or the Exchange Act to the same extent as the foregoing indemnity from the
Company to each such Holder, but only with reference to written information
relating to such Holder furnished to the Trust or the Company by or on behalf of
such Holder specifically for inclusion in the documents referred to in the
foregoing indemnity. This indemnity agreement will be in addition to any
liability which any such Holder may otherwise have.
(c) Promptly after receipt by an indemnified party under this Section 6 of
notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against the indemnifying party under this
Section 6, notify the indemnifying party in writing of the commencement thereof;
but the failure so to notify the indemnifying party (i) will not relieve it from
liability under paragraph (a) or (b) above or paragraph (d) below unless and to
the extent it did not otherwise learn of such action and such failure results in
the forfeiture by the indemnifying party of substantial rights and defenses and
(ii) will not, in any event, relieve the indemnifying party from any obligations
to any indemnified party other than obligations provided under this Section 6.
The indemnifying party shall be entitled to appoint counsel of the indemnifying
party's choice at the indemnifying party's expense to represent the indemnified
party in any action for which indemnification is sought (in which case the
indemnifying party shall not thereafter be responsible for the fees and expenses
of any separate counsel retained by the indemnified party or parties except as
set forth below); provided, however, that such counsel shall be reasonably
satisfactory to the indemnified party. Notwithstanding the indemnifying party's
election to appoint counsel to represent the indemnified party in an action, the
indemnified party shall have the right to employ separate counsel (including
local counsel) (it being understood that the indemnifying party shall not be
liable for the fees, costs and expenses of more than one separate counsel (and,
to the extent necessary, one local counsel in each jurisdiction)), and the
indemnifying party shall bear the reasonable fees, costs and expenses of such
separate counsel (and local counsel) if (i) the use of counsel chosen by the
indemnifying party to represent the indemnified party would present such counsel
with a conflict of interest, (ii) the actual or potential defendants in, or
targets of, any such action include both the indemnified party and the
indemnifying party and the indemnified party shall have reasonably concluded
that there may be legal defenses available to it and/or other indemnified
parties which are different from or additional to those available to the
indemnifying party, (iii) the indemnifying party shall not have employed counsel
reasonably satisfactory to the indemnified party to represent the indemnified
party within a reasonable time after notice of the institution of such action or
(iv) the indemnifying party shall authorize the indemnified party to employ
separate counsel at the expense of the indemnifying party. An indemnifying party
will not, without the prior written consent of the indemnified par- ties, settle
or compromise or consent to the entry of any judgment with respect to any
pending or threatened claim, action, suit or proceeding in respect of which
indemnification or contribution may be sought hereunder (whether or not the
indemnified parties are actual or potential parties to such claim or action)
unless such settlement, compromise or consent includes an unconditional release
of each indemnified party from all liability arising out of such claim, action,
suit or proceeding.
(d) In the event that the indemnity provided in paragraph (a) or (b) of this
Section 6 is unavailable to or insufficient to hold harmless an indemnified
party for any reason, then each applicable indemnifying party, in lieu of
indemnifying such indemnified party, shall have a joint and several obligation
to contribute to the aggregate losses, claims, damages and liabilities
(including legal or other expenses reasonably incurred in connection with
investigating or defending the same) (collectively "Losses") to which such
indemnified party may be subject in such proportion as is appropriate to reflect
the relative benefits received by such indemnifying party, on the one hand, and
such indemnified party, on the other hand, from the Initial Placement and the
Registration Statement which resulted in such Losses. If the allocation provided
by the immediately preceding sentence is unavailable for any reason, the
indemnifying party and the indemnified party shall contribute in such proportion
as is appropriate to reflect not only such relative benefits but also the
relative fault of such indemnifying party, on the one hand, and such indemnified
party, on the other hand, in connection with the statements or omissions which
resulted in such Losses as well as any other relevant equitable considerations.
Benefits received by the Trust and the Company shall be deemed to be equal to
the total net proceeds from the Initial Placement (before deducting expenses) as
set forth on the cover page of the Final Memorandum. Benefits received by the
Purchaser shall be deemed to be equal to the total purchase discounts,
commissions or compensation as set forth on the cover page of the Final
Memorandum, and benefits received by any other Holders shall be deemed to be
equal to the excess, if any, of the value to such Holder of receiving Securities
or Exchange Securities, as applicable, registered under the Act over the value
to such Holder of holding Securities not registered under the Act. Benefits
received by any underwriter shall be deemed to be equal to the total
underwriting discounts and commissions, as set forth on the cover page of the
Prospectus forming a part of the Registration Statement which resulted in such
Losses. Relative fault shall be determined by reference to whether any alleged
untrue statement or omission relates to information provided by the indemnifying
party, on the one hand, or by the indemnified party, on the other hand. The
parties agree that it would not be just and equitable if contribution were
determined by pro rata allocation or any other method of allocation which does
not take account of the equitable considerations referred to above.
Notwithstanding the provisions of this paragraph (d), no person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. For purposes of this Section 6, each person who
controls a Holder within the meaning of either the Act or the Exchange Act and
each director, officer, employee and agent of such Holder shall have the same
rights to contribution as such Holder, and each person who controls the Company
or the Trust within the meaning of either the Act or the Exchange Act, each
officer of the Company and each trustee of the Trust who shall have signed the
Registration Statement and each director of the Company and each trustee of the
Trust shall have the same rights to contribution as the Company, subject in each
case to the applicable terms and conditions of this paragraph (d).
(e) The provisions of this Section 6 will remain in full force and effect,
regardless of any investigation made by or on behalf of any Holder, the Company
or the Trust or any of the officers, directors, trustees or controlling persons
referred to in Section 6 hereof, and will survive the sale by a Holder of
securities covered by a Registration Statement.
7. Liquidated Damages and Additional Distributions Under Certain
Circumstances.
If (i) (A) neither the Exchange Offer Registration Statement nor
a Shelf Registration Statement is filed with the Commission on or
prior to the 150th day after the Closing Date or (B) notwithstanding
that the Company and the Trust have consummated or will consummate an
Exchange Offer, the Company 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 3, then, commencing
on the day after either such required filing date, liquidated damages
("Liquidated Damages") shall accrue on the principal amount of the
Junior Subordinated Debt Securities, and additional distributions
("Additional Distributions") shall accumulate on the liquidation
amount of the Trust Securities (as defined in the Final Memorandum),
each at a rate of .25% per annum; or
(ii) (A) neither the Exchange Offer Registration Statement nor a
Shelf Registration Statement is declared effective by the Commission
on or prior to the 180th day after the Closing Date or (B)
notwithstanding that the Company and the Trust have consummated or
will consummate an Exchange Offer, the Company and the Trust are
required to file a Shelf Registration Statement and such Shelf
Registration Statement is not declared effective by the Commission on
or prior to the 30th day after the date such Shelf Registration
Statement was required to be filed, then, commencing on the 181st day
after the Closing Date, Liquidated Damages shall accrue on the
principal amount of the Junior Subordinated Debt Securities, and
Additional Distributions shall accumulate on the liquidation amount of
the Trust Securities, each at a rate of .25% per annum; or
(iii) (A) the Trust has not exchanged Exchange Capital Securities
for all Capital Securities or the Company has not exchanged the
Exchange Guarantee or Exchange Junior Subordinated Debt Securities for
the Guarantee and all Junior Subordinated Debt Securities validly
tendered in accordance with the terms of the Exchange Offer on or
prior to the 30th day after the date on which the Exchange Offer
Registration Statement was declared effective or (B) if applicable,
the Shelf Registration Statement has been declared effective and such
Shelf Registration Statement ceases to be effective or usable by the
Holders at any time prior to the third anniversary of the Closing Date
(other than after such time as all Capital Securities have been
disposed of thereunder), then Liquidated Damages shall accrue on the
principal amount of Junior Subordinated Debt Securities, and
Additional Distributions shall accumulate on the Liquidation Amount of
the Trust Securities, each at a rate of .25% per annum commencing on
(x) the 31st day after such effective date, in the case of (A) above,
or (y) the day such Shelf Registration Statement ceases to be
effective or usable in the case of (B) above; provided that if the
Shelf Registration Statement has ceased to be effective or usable
solely as a result of (x) the filing by the Company of a post
effective amendment to such Shelf Registration Statement to
incorporate annual audited financial informa tion with respect to the
Company where such post-effec tive amendment is not yet effective and
must be de clared effective to permit Holders to use the related
Prospectus or (y) the occurrence of other material events with respect
to the Company or the Trust (provided the Company is proceeding
promptly and in good faith to amend the Shelf Registration Statement
to describe such events), then Liquidated Damages and Additional
Distributions shall not accrue during such period for which the Shelf
Registration Statement is not effective or usable unless such period
exceeds 45 days;
provided, however, that neither the Liquidated Damages rate on the Junior
Subordinated Debt Securities, nor the Additional Distributions rate on the
Liquidation Amount of the Trust Securities, payable pursuant to this Section 7
may exceed in the aggregate .25% per annum; provided, further, however, that (1)
upon the filing of the Exchange Offer Registration Statement or the Shelf
Registration Statement (in the case of clause (i) above), (2) upon the
effectiveness of the Exchange Offer Registration Statement or the Shelf
Registration Statement (in the case of clause (ii) above), (3) upon the exchange
of Exchange Capital Securities, the Exchange Guarantee and Exchange Junior
Subordinated Debt Securities for all Capital Securities, the Guarantee and
Junior Subordinated Debt Securities 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), and (4) upon
the expiration of the Shelf Registration Period, Liquidated Damages on the
Junior Subordinated Debt Securities, and Additional Distributions on the
Liquidation Amount of the Trust Securities as a result of such clause (or the
relevant subclause thereof), as the case may be, shall cease to accrue.
Any amounts of Liquidated Damages and Additional Distributions due pursuant
to the foregoing paragraphs will be payable in cash on February 1 and August 1
each year to the holders of record on the preceding January 15 and July 15,
respectively.
8. Miscellaneous.
(a) No Inconsistent Agreements. Each of the Trust and the Company
has not, as of the date hereof, entered into, nor shall it, on or
after the date here of, enter into, any agreement with respect to the
Securities that is inconsistent with the rights granted to the Holders
herein or otherwise conflicts with the provisions hereof.
(b) Amendments and Waivers. The provisions of this Agreement,
including the provisions of this sentence, may not be amended,
qualified, modified or supplemented, and waivers or consents to
departures from the provisions hereof may not be given, unless the
Trust and the Company have obtained the written consent of the Holders
of at least a majority of the then outstanding aggregate liquidation
amount or principal amount, as the case may be, of Securities (or,
after the consummation of any Exchange Offer in accordance with
Section 2 hereof, of Exchange Securities); provided, however, that,
with respect to any matter that affects the rights of the Purchaser
hereunder, the Trust and the Company shall obtain the written consent
of the Purchaser. Notwithstanding the foregoing (except the foregoing
proviso), a waiver or consent to departure from the provisions hereof
with respect to a matter that relates exclusively to the rights of
Holders whose securities are being sold pursuant to a Registration
Statement and that does not directly or indirectly affect the rights
of other Holders may be given by the Majority Holders, determined on
the basis of securities being sold rather than registered under such
Registration Statement.
(c) Notices. All notices and other communica tions provided for
or permitted hereunder shall be made in writing by hand-delivery,
first-class mail, telex, telecopier, or air courier guaranteeing
overnight delivery:
(1) if to a Holder, at the most current
address given by such Holder to the Company in
accordance with the provisions of this Section 8(c),
which address initially is, with respect to each
Holder, the address of such Holder maintained by
the Securities Registrar (as defined in the
Declaration), with a copy in like manner to the
Purchaser;
(2) if to you, initially at the address set
forth in the Purchase Agreement; and
(3) if to the Company or the Trust, initially
at the address set forth in the Purchase Agreement.
All such notices and communications shall be deemed to have been
duly given when received.
The Purchaser, the Trust or the Company by notice to the other
may designate additional or different addresses for subsequent notices
or communications.
(d) Successors and Assigns. This Agreement shall inure to the
benefit of and be binding upon the successors and assigns of each of
the parties, including, without the need for an express assignment or
any consent by the Company or the Trust thereto, subsequent Holders of
Securities and/or Exchange Securities. The Trust and the Company
hereby agree to extend the benefits of this Agreement to any Holder of
Securities and/or Exchange Securities and any such Holder may
specifically enforce the provisions of this Agreement as if an
original party hereto.
(e) 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.
(f) Headings. The headings in this Agreement are for convenience
of reference only and shall not limit or otherwise affect the meaning
hereof.
(g) Governing Law. This Agreement shall be governed by and
construed in accordance with the internal laws of the State of New
York applicable to agreements made and to be performed in said State.
(h) Severability. In the event that any one of more of the
provisions contained herein, or the application thereof in any
circumstances, is held invalid, illegal or unenforceable in any
respect for any reason, the validity, legality and enforceability of
any such provision in every other respect and of the remaining
provisions hereof shall not be in any way impaired or affected
thereby, it being intended that all of the rights and privileges of
the parties shall be enforceable to the fullest extent permitted by
law.
(i) Securities Held by the Trust or the Company. Whenever the
consent or approval of Holders of a specified percentage of
liquidation amount or principal amount, as the case may be, of
Securities or Exchange Securities is required hereunder, Securities or
Exchange Securities, as applicable, held by the Trust or the Company
or their respective Affiliates (other than subsequent Holders of
Securities or Exchange Securities if such subsequent Holders are
deemed to be Affiliates solely by reason of their holdings of such
Securities or Exchange Securities) shall not be counted in determining
whether such consent or approval was given by the Holders of such
required percentage.
Please confirm that the foregoing correctly sets forth the agreement among
the Trust, the Company and you.
Very truly yours,
UNION STATE CAPITAL TRUST I
by: /s/
---------------------------------
Name:
Title:
U.S.B. HOLDING CO., INC.
by: /s/
---------------------------------
Name:
Title:
Accepted in New York, New York
February 5, 1997
KEEFE, BRUYETTE & WOODS, INC.
by:
_______________________
Name:
Title:
ANNEX A
Each broker-dealer that receives Exchange Securities for its own account
pursuant to the Exchange Offer must acknowledge that it will deliver a
prospectus in connection with any resale of such Exchange 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 brokerdealer in connection with
resales of Exchange Securities received in exchange for Securities acquired by
such brokerdealer as a result of market-making activities or other trading
activities. The Trust and the Company have agreed that, ending on the close of
business on the 180th day following the Expiration Date (as defined herein), it
will make this Prospectus available to any broker-dealer for use in connection
with any such resale. See "Plan of Distribution".
ANNEX B
Each broker-dealer that receives Exchange Securities for its own account in
exchange for Securities, where such Securities were acquired by such
broker-dealer as a result of market-making activities or other trading
activities, must acknowledge that it will deliver a prospectus in connection
with any resale of such Exchange Securities. See "Plan of Distribution".
ANNEX C
Plan of Distribution
Each broker-dealer that receives Exchange Securities for its own account
pursuant to the Exchange Offer must acknowledge that it will deliver a
prospectus in connection with any resale of such Exchange Securities. This
Prospectus, as it may be amended or supplemented from time to time, may be used
by a broker-dealer in connection with resales of Exchange Securities received in
exchange for Securities where such Securities were acquired by such
broker-dealer as a result of market-making activities or other trading
activities. The Trust and the Company have agreed that, starting on the
Expiration Date and ending on the close of business on the 180th day following
the Expiration Date, it will make this Prospectus, as amended or supplemented,
available to any broker-dealer for use in connection with any such resale. In
addition, until ___________, 199__, all dealers effecting transactions in the
Exchange Securities may be required to deliver a prospectus.
The Trust and the Company will not receive any proceeds from any sale of
Exchange Securities by brokerdealers. Exchange Securities received by
broker-dealers for their own account pursuant to the Exchange Offer may be sold
from time to time in one or more transactions in the over-the-counter market, in
negotiated transactions, through the writing of options on the Exchange
Securities or a combination of such methods of resale, at market prices
prevailing at the time of resale, at prices related to such prevailing market
prices or at negotiated prices. Any such resale may be made directly to
purchasers or to or through brokers or dealers who may receive compensation in
the form of commissions or concessions from any such broker-dealer and/or the
purchasers of any such Exchange Securities. Any brokerdealer that resells
Exchange Securities that were received by it for its own account pursuant to the
Exchange Offer and any broker or dealer that participates in a distribution of
such Exchange Securities may be deemed to be an "underwriter" within the meaning
of the Securities Act and any profit of any such resale of Exchange Securities
and any commissions or concessions received by any such persons may be deemed to
be underwriting compensation under the Securities Act. The Letter of Transmittal
states that by acknowledging that it will deliver and by delivering a
prospectus, a broker-dealer will not be deemed to admit that it is an
"underwriter" within the meaning of the Securities Act.
For a period of 180 days after the Expiration Date, the Trust and the Company
will promptly send additional copies of this Prospectus and any amendment or
supplement to this Prospectus to any broker-dealer that requests such documents
in the Letter of Transmittal. The Trust and the Company have agreed to pay all
expenses incident to the Exchange Offer (including the expenses of one counsel
for the holders of the Securities) other than commissions or concessions of any
brokers or dealers and will indemnify the holders of the Securities (including
any broker-dealers) against certain liabilities, including liabilities under the
Securities Act.
[If applicable, add information required by Regulation S-K Items 507 and/or
508.]
ANNEX D
Rider A
CHECK HERE IF YOU ARE A BROKER-DEALER AND WISH TO RECEIVE 10
ADDITIONAL COPIES OF THE PROSPECTUS AND 10 COPIES OF ANY AMENDMENTS OR
SUPPLEMENTS THERETO.
Name:__________________________________________
Address: ______________________________________
______________________________________
Rider B
If the undersigned is not a broker-dealer, the undersigned represents that
it is not engaged in, and does not intend to engage in, a distribution of
Exchange Securities. If the undersigned is a broker-dealer that will receive
Exchange Securities for its own account in exchange for Securities, it
represents that the Securities to be exchanged for Exchange Securities were
acquired by it as a result of market-making activities or other trading
activities and acknowledges that it will deliver a prospectus in connection with
any resale of such Exchange Securities; however, by so acknowledging and by
delivering a prospectus, the undersigned will not be deemed to admit that it is
an "underwriter" within the meaning of the Securities Act.
ANNEX E
FORM OF LETTER TO BE PROVIDED BY ISSUER TO
THE DEPOSITORY TRUST COMPANY
Union State Capital Trust I
U.S.B. Holding Co., Inc.
100 Dutch Hill Road
Orangeburg, New York 10962
The Depository Trust Company
7 Hanover Square, 23rd Floor
New York, NY 10004
Re: 9.58% Capital Securities (the "Securities")
of Union State Capital Trust I, fully and
unconditionally guaranteed by U.S.B. Holding
Co., Inc.
Ladies and Gentlemen:
Please be advised that the Securities and Exchange Commission has declared
effective a Registration Statement on Form S-3 under the Securities Act of 1933
with regard to all of the Securities referenced above. Accordingly, there is no
longer any restriction as to whom such Securities may be sold and any
restrictions on the CUSIP designation are no longer appropriate and may be
removed. I understand that upon receipt of this letter, DTC will remove any stop
or restriction on its system with respect to this issue.
As always, please do not hesitate to call if we can be of further
assistance.
UNION STATE CAPITAL TRUST I
by: /s/
----------------------------------
Authorized Officer
U.S.B. HOLDING CO., INC.
by: /s/
----------------------------------
Authorized Officer
[Letterhead of Cadwalader, Wickersham & Taft]
June 6, 1997
U.S.B. Holding Co., Inc.
Union State Capital Trust I
c/o U.S.B. Holding Co., Inc.
100 Dutch Hill Road
Orangeburg, New York 10962
Re: Exchange Offer of U.S.B. Holding Co., Inc.
and Union State Capital Trust I
----------------------------------------------
Ladies and Gentlemen:
We have acted as special counsel to U.S.B. Holding Co., Inc., a corporation
organized under the laws of the State of Delaware (the "Company"), and Union
State Capital Trust I, a business trust formed under the Business Trust Act of
the State of Delaware (Chapter 38, Title 12, of the Delaware Code, 12 Del. L.
Sec. 3801 et seq.) (the "Trust"), in connection with the preparation of the
Registration Statement on Form S-4 filed by the Company and the Trust with
respect to the registration under the Securities Act of 1933, as amended (the
"Act"), of (i) the 9.58% Series B Capital Securities (the "New Capital
Securities") to be issued by the Trust, (ii) the guarantee by the Company of
payments of cash distributions and payments on liquidation of the Trust or upon
redemption of the New Capital Securities (the "New Guarantee"), and (iii) the
Series B Junior Subordinated Debt Securities due February 1, 2027 (the "New
Junior Subordinated Debt Securities") to be issued by the Company.
In connection with this opinion, we have examined originals or copies,
certified or otherwise identified to our satisfaction, of the following: (i) the
Registration Statement on Form S-4 as filed by the Company and the Trust with
the Securities and Exchange Commission (the "Commission") on June 6, 1997 under
the Act relating to the registration of the New Capital Securities, the New
Guarantee and the New Junior Subordinated Debt Securities (the "Registration
Statement"); (ii) an executed copy of the Registration Agreement, dated as of
February 5, 1997 (the "Registration Agreement"), among the Company, the
Trust and Keefe, Bruyette & Woods, Inc.; (iii) an executed copy of the Junior
Subordinated Indenture, dated as of February 5, 1997 (the "Indenture"), between
The Chase Manhattan Bank, as indenture trustee, and the Company; (iv) an
executed copy of the Amended and Restated Declaration of Trust of the Trust,
dated as of February 5, 1997 (the "Declaration"), among Thomas E. Hales, Michael
H. Fury, Raymond J. Crotty and Steven T. Sabatini, as administrative trustees,
The Chase Manhattan Bank, as property trustee and Chase Manhattan Bank Delaware,
as Delaware trustee; (v) the form of the New Guarantee; and (vi) the Certificate
of Incorporation and Bylaws of the Company. We have also examined originals or
copies, certified or otherwise identified to our satisfaction, of such records
of the Company and such agreements, certificates of public officials,
certificates of officers or other representatives of the Company and others, and
such other documents, certificates and records as we have deemed necessary or
appropriate as a basis for the opinions set forth herein.
For purposes of our opinion, we have assumed the legal capacity of all
natural persons, the genuineness of all signatures, the authenticity of all
documents submitted to us as originals, the conformity to original documents of
all documents submitted to us as certified, conformed or photostatic copies, and
the authenticity of the originals of such latter documents. In making our
examination of documents executed by parties other than the Company, we have
assumed that such parties had the power, corporate or other, to enter into and
perform all obligations thereunder and have also assumed the due authorization
by all requisite action, corporate or other, and the execution and delivery by
such parties of such documents. We have also assumed the validity and binding
effect of such documents on all parties other than the Company. As to any facts
material to the opinions expressed herein that we did not independently
establish or verify, we have relied upon oral or written statements and
representations of officers and other representatives of the Company, the
trustees and other representatives of the Trust and others.
Members of our firm are admitted to the Bar of the State of New York, and
we do not express any opinion as to the laws of any other jurisdiction other
than the General Corporation Law of the State of Delaware and the federal laws
of the United States of America to the extent referred to specifically herein.
Based upon the foregoing and subject to the limitations, qualifications,
exceptions and assumptions set forth herein, we are of the opinion that the New
Guarantee has been duly authorized by the Company, and when (i) the Registration
Statement becomes effective, (ii) the New Guarantee, the Declaration and the
Indenture have been qualified under the Trust Indenture Act of 1939, as amended,
and (iii) the New Guarantee is duly executed and delivered by the Company and
issued in the exchange offer as contemplated by the Registration Agreement and
the Registration Statement, the New Guarantee will constitute a valid and
legally binding agreement of the Company in favor of the holders of New Capital
Securities, enforceable against the Company in accordance with its terms, except
to the extent that enforcement thereof may be limited by bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium, or other similar laws now or
hereafter in effect relating to or affecting creditors' rights generally,
general equitable principles (regardless of whether considered in a proceeding
at law or in equity) and by an implied covenant of good faith and fair dealing.
We hereby consent to the filing of this opinion with the Commission as an
exhibit to the Registration Statement. We also consent to the reference to our
firm under the caption "Legal Matters" in the prospectus that forms a part of
the Registration Statement. In giving this consent, we do not thereby admit that
we are included in the category of persons whose consent is required under
Section 7 of the Act or the rules and regulations of the Commission. This
opinion is expressed as of the date hereof, and we disclaim any undertaking to
advise you of any subsequent changes in the facts stated or assumed herein or of
any subsequent changes in applicable law.
This opinion is furnished to you solely for your benefit in connection with
the preparation of the Registration Statement and is not to be used, circulated,
quoted or otherwise referred to for any other purpose or relied upon by any
other person without our express written permission.
Very truly yours,
/s/ Cadwalader, Wickersham & Taft
----------------------------------
Cadwalader, Wickersham & Taft
Exhibit 5.2
[Letterhead of Ashby & Geddes]
June 6, 1997
U.S.B. Holding Co., Inc.
Union State Capital Trust I
100 Dutch Hill Road
Orangeburg, New York 10962
Re: Exchange of Capital Securities
------------------------------
Gentlemen:
We have acted as special Delaware counsel to U.S.B. Holding Co., Inc., a
Delaware corporation (the "Company"), and Union State Capital Trust I (the
"Trust"), a business trust formed under the Business Trust Act of the State of
Delaware, 12 Del.C. Section 3801 et seq., in connection with the preparation of
a registration statement on Form S-4 filed by the Company and the Trust with
respect to the registration of (i) 20,000 9.58% Series B Capital Securities
(liquidation amount of $1,000 per security) of the Trust (the "New Capital
Securities") to be exchanged for all or any portion of the Trust's outstanding
9.58% Series A Capital Securities (the "Old Capital Securities"); (ii) the
Company's Series B Junior Subordinated Debt Securities due February 1, 2027 (the
"New Junior Subordinated Debt Securities") to be exchanged for a like aggregate
principal amount of its Series A Junior Subordinated Debt Securities due
February 1, 2027; and (iii) the Company's guarantee of payments of cash
distributions and payments on liquidation of the Trust or redemption of the New
Capital Securities to be exchanged for a like guarantee in respect of the Old
Capital Securities.
In connection with this opinion, we have examined the following: (i) the
registration statement on Form S-4 as filed by the Company and the Trust with
the Securities and Exchange Commission on June 6, 1997 (the "Registration
Statement"); (ii) a certified copy of the certificate of trust (the "Certificate
of Trust") of the Trust, filed with the Secretary of State of the State of
Delaware on January 27, 1997; (iii) a signed copy of the Declaration of Trust
(the "Declaration") among the Company, as depositor, Thomas E. Hales, Michael H.
Fury, Raymond J. Crotty and Steven T. Sabatini, as administrative trustees (the
"Administrative Trustees"), and Chase Manhattan Bank Delaware, as trustee (the
"Trustee"); (iv) an executed copy of the Amended and Restated Declaration of
Trust among the Company, The Chase Manhattan Bank, as property trustee (the
"Property Trustee"), and the Administrative Trustees; (v) a signed copy of the
Registration Agreement, dated as of February 5, 1997, among the Trust, the
Company, and Keefe, Bruyette & Woods, Inc. (the "Registration Agreement"); (vi)
the form of the New Capital Securities and a specimen certificate thereof; (vii)
the form of the New Junior Subordinated Debt Securities and a specimen
certificate thereof (the Registration Statement, Certificate of Trust,
Declaration, Amended Declaration, Registration Agreement, form of New Capital
Securities, and form of New Junior Subordinated Debt Securities are hereinafter
collectively referred to as the "Documents"); (viii) certificates of good
standing for the Company and the Trust from the Delaware Secretary of State
dated June 6, 1997; and (ix) the certificate of incorporation and bylaws of the
Company.
Our opinion is predicated upon the accuracy of all material information
that we have received. For purposes of our opinion, we have assumed the legal
capacity of all natural persons, the genuineness of all signatures, the
conformity to original documents of all documents submitted to us as certified,
conformed or photostatic copies, and the authenticity of the originals of such
latter documents. In making our examination of the Documents, we have assumed
that, with the exception of the Company and the Trust, the parties to the
Documents have the power, corporate and other, to enter into and perform all
obligations thereunder and have also assumed the due authorization by all
requisite action, corporate and other, and the execution and delivery by such
parties of such documents. We have also assumed the validity and binding effect
of such documents on all parties other than the Company and the Trust. We have
not independently established or verified any facts material to this opinion.
Members of our firm are admitted to the Bar of the Supreme Court of the
State of Delaware only, and we do not express any opinion as to the laws of any
other jurisdiction.
Based upon the foregoing and subject to the limitations, qualifications,
exceptions and assumptions set forth herein, we are of the opinion that when the
Registration Statement becomes effective:
1. The New Junior Subordinated Debt Securities have been duly
authorized for issuance by the Company, and, when properly issued, the New
Junior Subordinated Debt Securities will constitute valid and binding
obligations of the Company enforceable against the Company in accordance
with their terms, except to the extent that enforcement thereof may be
limited by (1) bankruptcy, insolvency, reorganization, moratorium,
fraudulent conveyance or other similar laws now or hereafter in effect
relating to creditors' rights generally and (2) general principals of
equity (regardless of whether enforceability is considered in a proceeding
at law or in equity).
2. The New Capital Securities have been duly authorized for
issuance by the Trust, and, when properly issued, the New Capital
Securities will represent, subject to the qualifications set forth in
paragraph 3 below, fully paid and nonassessable undivided beneficial
interests in the assets of the Trust and will entitle the holders thereof
to the benefits of the Amended Declaration except to the extent that
enforcement of the Amended Declaration may be limited by (1) bankruptcy,
insolvency, reorganization, moratorium or other similar laws now or
hereafter in effect relating to creditors' rights generally and (2) general
principles of equity (regardless of whether enforcement is considered in a
proceeding in equity or at law).
3. The holders of the New Capital Securities will be entitled to
the same limitation of personal liability extended to stockholders of
private corporations for profit organized under the General Corporation Law
of the State of Delaware. We must note, however, that the holders of the
New Capital Securities may be obligated, pursuant to the Amended
Declaration, to (i) pay taxes or governmental charges arising from the
transfer of Old Capital Securities and the issuance of replacement New
Capital Securities and (ii) provide security and indemnity in connection
with requests of or directions to the Property Trustee to exercise their
rights and powers under the Amended Declaration.
This opinion is issued as of this date, and we assume no obligation to
advise you or others of changes in law or fact that occur after this date, even
though such changes might affect our opinion.
We hereby consent to the filing of this opinion with the Commission as an
exhibit to the Registration Statement. We also consent to the reference to our
firm under the caption "Legal Matters" in the prospectus which forms a part of
the Registration Statement. In giving this consent, we do not thereby admit that
we are included in the category of persons whose consent is required under
Section 7 of the Act or the rules and regulations of the Commission. Otherwise,
this opinion is furnished to you solely for your benefit in connection with the
Registration Statement and is not to be used, circulated, quoted or otherwise
referred to for any other purpose or relied upon by any other person without our
express written permission.
ASHBY & GEDDES
By: /s/ Ashby & Geddes
-------------------------------
For the Firm
Exhibit 8.1
[Letterhead of Cadwalader, Wickersham & Taft]
June 6, 1997
U.S.B. Holding Co., Inc.
Union State Capital Trust I
c/o U.S.B. Holding Co., Inc.
100 Dutch Hill Road
Orangeburg, New York 10962
Re: Exchange Offer of U.S.B. Holding Co., Inc.
and Union State Capital Trust I
------------------------------------------
Ladies and Gentlemen:
We have acted as special counsel to U.S.B. Holding Co., Inc., a corporation
organized under the laws of the State of Delaware (the "Company"), and Union
State Capital Trust I, a business trust formed under the Business Trust Act of
the State of Delaware (Chapter 38, Title 12, of the Delaware Code, 12 Del. L.
Sec. 3801 et seq.) (the "Trust"), in connection with the preparation of the
Registration Statement on Form S-4 filed by the Company and the Trust with
respect to the registration under the Securities Act of 1933, as amended (the
"Act"), of (i) the 9.58% Series B Capital Securities (the "New Capital
Securities") to be issued by the Trust, (ii) the guarantee by the Company of
payments of cash distributions and payments on liquidation of the Trust or
redemption of the New Capital Securities (the "New Guarantee"), and (iii) the
Series B Junior Subordinated Debt Securities due February 1, 2027 (the "New
Junior Subordinated Debt Securities") to be issued by the Company.
In connection with this opinion, we have examined originals or copies,
certified or otherwise identified to our satisfaction, of the following: (i) the
Registration Statement on Form S-4 as filed by the Company and the Trust with
the Securities and Exchange Commission (the "Commission") on June 6, 1997 under
the Act relating to the registration of the New Capital Securities, the New
Guarantee and the New Junior Subordinated Debt Securities (the "Registration
Statement"); (ii) an executed copy of the Registration Agreement, dated as of
February 5, 1997 (the "Registration Agreement"), among the Company, the
Trust and Keefe, Bruyette & Woods, Inc.; (iii) an executed copy of the Junior
Subordinated Indenture, dated as of February 5, 1997 (the "Indenture"), between
The Chase Manhattan Bank, as indenture trustee, and the Company; (iv) an
executed copy of the Amended and Restated Declaration of Trust of the Trust,
dated as of February 5, 1997 (the "Declaration"), among Thomas E. Hales, Michael
H. Fury, Raymond J. Crotty and Steven T. Sabatini, as administrative trustees,
The Chase Manhattan Bank, as property trustee and Chase Manhattan Bank Delaware,
as Delaware trustee; (v) the form of the New Guarantee; and (vi) the Certificate
of Incorporation and Bylaws of the Company. We have also examined originals or
copies, certified or otherwise identified to our satisfaction, of such records
of the Company and such agreements, certificates of public officials,
certificates of officers or other representatives of the Company and others, and
such other documents, certificates and records as we have deemed necessary or
appropriate as a basis for the opinions set forth herein.
For purposes of our opinion, we have assumed the legal capacity of all
natural persons, the genuineness of all signatures, the authenticity of all
documents submitted to us as originals, the conformity to original documents of
all documents submitted to us as certified, conformed or photostatic copies, and
the authenticity of the originals of such latter documents. In making our
examination of documents executed by parties other than the Company, we have
assumed that such parties had the power, corporate or other, to enter into and
perform all obligations thereunder and have also assumed the due authorization
by all requisite action, corporate or other, and the execution and delivery by
such parties of such documents. We have also assumed the validity and binding
effect of such documents on all parties other than the Company. As to any facts
material to the opinions expressed herein that we did not independently
establish or verify, we have relied upon oral or written statements and
representations of officers and other representatives of the Company, the
trustees and other representatives of the Trust and others.
We do not express any opinion as to the laws of any other jurisdiction
other than the federal laws of the United States of America to the extent
referred to specifically herein.
Based upon the foregoing and subject to the limitations,
qualifications, exceptions and assumptions set forth herein, we are of the
opinion that:
(i) The Trust will be classified as a grantor trust for federal income
tax purposes and not as an association (or publicly traded partnership)
taxable as a corporation.
(ii) The New Junior Subordinated Debt Securities will be classified as
indebtedness of the Company for United States federal income tax purposes.
(iii) The statements made under the heading "Certain United States
Federal Income Tax Considerations" in the Registration Statement, in so far
as such statements purport to summarize certain federal income tax laws of
the United States, constitute a fair summary of the principal United States
federal income tax consequences of an investment in the New Capital
Securities.
We hereby consent to the filing of this opinion with the Commission as an
exhibit to the Registration Statement. We also consent to the reference to our
firm under the caption "Legal Matters" in the prospectus that forms a part of
the Registration Statement. In giving this consent, we do not thereby admit that
we are included in the category of persons whose consent is required under
Section 7 of the Act or the rules and regulations of the Commission. This
opinion is expressed as of the date hereof, and we disclaim any undertaking to
advise you of any subsequent changes in the facts stated or assumed herein or of
any subsequent changes in applicable law.
<PAGE>
This opinion is furnished to you solely for your benefit in connection with
the preparation of the Registration Statement and is not to be used, circulated,
quoted or otherwise referred to for any other purpose or relied upon by any
other person without our express written permission.
Very truly yours,
/s/ Cadwalader, Wickersham & Taft
USB - Earnings to Fixed Charges
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C>
Qtr 1 97 Qtr 1 96 1996 1995 1994 1993 1992
Without Deposit Interest
pre tax earnings 3,345.00 3,343.00 14,188.00 13,638.00 10,126.00 9,805.00 7,449.00
interest on borrowings 1,190.00 180.00 1,827.00 880.00 588.00 216.00 142.00
1/3 rent expense 54.33 39.00 177.00 176.67 150.67 141.33 119.33
interest on deposits - - - - - - -
4,589.33 3,562.00 16,192.00 14,694.67 10,864.67 10,162.33 7,710.33
fixed charges 1,244.33 219.00 2,004.00 1,056.67 738.67 357.33 261.33
ratio earnings to fixed 3.69 16.26 8.08 13.91 14.71 28.44 29.50
charges
</TABLE>
USB - Earnings to Fixed Charges and Preferred Stock
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C>
0.30 0.33 0.34 0.32 0.31 0.37 0.36
Qtr 1 97 Qtr 1 96 1996 1995 1994 1993 1992
Without Deposit Interest
pre tax earnings 3,345.00 3,343.00 14,188.00 13,638.00 10,126.00 9,805.00 7,449.00
interest on borrowings 1,190.00 180.00 1,827.00 880.00 588.00 216.00 142.00
1/3 rent expense 54.33 39.00 177.00 176.67 150.67 141.33 119.33
interest on deposits - - - - - - -
4,589.33 3,562.00 16,192.00 14,694.67 10,864.67 10,162.33 7,710.33
preferred dividend 48.77 117.38 443.09 460.60 455.67 518.72 533.19
fixed charges 1,293.10 336.38 2,447.09 1,517.27 1,194.34 876.05 794.52
ratio earnings to fixed 3.55 10.59 6.62 9.68 9.10 11.60 9.70
charges
</TABLE>
USB - Earnings to Fixed Charges and Preferred Stock (Proforma)
<TABLE>
<S> <C> <C> <C> <C>
Qtr 1 97 Qtr 1 96 1996
Without Deposit Interest
20,000.00
pre tax earnings 3,345.00 3,343.00 14,188.00 9.58%
interest on borrowings 1,190.00 180.00 1,827.00 1,916.00
capital securities - - - 33.33
1/3 rent expense 54.33 39.00 177.00 1,949.33
interest on deposits - - - -
4,589.33 3,562.00 16,192.00 1,949.33
487.33
fixed charges 1,731.67 706.33 3,953.33
ratio earnings to fixed charges 2.65 5.04 4.10
</TABLE>
USB - Earnings to Fixed Charges
<TABLE>
<CAPTION>
Qtr 1 97 Qtr 1 96 1996 1995 1994 1993 1992
<S> <C> <C> <C> <C> <C> <C> <C>
With Deposit Interest
pre tax earnings 3,345.00 3,343.00 14,188.00 13,638.00 10,126.00 9,805.00 7,449.00
interest on borrowings 1,190.00 180.00 1,827.00 880.00 588.00 216.00 142.00
1/3 rent expense 54.33 39.00 177.00 176.67 150.67 141.33 119.33
interest on deposits 6,760.00 6,065.00 25,774.00 23,438.00 15,345.00 12,922.00 15,151.00
11,349.33 9,627.00 41,966.00 38,132.67 26,209.67 23,084.33 22,861.33
fixed charges 8,004.33 6,284.00 27,778.00 24,494.67 16,083.67 13,279.33 15,412.33
ratio earnings to fixed 1.42 1.53 1.51 1.56 1.63 1.74 1.48
charges
</TABLE>
USB - Earnings to Fixed Charges and Preferred Stock
<TABLE>
<CAPTION>
0.30 0.33 0.34 0.32 0.31 0.37 0.36
Qtr 1 97 Qtr 1 96 1996 1995 1994 1993 1992
<S> <C> <C> <C> <C> <C> <C> <C>
With Deposit Interest
per tax earnings 3,345.00 3,343.00 14,188.00 13,638.00 10,126.00 9,805.00 7,449.00
interest on borrowings 1,190.00 180.00 1,827.00 880.00 588.00 216.00 142.00
1/3 rent expense 54.33 39.00 177.00 176.67 150.67 141.33 119.33
interest on deposits 6,760.00 6,065.00 25,774.00 23,438.00 15,345.00 12,922.00 15,151.00
11,349.33 9,627.00 41,966.00 38,132.67 26,209.67 23,084.33 22,861.33
preferred dividend 48.77 117.38 443.09 460.60 455.67 518.72 533.19
fixed charges 8,053.10 6,401.38 28,221.09 24,955.27 16,539.34 13,798.05 15,945.52
ratio earnings to fixed 1.41 1.50 1.49 1.53 1.58 1.67 1.43
charges
</TABLE>
USB - Earnings to Fixed Charges and Preferred Stock (Proforma)
<TABLE>
<S> <C> <C> <C>
With Deposit Interest Qtr 1 97 Qtr 1 96 1996
- ---------------------
pre tax earnings 3,345.00 3,343.00 14,188.00
interest on borrowings 1,190.00 180.00 1,827.00
capital securities - - -
1/3 rent expense 54.33 39.00 177.00
interest on deposits 6,760.00 6,065.00 25,774.00
11,349.33 9,627.00 41,966.00
fixed charges 8,491.67 6,771.33 29,727.33
ratio earnings to fixed charges 1.34 1.42 1.41
</TABLE>
[Letterhead of Deloitte & Touche LLP]
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration Statement of
U.S.B. Holding Co., Inc. (the "Corporation") on Form S-4 of our report dated
January 24, 1997 (February 5, 1997 as to Note 17), incorporated by reference in
the Corporation's 1996 Annual Report on Form 10-K and appearing in the
Corporation's 1996 Annual Report to Shareholders.
/s/ Deloitte & Touche LLP
Stamford, Connecticut
June 6, 1997
-------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
-------------------------
FORM T-1
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF
A CORPORATION DESIGNATED TO ACT AS TRUSTEE
-------------------------------------------
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF
A TRUSTEE PURSUANT TO SECTION 305(b)(2) ________
----------------------------------------
THE CHASE MANHATTAN BANK
(Exact name of trustee as specified in its charter)
New York 13-4994650
(State of incorporation (I.R.S. employer
if not a national bank) identification No.)
270 Park Avenue
New York, New York 10017
(Address of principal executive offices) (Zip Code)
William H. McDavid
General Counsel
270 Park Avenue
New York, New York 10017
Tel: (212) 270-2611
(Name, address and telephone number of agent for service)
---------------------------------------------
U. S. B. Holding Co., Inc.
(Exact name of obligor as specified in its charter)
36-3197969
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification No.)
100 Dutch Hill Road
Orangeburg, New York 10962
(Address of principal executive offices) (Zip Code)
---------------------------------------------
Junior Subordinated Debt Securities
(Title of the indenture securities)
GENERAL
Item 1. General Information.
Furnish the following information as to the trustee:
(a) Name and address of each examining or supervising authority to which it
is subject.
New York State Banking Department, State House, Albany, New York 12110.
Board of Governors of the Federal Reserve System, Washington, D.C., 20551
Federal Reserve Bank of New York, District No. 2, 33 Liberty Street, New
York, N.Y.
Federal Deposit Insurance Corporation, Washington, D.C., 20429.
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
Item 2. Affiliations with the Obligor.
If the obligor is an affiliate of the trustee, describe each such
affiliation.
None.
Item 16. List of Exhibits
List below all exhibits filed as a part of this Statement of Eligibility.
1. A copy of the Articles of Association of the Trustee as now in effect,
including the Organization Certificate and the Certificates of Amendment dated
February 17, 1969, August 31, 1977, December 31, 1980, September 9, 1982,
February 28, 1985, December 2, 1991 and July 10, 1996 (see Exhibit 1 to Form T-1
filed in connection with Registration Statement No. 333-06249, which is
incorporated by reference).
2. A copy of the Certificate of Authority of the Trustee to Commence
Business (see Exhibit 2 to Form T-1 filed in connection with Registration
Statement No. 33-50010, which is incorporated by reference. On July 14, 1996, in
connection with the merger of Chemical Bank and The Chase Manhattan Bank
(National Association), Chemical Bank, the surviving corporation, was renamed
The Chase Manhattan Bank).
3. None, authorization to exercise corporate trust powers being contained
in the documents identified above as Exhibits 1 and 2.
4. A copy of the existing By-Laws of the Trustee (see Exhibit 4 to Form T-1
filed in connection with Registration Statement No. 333-06249, which is
incorporated by reference).
5. Not applicable.
6. The consent of the Trustee required by Section 321(b) of the Act (see
Exhibit 6 to Form T-1 filed in connection with Registration Statement No.
33-50010, which is incorporated by reference. On July 14, 1996, in connection
with the merger of Chemical Bank and The Chase Manhattan Bank (National
Association), Chemical Bank, the surviving corporation, was renamed The Chase
Manhattan Bank).
7. A copy of the latest report of condition of the Trustee, published
pursuant to law or the requirements of its supervising or examining authority.
8. Not applicable.
9. Not applicable.
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939 the
Trustee, The Chase Manhattan Bank, a corporation organized and existing under
the laws of the State of New York, has duly caused this statement of eligibility
to be signed on its behalf by the undersigned, thereunto duly authorized, all in
the City of New York and State of New York, on the 23rd day of May, 1997.
THE CHASE MANHATTAN BANK
By _________________________
Sheik Wiltshire
Second Vice President
Item 16. List of Exhibits
List below all exhibits filed as a part of this Statement of Eligibility.
1. A copy of the Articles of Association of the Trustee as now in effect,
including the Organization Certificate and the Certificates of Amendment dated
February 17, 1969, August 31, 1977, December 31, 1980, September 9, 1982,
February 28, 1985, December 2, 1991 and July 10, 1996 (see Exhibit 1 to Form T-1
filed in connection with Registration Statement No. 333-06249, which is
incorporated by reference).
2. A copy of the Certificate of Authority of the Trustee to Commence
Business (see Exhibit 2 to Form T-1 filed in connection with Registration
Statement No. 33-50010, which is incorporated by reference. On July 14, 1996, in
connection with the merger of Chemical Bank and The Chase Manhattan Bank
(National Association), Chemical Bank, the surviving corporation, was renamed
The Chase Manhattan Bank).
3. None, authorization to exercise corporate trust powers being contained
in the documents identified above as Exhibits 1 and 2.
4. A copy of the existing By-Laws of the Trustee (see Exhibit 4 to Form T-1
filed in connection with Registration Statement No. 333-06249, which is
incorporated by reference).
5. Not applicable.
6. The consent of the Trustee required by Section 321(b) of the Act (see
Exhibit 6 to Form T-1 filed in connection with Registration Statement No.
33-50010, which is incorporated by reference. On July 14, 1996, in connection
with the merger of Chemical Bank and The Chase Manhattan Bank (National
Association), Chemical Bank, the surviving corporation, was renamed The Chase
Manhattan Bank).
7. A copy of the latest report of condition of the Trustee, published
pursuant to law or the requirements of its supervising or examining authority.
8. Not applicable.
9. Not applicable.
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939 the
Trustee, The Chase Manhattan Bank, a corporation organized and existing under
the laws of the State of New York, has duly caused this statement of eligibility
to be signed on its behalf by the undersigned, thereunto duly authorized, all in
the City of New York and State of New York, on the 23rd day of May, 1997.
THE CHASE MANHATTAN BANK
By /s/Sheik Wiltshire
--------------------------
Sheik Wiltshire
Second Vice President
-------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
-------------------------
FORM T-1
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF
A CORPORATION DESIGNATED TO ACT AS TRUSTEE
-------------------------------------------
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF
A TRUSTEE PURSUANT TO SECTION 305(b)(2) ________
----------------------------------------
THE CHASE MANHATTAN BANK
(Exact name of trustee as specified in its charter)
New York 13-4994650
(State of incorporation (I.R.S. employer
if not a national bank) identification No.)
270 Park Avenue
New York, New York 10017
(Address of principal executive offices) (Zip Code)
William H. McDavid
General Counsel
270 Park Avenue
New York, New York 10017
Tel: (212) 270-2611
(Name, address and telephone number of agent for service)
---------------------------------------------
Union State Capital Trust I
(Exact name of obligor as specified in its charter)
13-7117454
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification No.)
100 Dutch Hill Road
Orangeburg, New York 10962
(Address of principal executive offices) (Zip Code)
---------------------------------------------
Capital Securities
(Title of the indenture securities)
GENERAL
Item 1. General Information.
Furnish the following information as to the trustee:
(a) Name and address of each examining or supervising authority to which it
is subject.
New York State Banking Department, State House, Albany, New York 12110.
Board of Governors of the Federal Reserve System, Washington, D.C., 20551
Federal Reserve Bank of New York, District No. 2, 33 Liberty Street, New
York, N.Y.
Federal Deposit Insurance Corporation, Washington, D.C., 20429.
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
Item 2. Affiliations with the Obligor.
If the obligor is an affiliate of the trustee, describe each such
affiliation.
None.
Item 16. List of Exhibits
List below all exhibits filed as a part of this Statement of Eligibility.
1. A copy of the Articles of Association of the Trustee as now in effect,
including the Organization Certificate and the Certificates of Amendment dated
February 17, 1969, August 31, 1977, December 31, 1980, September 9, 1982,
February 28, 1985, December 2, 1991 and July 10, 1996 (see Exhibit 1 to Form T-1
filed in connection with Registration Statement No. 333-06249, which is
incorporated by reference).
2. A copy of the Certificate of Authority of the Trustee to Commence
Business (see Exhibit 2 to Form T-1 filed in connection with Registration
Statement No. 33-50010, which is incorporated by reference. On July 14, 1996, in
connection with the merger of Chemical Bank and The Chase Manhattan Bank
(National Association), Chemical Bank, the surviving corporation, was renamed
The Chase Manhattan Bank).
3. None, authorization to exercise corporate trust powers being contained
in the documents identified above as Exhibits 1 and 2.
4. A copy of the existing By-Laws of the Trustee (see Exhibit 4 to Form T-1
filed in connection with Registration Statement No. 333-06249, which is
incorporated by reference).
5. Not applicable.
6. The consent of the Trustee required by Section 321(b) of the Act (see
Exhibit 6 to Form T-1 filed in connection with Registration Statement No.
33-50010, which is incorporated by reference. On July 14, 1996, in connection
with the merger of Chemical Bank and The Chase Manhattan Bank (National
Association), Chemical Bank, the surviving corporation, was renamed The Chase
Manhattan Bank).
7. A copy of the latest report of condition of the Trustee, published
pursuant to law or the requirements of its supervising or examining authority.
8. Not applicable.
9. Not applicable.
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939 the
Trustee, The Chase Manhattan Bank, a corporation organized and existing under
the laws of the State of New York, has duly caused this statement of eligibility
to be signed on its behalf by the undersigned, thereunto duly authorized, all in
the City of New York and State of New York, on the 23rd day of May, 1997.
THE CHASE MANHATTAN BANK
By _________________________
Sheik Wiltshire
Second Vice President
Item 16. List of Exhibits
List below all exhibits filed as a part of this Statement of Eligibility.
1. A copy of the Articles of Association of the Trustee as now in effect,
including the Organization Certificate and the Certificates of Amendment dated
February 17, 1969, August 31, 1977, December 31, 1980, September 9, 1982,
February 28, 1985, December 2, 1991 and July 10, 1996 (see Exhibit 1 to Form T-1
filed in connection with Registration Statement No. 333-06249, which is
incorporated by reference).
2. A copy of the Certificate of Authority of the Trustee to Commence
Business (see Exhibit 2 to Form T-1 filed in connection with Registration
Statement No. 33-50010, which is incorporated by reference. On July 14, 1996, in
connection with the merger of Chemical Bank and The Chase Manhattan Bank
(National Association), Chemical Bank, the surviving corporation, was renamed
The Chase Manhattan Bank).
3. None, authorization to exercise corporate trust powers being contained
in the documents identified above as Exhibits 1 and 2.
4. A copy of the existing By-Laws of the Trustee (see Exhibit 4 to Form T-1
filed in connection with Registration Statement No. 333-06249, which is
incorporated by reference).
5. Not applicable.
6. The consent of the Trustee required by Section 321(b) of the Act (see
Exhibit 6 to Form T-1 filed in connection with Registration Statement No.
33-50010, which is incorporated by reference. On July 14, 1996, in connection
with the merger of Chemical Bank and The Chase Manhattan Bank (National
Association), Chemical Bank, the surviving corporation, was renamed The Chase
Manhattan Bank).
7. A copy of the latest report of condition of the Trustee, published
pursuant to law or the requirements of its supervising or examining authority.
8. Not applicable.
9. Not applicable.
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939 the
Trustee, The Chase Manhattan Bank, a corporation organized and existing under
the laws of the State of New York, has duly caused this statement of eligibility
to be signed on its behalf by the undersigned, thereunto duly authorized, all in
the City of New York and State of New York, on the 23rd day of May, 1997.
THE CHASE MANHATTAN BANK
By /s/Sheik Wiltshire
--------------------------
Sheik Wiltshire
Second Vice President
-------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
-------------------------
FORM T-1
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF
A CORPORATION DESIGNATED TO ACT AS TRUSTEE
-------------------------------------------
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF
A TRUSTEE PURSUANT TO SECTION 305(b)(2) ________
----------------------------------------
THE CHASE MANHATTAN BANK
(Exact name of trustee as specified in its charter)
New York 13-4994650
(State of incorporation (I.R.S. employer
if not a national bank) identification No.)
270 Park Avenue
New York, New York 10017
(Address of principal executive offices) (Zip Code)
William H. McDavid
General Counsel
270 Park Avenue
New York, New York 10017
Tel: (212) 270-2611
(Name, address and telephone number of agent for service)
---------------------------------------------
Union State Capital Trust I
(Exact name of obligor as specified in its charter)
13-711454
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification No.)
100 Dutch Hill Road
Orangeburg, New York 10962
(Address of principal executive offices) (Zip Code)
---------------------------------------------
Guarantee of Capital Securities
(Title of the indenture securities)
GENERAL
Item 1. General Information.
Furnish the following information as to the trustee:
(a) Name and address of each examining or supervising authority to which it
is subject.
New York State Banking Department, State House, Albany, New York 12110.
Board of Governors of the Federal Reserve System, Washington, D.C., 20551
Federal Reserve Bank of New York, District No. 2, 33 Liberty Street, New
York, N.Y.
Federal Deposit Insurance Corporation, Washington, D.C., 20429.
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
Item 2. Affiliations with the Obligor.
If the obligor is an affiliate of the trustee, describe each such
affiliation.
None.
Item 16. List of Exhibits
List below all exhibits filed as a part of this Statement of Eligibility.
1. A copy of the Articles of Association of the Trustee as now in effect,
including the Organization Certificate and the Certificates of Amendment dated
February 17, 1969, August 31, 1977, December 31, 1980, September 9, 1982,
February 28, 1985, December 2, 1991 and July 10, 1996 (see Exhibit 1 to Form T-1
filed in connection with Registration Statement No. 333-06249, which is
incorporated by reference).
2. A copy of the Certificate of Authority of the Trustee to Commence
Business (see Exhibit 2 to Form T-1 filed in connection with Registration
Statement No. 33-50010, which is incorporated by reference. On July 14, 1996, in
connection with the merger of Chemical Bank and The Chase Manhattan Bank
(National Association), Chemical Bank, the surviving corporation, was renamed
The Chase Manhattan Bank).
3. None, authorization to exercise corporate trust powers being contained
in the documents identified above as Exhibits 1 and 2.
4. A copy of the existing By-Laws of the Trustee (see Exhibit 4 to Form T-1
filed in connection with Registration Statement No. 333-06249, which is
incorporated by reference).
5. Not applicable.
6. The consent of the Trustee required by Section 321(b) of the Act (see
Exhibit 6 to Form T-1 filed in connection with Registration Statement No.
33-50010, which is incorporated by reference. On July 14, 1996, in connection
with the merger of Chemical Bank and The Chase Manhattan Bank (National
Association), Chemical Bank, the surviving corporation, was renamed The Chase
Manhattan Bank).
7. A copy of the latest report of condition of the Trustee, published
pursuant to law or the requirements of its supervising or examining authority.
8. Not applicable.
9. Not applicable.
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939 the
Trustee, The Chase Manhattan Bank, a corporation organized and existing under
the laws of the State of New York, has duly caused this statement of eligibility
to be signed on its behalf by the undersigned, thereunto duly authorized, all in
the City of New York and State of New York, on the 23rd day of May, 1997.
THE CHASE MANHATTAN BANK
By _________________________
Sheik Wiltshire
Second Vice President
Item 16. List of Exhibits
List below all exhibits filed as a part of this Statement of Eligibility.
1. A copy of the Articles of Association of the Trustee as now in effect,
including the Organization Certificate and the Certificates of Amendment dated
February 17, 1969, August 31, 1977, December 31, 1980, September 9, 1982,
February 28, 1985, December 2, 1991 and July 10, 1996 (see Exhibit 1 to Form T-1
filed in connection with Registration Statement No. 333-06249, which is
incorporated by reference).
2. A copy of the Certificate of Authority of the Trustee to Commence
Business (see Exhibit 2 to Form T-1 filed in connection with Registration
Statement No. 33-50010, which is incorporated by reference. On July 14, 1996, in
connection with the merger of Chemical Bank and The Chase Manhattan Bank
(National Association), Chemical Bank, the surviving corporation, was renamed
The Chase Manhattan Bank).
3. None, authorization to exercise corporate trust powers being contained
in the documents identified above as Exhibits 1 and 2.
4. A copy of the existing By-Laws of the Trustee (see Exhibit 4 to Form T-1
filed in connection with Registration Statement No. 333-06249, which is
incorporated by reference).
5. Not applicable.
6. The consent of the Trustee required by Section 321(b) of the Act (see
Exhibit 6 to Form T-1 filed in connection with Registration Statement No.
33-50010, which is incorporated by reference. On July 14, 1996, in connection
with the merger of Chemical Bank and The Chase Manhattan Bank (National
Association), Chemical Bank, the surviving corporation, was renamed The Chase
Manhattan Bank).
7. A copy of the latest report of condition of the Trustee, published
pursuant to law or the requirements of its supervising or examining authority.
8. Not applicable.
9. Not applicable.
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939 the
Trustee, The Chase Manhattan Bank, a corporation organized and existing under
the laws of the State of New York, has duly caused this statement of eligibility
to be signed on its behalf by the undersigned, thereunto duly authorized, all in
the City of New York and State of New York, on the 23rd day of May, 1997.
THE CHASE MANHATTAN BANK
By /s/Sheik Wiltshire
--------------------------
Sheik Wiltshire
Second Vice President
LETTER OF TRANSMITTAL
UNION STATE CAPITAL TRUST I
OFFER TO EXCHANGE ITS
9.58% SERIES B CAPITAL SECURITIES
(LIQUIDATION AMOUNT $1,000 PER CAPITAL SECURITY)
WHICH HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933
FOR ANY AND ALL OF ITS OUTSTANDING
9.58% SERIES A CAPITAL SECURITIES
(LIQUIDATION AMOUNT $1,000 PER CAPITAL SECURITY)
UNCONDITIONALLY GUARANTEED, AS DESCRIBED HEREIN, BY
U.S.B. HOLDING CO., INC.
PURSUANT TO THE PROSPECTUS DATED ________,1997
- --------------------------------------------------------------------------------
THE EXCHANGE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M., NEW YORK CITY
TIME, ON ________, 1997, UNLESS THE OFFER IS EXTENDED. TENDERS MAY BE WITHDRAWN
PRIOR TO 5:00 P.M., NEW YORK CITY TIME, ON THE EXPIRATION DATE.
- --------------------------------------------------------------------------------
The Exchange Agent For The Exchange Offer Is:
The Chase Manhattan Bank
<TABLE>
<CAPTION>
<S> <C> <C>
By Hand Or Overnight Delivery: Facsimile Transmissions: By Registered Or Certified Mail:
The Chase Manhattan Bank (Eligible Institutions Only) The Chase Manhattan Bank
450 West 33rd Street, 15th Floor 450 West 33rd Street, 15th Floor
New York, New York 10001-2697 (212) 946-3082 New York, New York 10001-2697
Attention: Global Trust Services Attention: Global Trust Services
Shiek Wiltshire To Confirm by Telephone Shiek Wiltshire
or for Information Call:
(212) 946-8150
</TABLE>
Delivery of this Letter of Transmittal to an address other than as set
forth above or transmission of this Letter of Transmittal via facsimile to a
number other than as set forth above does not constitute a valid delivery.
THE INSTRUCTIONS CONTAINED HEREIN SHOULD BE READ CAREFULLY BEFORE THIS
LETTER OF TRANSMITTAL IS COMPLETED.
Capitalized terms used but not defined herein shall have the same meaning
given them in the Prospectus (as defined below).
To participate in the Exchange Offer (as defined below), Holders must
tender by (a) book-entry transfer pursuant to the procedures set forth in the
Prospectus under "The Exchange Offer -- Procedures for Tendering Old Capital
Securities," or (b) forwarding Certificates herewith. Holders who are DTC
Participants tendering by book-entry transfer must execute such tender through
the Automated Tender Offer Program ("ATOP") of DTC. A Holder using ATOP should
transmit its acceptance to DTC on or prior to the Expiration Date. DTC will
verify such acceptance, execute a book-entry transfer of the tendered Old
Capital Securities into the Exchange Agent's account at DTC and then send to the
Exchange Agent confirmation of such book-entry transfer (a "book-entry
confirmation"), including an agent's message ("Agent's Message") confirming that
DTC has received an express acknowledgment from such Holder that such Holder has
received and agrees to be bound by this Letter of Transmittal and that the Trust
and the Corporation may enforce this Letter of Transmittal against such Holder.
The book-entry confirmation must be received by the Exchange Agent in order for
the tender relating thereto to be effective. Book-entry transfer to DTC in
accordance with DTC's procedures does not constitute delivery of the book-entry
confirmation to the Exchange Agent.
If the tender is not made through ATOP, Certificates, as well as this
Letter of Transmittal (or facsimile thereof), properly completed and duly
executed, with any required signature guarantees, and any other documents
required by this Letter of Transmittal, must be received by the Exchange Agent
at its address set forth herein on or prior to the Expiration Date in order for
such tender to be effective.
Holders of Old Capital Securities who cannot complete the procedures for
delivery by book-entry transfer of such Old Capital Securities on a timely basis
or who cannot deliver their Certificates for such Old Capital Securities and all
other required documents to the Exchange Agent on or prior to the Expiration
Date, must, in order to participate in the Exchange Offer, tender their Old
Capital Securities according to the guaranteed delivery procedures set forth in
the Prospectus under "The Exchange Offer--Procedures for Tendering Old Capital
Securities."
DELIVERY OF DOCUMENTS TO THE BOOK-ENTRY TRANSFER FACILITY DOES NOT
CONSTITUTE DELIVERY TO THE EXCHANGE AGENT.
NOTE: SIGNATURES MUST BE PROVIDED BELOW
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY
ALL TENDERING HOLDERS COMPLETE THIS BOX:
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------
DESCRIPTION OF OLD CAPITAL SECURITIES TENDERED
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------- ----------------------------------------------------
Old Capital Securities tendered
If blank, please print name and address of registered holder. (Attach additional list if necessary)
- --------------------------------------------------------------- ----------------------------------------------------
- --------------------------------------------------------------- ----------------- ----------------- ----------------
Aggregate Principal
Principal Amount of Old
Amount of Old Capital
Certificate Capital Securities (if
Number(s)* Securities less than
all)**
<S> <C> <C> <C>
- --------------------------------------------------------------- ----------------- ----------------- ----------------
- --------------------------------------------------------------- ----------------- ----------------- ----------------
- --------------------------------------------------------------- ----------------- ----------------- ----------------
- --------------------------------------------------------------- ----------------- ----------------- ----------------
- --------------------------------------------------------------- ----------------- ----------------- ----------------
- --------------------------------------------------------------- ----------------- ----------------- ----------------
- --------------------------------------------------------------- ----------------- ----------------- ----------------
- --------------------------------------------------------------- ----------------- ----------------- ----------------
- --------------------------------------------------------------- ----------------- ----------------- ----------------
- --------------------------------------------------------------- ----------------- ----------------- ----------------
TOTAL AMOUNT
TENDERED:
- --------------------------------------------------------------- ----------------- ----------------- ----------------
- --------------------------------------------------------------------------------------------------------------------
</TABLE>
- --------------------------------------------------------------------------------
* Need not be completed by book-entry holders.
- --------------------------------------------------------------------------------
** Old Capital Securities may be tendered in whole or in part in denominations
of $100,000 and integral multiples of $1,000 in excess thereof, provided
that if any Old Capital Securities are tendered for exchange in part, the
untendered principal amount thereof must be $100,000 or any integral
multiple of $1,000 in excess thereof. All Old Capital Securities held shall
be deemed tendered unless a lesser number is specified in this column. See
Instruction 4.
- --------------------------------------------------------------------------------
(BOXES BELOW TO BE CHECKED BY ELIGIBLE INSTITUTIONS ONLY)
[ ] CHECK HERE IF TENDERED OLD CAPITAL SECURITIES ARE BEING DELIVERED BY
BOOK-ENTRY TRANSFER MADE TO THE ACCOUNT MAINTAINED BY THE EXCHANGE AGENT
WITH DTC AND COMPLETE THE FOLLOWING:
Name of Tendering Institution ____________________________________________
DTC Account Number _______________________________________________________
Transaction Code Number___________________________________________________
[ ] CHECK HERE AND ENCLOSE A PHOTOCOPY OF THE NOTICE OF GUARANTEED DELIVERY IF
TENDERED OLD CAPITAL SECURITIES ARE BEING DELIVERED PURSUANT TO A NOTICE OF
GUARANTEED DELIVERY PREVIOUSLY SENT TO THE EXCHANGE AGENT AND COMPLETE THE
FOLLOWING:
Name of Registered Holder(s) _____________________________________________
Window Ticket Number (if any) ____________________________________________
Date of Execution of Notice of Guaranteed Delivery _______________________
Name of Institution which Guaranteed Delivery ____________________________
If Guaranteed Delivery is to be made By Book-Entry Transfer:
Name of Tendering Institution_______________________________
DTC Account Number__________________________________________
Transaction Code Number_____________________________________
[ ] CHECK HERE IF TENDERED BY BOOK-ENTRY TRANSFER AND NON-EXCHANGED OLD CAPITAL
SECURITIES ARE TO BE RETURNED BY CREDITING THE DTC ACCOUNT NUMBER SET FORTH
ABOVE.
[ ] CHECK HERE IF YOU ARE A BROKER-DEALER WHO ACQUIRED THE OLD CAPITAL
SECURITIES FOR ITS OWN ACCOUNT AS A RESULT OF MARKET MAKING OR OTHER
TRADING ACTIVITIES (A "PARTICIPATING BROKER-DEALER") AND WISH TO RECEIVE 10
ADDITIONAL COPIES OF THE PROSPECTUS AND 10 COPIES OF ANY AMENDMENTS OR
SUPPLEMENTS THERETO.
Name:__________________________________________________________________________
Address:_______________________________________________________________________
Ladies and Gentlemen:
The undersigned hereby tenders to Union State Capital Trust I, a trust
formed under the laws of the State of Delaware (the "Trust"), and U.S.B. Holding
Co., Inc., a Delaware corporation (the "Corporation"), the above described
aggregate Liquidation Amount of the Trust's 9.58% Series A Capital Securities
(the "Old Capital Securities") in exchange for a like aggregate Liquidation
Amount of the Trust's 9.58% Series B Capital Securities (the "New Capital
Securities") which have been registered under the Securities Act of 1933 (the
"Securities Act"), upon the terms and subject to the conditions set forth in the
Prospectus dated ___, 1997 (as the same may be amended or supplemented from time
to time, the "Prospectus"), receipt of which is hereby acknowledged, and in this
Letter of Transmittal (which, together with the Prospectus, constitute the
"Exchange Offer").
Subject to and effective upon the acceptance for exchange of all or any
portion of the Old Capital Securities tendered herewith in accordance with the
terms and conditions of the Exchange Offer (including, if the Exchange Offer is
extended or amended, the terms and conditions of any such extension or
amendment), the undersigned hereby sells, assigns and transfers to or upon the
order of the Trust all right, title and interest in and to such Old Capital
Securities as are being tendered herewith. The undersigned hereby irrevocably
constitutes and appoints the Exchange Agent as its agent and attorney-in-fact
(with full knowledge that the Exchange Agent is also acting as agent of the
Corporation and the Trust in connection with the Exchange Offer) with respect to
the tendered Old Capital Securities, with full power of substitution (such power
of attorney being deemed to be an irrevocable power coupled with an interest)
subject only to the right of withdrawal described in the Prospectus, to (i)
deliver Certificates for Old Capital Securities to the Corporation or the Trust
together with all accompanying evidences of transfer and authenticity to, or
upon the order of, the Trust, upon receipt by the Exchange Agent, as the
undersigned's agent, of the New Capital Securities to be issued in exchange for
such Old Capital Securities, (ii) present Certificates for such Old Capital
Securities for transfer, and to transfer the Old Capital Securities on the books
of the Trust, and (iii) receive for the account of the Trust all benefits and
otherwise exercise all rights of beneficial ownership of such Old Capital
Securities, all in accordance with the terms and conditions of the Exchange
Offer.
THE UNDERSIGNED HEREBY REPRESENTS AND WARRANTS THAT THE UNDERSIGNED HAS
FULL POWER AND AUTHORITY TO TENDER, EXCHANGE, SELL, ASSIGN AND TRANSFER THE OLD
CAPITAL SECURITIES TENDERED HEREBY AND THAT, WHEN THE SAME ARE ACCEPTED FOR
EXCHANGE, THE TRUST WILL ACQUIRE GOOD, MARKETABLE AND UNENCUMBERED TITLE
THERETO, FREE AND CLEAR OF ALL LIENS, RESTRICTIONS, CHARGES AND ENCUMBRANCES,
AND THAT THE OLD CAPITAL SECURITIES TENDERED HEREBY ARE NOT SUBJECT TO ANY
ADVERSE CLAIMS OR PROXIES. THE UNDERSIGNED WILL, UPON REQUEST, EXECUTE AND
DELIVER ANY ADDITIONAL DOCUMENTS DEEMED BY THE CORPORATION, THE TRUST OR THE
EXCHANGE AGENT TO BE NECESSARY OR DESIRABLE TO COMPLETE THE EXCHANGE, ASSIGNMENT
AND TRANSFER OF THE OLD CAPITAL SECURITIES TENDERED HEREBY, AND THE UNDERSIGNED
WILL COMPLY WITH ITS OBLIGATIONS UNDER THE REGISTRATION RIGHTS AGREEMENT. THE
UNDERSIGNED HAS READ AND AGREES TO ALL OF THE TERMS OF THE EXCHANGE OFFER.
The name(s) and address(es) of the registered holder(s) of the Old Capital
Securities tendered hereby should be printed above, if they are not already set
forth above, as they appear on the Certificates representing such Old Capital
Securities. The Certificate number(s) and the Old Capital Securities that the
undersigned wishes to tender should be indicated in the appropriate boxes above.
If any tendered Old Capital Securities are not exchanged pursuant to the
Exchange Offer for any reason, or if Certificates are submitted for more Old
Capital Securities than are tendered or accepted for exchange, Certificates for
such nonexchanged or nontendered Old Capital Securities will be returned (or, in
the case of Old Capital Securities tendered by book-entry transfer, such Old
Capital Securities will be credited to an account maintained at DTC), without
expense to the tendering holder, promptly following the expiration or
termination of the Exchange Offer.
The undersigned understands that tenders of Old Capital Securities pursuant
to any one of the procedures described in "The Exchange Offer--Procedures for
Tendering the Old Capital Securities" in the Prospectus and in the instructions
attached hereto will, upon the Corporation's and the Trust's acceptance for
exchange of such tendered Old Capital Securities, constitute a binding agreement
between the undersigned, the Corporation and the Trust upon the terms and
subject to the conditions of the Exchange Offer. The undersigned recognizes
that, under certain circumstances set forth in the Prospectus, the Corporation
and the Trust may not be required to accept for exchange any of the Old Capital
Securities tendered hereby.
Unless otherwise indicated herein in the box entitled "Special Issuance
Instructions" below, the undersigned hereby directs that the New Capital
Securities be issued in the name(s) of the undersigned or, in the case of a
book-entry transfer of Old Capital Securities, that such New Capital Securities
be credited to the account indicated above maintained at DTC. If applicable,
substitute Certificates representing Old Capital Securities not exchanged or not
accepted for exchange will be issued to the undersigned or, in the case of a
book-entry transfer of Old Capital Securities, will be credited to the account
indicated above maintained at DTC. Similarly, unless otherwise indicated under
"Special Delivery Instructions," please deliver New Capital Securities to the
undersigned at the address shown below the undersigned's signature.
BY TENDERING OLD CAPITAL SECURITIES AND EXECUTING THIS LETTER OF
TRANSMITTAL, THE UNDERSIGNED HEREBY REPRESENTS AND AGREES THAT (I) THE
UNDERSIGNED IS NOT AN "AFFILIATE" OF THE CORPORATION OR THE TRUST, (II) ANY NEW
CAPITAL SECURITIES TO BE RECEIVED BY THE UNDERSIGNED ARE BEING ACQUIRED IN THE
ORDINARY COURSE OF ITS BUSINESS, (III) THE UNDERSIGNED HAS NO ARRANGEMENT OR
UNDERSTANDING WITH ANY PERSON TO PARTICIPATE IN A DISTRIBUTION (WITHIN THE
MEANING OF THE SECURITIES ACT) OF NEW CAPITAL SECURITIES TO BE RECEIVED IN THE
EXCHANGE OFFER, AND (IV) IF THE UNDERSIGNED IS NOT A BROKER-DEALER, THE
UNDERSIGNED IS NOT ENGAGED IN, AND DOES NOT INTEND TO ENGAGE IN, A DISTRIBUTION
(WITHIN THE MEANING OF THE SECURITIES ACT) OF SUCH NEW CAPITAL SECURITIES. BY
TENDERING OLD CAPITAL SECURITIES PURSUANT TO THE EXCHANGE OFFER AND EXECUTING
THIS LETTER OF TRANSMITTAL, A HOLDER OF OLD CAPITAL SECURITIES WHICH IS A
BROKER-DEALER REPRESENTS AND AGREES, CONSISTENT WITH CERTAIN INTERPRETIVE
LETTERS ISSUED BY THE STAFF OF THE DIVISION OF CORPORATION FINANCE OF THE
SECURITIES AND EXCHANGE COMMISSION TO THIRD PARTIES, THAT (A) SUCH OLD CAPITAL
SECURITIES HELD BY THE BROKER-DEALER ARE HELD ONLY AS A NOMINEE, OR (B) SUCH OLD
CAPITAL SECURITIES WERE ACQUIRED BY SUCH BROKER-DEALER FOR ITS OWN ACCOUNT AS A
RESULT OF MARKET-MAKING ACTIVITIES OR OTHER TRADING ACTIVITIES AND IT WILL
DELIVER THE PROSPECTUS (AS AMENDED OR SUPPLEMENTED FROM TIME TO TIME) MEETING
THE REQUIREMENTS OF THE SECURITIES ACT IN CONNECTION WITH ANY RESALE OF SUCH NEW
CAPITAL SECURITIES (PROVIDED THAT, BY SO ACKNOWLEDGING AND BY DELIVERING A
PROSPECTUS, SUCH BROKER-DEALER WILL NOT BE DEEMED TO ADMIT THAT IT IS AN
"UNDERWRITER" WITHIN THE MEANING OF THE SECURITIES ACT).
THE CORPORATION AND THE TRUST HAVE AGREED THAT, SUBJECT TO THE PROVISIONS
OF THE REGISTRATION RIGHTS AGREEMENT, THE PROSPECTUS, AS IT MAY BE AMENDED OR
SUPPLEMENTED FROM TIME TO TIME, MAY BE USED BY A PARTICIPATING BROKER-DEALER (AS
DEFINED BELOW) IN CONNECTION WITH RESALES OF NEW CAPITAL SECURITIES RECEIVED IN
EXCHANGE FOR OLD CAPITAL SECURITIES, WHERE SUCH OLD CAPITAL SECURITIES WERE
ACQUIRED BY SUCH PARTICIPATING BROKER-DEALER FOR ITS OWN ACCOUNT AS A RESULT OF
MARKET-MAKING ACTIVITIES OR OTHER TRADING ACTIVITIES, FOR A PERIOD ENDING 90
DAYS AFTER THE EXPIRATION DATE (SUBJECT TO EXTENSION UNDER CERTAIN LIMITED
CIRCUMSTANCES DESCRIBED IN THE PROSPECTUS) OR, IF EARLIER, WHEN ALL SUCH NEW
CAPITAL SECURITIES HAVE BEEN DISPOSED OF BY SUCH PARTICIPATING BROKER-DEALER. IN
THAT REGARD, EACH BROKER-DEALER WHO ACQUIRED OLD CAPITAL SECURITIES FOR ITS OWN
ACCOUNT AS A RESULT OF MARKET-MAKING OR OTHER TRADING ACTIVITIES (A
"PARTICIPATING BROKER-DEALER"), BY TENDERING SUCH OLD CAPITAL SECURITIES AND
EXECUTING THIS LETTER OF TRANSMITTAL, AGREES THAT, UPON RECEIPT OF NOTICE FROM
THE CORPORATION 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 THE
PROSPECTUS UNTRUE IN ANY MATERIAL RESPECT OR WHICH CAUSES THE PROSPECTUS TO OMIT
TO STATE A MATERIAL FACT NECESSARY IN ORDER TO MAKE THE STATEMENTS CONTAINED OR
INCORPORATED BY REFERENCE THEREIN, 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 PARTICIPATING BROKER-DEALER
WILL SUSPEND THE SALE OF NEW CAPITAL SECURITIES PURSUANT TO THE PROSPECTUS UNTIL
THE CORPORATION AND THE TRUST HAVE AMENDED OR SUPPLEMENTED THE PROSPECTUS TO
CORRECT SUCH MISSTATEMENT OR OMISSION AND HAVE FURNISHED COPIES OF THE AMENDED
OR SUPPLEMENTED PROSPECTUS TO THE PARTICIPATING BROKER-DEALER OR THE CORPORATION
OR THE TRUST HAS GIVEN NOTICE THAT THE SALE OF THE NEW CAPITAL SECURITIES MAY BE
RESUMED, AS THE CASE MAY BE. IF THE CORPORATION OR THE TRUST GIVES SUCH NOTICE
TO SUSPEND THE SALE OF THE NEW CAPITAL SECURITIES, THEY SHALL EXTEND THE 90-DAY
PERIOD REFERRED TO ABOVE DURING WHICH PARTICIPATING BROKER-DEALERS ARE ENTITLED
TO USE THE PROSPECTUS IN CONNECTION WITH THE RESALE OF NEW CAPITAL SECURITIES BY
THE NUMBER OF DAYS DURING THE PERIOD FROM AND INCLUDING THE DATE OF THE GIVING
OF SUCH NOTICE TO AND INCLUDING THE DATE WHEN PARTICIPATING BROKER-DEALERS SHALL
HAVE RECEIVED COPIES OF THE SUPPLEMENTED OR AMENDED PROSPECTUS NECESSARY TO
PERMIT RESALES OF THE NEW CAPITAL SECURITIES OR TO AND INCLUDING THE DATE ON
WHICH THE CORPORATION OR THE TRUST HAS GIVEN NOTICE THAT THE SALE OF NEW CAPITAL
SECURITIES MAY BE RESUMED, AS THE CASE MAY BE.
AS A RESULT, A PARTICIPATING BROKER-DEALER WHO INTENDS TO USE THE
PROSPECTUS IN CONNECTION WITH RESALES OF NEW CAPITAL SECURITIES RECEIVED IN
EXCHANGE FOR OLD CAPITAL SECURITIES PURSUANT TO THE EXCHANGE OFFER MUST NOTIFY
THE CORPORATION AND THE TRUST, OR CAUSE THE CORPORATION AND THE TRUST TO BE
NOTIFIED, ON OR PRIOR TO THE EXPIRATION DATE, THAT IT IS A PARTICIPATING
BROKER-DEALER. SUCH NOTICE MAY BE GIVEN IN THE SPACE PROVIDED ABOVE OR MAY BE
DELIVERED TO THE EXCHANGE AGENT AT THE ADDRESS SET FORTH IN THE PROSPECTUS UNDER
"THE EXCHANGE OFFER--EXCHANGE AGENT."
Holders of Old Capital Securities whose Old Capital Securities are accepted
for exchange will not receive Distributions on such Old Capital Securities and
the undersigned waive(s) the right to receive any Distributions on such Old
Capital Securities accumulated from and including August 1, 1997. Accordingly,
holders of New Capital Securities as of the record date for the payment of
Distributions on [______ 1, 1997] will be entitled to Distributions accumulated
from and including [_________ 1, 1997].
The undersigned will, upon request, execute and deliver any additional
documents deemed by the Corporation or the Trust to be necessary or desirable to
complete the sale, assignment and transfer of the Old Capital Securities
tendered hereby. All authority herein conferred or agreed to be conferred in
this Letter of Transmittal shall survive the death or incapacity of the
undersigned and any obligation of the undersigned hereunder shall be binding
upon the heirs, executors, administrators, personal representatives, trustees in
bankruptcy, legal representatives, successors and assigns of the undersigned.
Except as stated in the Prospectus, this tender is irrevocable.
THE UNDERSIGNED, BY COMPLETING THE BOX ENTITLED "DESCRIPTION OF OLD CAPITAL
SECURITIES" ABOVE AND SIGNING THIS LETTER, WILL BE DEEMED TO HAVE TENDERED THE
OLD CAPITAL SECURITIES AS SET FORTH IN SUCH BOX.
- --------------------------------------------------------------------------------
HOLDER(S) SIGN HERE
(SEE INSTRUCTIONS 2, 5 AND 6)
(PLEASE COMPLETE SUBSTITUTE FORM W-9 ON PAGE 11) (NOTE:
SIGNATURE(S) MUST BE GUARANTEED IF REQUIRED BY INSTRUCTION 2)
Must be signed by registered holder(s) exactly as name(s) appear(s) on
Certificate(s) for the Old Capital Securities hereby tendered or on the register
of holders maintained by the Trust, or by any person(s) authorized to become the
registered holder(s) by endorsements and documents transmitted herewith
(including such opinions of counsel, certifications and other information as may
be required by the Trust or the Trustee for the Old Capital Securities to comply
with the restrictions on transfer applicable to the Old Capital Securities). If
signature is by an attorney-in-fact, executor, administrator, trustee, guardian,
officer of a corporation or another acting in a fiduciary capacity or
representative capacity, please set forth the signer's full title. See
Instruction 5.
(SIGNATURE(S) OF HOLDER(S))
Date:___________, 1997
Name(s)________________________________________________________________________
_______________________________________________________________________________
(PLEASE PRINT)
Capacity (full title)__________________________________________________________
Address________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
(INCLUDE ZIP CODE)
Area Code and Telephone Number_________________________________________________
_______________________________________________________________________________
(TAX IDENTIFICATION OR SOCIAL SECURITY NUMBER(S))
_______________________________________________________________________________
_______________________________________________________________________________
GUARANTEE OF SIGNATURE(S)
(SEE INSTRUCTIONS 2 AND 5)
_______________________________________________________________________________
(AUTHORIZED SIGNATURE)
Date:_______________, 1997
Name of Firm___________________________________________________________________
Capacity (full title)__________________________________________________________
(PLEASE PRINT)
Address________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
(INCLUDE ZIP CODE)
Area Code and Telephone Number_________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
SPECIAL ISSUANCE INSTRUCTIONS
(SEE INSTRUCTIONS 1, 5 AND 6)
To be completed ONLY if New Capital Securities or Old Capital Securities not
tendered are to be issued in the name of someone other than the registered
holder of the Old Capital Securities whose name(s) appear(s) above.
Issue
[ ] Old Capital Securities not tendered to:_______________________
[ ] New Capital Securities to:_____________________________
Name(s)_______________________________________________________________________
Address________________________________________________________________________
_______________________________________________________________________________
(INCLUDE ZIP CODE)
Area Code and Telephone Number_________________________________________________
_______________________________________________________________________________
(TAX IDENTIFICATION OR SOCIAL SECURITY NUMBER(S))
_______________________________________________________________________________
SPECIAL DELIVERY INSTRUCTIONS
(SEE INSTRUCTIONS 1, 5 AND 6)
To be completed ONLY if New Capital Securities or Old Capital Securities not
tendered are to be sent to someone other than the registered holder of the Old
Capital Securities whose name(s) appear(s) above, or such registered holder(s)
at an address other than that shown above.
Mail
[ ] Old Capital Securities not tendered to:
[ ] New Capital Securities to:
Name(s)_______________________________________________________________________
Address_______________________________________________________________________
______________________________________________________________________________
(INCLUDE ZIP CODE)
Area Code and Telephone Number ________________________________________________
_______________________________________________________________________________
(TAX IDENTIFICATION OR SOCIAL SECURITY NUMBER(S))
_______________________________________________________________________________
INSTRUCTIONS
FORMING PART OF THE TERMS AND CONDITIONS OF THE EXCHANGE OFFER
1. DELIVERY OF LETTER OF TRANSMITTAL AND CERTIFICATES; GUARANTEED DELIVERY
PROCEDURES. To tender in the Exchange Offer, Holders must tender by (a)
forwarding Certificates herewith or (b) book-entry transfer pursuant to the
procedures set forth in "The Exchange Offer -- Procedures for Tendering Old
Capital Securities" in the Prospectus. Holders who are DTC Participants
tendering by book-entry transfer must execute such tender through DTC's ATOP
system. A Holder using ATOP should transmit its acceptance to DTC on or prior to
the Expiration Date. DTC will verify such acceptance, execute a book-entry
transfer to the tendered Old Capital Securities into the Exchange Agent's
account at DTC and then send to the Exchange Agent a book-entry confirmation,
including an Agent's Message confirming that DTC has received an express
acknowledgment from such Holder that such Holder has received and agrees to be
bound by this Letter of Transmittal and that the Trust and the Corporation may
enforce this Letter of Transmittal against such Holder. The book-entry
confirmation must be received by the Exchange Agent in order for the tender
relating thereto to be effective. Book entry transfer to DTC in accordance with
DTC's procedure does not constitute delivery of the book-entry confirmation to
the Exchange Agent.
If the tender is not made through ATOP, Certificates, as well as this
Letter of Transmittal (or facsimile thereof), properly completed and duly
executed, with any required signature guarantees, and any other documents
required by this Letter of Transmittal, must be received by the Exchange Agent
at its address set forth herein on or prior to the Expiration Date in order for
such tender to be effective.
Old Capital Securities may be tendered in whole or in part in the principal
amount of $100,000 (100 Capital Securities) and integral multiples of $1,000 in
excess thereof, provided that, if any Old Capital Securities are tendered for
exchange in part, the untendered principal amount thereof must be $100,000 (100
Capital Securities) or any integral multiple of $1,000 in excess thereof.
Holders who wish to tender their Old Capital Securities and (i) whose Old
Capital Securities are not immediately available or (ii) who cannot deliver
their Old Capital Securities, this Letter of Transmittal and all other required
documents to the Exchange Agent on or prior to the Expiration Date or (iii) who
cannot complete the procedures for delivery by book-entry transfer on a timely
basis, may tender their Old Capital Securities by properly completing and duly
executing a Notice of Guaranteed Delivery pursuant to the guaranteed delivery
procedures set forth in "The Exchange Offer--Procedures for Tendering the Old
Capital Securities" in the Prospectus. Pursuant to such procedures: (i) such
tender must be made by or through an Eligible Institution (as defined below);
(ii) a properly completed and duly executed Notice of Guaranteed Delivery,
substantially in the form made available by the Trust, must be received by the
Exchange Agent on or prior to the Expiration Date; and (iii) the Certificates
(or a book-entry confirmation (as defined in this Prospectus)) representing all
tendered Old Capital Securities, in proper form for transfer, together with a
Letter of Transmittal (or facsimile thereof), properly completed and duly
executed, with any required signature guarantees and any other documents
required by this Letter of Transmittal, must be received by the Exchange Agent
within three New York Stock Exchange, Inc. trading days after the date of
execution of such Notice of Guaranteed Delivery, all as provided in "The
Exchange Offer--Procedures for Tendering the Old Capital Securities" in the
Prospectus.
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. For Old Capital
Securities to be properly tendered pursuant to the guaranteed delivery
procedure, the Exchange Agent must receive a Notice of Guaranteed Delivery on or
prior to the Expiration Date. As used herein and in the Prospectus, "Eligible
Institution" means a firm or other entity identified in Rule 17Ad-15 under the
Exchange Act as "an eligible guarantor institution," including (as such terms
are defined therein) (i) a bank; (ii) a broker, dealer, municipal securities
broker or dealer or government securities broker or dealer; (iii) a credit
union; (iv) a national securities exchange, registered securities association or
clearing agency; or (v) a savings association that is a participant in a
Securities Transfer Association.
THE METHOD OF DELIVERY OF CERTIFICATES, THIS LETTER OF TRANSMITTAL AND ALL
OTHER REQUIRED DOCUMENTS IS AT THE OPTION AND SOLE RISK OF THE TENDERING HOLDER
AND THE DELIVERY WILL BE DEEMED MADE ONLY WHEN ACTUALLY RECEIVED BY THE EXCHANGE
AGENT. IF DELIVERY IS BY MAIL, REGISTERED MAIL WITH RETURN RECEIPT REQUESTED,
PROPERLY INSURED, OR OVERNIGHT DELIVERY SERVICE IS RECOMMENDED. IN ALL CASES,
SUFFICIENT TIME SHOULD BE ALLOWED TO ENSURE TIMELY DELIVERY.
Neither the Corporation nor the Trust will accept any alternative,
conditional or contingent tenders. Each tendering holder, by execution of a
Letter of Transmittal (or facsimile thereof), waives any right to receive any
notice of the acceptance of such tender.
2. GUARANTEE OF SIGNATURES. No signature guarantee on this Letter of
Transmittal is required if:
(i) this Letter of Transmittal is signed by the registered holder (which
term, for purposes of this document, shall include any participant in
DTC whose name appears on a security position listing as the owner of
the Old Capital Securities) of Old Capital Securities tendered
herewith, unless such holder(s) has completed either the box entitled
"Special Issuance Instructions" or the box entitled "Special Delivery
Instructions" above, or
(ii) such Old Capital Securities are tendered for the account of a firm
that is an Eligible Institution.
In all other cases, an Eligible Institution must guarantee the signature(s)
on this Letter of Transmittal. See Instruction 5.
3. INADEQUATE SPACE. If the space provided in the box captioned
"Description of Old Capital Securities" is inadequate, the Certificate number(s)
and/or the principal amount of Old Capital Securities and any other required
information should be listed on a separate signed schedule which is attached to
this Letter of Transmittal.
4. PARTIAL TENDERS AND WITHDRAWAL RIGHTS. Tenders of Old Capital Securities
will be accepted only in the principal amount of $100,000 (100 Capital
Securities) and integral multiples of $1,000 in excess thereof, provided that if
any Old Capital Securities are tendered for exchange in part, the untendered
principal amount thereof must be $100,000 (100 Capital Securities) or any
integral multiple of $1,000 in excess thereof. If less than all the Old Capital
Securities evidenced by any Certificate submitted are to be tendered, fill in
the principal amount of Old Capital Securities which are to be tendered in the
box entitled "Principal Amount of Old Capital Securities Tendered." In such
case, new Certificate(s) for the remainder of the Old Capital Securities that
were evidenced by your old Certificate(s) will only be sent to the holder of the
Old Capital Security, promptly after the Expiration Date. All Old Capital
Securities represented by Certificates delivered to the Exchange Agent will be
deemed to have been tendered unless otherwise indicated.
Except as otherwise provided herein, tenders of Old Capital Securities may
be withdrawn at any time on or prior to the Expiration Date. In order for a
withdrawal to be effective on or prior to that time, a written or facsimile
transmission of such notice of withdrawal must be timely received by the
Exchange Agent at one of its addresses set forth above or in the Prospectus 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 Old Capital Securities have been tendered) the name of the
registered holder of the Old Capital Securities as set forth on the Certificate
for the Old Capital Securities, if different from that of the person who
tendered such Old Capital Securities. If Certificates for the Old Capital
Securities have been delivered or otherwise identified to the Exchange Agent,
then prior to the physical release of such Certificates for the Old Capital
Securities, the tendering holder must submit the serial numbers shown on the
particular Certificates for the 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 the Prospectus
under "The Exchange Offer-- Procedures for Tendering the 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 in the Prospectus
under "The Exchange Offer--Procedures for Tendering the 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 Corporation and
the Trust, in their sole discretion, whose determination shall be final and
binding on all parties. Neither the Corporation, the Trust, any affiliates or
assigns of the Corporation 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 without cost to such holder
promptly after withdrawal.
5. SIGNATURES ON LETTER OF TRANSMITTAL, ASSIGNMENTS AND ENDORSEMENTS. If
this Letter of Transmittal is signed by the registered holder(s) of the Old
Capital Securities tendered hereby, the signature(s) must correspond exactly
with the name(s) as written on the face of the Certificate(s) without
alteration, enlargement or any change whatsoever.
If any of the Old Capital Securities tendered hereby are owned of record by
two or more joint owners, all such owners must sign this Letter of Transmittal.
If any tendered Old Capital Securities are registered in different name(s)
on several Certificates, it will be necessary to complete, sign and submit as
many separate Letters of Transmittal (or facsimiles thereof) as there are
different registrations of Certificates.
If this Letter of Transmittal or any Certificates or bond powers are signed
by trustees, executors, administrators, guardians, attorneys-in- fact, officers
of corporations or others acting in a fiduciary or representative capacity, such
persons should so indicate when signing and must submit proper evidence
satisfactory to the Corporation and the Trust, in their sole discretion, of each
such person's authority so to act.
When this Letter of Transmittal is signed by the registered owner(s) of the
Old Capital Securities listed and transmitted hereby, no endorsement(s) of
Certificate(s) or separate bond power(s) are required unless New Capital
Securities are to be issued in the name of a person other than the registered
holder(s). Signature(s) on such Certificate(s) or bond power(s) must be
guaranteed by an Eligible Institution.
If this Letter of Transmittal is signed by a person other than the
registered owner(s) of the Old Capital Securities listed, the Certificates must
be endorsed or accompanied by appropriate bond powers, signed exactly as the
name or names of the registered owner(s) appear(s) on the Certificates, and also
must be accompanied by such opinions of counsel, certifications and other
information as the Corporation, the Trust or the Trustee for the Old Capital
Securities may require in accordance with the restrictions on transfer
applicable to the Old Capital Securities. Signatures on such Certificates or
bond powers must be guaranteed by an Eligible Institution.
6. SPECIAL ISSUANCE AND DELIVERY INSTRUCTIONS. If New Capital Securities
are to be issued in the name of a person other than the signer of this Letter of
Transmittal, or if New Capital Securities are to be sent to someone other than
the signer of this Letter of Transmittal or to an address other than that shown
above, the appropriate boxes on this Letter of Transmittal should be completed.
Certificates for Old Capital Securities not exchanged will be returned by mail
or, if tendered by book-entry transfer, by crediting the account indicated above
maintained at DTC. See Instruction 4.
7. IRREGULARITIES. The Corporation and the Trust will determine, in their
sole discretion, all questions as to the form of documents, validity,
eligibility (including time of receipt) and acceptance for exchange of any
tender of Old Capital Securities, which determination shall be final and binding
on all parties. The Corporation and the Trust reserve the absolute right to
reject any and all tenders determined by either of them not to be in proper form
or the acceptance of which, or exchange for which, may, in the view of counsel
to the Corporation and the Trust be unlawful. The Corporation and the Trust also
reserve the absolute right, subject to applicable law, to waive any of the
conditions of the Exchange Offer set forth in the Prospectus under "The Exchange
Offer--Conditions to the Exchange Offer" or any conditions or irregularity in
any tender of Old Capital Securities of any particular holder whether or not
similar conditions or irregularities are waived in the case of other holders.
The Corporation's and the Trust's interpretation of the terms and conditions of
the Exchange Offer (including this Letter of Transmittal and the instructions
hereto) will be final and binding. No tender of Old Capital Securities will be
deemed to have been validity made until all irregularities with respect to such
tender have been cured or waived. The Corporation, the Trust, any affiliates or
assigns of the Corporation, the Trust, the Exchange Agent, or any other person
shall not be under any duty to give notification of any irregularities in
tenders or incur any liability for failure to give such notification.
8. QUESTIONS, REQUESTS FOR THE ASSISTANCE AND ADDITIONAL COPIES. Questions
and requests for assistance may be directed to the Exchange Agent at its address
and telephone number set forth on the front of this Letter of Transmittal.
Additional copies of the Prospectus, the Notice of Guaranteed Delivery and the
Letter of Transmittal may be obtained from the Exchange Agent or from your
broker, dealer, commercial bank, trust company or other nominee.
9. 31% BACKUP WITHHOLDING; SUBSTITUTE FORM W-9. Under U.S. Federal income
tax law, a holder whose tendered Old Capital Securities are accepted for
exchange is required to provide the Exchange Agent with such holder's correct
taxpayer identification number ("TIN") on Substitute Form W-9 below. If the
Exchange Agent is not provided with the correct TIN, the Internal Revenue
Service (the "IRS") may subject the holder or other payee to a $50 penalty. In
addition, payments to such holders or other payees with respect to Old Capital
Securities exchanged pursuant to the Exchange Offer may be subject to 31% backup
withholding.
The box in Part 2 of the Substitute Form W-9 may be checked if the
tendering holder has not been issued a TIN and has applied for a TIN or intends
to apply for a TIN in the near future. If the box in Part 2 is checked, the
holder or other payee must also complete the Certificate of Awaiting Taxpayer
Identification Number below in order to avoid backup withholding.
Notwithstanding that the box in Part 2 is checked and the Certificate of
Awaiting Taxpayer Identification Number is completed, the Exchange Agent will
withhold 31% of all payments made prior to the time a properly certified TIN is
provided to the Exchange Agent. The Exchange Agent will retain such amounts
withheld during the 60-day period following the date of the Substitute Form W-9.
If the holder furnishes the Exchange Agent with its TIN within 60 days after the
date of the Substitute Form W- 9, the amounts retained during the 60-day period
will be remitted to the holder and no further amounts shall be retained or
withheld from payments made to the holder thereafter. If, however, the holder
has not provided the Exchange Agent with its TIN within such 60-day period,
amounts withheld will be remitted to the IRS as backup withholding. In addition,
31% of all payments made thereafter will be withheld and remitted to the IRS
until a correct TIN is provided.
The holder is required to give the Exchange Agent the TIN (e.g., social
security number or employer identification number) of the registered owner of
the Old Capital Securities or of the last transferee appearing on the transfers
attached to, or endorsed on, the Old Capital Securities. If the Old Capital
Securities are registered in more than one name or are not in the name of the
actual owner, consult the enclosed "Guidelines for Certification of Taxpayer
Identification Number on Substitute Form W-9" for additional guidance on which
number to report.
Certain holders (including, among others, corporations, financial
institutions and certain foreign persons) may not be subject to these backup
withholding and reporting requirements. Such holders should nevertheless
complete the attached Substitute Form W-9 below, and write "exempt" on the face
thereof, to avoid possible erroneous backup withholding. A foreign person may
qualify as an exempt recipient by submitting a properly completed IRS Form W-8,
signed under penalties of perjury, attesting to that holder's exempt status.
Please consult the enclosed "Guidelines for Certification of Taxpayer
Identification Number on Substitute Form W-9" for additional guidance on which
holders are exempt from backup withholding.
Backup withholding is not an additional U.S. Federal income tax. Rather,
the U.S. Federal income tax liability of a person subject to backup withholding
will be reduced by the amount of tax withheld. If withholding results in an
overpayment of taxes, a refund may be obtained.
10. WAIVER OF CONDITIONS. The Corporation and the Trust reserve the
absolute right to waive satisfaction of any or all conditions enumerated in the
Prospectus.
11. NO CONDITIONAL TENDERS. No alternative, conditional or contingent
tenders will be accepted. All tendering holders of Old Capital Securities, by
execution of this Letter of Transmittal, shall waive any right to receive notice
of the acceptance of Old Capital Securities for exchange.
Neither the Corporation, the Trust, the Exchange Agent nor any other person
is obligated to give notice of any defect or irregularity with respect to any
tender of Old Capital Securities nor shall any of them incur any liability for
failure to give any such notice.
12. LOST, DESTROYED OR STOLEN CERTIFICATES. If any Certificate(s)
representing Old Capital Securities have been lost, destroyed or stolen, the
holder should promptly notify the Exchange Agent. The holder will then be
instructed as to the steps that must be taken in order to replace the
Certificate(s). This Letter of Transmittal and related documents cannot be
processed until the procedures for replacing lost, destroyed or stolen
Certificate(s) have been followed.
13. SECURITY TRANSFER TAXES. 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 tax (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.
IMPORTANT: THIS LETTER OF TRANSMITTAL (OR FACSIMILE THEREOF)
AND ALL OTHER REQUIRED DOCUMENTS MUST BE RECEIVED BY THE
EXCHANGE AGENT ON OR PRIOR TO THE EXPIRATION DATE.
TO BE COMPLETED BY ALL TENDERING SECURITYHOLDERS
(See Instruction 9)
PAYER'S NAME: THE CHASE MANHATTAN BANK
<PAGE>
<TABLE>
<CAPTION>
- --------------------------------------- -------------------------------------- --------------------------------------
<S> <C> <C>
SUBSTITUTE Part 1--PLEASE PROVIDE YOUR TIN ON TIN:
Form W-9 THE LINE AT RIGHT AND CERTIFY BY ________________________
SIGNING AND DATING BELOW Social Security Number or Employer
Identification Number
-------------------------------------- --------------------------------------
Department of the Treasury
Internal Revenue PART 2-TIN Applied [ ]
For Service Payer's Request
for Taxpayer Identification Number -------------------------------------- --------------------------------------
("TIN") and Certification CERTIFICATION-UNDER THE PENALTIES OF
PERJURY, I CERTIFY THAT:
(1) the number shown on this form is my
correct taxpayer Certification
identification number (or I am waiting
for a number and to be issued to me).
(2) I am not subject to backup
withholding either because (i) I am
exempt from backup withholding, (ii) I
have not been notified by the Internal
Revenue Service ("IRS") that I am
subject to backup withholding as a
result of a failure to report all
interest or dividends, or (iii) the IRS
has notified me that I am no longer
subject to backup withholding, and
(3) any other information provided on
this form is true and correct. Signature
_________________ Date_______________,
1997
</TABLE>
_______________________________________________________________________________
You must cross out item (iii) in Part (2) above if you have been notified by the
IRS that you are subject to backup withholding because of underreporting
interest or dividends on your tax return and you have not been notified by the
IRS that you are no longer subject to backup withholding.
_______________________________________________________________________________
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY IN CERTAIN CIRCUMSTANCES
RESULT IN BACKUP WITHHOLDING OF 31% OF ANY AMOUNTS PAID TO YOU PURSUANT TO THE
EXCHANGE OFFER. PLEASE REVIEW THE ENCLOSED GUIDELINES FOR CERTIFICATION OF
TAXPAYER IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 FOR ADDITIONAL DETAILS.
YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU CHECKED THE BOX IN PART 2 OF
THE SUBSTITUTE FORM W-9
_______________________________________________________________________________
CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER
I certify under penalties of perjury that a taxpayer identification number
has not been issued to me, and either (1) I have mailed or delivered an
application to receive a taxpayer identification number to the appropriate
Internal Revenue Service Center or Social Security Administration Office or (2)
I intend to mail or deliver an application in the near future. I understand that
if I do not provide a taxpayer identification number by the time of payment, 31%
of all payments made to me on account of the New Capital Securities shall be
retained until I provide a taxpayer identification number to the Exchange Agent
and that, if I do not provide my taxpayer identification number within 60 days,
such retained amounts shall be remitted to the Internal Revenue Service as
backup withholding and 31% of all reportable payments made to me thereafter will
be withheld and remitted to the Internal Revenue Service until I provide a
taxpayer identification number.
Signature ________________________________ Date ____________________, 1997
EXHIBIT 99.2
NOTICE OF GUARANTEED DELIVERY
FOR TENDER OF
9.58% SERIES A CAPITAL SECURITIES
(LIQUIDATION AMOUNT $1,000 PER CAPITAL SECURITY)
OF
UNION STATE CAPITAL TRUST I
FULLY AND UNCONDITIONALLY GUARANTEED BY
U.S.B. HOLDING CO., INC.
This Notice of Guaranteed Delivery, or one substantially equivalent to this
form, must be used to accept the Exchange Offer (as defined below) if (i)
certificates for the Trust's (as defined below) 9.58% Series A Capital
Securities (the "Old Capital Securities") are not immediately available, (ii)
the Old Capital Securities, the Letter of Transmittal and all other required
documents cannot be delivered to The Chase Manhattan Bank (the "Exchange Agent")
on or prior to the Expiration Date (as defined in the Prospectus referred to
below) or (iii) the procedures for delivery by book-entry transfer cannot be
completed on a timely basis. This Notice of Guaranteed Delivery may be delivered
by hand, overnight courier or mail, or transmitted by facsimile transmission, to
the Exchange Agent. See "The Exchange Offer--Procedures for Tendering the Old
Capital Securities" in the Prospectus. In addition, in order to utilize the
guaranteed delivery procedure to tender Old Capital Securities pursuant to the
Exchange Offer, a completed, signed and dated Letter of Transmittal relating to
the Old Capital Securities (or facsimile thereof) must also be received by the
Exchange Agent on or prior to the Expiration Date. Capitalized terms not defined
herein have the meanings assigned to them in the Prospectus.
The Exchange Agent For The Exchange Offer Is:
The Chase Manhattan Bank
<TABLE>
<CAPTION>
<S> <C> <C>
By Registered or Certified Mail Facsimile Transmissions: By Hand or Overnight Delivery
(Eligible Institutions Only)
The Chase Manhattan Bank The Chase Manhattan Bank
450 West 33rd Street, 15th Floor (212) 946-3082 450 West 33rd Street, 15th Floor
New York, New York 10001-2697 New York, New York 10001-2697
Attention: Global Trust Services Confirm By Telephone: Attention: Global Trust Services
Shiek Wiltshire (212) 946-8158 Shiek Wiltshire
For Information Call:
(212) 946-8158
</TABLE>
Delivery of this Notice of Guaranteed Delivery to an address other than as
set forth above or transmission of this Notice of Guaranteed Delivery via
facsimile to a number other than as set forth above will not constitute a valid
delivery. THIS NOTICE OF GUARANTEED DELIVERY IS NOT TO BE USED TO GUARANTEE
SIGNATURES. IF A SIGNATURE ON A LETTER OF TRANSMITTAL IS REQUIRED TO BE
GUARANTEED BY AN "ELIGIBLE INSTITUTION" UNDER THE INSTRUCTIONS THERETO, SUCH
SIGNATURE GUARANTEE MUST APPEAR IN THE APPLICABLE SPACE PROVIDED IN THE
SIGNATURE BOX ON THE LETTER OF TRANSMITTAL.
Ladies and Gentlemen:
The undersigned hereby tenders to Union State Capital Trust I, a Delaware
business trust (the "Trust"), and to U.S.B. Holding Co., Inc., a Delaware
corporation (the "Corporation"), upon the terms and subject to the conditions
set forth in the Prospectus dated __________, 1997 (as the same may be amended
or supplemented from time to time, the "Prospectus"), and the related Letter of
Transmittal (which together constitute the "Exchange Offer"), receipt of which
is hereby acknowledged, the aggregate principal amount of Old Capital Securities
set forth below pursuant to the guaranteed delivery procedures set forth in the
Prospectus under the caption "The Exchange Offer--Procedures for Tendering the
Old Capital Securities."
Name(s) of Registered Holder(s):___________
Aggregate Liquidation Amount Tendered: $_____________*
Certificate No(s)
(if available):----------------------
- -------------------------------------
Total Liquidation Amount
Represented by Old Capital
Securities Certificate(s)
$-----------------------------------
If Old Capital Securities will be tendered by book-entry transfer, provide the
following information:
DTC Account Number:-----------------
Date:-------------------------------
- ------------------------------------
* Must be in denominations of a Liquidation Amount of $1,000 and any
integral multiple thereof, and not less than $100,000 aggregate
Liquidation Amount.
- -------------------------------------------------------------------------------
All authority herein conferred or agreed to be conferred shall survive the
death or incapacity of the undersigned and every obligation of the undersigned
hereunder shall be binding upon the heirs, personal representatives, successors
and assigns of the undersigned.
- -------------------------------------------------------------------------------
PLEASE SIGN HERE
X----------------------------- ------------------------------------
X----------------------------- ------------------------------------
Signature(s) of Owner(s) Date
or Authorized Signatory
Area Code and Telephone Number:-----------------------------
Must be signed by the holder(s) of the Old Capital Securities
as their name(s) appear(s) on certificates for Old Capital Securities or on a
security position listing, or by person(s) authorized to become registered
holder(s) by endorsement and documents transmitted with this Notice of
Guaranteed Delivery.
<PAGE>
If signature is by a trustee, executor, administrator, guardian,
attorney-in-fact, officer or other person acting in a fiduciary or
representative capacity, such person must set forth his or her full title below.
Please print name(s) and address(es)
Name(s):----------------------------------------------------------------------
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
Capacity:---------------------------------------------------------------------
Address(es):------------------------------------------------------------------
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
GUARANTEE
(NOT TO BE USED FOR SIGNATURE GUARANTEE)
The undersigned, a firm or other entity identified in Rule 17Ad-15 under
the Securities Exchange Act of 1934, as amended, as an "eligible guarantor
institution," including (as such terms are defined therein): (i) a bank; (ii) a
broker, dealer, municipal securities broker, municipal securities dealer,
government securities broker or government securities dealer; (iii) a credit
union; (iv) a national securities exchange, registered securities association or
clearing agency; or (v) a savings association that is a participant in a
Securities Transfer Association recognized program (each of the foregoing being
referred to as an "Eligible Institution"), hereby guarantees to deliver to the
Exchange Agent, at one of its addresses set forth above, either the Old Capital
Securities tendered hereby in proper form for transfer, or confirmation of the
book-entry transfer of such Old Capital Securities to the Exchange Agent's
account at The Depository Trust Company, pursuant to the procedures for
book-entry transfer set forth in the Prospectus, in either case together with
one or more properly completed and duly executed Letter(s) of Transmittal (or
facsimile thereof) and any other required documents within three business days
after the date of execution of this Notice of Guaranteed Delivery.
The undersigned acknowledges that it must deliver the
Letter(s) of Transmittal and the Old Capital Securities tendered hereby to the
Exchange Agent within the time period set forth above and that failure to do so
could result in a financial loss to the undersigned.
- ------------------------------------ ----------------------------------------
Name of Firm Authorized Signature
- ------------------------------------ ----------------------------------------
Address Title
- ------------------------------------ ----------------------------------------
Zip Code (Please Type or Print)
Area Code and Telephone No. ------------------ Dated:-------------------------
NOTE: DO NOT SEND CERTIFICATES FOR OLD CAPITAL SECURITIES WITH THIS FORM.
CERTIFICATES FOR OLD CAPITAL SECURITIES SHOULD ONLY BE SENT WITH YOUR LETTER OF
TRANSMITTAL.
EXHIBIT 99.3
EXCHANGE AGENT AGREEMENT
__________ ___, 1997
Global Trust Services
The Chase Manhattan Bank
450 West 33rd Street, 15th Floor
New York, New York 10001-2697
Ladies and Gentlemen:
Union State Capital Trust I, a trust formed under the laws of the State of
Delaware (the "Trust"), proposes to make an offer (the "Exchange Offer") to
exchange its 9.58% Series A Capital Securities (Liquidation Amount $1,000 per
Capital Security) (the "Old Securities") for its 9.58% Series B Capital
Securities (Liquidation Amount $1,000 per Capital Security) (the "New
Securities"). All of the beneficial interests represented by common securities
of the Trust are owned by U.S.B. Holding Co., Inc., a Delaware corporation (the
"Corporation"). The terms and conditions of the Exchange Offer as currently
contemplated are set forth in a prospectus, dated _______, 1997 (the
"Prospectus"), to be distributed to all record holders of the Old Securities.
The Old Securities and the New Securities are collectively referred to herein as
the "Securities."
The Trust hereby appoints The Chase Manhattan Bank to act as exchange agent
(the "Exchange Agent") in connection with the Exchange Offer. References
hereinafter to "you" shall refer to The Chase Manhattan Bank.
The Exchange Offer is expected to be commenced by the Trust on or about
________, 1997. The Letter of Transmittal accompanying the Prospectus (or in the
case of book entry securities, the ATOP system) is to be used by the holders of
the Old Securities to accept the Exchange Offer and contains instructions with
respect to (i) the delivery of certificates for Old Securities tendered in
connection therewith and (ii) the book entry transfer of Securities to the
Exchange Agent's account.
The Exchange Offer shall expire at 5:00 P.M., New York City time, on
_________, 1997 or on such later date or time to which the Trust may extend the
Exchange Offer (the "Expiration Date"). Subject to the terms and conditions set
forth in the Prospectus, the Trust expressly reserves the right to extend the
Exchange Offer from time to time by giving oral (to be confirmed in writing) or
written notice to you before 9:00 A.M., New York City time, on the business day
following the previously scheduled Expiration Date.
The Trust expressly reserves the right to amend or terminate the Exchange
Offer, and not to accept for exchange any Old Securities not theretofore
accepted for exchange, upon the occurrence of any of the conditions of the
Exchange Offer specified in the Prospectus under the caption "The Exchange Offer
- -- Conditions to the Exchange Offer." The Trust will give oral (confirmed in
writing) or written notice of any amendment, termination or nonacceptance of Old
Securities to you promptly after any amendment, termination or nonacceptance.
In carrying out your duties as Exchange Agent, you are to act in accordance
with the following instructions:
1. You will perform such duties and only such duties as are specifically
set forth in the section of the Prospectus captioned "The Exchange Offer" or as
specifically set forth herein; provided, however, that in no way will your
general duty to act in good faith be discharged by the foregoing.
2. You will establish an account with respect to the Old Securities at The
Depository Trust Company (the "Book-Entry Transfer Facility") for purposes of
the Exchange Offer within two business days after the date of the Prospectus,
and any financial institution that is a participant in the Book-Entry Transfer
Facility's system may make book-entry delivery of the Old Securities by causing
the Book-Entry Transfer Facility to transfer such Old Securities into your
account in accordance with the Book-Entry Transfer Facility's procedure for such
transfer.
3. You are to examine each of the Letters of Transmittal and certificates
for the Old Securities (or confirmation of book-entry transfer into your account
at the Book-Entry Transfer Facility) and any other documents delivered or mailed
to you by or for holders of the Old Securities to ascertain whether: (i) the
Letters of Transmittal and any such other documents are duly executed and
properly completed in accordance with instructions set forth therein and (ii)
the Old Securities have otherwise been properly tendered. In each case where the
Letter of Transmittal or any other document has been improperly completed or
executed or any of the certificates for the Old Securities are not in proper
form for transfer or some other irregularity in connection with the acceptance
of the Exchange Offer exists, you will endeavor to inform the presenters of the
need for fulfillment of all requirements and to take any other action as may be
necessary or advisable to cause such irregularity to be corrected.
4. With the approval of any Administrative Trustee of the Trust or any
person designated in writing by the President or any Vice President of the
Corporation (a "Designated Officer") (such approval, if given orally, to be
confirmed in writing) or any other party designated by any such Administrative
Trustee or Designated Officer in writing, you are authorized to waive any
irregularities in connection with any tender of Old Securities pursuant to the
Exchange Offer.
5. Tenders of the Old Securities may be made only as set forth in the
Letter of Transmittal and in the section of the Prospectus captioned "The
Exchange Offer -- Procedures for Tendering the Old Capital Securities," and the
Old Securities shall be considered properly tendered to you only when tendered
in accordance with the procedures set forth therein.
Notwithstanding the provisions of this paragraph 5, Old Securities that any
Administrative Trustee of the Trust or Designated Officer of the Corporation
shall approve as having been properly tendered shall be considered to be
properly tendered (such approval, if given orally, shall be confirmed in
writing).
6. You shall advise the Trust and the Corporation with respect to any Old
Securities received subsequent to the Expiration Date and accept their
instructions with respect to disposition of such Old Securities.
7. You shall accept tenders:
(a) in cases where the Old Securities are registered in two or more names
only if signed by all named holders;
(b) in cases where the signing person (as indicated on the Letter of
Transmittal) is acting in a fiduciary or a representative capacity only when
proper evidence of such person's authority so to act is submitted; and
(c) from persons other than the registered holder of the Old Securities
provided that customary transfer requirements, including any applicable transfer
taxes, are fulfilled.
You shall accept partial tenders of the Old Securities where so indicated
and as permitted in the Letter of Transmittal and deliver certificates for the
Old Securities to the transfer agent for split-up and return any untendered Old
Securities to the holder (or such other person as may be designated in the
Letter of Transmittal) as promptly as practicable after expiration or
termination of the Exchange Offer.
8. Upon satisfaction or waiver of all of the conditions to the Exchange
Offer, the Trust will notify you (such notice if given orally, to be confirmed
in writing) of its acceptance, promptly after the Expiration Date, of all Old
Securities properly tendered and you, on behalf of the Trust, will exchange such
Old Securities for New Securities and cause such Old Securities to be canceled.
Delivery of New Securities will be made on behalf of the Trust by you at the
rate of $1,000 liquidation amount of New Securities for each $1,000 liquidation
amount of the corresponding series of Old Securities tendered promptly after
notice (such notice if given orally, to be confirmed in writing) of acceptance
of said Old Securities by the Trust; provided, however, that in all cases, the
Old Securities tendered pursuant to the Exchange Offer will be exchanged only
after timely receipt by you of certificates for such Old Securities (or
confirmation of book-entry transfer into your account at the Book-Entry Transfer
Facility), a properly completed and duly executed Letter of Transmittal (or
facsimile thereof) with any required signature guarantees and any other required
documents. You shall issue New Securities only in denominations of $1,000 or any
integral multiple thereof. Old Capital Securities may be tendered in whole or in
part in denominations of $100,000 and integral multiples of $1,000 in excess
thereof, provided that if any Old Capital Securities are tendered for exchange
in part, the untendered liquidation amount thereof must be $100,000 or any
integral multiple of $1,000 in excess thereof.
9. Tenders pursuant to the Exchange Offer are irrevocable, except that,
subject to the terms and upon the conditions set forth in the Prospectus and the
Letter of Transmittal, the Old Securities tendered pursuant to the Exchange
Offer may be withdrawn at any time on or prior to the Expiration Date.
10. The Trust shall not be required to exchange any Old Securities tendered
if any of the conditions set forth in the Exchange Offer are not met. Notice of
any decision by the Trust not to exchange any Old Securities tendered shall be
given orally (and confirmed in writing) by the Trust to you.
11. If, pursuant to the Exchange Offer, the Trust does not accept for
exchange all or part of the Old Securities tendered because of an invalid
tender, the occurrence of certain other events set forth in the Prospectus under
the caption "The Exchange Offer -- Conditions to the Exchange Offer" or
otherwise, you shall promptly after the expiration or termination of the
Exchange Offer return those certificates for unaccepted Old Securities (or
effect appropriate book-entry transfer), together with any related required
documents and the Letters of Transmittal relating thereto that are in your
possession, to the persons who deposited them.
12. All certificates for reissued Old Securities, unaccepted Old Securities
or for New Securities shall be forwarded by (a) first-class certified mail,
return receipt requested, under a blanket surety bond protecting you and the
Trust from loss or liability arising out of the non- receipt or non-delivery of
such certificates or (b) by registered mail insured separately for the
replacement value of each of such certificates.
13. You are not authorized to pay or offer to pay any concessions,
commissions or solicitation fees to any broker, dealer, bank or other persons or
to engage or utilize any person to solicit tenders.
14. As Exchange Agent hereunder you:
(a) shall have no duties or obligations other than those specifically set
forth in the section of the Prospectus captioned "The Exchange Offer," the
Letter of Transmittal or herein or as may be subsequently agreed to in writing
by you and the Trust;
(b) will be regarded as making no representations and having no
responsibilities as to the validity, sufficiency, value or genuineness of any of
the certificates or the Old Securities represented thereby deposited with you
pursuant to the Exchange Offer, and will not be required to and will make no
representation as to the validity, value or genuineness of the Exchange Offer;
(c) shall not be obligated to take any legal action hereunder that might in
your reasonable judgment involve any expense or liability, unless you shall have
been furnished with reasonable indemnity;
(d) shall not be liable to the Trust or the Corporation for any action
taken or omitted by you, or any action suffered by you to be taken or omitted,
without negligence, misconduct or bad faith on your part, by reason of or as a
result of the administration of your duties hereunder in accordance with the
terms and conditions of this Agreement or by reason of your compliance with the
instructions set forth herein or with any written or oral instructions delivered
to you pursuant hereto, and may reasonably rely on and shall be protected in
acting in reliance upon any certificate, instrument, opinion, notice, letter,
telegram or other document or security delivered to you and reasonably believed
by you to be genuine and to have been signed by the proper party or parties;
(e) may reasonably act upon any tender, statement, request, agreement or
other instrument whatsoever not only as to its due execution and validity and
effectiveness of its provisions, but also as to the truth and accuracy of any
information contained therein, which you shall in good faith believe to be
genuine or to have been signed or represented by a proper person or persons;
(f) may rely on and shall be protected in acting upon written or oral
instructions from any Administrative Trustee of the Trust or from any Designated
Officer of the Corporation;
(g) may consult with your counsel with respect to any questions relating to
your duties and responsibilities and the advice or opinion of such counsel shall
be full and complete authorization and protection in respect of any action
taken, suffered or omitted to be taken by you hereunder in good faith and in
accordance with the advice or opinion of such counsel; and
(h) shall not advise any person tendering Old Securities pursuant to the
Exchange Offer as to the wisdom of making such tender or as to the market value
or decline or appreciation in market value of any Old Securities.
15. You shall take such action as may from time to time be requested by the
Trust or its counsel or any Designated Officer of the Corporation (and such
other action as you may reasonably deem appropriate) to furnish copies of the
Prospectus, Letter of Transmittal and the Notice of Guaranteed Delivery (as
defined in the Prospectus) or such other forms as may be approved from time to
time by the Trust or the Corporation, to all persons requesting such documents
and to accept and comply with telephone requests for information relating to the
Exchange Offer, provided that such information shall relate only to the
procedures for accepting (or withdrawing from) the Exchange Offer. The Trust
will furnish you with copies of such documents at your request. All other
requests for information relating to the Exchange Offer shall be directed to the
Trust, Attention: Steven T. Sabatini.
16. You shall advise by facsimile transmission or telephone, and promptly
thereafter confirm in writing to Steven T. Sabatini of the Trust, and such other
person or persons as the Trust or the Corporation may request, daily (and more
frequently during the week immediately preceding the Expiration Date and if
otherwise requested) up to and including the Expiration Date, as to the number
of Old Securities that have been tendered pursuant to the Exchange Offer and the
items received by you pursuant to this Agreement, separately reporting and
giving cumulative totals as to items properly received and items improperly
received. In addition, you will also inform, and cooperate in making available
to, the Trust or the Corporation or any such other person or persons upon oral
request made from time to time on or prior to the Expiration Date of such other
information as it or such person reasonably requests. Such cooperation shall
include, without limitation, the granting by you to the Trust or the Corporation
and such person as the Trust or the Corporation may request of access to those
persons on your staff who are responsible for receiving tenders, in order to
ensure that immediately prior to the Expiration Date the Trust or the
Corporation shall have received information in sufficient detail to enable it to
decide whether to extend the Exchange Offer. You shall prepare a final list of
all persons whose tenders were accepted, the aggregate liquidation amount of Old
Securities tendered, the aggregate liquidation amount of Old Securities accepted
and deliver the list to the Trust promptly after the Expiration Date.
17. Letters of Transmittal and Notices of Guaranteed Delivery shall be
stamped by you as to the date and the time of receipt thereof and shall be
maintained by you for a period of time at least equal to the period of time you
maintain other records pertaining to the transfer of securities. You shall
dispose of unused Letters of Transmittal and other surplus materials by
returning them to the Trust at the address set forth below for notices.
18. You hereby expressly waive any lien, encumbrance or right of set-off
whatsoever that you may have with respect to funds deposited with you for the
payment of transfer taxes by reasons of amounts, if any, borrowed by the Trust,
or any of its subsidiaries or affiliates pursuant to any loan or credit
agreement with you or for compensation owed to you hereunder.
19. For services rendered as Exchange Agent hereunder, you shall be
entitled to such compensation and reimbursement of out-of-pocket expenses as set
forth on Schedule I attached hereto.
20. You hereby acknowledge receipt of the Prospectus and the Letter of
Transmittal and further acknowledge that you have examined each of them. Any
inconsistency between this Agreement, on the one hand, and the Prospectus and
the Letter of Transmittal (as they may be amended from time to time), on the
other hand, shall be resolved in favor of the latter two documents, except with
respect to the duties, liabilities and indemnification of you as Exchange Agent,
which shall be controlled by this Agreement.
21. (a) The Trust covenants and agrees to indemnify and hold you harmless
in your capacity as Exchange Agent hereunder against any loss, liability, cost
or expense, including reasonable attorneys' fees and expenses, arising out of or
in connection with any act, omission, delay or refusal made by you in reliance
upon any signature, endorsement, assignment, certificate, order, request,
notice, instruction or other instrument or document reasonably believed by you
to be valid, genuine and sufficient and in accepting any tender or effecting any
transfer of Old Securities reasonably believed by you in good faith to be
authorized, and in delaying or refusing in good faith to accept any tenders or
effect any transfer of Old Securities; provided, however, that the Trust shall
not be liable for indemnification or otherwise for any loss, liability, cost or
expense to the extent arising out of your gross negligence or willful
misconduct.
(b) You agree that, without the prior written consent of the Trust (which
consent shall not be unreasonably withheld), you will not settle, compromise or
consent to the entry of any pending or threatened claim, action, or proceeding
in respect of which indemnification could be sought in accordance with the
indemnification provisions of this Agreement (whether or not you or the Trust or
any of its trustees, or controlling persons is an actual or potential party to
such claim, action or proceeding), unless such settlement, compromise or consent
includes an unconditional release of the Trust and its trustees and controlling
persons from all liability arising out of such claim, action or proceeding.
22. You shall arrange to comply with all requirements under the tax laws of
the United States, including those relating to missing tax identification
numbers, and shall file any appropriate reports with the Internal Revenue
Service.
23. You shall notify the Trust of the amount of any transfer taxes payable
in respect of the exchange of Old Securities and, upon receipt of written
approval from the Trust, you shall deliver or cause to be delivered, in a timely
manner to each governmental authority to which any transfer taxes are payable in
respect of the exchange of Old Securities, your check in the amount of all
transfer taxes so payable, and the Trust shall reimburse you for the amount of
any and all transfer taxes payable in respect of the exchange of Old Securities;
provided, however, that you shall reimburse the Trust for amounts refunded to
you in respect of your payment of any such transfer taxes, at such time as such
refund is received by you.
24. This Agreement and your appointment as Exchange Agent hereunder shall
be construed and enforced in accordance with the laws of the State of New York
applicable to agreements made and to be performed entirely within such state,
and without regard to conflicts of law principles, and shall inure to the
benefit of, and the obligations created hereby shall be binding upon, the
successors and assigns of each of the parties hereto.
25. This Agreement may be executed in one or more counterparts, each of
which shall be deemed to be an original and all of which taken together shall
constitute one and the same agreement.
26. In case any provision of this Agreement shall be invalid, illegal or
unenforceable, the validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby.
27. This Agreement shall not be deemed or construed to be modified,
amended, rescinded, canceled or waived, in whole or in part, except by a written
instrument signed by a duly authorized representative of the party to be
charged. This Agreement may not be modified orally.
28. Unless otherwise provided herein, all notices, requests and other
communications to any party hereunder shall be in writing (including facsimile
or similar writing) and shall be given to such party, addressed to it, at its
address or facsimile number set forth below:
If to the Trust:
Union State Capital Trust I
c/o U.S.B. Holding Co., Inc.
100 Dutch Hill Road
Orangeburg, New York 10962
Facsimile: (914) 365-4695
Attention: Steven T. Sabatini
If to the Exchange Agent:
The Chase Manhattan Bank
450 West 33rd Street
15th Floor
New York, New York 10001-2692
Facsimile: (212) 946-8158
Attention: Global Trust Services
Shiek Wiltshire
29. Unless terminated earlier by the parties hereto, this Agreement shall
terminate 90 days following the Expiration Date. Notwithstanding the foregoing,
paragraphs 19, 21 and 23 shall survive the termination of this Agreement. Upon
any termination of this Agreement, you shall promptly deliver to the Trust any
certificates for Securities, funds or property then held by you as Exchange
Agent under this Agreement.
30. This Agreement shall be binding and effective as of the date hereof.
Please acknowledge receipt of this Agreement and confirm the arrangements
herein provided by signing and returning the enclosed copy.
UNION STATE CAPITAL TRUST I
By: /s/
------------------------------
Name:
Title: Administrative Trustee
Accepted as the date
first above written:
THE CHASE MANHATTAN BANK, as Exchange Agent
By:
Name:
Title:
SCHEDULE I
FEES
UNION STATE CAPITAL TRUST I
Exchange Agency
Fee Schedule
Flat Fee...............................................................$5,000.00
Out-Of-Pocket Expenses
Fees quoted do not include out-of-pocket expenses including, but not
limited to, reasonable legal fees and expenses, facsimile, stationary, postage,
telephone, overnight courier and messenger costs, all of which shall be paid by
the Trust.
UNION STATE CAPITAL TRUST I
OFFER FOR ALL OUTSTANDING
9.58% SERIES A CAPITAL SECURITIES
IN EXCHANGE FOR
9.58% SERIES B CAPITAL SECURITIES
To: Brokers, Dealers, Commercial Banks,
Trust Companies and Other Nominees:
Union State Capital Trust I (the "Trust") is offering, upon and subject to
the terms and conditions set forth in a prospectus dated _______ __, 1997 (the
"Prospectus"), and the enclosed letter of transmittal (the "Letter of
Transmittal"), to exchange (the "Exchange Offer") its 9.58% Series B Capital
Securities (the "New Capital Securities") for any and all of its outstanding
9.58% Series A Capital Securities (the "Old Capital Securities"). The Exchange
Offer is being made in order to satisfy certain obligations of the Trust and
U.S.B. Holding Co., Inc., Inc. (the "Corporation") contained in the registration
rights agreement dated February 5, 1997 among the Trust, the Corporation and the
initial purchaser referred to therein.
We are requesting that you contact your clients for whom you hold Old
Capital Securities regarding the Exchange Offer. For your information and for
forwarding to your clients for whom you hold Old Capital Securities registered
in your name or in the name of your nominee, or who hold Old Capital Securities
registered in their own names, we are enclosing the following documents:
1. The Prospectus;
2. The Letter of Transmittal for your use and for the information (or the
use, where relevant) of your clients;
3. A Notice of Guaranteed Delivery to be used to accept the Exchange Offer
if certificates for Old Capital Securities are not immediately available or time
will not permit all required documents to reach the Exchange Agent prior to the
Expiration Date (as defined below) or if the procedure for book-entry transfer
cannot be completed on a timely basis;
4. A form of letter that may be sent to your clients for whose account you
hold Old Capital Securities registered in your name or the name of your nominee,
with space provided for obtaining such clients' instructions with regard to the
Exchange Offer; and
5. Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9.
YOUR PROMPT ACTION IS REQUESTED. THE EXCHANGE OFFER WILL EXPIRE AT 5:00
P.M., NEW YORK CITY TIME, ON ________ ___, 1997, OR ON SUCH LATER DATE OR TIME
TO WHICH THE CORPORATION OR THE TRUST MAY EXTEND THE EXCHANGE OFFER (THE
"EXPIRATION DATE"). THE OLD CAPITAL SECURITIES TENDERED PURSUANT TO THE EXCHANGE
OFFER MAY BE WITHDRAWN AT ANY TIME BEFORE THE EXPIRATION DATE.
To participate in the Exchange Offer, your clients must tender by having
you execute for them a book-entry transfer of tendered Old Capital Securities
into the account of The Chase Manhattan Bank, as Exchange Agent, at The
Depository Trust Company ("DTC") using DTC's Automated Tender Offer Program.
Your clients may also tender by having certificates representing the Old Capital
Securities, a duly executed and properly completed Letter of Transmittal (or
facsimile thereof), with any required signature guarantees, and any other
required documents delivered to such Exchange Agent. The Letter of Transmittal
and the Prospectus should be consulted for complete instructions and information
about participation in the Exchange Offer.
If holders of Old Capital Securities wish to tender, but it is
impracticable for them to forward their certificates for Old Capital Securities
prior to the expiration of the Exchange Offer or to comply with the book-entry
transfer procedures on a timely basis, a tender may be effected by following the
guaranteed delivery procedures described in the Prospectus under "The Exchange
Offer -- Procedures for Tendering Old Capital Securities -- Guaranteed
Delivery."
The Trust will, upon request, reimburse brokers, dealers, commercial banks
and trust companies for reasonable and necessary costs and expenses incurred by
them in forwarding the Prospectus and the related documents to the beneficial
owners of Old Capital Securities held by them as nominee or in a fiduciary
capacity. The Trust will pay or cause to be paid all stock transfer taxes
applicable to the exchange of Old Capital Securities pursuant to the Exchange
Offer, except as set forth in Instruction 6 of the Letter of Transmittal.
Any inquiries you may have with respect to the Exchange Offer, or requests
for additional copies of the enclosed materials, should be directed to The Chase
Manhattan Bank, the Exchange Agent for the Old Capital Securities, at its
address and telephone number set forth on the front of the Letter of
Transmittal.
Very truly yours,
UNION STATE CAPITAL TRUST I
NOTHING HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL CONSTITUTE YOU OR ANY
PERSON AS AN AGENT OF THE TRUST OR THE EXCHANGE AGENT, OR AUTHORIZE YOU OR ANY
OTHER PERSON TO USE ANY DOCUMENT OR MAKE ANY STATEMENTS ON BEHALF OF EITHER OF
THEM WITH RESPECT TO THE EXCHANGE OFFER, EXCEPT FOR STATEMENTS EXPRESSLY MADE IN
THE PROSPECTUS OR THE LETTER OF TRANSMITTAL.
Enclosures
UNION STATE CAPITAL TRUST I
OFFER FOR ALL OUTSTANDING
9.58% SERIES A CAPITAL SECURITIES
IN EXCHANGE FOR
9.58% SERIES B CAPITAL SECURITIES
To Our Clients:
Enclosed for your consideration is a prospectus dated June __, 1997 (the
"Prospectus"), and the related letter of transmittal (the "Letter of
Transmittal") relating to the offer (the "Exchange Offer") of Union State
Capital Trust I (the "Trust") and U.S.B. Holding Co., Inc. (the "Corporation")
to exchange the Trust's 9.58% Series B Capital Securities (the "New Capital
Securities") for any and all of the Trust's outstanding 9.58% Series A Capital
Securities (the "Old Capital Securities"), upon the terms and subject to the
conditions described in the Prospectus. The Exchange Offer is being made in
order to satisfy certain obligations of the Trust and the Corporation contained
in the registration rights agreement dated February 5, 1997 among the Trust, the
Corporation and the initial purchaser referred to therein.
This material is being forwarded to you as the beneficial owner of the Old
Capital Securities carried by us in your account but not registered in your
name. A TENDER OF SUCH OLD CAPITAL SECURITIES MAY ONLY BE MADE BY US AS THE
HOLDER OF RECORD AND PURSUANT TO YOUR INSTRUCTIONS.
Accordingly, we request instructions as to whether you wish us to tender on
your behalf the Old Capital Securities held by us for your account, pursuant to
the terms and conditions set forth in the enclosed Prospectus and Letter of
Transmittal.
Your instructions should be forwarded to us as promptly as possible in
order to permit us to tender the Old Capital Securities on your behalf in
accordance with the provisions of the Exchange Offer. The Exchange Offer shall
expire at 5:00 p.m., New York City time, on ______ ___, 1997 or on such later
date or time to which the Corporation or the Trust may extend the Exchange
Offer. Any Old Capital Securities tendered pursuant to the Exchange Offer may be
withdrawn at any time before the Expiration Date.
Your attention is directed to the following:
1. The Exchange Offer is for any and all Old Capital Securities.
2. The Exchange Offer is subject to certain conditions set forth in the
Prospectus in the section captioned "The Exchange Offer -- Conditions to the
Exchange Offer."
3. Any transfer taxes incident to the transfer of Old Capital Securities
from the holder to the Corporation will be paid by the Corporation, except as
otherwise provided in the Instructions in the Letter of Transmittal.
4. The Exchange Offer expires at 5:00 p.m., New York City time, on _____
___, 1997, or on such later date or time to which the Corporation or the Trust
may extend the Exchange Offer.
If you wish to have us tender your Old Capital Securities, please so
instruct us by completing, executing and returning to us the instruction form on
the back of this letter. THE LETTER OF TRANSMITTAL IS FURNISHED TO YOU FOR
INFORMATION ONLY AND MAY NOT BE USED DIRECTLY BY YOU TO TENDER ORIGINAL CAPITAL
SECURITIES.
<PAGE>
INSTRUCTIONS WITH RESPECT TO THE EXCHANGE OFFER
The undersigned acknowledges receipt of your letter and the enclosed
material referred to therein relating to the Exchange Offer made by Union State
Capital Trust I with respect to its Old Capital Securities.
This will instruct you to tender the Old Capital Securities held by you for
the account of the undersigned, upon and subject to the terms and conditions set
forth in the Prospectus and the related Letter of Transmittal.
Please tender the Old Capital Securities held by you for my account as
indicated below:
Aggregate Liquidation Value of Old
Capital Securities Tendered
Old Capital Securities __________________________________
[ ] Please do not tender any Old
Capital Securities held
by you for my account.
Dated: _____________, 1997
__________________________________
__________________________________
Signature(s)
__________________________________
Please print name(s) here
__________________________________
__________________________________
__________________________________
Address(es)
__________________________________
Area Code and Telephone Number
__________________________________
Tax Identification or
Social Security No(s).
__________________________________
None of the Old Capital Securities held by us for your account will be
tendered unless we receive written instructions from you to do so. Unless a
specific contrary instruction is given in the space provided, your signature(s)
hereon shall constitute an instruction to us to tender all the Old Capital
Securities held by us for your account.
