<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): JULY 10, 1997
Commission file number 2-76555
COMMERCE SECURITY BANCORP, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 33-0720548
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(State or other jurisdiction of (I.R.S. Employer or
incorporation or organization) Identification No.)
7777 CENTER AVENUE, HUNTINGTON BEACH, CALIFORNIA 92647-3067
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(Address of principal executive offices) (Zip Code)
(714) 895-2929
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(Registrant's telephone number, including area code)
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ITEM 5. OTHER EVENTS
------------
SALE OF CAPITAL SECURITIES BY CERTAIN PRINCIPAL SHAREHOLDERS. As
previously reported on Form 8-K/A filed on July 11, 1997 by Commerce Security
Bancorp, Inc. (the "Company"), CSBI Capital Trust I (the "Trust"), a special
purpose Delaware business trust formed by the Company, issued a total of 27,657
shares of Subordinated Capital Income Securities, Series A, having a liquidation
value of $1,000 per share (the "Series A Capital Securities"), to Dartmouth
Capital Group, L.P. ("DCG"), Madison Dearborn Partners II, L.P. ("MDP"), Olympus
Growth Fund II, L.P. ("OGF"), and Olympus Executive Fund, L.P. ("OEF," and
together with OGF, "Olympus") and for an aggregate cash payment, net of a 1%
commitment fee, of $27,386,368. The Trust in turn invested the proceeds of the
Series A Capital Securities in Junior Subordinated Debentures issued by the
Company. The Company used the proceeds from the sale of the Junior Subordinated
Debentures to fund a portion of the Company's acquisition of Eldorado Bancorp,
which was completed on June 6, 1997.
On July 15, 1997, pursuant to a Purchase Agreement dated July 10, 1997 (the
"Purchase Agreement") by and among DCG, MDP, Olympus (collectively, the
"Sellers"), the Company, the Trust and the purchaser named therein (the "Initial
Purchaser"), the Sellers sold the Initial Purchaser all 27,657 shares of the
Series A Capital Securities held by Sellers for an aggregate cash payment, net
of a $900,000 commission to the Initial Purchaser, of $26,486,368.
The foregoing description of the purchase and sale of the Series A Capital
Securities is qualified in its entirety by reference to the Purchase Agreement
and a certain letter agreement, dated July 10, 1997, among the Sellers and the
Company, each of which is filed as an exhibit to this report.
Certain terms of the Series A Capital Securities, the Junior Subordinated
Debentures and related instruments changed as a result of the sale of the
Series A Capital Securities by the Sellers to the Initial Purchaser, including a
change in the interest rate on the Junior Subordinated Debentures to 11 3/4% per
annum.
The foregoing description of the Series A Capital Securities and the Junior
Subordinated Debentures is qualified in its entirety by reference to the Trust's
Amended and Restated Declaration of Trust, the form of Junior Subordinated
Debentures, the Indenture, and the Amended and Restated Series A Capital
Securities Guarantee Agreement (the "Guarantee"), each of which is filed as an
exhibit to this report.
Pursuant to a registration rights agreement (the "Registration Rights
Agreement") among the Company, the Trust and the Initial Purchaser, the Company
and the Trust have agreed to file, no later than May 15, 1998, a registration
statement with respect to an offer to exchange (i) the Series A Capital
Securities for a new series of capital securities of the Trust (the "New Capital
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Securities") registered under the Securities Act with terms substantially
identical to those of the Series A Capital Securities (except with respect to
certain transfer restrictions and distribution provisions), (ii) the
Guarantee for an identical guarantee in respect of the New Capital Securities
registered under the Securities Act with terms substantially identical to
those of the Guarantee and (iii) the Junior Subordinated Debentures for a new
series of junior subordinated debentures registered under the Securities Act
with terms substantially identical to those of the Junior Subordinated
Debentures, with such exceptions and conditions as set forth in the
Registration Rights Agreement.
The foregoing description of the Registration Rights Agreement is
qualified in its entirety by reference to the Registration Rights Agreement
filed as an exhibit to this report.
PURCHASE OF SECURITIES FROM DCG. Pursuant to that certain Shareholder
Agreement, dated June 6, 1997 (the "Shareholder Agreement"), to which the
Company, DCG, MDP and Olympus are parties, MDP and Olympus exercised their
option to purchase all of the senior securities of the Company (other than the
Series A Capital Securities) acquired by DCG on June 6, 1997, consisting of
18,647 shares of Series B Preferred Stock, 771,788 shares of Special Common
Stock, and 639,714 Series B Warrants. The purchase of such securities (the
"Senior Equity Securities") occurred immediately following the sale of the
Series A Capital Securities referenced above.
The foregoing description of the purchase by MDP and Olympus of the Senior
Equity Securities from DCG is qualified in its entirety by reference to the
Shareholder Agreement and that certain Call Exercise Agreement dated July 15,
1997 among MDP, Olympus, DCG and the Company, each of which is filed as an
exhibit to this report.
PRO FORMA SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS. Immediately
following the closing of the purchase of the Series A Capital Securities by the
Initial Purchaser pursuant to the Purchase Agreement, and the closing of the
purchase of the Senior Equity Securities by MDP and Olympus, DCG owned 30.1% of
the shares of voting Common Stock of the Company then outstanding, and each of
MDP and Olympus owned 9.9%. Exhibit 99.1 to this report sets forth the
respective amounts of each tranche of voting securities owned, as of July 15,
1997, by DCG, MDP, Olympus and each other holder of more than 5% of any class of
outstanding equity securities of the Company.
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ITEM 7. EXHIBITS
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DESCRIPTION PAGE
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(c) Exhibits
4.1 Amended and Restated Declaration of Trust of CSBI Capital 6
Trust I dated as of July 15, 1997, by and among the Company,
the Regular Trustees, the Property Trustee and the Delaware
Trustee named therein.
4.2 Indenture between the Company and Wilmington Trust Company, 89
dated as of July 15, 1997.
4.3 Form of Junior Subordinated Debentures. 147
4.4 Amended and Restated Series A Capital Securities Guarantee 155
Agreement, dated July 15, 1997.
10.1 Purchase Agreement dated July 10, 1997, by and among MDP, 176
DCG, Olympus, the Trust, the Company and the Initial
Purchaser named therein.
10.2 Letter Agreement among CSBI, DCG, MDP and Olympus, dated 205
July 10, 1997.
10.3 Registration Rights Agreement dated July 10, 1997 by and 210
among the Company, the Trust and the Initial Purchaser.
10.4 Shareholder Agreement, dated June 6, 1997, among DCG, MDP, *
Olympus and the other parties named therein. *
10.5 Call Exercise Agreement, dated July 15, 1997, by and among 231
the Company, the Trust, DCG, MDP and Olympus.
99.1 Schedule of Principal Shareholders as of July 15, 1997. 240
* Incorporated by reference to Exhibit 10.6 to the Company's Current
Report on Form 8-K/A filed with the Commission on July 11, 1997.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
COMMERCE SECURITY BANCORP, INC.
August 7, 1997 By: /s/ Curt A. Christianssen
-------------------------------------
Curt A. Christianssen
Senior Vice President
Chief Financial Officer
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EXHIBIT 4.1
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AMENDED AND RESTATED DECLARATION OF TRUST
CSBI CAPITAL TRUST I
Dated as of July 15, 1997
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TABLE OF CONTENTS
Page
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ARTICLE 1
INTERPRETATION AND DEFINITIONS
Section 1.1 Interpretation and Definitions . . . . . . . . . . . . . . . . . 1
Affiliate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Authorized Officer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Business Day . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Business Trust Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Capital Security . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Capital Security Certificate . . . . . . . . . . . . . . . . . . . . . . . . 2
Certificate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Certificate of Trust . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Closing Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Code . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Commission . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Common Securities Holder . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Common Security . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Common Security Certificate . . . . . . . . . . . . . . . . . . . . . . . . . 3
Corporate Trust Office . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Covered Person . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Debenture Issuer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Debenture Issuer Indemnified Person . . . . . . . . . . . . . . . . . . . . . 3
Debenture Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Debentures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Delaware Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Depositary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Distribution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
DTC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Exchange Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Federal Reserve . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Fiduciary Indemnified Person . . . . . . . . . . . . . . . . . . . . . . . . 4
Fiscal Year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Global Security . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Guarantee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Holder . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Indemnified Person . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Indenture . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Indenture Event of Default . . . . . . . . . . . . . . . . . . . . . . . . . 5
Initial Purchaser . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Institutional Accredited Investor . . . . . . . . . . . . . . . . . . . . . . 5
Investment Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Investment Company Act . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Investment Company Event . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Legal Action . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
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List of Holders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Majority in Liquidation Amount . . . . . . . . . . . . . . . . . . . . . . . 5
New Capital Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
New Capital Security Certificate . . . . . . . . . . . . . . . . . . . . . . 6
Officers' Certificate . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Paying Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Payment Amount . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Person . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Private Placement Legend . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Property Account . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Property Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Pro Rata . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Qualified Institutional Buyer . . . . . . . . . . . . . . . . . . . . . . . . 6
Quorum . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Redemption Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Registration Rights Agreement . . . . . . . . . . . . . . . . . . . . . . . . 7
Regular Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Regulation S . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Regulatory Capital Event . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Related Party . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Responsible Officer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Restricted Global Security . . . . . . . . . . . . . . . . . . . . . . . . . 8
Restricted Period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Restricted Security . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Rule 144A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Rule 3a-5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Securities Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Special Event . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Sponsor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Successor Delaware Trustee . . . . . . . . . . . . . . . . . . . . . . . . . 8
Successor Entity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Successor Property Trustee . . . . . . . . . . . . . . . . . . . . . . . . . 8
Successor Security . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Super Majority . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Tax Event . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
10% in Liquidation Amount . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Transfer Restricted Securities . . . . . . . . . . . . . . . . . . . . . . . 9
Transfer Restricted Securities Certificate . . . . . . . . . . . . . . . . . 9
Treasury Regulations . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Trust Enforcement Event . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Trust Indenture Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Trustees' Authorization Certificate . . . . . . . . . . . . . . . . . . . . . 10
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ARTICLE 2
TRUST INDENTURE ACT
Section 2.1 Trust Indenture Act; Application . . . . . . . . . . . . . . . . 10
Section 2.2 Lists of Holders of Securities . . . . . . . . . . . . . . . . . 10
Section 2.3 Reports by the Property Trustee . . . . . . . . . . . . . . . . 11
Section 2.4 Periodic Reports to the Property Trustee . . . . . . . . . . . . 11
Section 2.5 Evidence of Compliance with Conditions Precedent . . . . . . . . 11
Section 2.6 Trust Enforcement Events; Waiver . . . . . . . . . . . . . . . . 11
Section 2.7 Trust Enforcement Event; Notice . . . . . . . . . . . . . . . . 13
ARTICLE 3
ORGANIZATION
Section 3.1 Name and Organization . . . . . . . . . . . . . . . . . . . . . 14
Section 3.2 Office . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Section 3.3 Purpose . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Section 3.4 Authority . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Section 3.5 Title to Property of the Trust . . . . . . . . . . . . . . . . . 15
Section 3.6 Powers and Duties of the Regular Trustees . . . . . . . . . . . 15
Section 3.7 Prohibition of Actions by the Trust and the Trustees . . . . . . 20
Section 3.8 Powers and Duties of the Property Trustee . . . . . . . . . . . 22
Section 3.9 Certain Duties and Responsibilities of the Property Trustee . . 24
Section 3.10 Certain Rights of Property Trustee . . . . . . . . . . . . . . . 26
Section 3.11 Delaware Trustee . . . . . . . . . . . . . . . . . . . . . . . . 29
Section 3.12 Execution of Documents . . . . . . . . . . . . . . . . . . . . . 29
Section 3.13 Not Responsible for Recitals or Issuance of Securities . . . . . 29
Section 3.14 Duration of Trust . . . . . . . . . . . . . . . . . . . . . . . 30
Section 3.15 Mergers . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Section 3.16 Property Trustee May File Proofs of Claim . . . . . . . . . . . 32
ARTICLE 4
SPONSOR
Section 4.1 Responsibilities of the Sponsor . . . . . . . . . . . . . . . . 33
Section 4.2 Compensation, Indemnification and Expenses of the Trustee . . . 33
ARTICLE 5
TRUST COMMON SECURITIES HOLDER
Section 5.1 Debenture Issuer's Purchases of Common Securities . . . . . . . 34
Section 5.2 Covenants of the Common Securities Holder . . . . . . . . . . . 34
ARTICLE 6
TRUSTEES
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Section 6.1 Number of Trustees . . . . . . . . . . . . . . . . . . . . . . . 35
Section 6.2 Delaware Trustee . . . . . . . . . . . . . . . . . . . . . . . . 35
Section 6.3 Property Trustee; Eligibility . . . . . . . . . . . . . . . . . 35
Section 6.4 Qualifications of Regular Trustees and Delaware Trustee
Generally . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
Section 6.5 Initial Regular Trustees . . . . . . . . . . . . . . . . . . . 36
Section 6.6 Appointment, Removal and Resignation of Trustees . . . . . . . . 37
Section 6.7 Vacancies among Trustees . . . . . . . . . . . . . . . . . . . . 38
Section 6.8 Effect of Vacancies . . . . . . . . . . . . . . . . . . . . . . 38
Section 6.9 Delegation of Power . . . . . . . . . . . . . . . . . . . . . . 38
Section 6.10 Merger, Conversion, Consolidation or Succession to Business . . 39
ARTICLE 7
THE SECURITIES
Section 7.1 General Provisions Regarding Securities . . . . . . . . . . . . 39
Section 7.2 Distributions . . . . . . . . . . . . . . . . . . . . . . . . . 42
Section 7.3 Redemption of Securities . . . . . . . . . . . . . . . . . . . . 42
Section 7.4 Redemption Procedures . . . . . . . . . . . . . . . . . . . . . 43
Section 7.5 Voting Rights of Capital Securities . . . . . . . . . . . . . . 45
Section 7.6 Voting Rights of Common Securities . . . . . . . . . . . . . . . 47
Section 7.7 Paying Agent . . . . . . . . . . . . . . . . . . . . . . . . . . 48
Section 7.8 Transfer of Securities . . . . . . . . . . . . . . . . . . . . . 49
Section 7.9 Mutilated, Destroyed, Lost or Stolen Certificates . . . . . . . 50
Section 7.10 Persons Deemed Security Holders . . . . . . . . . . . . . . . . 50
Section 7.11 Global Securities . . . . . . . . . . . . . . . . . . . . . . . 50
Section 7.12 Restrictive Legend . . . . . . . . . . . . . . . . . . . . . . . 53
Section 7.13 Special Transfer Provisions . . . . . . . . . . . . . . . . . . 55
ARTICLE 8
DISSOLUTION AND TERMINATION OF TRUST
Section 8.1 Dissolution and Termination of Trust . . . . . . . . . . . . . . 58
Section 8.2 Liquidation Distribution Upon Termination and Dissolution
of the Trust . . . . . . . . . . . . . . . . . . . . . . . . . . 59
ARTICLE 9
LIMITATION OF LIABILITY OF
HOLDERS OF SECURITIES, TRUSTEES OR OTHERS
Section 9.1 Liability . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
Section 9.2 Exculpation . . . . . . . . . . . . . . . . . . . . . . . . . . 60
Section 9.3 Fiduciary Duty . . . . . . . . . . . . . . . . . . . . . . . . . 60
Section 9.4 Indemnification . . . . . . . . . . . . . . . . . . . . . . . . 61
Section 9.5 Outside Businesses . . . . . . . . . . . . . . . . . . . . . . . 64
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ARTICLE 10
ACCOUNTING
Section 10.1 Fiscal Year . . . . . . . . . . . . . . . . . . . . . . . . . . 64
Section 10.2 Certain Accounting Matters . . . . . . . . . . . . . . . . . . 65
Section 10.3 Banking . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
Section 10.4 Withholding . . . . . . . . . . . . . . . . . . . . . . . . . . 65
ARTICLE 11
AMENDMENTS AND MEETINGS
Section 11.1 Amendments . . . . . . . . . . . . . . . . . . . . . . . . . . 66
Section 11.2 Meetings of the Holders of Securities; Action by Written
Consent . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
ARTICLE 12
REPRESENTATIONS OF PROPERTY TRUSTEE
AND DELAWARE TRUSTEE
Section 12.1 Representations and Warranties of the Property Trustee . . . . 70
Section 12.2 Representations and Warranties of the Delaware Trustee . . . . 71
ARTICLE 13
MISCELLANEOUS
Section 13.1 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
Section 13.2 Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . 73
Section 13.3 Intention of the Parties . . . . . . . . . . . . . . . . . . . 73
Section 13.4 Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
Section 13.5 Successors and Assigns . . . . . . . . . . . . . . . . . . . . 73
Section 13.6 Partial Enforceability . . . . . . . . . . . . . . . . . . . . 74
Section 13.7 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . 74
Section 13.8 Undertaking for Costs . . . . . . . . . . . . . . . . . . . . . 74
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AMENDED AND RESTATED DECLARATION OF TRUST
THIS AMENDED AND RESTATED DECLARATION OF TRUST ("Declaration")
dated as of July 15, 1997 between COMMERCE SECURITY BANCORP, INC., a Delaware
corporation, as Sponsor, and ROBERT P. KELLER, CURT A. CHRISTIANSSEN and
CLAIRE FITZPATRICK as the initial Regular Trustees, WILMINGTON TRUST COMPANY,
as the initial Property Trustee, and WILMINGTON TRUST COMPANY, as the initial
Delaware Trustee, not in their individual capacities but solely as Trustees,
and the holders, from time to time, of undivided beneficial ownership
interests in the assets of the Trust to be issued pursuant to this
Declaration.
WHEREAS, the Trustees (or their predecessor Trustees) and the
Sponsor established CSBI Capital Trust I (the "Trust"), a business trust
under the Business Trust Act (as defined, together with other capitalized
terms, herein) pursuant to a Declaration of Trust dated as of June 5, 1997
(the "Original Declaration") and a Certificate of Trust (the "Certificate of
Trust") filed with the Secretary of State of the State of Delaware on June 5,
1997; and
WHEREAS, the sole purpose of the Trust is to issue and sell, in one
or more issuances and sales, certain securities representing undivided
beneficial ownership interests in the assets of the Trust, to invest the
proceeds from such sales in the Debentures issued by the Debenture Issuer and
to engage in only those activities necessary or incidental thereto; and
WHEREAS, all of the Trustees and the Sponsor, by this Declaration,
desire to amend and restate each and every term and provision of the Original
Declaration.
NOW, THEREFORE, it being the intention of the parties hereto that
the Trust constitute a business trust under the Business Trust Act, the
Trustees hereby declare that all assets contributed to the Trust be held in
trust for the benefit of the Holders, from time to time, of the Securities
representing undivided beneficial ownership interests in the assets of the
Trust issued hereunder, subject to the provisions of this Declaration.
ARTICLE 1
INTERPRETATION AND DEFINITIONS
Section 1.1 Interpretation and Definitions.
Unless the context otherwise requires:
(a) capitalized terms used in this Declaration but not defined in
the preamble above have the respective meanings assigned to them in this
Section 1.1;
(b) a term defined anywhere in this Declaration has the same
meaning throughout;
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(c) all references to "the Declaration" or "this Declaration" are
to this Declaration as modified, supplemented or amended from time to time;
(d) all references in this Declaration to Articles and Sections are
to Articles and Sections of this Declaration unless otherwise specified;
(e) a term defined in the Trust Indenture Act has the same meaning
when used in this Declaration unless otherwise defined in this Declaration or
unless the context otherwise requires; and
(f) a reference to the singular includes the plural and vice versa
and a reference to any masculine form of a term shall include the feminine
form of a term, as applicable.
"Affiliate" has the same meaning as given to that term in Rule 405
of the Securities Act or any successor rule thereunder.
"Authorized Officer" of a Person means the Chairman of the Board, a
Vice Chairman of the Board, the Chief Executive Officer, the President, a
Vice President, the principal financial officer, the Treasurer, an Assistant
Treasurer, the Secretary or an Assistant Secretary of such Person.
"Business Day" means any day other than a Saturday or Sunday or a
day on which banking institutions in Huntington Beach, California or
Wilmington, Delaware 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 is closed for business.
"Business Trust Act" means Chapter 38 of Title 12 of the Delaware
Code, 12 Del. Code Section 3801 et seq., as it may be amended from time to
time, or any successor legislation.
"Capital Security" has the meaning specified in Section 7.1.
"Capital Security Certificate" means a certificate representing a
Capital Security.
"Certificate" means a Common Security Certificate or a Capital
Security Certificate.
"Certificate of Trust" has the meaning specified in the recitals
hereto.
"Closing Date" means June 6, 1997 or such subsequent date or dates
on which the Capital Securities are issued and sold.
"Code" means the Internal Revenue Code of 1986, as amended from
time to time, or any successor legislation. A reference to a specific
section of the Code refers not only to such specific section but also to any
corresponding provision of any federal tax statute enacted after the
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date of this Declaration, as such specific section or corresponding provision
is in effect on the date of application of the provisions of this Declaration
containing such reference.
"Commission" means the Securities and Exchange Commission.
"Common Securities Holder" means Commerce Security Bancorp, Inc. in
its capacity as purchaser and holder of all of the Common Securities issued
or to be issued by the Trust.
"Common Security" has the meaning specified in Section 7.1.
"Common Security Certificate" means a definitive certificate in
fully registered form representing a Common Security.
"Corporate Trust Office" means the office of the Property Trustee
at which the corporate trust business of the Property Trustee shall, at any
particular time, be principally administered, which office at the date of
execution of this Declaration is located at Rodney Square North, 1100 N.
Market Street, Wilmington, DE 19890-0001, Attention: Corporate Trust Services
Division.
"Covered Person" means (a) any officer, director, trustee,
shareholder, partner, member, representative, employee or agent of (i) the
Trust or (ii) the Trust's Affiliates; and (b) any Holder of Securities.
"Debenture Issuer" means Commerce Security Bancorp, Inc. in its
capacity as issuer, in one or more issuances, of the Debentures under the
Indenture.
"Debenture Issuer Indemnified Person" means (a) any Regular
Trustee; (b) any Affiliate of any Regular Trustee; (c) any officers,
directors, shareholders, members, partners, employees, representatives or
agents of any Regular Trustee or any Affiliate thereof; or (d) any officer,
employee or agent of the Trust or its Affiliates, but does not include any
Fiduciary Indemnified Person.
"Debenture Trustee" means Wilmington Trust Company, in its capacity
as trustee under the Indenture until a successor is appointed thereunder, and
thereafter means such successor trustee.
"Debentures" means the Securities (as defined in the Indenture) to
be issued, in one or more issuances, by the Debenture Issuer and to be held
by the Property Trustee.
"Delaware Trustee" has the meaning set forth in Section 6.2.
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"Depositary" means, with respect to Securities issuable in whole or
in part in the form of one or more Global Securities, a clearing agency
registered under the Exchange Act that is designated to act as Depositary for
such Securities.
"Distribution" means a distribution payable to Holders of
Securities in accordance with Section 7.2.
"DTC" means The Depository Trust Company, the initial Depositary.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended from time to time, or any successor legislation.
"Federal Reserve" means the Board of Governors of the Federal
Reserve System.
"Fiduciary Indemnified Person" has the meaning set forth in Section
9.4(b).
"Fiscal Year" has the meaning set forth in Section 10.1.
"Global Security" has the meaning set forth in Section 7.11.
"Guarantee" means the guarantee agreement of the Sponsor in respect
of the Capital Securities and the Common Securities.
"Holder" means a Person in whose name a Certificate representing a
Security is registered, such Person being a beneficial owner within the
meaning of the Business Trust Act; PROVIDED, HOWEVER, that in determining
whether the Holders of the requisite liquidation amount of Capital Securities
have voted on any matter provided for in this Declaration, then for the
purpose of such determination only (and not for any other purpose hereunder),
if the Capital Securities are then issued in the form of one or more Global
Securities, the term "Holders" shall mean the holder of the Global Security
acting at the direction of the beneficial owners of the Capital Securities.
"Indemnified Person" means a Debenture Issuer Indemnified Person or
a Fiduciary Indemnified Person.
"Indenture" means the Indenture dated as of July 15, 1997, between
the Debenture Issuer and the Debenture Trustee, and any indenture
supplemental thereto pursuant to which the Debentures are to be issued.
"Indenture Event of Default" means an "Event of Default" as defined
in the Indenture.
"Initial Purchaser" means Lehman Brothers Inc.
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"Institutional Accredited Investor" means an institution that is an
"accredited investor" as the term is defined in Rule 501(a)(1), (2), (3) or (7)
under the Securities Act.
"Investment Company" means an investment company as defined in the
Investment Company Act and the regulations promulgated thereunder.
"Investment Company Act" means the Investment Company Act of 1940, as
amended from time to time, or any successor legislation.
"Investment Company Event" means the receipt by the Trust of an
opinion of counsel experienced in such matters to the effect that, as a result
of the occurrence of a change in law or regulation or a change in interpretation
or application of law or regulation by any legislative body, court, governmental
agency or regulatory authority (a "Change in 1940 Act Law"), the Trust is or
will be considered an "investment company" that is required to be registered
under the Investment Company Act, which Change in 1940 Act Law becomes effective
on or after the Closing Date.
"Legal Action" has the meaning set forth in Section 3.6(g).
"List of Holders" has the meaning specified in Section 2.2(a).
"Majority in Liquidation Amount" means, except as provided in the
terms of the Capital Securities or by the Trust Indenture Act, Holder(s) of
outstanding Securities, voting together as a single class, or, as the context
may require, Holders of outstanding Capital Securities or Holders of outstanding
Common Securities, voting separately as a class, who are the record owners of
more than 50% of the aggregate liquidation amount (including the stated amount
that would be paid on redemption, liquidation or otherwise, plus accrued and
unpaid Distributions to the date upon which the voting percentages are
determined) of all outstanding Securities of the relevant class.
"New Capital Securities" has the meaning specified in Section 7.1.
"New Capital Security Certificate" has the meaning specified in
Section 7.1.
"Officers' Certificate" means, with respect to any Person (other than
Regular Trustees who are natural persons), a certificate signed by two
Authorized Officers of such Person on behalf of such Person. Any Officers'
Certificate delivered with respect to compliance with a condition or covenant
provided for in this Declaration shall include:
(a) a statement that each officer signing the Officers' Certificate
has read the covenant or condition and the definitions relating thereto;
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(b) a statement that each such officer has made such examination or
investigation as, in such officer's opinion, is necessary to enable such officer
to express an informed opinion as to whether or not such covenant or condition
has been complied with; and
(c) a statement as to whether, in the opinion of each such officer
and on behalf of such Person, such condition or covenant has been complied with;
provided, that the term "Officers' Certificate", when used with reference to
Regular Trustees who are natural persons shall mean a certificate signed by two
of the Regular Trustees which otherwise satisfies the foregoing requirements.
"Paying Agent" has the meaning specified in Section 3.8(h).
"Payment Amount" has the meaning specified in Section 7.2(a).
"Person" means a legal person, including any individual, corporation,
estate, partnership, joint venture, association, joint stock company, limited
liability company, trust, unincorporated association, or government or any
agency or political subdivision thereof or any other entity of whatever nature.
"Private Placement Legend" has the meaning specified in Section 7.12.
"Property Account" has the meaning specified in Section 3.8(c).
"Property Trustee" means the Trustee meeting the eligibility
requirements set forth in Section 6.3.
"Pro Rata" means pro rata to each Holder of Securities according to
the aggregate liquidation amount of the Securities held by the relevant Holder
in relation to the aggregate liquidation amount of all Securities outstanding.
"Qualified Institutional Buyer" or "QIB" has the meaning specified in
Rule 144A under the Securities Act.
"Quorum" means a majority of the Regular Trustees or, if there are
only two Regular Trustees, both of them.
"Redemption Price" has the meaning specified in Section 7.3(a).
"Registration Rights Agreement" means the Registration Rights
Agreement dated the date hereof between the Debenture Issuer, the Trust and the
Initial Purchaser for the benefit of themselves and the Holders of the Capital
Securities issued by the Trust as of the date hereof, as the same may be amended
from time to time in accordance with the terms thereof.
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"Regular Trustee" means any Trustee other than the Property Trustee
and the Delaware Trustee.
"Regulatory Capital Event" means the Debenture Issuer's delivery of 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 political subdivision, agency or authority thereof or (b)
any official or administrative pronouncement or action or judicial decision
interpreting or applying such laws or regulations which amendment or change is
effective or such pronouncement or action or decision is announced on or after
the date of original issuance of the Capital Securities, there is more than an
insubstantial risk that the Capital Securities do not constitute, or within 90
days of the date thereof will not constitute, Tier 1 capital (or its then
equivalent) for the purposes of the capital adequacy guidelines of the federal
bank regulatory agency(ies) then having jurisdiction over the Company; PROVIDED,
HOWEVER, that the distribution of the Debentures to the Holders of the
Securities in connection with the liquidation of the Trust by the Debenture
Issuer shall not in and of itself constitute a Regulatory Capital Event unless
such liquidation shall have occurred in connection with a Tax Event or an
Investment Company Event.
"Related Party" means, with respect to the Sponsor, any direct or
wholly owned subsidiary of the Sponsor or any Person that owns, directly or
indirectly, 100% of the outstanding voting securities of the Sponsor.
"Responsible Officer" means, with respect to the Property Trustee, any
officer within the Corporate Trust Office of the Property Trustee, including any
vice-president, any assistant vice-president, the secretary, any assistant
secretary, the treasurer, any assistant treasurer or other officer of the
Corporate Trust Office of the Property Trustee customarily performing functions
similar to those performed by any of the above designated officers and also
means, with respect to a particular corporate trust matter, any other officer to
whom such matter is referred because of that officer's knowledge of and
familiarity with the particular subject.
"Restricted Global Security" means any Global Security or Securities
evidencing Securities that are to be sold pursuant to Rule 144A.
"Restricted Period" shall have the meaning specified in
Section 7.13(g).
"Restricted Security" has the meaning assigned to such term in Rule
144(a)(3) under the Securities Act.
"Rule 144A" means Rule 144A under the Securities Act.
"Rule 3a-5" means Rule 3a-5 under the Investment Company Act or any
successor rule thereunder.
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"Securities" means the Common Securities and the Capital Securities
(whether issued at the initial Closing or any subsequent Closing Date).
"Securities Act" means the Securities Act of 1933, as amended from
time to time, or any successor legislation.
"Special Event" means a Tax Event, a Regulatory Capital Event or an
Investment Company Event.
"Sponsor" means Commerce Security Bancorp, Inc., a Delaware
corporation, or any successor entity in a merger, consolidation or amalgamation,
in its capacity as sponsor of the Trust.
"Successor Delaware Trustee" has the meaning specified in Section
6.6(b).
"Successor Entity" has the meaning specified in Section 3.15(b)(i).
"Successor Property Trustee" has the meaning specified in Section
6.6(b).
"Successor Security" has the meaning specified in Section 3.15(b)(i)b.
"Super Majority" has the meaning set forth in Section 2.6(a)(ii).
"Tax Event" means the receipt by the Debenture Issuer of an opinion of
counsel rendered by a law firm with a recognized tax practice, or an opinion
rendered by a nationally recognized accounting firm, to the effect that, as a
result of any amendment to, change in or announced proposed change in the laws
(or any regulations thereunder) of the United States or any political
subdivision, agency or authority thereof or therein, or as a result of any
official or administrative pronouncement or action or judicial decision
interpreting or applying such laws or regulations, 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 the United States federal income tax with respect to
income received or accrued on the Debentures, (ii) interest payable by the
Debenture Issuer on such Debentures is not, or within 90 days of the date of
such opinion will not be, deductible by the Debenture Issuer, in whole or in
part, for United States federal income tax purposes, or (iii) the Trust is, or
will be within 90 days of the date of such opinion, subject to more than a DE
MINIMIS amount of other taxes, duties or other governmental charges.
"10% in Liquidation Amount" means, except as provided in the terms of
the Capital Securities or by the Trust Indenture Act, Holder(s) of outstanding
Securities, voting together as a single class, or, as the context may require,
Holders of outstanding Capital Securities or Holders of outstanding Common
Securities, voting separately as a class, who are the record owners of 10% or
more of the aggregate liquidation amount (including the stated amount that would
be paid on
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redemption, liquidation or otherwise, plus accrued and unpaid Distributions to
the date upon which the voting percentages are determined) of all outstanding
Securities of the relevant class.
"Transfer Restricted Securities" has the meaning specified in Section
7.1.
"Transfer Restricted Securities Certificate" has the meaning specified
in Section 7.1.
"Treasury Regulations" means the income tax regulations, including
temporary and proposed regulations, promulgated under the Code by the United
States Treasury, as such regulations may be amended from time to time (including
corresponding provisions of succeeding regulations).
"Trust Enforcement Event" in respect of the Securities means an
Indenture Event of Default has occurred and is continuing in respect of the
Debentures.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as
amended from time to time, or any successor legislation.
"Trustee" or "Trustees" means each Person who has signed this
Declaration as a trustee, so long as such Person shall continue in office in
accordance with the terms hereof, and all other Persons who may from time to
time be duly appointed, qualified and serving as Trustees in accordance with the
provisions hereof, and references herein to a Trustee or the Trustees shall
refer to such Person or Persons solely in their capacity as trustees hereunder.
"Trustees' Authorization Certificate" means a written certificate
signed by two of the Regular Trustees for the purpose of establishing the terms
and form of the Capital Securities and the Common Securities as determined by
the Regular Trustees.
ARTICLE 2
TRUST INDENTURE ACT
Section 2.1 Trust Indenture Act; Application.
(a) This Declaration is subject to the provisions of the Trust
Indenture Act that are required to be part of this Declaration and shall, to the
extent applicable, be governed by such provisions.
(b) The Property Trustee shall be the only Trustee that is a Trustee
for the purposes of the Trust Indenture Act.
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(c) If and to the extent that any provision of this Declaration
conflicts with the duties imposed by Sections 310 to 317, inclusive, of the
Trust Indenture Act, such imposed duties shall control.
(d) The application of the Trust Indenture Act to this Declaration
shall not affect the Trust's classification as a grantor trust for United States
federal income tax purposes and shall not affect the nature of the Securities as
equity securities representing undivided beneficial ownership interests in the
assets of the Trust.
Section 2.2 Lists of Holders of Securities.
(a) Each of the Sponsor and the Regular Trustees on behalf of the
Trust shall provide the Property Trustee with a list, in such form as the
Property Trustee may reasonably require, of the names and addresses of the
Holders of the Securities ("List of Holders"), (i) not later than the Business
Day immediately following each record date fixed pursuant to Section 7.2(c) and
current as of such record date, and (ii) at any other time, within 30 days of
receipt by the Trust of a written request from the Property Trustee for a List
of Holders as of a date no more than 15 days before such List of Holders is
given to the Property Trustee; provided that neither the Sponsor nor the Regular
Trustees on behalf of the Trust shall be obligated to provide such List of
Holders at any time the List of Holders does not differ from the most recent
List of Holders given to the Property Trustee by the Sponsor and the Regular
Trustees on behalf of the Trust. The Property Trustee shall preserve, in as
current a form as is reasonably practicable, all information contained in Lists
of Holders given to it or which it receives in the capacity as Paying Agent (if
acting in such capacity), provided that the Property Trustee may destroy any
List of Holders previously given to it on receipt of a new List of Holders.
(b) The Property Trustee shall comply with its obligations under, and
shall be entitled to the benefits of, Sections 311(a), 311(b) and 312(b) of the
Trust Indenture Act.
Section 2.3 Reports by the Property Trustee.
Within 60 days after July 15 of each year (commencing in the year of
the issuance of the Capital Securities), 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 2.4 Periodic Reports to the Property Trustee.
Each of the Sponsor and the Regular 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 of the Trust
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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 Precedent.
Each of the Sponsor and the Regular 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 that relate to
any of the matters set forth in Section 314(c) of the Trust Indenture Act. Any
certificate or opinion required to be given by an officer pursuant to Section
314(c)(1) may be given in the form of an Officers' Certificate.
Section 2.6 Trust Enforcement Events; Waiver.
(a) The Holders of a Majority in Liquidation Amount of the Capital
Securities may, by vote or written consent, on behalf of the Holders of all of
the Capital Securities, waive any past Trust Enforcement Event in respect of the
Capital Securities and its consequences, provided that, if the underlying
Indenture Event of Default:
(i) is not waivable under the Indenture, the Trust Enforcement
Event under the Declaration shall also not be waivable; or
(ii) requires the consent or vote of greater than a majority in
principal amount of the holders of the Debentures (a "Super
Majority") to be waived under the Indenture, the Trust
Enforcement Event under the Declaration may only be waived
by the vote or written consent of the Holders of at least
the proportion in liquidation amount of the Capital
Securities that the relevant Super Majority represents of
the aggregate principal amount of the Debentures
outstanding.
The foregoing provisions of this Section 2.6(a) shall be in lieu of
Section 316(a)(1)(B) of the Trust Indenture Act and such Section 316(a)(1)(B) of
the Trust Indenture Act is hereby expressly excluded from this Declaration and
the Securities, as permitted by the Trust Indenture Act. Upon such waiver, any
such default shall cease to exist, and any Trust Enforcement Event with respect
to the Capital Securities arising therefrom shall be deemed to have been cured,
for every purpose of this Declaration and the Capital Securities, but no such
waiver shall extend to any subsequent or other Trust Enforcement Event with
respect to the Capital Securities or impair any right consequent thereon. Any
waiver by the Holders of the Capital Securities of a Trust Enforcement Event
with respect to the Capital Securities shall also be deemed to constitute a
waiver by the Holders of the Common Securities of any such Trust Enforcement
Event with respect to the Common Securities for all purposes of this Declaration
without any further act, vote, or consent of the Holders of the Common
Securities.
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(b) The Holders of a Majority in Liquidation Amount of the Common
Securities may, by vote or written consent, on behalf of the Holders of all of
the Common Securities, waive any past Trust Enforcement Event in respect of the
Common Securities and its consequences, provided that, if the underlying
Indenture Event of Default:
(i) is not waivable under the Indenture, except where the
Holders of the Common Securities are deemed to have waived
such Trust Enforcement Event under the Declaration as
provided below in this Section 2.6(b), the Trust Enforcement
Event under the Declaration shall also not be waivable; or
(ii) requires the consent or vote of a Super Majority to be
waived under the Indenture, except where the Holders of the
Common Securities are deemed to have waived such Trust
Enforcement Event under the Declaration as provided below in
this Section 2.6(b), the Trust Enforcement Event under the
Declaration may only be waived by the vote or written
consent of the Holders of at least the proportion in
liquidation amount of the Common Securities that the
relevant Super Majority represents of the aggregate
principal amount of the Debentures outstanding;
provided further, each Holder of Common Securities will be deemed to have waived
any Trust Enforcement Event and all Trust Enforcement Events with respect to the
Common Securities and the consequences thereof until all Trust Enforcement
Events with respect to the Capital Securities have been cured, waived or
otherwise eliminated, and until such Trust Enforcement Events with respect to
the Capital Securities have been so cured, waived or otherwise eliminated, the
Property Trustee will be deemed to be acting solely on behalf of the Holders of
the Capital Securities and only the Holders of the Capital Securities will have
the right to direct the Property Trustee in accordance with the terms of the
Securities. The foregoing provisions of this Section 2.6(b) shall be in lieu of
Sections 316(a)(1)(A) and 316(a)(1)(B) of the Trust Indenture Act and such
Sections 316(a)(1)(A) and 316(a)(1)(B) of the Trust Indenture Act are hereby
expressly excluded from this Declaration and the Securities, as permitted by the
Trust Indenture Act. Subject to the foregoing provisions of this Section
2.6(b), upon such waiver, any such default shall cease to exist and any Trust
Enforcement Event with respect to the Common Securities arising therefrom shall
be deemed to have been cured for every purpose of this Declaration, but no such
waiver shall extend to any subsequent or other Trust Enforcement Event with
respect to the Common Securities or impair any right consequent thereon.
(c) A waiver of an Indenture Event of Default by the Property Trustee
at the direction of the Holders of the Capital Securities constitutes a waiver
of the corresponding Trust Enforcement Event with respect to the Capital
Securities under this Declaration. The foregoing provisions of this Section
2.6(c) shall be in lieu of Section 316(a)(1)(B) of the Trust Indenture Act and
such Section 316(a)(1)(B) of the Trust Indenture Act is hereby expressly
excluded from this Declaration and the Securities, as permitted by the Trust
Indenture Act.
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Section 2.7 Trust Enforcement Event; Notice.
(a) The Property Trustee shall, within 90 days after the occurrence of
a Trust Enforcement Event actually known to a Responsible Officer of the
Property Trustee, transmit by mail, first class postage prepaid, to the Holders
of the Securities, notices of all such defaults with respect to the Securities,
unless such defaults have been cured before the giving of such notice (the term
"defaults" for the purposes of this Section 2.7(a) being hereby defined to be an
Indenture Event of Default, not including any periods of grace provided for
therein and irrespective of the giving of any notice provided therein); provided
that, except for a default in the payment of principal of (or premium, if any)
or interest on any of the Debentures, the Property Trustee shall be protected in
withholding such notice if and so long as a Responsible Officer of the Property
Trustee in good faith determines that the withholding of such notice is in the
interests of the Holders of the Securities.
(b) The Property Trustee shall not be deemed to have knowledge of any
default except:
(i) a default under Sections 501(1) and 501(2) of the Indenture;
or
(ii) any default as to which the Property Trustee shall have
received written notice or of which a Responsible Officer of
the Property Trustee charged with the administration of this
Declaration shall have actual knowledge.
ARTICLE 3
ORGANIZATION
Section 3.1 Name and Organization.
The Trust hereby continued is named "CSBI Capital Trust I" as such
name may be modified from time to time by the Regular Trustees following written
notice to the Holders of Securities. The Trust's activities may be conducted
under the name of the Trust or any other name deemed advisable by the Regular
Trustees.
Section 3.2 Office.
The address of the principal executive office of the Trust is c/o
Commerce Security Bancorp, Inc., 7777 Center Avenue, Huntington Beach, CA
92647. On 10 Business Days' written notice to the Holders of Securities, the
Regular Trustees may designate another principal office.
Section 3.3 Purpose.
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The exclusive purposes and functions of the Trust are (a) to issue and
sell, in one or more issuances and sales, the Securities, (b) to use the gross
proceeds from such sale to acquire the Debentures issued or to be issued by the
Debenture Issuer, and (c) except as otherwise limited herein, to engage in only
those other activities necessary or incidental thereto. The Trust shall not
borrow money, issue debt or reinvest proceeds derived from investments,
mortgage, pledge any of its assets or otherwise undertake (or permit to be
undertaken) any activity that would cause the Trust not to be classified as a
grantor trust for United States federal income tax purposes.
By the acceptance of this Trust, none of the Trustees, the Sponsor,
the Holders of the Capital Securities or Common Securities will take any
position which is contrary to the classification of the Trust as a grantor trust
for United States federal income tax purposes.
Section 3.4 Authority.
Subject to the limitations provided in this Declaration and to the
specific duties of the Property Trustee, the Regular Trustees shall have
exclusive authority to carry out the purposes of the Trust. An action taken by
the Regular Trustees in accordance with their powers shall constitute the act of
and serve to bind the Trust and an action taken by the Property Trustee on
behalf of the Trust in accordance with its powers shall constitute the act of
and serve to bind the Trust. In dealing with the Trustees acting on behalf of
the Trust, no person shall be required to inquire into the authority of the
Trustees to bind the Trust. Persons dealing with the Trust are entitled to rely
conclusively on the power and authority of the Trustees as set forth in this
Declaration. Except as expressly set forth in this Declaration and except if a
meeting of the Regular Trustees is called with respect to any matter over which
the Regular Trustees have power to act, any power of the Regular Trustees may be
exercised by, or with the consent of, any one such Regular Trustee.
Section 3.5 Title to Property of the Trust.
Except as provided in Section 3.8 with respect to the Debentures and
the Property Account or as otherwise provided in this Declaration, legal title
to all assets of the Trust shall be vested in the Trust. The Holders shall not
have legal title to any part of the assets of the Trust, but shall have an
undivided beneficial ownership interest in the assets of the Trust.
Section 3.6 Powers and Duties of the Regular Trustees.
The Regular Trustees shall have the power, duty and authority to cause
the Trust to engage in the following activities, subject to the limitations and
restrictions of applicable laws:
(a) to establish the terms and form of the Capital Securities and the
Common Securities in the manner specified in Section 7.1 and issue and sell, in
one or more issuances and sales, the Capital Securities and the Common
Securities in accordance with this Declaration; PROVIDED, HOWEVER, that the
Trust may issue no more than two series of Capital Securities (which
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will consist exclusively of the Transfer Restricted Securities and the New
Capital Securities) and, provided further, that there shall be no interests
in the Trust other than the Securities, and no more than one series of Common
Securities;
(b) in connection with the issuances and sales of the Capital
Securities, at the direction of the Sponsor, to:
(i) execute and file with the Commission one or more
registration statements on the applicable forms prepared by
the Sponsor, including any amendments thereto, pertaining to
the Capital Securities, the Guarantee and the Debentures;
(ii) if deemed necessary or desirable by the Sponsor, execute and
file an application, prepared by the Sponsor, to the New
York Stock Exchange, Inc. or any other national stock
exchange, the NASDAQ National Market or the Private
Offerings, Resales and Trading through Automated Linkages
("PORTAL") Market for listing of any Capital Securities, the
Guarantee and the Debentures;
(iii) if deemed necessary or desirable by the Sponsor, execute and
file with the Commission a registration statement on Form
8-A, including any amendments thereto, prepared by the
Sponsor, relating to the registration of the Capital
Securities, the Guarantee and the Debentures under Section
12(b) of the Exchange Act;
(iv) execute and file any documents prepared by the Sponsor, or
take any acts as determined by the Sponsor to be necessary,
in order to qualify or register all or part of the Capital
Securities in any State in which the Sponsor has determined
to qualify or register such Capital Securities for sale;
(v) execute and enter into one or more purchase agreements and
other related agreements each providing for the sale of the
Capital Securities to the Initial Purchaser related thereto;
and
(vi) execute and enter into one or more Registration Rights
Agreements.
(c) to acquire Debentures with the proceeds of each sale of the
Capital Securities and the Common Securities; PROVIDED, HOWEVER, that the
Regular Trustees shall cause legal title to the Debentures to be held of
record in the name of the Property Trustee for the benefit of the Holders of
the Capital Securities and the Holders of the Common Securities;
(d) to give the Sponsor and the Property Trustee prompt written notice
of the occurrence of a Special Event; provided that the Regular Trustees shall
consult with the Sponsor
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and the Property Trustee before taking or refraining from taking any action
in relation to any such Special Event;
(e) to establish a record date with respect to all actions to be taken
hereunder that require a record date be established, including and with respect
to, for the purposes of Section 316(c) of the Trust Indenture Act,
Distributions, voting rights, redemptions and exchanges, and to issue relevant
notices to the Holders of Capital Securities and Holders of Common Securities as
to such actions and applicable record dates;
(f) to take all actions and perform such duties as may be required of
the Regular Trustees pursuant to the terms of this Declaration and the
Securities;
(g) to bring or defend, pay, collect, compromise, arbitrate, resort to
legal action or otherwise adjust claims or demands of or against the Trust
("Legal Action"), unless pursuant to Section 3.8(e), the Property Trustee has
the exclusive power to bring such Legal Action;
(h) to employ or otherwise engage employees and agents (who may be
designated as officers with titles) and managers, contractors, advisors and
consultants to conduct only those services that the Regular Trustees have
authority to conduct directly, and to and pay reasonable compensation for such
services;
(i) to cause the Trust to comply with the Trust's obligations under
the Trust Indenture Act;
(j) to give the certificate required by Section 314(a)(4) of the Trust
Indenture Act to the Property Trustee, which certificate may be executed by any
Regular Trustee;
(k) to incur expenses that are necessary or incidental to carry out
any of the purposes of the Trust;
(l) to act as, or appoint another Person to act as, registrar and
transfer agent for the Securities;
(m) to give prompt written notice to the Holders of the Securities of
any notice received from the Debenture Issuer of its election to defer payments
of interest on the Debentures by extending the interest payment period under the
Debentures as authorized by the Indenture;
(n) to take all action that may be necessary or appropriate for the
preservation and the continuation of the Trust's valid existence, rights,
franchises and privileges as a statutory business trust under the laws of the
State of Delaware and of each other jurisdiction in which such existence is
necessary to protect the limited liability of the Holders of the Capital
Securities and the Holders of the Common Securities or to enable the Trust to
effect the purposes for which the Trust was created;
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(o) to take any action, not inconsistent with applicable law, that
the Regular Trustees determine in their discretion to be necessary or
desirable in carrying out the purposes and functions of the Trust as set out
in Section 3.3 or the activities of the Trust as set out in this Section 3.6,
including, but not limited to:
(i) causing the Trust not to be deemed to be an Investment
Company required to be registered under the Investment
Company Act;
(ii) causing the Trust to be classified as a grantor trust for
United States federal income tax purposes; and
(iii) cooperating with the Debenture Issuer to ensure that the
Debentures will be treated as indebtedness of the Debenture
Issuer for United States federal income tax purposes.
(p) to take all action necessary to cause all applicable tax returns
and tax information reports that are required to be filed with respect to the
Trust to be duly prepared and filed by the Regular Trustees, on behalf of the
Trust; and
(q) to execute all documents or instruments, perform all duties and
powers, and do all things for and on behalf of the Trust in all matters
necessary or incidental to the foregoing.
No provision of this Declaration shall be construed to relieve a
Regular Trustee from liability for his own negligent action, his own
negligent failure to act, or his own willful misconduct, except that:
(i) prior to the occurrence of a Trust Enforcement Event and
after the curing or waiving of such Trust Enforcement Event
that may have occurred:
(A) the duties and obligations of the Regular Trustees shall
be determined solely by the express provisions of this
Declaration and the Regular Trustees shall not be liable
except for the performance of such duties and
obligations as are specifically set forth in this
Declaration, and no implied covenants or obligations
shall be read into this Declaration against the Regular
Trustees; and
(B) in the absence of bad faith on the part of a Regular
Trustee, such Regular 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 such Regular Trustee and
conforming to the requirements of this Declaration; but
in the case of any such certificates or opinions that by
any provision hereof are specifically required to be
furnished to such Regular Trustee, such Regular
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Trustee shall be under a duty to examine the same to
determine whether or not they substantially conform to
the requirements of this Declaration;
(ii) a Regular Trustee shall not be liable for any error of
judgment made in good faith unless it shall be proved that
such Regular Trustee was negligent in ascertaining the
pertinent facts;
(iii) no provision of this Declaration shall require a Regular
Trustee to expend or risk its own funds or otherwise incur
personal financial liability in the performance of any of
its duties or in the exercise of any of its rights or
powers, if it shall have reasonable grounds for believing
that the repayment of such funds or liability is not
reasonably assured to it under the terms of this Declaration
or indemnity reasonably satisfactory to such Regular Trustee
against such risk or liability is not reasonably assured to
it;
(iv) a Regular Trustee shall not be responsible for monitoring
the compliance by the Property Trustee or the Sponsor with
their respective duties under this Declaration, nor shall
such Regular Trustee be liable for any default or misconduct
of the Property Trustee or the Sponsor;
(v) a Regular Trustee may conclusively rely and shall be fully
protected in acting or refraining from acting upon any
resolution, certificate, statement, instrument, opinion,
report, notice, request, direction, consent, order, bond,
debenture, note, other evidence of indebtedness or other
paper or document believed by it to be genuine and to have
been signed, sent or presented by the proper party or
parties;
(vi) a Regular Trustee shall have no duty (other than as set
forth in this Declaration) to see to any recording, filing
or registration of any instrument (including any financing
or continuation statement or any filing under tax or
securities laws) or any rerecording, refiling or
registration thereof;
(vii) the Regular Trustees may consult with counsel or other
experts of their selection and the advice or opinion of such
counsel and experts with respect to legal matters or advice
within the scope of such experts' area of expertise shall be
full and complete authorization and protection in respect of
any action taken, suffered or omitted by them hereunder in
good faith and in accordance with such advice or opinion,
such counsel may be counsel to the Sponsor or any of its
Affiliates, and may include any of its employees. The
Regular Trustees shall have the right at any time to seek
instructions concerning the administration of this
Declaration from any court of competent jurisdiction;
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(viii) the Regular Trustees shall be under no obligation to
exercise any of the rights or powers vested in them by this
Declaration at the request or direction of any Holder,
unless such Holder shall have provided to the Regular
Trustees security and indemnity, reasonably satisfactory to
the Regular Trustees, against the costs, expenses (including
attorneys' fees and expenses) and liabilities that might be
incurred by them in complying with such request or
direction, including such reasonable advances as may be
requested by them;
(ix) a Regular 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 it, in its discretion, may make such
further inquiry or investigation into such facts or matters
as it may see fit;
(x) a Regular Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or
by or through agents, custodians, nominees or attorneys and
such Regular Trustee shall not be responsible for any
misconduct or negligence on the part of any agent or
attorney appointed with due care by him hereunder;
(xi) any action taken by a Regular Trustee or its agents
hereunder shall bind the Trust and the Holders of the
Securities, and the signature of such Regular Trustee or its
agents alone shall be sufficient and effective to perform
any such action and no third party shall be required to
inquire as to the authority of such Regular Trustee to so
act or as to its compliance with any of the terms and
provisions of this Declaration, both of which shall be
conclusively evidenced by such Regular Trustee's or its
agent's taking such action;
(xii) except as otherwise expressly provided by this Declaration,
a Regular Trustee shall not be under any obligation to take
any action that is discretionary under the provisions of
this Declaration; and
(xiii) a Regular Trustee shall not be liable for any action taken,
suffered, or omitted to be taken by it in good faith and
reasonably believed by it to be authorized or within the
discretion or rights or powers conferred upon it by this
Declaration.
The Regular Trustees shall exercise the powers set forth in this
Section 3.6 in a manner that is consistent with the purposes and functions of
the Trust set out in Section 3.3 and subject to the limitations and
restrictions of applicable law, and the Regular Trustees shall have
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no power to, and shall not, take any action that is inconsistent with the
purposes and functions of the Trust set forth in Section 3.3 or that is
inconsistent with or in contravention of any applicable law.
Subject to this Section 3.6, the Regular Trustees shall have none of
the powers or the authority of the Property Trustee set forth in Section 3.8.
Pursuant to the Indenture, any expenses incurred by the Regular
Trustees pursuant to this Section 3.6 shall be reimbursed by the Debenture
Issuer.
Section 3.7 Prohibition of Actions by the Trust and the Trustees.
(a) The Trust shall not, and the Trustees (including the Property
Trustee) shall cause the Trust not to, engage in any activity other than as
required or authorized by this Declaration. In particular, the Trust shall not
and the Trustees (including the Property Trustee) shall cause the Trust not to:
(i) invest any proceeds received by the Trust from holding the
Debentures, but shall distribute all such proceeds to
Holders of Securities pursuant to the terms of this
Declaration and of the Securities;
(ii) acquire any assets other than the Debentures (and any
interest or proceeds received thereon) and the Guarantee
(and the proceeds received thereon or with respect thereto);
(iii) possess Trust property for other than a Trust purpose;
(iv) make any loans or incur any indebtedness;
(v) possess any power or otherwise act in such a way as to vary
the Trust assets;
(vi) possess any power or otherwise act in such a way as to vary
the terms of the Securities in any way whatsoever (except to
the extent expressly authorized in this Declaration or by
the terms of the Securities);
(vii) issue any securities or other evidences of beneficial
ownership of, or beneficial interest in, the Trust other
than the Securities; or
(viii) other than as provided in this Declaration or by the terms
of the Securities, (A) direct the time, method and place of
exercising any trust or power conferred upon the Debenture
Trustee with respect to the Debentures, (B) waive any past
default that is waivable under the Indenture, (C) exercise
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any right to rescind or annul any declaration that the
principal of all the Debentures shall be due and payable, or
(D) consent to any amendment, modification or termination of
the Indenture or the Debentures where such consent shall be
required unless, in each case, the Trust shall have received
(x) the prior approval of the Majority in Liquidation Amount
of the Capital Securities; PROVIDED, HOWEVER, that where a
consent or action under the Indenture would require the
consent or act of the holders of more than a majority of the
aggregate liquidation amount of Debentures affected thereby,
only the Holders of the percentage of the aggregate stated
liquidation amount of the Capital Securities which is at
least equal to the percentage required under the Indenture
may direct the Property Trustee to give such consent to take
such action and, in the case of any amendment, modification
or termination under clause (D) only, (y) an opinion of
counsel to the effect that such modification 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, or the Trust will not be
classified as a grantor trust for United States federal
income tax purposes; or
(ix) take any action inconsistent with the status of the Trust as
a grantor trust for United States federal income tax
purposes; or
(x) revoke any action previously authorized or approved by a
vote of the Holders of the Capital Securities except
pursuant to a subsequent vote of the Holders of the Capital
Securities.
Section 3.8 Powers and Duties of the Property Trustee.
(a) The legal title to the Debentures shall be owned by and held of
record in the name of the Property Trustee in trust for the benefit of the Trust
and the Holders of the Securities. The right, title and interest of the
Property Trustee to the Debentures shall vest automatically in each Person who
may hereafter be appointed as Property Trustee in accordance with Section 6.6.
Such vesting and cessation of title shall be effective whether or not
conveyancing documents with regard to the Debentures have been executed and
delivered.
(b) The Property Trustee shall not transfer its right, title and
interest in the Debentures to the Regular Trustees or to the Delaware Trustee
(if the Property Trustee does not also act as Delaware Trustee).
(c) The Property Trustee shall:
(i) establish and maintain a segregated non-interest bearing
trust account (the "Property Account") in the name of and
under the exclusive control of the
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Property Trustee on behalf of the Holders of the Securities
and, upon the receipt of payments of funds made in respect
of the Debentures held by the Property Trustee, deposit such
funds into the Property Account and make payments to the
Holders of the Capital Securities and Holders of the Common
Securities from the Property Account in accordance with
Section 7.2; PROVIDED, HOWEVER, that if a Paying Agent has
been appointed and continues to serve pursuant to Section
3.8(h), the Property Account may be established and
maintained in the name of, and under the exclusive control
of, such Paying Agent. Funds in the Property Account shall
be held uninvested until disbursed in accordance with this
Declaration;
(ii) engage in such ministerial activities as shall be necessary
or appropriate to effect the redemption of the Capital
Securities and the Common Securities to the extent the
Debentures are redeemed or mature; and
(iii) upon written notice of distribution issued by the Regular
Trustees in accordance with the terms of the Securities,
engage in such ministerial activities as so directed and as
shall be necessary or appropriate to effect the distribution
of the Debentures to Holders of Securities upon the
occurrence of a Special Event.
(d) The Property Trustee shall take all actions and perform such
duties as may be specifically required of the Property Trustee pursuant to
the terms of this Declaration and the Securities.
(e) The Property Trustee shall take any Legal Action which arises
out of or in connection with a Trust Enforcement Event of which a Responsible
Officer of the Property Trustee has actual knowledge or the Property
Trustee's duties and obligations under this Declaration or the Trust
Indenture Act; PROVIDED, HOWEVER, that if a Trust Enforcement Event has
occurred and is continuing and such event is attributable to the failure of
the Debenture Issuer to pay interest or principal (or premium, if any) on the
Debentures on the date such interest or principal (or premium, if any) is
otherwise payable (or in the case of redemption, on the redemption date),
then a Holder of Capital Securities may directly institute a proceeding for
enforcement of payment to such Holder of the principal of (or premium, if
any) or interest on the Debentures having a principal amount equal to the
aggregate liquidation amount of the Capital Security of such Holder (a
"Direct Action"), on or after the respective due date specified in the
Debentures. In connection with such Direct Action, the rights of the Holders
of the Common Securities will be subrogated to the rights of such Holder of
Capital Securities to the extent of any payment made by the Debenture Issuer
to such Holder of Capital Securities in such Direct Action; PROVIDED,
HOWEVER, that no Holder of the Common Securities may exercise any such right
of subrogation so long as a Trust Enforcement Event with respect to the
Capital Securities has occurred and is continuing.
(f) The Property Trustee shall continue to serve as a Trustee until
either:
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(i) the Trust has been completely liquidated and the proceeds of
the liquidation distributed to the Holders of Securities
pursuant to the terms of the Securities; or
(ii) a Successor Property Trustee has been appointed and has
accepted that appointment in accordance with Section 6.6.
(g) Subject to such limitations as are necessary to insure
compliance with Section 3.3, the Property Trustee shall have the legal power
to exercise all of the rights, powers and privileges of a holder of
Debentures under the Indenture and, if a Trust Enforcement Event actually
known to a Responsible Officer of the Property Trustee occurs and is
continuing, the Property Trustee shall, for the benefit of Holders of the
Securities, enforce its rights as holder of the Debentures subject to the
rights of the Holders pursuant to the terms of such Securities.
(h) The Property Trustee may authorize one or more Persons (each, a
"Paying Agent"), which may be the Debenture Issuer unless (i) there shall
have occurred an Indenture Event of Default or (ii) the Holders of two-thirds
in liquidation amount of the Securities shall have directed the Property
Trustee not to permit the Debenture Issuer to act as Paying Agent, to pay
Distributions, redemption payments or liquidation payments on behalf of the
Trust with respect to all Securities. Any such Paying Agent shall comply
with Section 317(b) of the Trust Indenture Act. Any Paying Agent may be
removed by the Property Trustee at any time (and in the case of the Debenture
Issuer, shall be removed if (I) there shall have occurred an Indenture Event
of Default or (II) the Holders of two-thirds in liquidation amount of the
Securities shall have so directed the Property Trustee), and a successor
Paying Agent or additional Paying Agents may be appointed at any time by the
Property Trustee. Any Paying Agent appointed by the Property Trustee shall be
a bank or trust company acceptable to the Debenture Issuer.
(i) Subject to this Section 3.8, the Property Trustee shall have
none of the duties, liabilities, powers or the authority of the Regular
Trustees set forth in Section 3.6.
The Property Trustee shall exercise the powers set forth in this
Section 3.8 in a manner that is consistent with the purposes and functions of
the Trust set out in Section 3.3 and subject to the limitations and
restrictions of applicable law, and the Property Trustee shall have no power
to, and shall not, take any action that is inconsistent with the purposes and
functions of the Trust set out in Section 3.3.
Section 3.9 Certain Duties and Responsibilities of the Property
Trustee.
(a) The Property Trustee, before the occurrence of any Trust
Enforcement Event and after the curing of all Trust Enforcement Events that
may have occurred, shall undertake to perform only such duties as are
specifically set forth in this Declaration and no implied covenants shall be
read into this Declaration against the Property Trustee. In case a Trust
Enforcement Event has occurred (that has not been cured or waived pursuant to
Section 2.6) of which a
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Responsible Officer of the Property Trustee has actual knowledge, the
Property Trustee shall exercise such of the rights and powers vested in it by
this Declaration, and use the same degree of care and skill in their
exercise, as a prudent person would exercise or use under the circumstances
in the conduct of his or her own affairs.
(b) No provision of this Declaration shall be construed to relieve the
Property Trustee from liability for its own negligent action, its own negligent
failure to act or its own willful misconduct, except that:
(i) prior to the occurrence of a Trust Enforcement Event and
after the curing or waiving of all such Trust Enforcement
Events that may have occurred:
a. the duties and obligations of the Property Trustee shall
be determined solely by the express provisions of this
Declaration and the Property Trustee shall not be liable
except for the performance of such duties and
obligations as are specifically set forth in this
Declaration, and no implied covenants or obligations
shall be read into this Declaration against the Property
Trustee; and
b. in the absence of bad faith on the part of the Property
Trustee, the Property Trustee may conclusively rely, as
to the truth of the statements and the correctness of
the opinions expressed therein, upon any certificates or
opinions furnished to the Property Trustee and
conforming to the requirements of this Declaration; but
in the case of any such certificates or opinions that by
any provision hereof are specifically required to be
furnished to the Property Trustee, the Property Trustee
shall be under a duty to examine the same to determine
whether or not they conform to the requirements of this
Declaration;
(ii) the Property Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer of the
Property Trustee, unless it shall be proved that the
Property Trustee was negligent in ascertaining the pertinent
facts;
(iii) the Property Trustee shall not be liable with respect to any
action taken or omitted to be taken by it without
negligence, in good faith in accordance with the direction
of the Holders of not less than a Majority in Liquidation
Amount of the Securities relating to the time, method and
place of conducting any proceeding for any remedy available
to the Property Trustee, or exercising any trust or power
conferred upon the Property Trustee under this Declaration;
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(iv) no provision of this Declaration shall require the Property
Trustee to expend or risk its own funds or otherwise incur
personal financial liability in the performance of any of
its duties or in the exercise of any of its rights or
powers, if it shall have reasonable grounds for believing
that the repayment of such funds or liability is not
reasonably assured to it under the terms of this Declaration
or indemnity reasonably satisfactory to the Property Trustee
against such risk or liability is not reasonably assured to
it;
(v) the Property Trustee's sole duty with respect to the
custody, safe-keeping and physical preservation of the
Debentures and the Property Account shall be to deal with
such property in a similar manner as the Property Trustee
deals with similar property for its own account, subject to
the protections and limitations on liability afforded to the
Property Trustee under this Declaration and the Trust
Indenture Act;
(vi) the Property Trustee shall have no duty or liability for or
with respect to the value, genuineness, existence or
sufficiency of the Debentures or the payment of any taxes or
assessments levied thereon or in connection therewith;
(vii) the Property Trustee shall not be liable for any interest on
any money received by it except as it may otherwise agree
with the Sponsor. Money held by the Property Trustee need
not be segregated from other funds held by it except in
relation to the Property Account maintained by the Property
Trustee pursuant to Section 3.8(c)(i) and except to the
extent otherwise required by law;
(viii) the Property Trustee shall not be responsible for monitoring
the compliance by the Regular Trustees or the Sponsor with
their respective duties under this Declaration, nor shall
the Property Trustee be liable for any default or misconduct
of the Regular Trustees or the Sponsor; and
(ix) money held by the Trustee in trust hereunder need not be
segregated from other funds except to the extent required by
law. The Trustee shall be under no liability for interest
on any money received by it hereunder except as otherwise
agreed in writing with the Debenture Issuer.
Section 3.10 Certain Rights of Property Trustee.
(a) Subject to the provisions of Section 3.9:
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(i) the Property Trustee may conclusively rely and shall be
fully protected in acting or refraining from acting upon any
resolution, certificate, statement, instrument, opinion,
report, notice, request, direction, consent, order, bond,
debenture, note, other evidence of indebtedness or other
paper or document believed by it to be genuine and to have
been signed, sent or presented by the proper party or
parties;
(ii) any direction or act of the Sponsor or the Regular Trustees
contemplated by this Declaration shall be sufficiently
evidenced by an Officers' Certificate (or, with respect to
the establishment of the terms and form of the Securities by
the Regular Trustees, by a Trustees' Authorization
Certificate);
(iii) whenever in the administration of this Declaration, the
Property Trustee shall deem it desirable that a matter be
proved or established before taking, suffering or omitting
any action hereunder, the Property Trustee (unless other
evidence is herein specifically prescribed) may, in the
absence of bad faith on its part, request and conclusively
rely upon an Officers' Certificate which, upon receipt of
such request, shall be promptly delivered by the Sponsor or
the Regular Trustees;
(iv) the Property Trustee shall have no duty to see to any
recording, filing or registration of any instrument
(including any financing or continuation statement or any
filing under tax or securities laws) or any rerecording,
refiling or registration thereof;
(v) the Property Trustee may consult with counsel of its choice
or other experts and the advice or opinion of such counsel
and experts with respect to legal matters or advice within
the scope of such experts' area of expertise shall be full
and complete authorization and protection in respect of any
action taken, suffered or omitted by it hereunder in good
faith and in accordance with such advice or opinion, such
counsel may be counsel to the Sponsor or any of its
Affiliates, and may include any of its employees. The
Property Trustee shall have the right at any time to seek
instructions concerning the administration of this
Declaration from any court of competent jurisdiction;
(vi) the Property Trustee shall be under no obligation to
exercise any of the rights or powers vested in it by this
Declaration at the request or direction of any Holder,
unless such Holder shall have provided to the Property
Trustee security and indemnity, reasonably satisfactory to
the Property Trustee, against the costs, expenses (including
attorneys' fees and expenses and the expenses of the
Property Trustee's agents, nominees or custodians) and
liabilities that might be incurred by it in complying with
such request
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or direction, including such reasonable advances as may be
requested by the Property Trustee; provided that, nothing
contained in this Section 3.10(a) shall be taken to relieve
the Property Trustee, upon the occurrence of an Indenture
Event of Default, of its obligation to exercise the rights
and powers vested in it by this Declaration;
(vii) the Property Trustee shall not be bound to make any
investigation into the facts or matters stated in any
resolution, certificate, statement, instrument, opinion,
report, notice, request, direction, consent, order, bond,
debenture, note, other evidence of indebtedness or other
paper or document, but the Property Trustee, in its
discretion, may make such further inquiry or investigation
into such facts or matters as it may see fit;
(viii) the Property Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or
by or through agents, custodians, nominees or attorneys and
the Property Trustee shall not be responsible for any
misconduct or negligence on the part of any agent or
attorney appointed with due care by it hereunder;
(ix) any action taken by the Property Trustee or its agents
hereunder shall bind the Trust and the Holders of the
Securities, and the signature of the Property Trustee or its
agents alone shall be sufficient and effective to perform
any such action and no third party shall be required to
inquire as to the authority of the Property Trustee to so
act or as to its compliance with any of the terms and
provisions of this Declaration, both of which shall be
conclusively evidenced by the Property Trustee's or its
agent's taking such action;
(x) whenever in the administration of this Declaration the
Property Trustee shall deem it desirable to receive
instructions with respect to enforcing any remedy or right
or taking any other action hereunder, the Property Trustee
(i) may request instructions from the Holders of the
Securities, the Regular Trustees or the Sponsor which
instructions may only be given by the Holders of the same
proportion in liquidation amount of the Securities as would
be entitled to direct the Property Trustee under the terms
of the Securities in respect of such remedy, right or
action, (ii) may refrain from enforcing such remedy or right
or taking such other action until such instructions are
received, and (iii) shall be protected in conclusively
relying on or acting in or accordance with such
instructions;
(xi) if no Trust Enforcement Event has occurred and is continuing
and the Property Trustee is required to decide between
alternative causes of action, construe ambiguous provisions
in their Declaration or is unsure of the
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application of any provision of their Declaration, and the
matter is not one on which Holders of Capital Securities are
entitled under the Declaration to vote, then the Property
Trustee may, but shall be under no duty to, take such action
as is directed by the Sponsor and, if not so directed, shall
take such action as it deems advisable and in the best
interests of the Holders of the Securities and will have no
liability except for its own bad faith, negligence or willful
misconduct;
(xii) except as otherwise expressly provided by this Declaration,
the Property Trustee shall not be under any obligation to
take any action that is discretionary under the provisions
of this Declaration;
(xiii) the Property Trustee shall not be liable for any action
taken, suffered or omitted to be taken by it without
negligence, in good faith and reasonably believed by it to
be authorized or within the discretion, rights or powers
conferred upon it by this Declaration; and
(xiv) the Trustee shall have a lien prior to the Securities as to
all property and funds held by it hereunder for any amount
owing it or any predecessor Trustee, except with respect to
funds held in trust for the benefit of the Holders of
particular Securities.
(b) No provision of this Declaration shall be deemed to impose any
duty or obligation on the Property Trustee to perform any act or acts or
exercise any right, power, duty or obligation conferred or imposed on it, in any
jurisdiction in which it shall be illegal, or in which the Property Trustee
shall be unqualified or incompetent in accordance with applicable law, to
perform any such act or acts, or to exercise any such right, power, duty or
obligation. No permissive power or authority available to the Property Trustee
shall be construed to be a duty.
Section 3.11 Delaware Trustee.
Notwithstanding any other provision of this Declaration other than
Section 6.2, the Delaware Trustee shall not be entitled to exercise any powers,
nor shall the Delaware Trustee have any of the duties and responsibilities of
the Trustees (except as required under the Business Trust Act). Except as set
forth in Section 6.2, the Delaware Trustee shall be a Trustee for the sole and
limited purpose of fulfilling the requirements of Section 3807 of the Business
Trust Act.
Section 3.12 Execution of Documents.
Unless otherwise determined by the Regular Trustees, and except as
otherwise required by the Business Trust Act, any Regular Trustee is authorized
to execute on behalf of the Trust any documents that the Regular Trustees have
the power and authority to execute pursuant to Section 3.6.
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Section 3.13 Not Responsible for Recitals or Issuance of Securities.
The recitals contained in this Declaration and the Securities shall be
taken as the statements of the Sponsor, and the Trustees do not assume any
responsibility for their correctness. The Trustees make no representations as
to the value or condition of the property of the Trust or any part thereof. The
Trustees make no representations as to the validity or sufficiency of this
Declaration, the Securities, the Debentures or the Indenture.
Section 3.14 Duration of Trust.
The Trust shall exist until terminated pursuant to the provisions of
Article 8 hereof.
Section 3.15 Mergers.
(a) The Trust may not 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 corporation or other body, except as
described in Section 3.15(b) and (c).
(b) The Trust may, at the request of the Sponsor, with the consent of
the Regular Trustees or, if there are more than two, a majority of the Regular
Trustees and without the consent of the Holders of the Securities, the Delaware
Trustee or the Property Trustee, consolidate, amalgamate, merge with or into, or
be replaced by or convey, transfer or lease its properties substantially as an
entirety to a trust organized as such under the laws of any State; provided
that:
(i) if the Trust is not the successor, such successor entity
(the "Successor Entity") either:
a. expressly assumes all of the obligations of the Trust
under the Securities; or
b. substitutes for the Capital Securities other securities
having substantially the same terms as the Capital
Securities (the "Successor Securities," and each a
"Successor Security") so long as the Successor
Securities rank the same as the Capital Securities rank
with respect to Distributions and payments upon
liquidation, redemption and otherwise;
(ii) the Sponsor expressly appoints a trustee of such Successor
Entity that possesses the same powers and duties as the
Property Trustee as the holder of the Debentures;
(iii) the Capital Securities or any Successor Securities are
listed, or any Successor Securities will be listed upon
notification of issuance, on any
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national securities exchange or with any other organization
on which the Capital Securities are then listed or quoted;
(iv) if the Capital Securities are then rated by any nationally
recognized statistical rating organization, such merger,
consolidation, amalgamation, replacement, conveyance,
transfer or lease does not cause the Capital Securities
(including any Successor Securities) to be downgraded by
such 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 Sponsor has
received an opinion of 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;
b. following such merger, consolidation, amalgamation,
replacement, conveyance, transfer or lease neither the
Trust nor the Successor Entity will be required to
register as an Investment Company; and
c. following such merger, consolidation, amalgamation or
replacement, the Trust (or the Successor Entity) will
continue to be classified as a grantor trust for United
States federal income tax purposes;
(viii) the Sponsor or any permitted successor or assignee owns all
of the Common Securities and guarantees the obligations of
such Successor Entity under the Successor Securities at
least to the extent provided by the Guarantee; and
(ix) such Successor Entity expressly assumes all of the
obligations of the Trust with respect to the Trustees.
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(c) Notwithstanding Section 3.15(b), the Trust shall not, except with
the consent of Holders of 100% in liquidation amount of the Securities,
consolidate, amalgamate, merge with or into, or be replaced by, or convey,
transfer or lease its properties 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 Successor Entity to be
classified as other than a grantor trust for United States federal income tax
purposes and each Holder of the Securities not to be treated as owning an
undivided interest in the Debentures.
Section 3.16 Property Trustee May File Proofs of Claim.
In case of the pendency of any receivership, insolvency, liquidation,
bankruptcy, reorganization, arrangement, adjustment, composition or other
similar judicial proceeding relative to the Trust or any other obligor upon the
Securities or the property of the Trust or of such other obligor or their
creditors, the Property Trustee (irrespective of whether any Distributions on
the Securities shall then be due and payable as therein expressed or by
declaration or otherwise and irrespective of whether the Property Trustee shall
have made any demand on the Trust for the payment of any past due Distributions)
shall be entitled and empowered, to the fullest extent permitted by law, by
intervention in such proceeding or otherwise:
(a) to file and prove a claim for the whole amount of any
Distributions owing and unpaid in respect of the Securities (or, if the
Securities are original issue discount Securities, such portion of the
liquidation amount as may be specified in the terms of such Securities) and to
file such other papers or documents as may be necessary or advisable in order to
have the claims of the Property Trustee (including any claim for the reasonable
compensation, expenses, disbursements and advances of the Property Trustee, its
and counsel) and of the Holders allowed in such judicial proceeding, and
(b) to collect and receive any moneys or other property payable or
deliverable on any such claims and to distribute the same;
and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized by
each Holder to make such payments to the Property Trustee and, in the event the
Property Trustee shall consent to the making of such payments directly to the
Holders, to pay to the Property Trustee any amount due it for the reasonable
compensation, expenses, disbursements and advances of the Property Trustee, its
agents and counsel, and any other amounts due the Property Trustee.
Nothing herein contained shall be deemed to authorize the Property
Trustee to authorize or consent to or accept or adopt on behalf of any Holder
any plan of reorganization, arrangement adjustment or compensation affecting the
Securities or the rights of any Holder thereof or to authorize the Property
Trustee to vote in respect of the claim of any Holder in any such proceeding.
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ARTICLE 4
SPONSOR
Section 4.1 Responsibilities of the Sponsor.
In connection with the issuances and sales of the Capital Securities,
the Sponsor shall have the exclusive right and responsibility to engage in the
following activities:
(a) to prepare for filing by the Trust with the Commission one or more
registration statements on the applicable forms, including any amendments
thereto, pertaining to the Capital Securities, the Guarantee and the Debentures,
at such time(s) as may be required pursuant to the Registration Rights Agreement
or as the Sponsor may otherwise deem to be desirable;
(b) to determine the States in which to take appropriate action to
qualify or register for sale all or part of the Capital Securities and to do any
and all such acts, other than actions which must be taken by the Trust, and
advise the Trust of actions it must take, and prepare for execution and filing
any documents to be executed and filed by the Trust, as the Sponsor deems
necessary or advisable in order to comply with the applicable laws of any such
States;
(c) to prepare any filing by the Trust of an application to the New
York Stock Exchange, Inc. or any other national stock exchange or the Nasdaq
National Market or the PORTAL Market for listing, if such filing is determined
to be necessary or desirable by the Sponsor;
(d) to prepare any filing by the Trust with the Commission of a
registration statement on Form 8-A, including any amendments thereto, if such
filing is determined to be necessary or desirable by the Sponsor;
(e) to negotiate the terms of one or more purchase agreements and
other related agreements providing for the sales of the Capital Securities to
the Initial Purchaser and related matters; and
(f) to negotiate the terms of one or more Registration Rights
Agreements.
Section 4.2 Compensation, Indemnification and Expenses of the
Trustees.
Pursuant to Sections 607 and 1009 of the Indenture, the Sponsor, in
its capacity as Debenture Issuer, agrees:
(1) to pay to the Trustees from time to time such compensation as the
Debenture Issuer and each Trustee shall from time to time agree in writing
for all services rendered
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by it hereunder (which compensation shall not be limited by any provision
of law in regard to the compensation of a trustee of an express trust);
(2) except as otherwise expressly provided herein, to reimburse the
Trustees upon their request for all reasonable expenses, disbursements and
advances incurred or made by the Trustees in accordance with any provision
of this Declaration (including the 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 Property Trustee and the Delaware Trustee and
their authorized agents for, and to hold each of them harmless against, any
loss, liability, claim, action, suit, cost, disbursement or expense
including taxes (other than taxes based upon, measured by or determined by
the income of any Trustee) of any kind and nature whatsoever incurred by or
asserted against the Property Trustee, the Delaware Trustee or their
respective authorized agents, without negligence or bad faith on the part
of the Property Trustee, the Delaware Trustee or their respective
authorized agents, as the case may be, and arising out of or in connection
with the acceptance or administration of the trust or trusts hereunder,
including the costs and expenses of defending any of them against any claim
or liability in connection with the exercise or performance of any of their
respective powers or duties hereunder; the provisions of this Section 4.2
shall survive the resignation or removal of the Delaware Trustee or the
Property Trustee or the termination of this Declaration.
ARTICLE 5
TRUST COMMON SECURITIES HOLDER
Section 5.1 Debenture Issuer's Purchases of Common Securities.
On each Closing Date the Debenture Issuer has purchased or will
purchase all of the Common Securities issued by the Trust on such Closing Date,
for an amount at least equal to (i) in the case of the initial Closing Date, 3%
of the initial capital of the Trust, and (ii) in the case of any subsequent
Closing Date, 3% of the additional capital added to the Trust on such Closing
Date, in each case at the same time as the related Capital Securities are sold
on such Closing Date.
Section 5.2 Covenants of the Common Securities Holder.
For so long as the Capital Securities remain outstanding, the Common
Securities Holder will covenant (i) to maintain directly 100% ownership of the
Common Securities, (ii) to cause the Trust to remain a statutory business trust
and not to voluntarily dissolve, wind up, liquidate or be terminated, except as
permitted by this Declaration, (iii) to use its commercially
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reasonable efforts to ensure that the Trust will not be an Investment Company
for purposes of the Investment Company Act, and (iv) to take no action which
would be reasonably likely to cause the Trust to be classified as an
association or a publicly traded partnership taxable as a corporation for
United States federal income tax purposes.
ARTICLE 6
TRUSTEES
Section 6.1 Number of Trustees.
The number of Trustees initially shall be five (5), and:
(a) at any time before the issuance of any Securities, the Sponsor may,
by written instrument, increase or decrease the number of Trustees; and
(b) after the issuance of any Securities, the number of Trustees may
be increased or decreased by vote of the Holders of a Majority in Liquidation
Amount of the Common Securities voting as a class at a meeting of the Holders of
the Common Securities or by written consent in lieu of such meeting; provided
that (1) the Delaware Trustee, in the case of a natural person, shall be a
person who is a resident of the State of Delaware or that, if not a natural
person, is an entity which has its principal place of business in the State of
Delaware and otherwise meets the requirements of applicable law; (2) at least
one Regular Trustee is an employee or officer of, or is affiliated with, the
Sponsor; and (3) one Trustee shall be the Property Trustee for so long as this
Declaration is required to qualify as an indenture under the Trust Indenture
Act, and such Trustee may also serve as Delaware Trustee if it meets the
applicable requirements.
Section 6.2 Delaware Trustee.
If required by the Business Trust Act, one Trustee (the "Delaware
Trustee") shall be:
(a) a natural person who is a resident of the State of Delaware; or
(b) if not a natural person, an entity which has its principal place
of business in the State of Delaware, and otherwise meets the requirements of
applicable law;
provided that, if the Property Trustee has its principal place of business in
the State of Delaware and otherwise meets the requirements of applicable law,
then the Property Trustee shall also be the Delaware Trustee and Section 3.11
shall have no application.
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Section 6.3 Property Trustee; Eligibility.
(a) There shall at all times be one Trustee which shall act as
Property Trustee which shall:
(i) not be an Affiliate of the Sponsor; and
(ii) be a corporation organized and doing business under the laws
of the United States of America or any State or Territory
thereof or of the District of Columbia, or a corporation or
other Person permitted by the Commission to act as an
institutional trustee under the Trust Indenture Act,
authorized under such laws to exercise corporate trust
owners, having a combined capital and surplus of at least 50
million U.S. dollars ($50,000,000), and subject to
supervision or examination by Federal, State, Territorial or
District of Columbia authority. If such corporation
publishes reports of condition at least annually, pursuant
to law or to the requirements of the supervising or
examining authority referred to above, then for the purposes
of this Section 6.3(a)(ii), the combined capital and surplus
of such corporation shall be deemed to be its combined
capital and surplus as set forth in its most recent report
of condition so published.
(b) If at any time the Property Trustee shall cease to be eligible to
so act under Section 6.3(a), the Property Trustee shall immediately resign in
the manner and with the effect set forth in Section 6.6(c).
(c) If the Property Trustee has or shall acquire any "conflicting
interest" within the meaning of Section 310(b) of the Trust Indenture Act, the
Property Trustee and the Holder of the Common Securities (as if it were the
Obliger referred to in Section 310(b) of the Trust Indenture Act) shall in all
respects comply with the provisions of Section 310(b) of the Trust Indenture
Act.
(d) The Guarantee shall be deemed to be specifically described in this
Declaration for purposes of clause (i) of the first provision contained in
Section 310(b) of the Trust Indenture Act.
Section 6.4 Qualifications of Regular Trustees and Delaware Trustee
Generally.
Each Regular Trustee and the Delaware Trustee (unless the Property
Trustee also acts as Delaware Trustee) shall be either a natural person who is
at least 21 years of age or a legal entity that shall act through one or more
Authorized Officers.
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Section 6.5 Initial Regular Trustees.
From and after the date of this Declaration, and until their
respective removal or replacement in accordance with Section 6.6, the Regular
Trustees shall be Robert P. Keller, Curt A. Christianssen and Claire
Fitzpatrick, the business address of all of whom is c/o Commerce Security
Bancorp, Inc., 7777 Center Avenue, Huntington Beach, CA 92647.
Section 6.6 Appointment, Removal and Resignation of Trustees.
(a) Subject to Section 6.6(b), Trustees may be appointed or removed
without cause at any time:
(i) until the issuance of any Securities, by written instrument
executed by the Sponsor; and
(ii) after the issuance of any Securities, by vote of the Holders
of a Majority in Liquidation Amount of the Common Securities
voting as a class at a meeting of the Holders of the Common
Securities.
(b) The Trustee that acts as Property Trustee shall not be removed in
accordance with Section 6.6(a) until a successor Trustee possessing the
qualifications to act as Property Trustee under Section 6.3(a) (a "Successor
Property Trustee") has been appointed and has accepted such appointment by
written instrument executed by such Successor Property Trustee and delivered to
the Regular Trustees and the Sponsor. The Trustee that acts as Delaware Trustee
shall not be removed in accordance with Section 6.6(a) until a successor Trustee
possessing the qualifications to act as Delaware Trustee under Sections 6.2 and
6.4 (a "Successor Delaware Trustee") has been appointed and has accepted such
appointment by written instrument executed by such Successor Delaware Trustee
and delivered to the Regular Trustees and the Sponsor.
(c) A Trustee appointed to office shall hold office until its
successor shall have been appointed, until his or her death or its dissolution
or until its removal or resignation. Any Trustee may resign from office
(without need for prior or subsequent accounting) by an instrument in writing
signed by the Trustee and delivered to the Sponsor and the Trust, which
resignation shall take effect upon such delivery or upon such later date as is
specified therein; PROVIDED, HOWEVER, that:
(i) No such resignation of the Trustee that acts as the Property
Trustee shall be effective:
a. until a Successor Property Trustee has been appointed and
has accepted such appointment by instrument executed by such
Successor Property Trustee and delivered to the Trust, the
Sponsor and the resigning Property Trustee; or
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b. until the assets of the Trust have been completely
liquidated and the proceeds thereof distributed to the
holders of the Securities; and
(ii) no such resignation of the Trustee that acts as the Delaware
Trustee shall be effective until a Successor Delaware
Trustee has been appointed and has accepted such appointment
by instrument executed by such Successor Delaware Trustee
and delivered to the Trust, the Sponsor and the resigning
Delaware Trustee.
(d) The Holders of the Common Securities shall use their best efforts
to promptly appoint a Successor Delaware Trustee or Successor Property Trustee,
as the case may be, if the Property Trustee or the Delaware Trustee delivers an
instrument of resignation in accordance with this Section 6.6.
(e) If no Successor Property Trustee or Successor Delaware Trustee, as
the case may be, shall have been appointed and accepted appointment as provided
in this Section 6.6 within 30 days after delivery to the Sponsor and the Trust
of an instrument of resignation or removal, the resigning or removed Property
Trustee or Delaware Trustee, as applicable, may petition any court of competent
jurisdiction for appointment of a Successor Property Trustee or Successor
Delaware Trustee, as applicable. Such court may thereupon, after prescribing
such notice, if any, as it may deem proper, appoint a Successor Property Trustee
or Successor Delaware Trustee, as the case may be.
(f) No Property Trustee or Delaware Trustee shall be liable for the
acts or omissions to act of any Successor Property Trustee or Successor Delaware
Trustee, as the case may be.
Section 6.7 Vacancies among Trustees.
If a Trustee ceases to hold office for any reason and the number of
Trustees is not reduced pursuant to Section 6.1, or if the number of Trustees is
increased pursuant to Section 6.1, a vacancy shall occur. The vacancy shall be
filled with a Trustee appointed in accordance with Section 6.6.
Section 6.8 Effect of Vacancies.
The death, resignation, retirement, removal, bankruptcy, dissolution,
liquidation, incompetence or incapacity to perform the duties of a Trustee shall
not operate to annul the Trust. Whenever a vacancy in the number of Regular
Trustees shall occur, until such vacancy is filled by the appointment of a
Regular Trustee in accordance with Section 6.6, the Regular Trustees in office,
regardless of their number, shall have all the powers granted to the Regular
Trustees and shall discharge all the duties imposed upon the Regular Trustees by
this Declaration.
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Section 6.9 Delegation of Power.
(a) Any Regular Trustee may, by power of attorney consistent with
applicable law, delegate to any natural person over the age of 21 his, her or
its power for the purpose of executing any documents contemplated in Section
3.6, including any registration statement or amendment thereto filed with the
Commission, or making any other governmental filing.
(b) The Regular Trustees shall have power to delegate from time to
time to such of their number or to officers of the Trust the doing of such
things and the execution of such instruments either in the name of the Trust or
the names of the Regular Trustees or otherwise as the Regular Trustees may deem
expedient, to the extent such delegation is not prohibited by applicable law or
contrary to the provisions of the Trust, as set forth herein.
Section 6.10 Merger, Conversion, Consolidation or Succession to
Business.
Any corporation into which the Property Trustee or the Delaware
Trustee, as the case may be, may be merged or converted or with which either may
be consolidated, or any corporation resulting from a merger, conversion or
consolidation to which the Property Trustee or the Delaware Trustee, as the case
may be, shall be a party, or any corporation succeeding to all or substantially
all of the corporate trust business of the Property Trustee or the Delaware
Trustee, as the case may be, shall be the successor of the Property Trustee or
the Delaware Trustee, as the case may be, hereunder, provided such corporation
shall be otherwise qualified and eligible under this Article, without the
execution or filing of any paper or any further act on the part of any of the
parties hereto.
ARTICLE 7
THE SECURITIES
Section 7.1 General Provisions Regarding Securities.
(a) The Regular Trustees shall on behalf of the Trust issue, in one
or more issuances, a class of capital securities representing undivided
beneficial ownership interests in the assets of the Trust (the "Transfer
Restricted Securities"), a class of capital securities to be issued only in
exchange for the Transfer Restricted Securities (the "New Capital
Securities," and together with the Transfer Restricted Securities, the
"Capital Securities"), and one class of common securities representing
undivided beneficial ownership interests in the assets of the Trust (the
"Common Securities"). The aggregate liquidation amount of Capital Securities
and Common Securities that may be issued by the Trust is unlimited; provided
that the Common Securities outstanding at any time must have an aggregate
liquidation amount with respect to the assets of the Trust equal to at least
3% of the assets of the Trust; and provided further that after the initial
issuance of Capital Securities and Common Securities, the Trust may not issue
additional Capital
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Securities or Common Securities unless the Trustees have received an opinion
of counsel with a recognized tax practice to the effect that the issuance of
such securities will not affect the Trust's status as a grantor trust for
United States federal income tax purposes.
(i) Capital Securities. The Capital Securities of the Trust
will have a liquidation amount with respect to the assets of
the Trust of $1,000 per Capital Security. The New Capital
Security Certificates and the Transfer Restricted
Certificates evidencing the Capital Securities shall be
substantially in the form of Exhibit A to the Declaration,
with such changes and additions thereto or deletions
therefrom as may be required by ordinary usage, custom or
practice or to conform to the rules of any stock exchange on
which the Capital Securities are listed; PROVIDED, that the
New Capital Security Certificates shall not contain any of
the provisions following the Trustee's authentication.
(ii) Common Securities. The Common Securities of the Trust will
have a liquidation amount with respect to the assets of the
Trust of $1,000 per Common Security. The Common Security
Certificates evidencing the Common Securities shall be
substantially in the form of Exhibit B to the Declaration,
with such changes and additions thereto or deletions
therefrom as may be required by ordinary usage, custom or
practice.
The Trust shall issue no securities or other interests in the assets
of the Trust other than the Capital Securities and the Common Securities.
(b) Payment of Distributions on, and payments of the Redemption Price
upon a redemption of, the Capital Securities and the Common Securities, as
applicable, shall be made Pro Rata based on the liquidation amount of such
Capital Securities and Common Securities; PROVIDED, HOWEVER, that if, on any
date on which amounts payable on Distribution or redemption, an Indenture Event
of Default shall have occurred and be continuing, no payment of any Distribution
on, or Redemption Price of, any of the Common Securities, and no other payment
on account of the redemption, liquidation or other acquisition of such Common
Securities, shall be made unless payment in full in cash of all accumulated and
unpaid Distributions on all of the outstanding Capital Securities for all
Distribution periods terminating on or prior thereto, or in the case of amounts
payable on redemption the full amount of the Redemption Price for all of the
outstanding Capital Securities then called for redemption, 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 payments of
the Redemption Price upon a redemption of, the Capital Securities then due and
payable.
(c) The Certificates shall be signed on behalf of the Trust by a
Regular Trustee. Such signature shall be the manual or facsimile signature of
any Regular Trustee. In case a Regular Trustee of the Trust who shall have
signed any of the Certificates shall cease to be such
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Regular Trustee before the Certificates so signed shall be delivered by the
Trust, such Certificates nevertheless may be delivered as though the person
who signed such Certificates had not ceased to be such Regular Trustee; and
any Certificate may be signed on behalf of the Trust by such persons who, at
the actual date of execution of such Certificate, shall be the Regular
Trustees of the Trust, although at the date of the execution and delivery of
the Declaration any such person was not such a Regular Trustee. Certificates
shall be printed, lithographed or engraved or may be produced in any other
manner as is reasonably acceptable to the Regular Trustees, as evidenced by
their execution thereof, and may have such letters, numbers or other marks of
identification or designation and such legends or endorsements as the Regular
Trustees may deem appropriate, or as may be required to comply with any law
or with any rule or regulation of any stock exchange on which Securities may
be listed, or to conform to usage.
A Certificate issued on or after July 1, 1997 shall not be valid until
authenticated by the manual signature of an authorized officer of the Property
Trustee. Such signature shall be conclusive evidence that the Certificate has
been authenticated under this Declaration.
In the event that the Trust elects to issue additional Securities
hereunder on a subsequent Closing Date, the Trust shall deliver to the Property
Trustee, in the manner provided in the following paragraph, duly executed
Certificates and a written order, together with such certificates and opinions
of counsel (in each case in substantially the form delivered at the initial
Closing Date), as are required for the issuance of Securities under this
Declaration, including the opinion of counsel required by Section 7.1(a).
Upon a written order of the Trust signed by one Regular Trustee, the
Property Trustee shall authenticate the Certificates for original issue. The
aggregate number of Capital Securities outstanding at any time shall not exceed
the liquidation amount set forth in Section 7(a).
The Property Trustee may appoint an authenticating agent acceptable to
the Trust to authenticate Certificates. An authenticating agent may
authenticate Certificates whenever the Property Trustee may do so. Each
reference in this Declaration to authentication by the Property Trustee includes
authentication by such agent. An authenticating agent has the same rights as
the Property Trustee to deal with the Sponsor or an Affiliate of the Sponsor.
(d) The consideration received by the Trust for the issuance of the
Securities shall constitute a contribution to the capital of the Trust and shall
not constitute a loan to the Trust.
(e) Upon issuance of the Securities as provided in this Declaration,
the Securities so issued shall be deemed to be validly issued, fully paid and
non-assessable.
(f) Every Person, by virtue of having become a Holder in accordance
with the terms of this Declaration, shall be deemed to have expressly assented
and agreed to the terms of, and shall be bound by, this Declaration and the
terms of the Securities, the Guarantee, the Indenture and the Debentures.
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(g) The Securities shall have no preemptive rights.
Section 7.2 Distributions.
(a) Holders of Securities shall be entitled to receive cumulative
cash Distributions at the rate of 11 3/4% per annum on the stated liquidation
amount of $1,000 per Security, calculated on the basis of the actual number
of days elapsed in a year consisting of twelve 30-day months. For any period
shorter than a full 90-day quarterly period, Distributions will be computed
on the basis of the actual number of days elapsed in such 90-day quarterly
period. Subject to Section 7.1(b), Distributions shall be made on the
Capital Securities and the Common Securities on a Pro Rata basis.
Distributions on the Securities shall be payable quarterly only to the extent
that the Trust has funds available for the payment of such Distributions in
the Property Account. Distributions not paid on the scheduled payment date
will accumulate and compound quarterly at the rate payable on the Debentures,
to the extent permitted by applicable law ("Compounded Distributions").
"Distributions" shall mean ordinary cumulative distributions together with
any Compounded Distributions. If and to the extent that the Debenture Issuer
makes a payment of interest (including Additional Interest (as defined in the
Indenture)), premium and/or principal on the Debentures held by the Property
Trustee (the amount of any such payment being a "Payment Amount"), the
Property Trustee shall and is directed, to the extent funds are available for
that purpose, to make a Pro Rata distribution of the Payment Amount to
Holders, subject to the terms of Section 7.1(b).
(b) Distributions on the Securities will be cumulative, will accrue
from June 30, 1997 and will be payable quarterly in arrears on the 30th day
of March, June, September and December, commencing September 30, 1997, when,
as and if available for payment, by the Property Trustee, except as otherwise
described below. If Distributions are not paid when scheduled, the accrued
Distributions shall be paid to the Holders of record of Securities as they
appear on the books and records of the Trust on the record date as determined
under Section 7.2(c).
(c) Distributions on the Securities will be payable to the Holders
thereof as they appear on the books and records of the Trust on the relevant
record dates, which relevant record date shall be the fifteenth (15th) day of
the month in which the relevant payment dates occur. In the event that any
date on which Distributions are payable on the Securities is not a Business
Day, payment of the distribution payable on such date will be made on the
next succeeding day which is a Business Day (without any adjustment to the
amount of such Distribution on account 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 (without any adjustment to the
amount of such Distribution on account of any such accelerated payment), in
each case with the same force and effect as if made on the date otherwise
fixed for the payment of such Distribution.
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Section 7.3 Redemption of Securities; Distribution of Debentures.
(a) Upon the repayment or redemption, in whole or in part, of the
Debentures, the proceeds from such repayment or redemption shall be
simultaneously applied Pro Rata (subject to Section 7.1(b)) to redeem
Securities having an aggregate liquidation amount equal to the aggregate
principal amount of the Debentures so repaid or redeemed for an amount equal
to the redemption price paid by the Debenture Issuer in respect of such
Debentures plus an amount equal to accrued and unpaid Distributions thereon
through the date of the redemption or such lesser amount as shall be received
by the Trust in respect of the Debentures so repaid or redeemed (the
"Redemption Price"). Holders will be given not less than 30 or more than 60
days notice of such redemption.
(b) If, at any time, a Special Event shall occur and be continuing,
the Sponsor may elect to, unless the Debentures are redeemed, within 90 days
following the occurrence of such Special Event, cause the dissolution of the
Trust upon not less than 30 nor more than 60 days' notice and, after
satisfaction of the claims of creditors, if any, cause the Debentures to be
distributed to the Holders of the Common Securities and the Capital
Securities in liquidation of the Trust.
(c) On the date fixed for any distribution of Debentures, upon
dissolution of the Trust, (i) the Capital Securities and the Common
Securities will no longer be deemed to be outstanding and (ii) certificates
representing Securities will be deemed to represent the Debentures having an
aggregate principal amount equal to the stated liquidation amount of, and
bearing accrued and unpaid interest equal to accrued and unpaid distributions
on, such Securities until such certificates are presented to the Sponsor or
its agent for transfer or reissuance.
Section 7.4 Redemption Procedures.
(a) Notice of any redemption of, or notice of distribution of
Debentures in exchange for, the Securities (a "Redemption/Distribution
Notice") will be given by the Trust by mail to each Holder of Securities to
be redeemed or exchanged not fewer than 30 nor more than 60 days before the
date fixed for redemption or exchange thereof which, in the case of a
redemption, will be the date fixed for redemption of the Debentures. For
purposes of the calculation of the date of redemption or exchange and the
dates on which notices are given pursuant to this Section 7.4, a
Redemption/Distribution Notice shall be deemed to be given on the day such
notice is first mailed by first-class mail, postage prepaid, to Holders of
Securities. Each Redemption/Distribution Notice shall be addressed to the
Holders of Securities at the address of each such Holder appearing in the
books and records of the Trust. No defect in the Redemption/Distribution
Notice or in the mailing of either thereof with respect to any Holder shall
affect the validity of the redemption or exchange proceedings with respect to
any other Holder.
(b) If fewer than all the outstanding Securities are to be so
redeemed, the Common Securities and the Capital Securities will be redeemed Pro
Rata and the Capital Securities to be
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redeemed will be redeemed as described below. The Trust may not redeem the
Securities in part unless all accrued and unpaid Distributions have been paid
in full on all Securities then outstanding plus accrued but unpaid
Distributions to the date of redemption. For all purposes of this
Declaration, unless the context otherwise requires, all provisions relating
to the redemption of Capital Securities shall relate, in the case of any
Capital Security redeemed or to be redeemed only in part, to the portion of
the aggregate liquidation amount of Capital Securities which has been or is
to be redeemed.
(c) If Securities are to be redeemed and the Trust gives a
Redemption/Distribution Notice, which notice may only be issued if the
Debentures are redeemed as set out in this Section 7.4 (which notice will be
irrevocable), then the Property Trustee, upon receipt of such funds, (A) in
the case of Capital Securities and Common Securities issued in definitive
certificated form, will pay the relevant Redemption Price to the Holders of
such Securities by wire transfer on the redemption date to any United States
bank account having been designated by such Holder or, if no such account has
been designated, by check mailed to the address of the relevant Holder
appearing on the books and records of the Trust on the redemption date, and
(B) in the case of Global Securities, will deposit irrevocably with the DTC
or its nominee (or successor clearing agency or its nominee) funds sufficient
to pay the applicable Redemption Price with respect to the Capital Securities
and will give the DTC irrevocable instructions and authority to pay the
Redemption Price to the Holders of the Capital Securities. If a
Redemption/Distribution Notice shall have been given and funds deposited as
required, then immediately prior to the close of business on the date of such
deposit, Distributions will cease to accrue on the Securities so called for
redemption and all rights of Holders of such Securities will cease, except
the right of the Holders of such Securities to receive the Redemption Price,
but without interest on such Redemption Price. If any date fixed for
redemption of Securities is not a Business Day, then payment of the
Redemption Price payable on such date will be made on the next succeeding day
that is a Business Day (and without any interest or other payment in respect
of any such delay) except that, if such 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 fixed for redemption. If payment of the Redemption Price in respect of
any Securities is improperly withheld or refused and not paid either by the
Property Trustee or by the Sponsor as guarantor pursuant to the Guarantee,
Distributions on such Securities will continue to accrue at the then
applicable rate from the original redemption date to the actual date of
payment, in which case the actual payment date will be considered the date
fixed for redemption for purposes of calculating the Redemption Price. For
these purposes, the applicable Redemption Price shall not include
Distributions which are being paid to Holders who were Holders on a relevant
record date. Upon satisfaction of the foregoing conditions, then immediately
prior to the close of business on the date of such deposit or payment, all
rights of Holders of such Debentures so called for redemption will cease,
except the right of the Holders to receive the Redemption Price, but without
interest on such Redemption Price, and from and after the date fixed for
redemption, such Debentures will not accrue distributions or bear interest.
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Neither the Regular Trustees nor the Trust shall be required to
register or cause to be registered the transfer or exchange of any Securities
that have been called for redemption, except in the case of any Securities
being redeemed in part, any portion thereof not to be redeemed.
(d) Subject to the foregoing and applicable law (including, without
limitation, United States Federal securities laws), the Debenture Issuer or
its subsidiaries may at any time and from time to time purchase outstanding
Capital Securities by tender, in the open market or by private agreement.
Section 7.5 Voting Rights of Capital Securities.
(a) Except as provided under this Article VII and as otherwise
required by the Business Trust Act, the Trust Indenture Act and other
applicable law, the Holders of the Capital Securities will have no voting
rights.
(b) Subject to the requirement of the Property Trustee obtaining a
tax opinion in certain circumstances set forth in Section 7.5(d) below, the
Holders of a Majority in Liquidation Amount of the Capital Securities have
the right to direct the time, method and place of conducting any proceeding
for any remedy available to the Property Trustee, or to direct the exercise
of any trust or power conferred upon the Property Trustee under the
Declaration, including the right to direct the Property Trustee, as Holder of
the Debentures, to (i) exercise the remedies available to it under the
Indenture as a Holder of the Debentures or (ii) consent to any amendment or
modification of the Indenture or the Debentures where such consent shall be
required; PROVIDED, HOWEVER, that where a consent or action under the
Indenture would require the consent or act of the Holders of more than a
majority in aggregate principal amount of Debentures affected thereby, only
the Holders of the percentage of the aggregate stated liquidation amount of
the Capital Securities which is at least equal to the percentage required
under the Indenture may direct the Property Trustee to give such consent or
to take such action.
(c) If the Property Trustee fails to enforce its rights under the
Debentures after a Holder of record of Capital Securities has made a written
request, such Holder of record of Capital Securities may, to the extent
permitted by applicable law, institute a legal proceeding directly against
the Debenture Issuer to enforce the Property Trustee's rights under the
Indenture without first instituting any legal proceeding against the Property
Trustee or any other person or entity. Notwithstanding the foregoing, if a
Trust Enforcement Event has occurred and is continuing and such event is
attributable to the failure of the Debenture Issuer to make any required
payment when due under the Indenture, then a Holder of Capital Securities may
directly institute a proceeding against the Debenture Issuer for enforcement
of such payment under the Indenture.
(d) The Property Trustee shall notify all Holders of the Capital
Securities of any notice of any Indenture Event of Default received from the
Debenture Issuer with respect to the Debentures. Such notice shall state
that such Indenture Event of Default also constitutes a Trust
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Enforcement Event. Except with respect to directing the time, method, and
place of conducting a proceeding for a remedy, the Property Trustee shall be
under no obligation to take any of the actions described in clause 7.5(b)(i)
and (ii) above unless the Property Trustee has obtained an opinion of
independent tax counsel to the effect that as a result of such action, the
Trust will not fail to be classified as a grantor trust for United States
federal income tax purposes and each Holder will be treated as owning an
undivided beneficial ownership interest in the Debentures.
(e) In the event the consent of the Property Trustee, as the Holder
of the Debentures, is required under the Indenture with respect to any
amendment or modification of the Indenture, the Property Trustee shall
request the direction of the Holders of the Securities with respect to such
amendment or modification and shall vote with respect to such amendment or
modification as directed by a Majority in Liquidation Amount of the
Securities voting together as a single class; PROVIDED, HOWEVER, that where a
consent under the Indenture would require the consent of the Holders of more
than a majority in aggregate principal amount of the Debentures, the Property
Trustee may only give such consent at the direction of the Holders of at
least the same proportion in aggregate stated liquidation amount of the
Securities. The Property Trustee shall not take any such action in
accordance with the directions of the Holders of the Securities unless the
Property Trustee has obtained an opinion of tax counsel to the effect that,
as a result of such action, the Trust will not be classified as other than a
grantor trust for United States federal income tax purposes and each Holder
will be treated as owning an undivided beneficial ownership interest in the
Debentures.
(f) A waiver of an Indenture Event of Default with respect to the
Debentures will constitute a waiver of the corresponding Trust Enforcement
Event.
(g) Any required approval or direction of Holders of Capital
Securities may be given at a separate meeting of Holders of Capital
Securities convened for such purpose, at a meeting of all of the Holders of
Securities or pursuant to written consent. The Regular Trustees will cause a
notice of any meeting at which Holders of Capital Securities are entitled to
vote, or of any matter upon which action by written consent of such Holders
is to be taken, to be mailed to each Holder of record of Capital Securities.
Each such notice will include a statement setting forth the following
information: (i) the date of such meeting or the date by which such action is
to be taken; (ii) a description of any resolution proposed for adoption at
such meeting on which such Holders are entitled to vote or of such matter
upon which written consent is sought; and (iii) instructions for the delivery
of proxies or consents.
(h) No vote or consent of the Holders of Capital Securities will be
required for the Trust to redeem and cancel Capital Securities or distribute
Debentures in accordance with the Declaration.
(i) Notwithstanding that Holders of Capital Securities are entitled
to vote or consent under any of the circumstances described above, any of the
Securities that are owned at such time by the Debenture Issuer or any entity
directly or indirectly controlled by, or under direct or
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indirect common control with, the Debenture Issuer, shall not be entitled to
vote or consent and shall, for purposes of such vote or consent, be treated
as if such Securities were not outstanding, provided, however that persons
otherwise eligible to vote to whom the Debenture Issuer or any of its
subsidiaries have pledged Capital Securities may vote or consent with respect
to such pledged Capital Securities under any of the circumstances described
herein.
(j) Holders of the Capital Securities will have no rights to appoint
or remove the Trustees, who may be appointed, removed or replaced solely by
the Debenture Issuer, as the Holder of all of the Common Securities.
Section 7.6 Voting Rights of Common Securities.
(a) Except as provided under Section 6.1(b) or this Section 7.6 or
as otherwise required by the Business Trust Act, the Trust Indenture Act or
other applicable law or provided by the Declaration, the Holders of the
Common Securities will have no voting rights.
(b) The Holders of the Common Securities are entitled, in accordance
with Article 6 of the Declaration, to vote to appoint, remove or replace any
Trustee or to increase or decrease the number of Trustees.
(c) Subject to Section 2.6 of the Declaration and only after all
Trust Enforcement Events with respect to the Capital Securities have been
cured, waived, or otherwise eliminated and subject to the requirement of the
Property Trustee obtaining a tax opinion in certain circumstances set forth
in this paragraph (c), the Holders of a Majority in liquidation amount of the
Common Securities have the right to direct the time, method and place of
conduction any proceeding for any remedy available to the Property Trustee,
or direct the exercise of any trust or power conferred upon the Property
Trustee under the Declaration, including the right to direct the Property
Trustee, as Holder of the Debentures, to (i) exercise the remedies available
to it under the Indenture as a Holder of the Debentures, or (ii) consent to
any amendment or modification of the Indenture or the Debentures where such
consent shall be required; PROVIDED, HOWEVER, that where a consent or action
under the Indenture would require the consent or act of the Holders of more
than a majority in aggregate principal amount of Debentures affected thereby,
only the Holders of the percentage of the aggregate stated liquidation amount
of the Common Securities which is at least equal to the percentage required
under the Indenture may direct the Property Trustee to have such consent or
take such action. Except with respect to directing the time, method, and
place of conducting a proceeding for a remedy, the Property Trustee shall be
under no obligation to take any of the actions described in clause 7.6(c)(i)
and (ii) above unless the Property Trustee has obtained an opinion of
independent tax counsel to the effect that, as a result of such action, for
United States federal income tax purposes the Trust will not fail to be
classified as a grantor trust and each Holder will be treated as owning an
undivided beneficial ownership interest in the Debentures.
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(d) If the Property Trustee fails to enforce its rights under the
Debentures after a Holder of record of Common Securities has made a written
request, such Holder of record of Common Securities may, to the extent
permitted by applicable law, directly institute a legal proceeding directly
against the Debenture Issuer, as sponsor of the Trust, to enforce the
Property Trustee's rights under the Debentures without first instituting any
legal proceeding against the Property Trustee or any other person or entity.
(e) A waiver of an Indenture Event of Default with respect to the
Debentures will constitute a waiver of the corresponding Trust Enforcement
Event.
(f) Any required approval or direction of Holders of Common
Securities may be given at a separate meeting of Holders of Common Securities
convened for such purpose, at a meeting of all of the Holders of Securities
or pursuant to written consent. The Regular Trustees will cause a notice of
any meeting at which Holders of Common Securities are entitled to vote, or of
any matter on which action by written consent of such Holders is to be taken,
to be mailed to each Holder of Common Securities. Each such notice will
include a statement setting forth the following information: (i) the date of
such meeting or the date by which such action is to be taken; (ii) a
description of any resolution proposed for adoption at such meeting on which
such Holders are entitled to vote or of such matter upon which written
consent is sought; and (iii) instructions for the delivery of proxies or
consents.
(g) No vote or consent of the Holders of Common Securities will be
required for the Trust to redeem and cancel Common Securities or to
distribute Debentures in accordance with the Declaration and the terms of the
Securities.
Section 7.7 Paying Agent.
Pursuant to Section 3.8(h), the Property Trustee may appoint one or
more Paying Agents, as it shall determine. The Property Trustee may change
any Paying Agent without prior notice to the Holders, except that the
Property Trustee shall give the Holders notice of any reappointment,
occurring after the date of this Declaration, of the Debenture Issuer as
Paying Agent. The Paying Agent shall be permitted to resign as Paying Agent
upon 30 days' written notice to the Property Trustee and the Debenture
Issuer. If the Property Trustee fails to appoint or maintain another entity
as Paying Agent, the Property Trustee shall act as such. The Debenture
Issuer is hereby appointed as the initial Paying Agent for the Capital
Securities and the Common Securities.
Section 7.8 Transfer of Securities.
(a) The Trust shall cause to be kept at the Corporate Trust Office
of the Property Trustee a register (the "Security Register") in which,
subject to such reasonable regulations as it may prescribe, the Trust shall
provide for the registration of Capital Securities and of transfers of
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Capital Securities. The Property Trustee is hereby appointed as "Security
Registrar" for the purpose of registering Capital Securities and transfers of
Capital Securities as herein provided.
(b) Upon surrender for registration of transfer of any Security at
an office or agency of the Trust designated for such purpose, the Trust shall
execute, and the Property Trustee shall authenticate and deliver, in the name
of the designated transferee or transferees, one or more new Securities of
any authorized denominations and of a like aggregate principal amount.
(c) At the option of the Holder, Securities may be exchanged for
other Securities of any authorized denominations and of a like aggregate
principal amount, upon surrender of the Securities to be exchanged at such
office or agency. Whenever any Securities are so surrendered for exchange,
the Trust shall execute, and the Property Trustee shall authenticate and
deliver, the Securities which the Holder making the exchange is entitled to
receive.
(d) Every Security presented or surrendered for registration of
transfer or for exchange shall (if so required by the Trust or the Property
Trustee) be duly endorsed, or be accompanied by a written instrument of
transfer in form satisfactory to the Trust and the Security Registrar duly
executed, by the Holder thereof or his attorney duly authorized in writing.
(e) No service charge shall be made for any registration of transfer
or exchange of Securities, but the Trust 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.
(f) If the Securities are to be redeemed in part, the Trust shall
not be required (A) to issue, register the transfer of or exchange any
Securities during a period beginning at the opening of business 15 days
before the day of the mailing of a notice of redemption of any such
Securities selected for redemption under Section 7.4 and ending at the close
of business on the day of such mailing, or (B) to register the transfer of or
exchange any Security so selected for redemption in whole or in part, except
the unredeemed portion of any Security being redeemed in part.
Section 7.9 Mutilated, Destroyed, Lost or Stolen Certificates.
If:
(a) any mutilated Certificates should be surrendered to the Regular
Trustees, or if the Regular Trustees shall receive evidence to their
satisfaction of the destruction, loss or theft of any Certificate; and
(b) there shall be delivered to the Regular Trustees such security
or indemnity as may be required by them to keep each of them, the Sponsor and
the Trust harmless, then, in the absence of notice that such Certificate
shall have been acquired by a bona fide purchaser, any
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Regular Trustee on behalf of the Trust shall execute and deliver, in exchange
for or in lieu of any such mutilated, destroyed, lost or stolen Certificate,
a new Certificate of like denomination. In connection with the issuance of
any new Certificate under this Section 7.9, the Regular Trustees 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 Certificate
issued pursuant to this Section shall constitute conclusive evidence of an
ownership interest in the relevant Securities, as if originally issued,
whether or not the lost, stolen or destroyed Certificate shall be found at
any time.
Section 7.10 Persons Deemed Security Holders.
The Trustees may treat the Person in whose name any Certificate
shall be registered on the books and records of the Trust as the sole holder
of such Certificate and of the Securities represented by such Certificate for
purposes of receiving Distributions and for all other purposes whatsoever
and, accordingly, shall not be bound to recognize any equitable or other
claim to or interest in such Certificate or in the Securities represented by
such Certificate on the part of any other Person, whether or not the Trust
shall have actual or other notice thereof.
Section 7.11 Global Securities.
Upon the vote of a Majority in Liquidation Amount of the Capital
Securities, the Trust shall cause the Capital Securities, the extent
requested by individual Holders, to be issued in the form of one or more
securities issued in book-entry form (each, a "Global Security"), deposited
with a Depositary as set forth herein.
If Capital Securities are to be issued in book-entry form pursuant
to the immediately preceding paragraph, then a Regular Trustee on behalf of
the Trust shall execute and the Property Trustee shall authenticate and
deliver one or more Global Securities that (i) shall represent and shall be
denominated in an amount equal to the aggregate liquidation amount of all of
the Capital Securities to be issued in the form of Global Securities and not
yet cancelled, (ii) shall be registered in the name of the Depositary for
such Global Security or Securities or the nominee of such Depositary, and
(iii) shall be delivered by the Property Trustee to such Depositary or
pursuant to such Depositary's instructions. Global Securities shall bear a
legend substantially to the following effect:
"This Capital Security is a Global Security within the meaning of
the Declaration hereinafter referred to and is registered in the name of a
Depositary or a nominee of a Depositary. Notwithstanding the provisions of
Section 7.8 of the Declaration, unless and until it is exchanged in whole or
in part for Capital Securities in definitive registered form, a Global
Security representing all or a part of the Capital Securities may not be
transferred in the manner provided in Section 7.8 of the Declaration except
as a whole by the Depositary to a nominee of such Depositary or by a nominee
of such Depositary to such Depositary or another nominee of such Depositary
or by such Depositary or any such nominee to a successor Depositary or a
nominee
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of such successor Depositary. Every Capital Security delivered upon
registration or transfer of, or in exchange for, or in lieu of, this Global
Security shall be a Global Security subject to the foregoing, except in the
limited circumstances described above. Unless this certificate is presented
by an authorized representative of DTC to the Trust or its agent for
registration of transfer, exchange or payment, and any certificate issued is
registered in the name of Cede & Co. or in such other name as is requested by
an authorized representative of DTC (and any payment is to be made to Cede &
Co. or to such other entity as is requested by an authorized representative
of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY
OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner hereof, Cede &
Co., has an interest herein."
Definitive Capital Securities issued in exchange for all or a part
of a Global Security pursuant to this Section 7.11 shall be registered in
such names and in such authorized denominations as the Depositary, pursuant
to instructions from its direct or indirect participants or otherwise, shall
instruct the Property Trustee. Upon execution and authentication, the
Property Trustee shall deliver such definitive Capital Securities to the
persons in whose names such definitive Capital Securities are so registered.
At such time as all interests in Global Securities have been
redeemed, repurchased or canceled, such Global Securities shall be, upon
receipt thereof, canceled by the Property Trustee in accordance with standing
procedures and instructions existing between the Depositary and the Property
Trustee. At any time prior to such cancellation, if any interest in Global
Securities is exchanged for definitive Capital Securities, redeemed, canceled
or transferred to a transferee who receives definitive Capital Securities
therefor or any definitive Capital Security is exchanged or transferred for
part of Global Securities, the principal amount of such Global Securities
shall, in accordance with the standing procedures and instructions existing
between the Depositary and the Property Trustee, be reduced or increased, as
the case may be, and an endorsement shall be made on such Global Securities
by the Property Trustee or the Property Trustee, at the direction of the
Property Trustee, to reflect such reduction or increase.
The Trust and the Property Trustee may for all purposes, including
the making of payments due on the Capital Securities, deal with the
Depositary as the authorized representative of the Holders for the purposes
of exercising the rights of Holders hereunder. The rights of the owner of
any beneficial interest in a Global Security shall be limited to those
established by law and agreements between such owners and the Depository
participants; PROVIDED that no such agreement shall give any rights to any
person against the Trust or the Property Trustee without the written consent
of the parties so affected. Multiple requests and directions from and votes
of the Depositary as holder of Capital Securities in global form with respect
to any particular matter shall not be deemed inconsistent to the extent they
do not represent an amount of Capital Securities in excess of those held in
the name of the Depositary or its nominee.
If at any time the Depositary for any Capital Securities represented
by one or more Global Securities notifies the Trust that it is unwilling or
unable to continue as Depositary for such
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Capital Securities or if at any time the Depositary for such Capital
Securities shall no longer be eligible under this Section 7.11, the Trust
shall appoint a successor Depositary with respect to such Capital Securities.
If a successor Depositary for such Capital Securities is not appointed by
the Trust within 90 days after the Trust receives such notice or becomes
aware of such ineligibility, the Trust's election that such Capital
Securities be represented by one or more Global Securities shall no longer be
effective and a Regular Trustee on behalf of the Trust shall execute, and the
Property Trustee will authenticate and deliver, Capital Securities in
definitive registered form, in any authorized denominations, in an aggregate
liquidation amount equal to the principal amount of the Global Security or
Global Securities representing such Capital Securities in exchange for such
Global Security or Global Securities.
If the Trust has caused all or any portion of the Capital Securities
to be issued in the form of Global Securities, the Trust may cease to cause
such Capital Securities to be issued in the form of Global Securities only
upon the affirmative vote of a majority in liquidation amount of the Holders
of Capital Securities. In such event a Regular Trustee on behalf of the
Trust shall execute, and the Property Trustee shall authenticate and deliver,
Capital Securities in definitive registered form, in any authorized
denominations, in an aggregate liquidation amount equal to the principal
amount of the Global Security or Global Securities representing such Capital
Securities, in exchange for such Global Security or Global Securities.
Notwithstanding any other provisions of this Declaration (other than
the provisions set forth in Section 7.13(a)), Global Securities may not be
transferred as a whole except by the Depositary to a nominee of the
Depositary or by a nominee of the Depositary to the Depositary or another
nominee of the Depositary or by the Depositary or any such nominee to a
successor Depositary or a nominee of such successor Depositary.
Interests of beneficial owners in a Global Security may be
transferred or exchanged for definitive Capital Securities and definitive
Capital Securities may be transferred or exchange for Global Securities in
accordance with rules of the Depositary and the provisions of Section 7.13.
Any Capital Security in global form may be endorsed with or have
incorporated in the text thereof such legends or recitals or changes not
inconsistent with the provisions of this Declaration as may be required by
the Property Trustee, the Depositary or by the National Association of
Securities Dealers, Inc. in order for the Capital Securities to be tradeable
on the PORTAL Market or as may be required for the Capital Securities to be
tradeable on any other market developed for trading of securities pursuant to
Rule 144A or required to comply with any applicable law or any regulation or
with the rules and regulations of any securities exchange upon which the
Capital Securities may be listed or traded or to conform with any usage with
respect thereto, or to indicate any special limitations or restrictions to
which any particular Capital Securities are subject.
Section 7.12 Restrictive Legend.
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(a) Each Global Security and definitive Capital Security that
constitutes a Restricted Security shall bear the following legend (the
"Private Placement Legend") on the face thereof until two years after the
later of the date of original issue and the last date on which the Sponsor or
any affiliate of the Sponsor was the owner of such Capital Securities (or any
predecessor thereto) (the "Resale Restriction Termination Date"), unless
otherwise agreed by the Trust and the Holder thereof:
"THIS CAPITAL SECURITY (OR ITS PREDECESSOR) HAS NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY
STATE SECURITIES LAWS AND NEITHER THIS CAPITAL SECURITY NOR ANY INTEREST OR
PARTICIPATION HEREIN MAY BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE
ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH
PURCHASER OF THIS CAPITAL SECURITY IS HEREBY NOTIFIED THAT THE SELLER MAY
BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE
SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER. THE HOLDER OF THIS
CAPITAL SECURITY, BY ITS ACCEPTANCE HEREOF, REPRESENTS, ACKNOWLEDGES AND
AGREES FOR THE BENEFIT OF THE TRUST THAT: (I) IT HAS ACQUIRED A
"RESTRICTED" SECURITY WHICH HAS NOT BEEN REGISTERED UNDER THE SECURITIES
ACT; (II) IT WILL NOT OFFER, SELL OR OTHERWISE TRANSFER THIS CAPITAL
SECURITY PRIOR TO THE LATER OF THE DATE WHICH IS TWO YEARS AFTER THE DATE
OF ORIGINAL ISSUANCE HEREOF AND THE LAST DATE ON WHICH THE TRUST OR ANY
AFFILIATE OF THE TRUST WAS THE OWNER OF SUCH RESTRICTED SECURITIES (OR ANY
PREDECESSOR) EXCEPT (A) TO THE TRUST, (B) PURSUANT TO A REGISTRATION
STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (C)
FOR SO LONG AS THIS CAPITAL SECURITY IS ELIGIBLE FOR RESALE PURSUANT TO
RULE 144A, TO A PERSON WHO THE SELLER REASONABLY BELIEVES IS A "QUALIFIED
INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN
A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (D) TO AN
"INSTITUTIONAL ACCREDITED INVESTOR" IN A TRANSACTION EXEMPT FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, OR (E) PURSUANT TO ANOTHER
AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES
ACT AND, IN EACH CASE, IN ACCORDANCE WITH THE APPLICABLE SECURITIES LAWS OF
ANY STATE OF THE UNITED STATES OR ANY APPLICABLE JURISDICTION; AND (III) IT
WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER FROM
IT OF THIS CAPITAL SECURITY OF THE RESALE RESTRICTIONS SET FORTH IN (II)
ABOVE. ANY OFFER, SALE OR OTHER DISPOSITION PURSUANT TO THE FOREGOING
CLAUSES (II)(D) AND (E) IS SUBJECT TO THE RIGHT OF THE ISSUER OF THIS
CAPITAL SECURITY AND THE PROPERTY TRUSTEE FOR THIS CAPITAL SECURITY TO
REQUIRE THE
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DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATIONS OR OTHER
INFORMATION ACCEPTABLE TO THEM IN FORM AND SUBSTANCE."
Any Capital Security (or security issued in exchange or substitution
therefor) as to which such restrictions on transfer shall have expired in
accordance with their terms may, upon satisfaction of the requirements of
Section 7.12(b) and surrender of such Capital Security for exchange to the
Capital Security registrar in accordance with the provisions of this Section
7.12(a), be exchanged for a new Capital Security or Capital Securities, of
like tenor and aggregate liquidation amount, which shall not bear the
restrictive legend required by this Section 7.12(a).
(b) Upon any sale or transfer of any Restricted Security (including
any interest in a Global Security) (i) that is effected pursuant to an
effective registration statement under the Securities Act or (ii) in
connection with which the Property Trustee receives certificates and other
information (including an opinion of counsel, if requested) reasonably
acceptable to the Sponsor and the Property Trustee to the effect that such
security will no longer be subject to the resale restrictions under federal
and state securities laws, then (A) in the case of a Restricted Security in
definitive form, the Capital Security registrar or co-registrar shall permit
the holder thereof to exchange such Restricted Security for a security that
does not bear the legend set forth in Section 7.12(a), and shall rescind any
such restrictions on transfer and (B) in the case of Restricted Securities
represented by a Global Security, such Capital Security shall no longer be
subject to the restrictions contained in the legend set forth in Section
7.12(a) (but still subject to the other provisions hereof). In addition, any
Capital Security (or security issued in exchange or substitution therefor) as
to which the restrictions on transfer described in the legend set forth in
Section 7.12(a) have expired by their terms, may, upon surrender thereof (in
accordance with the terms of this Declaration) together with such
certifications and other information (including an opinion of counsel having
substantial experience in practice under the Securities Act and otherwise
reasonably acceptable to the Sponsor, addressed to the Sponsor and the
Property Trustee and in a form acceptable to the Sponsor, to the effect that
the transfer of such Restricted Security has been made in compliance with
Rule 144 or such successor provision) acceptable to the Sponsor and the
Property Trustee as either of them may reasonably require, be exchanged for a
new Capital Security or Capital Securities of like tenor and aggregate
liquidation amount, which shall not bear the restrictive legends set forth in
Section 7.12(a).
Section 7.13 Special Transfer Provisions.
(a) At any time at the request of the beneficial holder of a Capital
Security in global form, such beneficial holder shall be entitled to obtain a
definitive Capital Security upon written request to the Regular Trustees in
accordance with the standing instructions and procedures existing between the
Depositary and the Regular Trustees for the issuance thereof. Any transfer
of a beneficial interest in a Capital Security in global form which cannot be
effected through book-entry settlement must be effected by the delivery to
the transferee (or its nominee) of a definitive Capital Security or
Securities registered in the name of the transferee (or its nominee) on the
books maintained by the Capital Securities registrar. With respect to any
such transfer, the
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Regular Trustees will cause, in accordance with the standing instructions and
procedures existing between the Depositary and the Regular Trustees, the
aggregate liquidation amount of the Global Security to be reduced and,
following such reduction, the Regular Trustees will cause definitive Capital
Securities in the appropriate aggregate liquidation amount registered in the
name of such transferee (or its nominee) and bearing such restrictive legends
as may be required by this Declaration to be delivered. In connection with
any such transfer, the Regular Trustees may request such representations and
agreements relating to the restrictions on transfer of such Capital
Securities from such transferee (or such transferee's nominee) as the Regular
Trustees may reasonably require.
(b) So long as the Capital Securities are eligible for book-entry
settlement, or unless otherwise required by law, upon any transfer of a
definitive Capital Security to a QIB in accordance with Rule 144A, unless
otherwise requested by the transferor, and upon receipt of the definitive
Capital Security being so transferred, together with a certification from the
transferor that the transferor reasonably believes the transferee is a QIB
(or other evidence satisfactory to the Property Trustee), the Property
Trustee shall make an endorsement on the Restricted Global Security to
reflect an increase in the aggregate liquidation amount of the Restricted
Global Security, and the Property Trustee shall cancel such definitive
Capital Security and cause, in accordance with the standing instructions and
procedures existing between the Depositary and the Property Trustee, the
aggregate liquidation amount of Capital Securities represented by the
Restricted Global Security to be increased accordingly.
ARTICLE 8
DISSOLUTION AND TERMINATION OF TRUST
Section 8.1 Dissolution and Termination of Trust.
(a) The Trust shall dissolve upon the earliest of:
(i) June 30, 2057;
(ii) any bankruptcy, insolvency, liquidation or similar
proceeding with respect to the Holder of the Common
Securities or the Sponsor or all or substantially all of
their properties;
(iii) the entry of a decree of judicial dissolution of the
Sponsor or the Trust;
(iv) the time when all of the Securities shall have matured
or been called for redemption and the amounts then due
shall have been paid to the Holders in accordance with
the terms of the Securities;
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(v) upon the election of the Sponsor, following the occurrence
and continuation of a Special Event, pursuant to which the
Trust shall have been dissolved in accordance with the terms
of the Securities, and all of the Debentures shall have been
distributed to the Holders of Securities in exchange for all
of the Securities; or
(vi) an election by a Majority in Liquidation Amount of the
Common Securities provided such action is taken before the
issuance of any Securities.
(b) As soon as is practicable after the occurrence of an event
referred to in Section 8.1(a) and upon completion of the winding up of the
Trust in accordance with Section 8.2 hereof, the Trustees shall terminate the
Trust by filing a certificate of cancellation with the Secretary of State of
the State of Delaware.
(c) The provisions of Section 3.9 and Article 10 shall survive the
termination of the Trust.
Section 8.2 Liquidation Distribution Upon Termination and
Dissolution of the Trust.
(a) In the event of any voluntary or involuntary liquidation,
dissolution, winding-up or termination of the Trust (each a "Liquidation"),
the Holders of the Capital Securities on the date of the Liquidation will be
entitled to receive, out of the assets of the Trust available for
distribution to Holders of Securities after satisfaction of the Trust's
liabilities in accordance with applicable law, distributions in cash or other
immediately available funds in an amount equal to the aggregate of the stated
liquidation amount of $1,000 per Security plus accrued and unpaid
Distributions thereon to the date of payment (such amount being the
"Liquidation Distribution"), unless, in connection with such Liquidation,
Debentures in an aggregate principal amount equal to the aggregate
liquidation amount of, with an Distribution rate identical to the interest
rate of, and accrued and unpaid distributions equal to accrued and unpaid
Distributions on, such Securities shall be distributed on a Pro Rata basis to
the Holders of the Securities in exchange for such Securities.
(b) If, upon any such Liquidation, 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 the amounts payable
directly by the Trust on the Securities shall be paid on a Pro Rata basis.
The Holders 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 an Indenture Event of Default has occurred
and is continuing, the Capital Securities shall have a preference over the
Common Securities with regard to such distributions.
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ARTICLE 9
LIMITATION OF LIABILITY OF
HOLDERS OF SECURITIES, TRUSTEES OR OTHERS
Section 9.1 Liability.
(a) Except as expressly set forth in this Declaration, the Guarantee
and the terms of the Securities, the Sponsor:
(i) shall not be personally liable for the return of any portion
of the capital contributions (or any return thereon) of the
Holders of the Securities which shall be made solely from
assets of the Trust; and
(ii) shall not be required to pay to the Trust or to any Holder
of Securities any deficit upon dissolution of the Trust or
otherwise.
(b) The Holder of the Common Securities shall be liable for all of the
debts and obligations of the Trust (other than with respect to the Securities)
to the extent not satisfied out of the Trust's assets.
(c) Pursuant to Section 3803(a) of the Business Trust Act, the Holders
of the Capital Securities shall be entitled to the same limitation of personal
liability extended to stockholders of private corporations for profit organized
under the General Corporation Law of the State of Delaware.
Section 9.2 Exculpation.
(a) No Indemnified Person shall be liable, responsible or
accountable in damages or otherwise to the Trust or any Covered Person for
any loss, damage or claim incurred by reason of any act or omission performed
or omitted by such Indemnified Person in good faith on behalf of the Trust
and in a manner such Indemnified Person reasonably believed to be within the
scope of the authority conferred on such Indemnified Person by this
Declaration or by law, except that an Indemnified Person shall be liable or
any such loss, damage or claim incurred by reason of such Indemnified
Person's negligence or willful misconduct with respect to such acts or
omissions.
(b) An Indemnified Person shall be fully protected in relying in
good faith upon the records of the Trust and upon such information, opinions,
reports or statements presented to the Trust by any Person as to matters the
Indemnified Person reasonably believes are within such other Person's
professional or expert competence and who has been selected with reasonable
care by or on behalf of the Trust, including information, opinions, reports
or statements as to the value and amount of the assets, liabilities, profits,
losses or any other facts pertinent to the existence and amount of assets
from which Distributions to Holders of Securities might properly be paid.
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Section 9.3 Fiduciary Duty.
(a) To the extent that, at law or in equity, an Indemnified Person
has duties (including fiduciary duties) and liabilities relating thereto to
the Trust or to any other Covered Person, an Indemnified Person acting under
this Declaration shall not be liable to the Trust or to an other Covered
Person for its good faith reliance on the provisions of this Declaration.
The provisions of this Declaration, to the extent that they restrict the
duties and liabilities of an Indemnified Person otherwise existing at law or
in equity (other than the duties imposed on the Property Trustee under the
Trust Indenture Act), are agreed by the parties hereto to replace such other
duties and liabilities of such Indemnified Person.
(b) Unless otherwise expressly provided herein:
(i) whenever a conflict of interest exists or arises between any
Covered Persons; or
(ii) whenever this Declaration or any other agreement
contemplated herein or therein provides that an Indemnified
Person shall act in a manner that is, or provides terms that
are, fair and reasonable to the Trust or any Holder of
Securities,
the Indemnified Person shall resolve such conflict of interest, take such
action or provide such terms, considering in each case the relative interest
of each party (including its own interest) to such conflict, agreement,
transaction or situation and the benefits and burdens relating to such
interests, any customary or accepted industry practices and any applicable
generally accepted accounting practices or principles. In the absence of bad
faith by the Indemnified Person, the resolution, action or term so made,
taken or provided by the Indemnified Person shall not constitute a breach of
this Declaration or any other agreement contemplated herein or of any duty or
obligation of the Indemnified Person at law or in equity or otherwise.
(c) Whenever in this Declaration an Indemnified Person is permitted
or required to make a decision:
(i) in its "discretion" or under a grant of similar authority,
the Indemnified Person shall be entitled to consider such
interests and factors as it desires, including its own
interests, and shall have no duty or obligation to give any
consideration to any interest of or factors affecting the
Trust or any other Person; or
(ii) in its "good faith" or under another express standard, the
Indemnified Person shall act under such express standard and
shall not be subject to any other or different standard
imposed by this Declaration or by applicable law.
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Section 9.4 Indemnification.
(a)(i) The Debenture Issuer shall indemnify, to the full extent
permitted by law, any Debenture Issuer Indemnified Person who was or is a
party or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative
or investigative (other than an action by or in the right of the Trust) by
reason of the fact that he or she is or was a Debenture Issuer Indemnified
Person against expenses (including attorney fees), judgments, fines and
amounts paid in settlement actually and reasonably incurred by him or her in
connection with such action, suit or proceeding if he or she acted in good
faith and in a manner he or she reasonably believed to be in or not opposed
to the best interests of the Trust, and, with respect to any criminal action
or proceeding, had no reasonable cause to believe his conduct was unlawful.
The termination of any action, suit or proceeding by judgment, order,
settlement, conviction or upon a plea of nolo contendere or its equivalent,
shall not, of itself, create a presumption that the Debenture Issuer
Indemnified Person did not act in good faith and in a manner which he
reasonably believed to be in or not opposed to the best interests of the
Trust, and, with respect to any criminal action or proceeding, had reasonable
cause to believe that his conduct was unlawful.
(ii) The Debenture Issuer shall indemnify, to the full extent
permitted by law, any Debenture Issuer Indemnified Person who was or is a
party or is threatened to be made a party to any threatened, pending or
completed action or suit by or in the right of the Trust to procure a
judgment in its favor by reason of the fact that he or she is or was a
Debenture Issuer Indemnified Person against expenses (including attorneys'
fees) actually and reasonably incurred by him in connection with the defense
or settlement of such action or suit if he or she acted in good faith and in
a manner he reasonably believed to be in or not opposed to the best interests
of the Trust and except that no such indemnification shall be made in respect
of any claim, issue or matter as to which such Debenture Issuer Indemnified
Person shall have been adjudged to be liable to the Trust unless and only to
the extent that the Court of Chancery of Delaware or the court in which such
action or suit was brought shall determine upon application that, despite the
adjudication of liability but in view of all the circumstances of the case,
such person is fairly and reasonably entitled to indemnity for such expenses
which such Court of Chancery or such other court shall deem proper.
(iii) Any indemnification under paragraphs (i) and (ii) of this
Section 9.4(a) (unless ordered by a court) shall be made by the Debenture
Issuer only as authorized in the specific case upon a determination that
indemnification of the Debenture Issuer Indemnified Person is proper in the
circumstances because he has met the applicable standard of conduct set forth
in paragraphs (i) and (ii). Such determination shall be made (1) by the
Regular Trustees by a majority vote of a quorum consisting of such Regular
Trustees who were not parties to such action, suit or proceeding, (2) if such
a quorum is not obtainable, or, even if obtainable, if a quorum of
disinterested Regular Trustees so directs, by independent legal counsel in a
written opinion, or (3) by the Holder of the Common Securities of the Trust.
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(iv) Expenses (including attorneys' fees) incurred by a Debenture
Issuer Indemnified Person in defending a civil, criminal, administrative or
investigative action, suit or proceeding referred to in paragraphs (i) and
(ii) of this Section 9.4(a) shall be paid by the Debenture Issuer in advance
of the final disposition of such action, suit or proceeding upon receipt of
an undertaking by or on behalf of such Debenture Issuer Indemnified Person to
repay such amount if it shall ultimately be determined that he is not
entitled to be indemnified by the Debenture Issuer as authorized in this
Section 9.4(a). Notwithstanding the foregoing, no advance shall be made by
the Debenture Issuer if a determination is reasonably and promptly made (i)
by the Regular Trustees by a majority vote of a quorum of disinterested
Regular Trustees, (ii) if such a quorum is not obtainable, or, even if
obtainable, if a quorum of disinterested Regular Trustees so directs, by
independent legal counsel in a written opinion or (iii) by the Holder of the
Common Securities of the Trust, that, based upon the facts known to the
Regular Trustees, counsel or the Holder of the Common Securities at the time
such determination is made, such Debenture Issuer Indemnified Person acted in
bad faith or in a manner that such person did not believe to be in or not
opposed to the best interests of the Trust, or, with respect to any criminal
proceeding, that such Debenture Issuer Indemnified Person believed or had
reasonable cause to believe his or her conduct was unlawful. In no event
shall any advance be made in instances where the Regular Trustees,
independent legal counsel or Holder of the Common Securities reasonably
determine that such person deliberately breached his or her duty to the Trust
or the Holders of the Common or Capital Securities.
(v) The indemnification and advancement of expenses provided by,
or granted pursuant to, the other paragraphs of this Section 9.4(a) shall not
be deemed exclusive of any other rights to which those seeking
indemnification and advancement of expenses may be entitled under any
agreement, vote of stockholders or disinterested directors of the Debenture
Issuer or Holder of the Common Securities of the Trust or otherwise, both as
to action in his official capacity and as to action in another capacity while
holding such office. All rights to indemnification under this Section 9.4(a)
shall be deemed to be provided by a contract between the Debenture Issuer and
each Debenture Issuer Indemnified Person who serves in such capacity at any
time while this Section 9.4(a) is in effect. Any repeal or modification of
this Section 9.4(a) shall not affect any rights or obligations then existing.
(vi) The Debenture Issuer or the Trust may purchase and maintain
insurance on behalf of any person who is or was a Debenture Issuer
Indemnified Person against any liability asserted against him or her and
incurred by him in any such capacity, or arising out of his status as such,
whether or not the Debenture Issuer would have the power to indemnify him
against such liability under the provisions of this Section 9.4(a).
(vii) For purposes of this Section 9.4(a), references to "the
Trust" shall include, in addition to the resulting or surviving entity, any
constituent entity (including any constituent of a constituent) absorbed in a
consolidation or merger, so that any person who is or was a director,
trustee, officer or employee of such constituent entity, or is or was serving
at the request of such constituent entity as a director, trustee, officer,
employee or agent of another entity, shall
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stand in the same position under the provisions of this Section 9.4(a) with
respect to the resulting or surviving entity as he or she would have with
respect to such constituent entity if its separate existence had continued.
(viii) The indemnification and advancement of expenses provided by,
or granted pursuant to, this Section 9.4(a) shall, unless otherwise provided
when authorized or ratified, continue as to a person who has ceased to be a
Debenture Issuer Indemnified Person and shall inure to the benefit of the
heirs, executors and administrators of such a person. The obligation to
indemnify as set forth in this Section 9.4(a) shall survive the satisfaction
and discharge of this Declaration.
(b) The Debenture Issuer agrees to indemnify the (i) Property
Trustee, (ii) the Delaware Trustee, (iii) an Affiliate of the Property
Trustee and the Delaware Trustee, and (iv) any officers, directors,
shareholders, members, partners, employees, representatives, custodians,
nominees or agents of the Property Trustee and the Delaware Trustee (each of
the Persons in (i) through (iv) being referred to as a "Fiduciary Indemnified
Person") for, and to hold each Fiduciary Indemnified Person harmless against,
any loss, liability or expense incurred without negligence or bad faith on
its part, arising out of or in connection with the acceptance or
administration of the trust or trusts hereunder, including the costs and
expenses (including reasonable legal fees and expenses) of defending itself
against or investigating any claim or liability in connection with the
exercise or performance of any of its powers or duties hereunder. The
provisions of this Section 9.4(a) shall survive the satisfaction and
discharge of this Declaration or the resignation or removal of the Property
Trustee or the Delaware Trustee, as the case may be.
Section 9.5 Outside Businesses.
Any Covered Person, the Sponsor, the Delaware Trustee and the
Property Trustee may engage in or possess an interest in other business
ventures of any nature or description, independently or with others, similar
or dissimilar to the activities of the Trust, and the Trust and the Holders
of Securities shall have no rights by virtue of this Declaration in and to
such independent ventures or the income or profits derived therefrom, and the
pursuit of any such venture, even if competitive with the activities of the
Trust, shall not be deemed wrongful or improper. No Covered Person, the
Sponsor, the Delaware Trustee or the Property Trustee shall be obligated to
present any particular investment or other opportunity to the Trust even if
such opportunity is of a character that, if presented to the Trust, could be
taken by the Trust, and any Covered Person, the Sponsor, the Delaware Trustee
and the Property Trustee shall have the right to take for its own account
(individually or as a partner or fiduciary) or to recommend to others any
such particular investment or other opportunity. Any Covered Person, the
Delaware Trustee and the Property Trustee may engage or be interested in any
financial or other transaction with the Sponsor or any Affiliate of the
Sponsor, or may act as depositary for, trustee or agent for, or act on any
committee or body of holders of, securities or other obligations of the
Sponsor or its Affiliates.
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ARTICLE 10
ACCOUNTING
Section 10.1 Fiscal Year.
The fiscal year ("Fiscal Year") of the Trust shall be the calendar
year, or such other year as is required by the Code.
Section 10.2 Certain Accounting Matters.
(a) At all times during the existence of the Trust, the Regular
Trustees shall keep, or cause to be kept, full books of account, records and
supporting documents, which shall reflect in reasonable detail, each transaction
of the Trust. The books of account shall be maintained on the accrual method of
accounting, in accordance with generally accepted accounting principles. The
Trust shall use the accrual method of accounting for United States federal
income tax purposes. The books of account and the records of the Trust shall be
examined by and reported upon as of the end of each Fiscal Year of the Trust by
a firm of independent certified public accountants selected by the Regular
Trustees.
(b) The Regular Trustees shall cause to be prepared and delivered to
each of the Holders of Securities, within 90 days after the end of each Fiscal
Year of the Trust, annual financial statements of the Trust, including a balance
sheet of the Trust as of the end of such Fiscal Year, and the related statements
of income or loss.
(c) The Regular Trustees shall cause to be duly prepared and delivered
to each of the Holders of Securities, an annual United States federal income tax
information statement, required by the Code, containing such information with
regard to the Securities held by each Holder as is required by the Code and the
Treasury Regulations. Notwithstanding any right under the Code to deliver any
such statement at a later date, the Regular Trustees shall endeavor to deliver
all such statements within 30 days after the end of each Fiscal Year of the
Trust.
(d) The Regular Trustees shall cause to be duly prepared and filed
with the appropriate taxing authority, an annual United States federal income
tax return, on a Form 1041 or such other form required by United States federal
income tax law, and any other annual income tax returns required to be filed by
the Regular Trustees on behalf of the Trust with any state or local taxing
authority.
Section 10.3 Banking.
The Trust shall maintain one or more bank accounts in the name and for
the sole benefit of the Trust; PROVIDED, HOWEVER, that all payments of funds in
respect of the Debentures held by the Property Trustee shall be made directly to
the Property Account and no other funds
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of the Trust shall be deposited in the Property Account. The sole
signatories for such accounts shall be designated by the Regular Trustees;
PROVIDED, HOWEVER, that the Property Trustee shall designate the signatories
for the Property Account.
Section 10.4 Withholding.
The Trust and the Regular Trustees shall comply with all withholding
requirements under United States federal, state and local law. The Trust shall
request, and the Holders shall provide to the Trust, such forms or certificates
as are necessary to establish an exemption from withholding with respect to each
Holder, and any representations and forms as shall reasonably be requested by
the Trust to assist it in determining the extent of, and in fulfilling, its
withholding obligations. The Regular Trustees shall file required forms with
applicable jurisdictions and, unless an exemption from withholding is properly
established by a Holder, shall remit amounts withheld with respect to the Holder
to applicable jurisdictions. To the extent that the Trust is required to
withhold and pay over any amounts to any authority with respect to distributions
or allocations to any Holder, the amount withheld shall be deemed to be a
distribution in the amount of the withholding to the Holder. In the event of
any claimed over withholding, Holders shall be limited to an action against the
applicable jurisdiction. If the amount required to be withheld was not withheld
from actual Distributions made, the Trust may reduce subsequent Distributions by
the amount of such withholding.
ARTICLE 11
AMENDMENTS AND MEETINGS
Section 11.1 Amendments.
(a) Except as otherwise provided in this Declaration or by any
applicable terms of the Securities, this Declaration may only be amended by a
written instrument approved and executed by (i) the Regular Trustees (or, if
there are more than two Regular Trustees, a majority of the Regular Trustees),
(ii) by the Property Trustee if the amendment affects the rights, powers,
duties, obligations or immunities of the Property Trustee; and (iii) by the
Delaware Trustee if the amendment affects the rights, powers, duties,
obligations or immunities of the Delaware Trustee.
(b) No amendment shall be made, and any such purported amendment shall
be void and ineffective:
(i) unless, in the case of any proposed amendment, the Property
Trustee shall have first received an Officers' Certificate
from each of the Trust and the Sponsor that such amendment
is permitted by, and conforms to, the terms of this
Declaration (including the terms of the Securities);
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(ii) unless, in the case of any proposed amendment which affects
the rights, powers, duties, obligations or immunities of the
Property Trustee, the Property Trustee shall have first
received:
a. an Officers' Certificate from each of the Trust and the
Sponsor that such amendment is permitted by, and conforms
to, the terms of this Declaration (including the terms of
the Securities); and
b. an opinion of counsel (who may be counsel to the Sponsor or
the Trust) that such amendment is permitted by, and conforms
to, the terms of this Declaration (including the terms of
the Securities); and
(iii) to the extent the result of such amendment would be to:
a. cause the Trust to be classified other than as a grantor
trust for United States federal income tax purposes;
b. reduce or otherwise adversely affect the powers of the
Property Trustee in contravention of the Trust Indenture
Act; or
c. cause the Trust to be deemed to be an Investment Company
required to be registered under the Investment Company Act.
(c) At such time after the Trust has issued any Securities that remain
outstanding, if the amendment would (i) adversely affect the powers, preferences
or special rights of the Securities, whether by way of amendment to the
Declaration or otherwise or (ii) result in the dissolution, winding-up or
termination of the Trust other than pursuant to the terms of this Declaration,
or (iii) change the amount or timing of any distribution on the Securities or
otherwise adversely affect the amount of any distribution required to be made in
respect of the Securities as of a specified date, then the Holders of the
Securities voting together as a single class will be entitled to vote on such
amendment or proposal and such amendment or proposal shall not be effective
except with the approval of at least a Majority in Liquidation Amount of the
Securities affected thereby; provided that, if any amendment or proposal
referred to in clause (i) above would adversely affect only the Capital
Securities or the Common Securities, then only the affected class will be
entitled to vote on such amendment or proposal and such amendment or proposal
shall not be effective except with the approval of a Majority in Liquidation
Amount of such class of Securities.
(d) Sections 7.8, 9.1 and this Section 11.1 shall not be amended
without the consent of all of the Holders of the Securities. In addition,
notwithstanding any other provision of this Declaration to the contrary, without
the consent of each Holder of a Security affected thereby, this Declaration may
not be amended to (i) reduce the amount or change the timing of any Distribution
required to be made on the Securities or the Redemption Price to be paid in
respect
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thereof, or (ii) restrict the right of a Holder of Securities to institute
suit for the enforcement of any such payment on or after the date such
payment is due or to bring a Direct Action, or (iii) amend the provisions of
this Section 11.1(d).
(e) Article 4 shall not be amended without the consent of the Holders
of a Majority in Liquidation Amount of the Common Securities.
(f) The rights of the Holders of the Common Securities under Article 6
to increase or decrease the number of, and appoint and remove, Trustees shall
not be amended without the consent of the Holders of a Majority in Liquidation
Amount of the Common Securities.
(g) Notwithstanding Section 11.1(c), this Declaration may be amended
without the consent of the Holders of the Securities to:
(i) to cure any ambiguity, correct or supplement any provisions
in this Declaration that may be inconsistent with any other
provision, or to make any other provisions with respect to
matters or questions arising under this Declaration that
shall not be inconsistent with the other provisions of this
Declaration;
(ii) to modify, eliminate or add to any provisions of this
Declaration to such extent as shall be necessary to ensure
that the Trust will be classified as a grantor trust and
will not be taxable as a corporation for United States
federal income tax purposes at all times that any Securities
are outstanding or to ensure that the Trust will not be
required to register as an "investment company" under the
Investment Company Act; or
(iii) to conform to any change in Rule 3a-5 or written change in
interpretation or application of Rule 3a-5 by any
legislative body, court, government agency or regulatory
authority;
provided, however, that such action shall not adversely affect in any material
respect the interests of any Holder of Capital Securities or Common Securities
Any amendments of this Declaration shall become effective when notice thereof is
given to the Holders of Capital Securities and Common Securities.
(h) The issuance of an order by the Regular Trustees for purposes of
establishing the terms and form of the Securities as contemplated by Section 7.1
shall not be deemed an amendment of this Declaration subject to the provisions
of this Section 11.1.
Section 11.2 Meetings of the Holders of Securities; Action by Written
Consent.
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(a) Meetings of the Holders of any class of Securities may be called
at any time by the Regular Trustees (or as provided in the terms of the
Securities) to consider and act on any matter on which Holders of such class of
Securities are entitled to act under the terms of this Declaration, the terms of
the Securities or the rules of any stock exchange on which the Capital
Securities are listed or admitted for trading. The Regular Trustees shall call
a meeting of the Holders of such class if directed to do so by the Holders of at
least 10% in Liquidation Amount of such class of Securities. Such direction
shall be given by delivering to the Regular Trustees one or more calls in a
writing stating that the signing Holders of Securities wish to call a meeting
and indicating the general or specific purpose for which the meeting is to be
called. Any Holders of Securities calling a meeting shall specify in writing
the Certificates held by the Holders of Securities exercising the right to call
a meeting and only those Securities specified shall be counted for purposes of
determining whether the required percentage set forth in the second sentence of
this paragraph has been met.
(b) Except to the extent otherwise provided in the terms of the
Securities, the following provisions shall apply to meetings of Holders of
Securities:
(i) notice of any such meeting shall be given to all the Holders
of Securities having a right to vote thereat at least 7 days
and not more than 60 days before the date of such meeting.
Whenever a vote, consent or approval of the Holders of
Securities is permitted or required under this Declaration
or the rules of any stock exchange on which the Capital
Securities are listed or admitted for trading, such vote,
consent or approval may be given at a meeting of the Holders
of Securities. Any action that may be taken at a meeting of
the Holders of Securities may be taken without a meeting if
a consent in writing setting forth the action so taken is
signed by the Holders of Securities owning not less than the
minimum amount of Securities in liquidation amount that
would be necessary to authorize or take such action at a
meeting at which all Holders of Securities having a right to
vote thereon were present and voting. Prompt notice of the
taking of action without a meeting shall be given to the
Holders of Securities entitled to vote who have not
consented in writing. The Regular Trustees may specify that
any written ballot submitted to the Security Holders for the
purpose of taking any action without a meeting shall be
returned to the Trust within the time specified by the
Regular Trustees;
(ii) each Holder of a Security may authorize any Person to act
for it by proxy on all matters in which a Holder of
Securities is entitled to participate, including waiving
notice of any meeting, or voting or participating at a
meeting. No proxy shall be valid after the expiration of 11
months from the date thereof unless otherwise provided in
the proxy. Every proxy shall be revocable at the pleasure
of the Holder of Securities executing such proxy. Except as
otherwise provided herein, all matters relating to the
giving,
65
<PAGE>
voting or validity of proxies shall be governed by the
General Corporation Law of the State of Delaware relating to
proxies, and judicial interpretations thereunder, as if the
Trust were a Delaware corporation and the Holders of the
Securities were stockholders of a Delaware corporation;
(iii) each meeting of the Holders of the Securities shall be
conducted by the Regular Trustees or by such other Person
that the Regular Trustees may designate; and
(iv) consistent with the Business Trust Act, this Declaration,
the terms of the Securities, the Trust Indenture Act or the
listing rules of any stock exchange on which the Capital
Securities are then listed for trading, otherwise provides,
the Regular Trustees, in their sole discretion, shall
establish all other provisions relating to meetings of
Holders of Securities, including notice of the time, place
or purpose of any meeting at which any matter is to be voted
on by any Holders of Securities, waiver of any such notice,
action by consent without a meeting, the establishment of a
record date, quorum requirements, voting in person or by
proxy or any other matter with respect to the exercise of
any such right to vote.
ARTICLE 12
REPRESENTATIONS OF PROPERTY TRUSTEE
AND DELAWARE TRUSTEE
Section 12.1 Representations and Warranties of the Property Trustee.
The Trustee that acts as initial Property Trustee represents and
warrants to the Trust and to the Sponsor at the date of this Declaration, and
each Successor Property Trustee represents and warrants to the Trust and the
Sponsor at the time of the Successor Property Trustee's acceptance of its
appointment as Property Trustee, that:
(a) the Property Trustee is a corporation or bank duly organized,
validly existing and in good standing under the laws of the jurisdiction of its
incorporation or organization, with trust power and authority to execute and
deliver, and to carry out and perform its obligations under the terms of, this
Declaration;
(b) the Property Trustee satisfies the requirements set forth in
Section 6.3(a);
(c) the execution, delivery and performance by the Property Trustee of
this Declaration has been duly authorized by all necessary corporate action on
the part of the Property Trustee. This Declaration has been duly executed and
delivered by the Property Trustee, and it
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<PAGE>
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);
(d) the execution, delivery and performance of this Declaration by the
Property Trustee does not conflict with or constitute a breach of the articles
of association or incorporation, as the case may be, or the by-laws (or other
similar organizational documents) of the Property Trustee; and
(e) 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 Property Trustee of this Declaration.
Section 12.2 Representations and Warranties of the Delaware Trustee.
The Trustee that acts as initial Delaware Trustee represents and
warrants to the Trust and to the Sponsor at the date of this Declaration, and
each Successor Delaware Trustee represents and warrants to the Trust and the
Sponsor at the time of the Successor Delaware Trustee's acceptance of its
appointment as Delaware Trustee, that:
(a) the Delaware Trustee satisfies the requirements set forth in
Section 6.2 and has the power and authority to execute and deliver, and to carry
out and perform its obligations under the terms of, this Declaration and, if it
is not a natural person, is duly organized, validly existing and in good
standing under the laws of its jurisdiction of incorporation or organization;
(b) the Delaware Trustee has been authorized to perform its
obligations under the Certificate of Trust and this Declaration. This
Declaration under Delaware law constitutes a legal, valid and binding obligation
of the Delaware Trustee, enforceable against it in accordance with its terms,
subject to applicable bankruptcy, reorganization, moratorium, insolvency and
other similar laws affecting creditors' rights generally and to general
principles of equity and the discretion of the court (regardless of whether the
enforcement of such remedies is considered in a proceeding in equity or at law);
and
(c) no consent, approval or authorization of, or registration with or
notice to, any State or Federal banking authority is require for the execution,
delivery or performance by the Delaware Trustee of this Declaration.
ARTICLE 13
MISCELLANEOUS
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Section 13.1 Notices.
All notices provided for in this Declaration shall be in writing, duly
signed by the party giving such notice, and shall be delivered, telecopied or
mailed by registered or certified mail, as follows:
(a) if given to the Trust, in care of the Regular Trustees at the
Trust's mailing address set forth below (or such other address as the Trust may
give notice of to the Property Trustee, the Delaware Trustee and the Holders of
the Securities):
Commerce Security Bancorp, Inc.
7777 Center Avenue
Huntington Beach, CA 92647
Attention: Chief Financial Officer
Telecopy: (714) 891-8884
--------------
WITH A COPY TO:
Nutter, McClennen & Fish, LLP
One International Place
Boston, MA 02110-2699
Attention: Michael K. Krebs, Esquire
Telecopy: (617) 973-9748
--------------
(b) if given to the Delaware Trustee, at the mailing address set forth
below (or such other address as the Delaware Trustee may give notice of to the
Regular Trustees, the Property Trustee and the Holders of the Securities):
Wilmington Trust Company
Rodney Square North
1100 N. Market Street
Wilmington, Delaware 19890-0001
Attention: Corporate Trust Administration
Telecopy: (302) 651-8882
--------------
WITH COPY TO:
Richards, Layton & Finger, P.A.
One Rodney Square
PO Box 551
Wilmington, Delaware 19899
Attn: Doneene Keemer Damon, Esq.
Telecopy: (302) 658-6548
--------------
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<PAGE>
(c) if given to the Property Trustee, at its Corporate Trust Office
set forth below (or such other address as the Property Trustee may give notice
of to the Regular Trustees, the Delaware Trustee and the Holders of the
Securities).
Wilmington Trust Company
Rodney Square North
1100 N. Market Street
Wilmington, Delaware 19890-0001
Attention: Corporate Trust Administration
Telecopy: (302) 651-8882
--------------
WITH COPY TO:
Richards, Layton & Finger, P.A.
One Rodney Square
PO Box 551
Wilmington, Delaware 19899
Attn: Doneene Keemer Damon, Esq.
Telecopy: (302) 658-6548
--------------
(d) if given to the Sponsor, at the mailing address set forth below
(or such other address as the Sponsor may give notice of to the Property
Trustee, the Delaware Trustee and the Trust):
Commerce Security Bancorp, Inc.
c/o Liberty National Bank
7777 Center Avenue
Huntington Beach, CA 92647
Attention: Chief Financial Officer
Telecopy: (714) 891-8884
--------------
(e) if given to any Holder, at the address set forth on the books and
records of the Trust.
All such notices shall be deemed to have been given when received in person,
telecopied with receipt confirmed or mailed by first class mail, postage prepaid
except that if a notice or other document is refused delivery or cannot be
delivered because of a changed address of which no notice was given, such notice
or other document shall be deemed to have been delivered on the date of such
refusal or inability to deliver.
Section 13.2 Governing Law.
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<PAGE>
This Declaration and the rights of the parties hereunder shall be
governed by and interpreted in accordance with the laws of the State of
Delaware.
Section 13.3 Intention of the Parties.
It is the intention of the parties hereto that the Trust be classified
for United States federal income tax purposes as a grantor trust. The
provisions of this Declaration shall be interpreted in a manner consistent with
such classification.
Section 13.4 Headings.
Headings contained in this Declaration are inserted for convenience of
reference only and do not affect the interpretation of this Declaration or any
provision hereof.
Section 13.5 Successors and Assigns.
Whenever in this Declaration any of the parties hereto is named or
referred to, the successors and assigns of such party shall be deemed to be
included, and all covenants and agreements in this Declaration by the Sponsor
and the Trustees shall bind and inure to the benefit of their respective
successors and assigns, whether so expressed.
Section 13.6 Partial Enforceability.
If any provision of this Declaration, or the application of such
provision to any Person or circumstance, shall be held invalid, the remainder of
this Declaration, or the application of such provision to persons or
circumstances other than those to which it is held invalid, shall not be
affected thereby.
Section 13.7 Counterparts.
This Declaration may contain more than one counterpart of the
signature page and this Declaration may be executed by the affixing of the
signature of each of the Trustees to one of such counterpart signature pages.
All of such counterpart signature pages shall be read as though one, and they
shall have the same force and effect as though all of the signers had signed a
single signature page.
Section 13.8 Undertaking for Costs.
In any suit for the enforcement of any right or remedy under this
Declaration or in any suit against any Trustee for any action taken or omitted
by it as a Trustee, a court in its discretion may require the filing by any
party litigant in the suit of an undertaking to pay the costs of the suit, and
the court in its discretion may assess reasonable costs, including reasonable
attorney's fees and expenses, against any party litigant in the suit, having due
regard to the merits
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<PAGE>
and good faith of the claims or defenses made by the party litigant. This
Section 13.8 does not apply to a suit by a Trustee, a suit by a Holder to
enforce its right to payment or a suit by Holders of more than 10% in
Liquidation Amount of the then outstanding Securities.
71
<PAGE>
IN WITNESS WHEREOF, the undersigned have caused these presents to be
executed as of the day and year first above written.
COMMERCE SECURITY BANCORP, INC.,
as Sponsor and Common Securities Holder
By:
-------------------------------------
Name:
Title:
WILMINGTON TRUST COMPANY,
as Property Trustee
By:
-------------------------------------
Name:
Title:
WILMINGTON TRUST COMPANY,
as Delaware Trustee
By:
--------------------------------------
Name:
Title:
Robert P. Keller, as Regular Trustee
-----------------------------------------
Curt A. Christianssen, as Regular Trustee
-----------------------------------------
Claire Fitzpatrick, as Regular Trustee
-----------------------------------------
72
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EXHIBIT A
[If the Capital Security is to be represented by a Global Security,
INSERT:
This Capital Security is a Global Certificate within the meaning of
the Declaration hereinafter referred to and is registered in the name of The
Depository Trust Company, a New York corporation (the "Depository"), or a
nominee of the Depository. This Capital Security is exchangeable for Capital
Securities registered in the name of a person other than the Depository or its
nominee only in the limited circumstances described in the Declaration and no
transfer of this Capital Security (other than a transfer of this Capital
Security as a whole by the Depository to a nominee of the Depository or by a
nominee of the Depository to the Depository or another nominee of the
Depository) may be registered except in limited circumstances.
Unless this Capital Security Certificate is presented by an authorized
representative of the Depository to CSBI Capital Trust I or its agent for
registration of transfer, exchange or payment, and any Capital Security
Certificate issued is registered in the name of Cede & Co. or such other name as
registered by an authorized representative of the Depository (and any payment
hereon is made to Cede & Co. or to such other entity as is requested by an
authorized representative of the Depository), ANY TRANSFER, PLEDGE OR OTHER USE
HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL since the
registered owner hereof, Cede & Co., has an interest herein.]
CERTIFICATE NO. ___ NUMBER OF CAPITAL SECURITIES: _______
CUSIP NO. ______ [IF ANY]
CERTIFICATE EVIDENCING CAPITAL SECURITIES
OF
CSBI CAPITAL TRUST I
11 3/4% SUBORDINATED CAPITAL INCOME SECURITIES, SERIES A
(LIQUIDATION AMOUNT $1,000 PER CAPITAL SECURITY)
CSBI Capital Trust I, a statutory business trust formed under the
laws of the State of Delaware (the "Trust"), hereby certifies that
[Cede & Co.][Name of definitive owner] (the "Holder") is the registered owner
of _______ capital securities (with an aggregate liquidation amount of
$__________) of the Trust, representing undivided beneficial ownership
interests in the assets of the Trust, designated the 11 3/4% Subordinated
Capital Income Securities, Series A (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 the Declaration (as defined below). The
designation, rights, privileges, restrictions, preferences and other terms
and provisions of the Capital Securities represented hereby are issued and
shall in all respects be subject to the provisions of the Amended and
Restated Declaration of Trust of the Trust, dated as of July 15, 1997 (as the
same may be amended from time to time, the "Declaration"), among Commerce
Security Bancorp, Inc., as Sponsor (the "Company"), Robert P. Keller, Curt A.
Christianssen and Claire Fitzpatrick, as Regular Trustees, Wilmington Trust
Company, as Property Trustee, and Wilmington Trust Company, as Delaware
Trustee.
<PAGE>
Capitalized terms used herein but not defined shall have the meaning given
them in the Declaration. The Holder is entitled to the benefits of the
Guarantee to the extent described therein. The Sponsor will provide a copy
of the Declaration, the Guarantee and the Indenture to a Holder without
charge upon written request to the Sponsor at its principal place of business.
Upon receipt of this certificate, the Holder is bound by the
Declaration and is entitled to the benefits thereunder.
By acceptance, the Holder agrees to treat, for all United States tax
purposes, the Debentures as indebtedness and the Capital Securities as
evidence of undivided indirect beneficial ownership interests in the
Debentures.
IN WITNESS WHEREOF, the Trust has executed this certificate this ____
day of ____________, 199_.
CSBI CAPITAL TRUST I
By:
-------------------------------------
Name:
Title:
This is one of the Securities referred to in the within-mentioned
Declaration.
WILMINGTON TRUST COMPANY
By:
--------------------------------------
Authorized Officer
2
<PAGE>
In connection with any transfer of this Security occurring prior to the
date which is the earlier of (i) the date of the declaration by the Commission
of the effectiveness of a registration statement under the Securities Act
covering resales of this Security (which effectiveness shall not have been
suspended or terminated at the date of the transfer) and (ii) two years after
the later of the date of original issue and the last date on which the Trust or
any affiliate of the Trust was the owner of such Capital Securities (or any
predecessor thereto) (the "Resale Restriction Termination Date"), the
undersigned confirms that it has not utilized any general solicitation or
general advertising in connection with the transfer and that such transfer is
being made:
[CHECK ONE]
(1) ___ to the Trust or a subsidiary thereof; or
(2) ___ pursuant to and in compliance with Rule 144A under the Securities Act
of 1933, as amended; or
(3) ___ to an institutional "accredited investor" (as defined in Rule
501(a)(1), (2), (3) or (7) under the Securities Act of 1933, as
amended) that has furnished to the Trust a signed letter containing
certain representations and agreements (the form of which letter can
be obtained from the Property Trustee); or
(4) ___ pursuant to the exemption from registration provided by Rule 144 under
the Securities Act of 1933, as amended; or
(5) ___ pursuant to an effective registration statement under the Securities
Act of 1933, as amended; or
(6) ___ pursuant to another available exemption from the registration
requirements of the Securities Act of 1933, as amended.
Unless one of the boxes is checked, the Property Trustee will refuse to register
any of the Securities evidenced by this certificate in the name of any person
other than the registered Holder thereof; PROVIDED, HOWEVER, that if box (3),
(4) or (6) is checked, the Trust or the Property Trustee may require, prior to
registering any such transfer of the Securities, in its sole discretion, such
written legal opinions, certifications (including an investment letter in the
case of box (3) and other information as the Property Trustee or the Trust may
reasonably request to confirm that such transfer is being made pursuant to an
exemption from, or in a transaction not subject to, the registration
requirements of the Securities Act of 1933, as amended.
If none of the foregoing boxes is checked, the Property Trustee shall not be
obligated to register this Security in the name of any person other than the
Holder hereof unless and until the conditions to any such transfer of
registration set forth herein and in the Declaration shall have been satisfied.
Dated: Signed:
------------------ ------------------------------------------
(Sign exactly as name appears on the other
side of this Security)
Signature Guarantee:
--------------------------------------
Participant in a Recognized
Signature Guarantee Medallion Program
3
<PAGE>
TO BE COMPLETED BY PURCHASER IF (2) ABOVE IS CHECKED
The undersigned represents and warrants that it is purchasing this
Security for its own account or an account with respect to which it exercises
sole investment discretion and that it and any such account is a "qualified
institutional buyer" within the meaning of Rule 144A under the Securities Act
and is aware that the sale to it is being made in reliance on Rule 144A and
acknowledges that it has received such information regarding the Trust and the
Company as the undersigned has requested pursuant to Rule 144A and that it is
aware that the transferor is relying upon the undersigned's foregoing
representations in order to claim the exemption from registration provided by
Rule 144A.
Dated:
-------------- ------------------------------------------------
NOTICE: To be executed by an executive officer
4
<PAGE>
EXHIBIT B
THIS CERTIFICATE IS NOT TRANSFERABLE
CERTIFICATE NO. NUMBER OF COMMON SECURITIES:
-- ------
CERTIFICATE EVIDENCING COMMON SECURITIES
OF
CSBI CAPITAL TRUST I
COMMON SECURITIES
(LIQUIDATION AMOUNT $1,000 PER COMMON SECURITY)
CSBI Capital Trust I, a statutory business trust formed under the laws
of the State of Delaware (the "Trust"), hereby certifies that Commerce Security
Bancorp, Inc. (the "Holder") is the registered owner of common securities of the
Trust representing an undivided beneficial ownership interest in the assets of
the Trust designated the 11 3/4% Common Securities (liquidation amount $1,000
per Common Security) (the "Common Securities"). The Common Securities are not
transferable and any attempted transfer thereof shall be void. The designation,
rights, privileges, restrictions, preferences and other terms and provisions of
the Common Securities represented hereby are issued and shall in all respects be
subject to the provisions of the Amended and Restated Declaration of Trust of
the Trust, dated as of July 15, 1997 (as the same may be amended from time to
time, the "Declaration"), among Commerce Security Bancorp, Inc., as Sponsor,
Robert P. Keller, Curt A. Christianssen and Claire Fitzpatrick, as Regular
Trustees, Wilmington Trust Company, as Property Trustee and Wilmington Trust
Company, as Delaware Trustee. The Holder is entitled to the benefits of the
Guarantee to the extent described therein. Capitalized terms used herein but
not defined shall have the meaning given them in the Declaration. The Sponsor
will provide a copy of the Declaration, the Guarantee and the Indenture to a
Holder without charge upon written request to the Sponsor at its principal place
of business.
Upon receipt of this certificate, the Holder is bound by the
Declaration and is entitled to the benefits thereunder. By acceptance, the
Holder agrees to treat, for United States federal income tax purposes, the
Debentures as indebtedness and the Common Securities as evidence of an undivided
indirect beneficial ownership interest in the Debentures.
IN WITNESS WHEREOF, the Trust has executed this certificate this ___
day of _____________, 199_.
CSBI CAPITAL TRUST I
By:
-------------------------------------
Name:
Title:
<PAGE>
EXECUTION VERSION (INDENTURE)
EXHIBIT 4.2
COMMERCE SECURITY BANCORP, INC.
TO
WILMINGTON TRUST COMPANY,
as Trustee
INDENTURE
Dated as of July 15, 1997
11 3/4% Junior Subordinated Debentures due 2027
<PAGE>
INDENTURE
This INDENTURE is dated as of July 15, 1997, between COMMERCE SECURITY
BANCORP, INC., a corporation duly organized and existing under the laws of the
State of Delaware (herein called the "Company"), having its principal office at
7777 Center Avenue, Huntington Beach, California 92647 and Wilmington Trust
Company, a Delaware banking corporation, as Trustee (herein called the
"Trustee").
RECITALS
WHEREAS, for its lawful corporate purposes, the Company has duly
authorized the execution and delivery of this Indenture to provide for the
issuance of its 11 3/4% Junior Subordinated Debentures due 2027 (the "Junior
Subordinated Securities") and its 11 3/4% New Junior Subordinated Debentures due
2027 (the "New Junior Subordinated Securities", and together with the Junior
Subordinated Securities, the "Securities") to be issued in exchange for the
Junior Subordinated Securities.
WHEREAS, CSBI Capital Trust I (the "Trust") has offered to, and may
concurrently with any issuance by the Company of Junior Subordinated Securities
after the date hereof offer to, institutional investors or other members of the
public its Subordinated Capital Income Securities, Series A (the "Capital
Securities") representing undivided beneficial ownership interests in the assets
of the Trust, and has invested and will in the future invest the proceeds from
each offering, together with the proceeds of each issuance of its Common
Securities, in the Securities.
WHEREAS, to provide the terms and conditions upon which the Securities
are to be authenticated, issued and delivered, the Company has duly authorized
the execution of this Indenture.
WHEREAS, all things necessary to make this Indenture a valid agreement
of the Company, in accordance with its terms, have been done.
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 agreed, for the equal and
proportionate benefit of all Holders of the Securities, as follows:
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
SECTION 101. Definitions.
For all purposes of this Indenture, except as 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 and the
masculine as well as the feminine;
<PAGE>
(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;
(4) the words "herein," "hereof" and "hereunder" and other words of
similar import refer to this Indenture as a whole and not to any particular
Article, Section or other subdivision;
(5) a reference to any Person shall include its successor and
assigns;
(6) a reference to any agreement or instrument shall mean such
agreement or instrument as supplemented, modified, amended or amended and
restated and in effect from time to time;
(7) a reference to any statute, law, rule or regulation, shall
include any amendments thereto applicable to the relevant Person, and any
successor statute, law, rule or regulation; and
(8) a reference to any particular rating category shall be deemed to
include any corresponding successor category, or any corresponding rating
category issued by a successor or subsequent rating agency.
"Act", when used with respect to any Holder, has the meaning specified
in Section 104.
"Additional Interest" has the meaning specified in Section 307.
"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.
"Authenticating Agent" means any Person authorized by the Trustee to
act on behalf of the Trustee to authenticate Securities.
"Board of Directors" means either the board of directors of the
Company or any duly authorized committee of that board as the context requires.
"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 the Executive Committee thereof 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 a Saturday or Sunday or a day
on which banking institutions in Huntington Beach, California, or Wilmington,
Delaware are authorized or required by law or executive order to remain closed
or a day on which the Corporate Trust Office of the Trustee, or the principal
office of the Property Trustee, under the Declaration, is closed for business.
-2-
<PAGE>
"Capital Securities" has the meaning specified in the Recitals to this
instrument.
"Closing Date" means July 15, 1997.
"Commission" means the Securities and Exchange Commission, as from
time to time constituted, created under the Securities Exchange Act of 1934, or,
if at any time after the execution of this instrument such Commission is not
existing and performing the duties now assigned to it under the Trust Indenture
Act, then the body performing such duties at such time.
"Common Securities" means the common securities issued by the Trust.
"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" or "Company Order" means a written request or order
signed in the name of the Company by its Chairman of the Board, its Vice
Chairman of the Board, its President or a Vice President, and by its Treasurer,
an Assistant Treasurer, its Secretary or an Assistant Secretary, and delivered
to the Trustee.
"Corporate Trust Office" means the principal office of the Trustee in
Wilmington, Delaware at which at any particular time its corporate trust
business shall be administered and which at the date of this Indenture is
located at Rodney Square North, 1100 N. Market Street, Wilmington, Delaware
19890-0001, Attention: Corporate Trust Administration.
"Covenant Defeasance" has the meaning specified in Section 403.
"Custodian" means the custodian for the time being of any Global
Security as designated by the Depositary.
"Declaration" means the Amended and Restated Declaration of Trust,
dated as of even date herewith, as amended, modified or supplemented from time
to time, among the trustees of the Trust named therein, the Company, as sponsor,
and the holders from time to time of undivided beneficial ownership interests in
the assets of the Trust.
"Defaulted Interest" has the meaning specified in Section 307.
"Depositary" means, with respect to Securities issuable in whole or in
part in the form of one or more Global Securities, a clearing agency registered
under the Exchange Act that is designated to act as Depositary for such
Securities.
"Event of Default" has the meaning specified in Section 501.
"Exchange Act" means the Securities Exchange Act of 1934, as amended
from time to time, and any successor legislation.
"Extension Period" has the meaning specified in Section 301.
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"Federal Reserve" means the Board of Governors of the Federal Reserve
System.
"Global Security" means a Security that evidences all or part of the
Securities and is authenticated and delivered to, and registered in the name of,
the Depositary for such Securities or a nominee thereof.
"Guarantee" means the Amended and Restated Guarantee Agreement, dated
as of even date herewith, made by the Company in favor of Wilmington Trust
Company, as trustee thereunder for the benefit of the Holders (as defined
therein) of the Capital Securities and the holder of the Common Securities.
"Holder" means a Person in whose name a Security is registered in the
Security 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,
including, for all purposes of this instrument and any such supplemental
indenture, the provisions of the Trust Indenture Act that are deemed to be a
part of and govern this instrument and any such supplemental indenture,
respectively.
"Initial Purchaser" means Lehman Brothers Inc.
"Institutional Accredited Investor" means an institution that is an
"accredited investor" as the term is defined in Rule 501(a)(1), (2), (3) or (7)
under the Securities Act.
"Interest Payment Date", when used with respect to any installment of
interest on a Security, means the date specified in such Security as the fixed
date on which an installment of interest with respect to the Securities is due
and payable.
"Investment Company Event" means the receipt by the Trust of an
Opinion of Counsel experienced in such matters to the effect that, as a result
of the occurrence of a change in law or regulation or a change in interpretation
or application of law or regulation by any legislative body, court, governmental
agency or regulatory authority (a "Change in 1940 Act Law"), the Trust is or
will be considered an "investment company" that is required to be registered
under the Investment Company Act of 1940 as amended, which Change in 1940 Act
Law becomes effective on or after the date of original issuance of the
Securities.
"Junior Subordinated Securities" has the meaning specified in the
Recitals to this instrument.
"Legal Defeasance" has the meaning specified in Section 402.
"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 at the Stated Maturity or by declaration of
acceleration, call for redemption or otherwise.
"New Junior Subordinated Securities" has the meaning specified in the
Recitals to this instrument.
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"Officers' Certificate" means a certificate signed on behalf of the
Company by the Chairman of the Board, a Vice Chairman of the Board, the
President or a Vice President, and by the Treasurer, an Assistant Treasurer, the
Secretary or an Assistant Secretary, of the Company, and delivered to the
Trustee. One of the officers signing an Officers' Certificate given pursuant to
Section 1004 shall be the principal executive, financial or accounting officer
of the Company. Any Officers' Certificate delivered with respect to compliance
with a condition or covenant provided for in this Indenture shall include:
(a) a statement that each officer signing the Officers' Certificate
on behalf of the Company has read the covenant or condition and the definitions
relating thereto;
(b) a statement that each such officer has made such examination or
investigation as, in such officer's opinion, is necessary to enable such officer
to express an informed opinion as to whether or not such covenant or condition
has been complied with; and
(c) a statement as to whether, in the opinion of each such officer,
such condition or covenant has been complied with.
"Opinion of Counsel" means a written opinion of counsel, who may be
counsel for the Company (and who may be an employee of the Company), and who
shall be reasonably acceptable to the Trustee. An opinion of counsel may rely
on certificates as to matters of fact.
"Outstanding", when used with respect to Securities, means, as of the
date of determination, all Securities authenticated and delivered under this
Indenture, except: (i) Securities cancelled by the Trustee or delivered to the
Trustee for cancellation; (ii) Securities for whose payment or redemption money
in the necessary amount has been deposited with the Trustee or any Paying Agent
(other than the Company) in trust or set aside and segregated in trust by the
Company (if the Company shall act as its own Paying Agent) for the Holder of
such Securities; PROVIDED that, if such Securities are to be redeemed, notice of
such redemption has been duly given pursuant to this Indenture or provision
therefor satisfactory to the Trustee has been made; and (iii) Securities which
have been paid pursuant to Section 306, or in exchange for which or in lieu of
which other Securities have been authenticated and delivered pursuant to this
Indenture, other than any such Securities in respect of which there shall have
been presented to the Trustee proof satisfactory to it that such Securities are
held by a bona fide purchaser in whose hands such Securities are valid
obligations of the Company; PROVIDED, HOWEVER, that in determining whether the
holders of the requisite principal amount of Outstanding Securities are present
at a meeting of holders of Securities for quorum purposes or have consented to
or voted in favor of any request, demand, authorization, direction, notice,
consent, waiver, amendment or modification hereunder, Securities held for the
account of the Company, any of its subsidiaries or any of its affiliates shall
be disregarded and deemed not to be Outstanding, except that in determining
whether the Trustee shall be protected in making such a determination or relying
upon any such quorum, consent or vote, only Securities which the Trustee
actually knows to be so owned shall be so disregarded.
"Paying Agent" means any Person authorized by the Company to pay the
principal of or interest on any Securities on behalf of the Company.
"Permitted Redemption" means a redemption of Class B Common Stock of
the Company from any person that (x) owns less than 1% of the then-outstanding
shares of the Company's Class B
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Common Stock and (y) is not then, and has not been within the 12 months
preceding such date, an officer or director of the Company; PROVIDED that
a redemption or repurchase of Class B Common Stock will not constitute a
Permitted Redemption if the cumulative amount of all Permitted Redemptions
(through and including the proposed redemption) exceeds $2.5 million.
"Person" means a legal person, including any individual, corporation,
estate, partnership, joint venture, association, joint stock company, limited
liability company, trust, unincorporated association, or government or any
agency or political subdivision thereof, or any other entity of whatever nature.
"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 306 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.
"Private Placement Legend" has the meaning specified in Section 314 of
this Indenture.
"Property Trustee" has the meaning set forth in the Declaration.
"Qualified Institutional Buyer" or "QIB" shall have the meaning
specified in Rule 144A under the Securities Act.
"Quotation Agent" means a primary dealer in U.S. Government securities
reasonably designated by the Company.
"Redemption Date", when used with respect to any Security to be
redeemed, means the date fixed for such redemption by or pursuant to this
Indenture.
"Redemption Price", when used with respect to any Security to be
redeemed, means the price at which it is to be redeemed pursuant to this
Indenture.
"Registration Rights Agreement" means the Registration Rights
Agreement dated the date hereof between the Company and the Initial Purchasers
for the benefit of themselves and the Holders (as defined therein) of the
Capital Securities issued by the Trust as of the date hereof.
"Regular Record Date" for the interest payable on any Interest Payment
Date means the 15th day of the month in which the relevant Interest Payment Date
occurs.
"Regular Trustee" has the meaning specified in the Declaration.
"Regulatory Capital Event" means the Company's delivery of 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 political subdivision, agency or authority thereof or (b) any
official or administrative pronouncement or action or judicial decision
interpreting or applying such laws or regulations which amendment or change is
effective or which pronouncement, action or decision is announced on or after
the date of original issuance of the Capital Securities, there is more than an
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insubstantial risk that the Capital Securities do not constitute, or within 90
days of the date thereof will not constitute, Tier 1 capital (or its then
equivalent) for the purposes of the capital adequacy guidelines of the federal
bank regulatory agency(ies) then having jurisdiction over the Company; PROVIDED,
HOWEVER, that the distribution of the Securities to the Holders of the
Securities in connection with the liquidation of the Trust by the Company shall
not in and of itself constitute a Regulatory Capital Event unless such
liquidation shall have occurred in connection with a Tax Event or an Investment
Company Event.
"Remaining Life" means the period from the Redemption Date in a
Special Redemption to June 6, 2007.
"Responsible Officer", when used with respect to the Trustee, means
the Chairman or any Vice-Chairman of the board of directors, the Chairman or any
Vice-Chairman of the executive committee of the board of directors, the Chairman
of the trust committee, the President, any Vice President, the Secretary, any
Assistant Secretary, the Treasurer, any Assistant Treasurer, any Trust Officer
or Assistant Trust Officer, the Controller or any Assistant Controller or any
other officer of the Trustee customarily performing functions similar to those
performed by any of the above designated officers and also means, with respect
to a particular corporate trust matter, any other officer to whom such matter is
referred because of his knowledge of and familiarity with the particular
subject.
"Restricted Global Security" means any Global Security or Securities
evidencing Securities that are to be traded pursuant to Rule 144A.
"Restricted Period" shall have the meaning specified in Section 315.
"Restricted Security" has the meaning assigned to such term in Rule
144(a)(3) of the Securities Act.
"Rule 144A" means Rule 144A under the Securities Act.
"Securities" has the meaning specified in the Recitals to this
instrument.
"Securities Act" means the Securities Act of 1933, as amended.
"Security Register" and "Security Registrar" have the respective
meanings specified in Section 305.
"Senior Indebtedness" means, whether recourse is to all or a portion
of the assets of the Company and whether or not contingent, (i) every obligation
of the Company for money borrowed, (ii) every obligation of the Company
evidenced by bonds, debentures, notes or other similar instruments of the
Company, including obligations incurred in connection with the acquisition of
property, assets or businesses, including without limitation the Mandatory
Convertible Debentures due 1998 originally issued by SDN Bancorp, the
obligations under which have been assumed by the Company, (iii) every
reimbursement obligation of the Company with respect to letters of credit,
bankers' acceptances or similar facilities issued for the account of the
Company, (iv) every obligation of the Company issued or assumed as the deferred
purchase price of property or services (but excluding trade accounts payable or
accrued liabilities arising in the ordinary course of business), (v) every
capital lease obligation of the Company, (vi) all indebtedness of the Company
for claims (as defined in Section 101(4) of the United States Bankruptcy
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Code of 1978, as amended) in respect of derivative products such as interest
and foreign exchange rate contracts, commodity contracts and similar
arrangements and (vii) every obligation of the type referred to in clauses
(i) through (vi) of another Person and all dividends of another Person the
payment of which, in either case, the Company has guaranteed or is
responsible or liable for, directly or indirectly, as obligor or otherwise;
PROVIDED that "Senior Indebtedness" does not include obligations referred to
in clauses (i) through (vii) that, (a) by their terms, are expressly stated
to rank PARI PASSU in right of payment with, or to be not superior in right
of payment to, the Securities, (b) when incurred and without respect to any
election under Section 1111(b) of the United States Bankruptcy Code of 1978,
as amended, were without recourse to the Company, (c) consist of obligations
of the Company to any of its subsidiaries, (d) consist of obligations of the
Company to any employee or (e) consist of obligations in respect of debt
securities issued to any trust, or a trustee of such trust, partnership or
other entity affiliated with the Company that is a financing entity of the
Company in connection with the issuance of such financing entity of
securities that are similar to the Capital Securities.
"Special Event" means either an Investment Company Event, a Regulatory
Capital Event or a Tax Event.
"Special Record Date" for the payment of any Defaulted Interest means
a date fixed by the Trustee pursuant to Section 307.
"Special Redemption Discount Rate" and "Special Redemption Price" have
the meanings given those terms in Section 1202.
"Stated Maturity", when used with respect to any Security or any
installment of interest thereon, means the date specified in such Security as
the date on which the principal, together with any accrued and unpaid interest,
of such Security or such installment of interest is due and payable.
"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 the 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.
"Tax Event" means the receipt by the Trust of an Opinion of Counsel,
rendered by a law firm having a recognized tax practice or an opinion rendered
by a nationally recognized accounting firm, to the effect that, as a result of
any amendment to, change in or announced proposed change in the laws (or any
regulations thereunder) of the United States or any political subdivision,
agency or authority thereof or therein, or as a result of any official or
administrative pronouncement or action or judicial decision interpreting or
applying such laws or regulations, 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 Securities, (ii) interest payable by the Company on the Securities is
not, or within 90 days of the date of such opinion, will not be, deductible by
the Company, in whole or in part, for United States federal income tax purposes,
or (iii) 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.
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"Treasury Rate" means the yield to maturity 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 Treasury Rate shall be interpolated or extrapolated from such yields on
a straight-line basis, rounding to the nearest month) or 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 quarterly
equivalent yield to maturity of the United States Treasury security of the
maturity nearest the Remaining Life (or, if no maturity is within three months
before or after the Remaining Life, yields for the two maturities most closely
corresponding to the Remaining Life, interpolated or extrapolated as stated
above), as determined by the Quotation Agent.
"Trust" means CSBI Capital Trust I, a statutory business trust
declared and established pursuant to the Delaware Business Trust Act by the
Declaration.
"Trustee" means the Person named as the "Trustee" in the first
paragraph of this Indenture until a successor Trustee shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Trustee" shall mean such successor Trustee.
"Trust Indenture Act" means the Trust Indenture Act of 1939 as in
force at the date as of which this instrument was executed; PROVIDED, HOWEVER,
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.
"U.S. Government Obligations" has the meaning specified in Section
404.
"Vice President", when used with respect to the Company or the
Trustee, means any vice president, whether or not designated by a number, or by
a word or words added before or after the title "vice president."
SECTION 102. Compliance Certificates 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 such certificates and opinions as may be required under the Trust
Indenture Act. Each such certificate or opinion shall be given in the form of
an Officers' Certificate, if to be given by an officer of the Company, or an
Opinion of Counsel, if to be given by counsel, and shall comply with the
requirements of the Trust Indenture Act and any other requirement set forth in
this Indenture.
SECTION 103. Form 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 such
Person, or that they be so certified or covered by only one document, but one
such
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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
representations with respect to the 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 104. Acts of Holders; Record Dates.
(a) Any request, demand, authorization, direction, notice, consent,
waiver or other action provided by this Indenture to be given 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 are delivered to the Trustee at the address specified in
Section 105 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 601) 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 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 the Trustee deems
sufficient.
(c) The Company may, in the circumstances permitted by the Trust
Indenture Act, fix any day as the record date for the purpose of determining
the Holders entitled to give or take any request, demand, authorization,
direction, notice, consent, waiver or other action, or to vote on any action,
authorized or permitted to be given or taken by Holders. If not set by the
Company prior to the first solicitation of a Holder made by any Person in
respect of any such action, or, in the case of any such vote, prior to such
vote, the record date for any such action or vote shall be the 15th day (or,
if later, the date
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of the most recent list of Holders required to be provided pursuant to
Section 701) prior to such first solicitation or vote, as the case may be.
With regard to any record date, only the Holders on such date (or their
duly designated proxies) shall be entitled to give or take, or vote on, the
relevant action.
(d) The ownership of Securities shall be proved by the Security Register.
(e) Any request, demand, authorization, direction, notice, consent,
waiver or other Act of the Holder of any Security shall bind every future
Holder of the same Security and the Holder of every 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 Trustee or
the Company in reliance thereon, whether or not notation of such action is
made upon such Security.
SECTION 105. Notices, Etc. to Trustee and the 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, Attention: Corporate Trust
Division; or
(2) the Company by the Trustee or by any Holder shall be sufficient for
every purpose hereunder (unless otherwise herein expressly provided) 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 106. 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 his address as it appears in the Security
Register, not later than the latest date (if any), and not earlier than the
earliest date (if any), 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.
In case by reason of the suspension of regular mail service or by reason
of any other cause it shall be impracticable to give such notice by mail,
then such notification as shall be made by telecopier or overnight air
courier guaranteeing next day delivery.
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SECTION 107. Conflict With Trust Indenture Act.
If any provision hereof limits, qualifies or conflicts with a provision
of the Trust Indenture Act that is required under such Act to be a part of
and govern this Indenture, the provision of the Trust Indenture Act shall
control. If any provision of this Indenture modifies or excludes any
provision of the Trust Indenture Act that may be so modified or excluded, the
latter provision shall be deemed to apply to this Indenture as to modified or
so be excluded, as the case may be.
SECTION 108. 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 109. Separability Clause.
In case any provision in this Indenture or in the Securities 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 110. Benefits of Indenture.
Nothing in this Indenture or in the Securities, express or implied,
shall give to any Person, other than the parties hereto and their successors
hereunder, the holders of Senior Indebtedness, the holders of Capital
Securities (to the extent provided herein) and the Holders of Securities, any
benefit or any legal or equitable right, remedy or claim under this Indenture.
SECTION 111. Governing Law.
THIS INDENTURE AND THE SECURITIES SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE WITHOUT REGARD TO CONFLICTS
OF LAWS PRINCIPLES THEREOF. THIS INDENTURE IS SUBJECT TO THE PROVISIONS OF
THE TRUST INDENTURE ACT THAT ARE REQUIRED TO BE PART OF THIS INDENTURE AND
SHALL, TO THE EXTENT APPLICABLE, BE GOVERNED BY SUCH PROVISIONS.
SECTION 112. Legal Holidays.
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 of the Securities) payment of
interest or principal of the Securities need not be made on such date, but
may be made on the next succeeding Business Day (except that, if such
Business Day is in the next succeeding calendar year, such Interest Payment
Date, Redemption Date or Stated Maturity, as the case may be, shall be the
immediately preceding Business Day) with the same force and effect as if made
on the Interest Payment Date or Redemption Date, or at the Stated Maturity,
PROVIDED that no interest shall accrue and no reduction in the amount of such
interest shall be effected, for the period either before or following such
Interest Payment Date, Redemption Date or Stated Maturity, as the case may
be, on account of such delayed or accelerated payment.
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ARTICLE TWO
SECURITY FORMS
SECTION 201. Security Forms.
The Junior Subordinated Securities in definitive form and the New Junior
Subordinated Securities in definitive form shall be in the form attached
hereto as Exhibit A; PROVIDED, that the New Junior Subordinated Securities
shall not contain any of the provisions following the Trustee's
authentication.
If the Securities are distributed to the holders of Capital Securities
and Common Securities, the record holder (including any Depositary) of any
Capital Securities or Common Securities shall be issued Securities in
definitive, fully registered form without interest coupons, substantially in
the form of Exhibit A hereto, with the legends in substantially the form of
the legends existing on the security representing the Capital Securities or
Common Securities to be exchanged (with such changes thereto as the officers
executing such Securities determine to be necessary or appropriate, as
evidenced by their execution of the Securities) and such other legends as may
be applicable thereto (including any legend required by Section 313 or
Section 314 hereof), duly executed by the Company and authenticated by the
Trustee or the Authenticating Agent as provided herein, which Securities, if
to be held in global form by any Depositary, may be deposited on behalf of
the holders of the Securities represented thereby with the Trustee, as
custodian for the Depositary, and registered in the name of a nominee of the
Depositary.
Any Global Security shall represent such of the outstanding Securities
as shall be specified therein and shall provide that it shall represent the
aggregate amount of outstanding Securities from time to time endorsed thereon
and that the aggregate amount of outstanding Securities represented thereby
may from time to time be increased or reduced to reflect transfers or
exchanges permitted hereby. Any endorsement of a Global Security to reflect
the amount of any increase or decrease in the amount of outstanding
Securities represented thereby shall be made by the Trustee or the Custodian,
at the direction of the Trustee, in such manner and upon instructions given
by the holder of such Securities in accordance with the Indenture. Payment
of principal, interest and premium, if any, on any Global Security shall be
made to the holder of such Global Security.
The Securities shall have 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 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. The
definitive Securities shall be printed, lithographed or engraved or produced
by any combination of these or other methods, all as determined by the
officers executing such Securities, as evidenced by their execution of such
Securities.
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ARTICLE THREE
THE SECURITIES
SECTION 301. Title and Terms.
The aggregate principal amount of Securities which may be authenticated
and delivered under this Indenture is unlimited.
The Securities' Stated Maturity shall be June 6, 2027.
The Securities shall bear interest at a rate of 11 3/4% per annum, from
June 30, 1997 or from the most recent Interest Payment Date to which interest
has been paid or duly provided for, as the case may be, payable quarterly
(subject to deferral as set forth herein), in arrears, on the 30th day of
March, June, September and December of each year, commencing September 30,
1997, until the principal thereof is paid or made available for payment.
Interest will compound quarterly and will accrue at a rate of 11 3/4% per
annum, to the extent permitted by applicable law, on any interest installment
in arrears for more than one quarterly period or during an extension of an
interest payment period as set forth below in this Section 301. In the event
that any date on which interest is payable on the Securities 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 falls in the next calendar year, such payment will be made on
the immediately preceding Business Day (and without any reduction in amount
in respect of any such accelerated payment), in each case with the same force
and effect as if made on the date that would, but for this sentence, be the
date fixed for the payment of interest.
The Company shall have the right, at any time during the term of the
Securities, from time to time, to defer payment of interest on such Security
for up to 20 consecutive quarterly periods (an "Extension Period"); PROVIDED
that no Extension Period may extend past the Stated Maturity of the Security.
There may be multiple Extension Periods of varying lengths during the term
of the Securities. At the end of each Extension Period, if any, the Company
shall pay all interest then accrued and unpaid, together with interest
thereon, compounded quarterly at the rate specified on the Security to the
extent permitted by applicable law. Prior to the termination of any such
Extension Period, the Company may further extend the interest payment period,
PROVIDED that no Extension Period may exceed 20 consecutive quarterly periods
or extend beyond the Stated Maturity of the Securities. Upon the termination
of any such Extension Period and the payment of all amounts having been
accrued and not paid together with all amounts then due on any current
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 Property Trustee and the Regular Trustees written notice of its
election of such Extension Period at least one Business Day prior to the
record date for the related interest payment.
The principal of and interest on the Securities shall be payable at the
office or agency of the Paying Agent in the United States maintained for such
purpose and at any other office or agency maintained by the Company for such
purpose 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 election of each Holder, payment of interest
shall be made to such Holder (i) by check mailed to the
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address of the Person entitled thereto as such address shall appear in the
Security 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 Security Register.
The Securities shall be subordinated in right of payment to Senior
Indebtedness as provided in Article Eleven.
The Securities shall be redeemable as provided in Article Twelve.
SECTION 302. Denominations.
The Securities shall be issuable only in registered form, without
coupons, and only in denominations of $1,000 and any integral multiple
thereof.
SECTION 303. Execution, Authentication, Delivery and Dating.
The Securities shall be executed on behalf of the Company by its
Chairman of the Board, its Vice Chairman of the Board, its President or one
of its Vice Presidents. 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.
In the event that the Company elects to issue additional Junior
Subordinated Debentures hereunder on a subsequent Closing Date, the Company
shall deliver to the Trustee, in the manner provided under the following
paragraph, duly executed Securities and a Company Order, together with such
Officers' Certificates, Board Resolutions and Opinions of Counsel (in each
case in substantially the form delivered at the initial Closing Date), as are
required for the issuance of Securities under this Indenture.
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, together with a Company Order for the
authentication and delivery of such Securities; and the Trustee in accordance
with such Company Order shall authenticate and make available for delivery
such Securities as in this Indenture provided and not otherwise.
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 manual signature, and such certificate upon any
Security shall be conclusive evidence, and the only evidence, that such
Security has been duly authenticated and delivered hereunder.
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SECTION 304. Temporary Securities.
Pending the preparation of definitive Securities, the Company may
execute, and upon Company Order the Trustee shall authenticate and make
available for delivery, temporary Securities which are printed, lithographed,
typewritten, mimeographed or otherwise produced, in any authorized
denomination, substantially of the tenor of the definitive Securities in lieu
of which they are issued and with such appropriate insertions, omissions,
substitutions and other variations as the officers executing such Securities
may determine, as evidenced by their execution of such Securities.
If temporary Securities are issued, the Company will cause definitive
Securities 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 any
office or agency of the Company designated pursuant to Section 1002, without
charge to the Holder. Upon surrender for cancellation of any one or more
temporary Securities the Company shall execute and the Trustee shall
authenticate and make available for delivery in exchange therefor a like
principal amount of definitive Securities of authorized denominations. Until
so exchanged the temporary Securities shall in all respects be entitled to
the same benefits under this Indenture as definitive Securities.
SECTION 305. Registration; Registration of Transfer and Exchange.
The Company shall cause to be kept at the Corporate Trust Office of the
Trustee a register (the register maintained in such office and in any other
office or agency designated pursuant to Section 1002 being herein sometimes
collectively referred to as the "Security Register") in which, subject to
such reasonable regulations as it may prescribe, the Company shall provide
for the registration of Securities and of transfers of Securities. The
Trustee is hereby appointed as "Security Registrar" for the purpose of
registering Securities and transfers of Securities as herein provided.
Upon surrender for registration of transfer of any Security at an office
or agency of the Company designated pursuant to Section 1002 for such
purpose, the Company shall execute, and the Trustee shall authenticate and
make available for delivery, in the name of the designated transferee or
transferees, one or more new Securities of any authorized denominations and
of a like aggregate principal amount.
At the option of the Holder, Securities may be exchanged for other
Securities of any authorized denominations and of a like aggregate principal
amount, upon surrender of the Securities to be exchanged at such office or
agency. Whenever any Securities are so surrendered for exchange, the Company
shall execute, and the Trustee shall authenticate and make available for
delivery, the Securities 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
for exchange shall (if so required by the Company or the Trustee) be duly
endorsed, or be accompanied by a written instrument of transfer in form
satisfactory to the Company and the Security Registrar duly executed, by the
Holder thereof or his attorney duly authorized in writing.
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No service charge shall be made 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,
other than exchanges pursuant to Sections 304, 906 or 1208 not involving any
transfer.
If the Securities are to be redeemed in part, the Company shall not be
required (A) to issue, register the transfer of or exchange any Securities
during a period beginning at the opening of business 15 days before the day
of the mailing of a notice of redemption of any such Securities selected for
redemption under Section 1204 and ending at the close of business on the day
of such mailing, or (B) to register the transfer of or exchange any Security
so selected for redemption in whole or in part, except the unredeemed portion
of any Security being redeemed in part.
If the Securities are then eligible for book-entry settlement with the
Depositary, unless otherwise required by law, all Securities to be traded on
the PORTAL Market shall be represented by a Restricted Global Security
registered in the name of the Depositary or the nominee of the Depositary.
The transfer and exchange of beneficial interests in any Global
Security, which does not involve the issuance of a definitive Security or the
transfer of interests to another Global Security, shall be effected through
the Depositary (but not the Trustee or the Custodian) in accordance with this
Indenture (including the restrictions on transfer set forth herein) and the
procedures of the Depositary therefor. Neither the Trustee nor the Custodian
(in such respective capacities) will have any responsibility for the transfer
and exchange of beneficial interests in such Global Security that does not
involve the issuance of a definitive Security or the transfer of interests to
another Global Security.
SECTION 306. Mutilated, Destroyed, Lost and Stolen Securities.
If any mutilated Security is surrendered to the Company, the Company
shall execute and the Trustee shall authenticate and make available for
delivery in exchange therefor a new Security of like tenor and principal
amount and bearing a number not contemporaneously outstanding.
If there shall be delivered to the Company and 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 and any agent of either 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 Company shall execute and the Trustee shall authenticate
and make available for delivery, in lieu of any such destroyed, lost or
stolen Security, a new Security of like tenor and principal amount 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, subject to the preceding paragraph, pay such Security instead of issuing
a new 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.
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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 307. Payment of Interest; Interest Rights Preserved.
Interest on any Security 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.
Any interest on any Security which is payable, but is not punctually
paid or duly provided for, on any Interest Payment Date (herein called
"Defaulted Interest") shall forthwith cease to be payable to the Holder on
the relevant Regular Record Date by virtue of having been such Holder, and
such Defaulted Interest 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 (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 be not 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 at
his address as it appears in the Security Register, not less than 10 days
prior to such Special Record Date. Notice of the proposed payment of such
Defaulted Interest and the Special Record Date therefor having been so
mailed, such Defaulted Interest shall be paid to the Persons in whose names
the Securities (or their respective Predecessor Securities) are registered at
the close of business on such Special Record Date and shall no longer be
payable pursuant to the following clause (2).
(2) The Company may make payment of any Defaulted Interest in any other
lawful manner not inconsistent with the requirements of any securities
exchange on which the Securities may be listed, and if so listed, upon such
notice as may be required by such exchange, if, after notice given by the
Company to the Trustee of the proposed payment pursuant to this clause, such
manner of payment shall
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be deemed practicable by the Trustee. Subject to the foregoing provisions of
this Section, each Security delivered under this Indenture upon registration
of 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, which
were carried by such other Security.
In the event that a Registration Default (as defined in the Registration
Rights Agreement) occurs, additional interest ("Additional Interest") shall
become payable in respect of the Securities with respect to the first 90-day
period immediately following the occurrence of such Registration Default in
an amout equal to 0.50% of principal per annum. The amount of the Additional
Interest will increase by an additional 0.25% of principal per annum with
respect to each subsequent 90-day period until all Registration Defaults have
been cured, up to a maximum amount of Additional Interest of 1.0% of
principal per annum. Following the cure of all Registration Defaults, the
accrual of Additional Interest will cease. The amount of Additional Interest
will be determined by multiplying the applicable Additional Interest rate by
the principal amount of the Securities multiplied by a fraction, the
numerator of which is the number of days such Additional Interest rate was
applicable during such period (determined on the basis of a 360-day year
comprised of twelve 30-day months), and the denominator of which is 360.
SECTION 308. Persons Deemed Owners.
Prior to due presentment of a 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 such Security is registered as the owner of such
Security for the purpose of receiving payment of principal of and (subject to
Section 307) 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.
SECTION 309. Cancellation.
All Securities surrendered for payment, redemption, registration of
transfer or exchange shall, if surrendered to any Person other than the
Trustee, be delivered to the Trustee and shall be promptly cancelled 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 cancelled by the Trustee. No Securities shall be
authenticated in lieu of or in exchange for any Securities cancelled as
provided in this Section, except as expressly permitted by this Indenture.
All cancelled Securities held by the Trustee shall be disposed of as directed
by a Company Order, PROVIDED, HOWEVER, that the Trustee may but shall not be
required to destroy such Securities.
SECTION 310. Computation of Interest.
Interest on the Securities shall be computed on the basis of the actual
number of days elapsed in a year of twelve 30-day months. The amount of
interest payable for any period shorter than a full quarterly period for
which interest is computed will be computed on the basis of actual number of
days elapsed in such 90-day quarterly period.
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SECTION 311. Right of Set-off.
Notwithstanding anything to the contrary in the Indenture, the
Company shall have the right to set-off any payment it is otherwise required
to make thereunder to the extent the Company has theretofore made, or is
concurrently on the date of such payment making, a related payment under the
Guarantee.
SECTION 312. CUSIP Numbers.
The Company in issuing the Securities may use "CUSIP" numbers (if
then generally in use), and, if so, the Trustee shall use "CUSIP" numbers in
notices of redemption as a convenience to Holders; PROVIDED that any such
notice may state that no representation is made as to the correctness of such
numbers either as printed on the Securities or as contained in any notice of
a redemption and that reliance may be placed only on the other identification
numbers printed on the Securities, and any such redemption shall not be
affected by any defect in or omission of such numbers. The Company shall
promptly notify the Trustee of any change in the "CUSIP" numbers.
SECTION 313. Global Securities.
If the Securities are distributed to the holders of Capital
Securities, such Securities distributed in respect of Capital Securities, if
any, that are held in global form by a Depositary will initially be issued as
a Global Security, unless such transfer cannot be effected through book-entry
settlement. If the Company shall establish that the Securities are to be
issued in the form of one or more Global Securities, then the Company shall
execute and the Trustee shall, in accordance with Section 303 and the Company
Order, authenticate and deliver one or more Global Securities that (i) shall
represent and shall be denominated in an amount equal to the aggregate
principal amount of all of the Securities to be issued in the form of Global
Securities and not yet cancelled, (ii) shall be registered in the name of the
Depositary for such Global Security or Securities or the nominee of such
Depositary, and (iii) shall be delivered by the Trustee to such Depositary or
pursuant to such Depositary's instructions. Global Securities shall bear a
legend substantially to the following effect:
"This Security is a Global Security within the meaning of the
Indenture hereinafter referred to and is registered in the name of a
Depositary or a nominee of a Depositary. Notwithstanding the provisions of
Section 305, unless and until it is exchanged in whole or in part for
Securities in definitive registered form, a Global Security representing all
or a part of the Securities may not be transferred in the manner provided in
Section 305 except as a whole by the Depositary to a nominee of such
Depositary or by a nominee of such Depositary to such Depositary or another
nominee of such Depositary or by such Depositary or any such nominee to a
successor Depositary or a nominee of such successor Depositary. Every
Security delivered upon registration or transfer of, or in exchange for, or
in lieu of, this Global Security shall be a Global Security subject to the
foregoing, except in the limited circumstances described above. Unless this
certificate is presented by an authorized representative of The Depository
Trust Company, a New York corporation ("DTC"), to the Company or its agent
for registration of transfer, exchange or payment, and any certificate issued
is registered in the name of Cede & Co. or in such other name as is requested
by an authorized representative of DTC (and any payment is to be made to Cede
& Co. or to such other entity as is requested by an authorized representative
of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY
OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner hereof, Cede &
Co., has an interest herein."
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Definitive Securities issued in exchange for all or a part of a
Global Security pursuant to this Section 313 shall be registered in such
names and in such authorized denominations as the Depositary, pursuant to
instructions from its direct or indirect participants or otherwise, shall
instruct the Trustee. Upon execution and authentication, the Trustee shall
deliver such definitive Securities to the persons in whose names such
definitive Securities are so registered.
At such time as all interests in Global Securities have been
redeemed, repurchased or canceled, such Global Securities shall be, upon
receipt thereof, canceled by the Trustee in accordance with standing
procedures and instructions existing between the Depositary and the
Custodian. At any time prior to such cancellation, if any interest in Global
Securities is exchanged for definitive Securities, redeemed, canceled or
transferred to a transferee who receives definitive Securities therefor or
any definitive Security is exchanged or transferred for part of Global
Securities, the principal amount of such Global Securities shall, in
accordance with the standing procedures and instructions existing between the
Depositary and the Custodian, be reduced or increased, as the case may be,
and an endorsement shall be made on such Global Securities by the Trustee or
the Custodian, at the direction of the Trustee, to reflect such reduction or
increase.
The Company and the Trustee may for all purposes, including the
making of payments due on the Securities, deal with the Depositary as the
authorized representative of the Holders for the purposes of exercising the
rights of Holders hereunder. The rights of the owner of any beneficial
interest in a Global Security shall be limited to those established by law
and agreements between such owners and depository participants; PROVIDED,
that no such agreement shall give any rights to any person against the
Company or the Trustee without the written consent of the parties so
affected. Multiple requests and directions from and votes of the Depositary
as holder of Securities in global form with respect to any particular matter
shall not be deemed inconsistent to the extent they do not represent an
amount of Securities in excess of those held in the name of the Depositary or
its nominee.
If at any time the Depositary for any Securities represented by one
or more Global Securities notifies the Company that it is unwilling or unable
to continue as Depositary for such Securities or if at any time the
Depositary for such Securities shall no longer be eligible under this Section
313, the Company shall appoint a successor Depositary with respect to such
Securities. If a successor Depositary for such Securities is not appointed
by the Company within 90 days after the Company receives such notice or
becomes aware of such ineligibility, the Company's election that such
Securities be represented by one or more Global Securities shall no longer be
effective and the Company shall execute, and the Trustee, upon receipt of a
Company Order for the authentication and delivery of definitive Securities,
will authenticate and make available for delivery Securities in definitive
registered form, in any authorized denominations, in an aggregate principal
amount equal to the principal amount of the Global Security or Securities
representing such Securities in exchange for such Global Security or
Securities.
The Company may at any time and in its sole discretion determine
that the Securities issued in the form of one or more Global Securities shall
no longer be represented by a Global Security or Securities. In such event
the Company shall execute, and the Trustee, upon receipt of a Company Order
for the authentication and delivery of definitive Securities, shall
authenticate and make available for delivery, Securities in definitive
registered form, in any authorized denominations, in an aggregate principal
amount equal to the principal amount of the Global Security or Securities
representing such Securities, in exchange for such Global Security or
Securities.
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Notwithstanding any other provisions of this Indenture (other than
the provisions set forth in Section 314(a)), Global Securities may not be
transferred as a whole except by the Depositary to a nominee of the
Depositary or by a nominee of the Depositary to the Depositary or another
nominee of the Depositary or by the Depositary or any such nominee to a
successor Depositary or a nominee of such successor Depositary.
Interests of beneficial owners in Global Security may be
transferred or exchanged for definitive Securities and definitive Securities
may be transferred or exchange for Global Securities in accordance with rules
of the Depositary and the provisions of Section 315.
Any Security in global form may be endorsed with or have
incorporated in the text thereof such legends or recitals or changes not
inconsistent with the provisions of this Indenture as may be required by the
Custodian, the Depositary or by the National Association of Securities
Dealers, Inc. in order for the Securities to be tradeable on the PORTAL
Market or as may be required for the Securities to be tradeable on any other
market developed for trading of securities pursuant to Rule 144A or required
to comply with any applicable law or any regulation thereunder or with the
rules and regulations of any securities exchange upon which the Securities
may be listed or traded or to conform with any usage with respect thereto, or
to indicate any special limitations or restrictions to which any particular
Securities are subject.
SECTION 314. Restrictive Legend.
(a) Each Global Security and definitive Security that constitutes
a Restricted Security shall bear the following legend (the "Private Placement
Legend") on the face thereof until two years after the later of the date of
original issue and the last date on which the Company or any Affiliate of the
Company was the owner of such Capital Securities (or any predecessor thereto)
(the "Resale Restriction Termination Date"), unless otherwise agreed by the
Company and the Holder thereof:
"THIS SECURITY (OR ITS PREDECESSOR) HAS NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY
STATE SECURITIES LAWS AND NEITHER THIS SECURITY NOR ANY INTEREST OR
PARTICIPATION HEREIN MAY BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN
THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM.
EACH PURCHASER OF THIS SECURITY IS HEREBY NOTIFIED THAT THE SELLER MAY
BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE
SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER. THE HOLDER OF THIS
SECURITY, BY ITS ACCEPTANCE HEREOF, REPRESENTS, ACKNOWLEDGES AND AGREES
FOR THE BENEFIT OF THE COMPANY THAT: (I) IT HAS ACQUIRED A "RESTRICTED"
SECURITY WHICH HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT; (II) IT
WILL NOT OFFER, SELL OR OTHERWISE TRANSFER THIS SECURITY PRIOR TO THE
LATER OF THE DATE WHICH IS TWO YEARS AFTER THE DATE OF ORIGINAL ISSUANCE
HEREOF AND THE LAST DATE ON WHICH THE COMPANY OR ANY AFFILIATE OF THE
COMPANY WAS THE OWNER OF SUCH RESTRICTED SECURITIES (OR ANY PREDECESSOR)
EXCEPT (A) TO THE COMPANY, (B) PURSUANT TO A REGISTRATION STATEMENT
WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (C) FOR SO
LONG AS THIS SECURITY IS ELIGIBLE FOR RESALE PURSUANT TO RULE 144A, TO A
PERSON WHO THE SELLER REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL
BUYER" (AS
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DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN A
TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (D) TO AN
INSTITUTIONAL "ACCREDITED INVESTOR" IN A TRANSACTION EXEMPT FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, OR (E) PURSUANT TO
ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT AND, IN EACH CASE, IN ACCORDANCE WITH THE APPLICABLE
SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY APPLICABLE
JURISDICTION; AND (III) IT WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED
TO, NOTIFY ANY PURCHASER FROM IT OF THIS SECURITY OF THE RESALE
RESTRICTIONS SET FORTH IN (II) ABOVE. ANY OFFER, SALE OR OTHER
DISPOSITION PURSUANT TO THE FOREGOING CLAUSES (II)(D) AND (E) IS SUBJECT
TO THE RIGHT OF THE ISSUER OF THIS SECURITY AND THE TRUSTEE FOR THIS
SECURITY TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL,
CERTIFICATIONS OR OTHER INFORMATION ACCEPTABLE TO THEM IN FORM AND
SUBSTANCE."
Any Security (or security issued in exchange or substitution
therefor) as to which such restrictions on transfer shall have expired in
accordance with their terms may, upon satisfaction of the requirements of
Section 314(b) and surrender of such Security for exchange to the Security
Registrar in accordance with the provisions of this Section 314, be exchanged
for a new Security or Securities, of like tenor and aggregate principal
amount, which shall not bear the restrictive legend required by this Section
314(a).
(b) Upon any sale or transfer of any Restricted Security
(including any interest in a Global Security) (i) that is effected pursuant
to an effective registration statement under the Securities Act or (ii) in
connection with which the Trustee receives certificates and other information
(including an opinion of counsel, if requested) reasonably acceptable to the
Company and the Trustee to the effect that such security will no longer be
subject to the resale restrictions under federal and state securities laws,
then (A) in the case of a Restricted Security in definitive form, the
Security Registrar or co-Registrar shall permit the holder thereof to
exchange such Restricted Security for a Security that does not bear the
legend set forth in Section 314(a), and shall rescind any such restrictions
on transfer and (B) in the case of Restricted Securities represented by a
Global Security, such Security shall no longer be subject to the restrictions
contained in the legend set forth in Section 314(a) (but still subject to the
other provisions hereof). In addition, any Security (or Security issued in
exchange or substitution therefor) as to which the restrictions on transfer
described in the legend set forth in Section 314(a) have expired by their
terms, may, upon surrender thereof (in accordance with the terms of this
Indenture) together with such certifications and other information (including
an Opinion of Counsel having substantial experience in practice under the
Securities Act and otherwise reasonably acceptable to the Company, addressed
to the Company and the Trustee and in a form acceptable to the Company, to
the effect that the transfer of such Restricted Security has been made in
compliance with Rule 144 or such successor provision) acceptable to the
Company and the Trustee as either of them may reasonably require, be
exchanged for a new Security or Securities of like tenor and aggregate
principal amount, which shall not bear the restrictive legends set forth in
Section 314(a).
SECTION 315. Special Transfer Provisions.
At any time at the request of the beneficial holder of an interest
in a Security in global form, such beneficial holder shall be entitled to
obtain a definitive Security upon written request to
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the Trustee in accordance with the standing instructions and procedures
existing between the Depositary and the Trustee for the issuance thereof.
Upon receipt of any such request, the Trustee will cause the aggregate
principal amount of the Security in global form to be reduced and, following
such reduction, the Company will execute and the Trustee will authenticate
and deliver to such beneficial holder (or its nominee) a Security or
Securities in the appropriate aggregate principal amount in the name of such
beneficial holder (or its nominee) and bearing such restrictive legends as
may be required by this Indenture.
Any transfer of a beneficial interest in a Security in global form
which cannot be effected through book-entry settlement must be effected by
the delivery to the transferee (or its nominee) of a definitive Security or
Securities registered in the name of the transferee (or its nominee) on the
books maintained by the Trustee. With respect to any such transfer, the
Trustee will cause, in accordance with the standing instructions and
procedures existing between the Depositary and the Trustee, the aggregate
principal amount of the Security in global form to be reduced and, following
such reduction, the Company will execute and the Trustee will authenticate
and deliver to the transferee (or such transferee's nominee, as the case may
be), a Security or Securities in the appropriate aggregate principal amount
in the name of such transferee (or its nominee) and bearing such restrictive
legends as may be required by this Indenture. In connection with any such
transfer, the Trustee may request such representations and agreements
relating to the restrictions on transfer of such Security or Securities from
such transferee (or such transferee's nominee) as the Trustee may reasonably
require.
If and so long as the Securities are eligible for book-entry
settlement, or unless otherwise required by law, upon any transfer of a
definitive Security to a QIB in accordance with Rule 144A, unless otherwise
requested by the transferor, and upon receipt of the definitive Security or
Securities being so transferred, together with a certification from the
transferor that the transferor reasonably believes that the transferee is a
QIB (or other evidence satisfactory to the Trustee), the Trustee shall make
an endorsement on the Restricted Global Security to reflect an increase in
the aggregate principal amount of the Securities represented by the
Restricted Global Security, the Trustee shall cancel such definitive Security
or Securities and cause, in accordance with the standing instructions and
procedures existing between the Depositary and the Trustee, the aggregate
principal amount of Securities represented by the Restricted Global Security
to be increased accordingly.
If a holder of a definitive Security wishes at any time to exchange
its Security for a beneficial interest in any Global Security (or vice
versa), or to transfer its definitive Security to a person who wishes to take
delivery thereof in the form of a beneficial interest in a Global Security
(or vice versa), such Securities and beneficial interests may be exchanged or
transferred for one another only in accordance with such procedures as are
substantially consistent with the provisions of the two preceding paragraphs
(including the certification requirements intended to ensure that such
exchanges or transfers comply with Rule 144 or Rule 144A, as the case may be)
and as may be from time to time adopted by the Company and the Trustee.
Any beneficial interest in one of the Global Securities that is
transferred to a person who takes delivery in the form of an interest in the
other Global Security will, upon transfer, cease to be an interest in such
Global Security and become an interest in the other Global Security and,
accordingly, will thereafter be subject to all transfer restrictions and
other procedures applicable to beneficial interests in such other Global
Security for as long as it remains such an interest.
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ARTICLE FOUR
SATISFACTION AND DISCHARGE; DEFEASANCE
SECTION 401. Satisfaction and Discharge of Indenture.
This Indenture shall cease to be of further effect (except as to
any surviving rights of registration of transfer or exchange of Securities
herein expressly provided for), and the Trustee, on written demand of and at
the expense of the Company, shall execute instruments supplied by the Company
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 306 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 1003) 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 Maturity within one year, or (iii)
if redeemable at the option of the Company, are to be called for redemption
within one year under arrangements satisfactory to the Trustee for the giving
of notice of redemption by the Trustee in the name, and at the expense, of
the Company and the Company, in the case of (i), (ii) or (iii) above, has
deposited or caused to be deposited with the Trustee as funds in trust for
the purpose an amount sufficient to pay and discharge the entire indebtedness
on such Securities not theretofore delivered to the Trustee for cancellation,
for principal and interest to the date of such deposit (in the case of
Securities which have become due and payable) or to the Maturity or
Redemption Date, as the case may be; (2) the Company has paid or caused to be
paid all other sums payable hereunder by the Company; and (3) the Company has
delivered to the Trustee an Officers' Certificate and an Opinion of Counsel,
each stating that all conditions precedent herein provided for relating to
the satisfaction and discharge of this Indenture have been complied with.
Notwithstanding the satisfaction and discharge of this Indenture, the
obligations of the Company to the Trustee under Section 607 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 402
and the last paragraph of Section 1003 shall survive.
SECTION 402. Legal Defeasance.
In addition to discharge of this Indenture pursuant to Section 401,
in the case of any Securities with respect to which the exact amount
described in subparagraph (a) of Section 404 can be determined at the time of
making the deposit referred to in such subparagraph (a), the Company shall be
deemed to have paid and discharged the entire indebtedness on all the
Securities as provided in this Section on and after the date the conditions
set forth in Section 404 are satisfied, and the provisions of this Indenture
with respect to the Securities shall no longer be in effect (except as to (i)
rights of registration of transfer and exchange of Securities, (ii)
substitution of mutilated, defaced, destroyed, lost or stolen Securities,
(iii) maintenance of a Paying Agent, (iv) rights of Holders of Securities to
receive, solely from the trust fund described in subparagraph (a) of Section
404, payments of principal thereof and interest, if any, thereon upon the
original stated due dates therefor (but not upon acceleration), (v) the
rights, obligations, duties and immunities of the Trustee hereunder, (vi)
this Section 402 and (vii) the rights of the Holders of Securities as
beneficiaries hereof with respect to the property so deposited with the
Trustee payable to all or any of them) (hereinafter called "Legal
Defeasance"), and the Trustee, at the cost and expense of the Company, shall
execute proper instruments acknowledging the same.
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SECTION 403. Covenant Defeasance.
In the case of any Securities with respect to which the exact
amount described in subparagraph (a) of Section 404 can be determined at the
time of making the deposit referred to in such subparagraph (a), (x) the
Company shall be released from its obligations under any covenants specified
in or pursuant to this Indenture (except as to (i) rights of registration of
transfer and exchange of Securities, (ii) substitution of mutilated, defaced,
destroyed, lost or stolen Securities, (iii) maintenance of a Paying Agent,
(iv) rights of Holders of Securities to receive, from the Company pursuant to
Section 1001, payments of principal thereof and interest, if any, thereon
upon the original stated due dates therefor (but not upon acceleration), (v)
the rights, obligations, duties and immunities of the Trustee hereunder and
(vi) the rights of the Holders of Securities as beneficiaries hereof with
respect to the property so deposited with the Trustee payable to all or any
of them), and (y) the occurrence of any event specified in Section 501(3)
(with respect to any of the covenants specified in or pursuant to this
Indenture) shall be deemed not to be or result in an Event of Default, in
each case with respect to the Outstanding Securities as provided in this
Section on and after the date the conditions set forth in Section 404 are
satisfied (hereinafter called "Covenant Defeasance"), and the Trustee, at the
cost and expense of the Company, shall execute proper instruments
acknowledging the same. For this purpose, such Covenant Defeasance means
that the Company may omit to comply with and shall have no liability in
respect of any term, condition or limitation set forth in any such covenant
(to the extent so specified in the case of Section 501(3)), whether directly
or indirectly by reason of any reference elsewhere herein to any such
covenant or by reason of any reference in any such covenant to any other
provision herein or in any other document, but the remainder of this
Indenture and the Securities shall be unaffected thereby.
SECTION 404. Conditions to Legal Defeasance or Covenant Defeasance.
The following shall be the conditions to application of either
Section 402 or 403 to the Outstanding Securities:
(a) with reference to Section 402 or 403, the Company has
irrevocably deposited or caused to be irrevocably deposited with the Trustee
as funds in trust, specifically pledged as security for, and dedicated solely
to, the benefit of the Holders of Securities (i) cash, (ii) direct
obligations of the United States of America, backed by its full faith and
credit ("U.S. Government Obligations"), (iii) obligations of a Person
controlled or supervised by and acting as an agency or instrumentality of the
United States of America the timely payment of which is unconditionally
guaranteed as a full faith and credit obligation by the United States of
America, or (iv) a combination thereof, in each case sufficient, in the
opinion of a nationally recognized firm of independent public accountants
expressed in a written certification thereof delivered to the Trustee, to pay
and discharge the principal of and interest, if any, on all Securities on
each date that such principal or interest, if any, is due and payable;
(b) in the case of Legal Defeasance under Section 402, the Company
has delivered to the Trustee an Opinion of Counsel based on the fact that (x)
the Company has received from, or there has been published by, the Internal
Revenue Service a ruling or (y), since the date hereof, there has been a
change in the applicable United States federal income tax law, in either case
to the effect that, and such opinion shall confirm that, the Holders of the
Securities of such series will not recognize income, gain or loss for federal
income tax purposes as a result of such deposit and Legal Defeasance and will
be subject to federal income tax on the same amount and in the same manner
and at the same times as would have been the case if such deposit and Legal
Defeasance had not occurred;
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(c) in the case of Covenant Defeasance under Section 403, the
Company has delivered to the Trustee an Opinion of Counsel to the effect
that, and such opinion shall confirm that, the Holders of the Securities will
not recognize income, gain or loss for federal income tax purposes as a
result of such deposit and Covenant Defeasance and will be subject to federal
income tax on the same amount in the same manner and at the same times as
would have been the case if such deposit and Covenant Defeasance had not
occurred;
(d) such Legal Defeasance or Covenant Defeasance will not result
in a breach or violation of, or constitute a default under, any agreement or
instrument to which the Company is a party or by which it is bound; and
(e) the Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent contemplated by this provision have been complied with.
SECTION 405. Application of Trust Money.
Subject to the provisions of the last paragraph of Section 1003,
all money and U.S. Government Obligations deposited with the Trustee pursuant
to Section 401 shall be held in trust and such money and all money from such
U.S. Government Obligations shall be applied by it, in accordance with the
provisions of the Securities and this Indenture, to the payment, either
directly or through any Paying Agent (including the Company acting as its own
Paying Agent) as the Trustee may determine, to the Persons entitled thereto,
of the principal and interest for whose payment such money and U.S.
Government Obligations has been deposited with the Trustee.
SECTION 406. Indemnity for U.S. Government Obligations.
The Company shall pay and indemnify the Trustee against any tax,
fee or other charge imposed on or assessed against the U.S. Government
Obligations deposited pursuant to Section 404 or the principal or interest
received in respect of such obligations other than any such tax, fee or other
charge that by law is for the account of the Holders of Outstanding
Securities.
ARTICLE FIVE
REMEDIES
SECTION 501. Events of Default.
"Event of Default" wherever used herein, means any one of the
following events that has occurred and is continuing (whatever the reason for
such Event of Default and whether it shall be occasioned by the provisions of
Article Eleven or 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) failure for 30 days to pay any interest on the Securities when
due (subject to the deferral of any due date in the case of an Extension
Period); or
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(2) failure to pay any principal on the Securities when due,
whether at Stated Maturity, upon redemption, by declaration of acceleration
or otherwise; or
(3) failure to observe or perform in any material respect any
other covenant herein that continues for 90 days after written notice to the
Company from the Trustee or the Holders of at least 25% in aggregate
principal amount of the Outstanding Securities; or
(4) entry by a court having jurisdiction in the premises of (A) a
decree or order for relief in respect of the Company in an involuntary case
or proceeding under any applicable Federal or State bankruptcy, insolvency,
reorganization or other similar law or (B) a decree or order 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 law, or
appointing a custodian, receiver, liquidator, assignee, trustee, sequestrator
or other similar official of the Company or of substantially all of the
property of the Company, or ordering the winding up or liquidation of its
affairs, and the continuance of any such decree or order for relief or any
such other decree or order unstayed and in effect for a period of 90
consecutive days; or
(5) (A) the commencement by the Company of a voluntary case or
proceeding under any applicable Federal or State bankruptcy, insolvency,
reorganization or other similar law or of any other case or proceeding to be
adjudicated a bankrupt or insolvent, or (B) the consent by the Company to the
entry of a decree or order for relief in respect of itself in an involuntary
case or proceeding under any applicable Federal or State bankruptcy,
insolvency, reorganization or other similar law or to the commencement of any
bankruptcy or insolvency case or proceeding against the Company, or (C) the
filing by the Company 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 (D) the consent by the
Company to the filing of such petition or to the appointment of or taking
possession by a custodian, receiver, liquidator, assignee, trustee,
sequestrator or other similar official of the Company or of all or
substantially all of the property of the Company, or (E) the making by the
Company of an assignment for the benefit of creditors.
SECTION 502. Acceleration of Maturity; Rescission and Annulment.
If an Event of Default occurs and is continuing, then and in every
such case the Trustee or the Holders of not less than 25% in aggregate
principal amount of the Outstanding Securities shall have the right to
declare the principal of and the interest on all the Securities and any other
amounts payable hereunder to be due and payable immediately, PROVIDED,
HOWEVER, that if upon an Event of Default, the Trustee or the Holders of at
least 25% in aggregate principal amount of the Outstanding Securities fail to
declare the payment of all amounts on the Securities to be immediately due
and payable, the holders of at least 25% in aggregate liquidation amount of
Capital Securities then outstanding shall have such right, by a notice in
writing to the Company (and to the Trustee if given by Holders or the holders
of Capital Securities) and upon any such declaration such principal and all
accrued interest shall become immediately due and payable.
At any time after such a declaration of acceleration has been made
and before a judgment or decree for payment of the money due has been
obtained by the Trustee as hereinafter provided in this Article, the Holders
of a majority in aggregate principal amount of the Outstanding Securities, by
written notice to the Company and the Trustee, may rescind and annul such
declaration and its consequences if (1)
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the Company has paid or deposited with the Trustee a sum sufficient to pay
(A) all overdue interest on all Securities, (B) the principal of (and
premium, if any, on) any Securities which have become due otherwise than by
such declaration of acceleration and interest thereon at the rate borne by
the Securities, (C) to the extent that payment of such interest is lawful,
interest upon overdue interest at the rate borne by the Securities, and (D)
all sums paid or advanced by the Trustee hereunder and the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel; and (2) all Events of Default, other than the non-payment of the
principal of Securities which have become due solely by such declaration of
acceleration, have been cured or waived as provided in Section 513. 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
Capital Securities then outstanding shall have such right. No such
rescission shall affect any subsequent default or impair any right consequent
thereon.
SECTION 503. Collection of Indebtedness and Suits for Enforcement by Trustee
The Company covenants that if
(1) default is made in the payment of any 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 any
Security at the Maturity thereof,
the Company will, upon demand of the Trustee, pay to it, for the benefit of
the Holders of such Securities, the whole amount then due and payable on such
Securities for principal and interest, and, to the extent that payment
thereof shall be legally enforceable, interest on any overdue principal and
on any overdue interest, at the rate borne by the Securities, and, in
addition thereto, such further amount as shall be sufficient to cover the
costs and expenses of collection, including the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel.
If an Event of Default occurs and is continuing, the Trustee may in
its discretion proceed to protect and enforce its rights and the rights of
the Holders 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 504. Trustee May File Proofs of Claim.
In case of any receivership, insolvency, liquidation, bankruptcy,
reorganization, arrangement, adjustment, composition or other similar
judicial proceeding relative to the Company (or any other obligor upon the
Securities), its property or its creditors, the Trustee shall be entitled and
empowered, by intervention in such proceeding or otherwise, to take any and
all actions authorized under the Trust Indenture Act in order to have claims
of the Holders and the Trustee allowed in any such proceeding. 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; 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 Trustee 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 it for the
reasonable compensation, expenses, disbursements and advances of the Trustee,
its agents and
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counsel, and any other amounts due the Trustee under Section 607. No
provision of this Indenture 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 such proceeding.
SECTION 505. Trustee May Enforce Claims Without Possession of Securities.
All rights of action and claims under this Indenture or the
Securities may be prosecuted and enforced by the Trust 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 any express trust, and any recovery of judgment
shall, after provision for the payment of the reasonable compensation,
expenses, disbursements and advances of the Trustee, 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 506. Application of Money Collected.
Subject to Article Eleven, any money collected by the Trustee
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
on account of principal, 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 under Section
607; and
SECOND: To the payment of the amounts then due and unpaid for
principal of and interest on the Securities 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 as such
Securities for principal and interest, respectively.
THIRD: To the Company, if any balance shall remain.
SECTION 507. Limitation on Suits.
No Holder of any Security shall have any right to institute any
proceeding, judicial or otherwise, with respect to this Indenture, or for the
appointment of a receiver or trustee, or for any other remedy hereunder,
unless
(1) such Holder has previously given written notice to the Trustee
of a continuing Event of Default;
(2) the Holders of not less than 25% in principal amount of the
Outstanding Securities 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;
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(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; it being understood and intended
that no one or more Holders shall have any right in any manner whatever by
virtue of, or by availing of, any provision of this Indenture to affect, disturb
or prejudice the rights of any other Holders, or to obtain or to seek to obtain
priority or preference over any other Holders or to enforce any right under this
Indenture, except in the manner herein provided and for the equal and ratable
benefit of all the Holders.
SECTION 508. Unconditional Right of Holders to Receive Principal and Interest;
Capital Security Holders' Rights.
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 (subject to Section 307) interest on
such Security on the Stated Maturity expressed in such Security (or, in the case
of redemption, on the Redemption Date) and to institute suit for the enforcement
of any such payment, and such rights shall not be impaired without the consent
of such Holder.
If an Event of Default constituting the failure to pay interest or
principal on the Securities on the date such interest or principal is otherwise
payable has occurred and is continuing, then a holder of Capital Securities may
directly institute a proceeding for enforcement of payment to such holder
directly of the principal of or interest on the Securities having a principal
amount equal to the aggregate liquidation amount of the Capital Securities as
such holder on or after the respective due date specified in the Securities.
The Company may not amend this Section without the prior written consent of the
holders of all of the Capital Securities. Notwithstanding any payment made to
such holder of Capital Securities by the Company in connection with such a
Direct Action, the Company shall remain obligated to pay the principal of or
interest on the Securities held by the Trust or the Property Trustee and the
Company shall be subrogated to the rights of the holder of such Capital
Securities with respect to payments on the Capital Securities to the extent of
any payments made by the Company to such holder in any Direct Action. A holder
of Capital Securities will not be able to exercise directly any other remedy
available to the Holders of the Securities.
SECTION 509. 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 such case, subject to any
determination in such proceeding, the Company, the Trustee and the Holders shall
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 510. Rights and Remedies Cumulative.
Except as otherwise provided with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Securities in the last paragraph
of Section 306, no right or remedy herein
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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 other
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 511. Delay or Omission not Waiver.
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 512. Control by Holders.
The Holders of a majority in principal amount of the Outstanding
Securities shall have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Trustee or exercising
any trust or power conferred on the Trustee, provided that
(1) such direction shall not be in conflict with any rule of law or
with this Indenture; and
(2) the Trustee may take any other action deemed proper by the
Trustee which is not inconsistent with such direction.
SECTION 513. Waiver of Past Defaults.
Subject to Sections 902 and 1008 hereof, the Holders of not less than
a majority in principal amount of the Outstanding Securities may on behalf of
the Holders of all the Securities waive any past default hereunder and its
consequences, except a default
(1) in the payment of the principal of or interest on any Security
(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
(2) in respect of a covenant or provision hereof which under Article
Nine cannot be modified or amended without the consent of the Holder of each
Outstanding Security affected;
PROVIDED, HOWEVER, that such waiver or modification to such waiver shall not be
effective until the holders of a majority in liquidation preference of Capital
Securities shall have consented to such waiver or modification to such waiver;
PROVIDED FURTHER, that if the consent of the Holder of each of the Outstanding
Securities is required, such waiver shall not be effective until each holder of
the Capital Securities shall have consented to such waiver.
Upon any such waiver, such default shall cease to exist, effective as
of the date specified in such waiver (and effective retroactively to the date of
default, if so specified) and any Event of Default
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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 514. Undertaking for Costs.
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, suffered or
omitted by it as Trustee, a court may require any party litigant in such suit to
file an undertaking to pay the costs of such suit, and may assess costs against
any such party litigant, in the manner and to the extent provided in the Trust
Indenture Act; PROVIDED, that neither this Section nor the Trust Indenture Act
shall be deemed to authorize any court to require such an undertaking or to make
such an assessment in any suit instituted by the Company or the Trustee or in
any suit for the enforcement of the right to receive the principal of and
interest on any Security.
SECTION 515. Waiver of 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 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.
ARTICLE SIX
TRUSTEE
SECTION 601. Certain Duties and Responsibilities.
The duties and responsibilities of the Trustee shall be as provided by
the Trust Indenture Act. Notwithstanding the foregoing, 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 it shall have reasonable
grounds for believing that repayment of such funds or adequate indemnity against
such risk or liability is not reasonably assured to it. 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 602. Notice of Defaults.
The Trustee shall give the Holders notice of any default hereunder as
and to the extent provided by the Trust Indenture Act; PROVIDED, HOWEVER, that
except in the case of a default in the payment of the principal of or interest
on any Security, the Trustee shall be protected in withholding such notice if
and so long as the board of directors, the executive committee or a trust
committee of directors and/or Responsible Officers of the Trustee in good faith
determine that the withholding of such notice is in the interests of the Holders
of Securities; PROVIDED, FURTHER, that in the case of any default of the
character
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specified in Section 501(3), no such notice to Holders 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. For purposes of
this Section, the Trustee shall not be deemed to have knowledge of a default
unless the Trustee has actual knowledge of such default or has received
written notice of such default in the manner contemplated by Section 105.
SECTION 603. Certain Rights of Trustee.
Subject to the provisions of Section 601:
(a) the Trustee may rely and shall be protected in acting or
refraining from acting upon any resolution, certificate, statement, instrument,
opinion, report, notice, request, direction, consent, order, bond, debenture,
note, other evidence of indebtedness or other paper or document believed by it
to be genuine and to have been signed or presented by the proper party or
parties;
(b) any request or direction of the Company mentioned herein shall be
sufficiently evidenced by a Company Request or Company Order and any resolution
of the Board of Directors may be sufficiently evidenced by a Board Resolution;
(c) whenever in the administration of this Indenture the Trustee
shall deem it desirable that a matter be proved or established prior to taking,
suffering or omitting any action hereunder, the Trustee (unless other evidence
be herein specifically prescribed) may, in the absence of bad faith on its part,
rely upon an Officers' Certificate;
(d) the Trustee may consult with counsel of its choice (and such
counsel may be counsel to the Company or any of its Affiliates and may include
any of its employees) 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 reasonable security or indemnity 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, debenture,
note, other evidence of indebtedness or other paper or document, but the
Trustee, in its discretion, may make such further inquiry or investigation into
such facts or matters as it may see fit, and, if the Trustee shall determine to
make such further inquiry or investigation, it shall be entitled to examine the
books, records and premises of the 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; and
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(h) any application by the Trustee for written instructions from the
Company may, at the option of the Trustee, set forth in writing any action
proposed to be taken or omitted by the Trustee under this Indenture and the date
on and/or after which such action shall be taken or such omission shall be
effective. The Trustee shall not be liable to the Company for any action taken
by, or omission of, the Trustee in accordance with a proposal included in such
application on or after the date specified in such application (which date shall
not be less than five Business Days after the date any officer of the Company
actually receives such application, unless any such officer shall have consented
in writing to any earlier date) unless prior to taking any such action (or the
effective date in the case of an omission), the Trustee shall have received
written instructions in response to such application specifying the action to be
taken or omitted.
SECTION 604. 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, the Trustee shall not be accountable for the use
or application by the Company of Securities or the proceeds thereof.
SECTION 605. Trustee and Other Agents may Hold Securities.
The Trustee, any Paying Agent, any Security 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 608 and 613, may
otherwise deal with the Company with the same rights it would have if it were
not Trustee, Paying Agent, Security Registrar, or such other agent. Money held
by the Trustee in trust hereunder shall not be invested by the Trustee pending
distribution thereof to the holders of the Securities.
SECTION 606. Money Held in Trust.
Money held by the Trustee in trust hereunder need not be segregated
from other funds except to the extent required by law. The Trustee shall be
under no liability for interest on any money received by it hereunder except as
otherwise agreed in writing with the Company.
SECTION 607. Compensation; Reimbursement; and Indemnity.
The Company, as issuer of the Securities, agrees
(1) to pay to the Trustee from time to time such compensation as the
Company and the Trustee shall from time to time agree in writing for all
services rendered by it hereunder (which compensation shall not be limited by
any provision of law in regard to the compensation of a trustee of an express
trust);
(2) except as otherwise expressly provided herein, 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
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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 each of the Trustee and any predecessor Trustee for,
and to hold it harmless against, any and all loss, damage, claim, liability or
expense, including taxes (other than taxes based on the income, revenues or
gross receipts of the Trustee) incurred without negligence or bad faith on its
part, arising out of or in connection with the acceptance or administration of
this trust or the trusts hereunder, including the costs and expenses of
defending itself against any claim or liability in connection with the exercise
or performance of any of its powers or duties hereunder.
The obligations of the Company under this Section to compensate the
Trustee, to pay or reimburse the Trustee for expenses, disbursements and
advances and to indemnify and hold harmless the Trustee shall constitute
additional indebtedness hereunder and shall survive the satisfaction and
discharge of this Indenture. As security for the performance of such
obligations of the Company, the Trustee shall have a lien prior to the
Securities upon all property and lands held or collected by the Trustee as such,
except funds held in trust for the payment of principal of (and premiums, if
any, on) or interest on particular Securities.
When the Trustee incurs expenses or renders services in connection
with an Event of Default specified in Section 501(4) or Section 501(5), the
expenses (including the reasonable charges and expenses of its counsel) and the
compensation for the services are intended to constitute expenses of
administration under any applicable Federal or state bankruptcy, insolvency or
other similar law.
The provisions of this Section shall survive the termination of this
Indenture and the resignation or removal of the Trustee.
SECTION 608. Disqualification; Conflicting Interests.
If the Trustee has or shall acquire a conflicting interest within the
meaning of the Trust Indenture Act, the 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 Indenture.
SECTION 609. Corporate Trustee Required; Eligibility.
There shall at all times be a Trustee hereunder which shall 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 is organized and
doing business under the laws of the United States of America or any State or
Territory thereof or of the District of Columbia. If such Person 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 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 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.
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SECTION 610. 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 611.
(b) The Trustee may resign at any time 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.
(c) The Trustee may be removed at any time by Act of the Holders of a
majority in principal amount of the Outstanding Securities, delivered to the
Trustee and 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 removal, the removed Trustee may petition any court of
competent jurisdiction for the appointment of a successor Trustee.
(d) If at any time:
(1) the Trustee shall fail to comply with Section 608 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
(2) the Trustee shall cease to be eligible under Section 609 and
shall fail to resign after written request therefor by the Company or by any
such Holder, or
(3) the Trustee shall become incapable of acting or shall be
adjudged a bankrupt or insolvent or a receiver of the Trustee or of its property
shall be appointed or any public officer shall take charge or control of the
Trustee or of its property or affairs for the purpose of rehabilitation,
conservation or liquidation, then, in any such case, (i) the Company by a Board
Resolution may remove the Trustee, or (ii) subject to Section 514, any Holder
who has been a bona fide Holder of a Security for at least six months may, on
behalf of itself 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, the
Company, by a Board Resolution, shall promptly appoint a successor Trustee. If,
within one year after such resignation, removal or incapability, or the
occurrence of such vacancy, a successor Trustee shall be appointed by Act of the
Holders of a majority in principal amount of the Outstanding Securities
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 and supersede the successor Trustee appointed by the Company.
If no successor Trustee 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, on
behalf of itself and all others similarly situated, petition any court of
competent jurisdiction for the appointment of a successor Trustee.
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(f) The Company shall give notice of each resignation and each
removal of the Trustee and each appointment of a successor Trustee to all
Holders in the manner provided in Section 106. Each notice shall include the
name of the successor Trustee and the address of its Corporate Trust Office.
SECTION 611. Acceptance of Appointment by Successor.
Every successor Trustee appointed hereunder 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; PROVIDED that, on 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. 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 such rights, powers and
trusts.
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.
SECTION 612. 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 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,
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 made available for delivery, by the Trustee then in
office, any successor by merger, conversion or consolidation to such
authenticating Trustee may adopt such authentication and make available for
delivery the Securities so authenticated with the same effect as if such
successor Trustee had itself authenticated such Securities.
SECTION 613. Preferential Collection of Claims Against Company.
If and when the Trustee shall be or becomes 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).
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ARTICLE SEVEN
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY
SECTION 701. Company to Furnish Trustee Names and Addresses of Holders.
The Company will furnish or cause to be furnished to the Trustee (a)
quarterly, not later than the Business Day immediately following each Regular
Record Date, a list, in such form as the Trustee may reasonably require, of the
names and addresses of the Holders to the extent the Company has knowledge
thereof as of a date not more than 15 days prior to the delivery thereof, 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, a list of similar form and content
as of a date not more than 15 days prior to the time such list is furnished,
excluding from any such list names and addresses received by the Trustee in its
capacity as Security Registrar, and provided that the Company shall not be
obligated to deliver any such list at any time that such list does not differ
from the most recent list given to the Trustee by the Company.
SECTION 702. 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 701, and the names and
addresses of Holders received by the Trustee in its capacity as Security
Registrar. The Trustee may destroy any list furnished to it as provided in
Section 701 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 duties of the Trustee, shall be as provided by 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 any
disclosure of information as to names and addresses of Holders made pursuant to
the Trust Indenture Act.
SECTION 703. Reports by Trustee.
(a) The Trustee shall transmit to Holders as of July 15 of each year 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) A copy of each such report shall, at the time of such transmission to
Holders, be filed by the Trustee with any and each stock exchange upon which the
Securities are listed, with the Commission and with the Company. The Company
will notify the Trustee when the Securities are listed on any stock exchange.
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SECTION 704. Reports by Company.
The Company shall file with the Trustee and 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 pursuant to such Act; PROVIDED that any such
information, documents or reports required to be filed with the Commission
pursuant to Section 13(a) or 15(d) of the Securities and Exchange Act of 1934
shall be filed with the Trustee within 15 days after the same is so required
to be filed with the Commission. Delivery of such reports, information and
documents to the Trustee is for informational purposes only and the Trustee's
receipt of such shall not constitute constructive notice of any information
contained therein or determinable from information contained therein,
including the Company's compliance with any of its covenants hereunder (as to
which the Trustee is entitled to rely exclusively on Officers' Certificates).
ARTICLE EIGHT
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
SECTION 801. Company May Consolidate, Etc., Only on Certain Terms.
The Company shall not consolidate with or merge into any other Person or
convey, transfer or lease its properties and assets substantially as an
entirety to any Person, unless:
(1) the Person formed by such consolidation or into which the Company is
merged or the Person that acquires by conveyance or transfer, or which
leases, the properties and assets of the Company substantially as an
entirety shall be a corporation, partnership, bank, trust company, limited
liability company, trust or comparable entity, shall be 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 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 happened and be continuing;
(3) for so long as Securities registered on the Securities Register in
the name of the Trust (or the Property Trustee) are outstanding, such
consolidation, merger, conveyance, transfer or lease is permitted under the
Declaration and the Guarantee and does not give rise to any breach or
violation of the Declaration or the Guarantee;
(4) any such lease shall provide that it will remain in effect so long
as any Securities are Outstanding; and
(5) 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
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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 601, may rely upon such Officers'
Certificate and Opinion of Counsel as conclusive evidence that such
transaction complies with this Section 801.
SECTION 802. Successor Person 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 801, the successor Person 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 make available for delivery 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.
ARTICLE NINE
SUPPLEMENTAL INDENTURES
SECTION 901. 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 purposes:
(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; or
(2) to add to the covenants of the Company for the benefit of the
Holders, or to surrender any right or power herein conferred upon the
Company; or
(3) to cure any ambiguity or defect, 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
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matters or questions arising under this Indenture which shall not be
inconsistent with the provisions of this Indenture, provided that such action
pursuant to this clause (3) shall not adversely affect the interests of the
Holders of the Securities or, so long as any of the Capital Securities shall
remain outstanding, the holders of the Capital Securities; or
(4) to comply with any requirement of the Commission in order to effect
or maintain the qualification of this Indenture under the Trust Indenture Act.
SECTION 902. 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, 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 under this Indenture; PROVIDED, HOWEVER,
that no such supplemental indenture shall, without the consent of the Holder
of each Outstanding Security affected thereby,
(1) change the Stated Maturity of, the principal of, or any installment
of interest on, any Security, or reduce the principal amount thereof or the
rate of interest thereon or extend the time of payment of interest thereon
(except such extension as is contemplated hereby), 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 Redemption Date), or modify the provisions of
this Indenture with respect to the subordination of the Securities in a
manner adverse to the Holders,
(2) reduce the percentage in principal amount of the Outstanding
Securities, 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, or
(3) modify any of the provisions of this Section, Section 513 or Section
1008, 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 Outstanding Security affected thereby; PROVIDED, that,
so long as any of the Capital Securities remains outstanding, no such
amendment shall be made that adversely affects the holders of the 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 the outstanding Capital
Securities unless and until the principal of and any premium on the
Securities and all accrued and unpaid interest thereon have been paid in full.
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.
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SECTION 903. Execution of Supplemental Indentures.
In executing, or accepting the additional trust 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 601) shall be fully protected in relying
upon, an Opinion of Counsel stating that the execution of such supplemental
indenture is authorized or permitted by this Indenture. The Trustee may, but
shall not be obligated to, enter into such supplemental indenture which
affects the Trustee's own rights, duties or immunities under this Indenture
or otherwise.
SECTION 904. 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 905. Conformity With Trust Indenture Act.
Every supplemental indenture executed pursuant to this Article shall
conform to the requirements of the Trust Indenture Act.
SECTION 906. 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 Trustee, bear a notation in form approved by the Trustee as to any matter
provided for in such supplemental indenture. If the Company shall so
determine, new Securities so modified as to conform, in the opinion of the
Trustee and the Company, to any such supplemental indenture may be prepared
and executed by the Company and authenticated and made available for delivery
by the Trustee in exchange for Outstanding Securities.
ARTICLE TEN
COVENANTS
SECTION 1001. Payment of Principal and Interest.
The Company will duly and punctually pay the principal of and interest on
the Securities in accordance with the terms of the Securities and this
Indenture and comply with all other terms and conditions and agreements
contained herein.
SECTION 1002. Maintenance of Office or Agency.
The Company will maintain an office or agency where Securities may be
presented or surrendered for registration of transfer or exchange, Securities
may be surrendered for conversion and notices and demands to or upon the
Company in respect of the Securities and this Indenture may be served. The
Company hereby appoints the Trustee as its agent to receive all such
presentations and surrenders at
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the Corporate Trust Office of the Trustee. The foregoing appointment shall
not relate to notice and demands with respect to the Securities (unless such
notice or demand relates solely to the registration of such Security for
transfer or exchange), and all notices and demands in respect of the
Securities or this Indenture shall be made directly to the Company in
accordance with Section 105 hereof.
The Company may also from time to time designate one or more other
offices or agencies in the United States where the Securities may be
presented or surrendered for any or all 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 the United States for such purposes. The
Company will give prompt written notice to the Trustee of any such
designation or rescission and of any change in the location of any such other
office or agency.
SECTION 1003. Money for Security Payments to be Held in Trust.
If the Company shall at any time act as its own Paying Agent, it will,
on, or at the option of the Company, before each due date of the principal of
or interest on any of the Securities, segregate and hold in trust for the
benefit of the Persons entitled thereto a sum sufficient to pay the principal
or interest so becoming due until such sums shall be paid to such Persons or
otherwise disposed of as herein provided and will promptly notify the Trustee
of its action or failure so to act. In such case the Company shall not
invest the amount so segregated and held in trust pending the distribution
thereof.
Whenever the Company shall have one or more Paying Agents, it will, on or
prior to each due date of the principal of or interest on any Securities,
deposit with a Paying Agent a sum sufficient to pay such amount, such sum to
be held as provided by the Trust Indenture Act, and (unless such Paying Agent
is the Trustee) the Company will promptly notify the Trustee of its action or
failure so to act; PROVIDED, HOWEVER, that any such deposit on a due date
shall be initiated prior to 12:00 noon (New York time) in same-day funds.
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 (i) comply with the provisions of the Trust Indenture
Act applicable to it as a Paying Agent and (ii) during the continuance of any
default by the Company (or any other obligor upon the Securities) in the
making of any payment in respect of the Securities, upon the written request
of the Trustee, forthwith pay to the Trustee all sums held in trust by such
Paying Agent as such.
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 the 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 any Paying
Agent to the Trustee, such Payment 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 or interest that has
become due and payable shall be paid to the Company on Company Request, or
(if then held by the Company) shall be discharged from such trust; and the
Holder of such Security shall thereafter, as an unsecured general creditor,
look only to the Company
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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.
SECTION 1004. Statements by Officers as to Default.
The Company will deliver to the Trustee, within 120 days after the end of
each fiscal year of the Company ending after the date hereof, an Officers'
Certificate, stating whether or not to the best knowledge of the signers
thereof the Company is in default in the performance and observance of any of
the material terms, provisions and conditions of this Indenture (without
regard to any period of grace or requirement of notice provided hereunder)
and, if the Company shall be in default, specifying all such defaults and the
nature and status thereof of which they may have knowledge.
SECTION 1005. Existence.
Subject to Article Eight, the Company will do or cause to be done all
things necessary to preserve and keep in full force and effect its existence,
rights (charter and statutory) and franchises; PROVIDED, HOWEVER, that the
Company shall not be required to preserve any such right or franchise if the
Board of Directors shall determine that the preservation thereof is no longer
desirable in the conduct of the business of the Company and that the loss
thereof is not disadvantageous in any material respect to the Holders and,
while any Capital Securities are outstanding, the holders of the Capital
Securities.
SECTION 1006. Maintenance of Properties.
The Company will cause all properties used or useful in the conduct of
its business or the business of any Subsidiary to be maintained and kept in
good condition, repair and working order and supplied with all necessary
equipment and will cause to be made all necessary repairs, renewals,
replacements, betterments and improvements thereof, all as in the judgment of
the Company may be necessary so that the business carried on in connection
therewith may be properly and advantageously conducted at all times;
PROVIDED, HOWEVER, that nothing in this Section shall prevent the Company
from discontinuing the operation or maintenance of any such properties if
such discontinuance is, in the judgment of the Company, desirable in the
conduct of its business or the business of any Subsidiary and not
disadvantageous in any material respect to the Holders.
SECTION 1007. Payment of Taxes and Other Claims.
The Company will pay or discharge or cause to be paid or discharged,
before the same shall become delinquent, (1) all taxes, assessments and
governmental charges levied or imposed upon the Company or any Subsidiary or
upon the income, profits or property of the Company or any Subsidiary, and
(2) all lawful claims for labor, materials and supplies which, if unpaid,
might by law become a lien upon the property of the Company or any Subsidiary
that comprise more than 10% of the assets of the Company and its
Subsidiaries, taken as a whole; PROVIDED, HOWEVER, that the Company shall not
be required to pay or discharge or cause to be paid or discharged any such
tax, assessment, charge or claim whose amount, applicability or validity is
being contested in good faith by appropriate proceedings.
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SECTION 1008. Waiver of Certain Covenants.
Except as otherwise specified or as contemplated by Section 301 for
Securities, the Company may, with respect to the Securities, omit in any
particular instance to comply with any term, provision or condition set forth
in any covenant provided pursuant to Section 901(2) for the benefit of the
Holders if before the time for such compliance the Holders of at least a
majority in principal amount of the Outstanding Securities shall, by Act of
such Holders, either waive such compliance in such instance or generally
waive compliance with such term, provision or condition, but no waiver shall
extend to or affect such term, provision or condition except to the extent so
expressly waived, and, until such waiver shall become effective, the
obligations of the Company and the duties of the Trustee in respect of any
such term, provision or condition shall remain in full force and effect.
SECTION 1009. Payment of the Trust's Costs and Expenses.
Since the Trust is being formed solely to facilitate an investment in the
Securities, the Company, as borrower, hereby covenants to pay all debts and
obligations (other than with respect to the Capital Securities and Common
Securities) and all costs and expenses of the Trust (including, but not
limited to, all costs and expenses relating to the organization of the Trust,
the fees and expenses of the trustees of the Trust and all costs and expenses
relating to the operation of the Trust) and to pay any and all taxes, duties,
assessments or governmental charges of whatever nature (other than
withholding taxes) imposed on the Trust by the United States, or any other
taxing authority, so that the net amounts received and retained by the Trust
and the Property Trustee after paying such expenses will be equal to the
amounts the Trust and the Property Trustee would have received had no such
costs or expenses been incurred by or imposed on the Trust. The foregoing
obligations of the Company are for the benefit of, and shall be enforceable
by, any person to whom any such debts, obligations, costs, expenses and taxes
are owed (each, a "Creditor") whether or not such Creditor has received
notice thereof. Any such Creditor may enforce such obligations of the
Company directly against the Company, and the Company irrevocably waives any
right or remedy to require that any such Creditor take any action against the
Trust or any other person before proceeding against the Company. The Company
shall execute such additional agreements as may be necessary or desirable to
give full effect to the foregoing.
SECTION 1010. Restrictions on Payments and Distributions.
The Company will not, and will not permit any Subsidiary to, (i) declare
or pay any dividends or distributions on, or redeem, purchase, acquire, or
make a liquidation payment with respect to, any of the Company's capital
stock or (ii) make any payment of principal, interest or premium, if any, on
or repay, repurchase or redeem any debt securities of the Company that rank
PARI PASSU with or junior in interest to the Securities or make any guarantee
payments with respect to any guarantee by the Company of the debt securities
of any subsidiary of the Company if such guarantee ranks PARI PASSU with or
junior in interest to the Securities (other than (a) dividends, distributions
or other payments in common stock of the Company, (b) payments under the
Guarantee, (c) any declaration of a dividend in connection with the
implementation of a shareholders' rights plan, or the issuance of stock under
any such plan in the future, or the redemption or repurchase of any such
rights pursuant thereto, (d) purchases of common stock related to the
issuance of common stock or rights under any of the Company's benefit plans,
or (e) Permitted Redemptions of the Company's common stock) if at such time
(x) there shall have occurred any event of which the Company has actual
knowledge that (I) with the giving of notice or the lapse of time, or both,
would constitute an Event of Default and (II) in respect of which the Company
shall not have taken
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reasonable steps to cure, (y) the Company shall be in default with respect to
its payment of any obligations under the Guarantee or (z) the Company shall
have given notice of its election of an Extension Period as provided herein
and shall not have rescinded such notice, or such Extension Period, or any
extension thereof, shall be continuing.
SECTION 1011. Provision of Certain Information.
The Company shall deliver (i) if the Holder of the Outstanding Securities
is the Property Trustee, to each Person who beneficially holds Capital
Securities having an aggregate Liquidation Amount that, when added to the
Liquidation Value (as defined in the Company's Certificate of Incorporation)
of any shares of the Company's Series B Preferred Stock then held by such
holder of Capital Securities, equals or exceeds One Million Dollars
($1,000,000), or (ii) if the Holder of the Outstanding Securities is not the
Property Trustee, to each Holder of Securities having an aggregate principal
amount that, when added to the Liquidation Value of all shares of the
Company's Series B Preferred Stock held by such Holder equals or exceeds One
Million Dollars ($1,000,000) (unless in each case such Person is a financial
institution that directly competes with the Company or its Subsidiaries) the
following: (a) a management letter (a "Management Letter") quarterly
discussing the operations of the Company and the summary information for each
such period within 45 days after the end of each quarter, (b) a Management
Letter and yearly financials audited by a "Big Six" accounting firm, within
90 days of year-end, (c) copies of all periodic reports filed by the Company
with the Commission under Section 13 or Section 15(d) of the Exchange Act,
and (d) if requested by such a Holder or holder of Capital Securities,
Consolidated Reports of Income and Condition for each of the Company's
operating bank Subsidiaries, to the extent permissible, within three business
days of the filing of the same with such Subsidiary's applicable federal
regulator. If the Company is filing periodic reports with the Commission
under the Exchange Act, the Company may satisfy its obligations under clauses
(a) and (b) of the immediately preceding sentence by providing such Holder
(or such holder of Capital Securities) with a copy of the relevant Form 10-Q
(or 10-QSB) or Form 10-K (or 10-KSB), together with its annual report if not
included therein in the case of the Form 10-K (or 10-KSB), within three (3)
business days after the Company files such report with the SEC. Such Holder
(or such holder of Capital Securities) shall keep all information obtained
pursuant to this paragraph confidential to the extent the same is not then
publicly available.
The Company covenants and agrees that, during the period ending on June
6, 2000, if the Company is not then subject to Section 13 or 15(d) of the
Exchange Act, and provided that the Securities or the Capital Securities, as
applicable, then constitute restricted securities for purposes of the
Securities Act, the Company shall make available to each Holder, to any
holder of Capital Securities and to any prospective purchaser of Securities
or of Capital Securities (as identified by a Holder or a holder of Capital
Securities), in connection with any sale of Securities or Capital Securities,
the information required pursuant to Rule 144A(d)(4) under the Securities Act
upon the request of the Holder or such holder of Capital Securities, all to
the extent required from time to time under such Rule to enable the Holder or
such holder of Capital Securities to sell such Securities or such Capital
Securities without registration under the Securities Act within the limits of
the exemption provided by Rule 144A, as such rule may be amended from time to
time. Further, during the period ending on June 6, 2000, if the Company is
then subject to Section 13 or 15(d) of the Exchange Act, upon the request of
the Holder or a holder of Capital Securities, the Company will deliver to the
Holder or such holder of Capital Securities a written statement as to whether
the Company has complied with the requirements of such Sections.
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ARTICLE ELEVEN
SUBORDINATION OF SECURITIES
SECTION 1101. Securities Subordinate to Senior Indebtedness.
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 (subject to Article Four),
the payment of the principal of and interest on each and all of the
Securities are hereby expressly made subordinate and subject in right of
payment to the prior payment in full of all Senior Indebtedness.
The provisions of this Article Eleven are made for the benefit of the
holders of Senior Indebtedness and such holders are made obligees hereunder
and any one or more of them may enforce such provisions. Holders of Senior
Indebtedness need not prove reliance on the subordination provisions hereof.
SECTION 1102. Default on Senior Indebtedness.
In the event and during the continuation of any default in the payment of
principal, premium, interest or any other payment due on any Senior
Indebtedness, or in the event that any event of default with respect to any
Senior Indebtedness shall have occurred and be continuing and shall have
resulted in such Senior Indebtedness 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 in the event any judicial proceeding shall be
pending with respect to any such default in payment or such event of default,
then no payment shall be made by the Company with respect to the principal
(including redemption payments) of, or interest on, the Securities.
In the event that, notwithstanding the foregoing, any payment shall be
received by the Trustee or any Holder when such payment is prohibited by the
preceding paragraph of this Section 1102, such payment shall be held in trust
for the benefit of, and shall be paid over or delivered to, the holders of
Senior Indebtedness or their respective representatives, or to the trustee or
trustees under any indenture pursuant to which any of such Senior
Indebtedness may have been issued, as their respective interests may appear,
but only to the extent that the holders of the Senior Indebtedness (or their
representative or representatives or a trustee) notify the Trustee within 90
days of such payment of the amounts then due and owing on the Senior
Indebtedness and only the amounts specified in such notice to the Trustee
shall be paid to the holders of Senior Indebtedness; PROVIDED, HOWEVER, that
holders of Senior Indebtedness 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 Indebtedness to pay such amounts over
to the obligees on trade accounts payable or other liabilities arising in the
ordinary course of the Company's business.
SECTION 1103. Prior Payment of Senior Indebtedness Upon Acceleration of
Securities.
In the event that the Securities are declared due and payable before
their Stated Maturity, then and in such event the holders of the Senior
Indebtedness outstanding at the time such Securities so become due and
payable shall be entitled to receive payment in full of all amounts then due
on or in respect of such Senior Indebtedness (including any amounts due upon
acceleration), or provision shall be made
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for such payment in cash or cash equivalents or otherwise in a manner
satisfactory to the holders of such Senior Indebtedness, before the Holders
of the Securities are entitled to receive any payment or distribution of any
kind or character, whether in cash, properties or securities, by the Company
on account of the principal of or interest on the Securities or on account of
the purchase or other acquisition of Securities by the Company or any
Subsidiary; PROVIDED, HOWEVER, that holders of Senior Indebtedness 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
Indebtedness to pay such amounts over to the obligees on trade accounts
payable or other liabilities arising in the ordinary course of the Company's
business.
In the event that, notwithstanding the foregoing, any payment shall be
received by the Trustee or any Holder when such payment is prohibited by the
preceding paragraph of this Section 1103, such payment shall be held in trust
for the benefit of, and shall be paid over or delivered to, the holders of
Senior Indebtedness or their respective representatives, or to the trustee or
trustees under any indenture pursuant to which any of such Senior
Indebtedness may have been issued, as their respective interests may appear,
but only to the extent that the holders of the Senior Indebtedness (or their
representative or representatives or a trustee) notify the Trustee within 90
days of such payment of the amounts then due and owing on the Senior
Indebtedness and only the amounts specified in such notice to the Trustee
shall be paid to the holders of Senior Indebtedness.
SECTION 1104. Liquidation; Dissolution; Bankruptcy.
Upon any payment by the Company, or distribution of assets of the Company
of any kind or character, whether in cash, property or securities, to
creditors upon any dissolution or winding-up or liquidation or reorganization
of the Company, whether voluntary or involuntary or in bankruptcy,
insolvency, receivership or other proceedings, all principal of, and premium,
if any, and interest due or to become due upon all Senior Indebtedness
(including interest after the commencement of any bankruptcy, insolvency,
receivership or other proceedings at the rate specified in the applicable
Senior Indebtedness, whether or not such interest is an allowable claim in
any such proceeding) shall first be paid in full, or payment thereof provided
for in accordance with its terms, before any payment is made on account of
the principal or interest on the Securities; and upon any such dissolution or
winding-up or liquidation or reorganization any payment by the Company, or
distribution of substantially all of the assets of the Company of any kind or
character, whether in cash, property or securities, to which the Holders of
the Securities or the Trustee would be entitled, except for the provisions of
this Article Eleven, shall be paid by the Company or by any receiver, trustee
in bankruptcy, liquidating trustee, agent or other Person making such payment
or distribution, or by the Holders of the Securities or by the Trustee under
this Indenture if received by them or it, directly to the holders of Senior
Indebtedness (pro rata to such holders on the basis of the respective amounts
of Senior Indebtedness held by such holders, as calculated by the Company) or
their representative or representatives, or to the trustee or trustees under
any indenture pursuant to which any instruments evidencing any Senior
Indebtedness may have been issued, as their respective interests may appear,
to the extent necessary to pay all Senior Indebtedness in full (including
interest after the commencement of any bankruptcy, insolvency, receivership
or other proceedings at the rate specified in the applicable Senior
Indebtedness, whether or not such interest is in an allowable claim in any
such proceeding) or to provide for such payment in accordance with its terms,
after giving effect to any concurrent payment or distribution to or for the
holders of Senior Indebtedness, before any payment or distribution is made to
the Holders of Securities or to the Trustee or the Property Trustee on behalf
of the Holders of Capital Securities; PROVIDED, HOWEVER, that such holders of
Senior Indebtedness shall not be entitled to receive payment of any such
amounts to the extent that such holders would be required by
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the subordination provisions of such Senior Indebtedness to pay such amounts
over to the obligees on trade accounts payable or other liabilities arising
in the ordinary course of the Company's business.
In the event that, notwithstanding the foregoing, any payment or
distribution of assets of the Company of any kind or character, whether in
cash, property or securities, prohibited by the foregoing, shall be received
by the Trustee or the Holders of the Securities before all Senior
Indebtedness is paid in full (including interest after commencement of any
bankruptcy, insolvency, receivership or other proceedings at the rate
specified in the applicable Senior Indebtedness, whether or not such interest
is an allowable claim in any such proceeding), or provision is made for such
payment in accordance with its terms, such payment or distribution shall be
held in trust for the benefit of and shall be paid over or delivered to the
holders of Senior Indebtedness or their representative or representatives, or
to the trustee or trustees under any indenture pursuant to which any
instruments evidencing any Senior Indebtedness may have been issued, as their
respective interests may appear, as calculated by the Company, for
application to the payment of all Senior Indebtedness remaining unpaid to the
extent necessary to pay all Senior Indebtedness in full in accordance with
its terms, after giving effect to any concurrent payment or distribution to
or for the holders of such Senior Indebtedness.
Any holder of Senior Indebtedness may file any proof of claim or
similar instrument on behalf of the Trustee and the Holders if such
instrument has not been filed by the date which is 30 days prior to the date
specified for filing thereof.
For purposes of this Article Eleven, the words "cash, property or
securities" shall not be deemed to include shares of stock of the Company as
reorganized or readjusted, or securities of the Company or any other
corporation provided for by a plan of reorganization or readjustment, the
payment of which is subordinated at least to the extent provided in this
Article Eleven with respect to the Securities to the payment of all Senior
Indebtedness that may at the time be outstanding, PROVIDED, HOWEVER, that (i)
the Senior Indebtedness is assumed by the new corporation, if any, resulting
from any such reorganization or readjustment, and (ii) the rights of the
holders of the Senior Indebtedness are not, without the consent of such
holders, altered by such reorganization or readjustment. The consolidation
of the Company with, or merger of the Company into, another corporation or
the liquidation or dissolution of the Company following the conveyance or
transfer of its property as an entirety, or substantially as an entirety, to
another corporation upon the terms and conditions provided for in Article
Eight hereof shall not be deemed a dissolution, winding-up, liquidation or
reorganization for the purposes of this Section 1104 if such other
corporation shall, as a part of such consolidation, merger, conveyance or
transfer, comply with the conditions stated in Article Eight hereof. Nothing
in Section 1103 or in this Section 1104 shall apply to claims of, or payments
to, the Trustee under or pursuant to Section 607.
SECTION 1105. Subrogation.
Subject to the payment of all Senior Indebtedness to the extent
provided in Sections 1103 and 1104 of this Indenture, the rights of the
Holders of the Securities shall be subrogated to the rights of the holders of
Senior Indebtedness to receive payments or distributions of cash, property or
securities of the Company applicable to the Senior Indebtedness until the
principal of (and premium, if any) and interest on the Securities shall be
paid in full; and, for the purposes of such subrogation, no payments or
distributions to the holders of the Senior Indebtedness 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 Eleven, shall, as between
the Company, its creditors other than holders of Senior Indebtedness, and the
Holders
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of the Securities, be deemed to be a payment by the Company to or on account
of the Senior Indebtedness. It is understood that the provisions of this
Article Eleven are and are intended solely for the purposes of defining the
relative rights of the Holders of the Securities, on the one hand, and the
holders of the Senior Indebtedness on the other hand.
Nothing contained in this Article Eleven or elsewhere in this
Indenture or in the Securities is intended to or shall impair, as between the
Company, its creditors other than the holders of Senior Indebtedness, and the
Holders of the Securities, the obligation of the Company, which is absolute
and unconditional, to pay to the Holders of the Securities the principal of
(and premium, if any) and interest on the Securities as and when the same
shall become due and payable in accordance with their terms, or is intended
to or shall affect the relative rights of the Holders of the Securities and
creditors of the Company other than the holders of the Senior Indebtedness,
nor shall anything herein or therein prevent the Trustee or the Holder of any
Security from exercising all remedies otherwise permitted by applicable law
upon default under this Indenture, subject to the rights, if any, under this
Article Eleven of the holders of Senior Indebtedness in respect of cash,
property or securities of the Company received upon the exercise of any such
remedy.
Upon any payment or distribution of assets of the Company referred
to in this Article Eleven, the Trustee, subject to the provisions of Section
601, and the Holders of the Securities, shall be entitled to rely upon any
order or decree made by any court of competent jurisdiction in which such
dissolution, winding-up, liquidation or reorganization proceedings are
pending, or a certificate of the receiver, trustee in bankruptcy, liquidation
trustee, agent or other Person making such payment or distribution, delivered
to the Trustee or to the Holders of the Securities, for the purposes of
ascertaining the Persons entitled to participate in such distribution, the
holders of the Senior Indebtedness and other Senior 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
Eleven.
SECTION 1106. Trustee to Effectuate Subordination.
Each Holder of a Security by acceptance thereof authorizes and
directs the Trustee on such Holder's behalf to take such action as may be
necessary or appropriate to effectuate the subordination provided in this
Article Eleven and appoints the Trustee such Holder's attorney-in-fact for
any and all such purposes.
SECTION 1107. Notice by the Company.
The Company shall give prompt written notice to a Responsible
Officer of the Trustee of any fact known to the Company that would prohibit
the making of any payment of monies to or by the Trustee in respect of the
Securities pursuant to the provisions of this Article Eleven.
Notwithstanding the provisions of this Article Eleven or any other provision
of this Indenture, the Trustee shall not be charged with knowledge of the
existence of any facts that would prohibit the making of any payment of
monies to or by the Trustee in respect of the Securities pursuant to the
provisions of this Article Eleven, unless and until a Responsible Officer of
the Trustee shall have received written notice thereof at the Corporate Trust
Office of the Trustee from the Company or a holder or holders of Senior
Indebtedness or from any trustee therefor; and before the receipt of any such
written notice, the Trustee, subject to the provisions of Section 601, shall
be entitled in all respects to assume that no such facts exist; PROVIDED,
HOWEVER, that if the Trustee shall not have received the notice provided for
in this Section 1107 at least three Business Days
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prior to the date upon which by the terms hereof any money may become payable
for any purpose (including, without limitation, the payment of the principal
of (or premium, if any) or interest on any Security), then, anything herein
contained to the contrary notwithstanding, the Trustee shall have full power
and authority to receive such money and to apply the same to the purposes for
which they were received, and shall not be affected by any notice to the
contrary that may be received by it within three Business Days prior to such
date.
The Trustee, subject to the provisions of Section 601, shall be
entitled to rely on the delivery to it of a written notice by a Person
representing himself to be a holder of Senior Indebtedness (or a trustee on
behalf of such holder) to establish that such notice has been given by a
holder of Senior Indebtedness or a trustee on behalf of any such holder or
holders. In the event that the Trustee determines in good faith that further
evidence is required with respect to the right of any Person as a holder of
Senior Indebtedness to participate in any payment or distribution pursuant to
this Article Eleven, the Trustee may request such Person to furnish evidence
to the reasonable satisfaction of the Trustee as to the amount of Senior
Indebtedness held by such Person, the extent to which such Person is entitled
to participate in such payment or distribution and any other facts pertinent
to the rights of such Person under this Article Eleven, and if such evidence
is not furnished the Trustee may defer any payment to such Person pending
judicial determination as to the right of such Person to receive such payment.
SECTION 1108. Rights of the Trustee; Holders of Senior Indebtedness.
The Trustee in its individual capacity shall be entitled to all the
rights set forth in this Article Eleven in respect of any Senior Indebtedness
at any time held by it, to the same extent as any other holder of Senior
Indebtedness, and nothing in this Indenture shall deprive the Trustee of any
of its rights as such holder.
With respect to the holders of Senior Indebtedness, the Trustee
undertakes to perform or to observe only such of its covenants and
obligations as are specifically set forth in this Article Eleven, and no
implied covenants or obligations with respect to the holders of Senior
Indebtedness shall be read into this Indenture against the Trustee. The
Trustee shall not be deemed to owe any fiduciary duty to the holders of
Senior Indebtedness and, subject to the provisions of Section 601, the
Trustee shall not be liable to any holder of Senior Indebtedness if it shall
pay over or deliver to holders of Securities, the Company or any other Person
money or assets to which any holder of Senior Indebtedness shall be entitled
by virtue of this Article Eleven or otherwise.
SECTION 1109. Subordination May Not Be Impaired.
No right of any present or future holder of any Senior Indebtedness
to enforce subordination as herein provided shall at any time in any way be
prejudiced or impaired by any act or failure to act on the part of the
Company or by any act or failure to act, in good faith, by any such holder,
or by any noncompliance by the Company with the terms, provisions and
covenants of this Indenture, regardless of any knowledge thereof that any
such holder may have or otherwise be charged with.
Without in any way limiting the generality of the foregoing
paragraph, the holders of Senior Indebtedness may, at any time and from time
to time, without the consent of or notice to the Trustee or the Holders of
the Securities, without incurring responsibility to the Holders of the
Securities and without impairing or releasing the subordination provided in
this Article or the obligations hereunder of
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the Holders of the Securities to the holders of Senior Indebtedness, do any
one or more of the following: (i) change the manner, place or terms of
payment or extend the time of payment of, or renew or alter, Senior
Indebtedness or otherwise amend or supplement in any manner Senior
Indebtedness or any instrument evidencing the same or any agreement under
which Senior Indebtedness is outstanding; (ii) sell, exchange, release or
otherwise deal with any property pledged, mortgaged or otherwise securing
Senior Indebtedness; (iii) release any Person liable in any manner for the
collection of Senior Indebtedness; and (iv) exercise or refrain from
exercising any rights against the Company and any other Person.
ARTICLE TWELVE
REDEMPTION OF SECURITIES
SECTION 1201. Optional Redemption; Conditions to Optional Redemption.
At any time on or after June 6, 2007, the Company shall have the
right, subject to the last paragraph of this Section 1201 and to the receipt
of any necessary prior approval of the Federal Reserve, to redeem the
Securities (such redemption being called an "Optional Redemption"), in whole
or in part, from time to time, at the Redemption Prices set forth below
(expressed as a percentage of the principal amount of the Securities to be
redeemed), plus any accrued but unpaid interest (including any Additional
Interest) to the Redemption Date, if redeemed during the twelve-month periods
beginning on the dates indicated below:
June 6, 2007 . . . . . . . . . . . . . . . . .105.875%
June 6, 2008 . . . . . . . . . . . . . . . . .105.288%
June 6, 2009 . . . . . . . . . . . . . . . . .104.700%
June 6, 2010 . . . . . . . . . . . . . . . . .104.113%
June 6, 2011 . . . . . . . . . . . . . . . . .103.525%
June 6, 2012 . . . . . . . . . . . . . . . . .102.938%
June 6, 2013 . . . . . . . . . . . . . . . . .102.350%
June 6, 2014 . . . . . . . . . . . . . . . . .101.763%
June 6, 2015 . . . . . . . . . . . . . . . . .101.175%
June 6, 2016 . . . . . . . . . . . . . . . . .100.588%
At all times on or after June 6, 2017, the Redemption Price will be
100% of the principal amount of Securities to be redeemed, plus accrued and
unpaid interest, if any, to the Redemption Date.
For so long as the Trust is the Holder of all Securities
Outstanding, the proceeds of any redemption described in this Section 1201
shall be used by the Trust to redeem Common Securities and Capital Securities
in accordance with their terms. The Company shall not redeem the Securities
in part in an Optional Redemption unless all accrued and unpaid interest
(including any Additional Interest) has been paid in full on all Securities
outstanding for all quarterly interest periods terminating on or prior to the
Redemption Date.
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SECTION 1202. Redemption Upon Special Event; Conditions to Special Redemption.
If a Special Event shall occur and be continuing, the Company shall
have the right, subject to the last paragraph of this Section 1202 and to the
receipt of any necessary prior approval of the Federal Reserve, to redeem,
upon not less than 30 days nor more than 60 days notice, the Securities, in
whole or in part, at a Redemption Price equal to the Special Redemption
Price.
The "Special Redemption Price" shall equal the greater of (i) 100%
of the principal amount of the Securities then to be redeemed, or (ii) an
amount, determined by the Quotation Agent, equal to the sum of the present
values of the principal amount and premium payable with respect to an
Optional Redemption effected on June 6, 2007, together with scheduled
payments of interest accruing over the Remaining Life, discounted to the date
of the Special Redemption on a quarterly basis (assuming a 360-day year
consisting of 30-day months) at a rate equal to the Special Redemption
Discount Rate, plus, in each case, accrued interest thereon to the Redemption
Date. The "Special Redemption Discount Rate" means, with respect to any
Special Redemption, a rate determined by the Quotation Agent equal to the
Treasury Rate as of the third Business Day prior to the applicable Redemption
Date, plus (i) if the Redemption Date is on or before June 6, 1998, 4.75%
(475 basis points), or (ii) if the Redemption Date is after June 6, 1998,
4.00% (400 basis points).
Absent manifest error, the Quotation Agent's calculation of the
Special Redemption Price, including its determination of the Treasury Rate,
shall be final and binding on the Holders of the Securities.
For so long as the Trust is the Holder of all Securities
Outstanding, the proceeds of any redemption described in this Section 1202
shall be used by the Trust to redeem Common Securities and Capital Securities
in accordance with their terms. The Company shall not redeem the Securities
in part in a Special Redemption unless (a) all accrued and unpaid interest
(including any Additional Interest) has been paid in full on all Securities
outstanding for all quarterly interest periods terminating on or prior to the
Redemption Date, and (b) there shall remain Outstanding following such
Special Redemption Securities having an aggregate principal amount of not
less than $15,000,000.
SECTION 1203. Applicability of Article.
Redemption of Securities at the election of the Company, as
permitted by Sections 1201 and 1202, shall be made in accordance with such
provision and this Article.
SECTION 1204. Election to Redeem; Notice to Trustee.
The election of the Company to redeem Securities pursuant to
Section 1201 or Section 1202 shall be evidenced by a Board Resolution. In
case of any redemption at the election of the Company, the Company shall, at
least 45 days and no more than 60 days prior to the Redemption Date fixed by
the Company, notify the Trustee of such Redemption Date and of the principal
amount of Securities to be redeemed and provide a copy of the notice of
redemption given to Holders of Securities to be redeemed pursuant to Section
1205.
-54-
<PAGE>
SECTION 1205. Selection by Trustee of Securities to be Redeemed.
If less than all the Securities are to be redeemed (unless such
redemption affects only a single Security), the particular Securities to be
redeemed shall be selected by lot (or such other method of selection as the
Trustee may customarily employ) not more than 60 days prior to the Redemption
Date by the Trustee, from the Outstanding Securities not previously called
for redemption.
The Trustee shall promptly notify the Company in writing of the
Securities selected for redemption as aforesaid and, in case of any
Securities selected for partial redemption as aforesaid, the principal amount
thereof to be redeemed.
The provisions of the two preceding paragraphs shall not apply with
respect to any redemption affecting only a single Security, whether such
Security is to be redeemed in whole or in part. In the case of any such
redemption in part, the unredeemed portion of the principal amount of the
Security shall be in an authorized denomination (which shall not be less than
the minimum authorized denomination) for such Security.
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 Securities redeemed or to be redeemed only in
part, to the portion of the principal amount of such Securities which has
been or is to be redeemed.
SECTION 1206. Notice of Redemption.
Notice of redemption shall be given by first-class mail, postage
prepaid, mailed not less than 30 (provided that the Trustee shall itself have
received notice not less than 45 days prior to the Redemption Date) nor more
than 60 days prior to the Redemption Date, to each Holder of Securities to be
redeemed, at its address appearing in the Security Register.
All notices of redemption shall identify the Securities to be
redeemed (including CUSIP number) and shall state:
(1) the Redemption Date,
(2) the Redemption Price,
(3) that on the Redemption Date the Redemption Price will become
due and payable upon each such Security to be redeemed and that interest
thereon will cease to accrue on and after said date, and
(4) the place or places where such Securities are to be
surrendered for payment of the Redemption Price.
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.
-55-
<PAGE>
SECTION 1207. Deposit of Redemption Price.
On or prior to any Redemption Date, the Company shall deposit with
the Trustee or with a Paying Agent (or, if the Company is acting as its own
Paying Agent, segregate and hold in trust as provided in Section 1003) an
amount of money sufficient to pay the Redemption Price of, and (except if the
Redemption Date shall be an Interest Payment Date) accrued interest
(including any Additional Interest) on, all the Securities which are to be
redeemed on that date; PROVIDED, HOWEVER, that any such deposit on a
Redemption Date shall be initiated prior to 12:00 noon (New York time) in
same-day funds.
SECTION 1208. Securities Payable on Redemption Date.
Notice of redemption having been given as aforesaid, the Securities
so to be redeemed shall, on the Redemption Date, become due and payable at
the Redemption Price therein specified, and from and after such date (unless
the Company shall default in the payment of the Redemption Price and accrued
interest (including any Additional Interest)) such Securities shall cease to
bear interest. Upon surrender of any such Security for redemption in
accordance with said notice, such Security shall be paid by the Company at
the Redemption Price, together with accrued interest to the Redemption Date;
PROVIDED, HOWEVER, that installments of interest whose Stated Maturity is on
or prior to the Redemption Date shall be payable to the Holders of such
Securities, or one or more Predecessor Securities, registered as such at the
close of business on the relevant Record Dates according to their terms and
the provisions of Section 307.
If any Security called for redemption shall not be so paid upon
surrender thereof for redemption, the principal shall, until paid, bear
interest from the Redemption Date at the rate borne by the Security.
SECTION 1209. Securities Redeemed in Part.
Any Security which is to be redeemed only in part shall be
surrendered at a place of payment therefor (with, if the Company or the
Trustee so requires, due endorsement by, or a written instrument of transfer
in form satisfactory to the Company and the Trustee duly executed by, the
Holder therefor or its attorney duly authorized in writing), and the Company
shall execute, and the Trustee shall authenticate and deliver to the Holder
of such Security without service charge, a new Security or Securities, of any
authorized denomination as requested by such Holder, in aggregate principal
amount equal to and in exchange for the unredeemed portion of the principal
of the Security so surrendered.
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.
[remainder of page intentionally blank]
-56-
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to
be duly executed, all as of the day and year first above written.
COMMERCE SECURITY BANCORP, INC.
By:
----------------------------------------------
Name: Robert P. Keller
Title: President and Chief Executive Officer
WILMINGTON TRUST COMPANY, as Trustee
By:
----------------------------------------------
Name:
Title:
<PAGE>
EXHIBIT 4.3
COMMERCE SECURITY BANCORP, INC.
11 3/4% Junior Subordinated Debentures due 2027
$28,513,000
No. 1
COMMERCE SECURITY BANCORP, INC., a corporation duly organized and
existing under the laws of the State of Delaware (herein called the
"Company", which term includes any successor corporation under the Indenture
hereinafter referred to), for value received, hereby promises to pay to
Wilmington Trust Company, as Trustee, or registered assigns, the principal
sum of Twenty-Eight Million Five Hundred Thirteen Thousand Dollars and no/100
($28,513,000) on June 6, 2027, and to pay interest on said principal sum from
June 30, 1997 or from the most recent interest payment date (each such date,
an "Interest Payment Date") to which interest has been paid or duly provided
for, quarterly (subject to deferral as set forth herein) in arrears on the
30th day of March, June, September and December of each year, commencing
September 30, 1997, at a rate of 11 3/4% per annum until the principal hereof
shall have become due and payable (plus Additional Interest, if any), and on
any overdue principal and (without duplication and to the extent that payment
of such interest is enforceable under applicable law) on any overdue
installment of interest at the same rate per annum. The amount of interest
payable for any period will be computed on the actual number of days elapsed
and a year of 360 days. The amount of interest payable for any period
shorter than a full quarterly period for which interest is computed, will be
computed on the basis of actual number of days elapsed in such 90-day period.
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 (except that, if
such Business Day is in the next succeeding calendar year, such interest
shall be paid on the immediately preceding Business Day), with the same force
and effect as if made on the date the payment was originally payable,
PROVIDED that no interest shall accrue and no reduction in the amount of such
interest shall be effected, for the period either before or following such
Interest Payment Date, on account of such delayed or accelerated payment. A
"Business Day" shall mean any day other than a Saturday or a Sunday or a day
on which banking institutions in Huntington Beach, California or Wilmington,
Delaware are authorized or required by law or executive order to remain
closed or a day on which the Corporate Trust Office of the Trustee, or the
principal office of the Property Trustee under the Declaration, 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 the Securities (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 in which such 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 the
Securities for 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 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 may be
listed, and upon such notice as may be required by such exchange, all as more
fully provided in said Indenture.
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 20 quarterly periods (an "Extension Period"), provided that no
Extension Period may extend past the Stated Maturity of this Security. There
may be multiple Extension Periods of varying lengths during the term of this
Security. At the end of each
<PAGE>
Extension Period, if any, the Company shall pay all interest then accrued and
unpaid, together with interest thereon, compounded quarterly at the rate
specified on this Security to the extent permitted by applicable law. During
any such Extension Period, the Company may not, and may not permit any
subsidiary of the Company to, (i) declare or pay any dividends or
distributions on, or redeem, purchase, acquire, or make a liquidation payment
with respect to, any of the Company's capital stock or (ii) make any payment
of principal, interest or premium, if any, on or repay, repurchase or redeem
any debt securities of the Company that rank PARI PASSU with or junior in
interest to the Securities or make any guarantee payments with respect to any
guarantee by the Company of the debt securities of any subsidiary of the
Company if such guarantee ranks PARI PASSU or junior in interest to the
Securities (other than (a) dividends, distributions or other payments in
common stock of the Company, (b) payments under the Guarantee, (c) any
declaration of a dividend in connection with the implementation of a
shareholders' rights plan, or the issuance of stock under any such plan in
the future, or the redemption or repurchase of any such rights pursuant
thereto, (d) purchases of common stock related to the issuance of common
stock or rights under any of the Company's benefit plans, or (e) Permitted
Redemptions of the Company's common stock) As used herein, a Permitted
Redemption means a redemption of Class B Common Stock of the Company from any
person that (x) owns less than 1% of the then-outstanding shares of the
Company's Class B Common Stock and (y) is not then, and has not been within
the 12 months preceding such date, an officer or director of the Company;
PROVIDED that a redemption or repurchase of Class B Common Stock will not
constitute a Permitted Redemption if the cumulative amount of all Permitted
Redemptions (through and including the proposed redemption) exceeds $2.5
million. Prior to the termination of any such Extension Period, the Company
may further extend the interest payment period, provided that no Extension
Period may exceed 20 consecutive quarterly periods or extend beyond the
Stated Maturity of the Securities. Upon the termination of any such
Extension Period and the payment of all amounts having been accrued and not
paid together with all amounts then due on any Interest Payment Date, the
Company may elect to begin a new Extension Period subject to the above
requirements. No interest shall be due and payable during an Extension
Period, except at the end thereof. The Company shall give the Trustee notice
of its election of such Extension Period at least one Business Day prior to
the record date for the related interest payment.
Payment of the principal of and interest on this Security will be made at
the office or agency of the Paying Agent 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 election of the Holder hereof, payment of
interest shall be made to such Holder (i) by check mailed to the address of the
Person entitled thereto as such address shall appear in the Security 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
Security Register.
The indebtedness evidenced by this Security is, to the extent provided
in the Indenture, subordinate and subject in right of payment to the prior
payment in full of all Senior Indebtedness, and this Security is issued
subject to the provisions of the Indenture with respect thereto. Each Holder
of this Security, by accepting the same, (a) agrees to and shall be bound by
such provisions, (b) authorizes and directs the Trustee on its behalf to take
such action as may be necessary or appropriate to effectuate the
subordination so provided and (c) appoints the Trustee its 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 Indebtedness, whether
now outstanding or hereafter incurred, and waives reliance by each such
holder upon said provisions.
<PAGE>
In addition, each Holder hereof, by such Holder's acceptance hereof,
agrees to treat the Junior Subordinated Debentures evidenced hereby as
indebtedness of the Company for all United States tax purposes.
Reference is hereby made to the further provisions of the Indenture
summarized 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.
[remainder of page intentionally blank]
<PAGE>
IN WITNESS WHEREOF, Commerce Security Bancorp, Inc. has caused this
instrument to be duly executed.
Dated: July 15, 1997
COMMERCE SECURITY BANCORP, INC.
By:
----------------------------
Name:
Title:
<PAGE>
[Form of Reverse of Security]
This Security is one of a duly authorized issue of Securities of
Commerce eScurity Bancorp, Inc. (the "Company"), designated as its 11 3/4%
Junior Subordinated Debentures due 2027 (herein called the "Securities"),
issued under an Indenture, dated as of July 15, 1997 (herein called the
"Indenture"), between the Company and Wilmington Trust Company, a Deleware
banking corporation, 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.
All terms used in this Security which are defined in the Indenture shall
have the meanings assigned to them in the Indenture.
At any time on or after June 6, 2007, the Company shall have the right,
subject to the terms and conditions of Article Twelve of the Indenture, to
redeem this Security at the option of the Company, in whole or in part, at
the Redemption Prices set forth below (expressed as a percentage of the
principal amount hereof to be redeemed), plus any accrued but unpaid interest
(including any Additional Interest) to the Redemption Date, if redeemed
during the twelve-month periods beginning on the dates indicated below:
June 6, 2007 . . . . . . . . . . . . . . . .105.875%
June 6, 2008 . . . . . .. . . . . . . . . .105.288%
June 6, 2009 . . . . . . . . . . . . . . . .104.700%
June 6, 2010 . . . . . . . . . . . . . . . .104.113%
June 6, 2011 . . . . . . . . . . . . . . . .103.525%
June 6, 2012 . . . . . . . . . . . . . . . .102.938%
June 6, 2013 . . . . . . . . . . . . . . . .102.350%
June 6, 2014 . . . . . . . . . . . . . . . .101.763%
June 6, 2015 . . . . . . . . . . . . . . . .101.175%
June 6, 2016 . . . . . . . . . . . . . . . .100.588%
At all times on or after June 6, 2017, the Redemption Price will be
100% of the principal amount hereof to be redeemed, plus accrued and unpaid
interest, if any, to the Redemption Date.
If a Special Event as defined in Article Twelve of the Indenture shall
occur and be continuing, the Company shall have the right, subject to the
terms and conditions of Article Twelve of the Indenture, to redeem this
Security at the option of the Company, without premium or penalty, in whole
or in part (subject to the limitations set forht below), at a Special
Redemption Price equal to the greater of (i) 100% of the principal amount
hereof then to be redeemed, or (ii) an amount, determined by the Quotation
Agent, equal to the sum of the present values of the principal amount and
premium payable with respect to an Optional Redemption effected on June 6,
2007, together with scheduled payments of interest accruing over the
Remaining Life, discounted to the date of the Special Redemption on a
quarterly basis (assuming a 360-day year consisting of 30-day months) at a
rate equal to the Special Redemption Discount Rate, plus, in each case,
accrued interest thereon to the Redemption Date. The "Special Redemption
Discount Rate" means, with respect to any Special Redemption, a rate
determined by the Quotation Agent equal to the Treasury Rate as of the third
Business Day prior to the applicable Redemption Date, plus (i) if the
Redemption Date is on or before June 6, 1998, 4.75% (475 basis points), or
(ii) if the Redemption Date is after June 6, 1998, 4.00% (400 basis points).
Any redemption pursuant to this paragraph will be made upon not less than 30
nor more than 60 days notice. If the Securities are only partially redeemed
by the Company, the Securities will be redeemed by lot (or such other method
of selection as the Trustee may customarily employ). In the event of
redemption of this Security in part only, a new Security or Securities for
the unredeemed portion hereof will be issued in the name of the Holder hereof
upon the cancellation hereof. The Company shall not redeem the Securities in
part in a Special Redemption unless there shall remain Outstanding following
such Special Redemption Securities having an aggregate principal amount of
not less than $15,000,000.
If an Event of Default with respect to the Securities shall occur and be
continuing, the principal of the Securities may be declared due and payable
in the manner, with the effect and subject to the conditions provided in the
Indenture.
<PAGE>
The Indenture contains provisions for satisfaction and discharge or
legal defeasance of the entire indebtedness of this Security and for the
defeasance of certain covenants under the Indenture at any time upon
compliance by the Company with certain conditions set forth in the Indenture.
The Indenture contains provisions permitting the Company and the
Trustee, with the consent of Holders of not less than a majority in principal
amount of the Outstanding Securities affected by such modification, to modify
the Indenture in a manner affecting the rights of the Holders of the
Securities; PROVIDED that no such modification may, without the consent of
the Holder of each Outstanding Security affected thereby, (i) change the
maturity of the principal of, or any installment of interest on, such
Security or reduce the principal amount thereof, or the rate of payment of
interest thereon, or extend the time of payment of interest thereon (except
such extensions as are provided for in such Security), or change the place of
payment where, or the coin or currency in which, such Security or interest
thereon is payable, or impair the right to institute suit for the enforcement
of such payment on or after the Maturity thereof (or, in the case of
redemption, on or after the Redemption Date), or modify the provisions of the
Indenture with respect to the subordination of the Securities in a manner
adverse to the Holders, (ii) reduce the percentage in principal amount of the
Outstanding Securities, the consent of whose Holders is required for such
supplemental Indenture or the consent of whose Holders is required for any
waiver of compliance with certain provisions of the Indenture or certain
defaults hereunder and their consequences provided for in the Indenture, or
(iii) modify any of the provisions of Section 513, Section 902 or Section
1008 of the Indenture, except to increase any such percentage or to provide
that certain other provisions of the Indenture cannot be modified or waived
without the consent of the Holder of each Outstanding Security affected
thereby, PROVIDED that, so long as any of the Capital Securities remains
outstanding, no such amendment shall be made that adversely affects the
holders of the Capital Securities, and no termination of the Indenture shall
occur, and no waiver of an Event of Default or compliance with any covenant
under the Indenture shall be effective, without the prior consent of the
holders of at least a majority of the aggregate liquidation amount of the
outstanding Capital Securities unless and until the principal of and any
premium on the Securities and all accrued and unpaid interest thereon have
been paid in full.
No reference herein to the Indenture and no provision of this Security
or of the Indenture shall alter or impair the obligation of the Company,
which is absolute and unconditional, to pay the principal of and interest on
this Security at the times, place and rate, and in the coin or currency,
herein prescribed.
As provided in the Indenture and subject to certain limitations therein
set forth, the transfer of this Security is registrable in the Security
Register, upon surrender of this Security for registration of transfer at the
office or agency of the Company, duly endorsed by, or accompanied by a
written instrument of transfer in form satisfactory to the Company and the
Security Registrar duly executed by, the Holder hereof or his attorney duly
authorized in writing, and thereupon one or more new Securities, of
authorized denominations and for the same aggregate principal amount, 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 may
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 are issuable only in registered form without coupons in
denominations of $1,000 and any integral multiple thereof. As provided in
the Indenture and subject to certain limitations therein set forth,
Securities are exchangeable for a like aggregate principal amount of
Securities of a different authorized denomination, as requested by the Holder
surrendering the same.
THE SECURITIES AND THE INDENTURE SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE WITHOUT REGARD TO CONFLICTS
OF LAWS PRINCIPLES THEREOF.
<PAGE>
This is one of the Securities referred to in the within-mentioned
Indenture.
WILMINGTON TRUST COMPANY, as Trustee
By:
----------------------------------
Authorized Signatory
Dated: ________ __, ____
<PAGE>
In connection with any transfer of this Security occurring prior to
the date which is the earlier of (i) the date of the declaration by the
Commission of the effectiveness of a registration statement under the
Securities Act covering resales of this Security (which effectiveness shall
not have been suspended or terminated at the date of the transfer) and (ii)
two years after the later of the date of original issue and the last date on
which the Company or any affiliate of the Company was the owner of such
Security (or any predecessor thereto) (the "Resale Restriction Termination
Date"), the undersigned confirms that it has not utilized any general
solicitation or general advertising in connection with the transfer and that
such transfer is being made:
[CHECK ONE]
(1) ___ to the Company or a subsidiary thereof; or
(2) ___ pursuant to and in compliance with Rule 144A under the Securities
Act of 1933, as amended; or
(3) ___ to an institutional "accredited investor" (as defined in Rule
501(a)(1), (2), (3) or (7) under the Securities Act of 1933, as
amended) that has furnished to the Trustee a signed letter containing
certain representations and agreements (the form of which letter can
be obtained from the Trustee); or
(4) ___ pursuant to the exemption from registration provided by Rule 144 under
the Securities Act of 1933, as amended; or
(5) ___ pursuant to an effective registration statement under the Securities
Act of 1933, as amended; or
(6) ___ pursuant to another available exemption from the registration
requirements of the Securities Act of 1933, as amended.
Unless one of the boxes is checked, the Trustee will refuse to register any
of the Securities evidenced by this certificate in the name of any person
other than the registered Holder thereof; PROVIDED, HOWEVER, that if box (3),
(4), or (6) is checked, the Company or the Trustee may require, prior to
registering any such transfer of the Securities, in its sole discretion, such
written legal opinions, certifications (including an investment letter in the
case of box (3)) and other information as the Trustee or 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 of 1933, as amended.
If none of the foregoing boxes is checked, the Trustee or Registrar shall not
be obligated to register this Security in the name of any person other than
the Holder hereof unless and until the conditions to any such transfer of
registration set forth herein and in Section 315 of the Indenture shall have
been satisfied.
Dated: Signed:
------------------------------------------
(Sign exactly as name appears on the other side of
this Security)
Signature Guarantee:
------------------------------
Participant in a Recognized Signature Guarantee Medallion Program
TO BE COMPLETED BY PURCHASER IF (2) ABOVE IS CHECKED
The undersigned represents and warrants that it is purchasing this
Security for its own account or an account with respect to which it exercises
sole investment discretion and that it and any such account is a "qualified
institutional buyer" within the meaning of Rule 144A under the Securities Act
and is aware that the sale to it is being made in reliance on Rule 144A and
acknowledges that it has received such information regarding the Company as
the undersigned has requested pursuant to Rule 144A or has determined not to
request such information and that it is aware that the transferor is relying
upon the undersigned's foregoing representations in order to claim the
exemption from registration provided by Rule 144A.
Dated:
---------------------------------------
NOTICE: To be executed by an executive officer
DEBENTUR
<PAGE>
EXHIBIT 4.4
- -------------------------------------------------------------------------------
AMENDED AND RESTATED GUARANTEE AGREEMENT
CSBI CAPITAL TRUST I
DATED AS OF JULY 15, 1997
- -------------------------------------------------------------------------------
<PAGE>
AMENDED AND RESTATED GUARANTEE AGREEMENT
This AMENDED AND RESTATED GUARANTEE AGREEMENT (the "Guarantee"), dated
as of July 15, 1997, is executed and delivered by Commerce Security Bancorp,
Inc., a Delaware corporation (the "Guarantor"), and Wilmington Trust Company, a
Delaware banking corporation, as trustee (the "Guarantee Trustee"), for the
benefit of the Holders (as defined herein) of the Securities (as defined herein)
of CSBI Capital Trust I, a Delaware statutory business trust (the "Trust").
W I T N E S S E T H :
WHEREAS, pursuant to the Declaration (as defined herein), the Trust
has issued, and may in the future issue additional, capital securities,
having a liquidation amount of $1,000 per capital security, designated the 11
3/4% Subordinated Capital Income Securities, Series A (the "Capital
Securities") and common securities, having a liquidation amount of $1,000 per
common security, designated the Common Securities (the "Common Securities,"
and together with the Capital Securities, the "Securities");
WHEREAS, as incentive for the original Holders to purchase the
Securities, the Guarantor executed a Capital Securities Guarantee Agreement,
dated as of June 6, 1997 (the "Original Guarantee"), in which the Guarantor
irrevocably and unconditionally agreed, to the extent set forth in the
Original Guarantee, to pay to the Holders of the Securities the Guarantee
Payments (as defined therein) and to make certain other payments on the terms
and conditions set forth therein; and
WHEREAS, with the consent of the existing Holders (such consent
having duly been given), the Guarantor desires to amend and restate each and
every term and provision of the Original Guarantee.
NOW, THEREFORE, in consideration of the purchase by Lehman Brothers
Inc. of Securities, which purchase the Guarantor hereby agrees shall benefit
the Guarantor, the Guarantor executes and delivers this Guarantee for the
benefit of the Holders.
ARTICLE 1.
INTERPRETATION AND DEFINITIONS
SECTION 1.1 INTERPRETATION AND DEFINITIONS. In this Guarantee,
unless the context otherwise requires:
(a) capitalized terms used in this Guarantee but not defined in the
preamble above have the respective meanings assigned to them in this
Section 1.1;
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(b) a term defined anywhere in this Guarantee has the same meaning
throughout;
(c) all references to "the Guarantee" or "this Guarantee" are to this
Guarantee as modified, supplemented or amended from time to time;
(d) all references in this Guarantee to Articles and Sections are to
Articles and Sections of this Guarantee, unless otherwise specified;
(e) a term defined in the Trust Indenture Act has the same meaning
when used in this Guarantee, unless otherwise defined in this Guarantee or
unless the context otherwise requires; and
(f) a reference to the singular includes the plural and vice versa and
a reference to the masculine includes, as applicable, the feminine.
"Affiliate" has the same meaning as given to that term in Rule 405 of
the Securities Act of 1933, as amended, or any successor rule thereunder.
"Business Day" has the meaning given to such term in the Indenture.
"Corporate Trust Office" means the office of the Guarantee Trustee
at which the corporate trust business of the Guarantee Trustee shall at any
particular time, be principally administered, which office at the date of
execution of this Guarantee is located at Wilmington Trust Company, Rodney
Square North, 1100 N. Market Street, Wilmington, Delaware 19890-0001,
Attention: Corporate Trust Services.
"Covered Person" means any Holder or beneficial owner of Securities.
"Debentures" means the series of junior subordinated debentures
issued or to be issued, in one or more issuances, by the Guarantor,
designated the 11 3/4% Junior Subordinated Debentures due 2027, held by the
Property Trustee (as defined in the Declaration) of the Trust.
"Declaration" means the Amended and Restated Declaration of Trust,
dated as of July 15, 1997, as amended, modified or supplemented from time to
time, among the trustees of the Trust named therein, the Guarantor, as
sponsor, and the holders from time to time of undivided beneficial ownership
interests in the assets of the Trust.
"Guarantee Event of Default" means a default by the Guarantor on
any of its payment or other obligations under this Guarantee.
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"Guarantee Trustee" means Wilmington Trust Company, until a
successor Guarantee Trustee has been appointed and has accepted such
appointment pursuant to the terms of this Guarantee and thereafter means each
such Successor Guarantee Trustee.
"Guarantee Payments" means the following payments or distributions,
without duplication, with respect to the Securities, to the extent not paid
or made by the Trust: (i) any accrued and unpaid Distributions (as defined in
the Declaration) that are required to be paid on such Securities to the
extent the Trust shall have sufficient funds available therefor at the time,
(ii) the redemption price with respect to any Securities called for
redemption by the Trust, to the extent the Trust shall have sufficient funds
available therefor at the time, and (iii) upon a voluntary or involuntary
dissolution, winding-up or termination of the Trust (other than in connection
with the distribution of Debentures to the Holders in exchange for Securities
as provided in the Declaration), the lesser of (a) the aggregate liquidation
amount and all accrued and unpaid Distributions on the Securities to the date
of payment, to the extent the Trust shall have sufficient funds available
therefor at the time, and (b) the amount of assets of the Trust remaining
available for distribution to Holders (in either case, the "Liquidation
Distribution"). If a Trust Enforcement Event (as defined in the Declaration)
has occurred and is continuing, the rights of holders of the Common
Securities to receive Guarantee Payments under this Guarantee are
subordinated to the rights of Holders of the Capital Securities to receive
payments hereunder.
"Holder" shall mean any holder of Securities, as registered on the
books and records of the Trust; provided, however, that, in determining
whether the Holders of the requisite percentage of Capital Securities have
given any request, notice, consent or waiver hereunder, "Holder" shall not
include the Guarantor or any Affiliate of the Guarantor or any other obligor
on the Capital Securities; and provided further, that in determining whether
the Holders of the requisite liquidation amount of Capital Securities have
voted on any matter provided for in this Guarantee, then for the purpose of
such determination only (and not for any other purpose hereunder), if the
Capital Securities remain in the form of one or more Global Certificates (as
defined in the Declaration), the term "Holders" shall mean the holder of the
Global Certificate acting at the direction of the beneficial holders of the
securities.
"Indemnified Person" means the Guarantee Trustee, any Affiliate of
the Guarantee Trustee, and any officers, directors, shareholders, members,
partners, employees, representatives, nominees, custodians or agents of the
Guarantee Trustee.
"Indenture" means the Indenture, dated as of July 15, 1997, among
the Guarantor and Wilmington Trust Company, as trustee, and any indenture
supplemental thereto pursuant to which the Debentures are to be issued to the
Property Trustee (as defined in the Declaration) of the Trust.
"Majority in Liquidation Amount of the Securities" means, except as
provided in the terms of the Securities or by the Trust Indenture Act,
Holder(s) of outstanding Securities, voting separately as a class, who are
the record holders of more than 50% of the aggregate liquidation amount
(including the stated amount that would be paid on redemption, liquidation or
otherwise,
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plus accrued and unpaid Distributions to the date upon which the voting
percentages are determined) of all outstanding Securities. In determining
whether the Holders of the requisite amount of Securities have voted,
Securities which are owned by the Guarantor or any Affiliate of the Guarantor
shall be disregarded for the purpose of any such determination.
"Officers' Certificate" means, with respect to any Person, a
certificate signed on behalf of such Person by two Authorized Officers (as
defined in the Declaration) of such Person. Any Officers' Certificate
delivered with respect to compliance with a condition or covenant provided
for in this 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 statement that each such officer has made such examination or
investigation as, in such officer's opinion, is necessary to enable such
officer on behalf of such Person to express an informed opinion as to
whether or not such covenant or condition has been complied with; and
(c) a statement as to whether, in the opinion of each such officer
acting on behalf of such Person, such condition or covenant has been
complied with.
"Outstanding" has the meaning given to such term in the Indenture.
"Person" means a legal person, including any individual, corporation,
estate, partnership, joint venture, association, joint stock company, limited
liability company, trust, unincorporated association, or government or any
agency or political subdivision thereof, or any other entity of whatever nature.
"Responsible Officer" means, with respect to the Guarantee Trustee,
any officer within the Corporate Trust Office of the Guarantee Trustee,
including any vice president, any assistant vice president, the secretary, any
assistant secretary, the treasurer, any assistant treasurer or other officer of
the Corporate Trust Office of the Guarantee Trustee customarily performing
functions similar to those performed by any of the above designated officers and
also means, with respect to a particular corporate trust matter, any other
officer to whom such matter is referred because of that officer's knowledge of
and familiarity with the particular subject.
"Successor Guarantee Trustee" means a successor Guarantee Trustee
possessing the qualifications to act as Guarantee Trustee under Section 4.1.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as
amended from time to time, or any successor legislation.
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ARTICLE 2
TRUST INDENTURE ACT
SECTION 2.1 TRUST INDENTURE ACT; APPLICATION. (a) This Guarantee is
subject to the provisions of the Trust Indenture Act that are required to be
part of this Guarantee and shall, to the extent applicable, be governed by such
provisions.
(b) If and to the extent that any provision of this 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 LISTS OF HOLDERS OF SECURITIES. (a) The Guarantor
shall provide the Guarantee Trustee with a list, in such form as the
Guarantee Trustee may reasonably require, of the names and addresses of the
Holders of the Securities ("List of Holders"), (i) quarterly, not later than
the Business Day immediately following each record date for distributions on
the Securities as fixed under the Declaration, and current as of such record
date, and (ii) at such other times as the Guarantee Trustee may request in
writing, within 30 days of receipt by the Guarantor of a written request from
the Guarantee Trustee for a List of Holders as of a date no more than 15 days
before such List of Holders is given to the Guarantee Trustee; excluding from
any such list names and addresses received by the Guarantee Trustee in its
capacity as Security Registrar (as defined in the Indenture). The Guarantee
Trustee shall preserve, in as current a form as is reasonably practicable,
all information contained in Lists of Holders given to it, provided that it
may destroy any List of Holders previously given to it on receipt of a new
List of Holders.
(b) The Guarantee Trustee shall comply with its obligations under
Sections 311(a), 311(b) and 312(b) of the Trust Indenture Act.
SECTION 2.3 REPORTS BY GUARANTEE TRUSTEE. Within 60 days after
July 15 of each year (commencing with the year of the issuance of the
Securities), the Guarantee Trustee shall provide to the Holders of the
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 Guarantee Trustee shall also comply with the
requirements of Section 313(d) of the Trust Indenture Act.
SECTION 2.4 PERIODIC REPORTS TO GUARANTEE TRUSTEE. The Guarantor
shall provide to the Guarantee Trustee such documents, reports and
information as required by Section 314 (if any) 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 PRECEDENT. The
Guarantor shall provide to the Guarantee Trustee such evidence of compliance
with any conditions precedent,
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if any, provided for in this Guarantee that relate to any of the matters set
forth in Section 314(c) of the Trust Indenture Act. Any certificate or
opinion required to be given by an officer pursuant to Section 314(c)(1) may
be given in the form of an Officers' Certificate.
SECTION 2.6 GUARANTEE EVENT OF DEFAULT; WAIVER. The Holders of a
Majority in Liquidation Amount of the Securities may, by vote or written
consent, on behalf of the Holders of all of the Securities, waive any past
Guarantee Event of Default and its consequences. Upon such waiver, any such
Guarantee Event of Default shall cease to exist, and any Guarantee Event of
Default arising therefrom shall be deemed to have been cured, for every
purpose of this Guarantee, but no such waiver shall extend to any subsequent
or other default or Guarantee Event of Default or impair any right consequent
thereon.
SECTION 2.7 GUARANTEE EVENT OF DEFAULT; NOTICE. (a) The
Guarantee Trustee shall, within 90 days after the occurrence of a Guarantee
Event of Default actually known to a Responsible Officer of the Guarantee
Trustee, transmit by mail, first class postage prepaid, to the Holders of the
Securities, notices of all such Guarantee Events of Default, unless such
defaults have been cured before the giving of such notice; provided, that the
Guarantee Trustee shall be protected in withholding such notice if and so
long as a Responsible Officer of the Guarantee Trustee in good faith
determines that the withholding of such notice is in the interests of the
Holders of the Securities.
(b) The Guarantee Trustee shall not be deemed to have knowledge of
any Guarantee Event of Default unless the Guarantee Trustee shall have
received written notice thereof or a Responsible Officer of the Guarantee
Trustee charged with the administration of the Declaration shall have
obtained actual knowledge thereof.
SECTION 2.8 CONFLICTING INTERESTS. The Declaration shall be
deemed to be specifically described in this Guarantee for the purposes of
clause (i) of the first provision contained in Section 310(b) of the Trust
Indenture Act.
SECTION 2.9 DISCLOSURE OF INFORMATION. The disclosure of
information as to the names and addresses of the Holders of the Securities in
accordance with Section 312 of the Trust Indenture Act, regardless of the
source from which such information was derived, shall not be deemed to be a
violation of any existing law, or any law hereafter enacted which does not
specifically refer to Section 312 of the Trust Indenture Act, nor shall the
Guarantee Trustee be held accountable by reason of mailing any material
pursuant to a request made under Section 312(b) of the Trust Indenture Act.
SECTION 2.10 GUARANTEE TRUSTEE MAY FILE PROOFS OF CLAIM. Upon the
occurrence of a Guarantee Event of Default, the Guarantee Trustee is hereby
authorized to (a) recover judgment, in its own name and as trustee of an
express trust, against the Guarantor for the whole amount of any Guarantee
Payments remaining unpaid and (b) file such proofs of claim and other papers
or documents as may be necessary or advisable in order to have its claims and
those of the Holders of
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the Securities allowed in any judicial proceedings relative to the Guarantor,
its creditors or its property.
ARTICLE 3
POWERS, DUTIES AND RIGHTS OF
GUARANTEE TRUSTEE
SECTION 3.1 POWERS AND DUTIES OF GUARANTEE TRUSTEE.
(a) This Guarantee shall be held by the Guarantee Trustee on
behalf of the Trust for the benefit of the Holders of the Securities, and the
Guarantee Trustee shall not transfer this Guarantee to any Person except a
Holder of Securities exercising his or her rights pursuant to Section 5.4(b)
or to a Successor Guarantee Trustee on acceptance by such Successor Guarantee
Trustee. The right, title and interest of the Guarantee Trustee in and to
this Guarantee shall automatically vest in any Successor Guarantee Trustee,
and such vesting and succession of title shall be effective whether or not
conveyancing documents have been executed and delivered pursuant to the
appointment of such Successor Guarantee Trustee.
(b) If a Guarantee Event of Default actually known to a
Responsible Officer of the Guarantee Trustee has occurred and is continuing,
the Guarantee Trustee shall enforce this Guarantee for the benefit of the
Holders of the Securities.
(c) The Guarantee Trustee, before the occurrence of any Guarantee
Event of Default and after the curing of all Guarantee Events of Default that
may have occurred, shall undertake to perform only such duties as are
specifically set forth in this Guarantee, and no implied covenants shall be
read into this Guarantee against the Guarantee Trustee. In case a Guarantee
Event of Default has occurred (that has not been cured or waived pursuant to
Section 2.6) and is actually known to a Responsible Officer of the Guarantee
Trustee, the Guarantee Trustee shall exercise such of the rights and powers
vested in it by this 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 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 Guarantee Event of Default
and after the curing or waiving of all such Guarantee Events of
Default that may have occurred:
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(A) the duties and obligations of the Guarantee Trustee
shall be determined solely by the express provisions of this
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 Guarantee, and no implied
covenants or obligations shall be read into this Guarantee
against the Guarantee Trustee; and
(B) in the absence of bad faith on the part of the
Guarantee Trustee, the Guarantee Trustee may conclusively rely,
as to the truth of the statements and the correctness of the
opinions expressed therein, upon any certificates or opinions
furnished to the Guarantee Trustee and conforming to the
requirements of this Guarantee; but in the case of any such
certificates or opinions that by any provision hereof are
specifically required to be furnished to the Guarantee Trustee,
the Guarantee Trustee shall be under a duty to examine the same
to determine whether or not they conform to the requirements of
this Guarantee;
(ii) the Guarantee Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer of the Guarantee
Trustee, unless it shall be proved that the Guarantee Trustee was
negligent in ascertaining the pertinent facts upon which such judgment
was made;
(iii) the Guarantee Trustee shall not be liable with respect to
any action taken or omitted to be taken by it in good faith in
accordance with the direction of the Holders of not less than a
Majority in Liquidation Amount of the Securities relating to the time,
method and place of conducting any proceeding for any remedy available
to the Guarantee Trustee, or exercising any trust or power conferred
upon the Guarantee Trustee under this Guarantee; and
(iv) no provision of this 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 reasonably assured to it under the terms of
this Guarantee or indemnify, reasonably satisfactory to the Guarantee
Trustee, against such risk or liability is not reasonably assured to
it.
SECTION 3.2 CERTAIN RIGHTS OF GUARANTEE TRUSTEE. (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,
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bond, debenture, note, other evidence of indebtedness or other paper
or document believed by it to be genuine and to have been signed, sent
or presented by the proper party or parties;
(ii) Any direction or act of the Guarantor contemplated by this
Guarantee shall be sufficiently evidenced by an Officers' Certificate;
(iii) Whenever, in the administration of this Guarantee, the
Guarantee Trustee shall deem it desirable that a matter be proved or
established before taking, suffering or omitting 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, shall be promptly delivered by the Guarantor;
(iv) The Guarantee Trustee shall have no duty to see to any
recording, filing or registration or any instrument (or any
rerecording, refiling or registration thereof);
(v) The Guarantee Trustee may consult with counsel, and the
advice or opinion of such counsel with respect to legal matters shall
be full and complete authorization and protection in respect of any
action taken, suffered or omitted by it hereunder in good faith and in
accordance with such advice or opinion. Such counsel may be counsel
to the Guarantor or any of its Affiliates and may include any of its
employees. The Guarantee Trustee shall have the right at any time to
seek instructions concerning the administration of this Guarantee from
any court of competent jurisdiction;
(vi) The Guarantee Trustee shall be under no obligation to
exercise any of the rights or powers vested in it by this 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 the Guarantee Trustee, against the costs,
expenses (including attorneys' fees and expenses and the expenses of
the Guarantee Trustee's agents, nominees or custodians) and
liabilities that might be incurred by it in complying with such
request or direction, including such reasonable advances as may be
requested by the Guarantee Trustee; provided, that nothing contained
in this Section 3.2(a)(vi) shall be taken to relieve the Guarantee
Trustee, upon the occurrence of a Guarantee Event of Default, of its
obligation to exercise the rights and powers vested in it by this
Guarantee;
(vii) 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
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its discretion, may make such further inquiry or investigation into
such facts or matters as it may see fit;
(viii) The Guarantee Trustee may execute any of the trusts or
powers hereunder or perform any duties hereunder either directly or by
or through agents, nominees, custodians or attorneys, and the
Guarantee Trustee shall not be responsible for any misconduct or
negligence on the part of any agent or attorney appointed with due
care by it hereunder;
(ix) Any action taken by the Guarantee Trustee or its agents
hereunder shall bind the Holders of the Securities, and the signature
of the Guarantee Trustee or its agents alone shall be sufficient and
effective to perform any such action. No third party shall be
required to inquire as to the authority of the Guarantee Trustee to so
act or as to its compliance with any of the terms and provisions of
this Guarantee, both of which shall be conclusively evidenced by the
Guarantee Trustee's or its agent's taking such action; and
(x) Whenever in the administration of this 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 (i) may request instructions from the
Holders of a Majority in Liquidation Amount of the Securities, (ii)
may refrain from enforcing such remedy or right or taking such other
action until such instructions are received, and (iii) shall be
protected in conclusively relying on or acting in accordance with such
instructions.
(b) No provision of this 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.
SECTION 3.3 NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF GUARANTEE.
The recitals contained in this Guarantee shall be taken as the statements of the
Guarantor, and the Guarantee Trustee does not assume any responsibility for
their correctness. The Guarantee Trustee makes no representations as to the
validity or sufficiency of this Guarantee.
ARTICLE 4
GUARANTEE TRUSTEE
SECTION 4.1 GUARANTEE TRUSTEE; ELIGIBILITY.
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(a) There shall be at all times a Guarantee Trustee which shall:
(i) not be an Affiliate of the Guarantor; and
(ii) be a corporation organized and doing business under the laws
of the United States of America or any State or Territory thereof or
of the District of Columbia, or a corporation or Person permitted by
the Securities and Exchange Commission to act as an institutional
trustee under the Trust Indenture Act, authorized under such laws to
exercise corporate trust powers, having a combined capital and surplus
of at least 50 million U.S. dollars ($50,000,000), and subject to
supervision or examination by Federal, State, Territorial or District
of Columbia authority. If such corporation publishes reports of
condition at least annually, pursuant to law or to the requirements of
the supervising or examining authority referred to above, then, for
the purposes of this Section 4.1(a)(ii), the combined capital and
surplus of such corporation shall be deemed to be its combined capital
and surplus as set forth in its most recent report of condition so
published.
(b) If at any time the Guarantee Trustee shall cease to be eligible
so to 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(b).
(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 GUARANTEE
TRUSTEE.
(a) Subject to Section 4.1(b), the Guarantee Trustee may be appointed
or removed with or without cause at any time by the Guarantor. No resignation
or removal of the Guarantee Trustee and no appointment of a Successor Guarantee
Trustee pursuant to this Article shall become effective until the acceptance of
appointment by the Successor Guarantee Trustee by written instrument executed by
the Successor Guarantee Trustee and delivered to the Holders and the Guarantee
Trustee.
(b) Subject to the immediately preceding paragraph, a Guarantee
Trustee may resign at any time by giving written notice thereof to the Holders
and the Guarantor.
(c) If no Successor Guarantee Trustee shall have been appointed and
accepted appointment as provided in this Section 4.2 within 30 days after
delivery to the Guarantor of an instrument of removal or resignation, the
removed or resigning Guarantee Trustee may petition any court of competent
jurisdiction for the appointment of a Successor Guarantee Trustee. Such court
may thereupon, after prescribing such notice, if any, as it may deem proper,
appoint a Successor Guarantee Trustee.
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(d) No Guarantee Trustee shall be liable for the acts or omissions to
act of any Successor Guarantee Trustee.
(e) Upon termination of this Guarantee or removal or resignation of
the Guarantee Trustee pursuant to this Section 4.2, the Guarantor shall pay to
the Guarantee Trustee all amounts owing for fees and reimbursement of expenses
which have accrued to the date of such termination, removal or resignation.
(f) The Guarantor shall promptly notify the Holders of the
resignation, removal or appointment of the Guarantee Trustee.
ARTICLE 5
GUARANTEE
SECTION 5.1 GUARANTEE.
The Guarantor irrevocably and unconditionally agrees to pay in full to
the Holders, on a subordinated basis, the Guarantee Payments (without
duplication of amounts theretofore paid by the Trust), as and when due,
regardless of any defense, right of set-off or counterclaim that the Trust 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 Trust to pay such amounts to the Holders.
SECTION 5.2 WAIVER OF NOTICE AND DEMAND.
The Guarantor hereby waives notice of acceptance of this 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 Trust 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.
Notwithstanding anything to the contrary herein, the Guarantor retains all of
its rights under the Indenture to extend the interest payment period on the
Debentures and the Guarantor shall not be obligated hereunder to make any
Guarantee Payments during any Extension Period (as defined in the Indenture)
with respect to the Distributions (as defined in the Declaration) on the
Securities.
SECTION 5.3 OBLIGATIONS NOT AFFECTED.
The obligations, covenants, agreements and duties of the Guarantor
under this Guarantee shall be absolute and unconditional and shall remain in
full force and effect until the entire liquidation amount of all outstanding
Securities shall have been paid and such obligation shall in no way be affected
or impaired by reason of the happening from time to time of any event,
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including without limitation, the following, whether or not with notice to,
or the consent of, the Guarantor:
(a) The release or waiver, by operation of law or otherwise, of the
performance or observance by the Trust of any express or implied agreement,
covenant, term or condition relating to the Securities to be performed or
observed by the Trust;
(b) The extension of time for the payment by the Trust of all or any
portion of the Distributions, Redemption Price (as defined in the
Indenture), Liquidation Distribution or any other sums payable under the
terms of the Securities or the extension of time for the performance of any
other obligation under, arising out of, or in connection with the
Securities (other than an extension of time for payment of Distributions,
Redemption Price, Liquidation Distribution or other sum payable that
results from the extension of any interest payment period on the
Debentures);
(c) Any failure, omission, delay or lack of diligence on the part of
the Property Trustee or the Holders to enforce, assert or exercise any
right, privilege, power or remedy conferred on the Property Trustee or the
Holders pursuant to the terms of the Securities, or any action on the part
of the Trust 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 Trust
or any of the assets of the Trust;
(e) Any invalidity of, or defect or deficiency in, the Securities;
(f) The settlement or compromise of any obligation guaranteed hereby
or hereby incurred; or
(g) Any other circumstance whatsoever that might otherwise constitute
a legal or equitable discharge or defense of a guarantor, it being the
intent of this Section 5.3 that the obligations of the Guarantor hereunder
shall be absolute and unconditional under any and all circumstances.
There shall be no obligation of the Guarantee Trustee or the Holders
to give notice to, or obtain consent of, the Guarantor or any other Person with
respect to the happening of any of the foregoing.
No setoff, counterclaim, reduction or diminution of any obligation, or
any defense of any kind or nature that the Guarantor has or may have against any
Holder shall be available hereunder to the Guarantor against such Holder to
reduce the payments to it under this Guarantee.
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SECTION 5.4 RIGHTS OF HOLDERS.
(a) The Holders of a Majority in Liquidation Amount of the Securities
have the right to direct the time, method and place of conducting any proceeding
for any remedy available to the Guarantee Trustee in respect of this Guarantee
or exercising any trust or power conferred upon the Guarantee Trustee under this
Guarantee.
(b) If the Guarantee Trustee fails to enforce this Guarantee, then
any Holder of Securities may, subject to the subordination provisions of Section
6.2, institute a legal proceeding directly against the Guarantor to enforce the
Guarantee Trustee's rights under this Guarantee, without first instituting a
legal proceeding against the Trust, the Guarantee Trustee or any other person or
entity, if: (i) such Holder has previously given written notice to the Guarantee
Trustee of a continuing Guarantee Event of Default, (ii) the Holders of not less
than 25% in principal amount of the Outstanding Securities shall have made
written request to the Guarantee Trustee to institute proceedings in respect of
such Guarantee Event of Default in its own name as Guarantee Trustee hereunder,
(iii) such Holder or Holders have offered to the Guarantee Trustee reasonable
indemnity against the costs, expenses and liabilities to be incurred in
compliance with such request, (iv) the Guarantee Trustee for 60 days after its
receipt of such notice, request and offer of indemnity has failed to institute
any such proceeding, and (v) no direction inconsistent with such written request
has been given to the Guarantee Trustee during such 60-day period by the Holders
of a majority in principal amount of the Outstanding Securities; it being
understood and intended that no one or more Holders shall have any right in any
manner whatever by virtue of, or by availing of, any provision of this Guarantee
to affect, disturb or prejudice the rights of any other Holders, or to obtain or
to seek to obtain priority or preference over any other Holders or to enforce
any right under this Guarantee, except in the manner herein provided and for the
equal and ratable benefit of all the Holders.
(c) Notwithstanding anything to the contrary in this Section 5.4, if
the Guarantor has failed to make a Guarantee Payment, a Holder of Securities
may, subject to the subordination provisions of Section 6.2, directly institute
a proceeding against the Guarantor for enforcement of the Guarantee for such
payment to the Holder of the Securities of the principal of or interest on the
Debentures on or after the respective due dates specified in the Debentures, and
the amount of the payment will be based on the Holder's pro rata share of the
amount due and owing on all of the Securities. The Guarantor hereby waives any
right or remedy to require that any action on this Guarantee be brought first
against the Trust or any other person or entity before proceeding directly
against the Guarantor.
SECTION 5.5 GUARANTEE OF PAYMENT.
This Guarantee creates a guarantee of payment and not of collection.
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<PAGE>
SECTION 5.6 SUBROGATION.
The Guarantor shall be subrogated to all (if any) rights of the
Holders of Securities against the Trust in respect of any amounts paid to such
Holders by the Guarantor under this Guarantee; provided, however, that the
Guarantor shall not (except to the extent required by mandatory provisions of
law) be entitled to enforce or exercise any right that it may acquire by way of
subrogation of any indemnity, reimbursement or other agreement, in all cases as
a result of payment under this Guarantee, if at the time of any such payment,
any amounts are due and unpaid under this 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 Guarantee Trustee for the benefit of the Holders.
SECTION 5.7 INDEPENDENT OBLIGATIONS.
The Guarantor acknowledges that its obligations hereunder are
independent of the obligations of the Trust with respect to the Securities, and
that the Guarantor shall be liable as principal and as debtor hereunder to make
Guarantee Payments pursuant to the terms of this Guarantee notwithstanding the
occurrence of any event referred to in subsections 5.3(a) through 5.3(g),
inclusive, hereof.
ARTICLE 6
LIMITATION OF TRANSACTIONS; SUBORDINATION
SECTION 6.1 LIMITATION OF TRANSACTIONS.
So long as any Securities remain outstanding, if there shall have
occurred a Guarantee Event of Default or a Trust Enforcement Event, then the
Guarantor shall not, and shall not permit any subsidiary of the Guarantor, to
(i) declare or pay any dividends or distributions on, or redeem, purchase,
acquire, or make a liquidation payment with respect to, the Guarantor's capital
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 that rank pari
passu with or junior to the Debentures or make any guarantee payments with
respect to any guarantee by the Guarantor of the debt securities of any
subsidiary of the Guarantor if such guarantee ranks pari passu with or junior to
the Debentures (other than (a) repurchases, redemptions or other acquisitions of
shares of capital stock of the Guarantor in connection with any employment
contract, benefit plan or other similar arrangement with or for the benefit of
any one or more employees, officers, directors or consultants or in connection
with a dividend reinvestment or stockholder stock purchase plan, (b) as a result
of an exchange or conversion of any class or series of the Guarantor's capital
stock (or any capital stock of a subsidiary of the Guarantor) for any class or
series of the Guarantor's capital stock or of any class or series of the
Guarantor's indebtedness for any class or series of the Guarantor's capital
stock, (c) the purchase of fractional interests in shares of the Guarantor's
capital stock pursuant to the conversion or
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<PAGE>
exchange provisions of such capital stock or the security being converted or
exchanged, (d) any declaration of a dividend in connection with the adoption
of any stockholder's rights plan, or the issuance of rights, stock or other
property under any stockholder's rights plan, or the redemption or repurchase
of rights pursuant thereto, or (e) any dividend in the form of stock,
warrants, options or other rights where the dividend stock or the stock
issuable upon exercise of such warrants, options or other rights is the same
stock as that on which the dividend is being paid (or pari passu with or
junior to such stock).
SECTION 6.2 RANKING.
This Guarantee will constitute an unsecured obligation of the
Guarantor and will rank subordinate and junior in right of payment to all other
liabilities of the Guarantor, except those liabilities of the Guarantor made
pari passu or subordinate by their express terms.
If a Trust Enforcement Event has occurred and is continuing under the
Declaration, the rights of the holders of the Common Securities to receive
Guarantee Payments hereunder shall be subordinated to the rights of the holders
of the Capital Securities to receive payment of all amounts due and owing
hereunder.
ARTICLE 7
TERMINATION
SECTION 7.1 TERMINATION.
This Guarantee shall terminate upon (i) full payment of the
Redemption Price (as defined in the Declaration) of all Securities, (ii) upon
the distribution of the Debentures to the Holders of all the Securities or
(iii) upon full payment of the amounts payable in accordance with the
Declaration upon liquidation of the Trust. Notwithstanding the foregoing,
this Guarantee will continue to be effective or will be reinstated, as the
case may be, if at any time any Holder of Securities must restore payment of
any sums paid under the Securities or under this Guarantee.
ARTICLE 8
INDEMNIFICATION
SECTION 8.1 EXCULPATION.
(a) No Indemnified Person shall be liable, responsible or
accountable in damages or otherwise to the Guarantor or any Covered Person
for any loss, damage or claim incurred by reason of any act or omission
performed or omitted by such Indemnified Person in good faith in
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<PAGE>
accordance with this Guarantee and in a manner that such Indemnified Person
reasonably believed to be within the scope of the authority conferred on such
Indemnified Person by this Guarantee or by law, except that an Indemnified
Person shall be liable for any such loss, damage or claim incurred by reason
of such Indemnified Person's negligence or willful misconduct with respect to
such acts or omissions.
(b) An Indemnified Person shall be fully protected in relying in good
faith upon the records of the Guarantor and upon such information, opinions,
reports or statements presented to the Guarantor by any Person as to matter the
Indemnified Person reasonably believes are within such other Person's
professional or expert competence and who has been selected with reasonable care
by or on behalf of the Guarantor, including information, opinions, reports or
statements as to the value and amount of the assets, liabilities, profits,
losses, or any other facts pertinent to the existence and amount of assets from
which Distributions to Holders of Securities might properly be paid.
SECTION 8.2 INDEMNIFICATION.
The Guarantor agrees to indemnify each Indemnified Person for, and to
hold each Indemnified Person harmless against any loss, liability or expense
incurred without negligence or bad faith on its part, arising out of or in
connection with the acceptance or administration of the trust or trusts
hereunder, including the costs and expenses (including reasonable legal fees and
expenses) of defending itself against, or investigating, any claim or liability
in connection with the exercise or performance of any of its powers or duties
hereunder. The provisions of this Section 8.2 shall survive the termination of
this Guarantee or the resignation or removal of the Guarantee Trustee.
ARTICLE 9
MISCELLANEOUS
SECTION 9.1 SUCCESSORS AND ASSIGNS.
All guarantees and agreements contained in this Guarantee shall bind
the successors, assigns, receivers, trustees and representatives of the
Guarantor and shall inure to the benefit of the Holders of the Securities then
outstanding.
SECTION 9.2 AMENDMENTS.
Except with respect to any changes that do not materially adversely
affect the rights of the Holders (in which case no consent of the Holders will
be required), this Guarantee may only be amended with the prior approval of the
Holders of at least a Majority in Liquidation Amount of the Securities. The
provisions of Section 12.2 of the Declaration with respect to meetings of, and
action by written consent of, the Holders of the Securities apply to the giving
of such approval.
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<PAGE>
SECTION 9.3 NOTICES.
All notices provided for in this Guarantee shall be in writing, duly
signed by the party giving such notice, and shall be delivered, telecopied or
mailed by registered or certified mail, as follows:
(a) If given to the Guarantee Trustee, at the Guarantee Trustee's
mailing address set forth below (or such other address as the Guarantee
Trustee may give notice of to the Guarantor and the Holders of the
Securities):
Wilmington Trust Company
Rodney Square North
1100 N. Market Street
Wilmington, Delaware 19890-0001
Attention: Corporate Trust Administration
Telecopy: (302) 651-8882
--------------
WITH A COPY TO:
---------------
Richards, Layton & Finger
One Rodney Square
PO Box 551
Wilmington, Delaware 19899
Attn: Doneene Keemer Damon, Esq.
Telecopy: (302) 658-6548
(b) If given to the Guarantor, at the Guarantor's mailing addresses
set forth below (or such other address as the Guarantor may give notice of
to the Guarantee Trustee and the Holders of the Securities):
Commerce Security Bancorp, Inc.
7777 Center Avenue
Huntington Beach, CA 92647
Attention: Chief Financial Officer
Telecopy: (714) 891-8884
--------------
WITH A COPY TO:
---------------
Nutter, McClennen & Fish, LLP
One International Place
Boston, MA 02110
Attention: Michael K. Krebs, Esquire
Telecopy: (617) 973-9748
--------------
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<PAGE>
(c) If given to any Holder of Securities, at the address set forth on
the books and records of the Trust.
All such notices shall be deemed to have been given when received in
person, telecopied with receipt confirmed, or mailed by first class mail,
postage prepaid, except that if a notice or other document is refused delivery
or cannot be delivered because of a changed address of which no notice was
given, such notice or other document shall be deemed to have been delivered on
the date of such refusal or inability to deliver.
SECTION 9.4 BENEFIT.
This Guarantee is solely for the benefit of the Holders of the
Securities and, subject to Section 3.1(a), is not separately transferable from
the Securities.
SECTION 9.5 GOVERNING LAW.
THIS GUARANTEE SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF DELAWARE.
[remainder of page intentionally blank]
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<PAGE>
IN WITNESS WHEREOF, this Guarantee is executed as of the day and year
first above written.
COMMERCE SECURITY BANCORP, INC.,
as Guarantor
By:
----------------------------------------
Name: Robert P. Keller
Title: President and Chief Executive Officer
WILMINGTON TRUST COMPANY,
as Guarantee Trustee
By:
-----------------------------------------
Name:
Title:
GUARANTE.
<PAGE>
EXHIBIT 10.1
$27,657,000
CSBI CAPITAL TRUST I
11 3/4% TRUST SUBORDINATED CAPITAL INCOME SECURITIES, SERIES A
PURCHASE AGREEMENT
July 10, 1997
LEHMAN BROTHERS INC.,
Three World Financial Center
New York, New York 10285
Ladies and Gentlemen:
The institutions listed on Schedule 1 hereto (collectively, the
"Sellers") propose to sell to you (the "Purchaser") $27,657,000 aggregate
liquidation amount of 11 3/4% Trust Subordinated Capital Income Securities,
Series A (liquidation amount $1,000 per Security) (the "Capital Securities") of
CSBI Capital Trust I, a Delaware statutory business trust (the "Trust"),
guaranteed (the "Guarantee"; together with the Capital Securities, the
"Securities") by Commerce Security Bancorp, Inc., a Delaware corporation (the
"Company") to the extent set forth in the Capital Securities Guarantee Agreement
(the "Guarantee Agreement") between the Company and The Wilmington Trust
Company, as guarantee trustee (the "Guarantee Trustee") in favor of the Holders
(as defined therein). The Company is the owner of all of the beneficial
ownership interests represented by common securities (the "Common Securities")
of the Trust. Concurrently with the issuance of the Capital Securities and the
Company's purchase of all of the Common Securities, the Trust invested the
proceeds of each thereof in the Company's Junior Subordinated Debentures due
June 6, 2027 (the "Junior Subordinated Debentures") issued pursuant to the
Indenture (the "Indenture") between the Company and The Wilmington Trust
Company, as indenture trustee (the "Indenture Trustee").
The Securities will be offered without being registered under the
Securities Act of 1933, as amended (the "Securities Act"), in reliance on
exemptions therefrom.
In connection with the sale of the Securities, the Trust and the
Company have prepared a final Offering Memorandum (together with Appendix A
thereto and the documents incorporated or deemed to be incorporated by reference
therein, the "Offering Memorandum") setting forth, among other things, a
description of the terms of the Securities, the terms of the offering, a
description of the Company and the Trust and relevant information concerning the
Sellers. Prior to the purchase of the Securities by the Purchaser on the
Closing Date, the Company and the Sellers shall take such actions as may be
necessary to amend the Securities, the Junior Subordinated Debentures, the Trust
and any related instruments so as to conform the terms thereof to those set
forth in the Offering Memorandum.
1. REPRESENTATIONS, WARRANTIES AND AGREEMENTS OF THE COMPANY AND THE
TRUST. The Company and the Trust, jointly and severally, represent and warrant
to, and agree with, the Purchaser that as of the date hereof:
<PAGE>
2
(a) The Offering Memorandum does not contain any untrue
statement of a material fact or omit to state a material fact
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, except that
the representations and warranties set forth in this Section 1(a) do
not apply to statements or omissions in the Offering Memorandum based
upon information furnished to the Company or the Trust in writing by
or on behalf of the Purchaser expressly for use therein.
(b) The Company and each of its subsidiaries (which term shall
include only those subsidiaries (as defined in Section 15) which
constitute "significant subsidiaries" within the meaning of Rule 12b-2
under the Securities Exchange Act of 1934, as amended (the "Exchange
Act")) have been duly incorporated and are validly existing as
corporations in good standing under the laws of their respective
jurisdictions of incorporation, have all corporate power and authority
necessary to own or hold their respective properties and to conduct
the businesses in which they are engaged and are duly qualified to do
business and in good standing as foreign corporations in each
jurisdiction in which their respective ownership or lease of property
or the conduct of their respective businesses requires such
qualification, except where the failure to be so qualified and in good
standing could not reasonably be expected to have a material adverse
effect on the financial condition, results of operations, business or
business prospects of the Company and its subsidiaries taken as a
whole (a "Material Adverse Effect"). Eldorado Bank is the only
subsidiary of the Company which constitutes a "significant subsidiary"
within the meaning of Rule 12b-2.
(c) The Company has an authorized capitalization as set forth in
the Offering Memorandum, and all of the issued shares of capital stock
of the Company have been duly and validly authorized and issued, are
fully paid and non-assessable and conform in all material respects to
the description thereof contained in the Offering Memorandum; and all
of the issued shares of capital stock of each subsidiary of the
Company have been duly and validly authorized and issued and are fully
paid and non-assessable and are owned directly or indirectly by the
Company, free and clear of all liens, encumbrances, equities or
claims.
(d) The Trust has been duly created and is validly existing as a
statutory business trust in good standing under the Business Trust Act
of the State of Delaware (the "Delaware Business Trust Act") with the
trust power and authority to own its property and conduct its business
as described in the Offering Memorandum, and has conducted and will
conduct no business other than the transactions contemplated by this
Agreement or as otherwise described in the Offering Memorandum; the
Trust is not a party to or bound by any agreement or instrument other
than this Agreement, the Declaration of Trust (the "Declaration")
among the Company, as sponsor, the individuals named as administrative
or regular trustees therein (the "Regular Trustees"), The Wilmington
Trust Company, as property trustee (the "Property Trustee") and The
Wilmington Trust Company, as Delaware trustee (the "Delaware Trustee";
and together with the Property Trustee and the Regular
<PAGE>
3
Trustees, the "Trustees"), the Registration Rights Agreement (the
"Registration Rights Agreement") to be entered into among the Company,
the Trust and the Purchaser as described in the Offering Memorandum,
and the agreements and instruments contemplated by the Declaration and
described in the Offering Memorandum; the Trust has no liabilities or
obligations other than those arising out of the transactions
contemplated by this Agreement and the Declaration and described in
the Offering Memorandum; and the Trust is not a party to or subject to
any action, suit or proceeding of any nature.
(e) The Declaration has been duly authorized and, assuming due
authorization, execution and delivery of the Declaration by the
Delaware Trustee, is a valid and binding obligation of the Company,
enforceable against the Company in accordance with its terms, subject
to the effects of bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other similar laws relating to or
affecting creditors' rights generally, general equitable principles
(whether considered in a proceeding in equity or at law) and an
implied covenant of good faith and fair dealing, and at the Closing
Date (as defined in Section 5 hereof) will conform in all material
respects to all statements relating thereto in the Offering
Memorandum.
(f) The Capital Securities and the Common Securities have been
duly authorized and validly issued and are fully paid and non-
assessable and at the Closing Date will conform in all material
respects to the descriptions of the Capital Securities and the Common
Securities contained in the Offering Memorandum.
(g) The Guarantee Agreement, the Indenture and the Junior
Subordinated Debentures have been duly authorized and delivered by the
Company and constitute valid and legally binding obligations of the
Company enforceable against the Company in accordance with their
respective terms, subject to the effects of bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and other similar
laws relating to or affecting creditors' rights generally, general
equitable principles (whether considered in a proceeding in equity or
at law) and an implied covenant of good faith and fair dealing; and
the Indenture, the Junior Subordinated Debentures and the Guarantee
will at the Closing Date conform in all material respects to the
descriptions thereof contained in the Offering Memorandum.
(h) This Agreement has been duly authorized, executed and
delivered by each of the Trust and the Company and the Registration
Rights Agreement has been duly authorized by each of the Trust and the
Company and at or prior to the Closing Date will be duly delivered and
executed by each of the Trust and the Company.
(i) The execution, delivery and performance of this Agreement,
the Declaration and the Registration Rights Agreement by the Trust,
the issuance of the Common Securities and the Capital Securities by
the Trust, the purchase of the Junior Subordinated Debentures by the
Trust from the Company, the distribution of the Junior Subordinated
<PAGE>
4
Debentures upon the liquidation of the Trust in the circumstances
contemplated by the Declaration and described in the Offering
Memorandum, the consummation by the Trust of the transactions
contemplated herein and in the Declaration and the performance by the
Trust of its obligations hereunder and thereunder (the "Trust
Transactions"), did not and will not, as the case may be, conflict
with or result in a violation of any statute or any order, rule or
regulation of any court or governmental agency or body having
jurisdiction over the Trust or any of its assets; and except for such
consents, approvals, authorizations, registrations or qualifications
as may be required under applicable state securities laws in
connection with the purchase and distribution of the Capital
Securities by the Purchaser, no consent, approval, authorization or
order of or filing or registration with, any such court or
governmental agency or body was or is required, as the case may be,
for the Trust Transactions.
(j) The execution, delivery and performance of this Agreement,
the Guarantee Agreement, the Indenture and the Registration Rights
Agreement by the Company, the issuance of the Junior Subordinated
Debentures by the Company, the purchase of the Common Securities by
the Company from the Trust, the consummation by the Company of the
transactions contemplated herein and therein and the performance by
the Company of its obligations hereunder and thereunder (the "Company
Transactions") did not and will not, as the case may be, conflict with
or result in a breach or violation of any of the terms or provisions
of, or constitute a default under, any indenture, mortgage, deed of
trust, loan agreement or other agreement or instrument to which the
Company or any of its subsidiaries is a party or by which the Company
or any of its subsidiaries is bound or to which any of the properties
or assets of the Company or any of its subsidiaries is subject other
than such conflicts, breaches and violations as would not, either
individually or in the aggregate, have a Material Adverse Effect, nor
will such actions result in any violation of the provisions of the
charter or by-laws of the Company or any of its subsidiaries or any
statute or any order, rule or regulation of any court or governmental
agency or body having jurisdiction over the Company, any of its
subsidiaries or any of their properties or assets; and except for such
consents, approvals, authorizations, registrations or qualifications
as may be required under applicable state securities laws in
connection with the purchase and distribution of the Capital
Securities by the Purchaser, no consent, approval, authorization or
order of, or filing or registration with, any such court or
governmental agency or body was or is required, as the case may be,
for the Company Transactions.
(k) Neither the Company nor any of its subsidiaries has
sustained since the date of the latest quarterly financial statements
included in the Offering Memorandum any loss or interference with its
business from fire, explosion, flood or other calamity, whether or not
covered by insurance, or from any labor dispute or court or
governmental action, order or decree that, either individually or in
the aggregate, reasonably could be expected to have a Material Adverse
Effect, otherwise than as set forth or contemplated in the Offering
Memorandum; and, since such date, there has not been any material
change
<PAGE>
5
in the capital stock or long-term debt of the Company or any of
its subsidiaries otherwise than as set forth or contemplated in the
Offering Memorandum; and, since such date, there has not been any
material adverse change, or any development involving a prospective
material adverse change, in or affecting the general affairs,
management, financial position, stockholders' equity or results of
operations of the Company and its subsidiaries otherwise than as set
forth or contemplated in the Offering Memorandum.
(l) The financial statements (including the related notes and
supporting schedules) included in the Offering Memorandum present
fairly the financial condition and results of operations of the
entities purported to be shown thereby, at the dates and for the
periods indicated, and have been prepared in all material respects in
conformity with generally accepted accounting principles applied on a
consistent basis throughout the periods involved except as otherwise
disclosed therein; and the pro forma financial information included in
the Offering Memorandum has been prepared in all material respects in
accordance with the requirements of Regulation S-X promulgated by the
Securities and Exchange Commission (the "Commission") and contains all
adjustments necessary for a fair presentation of the information set
forth therein.
(m) Price Waterhouse LLP, who have certified certain financial
statements of the Company, whose report is included in the Offering
Memorandum and who have delivered the initial letter referred to in
Section 8(e) hereof, are independent public accountants as required by
the Securities Act and the rules and regulations of the Commission
thereunder during the periods covered by the financial statements on
which they reported contained in the Offering Memorandum.
(n) There are no legal or governmental proceedings pending to
which the Company or any of its subsidiaries is a party or of which
any property or asset of the Company or any of its subsidiaries is the
subject which, if determined adversely to the Company or any of its
subsidiaries would, either individually or in the aggregate, have a
Material Adverse Effect; and to the Company's knowledge, no such
proceedings are threatened or contemplated by governmental authorities
or threatened by others.
(o) Since the date as of which information is given in the
Offering Memorandum through the date hereof, and except as may
otherwise be disclosed in the Offering Memorandum, neither the Company
or any of its subsidiaries nor the Trust has (i) issued or granted any
securities, (ii) incurred any liability or obligation, direct or
contingent, other than liabilities and obligations which were incurred
in the ordinary course of business, (iii) entered into any transaction
not in the ordinary course of business or (iv) in the case of the
Company, declared or paid any dividend on its capital stock, except
for dividends payable in the ordinary course on the Series B Preferred
Stock (as defined in the Offering Memorandum) in accordance with the
terms thereof.
<PAGE>
6
(p) Neither the Company nor any of its subsidiaries (i) is in
violation of its charter or by-laws, (ii) is in default in any
respect, and no event has occurred which, with notice or lapse of time
or both, would constitute such a default, in the due performance or
observance of any term, covenant or condition contained in any
material indenture, mortgage, deed of trust, loan agreement or other
agreement or instrument to which it is a party or by which it is bound
or to which any of its properties or assets is subject, other than
such defaults as would not, either individually or in the aggregate,
have a Material Adverse Effect, or (iii) is in violation in any
material respect of any law, ordinance, governmental rule, regulation
or court decree to which it or its properties or assets may be subject
or has failed to obtain any license, permit, certificate, franchise or
other governmental authorization or permit necessary to the ownership
of its properties or assets or to the conduct of its business, other
then such violations and failures as would not, either individually or
in the aggregate, have a Material Adverse Effect.
(q) Neither the Company nor any of its subsidiaries nor the
Trust is an "investment company" within the meaning of such term under
the Investment Company Act of 1940, as amended (the "Investment
Company Act") and the rules and regulations of the Commission
thereunder.
(r) The Company is duly registered as a bank holding company
under the Bank Holding Company Act of 1956, as amended (the "BHC
Act"); and the deposit accounts of each of depository institution
subsidiary of the Company are insured by the Federal Deposit Insurance
Corporation ("FDIC") to the fullest extent permitted by law and the
rules and regulations of the FDIC, and no proceedings for the
termination of such insurance are pending or, to the Company's
knowledge, threatened.
(s) The Company and each of its subsidiaries are in compliance
with all laws administered by and regulations of the Board of
Governors of the Federal Reserve System, the FDIC and any other
federal or state bank regulatory authority with jurisdiction over the
Company or any of its subsidiaries (the "Bank Regulatory
Authorities"), other than where such failures to comply would not,
individually or in the aggregate, have a Material Adverse Effect.
Except as may be described in the Offering Memorandum, neither the
Company nor any of its subsidiaries is a party to any written
agreement or memorandum of understanding with, or a party to any
commitment letter or similar undertaking to, or is subject to any
order or directive by, or is a recipient of any extraordinary
supervisory letter from, or has adopted any board resolutions at the
request of, any Bank Regulatory Authority which restricts materially
the conduct of its business, or in any manner relates to its capital
adequacy, its credit policies or its management, nor have any of them
been advised by any Bank Regulatory Authority that it is contemplating
issuing or requesting (or is considering the appropriateness of
issuing or requesting) any such order, decree, agreement, memorandum
of understanding, extraordinary supervisory letter, commitment letter
or similar submission, or any such board resolutions.
<PAGE>
7
(t) Neither the Company nor any of its affiliates (as defined in
Rule 501(b) of Regulation D under the Securities Act, an "Affiliate")
has directly, or through any agent, (i) sold, offered for sale,
solicited offers to buy or otherwise negotiated in respect of, any
security (as defined in the Securities Act) which is or will be
integrated with the sale of the Capital Securities in a manner that
would require the registration under the Securities Act of the
Securities or (ii) engaged in any form of general solicitation or
general advertising in connection with the offering of the Securities
(as those terms are used in Regulation D under the Securities Act), or
in any manner involving a public offering within the meaning of
Section 4(2) of the Securities Act.
(u) Except as set forth in the Offering Memorandum, there are no
relationships or transactions between the Company and its subsidiaries
on the one hand and any of the Sellers and their respective affiliates
on the other that would be material to the holders of the Capital
Securities, and the descriptions of such relationships and
transactions set forth in the Offering Memorandum are fair and
accurate summaries of the terms thereof in all material respects.
2. REPRESENTATIONS, WARRANTIES AND AGREEMENTS OF THE SELLERS. Each
Seller severally represents, warrants and agrees that:
(a) The Offering Memorandum does not contain any untrue
statement of a material fact relating to the identity of such Seller
or its ownership of the Capital Securities (collectively, the "Seller
Information") or omit to state a material fact relating to such Seller
Information necessary to make the statements therein, in the light of
the circumstances under which they were made, not misleading.
(b) Such Seller has duly authorized, executed and delivered this
Agreement.
(c) Such Seller has, and immediately prior to the Closing Date
such Seller will have, good and valid title to the Capital Securities
to be sold by such Seller hereunder on such date, free and clear of
all liens, encumbrances, equities or claims; and upon delivery of such
Capital Securities and full payment therefor pursuant hereto, good and
valid title to such Capital Securities, free and clear of all liens,
encumbrances, equities or claims, will pass to the Purchaser.
(d) Such Seller has full right, power and authority to enter
into this Agreement; the execution, delivery and performance of this
Agreement by such Seller and the consummation by such Seller of the
transactions contemplated hereby will not conflict with or result in a
breach or violation of any of the terms or provisions of, or
constitute a default under, any indenture, mortgage, deed of trust,
loan agreement or other agreement or instrument to which such Seller
is a party or by which such Seller is bound or to which any of the
property or assets of such Seller is subject, other than such
conflicts, breaches and violations as would not, either individually
or in the aggregate, adversely
<PAGE>
8
affect in any material respect such Seller's ability to perform its
obligations under this Agreement on a timely basis, nor will such
actions result in any material violation of the provisions of the
charter or by-laws of such Seller or the articles of partnership of
such Seller or any statute or any order, rule or regulation of any
court or governmental agency or body having jurisdiction over such
Seller or the property or assets of such Seller; and, no consent,
approval, authorization or order of, or filing or registration with,
any such court or governmental agency or body is required for the
execution, delivery and performance of this Agreement by such Seller
and the consummation by such Seller of the transactions contemplated
hereby.
(e) Such Seller is not prompted to sell the Capital Securities
being sold by such Seller hereunder by any information concerning any
change, or any development involving a prospective change, that,
individually or in the aggregate, reasonably could be expected to have
a Material Adverse Effect, which information is not set forth in the
Offering Memorandum.
3. PURCHASE OF THE CAPITAL SECURITIES BY THE PURCHASER. On the basis
of the representations and warranties herein contained, and subject to the terms
and conditions herein set forth, each Seller hereby agrees, severally and not
jointly, to sell the liquidation amount of Capital Securities set opposite its
name in Schedule 1 hereto to the Purchaser and the Purchaser agrees to purchase
the liquidation amount of the Capital Securities set opposite that Seller's name
in Schedule 1 hereto, at a purchase price of 100% of the liquidation amount
thereof plus accrued and unpaid distributions thereon from June 30, 1997.
As compensation to the Purchaser for its commitment hereunder, each
Seller agrees to pay the Purchaser the commission set forth in Schedule 1
opposite each Seller's name. For convenience purposes, the Purchaser may offset
such amounts against the amounts payable in respect of the purchase price for
such Capital Securities pursuant to the preceding paragraph.
The Sellers shall not be obligated to deliver any of the Capital
Securities, except upon full payment for all of the Capital Securities to be
purchased as hereinafter provided.
4. OFFERING AND RESALE OF THE CAPITAL SECURITIES BY THE PURCHASER.
The Purchaser has advised the Company and the Sellers that it proposes to offer
the Capital Securities for resale upon the terms and conditions set forth in
this Agreement and in the Offering Memorandum. The Purchaser hereby represents
and warrants to, and agrees with, the Company and the Sellers that it (i) is
purchasing the Capital Securities pursuant to a private sale exempt from
registration under the Securities Act, (ii) will not solicit offers for, or
offer or sell, the Capital Securities by means of any form of general
solicitation or general advertising (as those terms are used in Regulation D
under the Securities Act) or in any manner involving a public offering within
the meaning of Section 4(2) of the Securities Act, and (iii) will solicit offers
for the Capital Securities only from, and will offer, sell or deliver the
Capital Securities, as part of the offering contemplated by the Offering
Memorandum, only to (1) persons whom it reasonably believes to be qualified
institutional buyers ("Qualified Institutional Buyers") as defined
<PAGE>
9
in Rule 144A under the Securities Act, as such rule may be amended from time
to time ("Rule 144A") or, if any such person is buying for one or more
institutional accounts for which such person is acting as fiduciary or agent,
only when such person has represented to the Purchaser that each such account
is a Qualified Institutional Buyer, to whom notice has been given that such
sale or delivery is being made in reliance on Rule 144A or (2) institutional
accredited investors ("Accredited Investors") as defined in Rule 501(a)(1)(2),
(3) or (7) under Regulation D who execute letters of representation in the form
included as Appendix A to the Offering Memorandum.
5. DELIVERY OF AND PAYMENT FOR THE CAPITAL SECURITIES. (a) Payment
of the purchase price for, and delivery of, the Capital Securities shall be made
at the offices of Simpson Thacher & Bartlett, New York, New York or at such
other place as shall be agreed upon by the Company and you, at 9:30 a.m. (New
York time), on July 15, 1997 or at such other time or date as you and the
Company shall determine (such date and time of payment and delivery being herein
called the "Closing Date").
(b) On the Closing Date, payment shall be made to the Sellers in
same-day funds by wire transfer to such account or accounts as the Sellers shall
specify prior to the Closing Date or by such means as the parties hereto shall
agree prior to the Closing Date against delivery to you of the certificates
evidencing the Capital Securities. Upon delivery, the Capital Securities shall
be registered in such names and in such denominations as the Purchaser shall
request in writing not less than two full business days prior to the Closing
Date. For the purpose of expediting the checking and packaging of certificates
evidencing the Capital Securities, the Company and the Sellers agree to make
such certificates available for inspection at least 24 hours prior to the
Closing Date.
6. FURTHER AGREEMENTS OF THE COMPANY AND THE TRUST. Each of the
Company and the Trust agrees:
(a) To furnish to you, without charge, as many copies of the
Offering Memorandum and any supplements and amendments thereto as you
may reasonably request.
(b) Prior to making any amendment or supplement to the Offering
Memorandum, the Company shall furnish a copy thereof to the Purchaser
and counsel to the Purchaser and will not effect any such amendment or
supplement to which the Purchaser shall reasonably object.
(c) If, at any time prior to the date on which all of the
Capital Securities purchased hereunder shall have been sold by the
Purchaser, any event shall occur or condition exist as a result of
which it is necessary, in the opinion of counsel for the Purchaser or
counsel for the Company and the Trust, to amend or supplement the
Offering Memorandum in order that the Offering Memorandum will not
include an untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements therein not
misleading in light of the circumstances existing at the time it is
delivered to a purchaser, or if it is necessary to amend or supplement
the Offering Memorandum to comply with applicable law, to promptly
prepare such amendment or supplement as may be
<PAGE>
10
necessary to correct such untrue statement or omission or so that the
Offering Memorandum, as so amended or supplemented, will comply with
applicable law and to furnish you such number of copies as you may
reasonably request; PROVIDED, HOWEVER, that expense of preparing and
delivering any such amendment or supplement shall be borne (i) prior
to the date on which the Company shall file its Annual Report on
Form 10-K or Form 10-KSB for the year ended December 31, 1997 with the
Securities and Exchange Commission, by the Company, and (ii)
thereafter, by the Purchaser.
(d) So long as the Capital Securities are outstanding and are
"Restricted Securities" within the meaning of Rule 144(a)(3) under the
Securities Act, to furnish to holders of the Capital Securities and
prospective purchasers of Capital Securities designated by such
holders, upon request of such holders or such prospective purchasers,
the information required to be delivered pursuant to Rule 144A(d)(4)
under the Securities Act, unless at the time of such request the
Company is subject to and in compliance with Section 13 or 15(d) of
the Exchange Act.
(e) For a period of three years following the date of the
Offering Memorandum, to furnish to the Purchaser copies of all
materials furnished by the Company to its shareholders and all public
reports and all reports and financial statements furnished by each of
the Company and the Trust to the principal national securities
exchange, if any, upon which the Capital Securities or any other
securities of the Company may be listed pursuant to requirements of or
agreements with such exchange or to the Commission pursuant to the
Exchange Act or any rule or regulation of the Commission thereunder.
(f) Promptly from time to time to take such action as the
Purchaser may reasonably request to qualify the Capital Securities,
the Guarantee Agreement and the Junior Subordinated Debenture for
offering and sale under the securities laws of such jurisdictions as
the Purchaser may request and to comply with such laws so as to permit
the continuance of sales and dealings therein in such jurisdictions
for as long as may be necessary to complete the distribution of the
Capital Securities; provided, however, that the Company shall not be
required to register or qualify as a foreign corporation or take any
action which would subject it to the service of process in suits,
other than as to matters relating to the offer and sale of the Capital
Securities, in any jurisdiction where it is not now so subject.
(g) Not to offer, sell, contract to sell or otherwise dispose of
any additional securities of the Trust or the Company substantially
similar to the Capital Securities or any securities convertible into
or exchangeable for or that represent the right to receive any such
similar securities, without the consent (which consent shall not be
unreasonably withheld) of the Purchaser during the period beginning
from the date of this Agreement and continuing to and including the
earlier of (i) the termination of trading restrictions on the Capital
Securities, as communicated to the Company by the Purchaser, and
(ii) 90 days following the Closing Date.
<PAGE>
11
(h) Not to, and to cause its affiliates not to, solicit any
offer to buy or offer to sell the Capital Securities by means of any
form of general solicitation or general advertising (as those terms
are used in Regulation D under the Securities Act) or in any manner
involving a public offering within the meaning of Section 4(2) of the
Securities Act.
(i) Not to, and to cause its affiliates not to, sell, offer for
sale or solicit offers to buy or otherwise negotiate in respect of any
security (as defined in the Securities Act) in a transaction that
could be integrated with the sale of the Capital Securities in a
manner that would require the registration under the Securities Act of
the Capital Securities.
(j) To take such steps as shall be reasonably necessary to
ensure that neither the Company or any subsidiary of the Company nor
the Trust shall become an "investment company" within the meaning of
such term under the Investment Company Act and the rules and
regulations of the Commission thereunder.
7. EXPENSES. The Company agrees to pay (a) the costs incident to the
preparation and printing of the Offering Memorandum and any amendments or
supplements thereto; (b) the costs of distributing the Offering Memorandum and
any amendments or supplements thereto; (c) the fees and expenses of the Property
Trustee (as defined in the Declaration); and (d) all other costs and expenses
incident to the performance of the obligations of the Company and the Trust. The
Company shall reimburse the Purchaser on the Closing Date for the reasonable
fees and expenses of its counsel in connection with the transactions
contemplated hereby in an amount up to $50,000 plus one-half of any such fees
and expenses in excess thereof.
8. CONDITIONS TO THE PURCHASER'S OBLIGATIONS. The obligations of the
Purchaser hereunder are subject to the accuracy, when made and on the Closing
Date, of the representations and warranties of the Company, the Trust and the
Sellers contained herein, to the performance in all material respects by the
Company, the Trust and the Sellers of their respective obligations hereunder,
and to each of the following additional terms and conditions:
(a) The Purchaser shall not have discovered and disclosed to the
Company, the Trust and the Sellers on or prior to the Closing Date
that the Offering Memorandum or any amendment or supplement thereto
contains any untrue statement of a fact which, in the opinion of
Simpson Thacher & Bartlett, counsel for the Purchaser, is material or
omits to state any fact which, in the opinion of such counsel, is
material and is required to be stated therein or is necessary to make
the statements therein not misleading.
(b) All corporate proceedings and other legal matters incident
to the authorization, form and validity of this Agreement, the
Indenture, the Junior Subordinated Debentures, the Guarantee
Agreement, the Capital Securities, the Common Securities, the Offering
Memorandum, and all other legal matters relating to this
<PAGE>
12
Agreement and the transactions contemplated hereby shall be reasonably
satisfactory in all respects to counsel for the Purchaser, and the
Company, the Trust and the Sellers shall have furnished to such
counsel all documents and information that they may reasonably
request to enable them to pass upon such matters.
(c) Nutter, McClennen & Fish, LLP shall have furnished to the
Purchaser their written opinion, as counsel to the Company and the
Trust, addressed to the Purchaser and dated the Closing Date, in form
and substance satisfactory to the Purchaser, to the effect set forth
in Exhibit A hereto.
(d) Richards, Layton & Finger shall have furnished to the
Purchaser their written opinion, on certain matters of Delaware law
relating to the organization of the Trust and the validity of the
Capital Securities, addressed to the Purchaser and dated the Closing
Date, in form and substance satisfactory to the Purchaser, to the
effect set forth in Exhibit B hereto and to such further effect as
counsel to the Purchaser may reasonably request.
(e) You shall have received (A) the Consent of Independent
Auditors dated the date of the Offering Memorandum, in form and
substance satisfactory to you, from KPMG Peat Marwick LLP, independent
auditors for Eldorado Bancorp and (B) letters, dated the date hereof
and the Closing Date in form and substance satisfactory to you, from
Price Waterhouse LLP, independent auditors for the Company, containing
statements and information of the type ordinarily included in
accountants' "comfort letters" to underwriters with respect to (i) the
financial statements and (ii) certain financial information (as of a
date after, or for a period beginning on or after, January 1, 1996),
in each case contained or incorporated by reference in the Offering
Memorandum as identified by you.
(f) The Company and the Trust shall have furnished to the
Purchaser a certificate, dated the Closing Date, of the President and
Chief Executive Officer of the Company and its chief financial officer
stating that:
(i) The representations, warranties and agreements of the
Company and the Trust in Section 1 are true and correct as of the
Closing Date and the Company has complied in all material
respects with all its agreements contained herein; and
(ii) They have carefully examined the Offering Memorandum
and, in their opinion the Offering Memorandum, as of its date and
as of the Closing Date, did not include any untrue statement of a
material fact and did not 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.
<PAGE>
13
(g) Each Seller shall have furnished to the Purchaser on the
Closing Date a certificate, dated such Closing Date, signed by an
authorized senior officer of such Seller, stating that the
representations and warranties of such Seller contained herein are
true and correct as of such Closing Date and that such Seller has
complied in all material respects with all agreements contained herein
to be performed by such Seller at or prior to such Closing Date.
(h) Subsequent to the execution and delivery of this Agreement
there shall not have occurred any of the following: (i) trading in
securities generally on the New York Stock Exchange or the American
Stock Exchange or in the over-the-counter market shall have been
suspended or minimum prices shall have been established on any such
exchange or such market by the Commission, by such exchange or by any
other regulatory body or governmental authority having jurisdiction,
(ii) a banking moratorium shall have been declared by Federal or New
York or California state authorities, (iii) the United States shall
have become engaged in hostilities, there shall have been an
escalation in hostilities involving the United States or there shall
have been a declaration of a national emergency or war by the United
States or (iv) there shall have occurred such a material adverse
change in general economic, political or financial conditions (or the
effect of international conditions on the financial markets in the
United States shall be such) as to make it, in the judgment of the
Purchaser, impracticable or inadvisable to proceed with the offering
or delivery of the Capital Securities on the terms and in the manner
contemplated in the Offering Memorandum.
(i) The Purchaser shall have received on or prior to the
Closing Date the Registration Rights Agreement executed by the Company
and the Trust.
All opinions, letters, evidence and certificates mentioned above or
elsewhere in this Agreement shall be deemed to be in compliance with the
provisions hereof only if they are in form and substance reasonably satisfactory
to counsel for the Purchaser.
9. INDEMNIFICATION AND CONTRIBUTION.
(a) The Company and the Trust, jointly and severally, shall indemnify
and hold harmless the Purchaser, each Seller, and their respective officers and
employees and each person, if any, who controls the Purchaser or a Seller within
the meaning of the Securities Act, from and against any loss, claim, damage or
liability, joint or several, or any action in respect thereof (including, but
not limited to, any loss, claim, damage, liability or action relating to
purchases and sales of Capital Securities), to which the Purchaser or a Seller
or such officers, employees or controlling persons may become subject, under the
Securities Act or otherwise, insofar as such loss, claim, damage, liability or
action arises out of, or is based upon, (i) any untrue statement or alleged
untrue statement of a material fact contained (A) in the Offering Memorandum or
in any amendment or supplement thereto or in any other offering materials
prepared by or on behalf of the Company and used with the Company's consent in
connection with the offering and sale of the Capital Securities hereunder, or
(B) in any blue sky application or other document prepared
<PAGE>
14
or executed by the Company or the Trust (or based upon any written
information furnished by the Company or the Trust) specifically for the
purpose of qualifying any or all of the Capital Securities under the
securities laws of any state or other jurisdiction (any such application,
document or information being hereinafter called a "Blue Sky Application"),
or (ii) the omission or alleged omission to state in the Offering Memorandum
or in any amendment or supplement thereto, in any such offering materials or
in any Blue Sky Application any material fact required to be stated therein
or necessary to make the statements therein not misleading, and shall
reimburse the Purchaser, each Seller, and their respective officers,
employees and controlling persons promptly upon demand for any legal or other
expenses reasonably incurred by the Purchaser or a Seller, or their
respective officers, employees or controlling persons in connection with
investigating or defending or preparing to defend against any such loss,
claim, damage, liability or action as such expenses are incurred; PROVIDED,
HOWEVER, that the Company and the Trust shall not be liable to indemnify the
Purchaser, a Seller, or any officers or employees or controlling persons in
any such case to the extent that any such loss, claim, damage, liability or
action arises out of, or is based upon, any untrue statement or alleged
untrue statement or omission or alleged omission made in the Offering
Memorandum or in any such amendment or supplement or in any Blue Sky
Application in reliance upon and in conformity with the written information
furnished to the Company or the Trust by or on behalf of the Purchaser
specifically for inclusion therein and described in Section 9(e). The
foregoing indemnity agreement is in addition to any liability which the
Company and the Trust may otherwise have to the Purchaser or to any officer,
employee or controlling person of the Purchaser. Notwithstanding any other
provision of this Agreement, the foregoing indemnity agreement with respect
to the Offering Memorandum shall not be available to the Purchaser if the
Company has complied in full with its obligations under Section 6(c) and a
copy of a supplement or amendment to the Offering Memorandum furnished by the
Company to the Purchaser was not sent or given by or on behalf of the
Purchaser to the person asserting such losses, claims, damages or liabilities
at or prior to the written confirmation of the sale of the Capital Securities
to such person, if such supplement or amendment would have cured the defect
giving rise to such loss, claim damage or liability.
(b) The Purchaser shall indemnify and hold harmless the Company, each
of the Sellers, each of their respective officers and employees, each of their
respective directors, the Trustee and each trustee thereof, and each person, if
any, who controls the Company or the Trust within the meaning of the Securities
Act, from and against any loss, claim, damage or liability, joint or several, or
any action in respect thereof, to which the Company, a Seller, any such
director, employee or officer, the Trust or any such trustee or any controlling
person may become subject, under the Securities Act or otherwise, insofar as
such loss, claim, damage, liability or action arises out of, or is based upon,
(i) any untrue statement or alleged untrue statement of a material fact
contained (A) in the Offering Memorandum or in any amendment or supplement
thereto, or (B) in any Blue Sky Application or (ii) the omission or alleged
omission to state in the Offering Memorandum or in any amendment or supplement
thereto, or in any Blue Sky Application any material fact required to be stated
therein or necessary to make the statements therein not misleading, but in each
case only to the extent that the untrue statement or alleged untrue statement or
omission or alleged omission was made in reliance upon and in conformity with
the written information furnished to the Company, the Trust or a Seller by or on
behalf of the Purchaser specifically for inclusion therein and described in
Section 9(e), and shall reimburse the Company, each Seller and any such
director, employee or officer, or the Trust or any such trustee, or controlling
person, for any legal or other expenses
<PAGE>
15
reasonably incurred by the Company or any such director, employee or officer,
or the Trust or any such trustee, or any controlling person in connection
with investigating or defending or preparing to defend against any such loss,
claim, damage, liability or action as such expenses are incurred. The
foregoing indemnity agreement is in addition to any liability which the
Purchaser may otherwise have to the Company, a Seller or any such director,
employee or officer, or the Trust or any such trustee, or any controlling
person.
(c) Promptly after receipt by an indemnified party under this Section
9 of notice of any claim or the commencement of any action, the indemnified
party shall, if a claim in respect thereof is to be made against the
indemnifying party under this Section 9, notify the indemnifying party in
writing of the claim or the commencement of that action; PROVIDED, HOWEVER, that
the failure to notify the indemnifying party shall not relieve it from any
liability which it may have under this Section 9 except to the extent it has
been materially prejudiced by such failure and, PROVIDED FURTHER, that the
failure to notify the indemnifying party shall not relieve it from any liability
which it may have to an indemnified party otherwise than under this Section 9.
If any such claim or action shall be brought against an indemnified party, and
it shall notify the indemnifying party thereof, the indemnifying party shall be
entitled to participate therein and, to the extent that it wishes, jointly with
any other similarly notified indemnifying party, to assume the defense thereof
with counsel reasonably satisfactory to the indemnified party. After notice
from the indemnifying party to the indemnified party of its election to assume
the defense of such claim or action, the indemnifying party shall not be liable
to the indemnified party under this Section 9 for any legal or other expenses
subsequently incurred by the indemnified party in connection with the defense
thereof other than reasonable costs of investigation; PROVIDED, HOWEVER, that
any indemnified party shall have the right to employ separate counsel in any
such action and to participate in the defense thereof but the fees and expenses
of such counsel shall be at the expense of such indemnified party unless (i) the
employment thereof has been specifically authorized by the indemnifying party in
writing, (ii) such indemnified party shall have been advised by such counsel
that there may be one or more legal defenses available to it which are different
from or additional to those available to the indemnifying party and in the
reasonable judgment of such counsel it is advisable for such indemnified party
to employ separate counsel or (iii) the indemnifying party has failed to assume
the defense of such action and employ counsel reasonably satisfactory to the
indemnified party, in which case, if such indemnified party notifies the
indemnifying party in writing that it elects to employ separate counsel at the
expense of the indemnifying party, the indemnifying party shall not have the
right to assume the defense of such action on behalf of such indemnified party,
it being understood, however, that the indemnifying party shall not, in
connection with any one such action or separate but substantially similar or
related actions in the same jurisdiction arising out of the same general
allegations or circumstances, be liable for the reasonable fees and expenses of
more than one separate firm of attorneys at any time for all such indemnified
parties, which firm shall be designated in writing (A) by the Purchaser, if the
indemnified parties under this Section 9 consist of, or include the Purchaser or
any of its officers, employees or controlling persons, or (B) by the Company, if
the indemnified parties under this Section consist of the Company, the Trust or
any of their respective directors, officers, trustees, employees or controlling
persons. No indemnifying party shall (i) without the prior written consent of
the indemnified parties (which consent shall not be unreasonably withheld),
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
<PAGE>
16
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, or (ii) be liable for any
settlement of any such action effected without its written consent (which
consent shall not be unreasonably withheld), but if settled with its written
consent or if there be a final judgment of the plaintiff in any such action,
the indemnifying party agrees to indemnify and hold harmless any indemnified
party from and against any loss of liability by reason of such settlement or
judgment.
(d) If the indemnification provided for in this Section 9 shall for
any reason be unavailable to or insufficient to hold harmless an indemnified
party under Section 9(a) or 9(b) in respect of any loss, claim, damage or
liability, or any action in respect thereof, referred to therein, then each
indemnifying party shall, in lieu of indemnifying such indemnified party,
contribute to the amount paid or payable by such indemnified party as a result
of such loss, claim, damage or liability, or action in respect thereof, (i) in
such proportion as shall be appropriate to reflect the relative benefits (A)
received by the Company and the Trust, (B) the Sellers and (C) the Purchaser,
respectively, from the offering of the Capital Securities or (ii) if the
allocation provided by clause (i) above is not permitted by applicable law, in
such proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) above but also the relative fault of the Company, the
Trust, the Sellers and the Purchaser, respectively, with respect to the
statements or omissions which resulted in such loss, claim, damage or liability,
or action in respect thereof, as well as any other relevant equitable
considerations. The relative benefits received by the Company, the Trust and
the Sellers on the one hand and the Purchaser on the other with respect to such
offering shall be deemed to be in the same proportion as the total net proceeds
from the offering of the Capital Securities purchased under this Agreement
(before deducting expenses) received by the Sellers on the one hand, and the
total underwriting commissions received by the Purchaser with respect to the
Capital Securities purchased under this Agreement, on the other hand, bear to
the total gross proceeds from the offering of the shares of the Capital
Securities under this Agreement. For purposes of the foregoing sentences solely
as between the Company and the Trust, on the one hand, and the Sellers, on the
other, the Company shall be responsible for all contributions required to be
made by the Sellers hereunder. The relative fault shall be determined by
reference to whether the untrue or alleged untrue statement of a material fact
or omission or alleged omission to state a material fact relates to information
supplied by the Company, the Trust, the Sellers or the Purchaser, the intent of
the parties and their relative knowledge, access to information and opportunity
to correct or prevent such statement or omission. The Company, the Trust, the
Sellers and the Purchaser agree that it would not be just and equitable if
contributions pursuant to this Section 9(d) were to be determined by pro rata
allocation or by any other method of allocation which does not take into account
the equitable considerations referred to herein. The amount paid or payable by
an indemnified party as a result of the loss, claim, damage or liability, or
action in respect thereof, referred to above in this Section 9(d) shall be
deemed to include, for purposes of this Section 9(d), any legal or other
expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this Section 9(d), neither the Purchaser nor any of the Sellers
shall be required to contribute any amount in excess of the amount by which, in
the case of the Purchaser, the total price at which the Capital Securities were
resold by the Purchaser or, in the case of each of the
<PAGE>
17
Sellers, the gross proceeds received by such Seller from the sale of Capital
Securities pursuant to this Agreement not immediately reinvested in other
securities of the Company, exceeds the amount of any damages which the
Purchaser or such Seller has otherwise paid or become liable to pay by reason
of any untrue or alleged untrue statement or omission or alleged omission.
No person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the Securities Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation.
(e) The Purchaser confirms that the statements with respect to the
offering of the Capital Securities set forth in the bottom paragraph on the
cover page of, and under the caption "Plan of Distribution" in, the Offering
Memorandum are correct and constitute the only information furnished in writing
to the Company or the Trust by or on behalf of the Purchaser specifically for
inclusion in the Offering Memorandum.
10. TERMINATION. The obligations of the Purchaser hereunder may be
terminated by it by notice given to and received by the Company or the Trust
prior to delivery of and payment for the Capital Securities if, prior to that
time, any of the events described in Section 8(h) shall have occurred or if the
Purchaser shall decline to purchase the Capital Securities for any reason
permitted under this Agreement.
11. REIMBURSEMENT OF PURCHASER'S EXPENSES. If (a) the Sellers shall
fail to tender the Capital Securities for delivery to the Purchaser for any
reason, or (b) the Purchaser shall decline to purchase the Capital Securities
for any reason permitted under this Agreement, the Company shall reimburse the
Purchaser for the reasonable fees and expenses of its counsel and for such other
out-of-pocket expenses as shall have been reasonably incurred by them in
connection with this Agreement and the proposed purchase of the Capital
Securities, and upon demand the Company shall pay the full amount thereof to the
Purchaser: provided, however, that in the circumstances described in clause (b)
of this sentence, (x) the Company's aggregate reimbursement obligation shall not
exceed $50,000, and (y) neither the Company nor any Seller shall be liable to
the Purchaser for damages on account of loss of anticipated profits or other
consequential damages arising out of the purchase of the Capital Securities.
12. NOTICES, ETC. All statements, requests, notices and agreements
hereunder shall be in writing, and:
(a) if to the Purchaser, shall be delivered or sent by mail,
telex or facsimile transmission to Lehman Brothers Inc., Three World
Financial Center, New York, New York 10285, Attention: Syndicate
Department (Fax: 212-528-8822);
(b) if to the Company or the Trust shall be delivered or sent by
mail, telex or facsimile transmission to the address of the Company
set forth in the Offering Memorandum, Attention: Chief Financial
Officer (Fax: 714-798-1154); and
(c) if to any Seller, shall be delivered or sent by mail, telex
or facsimile transmission to such Seller at the address set forth on
Schedule 1 hereto.
<PAGE>
18
Any such statements, requests, notices or agreements shall take effect at the
time of receipt thereof.
13. PERSONS ENTITLED TO BENEFIT OF AGREEMENT. This Agreement
shall inure to the benefit of and be binding upon the Purchaser, the Company,
the Trust, the Sellers and their respective successors. This Agreement and
the terms and provisions hereof are for the sole benefit of only those
persons, except that (A) the representations, warranties, indemnities and
agreements of the Company, the Trust and the Sellers contained in this
Agreement shall also be deemed to be for the benefit of the officers and
employees of the Purchaser and the person or persons, if any, who control the
Purchaser within the meaning of Section 15 of the Securities Act and (B) the
indemnity agreement of the Purchaser contained in Section 9(b) of this
Agreement shall be deemed to be for the benefit of directors, officers and
employees of the Company, the Trust and the Sellers and any person
controlling the Company, the Trust or Sellers within the meaning of Section
15 of the Securities Act. Nothing in this Agreement is intended or shall be
construed to give any person, other than the persons referred to in this
Section 13, any legal or equitable right, remedy or claim under or in respect
of this Agreement or any provision contained herein.
14. SURVIVAL. The respective indemnities, representations,
warranties and agreements of the Company, the Trust, the Sellers and the
Purchaser contained in this Agreement or made by or on behalf of them,
respectively, pursuant to this Agreement, shall survive the delivery of and
payment for the Capital Securities and shall remain in full force and effect,
regardless of any investigation made by or on behalf of any of them or any
person controlling any of them.
15. DEFINITION OF THE TERMS "BUSINESS DAY" AND "SUBSIDIARY". For
purposes of this Agreement, (a) "business day" means any day on which the New
York Stock Exchange, Inc. is open for trading and (b) "subsidiary" has the
meaning set forth in Rule 405 of the Rules and regulations of the Commission
under the Act.
16. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF NEW YORK.
17. COUNTERPARTS AND DELIVERY. This Agreement may be executed in one
or more counterparts and, if executed in more than one counterpart, the executed
counterparts shall each be deemed to be an original but all such counterparts
shall together constitute one and the same instrument. Any party to this
Agreement may deliver an executed copy of this Agreement to one or more of the
parties hereto by facsimile transmission of the signature page hereof as
executed by such party, and any party that elects to so deliver this Agreement
agrees to provide an original signature page to any other party hereto upon
request.
18. HEADINGS. The headings herein are inserted for convenience of
reference only and are not intended to be part of, or to affect the meaning or
interpretation of, this Agreement.
<PAGE>
If the foregoing correctly sets forth the agreement among the Company,
the Trust, the Sellers and the Purchaser, please indicate your acceptance in the
space provided for that purpose below.
Very truly yours,
COMMERCE SECURITY BANCORP, INC.
By:
--------------
Title:
CSBI CAPITAL TRUST I
By:
--------------
REGULAR TRUSTEE
MADISON DEARBORN CAPITAL PARTNERS II,
L.P.
By: Madison Dearborn Partners II, L.P.,
its general partner
By: Madison Dearborn Partners, Inc., its
general partner
By:
--------------
Name:
Title:
OLYMPUS GROWTH FUND II, L.P.
By: OGP II, L.P., its general partner
By: Conroy, L.L.C., its general partner
By:
--------------
Name: James A. Conroy
Title: Member
<PAGE>
20
OLYMPUS EXECUTIVE FUND, L.P.
By: OEF, L.P., its general partner
By: Conroy, L.L.C., its general partner
By:
--------------
Name: James A. Conroy
Title: Member
DARTMOUTH CAPITAL GROUP, L.P.
By: Dartmouth Capital Group, Inc.,
its general partner
By:
--------------
Name: Robert P. Keller
Title: President
<PAGE>
21
Accepted:
LEHMAN BROTHERS INC.
By
--------------
<PAGE>
SCHEDULE 1
Liquidation Amount of Purchaser's
Sellers Capital Securities Commission
------- ------------------- -------------
Madison Dearborn Capital
Partners II, L.P. . . . . . . . $11,617,000 $378,034.50
Three First National Plaza
Suite 1330
Chicago, IL 60602
Attention: Paul Wood
Telephone: (312) 732-5400
Telecopy: (312) 732-4098
Olympus Growth Fund II, L.P. . . . . 11,501,000 374,254.15
Metro Center
One Station Place
Stamford, CT 06902
Attention: James A. Conroy
Telephone: (203) 353-5900
Telecopy: (203) 353-5810
Olympus Executive Fund, L.P. . . . . 116,000 3,780.34
Metro Center
One Station Place
Stamford, CT 06902
Attention: James A. Conroy
Telephone: (203) 353-5900
Telecopy: (203) 353-5910
Dartmouth Capital Group, L.P.. . . . 4,423,000 143,931.01
c/o Commerce Security Bancorp, Inc.
7777 Center Avenue
Huntington Beach, CA 92647
Attention: Robert P. Keller
Telephone: (714) 895-2929
Telecopy: (714) 891-8884
------------------ -------------
Total . . . . . . . . . . . . $27,657,000 $900,000.00
<PAGE>
EXHIBIT A
FORM OF OPINION OF NUTTER, MCCLENNEN & FISH, LLP,
COMPANY COUNSEL TO BE DELIVERED
PURSUANT TO SECTION 8(c)
(i) The Company and each of its subsidiaries have been duly
incorporated and are validly existing as corporations in good standing under
the laws of their respective jurisdictions of incorporation, are duly
qualified to do business and are in good standing as foreign corporations in
each jurisdiction in which their respective ownership or lease of property or
the conduct of their respective businesses requires such qualification (other
than those jurisdictions in which the failure to so qualify would not have a
material adverse effect on the Company or the Company and its subsidiaries
taken as a whole), and have all power and authority necessary to own or hold
their respective properties and conduct the businesses in which they are
engaged as described in the Offering Memorandum.
(ii) Each of the Purchase Agreement and the Registration Rights
Agreement has been duly authorized, executed and delivered by the Company and
has been duly executed and delivered by the Trust.
(iii) The Indenture has been duly authorized, executed, and delivered
by the Company and, when duly authorized, executed and delivered by the
Indenture Trustee, will constitute a valid and legally binding obligation of the
Company, enforceable against the Company, in accordance with its terms, subject
to the effects of bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and other similar laws relating to or affecting creditors' rights
generally, general equitable principles (whether considered in a proceeding in
equity or at law) and implied covenant of good faith and fair dealing.
(iv) The Junior Subordinated Debentures have been duly authorized,
executed and delivered by the Company and constitute valid and legally binding
obligations of the Company enforceable against the Company in accordance with
their terms, subject to the effects of bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium and other similar laws relating to or
affecting creditors' rights generally, general equitable principles (whether
considered in a proceeding in equity or at law) and an implied covenant of good
faith and fair dealing.
(v) The Guarantee Agreement has been duly authorized, executed and
delivered by the Company and constitutes a valid and legally binding obligation
of the Company, enforceable against the Company in accordance with its terms
subject to the effects of bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other similar laws relating to or affecting
creditors' rights generally, general equitable principles (whether considered in
a proceeding in equity or at law) and an implied covenant of good faith and fair
dealing.
(vi) The Declaration has been duly authorized, executed and delivered
by the Company.
A-1
<PAGE>
(vii) The execution, delivery and performance of the Purchase
Agreement, the Declaration, the Indenture, the Junior Subordinated Debentures
and the Guarantee Agreement (collectively, the "Transaction Documents") by the
Company and the Trust, as applicable, does not and will not, as the case may be,
constitute a material breach of, or constitute a default under, any indenture,
mortgage, deed of trust, loan agreement or other agreement or instrument known
to us to which the Company or any of its subsidiaries is a party or by which the
Company or any of its subsidiaries is bound or to which any of the property or
assets of the Company or any of its subsidiaries is subject, nor will such
actions result in any violation of the provisions of the character or by-laws of
the Company or any of its subsidiaries or any statute or any order, rule or
regulation of any court or governmental agency or body having jurisdiction over
the Company or any of its subsidiaries or any of their respective properties or
assets, the effects of which breach, violation or default would be material to
the Company and its subsidiaries taken as a whole.
(viii) The Company has an authorized capitalization as set forth in
the Offering Memorandum; all of the outstanding shares of capital stock of each
significant subsidiary (as such term is defined in Rule 12b-2 under the Exchange
Act) have been duly authorized and validly issued and are fully paid and non-
assessable; except as disclosed in the Offering Memorandum, all such shares are,
to the best of such counsel's knowledge, owned by the Company (except for
directors' qualifying shares, if any) free and clear of any pledge, lien,
security interest, charge, claim, equitable right or encumbrance of any kind.
(ix) No consent, approval, authorization, order, registration or
qualification of or which any Federal or California governmental agency or body
or any Delaware governmental agency or body acting pursuant to the Delaware
General Corporation Law or, to our knowledge, any Federal or California court or
any Delaware court acting pursuant to the Delaware General Corporation Law was
or is required for the issue and sale by the Trust of the Capital Securities,
the issuance by the Company of the Junior Subordinated Debentures, the issuance
of the Guarantee Agreement by the Company and the compliance by the Company and
Trust with all of the provisions of the Purchase Agreement, except for such
consents approvals, authorizations, registrations or qualifications as may be
required under state securities or Blue Sky laws in connection with the purchase
and distribution of the Capital Securities by the Purchaser.
(x) The statements made in the Offering Memorandum under the captions
"Description of the Junior Subordinated Debentures", "The Trust", "Description
of the Capital Securities", "Description of the Guarantee" and "Relationship
Among the Capital Securities, the Junior Subordinated Debentures and the
Guarantee", insofar as such statements purport to constitute summaries of the
terms of the Capital Securities, the Junior Subordinated Debentures and the
Guarantee, constitute accurate summaries of the terms of the Capital Securities,
the Junior Subordinated Debentures and the Guarantee in all material respects,
and the statements in the Offering Memorandum under the caption "Certain United
States Federal Income Tax Consequences" are accurate in all material respects
and fairly summarize the matters referred to therein, and the opinion of Nutter,
McClennen & Fish, LLP, set forth therein is hereby confirmed.
A-2
<PAGE>
(xi) All descriptions in the Offering Memorandum of contracts and
other documents to which the Company or its subsidiaries are a party and which
are material to the holders of the Capital Securities are accurate in all
material respects.
(xii) Except as set forth in the Offering Memorandum, to our
knowledge there are no relationships or transactions between the Company and its
subsidiaries on the one hand and any of the Sellers and their respective
affiliates on the other that are material to the holders of the Capital
Securities, and the descriptions of such relationships and transactions set
forth in the Offering Memorandum are fair and accurate summaries of the terms
thereof in all material respects.
(xiii) To the best of our knowledge and other than as set forth in
the Offering Memorandum, there are no legal or governmental proceedings pending
to which the Company or any of its subsidiaries is a party or to which any
property of the Company or any of its subsidiaries is subject, which, if
determined adversely to the Company or any of its subsidiaries, would
individually or in the aggregate have a material adverse effect on the
consolidated financial position, shareholders' equity or results of operations
of the Company and its subsidiaries; and to the best of our knowledge, no such
proceedings are threatened or contemplated by governmental authorities or
threatened by others;
(xiv) Neither the Company nor the Trust is required to be registered
as an "investment company" under the 1940 Act.
(xv) The Company is duly registered as a bank holding company under
the Bank Holding Company Act of 1956, as amended (the "BHC Act"); and the
deposit accounts of Eldorado Bank are insured by the FDIC to the fullest extent
permitted by law and the rules and regulations of the FDIC, and to the best of
our knowledge no proceedings for the termination of such insurance are pending
or threatened.
(xvi) To the best of our knowledge, neither the Company nor any of
its subsidiaries is a party to any written agreement or memorandum of
understanding with, or a party to any commitment letter or similar undertaking
to, or is subject to any order or directive by, or is a recipient of any
extraordinary supervisory letter from, or has adopted any board resolutions at
the request of, any Bank Regulatory Authority which restricts materially the
conduct of its business, or in any manner relates to its capital adequacy, its
credit policies or its management, nor have any of them been advised by any Bank
Regulatory Authority that it is contemplating issuing or requesting (or is
considering the appropriateness of issuing or requesting) any such order,
decree, agreement, memorandum of understanding, extraordinary supervisory
letter, commitment letter or similar submission, or any such board resolutions.
(xvii) No registration of the Capital Securities, the Guarantee or
the Junior Subordinated Debentures under the Act, and no qualification of the
Declaration, the Guarantee or the Indenture under the Trust Indenture Act is
required for the offer and sale of the Securities by the Sellers to the
Purchaser or the initial reoffer and resale of the Securities by the Purchaser
solely in the manner contemplated by the Offering Memorandum.
A-3
<PAGE>
We have not independently verified the accuracy, completeness or
fairness of the statements made or included in the Offering Memorandum or in the
documents incorporated by reference therein (the "Exchange Act Documents") and
take no responsibility therefor, except as and to the extent set forth in
paragraphs (x), (xi) and (xii) above. In the course of the preparation by the
Company of the Offering Memorandum, we participated in conferences with certain
officers and employees of the Company, with representatives of Price Waterhouse
LLP and KPMG Peat Marwick LLP and with counsel to the Purchaser. Based on our
examination of the Offering Memorandum and the Exchange Act Documents, our
investigations made in connection with the preparation of the Offering
Memorandum and our participation in the conferences referred to above, we have
no reason to believe that the Offering Memorandum (including the Exchange Act
Documents) contains any untrue statement of a material fact or omits to state
any material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading.
A-4
<PAGE>
EXHIBIT B
FORM OF OPINION OF RICHARDS LAYTON & FINGER
SPECIAL DELAWARE COUNSEL TO THE COMPANY AND
THE TRUST TO BE DELIVERED PURSUANT TO SECTION 8(d)
(i) The Trust has been duly created and is validly existing in good standing
as a business trust under the Delaware Trust Act with the business trust
power and authority to own property and to conduct its business as described
in the Offering Memorandum and to enter into and perform its obligations
under each of the Purchase Agreement, the Capital Securities, the Common
Securities and the Declaration;
(ii) The Common Securities have been duly authorized by the
Declaration and are validly issued and (subject to the terms of the Declaration)
fully paid undivided beneficial interests in the assets of the Trust (such
counsel may note that the Holders of Common Securities will be subject to the
withholding provisions of Section 10.4 of the Declaration, will be required to
make payment or provide indemnity or security as set forth in the Declaration
and will be liable for the debts and obligations of the Trust to the extent
provided in Section [9.1(b)] of the Declaration); under the Delaware Trust Act
and the Declaration the issuance of the Common Securities is not subject to
preemptive or other similar rights.
(iii) The Capital Securities have been duly authorized by the
Declaration and validly issued and (subject to the terms of the Declaration) are
fully paid and non-assessable undivided beneficial interests in the Trust; the
Holders of the Capital Securities are entitled to the benefits of the
Declaration (subject to the limitations set forth in clause (v) below) and are
entitled to the same limitation of personal liability under Delaware law as
extended to stockholders of private corporations for profit (such counsel may
note that the Holders of Capital Securities will be subject to the withholding
provisions of Section [10.4] of the Declaration and will be required to make
payment or provide indemnity or security as set forth in the Declaration).
(iv) All necessary trust action has been taken to duly authorize the
execution and delivery by the Trust of the Purchase Agreement and the
performance of its obligations thereunder.
(v) Assuming the Declaration has been duly authorized by the Company
and has been duly executed and delivered by the Company and the Regular
Trustees, and assuming due authorization, execution and delivery of the
Declaration by the Property Trustee and the Delaware Trustee, the Declaration
constitutes a valid and binding obligation of the Company and the Regular
Trustees, enforceable against the Company and the Regular Trustees in accordance
with its terms, except to the extent that enforcement thereof may be limited by
(i) bankruptcy, insolvency, receivership, liquidation, fraudulent transfer,
reorganization, moratorium and similar laws of general applicability relating to
or affecting creditors' rights and remedies, (ii) general principles of equity
(regardless of whether considered and applied in
B-1
<PAGE>
a proceeding in equity or at law), and (iii) the effect of applicable public
policy on the enforceability of provisions relating to indemnification or
contribution.
(vi) The issuance and sale by the Trust of the Securities, the
purchase by the Trust of the Junior Subordinated Debentures, the execution,
delivery and performance by the Trust of the Purchase Agreement, the
consummation by the Trust of the transactions contemplated by the Purchase
Agreement and compliance by the Trust with its obligations thereunder (A) did
not and will not, as the case may be, violate (i) any of the provisions of the
Certificate of Trust or the Declaration or (ii) any applicable Delaware law or
administrative regulation, and (B) did not and do not require any filing with,
or authorization, approval, consent, license, order, registration, qualification
or decree of, any Delaware court or Delaware governmental authority or agency
(other that as may be required under the securities or blue sky laws of the
state of Delaware, as to which such counsel need express no opinion).
(vii) Assuming that the Trust derives no income from or connected
with services provided within the State of Delaware and has no assets,
activities (other than having a Delaware Trustee as required by the Delaware
Trust Act and the filing of documents with the Secretary of State of Delaware)
or employees in the State of Delaware, holders of the Capital Securities (other
than holders who reside or are domiciled in the State of Delaware) will have no
liability for income taxes imposed by the State of Delaware solely as a result
of their participation in the Trust, and the Trust will not be liable for any
income tax imposed by the State of Delaware.
B-2
<PAGE>
EXHIBIT 10.2
MADISON DEARBORN CAPITAL PARTNERS II, L.P.
OLYMPUS GROWTH FUND II, L.P.
OLYMPUS EXECUTIVE FUND, L.P.
July 10, 1997
Commerce Security Bancorp, Inc.
7777 Center Avenue
Huntington Beach, CA 92647
Attention: Robert P. Keller, President
Dartmouth Capital Group, L.P.
7777 Center Avenue
Huntington Beach, CA 92647
Attention: Robert P. Keller, President
Re: RESALE OF SUBORDINATED CAPITAL INCOME SECURITIES, SERIES A -- EXPENSES
Gentlemen:
Reference is hereby made to that certain Purchase Agreement, dated July 10,
1997 (the "Purchase Agreement"), by and among Lehman Brothers Inc. ("Lehman"),
Madison Dearborn Capital Partners II, L.P. ("MDP"), Olympus Growth Fund II, L.P.
("OGF"), Olympus Executive Fund, L.P. ("OEF," and together with OGF, "Olympus"),
Dartmouth Capital Group, L.P. ("DCG") and Commerce Security Bancorp, Inc.
("CSBI"). Capitalized terms used in this letter and not otherwise defined shall
have the meanings assigned to them in the Purchase Agreement.
Notwithstanding anything to the contrary contained in the Purchase
Agreement, MDP, Olympus, CSBI and DCG hereby agree as follows:
1. LEHMAN COMMISSION. Pursuant to Section 3 of the Purchase Agreement,
Sellers have agreed to pay the $900,000 commission owed to Lehman as of the
Closing by reducing pro rata as shown on Schedule 1 to the Purchase Agreement
the proceeds to be received by the Sellers upon the sale of the Securities to
Lehman. The parties hereto have agreed to reallocate among them the burden of
Lehman's fee as follows:
<PAGE>
Commerce Security Bancorp, Inc.
Dartmouth Capital Group, L.P.
July 10, 1997
Page 2
(a) CSBI will pay to DCG in immediately available funds as of the
Closing Date an amount (the "DCG Amount") equal to (x) $143,931.01,
representing DCG's share of the commission as set forth on Schedule 1 to
the Purchase Agreement, MINUS (y) 15.9923% of the Interest Adjustment (as
defined herein).
(b) CSBI will pay to each of MDP and Olympus in immediately available
funds as of the Closing Date an amount (the "Purchaser Amount"),
representing a portion of the commission payable by MDP, OGF and OEF, as
set forth on Schedule 1 to the Purchase Agreement, less an allocable
portion of the Interest Adjustment. The Purchaser Amount shall be
calculated as follows, rounded to the nearest cent:
(i) $175,000, MINUS
(ii) one half of the DCG Amount, MINUS
(iii) one-half of the Interest Adjustment.
CSBI shall allocate the Purchaser Amount payable to Olympus between OGF and
OEF on a 99:1 ratio.
2. INTEREST ADJUSTMENT. The Interest Adjustment shall be equal to the
product, rounded to the nearest cent, of (x) $576.1875 MULTIPLIED by (y) the
number of days elapsed from and including June 30, 1997 to and including the
date next preceding the Closing Date under the Purchase Agreement.
3. EXPENSES. Each of MDP and Olympus will bear one half of all
reasonable out-of-pocket expenses incurred by CSBI, DCG, MDP, or Olympus in
connection with the resale of the Securities pursuant to the Purchase Agreement
(other than the commission payable to Lehman), including, without limitation,
all reasonable disbursements of such attorneys or accountants retained by any of
MDP, Olympus, CSBI or DCG, and the expenses payable to Lehman under the terms of
the Purchase Agreement, excluding in each case any expense or other cost payable
pursuant to Section 6(d) or (e) of the Purchase Agreement, which shall be borne
by the Company, and any expense or other cost payable pursuant to Section 9 of
the Purchase Agreement, which shall be borne by the parties in the manner
specified therein. As between OGF and OEF, Olympus's share of the reimbursable
expenses covered by this section will be allocated on a 99:1 ratio.
<PAGE>
Commerce Security Bancorp, Inc.
Dartmouth Capital Group, L.P.
July 10, 1997
Page 3
4. REGISTRATION OF THE SECURITIES.
(a) Except as expressly provided in the following subsection (b),
each of MDP and Olympus will bear one-quarter of all reasonable out-of-
pocket costs, fees or other expenses, including, without limitation,
reasonable legal and accounting fees, filing fees and printing costs,
incurred by CSBI in fulfilling its obligations pursuant to the Registration
Rights Agreement referenced in the Purchase Agreement, in each case to the
extent such costs, fees or other expenses are in addition to costs, fees or
other expenses that CSBI would incur in the ordinary course of meeting its
reporting obligations under Section 13 or 15(d) of the Exchange Act, and
excluding costs, fees or other expenses incurred pursuant to Sections 8 or
9 of the Registration Rights Agreement. Each of MDP and Olympus shall
reimburse CSBI for their respective share of such costs, fees or other
expenses promptly after receipt of a written request therefor which
reasonably documents the allocation of such costs, fees or other expenses.
(b) Each of MDP and Olympus shall reimburse CSBI for one-half of any
Additional Interest (as defined in Section 5 of such Registration Rights
Agreement) payable by CSBI on the Junior Subordinated Debentures as a
consequence of a Registration Default (as defined therein) pursuant to
clause (x) of such Section 5, but only to the extent that such Additional
Interest accrues during the first 90 days of such a Registration Default.
Each of MDP and Olympus shall reimburse CSBI for their respective share of
such Additional Interest promptly after receipt of a written request
therefor setting forth in reasonable detail the calculation thereof.
Except as expressly provided in the immediately preceding sentence, CSBI
shall bear the cost of, and not be entitled to reimbursement from MDP or
Olympus for, all of the amounts of Additional Interest, if any, payable by
CSBI on the Junior Subordinated Debentures.
(c) As between OGF and OEF, Olympus's share of the reimbursable
expenses and Additional Interest covered by this Section 4 will be
allocated on a 99:1 ratio.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
<PAGE>
Commerce Security Bancorp, Inc.
Dartmouth Capital Group, L.P.
July 10, 1997
Page 4
Please confirm you agreement with the foregoing by signing this letter
below. Upon signing, this letter shall constitute the binding obligation of the
signatories hereto.
Sincerely,
MADISON DEARBORN CAPITAL PARTNERS II, L.P.
By: Madison Dearborn Partners II, L.P., its General Partner
By: Madison Dearborn Partners, Inc., its General Partner
By:
-------------------------------
Name: Paul R. Wood
Title: Vice President
OLYMPUS GROWTH FUND II, L.P.
By: OGF II, L.P., its general partner
By: Conroy, L.L.C., its general partner
By:
-------------------------------
Name: James A. Conroy
Title: Member
OLYMPUS EXECUTIVE FUND, L.P.
By: OEF, L.P., its general partner
By: Conroy, L.L.C., its general partner
By:
-------------------------------
Name: James A. Conroy
Title: Member
AGREED AND CONFIRMED
as of the date first written above
COMMERCE SECURITY BANCORP, INC.
By:
-------------------------------
Name: Curt A. Christianssen
Title: Treasurer and Chief Financial Officer
DARTMOUTH CAPITAL GROUP, L.P.
By: Dartmouth Capital Group, Inc., its general partner
By:
-------------------------------
Name: Curt A. Christianssen
Title: Treasurer
<PAGE>
Commerce Security Bancorp, Inc.
Dartmouth Capital Group, L.P.
July 10, 1997
Page 5
<PAGE>
EXHIBIT 10.3
REGISTRATION RIGHTS AGREEMENT
Dated as of July 15, 1997
Among
CSBI CAPITAL TRUST I,
COMMERCE SECURITY BANCORP, INC.
and
LEHMAN BROTHERS INC.,
as Initial Purchaser
<PAGE>
TABLE OF CONTENTS
Page
----
1. DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
2. SECURITIES SUBJECT TO THIS AGREEMENT. . . . . . . . . . . . . . . . . . 3
3. REGISTERED EXCHANGE OFFER . . . . . . . . . . . . . . . . . . . . . . . 3
4. SHELF REGISTRATION. . . . . . . . . . . . . . . . . . . . . . . . . . . 5
5. ADDITIONAL INTEREST AND ADDITIONAL DISTRIBUTIONS UNDER CERTAIN
CIRCUMSTANCES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
6. REGISTRATION PROCEDURES . . . . . . . . . . . . . . . . . . . . . . . . 7
7. REGISTRATION EXPENSES . . . . . . . . . . . . . . . . . . . . . . . . . 15
8. INDEMNIFICATION AND CONTRIBUTION. . . . . . . . . . . . . . . . . . . . 15
9. RULE 144A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
10. PARTICIPATION IN UNDERWRITTEN REGISTRATIONS . . . . . . . . . . . . . . 18
11. SELECTION OF UNDERWRITERS . . . . . . . . . . . . . . . . . . . . . . . 18
12. MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
<PAGE>
This Registration Rights Agreement (this "Agreement") is made and
entered into as of July 15, 1997 by and among CSBI Capital Trust I, a Delaware
statutory business trust (the "Trust"), Commerce Security Bancorp, Inc., a
Delaware corporation (the "Company"), and Lehman Brothers Inc. (the "Initial
Purchaser").
This Agreement is entered into in connection with the Purchase
Agreement, dated as of July 10, 1997 (the "Purchase Agreement"), among the
Company, the Trust, the Sellers (as named therein) and the Initial Purchaser,
and any additional purchase agreement between such parties, in each case which
provides for the sale or sales by the Trust to the Initial Purchaser of the
Trust's 11 3/4% Subordinated Capital Income Securities, Series A, liquidation
amount $1,000 per security (the "Capital Securities"). The Company is the owner
of all of the beneficial ownership interest represented by the common securities
(the "Common Securities") of the Trust. The Capital Securities are guaranteed
by a guarantee (the "Guarantee") by the Company, to the extent of funds held by
the Trust. Concurrently with the issuance of the Capital Securities and the
Common Securities, the Trust invested the proceeds of each thereof in the
Company's 11 3/4% Junior Subordinated Debentures due 2027 (the "Junior
Subordinated Debentures" and, together with the Capital Securities and the
Guarantee, the "Securities"). In order to induce the Initial Purchaser to enter
into the Purchase Agreement, the Trust and the Company have agreed to provide
the registration rights set forth in this Agreement for the benefit of the
Initial Purchaser and their direct and indirect transferees and assigns. The
execution and delivery of this Agreement is a condition to the Initial
Purchaser's obligations to purchase the Capital Securities under the Purchase
Agreement.
The parties hereby agree as follows:
1 DEFINITIONS. As used in this Agreement, the following
capitalized terms shall have the following meanings:
ADDITIONAL INTEREST: as defined in Section 5(a) hereof.
ADDITIONAL DISTRIBUTIONS: as defined in Section 5(a) hereof.
BROKER-DEALER: Any broker or dealer registered under the
Exchange Act.
CLOSING DATE: The date on which the Securities were sold to the
Initial Purchaser.
COMMISSION: The Securities and Exchange Commission.
CONSUMMATE: A Registered Exchange Offer shall be deemed
"Consummated" for purposes of this Agreement upon the occurrence of (i) the
filing and effectiveness under the Securities Act of the Exchange Offer
Registration Statement relating to the New Securities to be issued in the
Exchange Offer, (ii) the maintenance of such Registration Statement
continuously effective and the keeping of the Exchange Offer open for a
period not less than the minimum period required pursuant to Section 3(b)
hereof, and (iii) the delivery by the Company and the Trust of the New
Securities in the same aggregate principal amount as the aggregate
principal amount of Transfer Restricted Securities that were tendered by
Holders thereof pursuant to the Exchange Offer.
DECLARATION: The Amended and Restated Declaration of Trust,
dated as of July 15, 1997, among Wilmington Trust Company, as Property
Trustee, Wilmington Trust Company, as Delaware Trustee, and the Regular
Trustees named therein, pursuant to which the Capital Securities are being
issued, as amended or supplemented from time to time in accordance with the
terms thereof.
DISTRIBUTION: As defined in the Declaration.
EFFECTIVENESS TARGET DATE: (i) in the case of the Exchange Offer
Registration Statement, the 120th day after the filing date of the
Company's annual report on Form 10-K or Form 10-KSB, as applicable,
<PAGE>
2
subject to extension as permitted by the last sentence of Section 3(a), and
(ii) in the case of a Shelf Registration Statement, the 120th day after the
Shelf Filing Deadline (as defined in Section 4(a) hereof), subject to
extension as permitted by clause (y) of Section 4(a).
EXCHANGE ACT: The Securities Exchange Act of 1934, as amended.
EXCHANGE OFFER: The registration by the Company and the Trust
under the Securities Act of the New Securities pursuant to a Registration
Statement pursuant to which the Company and the Trust offer the Holders of
all outstanding Transfer Restricted Securities the opportunity to exchange
all such outstanding Transfer Restricted Securities held by such Holders
for New Securities in an aggregate amount equal to the aggregate amount of
the Transfer Restricted Securities tendered in such exchange offer by such
Holders.
EXCHANGE OFFER REGISTRATION STATEMENT: The Registration
Statement relating to the Exchange Offer, including the Prospectus which
forms a part thereof.
EXEMPT RESALES: The transactions in which the Initial Purchaser
propose to sell the Securities to certain "qualified institutional buyers,"
as such term is defined in Rule 144A under the Securities Act, and to
certain institutional "accredited investors," as such term is defined in
Rule 501(a)(1), (2), (3) and (7) of Regulation D under the Securities Act
("Accredited Institutions").
GUARANTEE AGREEMENT: The Amended and Restated Guarantee
Agreement, dated as of July 15, 1997, made by the Company, pursuant to
which the Guarantee is being issued, as amended or supplemented from time
to time in accordance with the terms thereof.
HOLDERS: As defined in Section 2(b) hereof.
INITIAL PURCHASER: As defined in the preamble hereto.
NASD: National Association of Securities Dealers, Inc.
NEW JUNIOR SUBORDINATED DEBENTURES: The Company's Junior
Subordinated Debentures to be issued pursuant to the Exchange Offer.
NEW SECURITIES: The Securities to be issued pursuant to the
Declaration and the Guarantee Agreement in the Exchange Offer.
PERSON: An individual, partnership, corporation, limited
liability company, trust or unincorporated organization, or a government or
agency or political subdivision thereof.
PROSPECTUS: The prospectus included in a Registration Statement,
as amended or supplemented by any prospectus supplement and by all other
amendments thereto, including post-effective amendments, and all material
incorporated by reference into such Prospectus.
REGISTRATION DEFAULT: As defined in Section 5 hereof.
REGISTRATION STATEMENT: Any registration statement of the
Company and the Trust relating to (a) an offering of New Securities
pursuant to an Exchange Offer or (b) the registration for resale of
Transfer Restricted Securities pursuant to the Shelf Registration
Statement, which is filed pursuant to the provisions of this Agreement, in
either case, including the Prospectus included therein, all amendments and
supplements thereto (including post-effective amendments) and all exhibits
and material incorporated by reference therein.
<PAGE>
3
SECURITIES ACT: The Securities Act of 1933, as amended.
SHELF FILING DEADLINE: As defined in Section 4 hereof.
SHELF REGISTRATION STATEMENT: As defined in Section 4 hereof.
TIA: The Trust Indenture Act of 1939, as amended.
TRANSFER RESTRICTED SECURITIES: Each Security, until the
earliest to occur of (a) the date on which such Security has been exchanged
by a Person other than a Broker-Dealer for New Securities in the Exchange
Offer, (b) following the exchange by a Broker-Dealer in the Exchange Offer
of such Security for one or more New Securities, the date on which such New
Securities are sold to a purchaser who receives from such Broker-Dealer on
or prior to the date of such sale a copy of the prospectus contained in the
Exchange Offer Registration Statement, (c) the date on which such Security
has been effectively registered under the Securities Act and disposed of in
accordance with the Shelf Registration Statement, or (d) the date on which
such Security is distributed to the public pursuant to Rule 144 under the
Securities Act or (e) the date on which such Security may be sold pursuant
to Rule 144(k) under the Securities Act.
UNDERWRITTEN REGISTRATION or UNDERWRITTEN OFFERING: A
registration in which securities of the Company and the Trust are sold to
an underwriter for reoffering to the public.
2 SECURITIES SUBJECT TO THIS AGREEMENT.
(a) TRANSFER RESTRICTED SECURITIES. The securities entitled to
the benefits of this Agreement are the Transfer Restricted Securities.
(b) HOLDERS OF TRANSFER RESTRICTED SECURITIES. A Person is
deemed to be a holder of Transfer Restricted Securities (each, a "Holder")
whenever such Person beneficially owns Transfer Restricted Securities.
3 REGISTERED EXCHANGE OFFER.
(a) Unless the Exchange Offer shall not be permissible under
applicable law or Commission policy (after the procedures set forth in
Section 6(a) below have been complied with), the Company and the Trust
shall (i) cause to be filed with the Commission as soon as practicable on
or prior to May 15, 1998, but in no event later than 45 days after the
filing of the Company's Annual Report on Form 10-K or Form 10-KSB for the
year ended December 31, 1997, a Registration Statement under the Securities
Act relating to the New Securities and the Exchange Offer, (ii) use all
commercially reasonable efforts to cause such Registration Statement to
become effective at the earliest possible time, but in no event later than
120 days after the filing of the Company's Annual Report on Form 10-K or
Form 10-KSB for the year ended December 31, 1997, (iii) in connection with
the foregoing, file (A) all pre-effective amendments to such Registration
Statement as may be necessary in order to cause such Registration Statement
to become effective, (B) if applicable, a post-effective amendment to such
Registration Statement pursuant to Rule 430A under the Securities Act and
(C) all necessary filings in connection with the registration and
qualification of the New Securities under the Blue Sky laws of such
jurisdictions as are necessary to permit Consummation of the Exchange
Offer, and (iv) unless the Exchange Offer would not be permitted by
applicable law or Commission policy, will commence the Exchange Offer and
use all commercially reasonable efforts to issue on or prior to 30 business
days after the date on which such Registration Statement was declared
effective by the Commission, New Securities in exchange for all Securities
tendered prior thereto in the Exchange Offer. The Exchange Offer shall be
on the appropriate form permitting registration of the New Securities to be
offered in exchange for the Transfer Restricted Securities and to permit
resales of New Securities held by Broker-
<PAGE>
4
Dealers as contemplated by Section 3(c) below. Notwithstanding any other
provision of this Agreement, including, without limitation, clauses (ii)
and (iii) of this subsection, if at any time (x) the Company is in
possession of material non-public information regarding the Company,
(y) the Board of Directors of the Company determines (based on the
advice of counsel) that the Prospectus included in the Exchange Offer
Registration Statement would have to disclose such material non-public
information in order for the Prospectus not to be materially false or
misleading, and (z) the Board of Directors of the Company determines
in good faith that disclosure of such material non-public information
would not be in the best interests of the Company and the holders of
its common stock, the Company may delay filing a pre-effective amendment
to the Exchange Offer Registration Statement or requesting the
effectiveness of such Exchange Offer Registration Statement, the period
during which such a delay occurs being referred to herein as the
Exchange Suspense Period. For purposes of this Section, the Exchange
Suspense Period shall commence upon notice to the Initial Purchaser and
shall end on the earlier of the date that the Company (i) files a request
with the Commission requesting that the Commission declare the Exchange
Offer Registration Statement effective, or (ii) files a pre-effective
amendment to the Exchange Offer Registration Statement. In no event,
however, shall an Exchange Suspense Period continue for more than 30
consecutive business days, nor shall all Exchange Suspense Periods continue
for more than an aggregate of 45 business days (whether or not consecutive)
prior to the effectiveness of the Exchange Offer Registration Statement.
(b) The Company and the Trust shall cause the Exchange Offer
Registration Statement to be effective continuously and shall keep the
Exchange Offer open for a period of not less than the minimum period
required under applicable federal and state securities laws to Consummate
the Exchange Offer; PROVIDED, HOWEVER, that in no event shall such period
be less than 20 business days. The Company and the Trust shall cause the
Exchange Offer to comply with all applicable federal and state securities
laws. No securities other than the New Securities shall be included in the
Exchange Offer Registration Statement. The Company and the Trust shall use
all commercially reasonable efforts to cause the Exchange Offer to be
Consummated on the earliest practicable date after the Exchange Offer
Registration Statement has become effective, but in no event later than 30
business days thereafter.
(c) The Company and the Trust shall indicate in a "Plan of
Distribution" section contained in the Prospectus contained in the Exchange
Offer Registration Statement that any Broker-Dealer who holds Securities
that are Transfer Restricted Securities and that were acquired for its own
account as a result of market-making activities or other trading activities
(other than Transfer Restricted Securities acquired directly from the
Company and the Trust), may exchange such Securities pursuant to the
Exchange Offer; however, such Broker-Dealer may be deemed to be an
"underwriter" within the meaning of the Securities Act and must, therefore,
deliver a prospectus meeting the requirements of the Securities Act in
connection with any resales of the New Securities received by such Broker-
Dealer in the Exchange Offer, which prospectus delivery requirement may be
satisfied by the delivery by such Broker-Dealer of the Prospectus contained
in the Exchange Offer Registration Statement. Such "Plan of Distribution"
section shall also contain all other information with respect to such
resales by Broker-Dealers that the Commission may require in order to
permit such resales pursuant thereto, but such "Plan of Distribution" shall
not name any such Broker-Dealer or disclose the amount of New Securities
held by any such Broker-Dealer except to the extent required by the
Commission as a result of a change in policy announced after the date of
this Agreement.
The Company and the Trust shall use all commercially reasonable
efforts to keep the Exchange Offer Registration Statement continuously
effective, supplemented and amended as required by the provisions of Section
6(c) below to the extent necessary to ensure that it is available for resales of
New Securities acquired by Broker-Dealers for their own accounts as a result of
market-making activities or other trading activities, and to ensure that it
conforms with the requirements of this Agreement, the Securities Act and the
policies, rules and regulations of the Commission as announced from time to
time, for a period of 180 days from the date on which the Exchange Offer
Registration Statement is declared effective. Notwithstanding the immediately
preceding sentence, the Company and the Trust shall have no obligation to keep
the Exchange Offer Registration Statement effective after the Consummation
<PAGE>
5
of the Exchange Offer unless one or more Broker-Dealers notifies the Company
in writing on or before the 10th business day after the Consummation of the
Exchange Offer, as provided in the letter of transmittal accompanying the
Exchange Offer Prospectus, that the Broker-Dealer is obligated to deliver a
Prospectus in connection with resales of New Securities received by such
Broker-Dealer in the Exchange Offer.
The Company and the Trust shall provide sufficient copies of the
latest version of such Prospectus to any Broker-Dealers that have timely given
such notice promptly upon request at any time during such 180-day period in
order to facilitate such resales.
4 SHELF REGISTRATION.
(a) SHELF REGISTRATION. If (i) the Company and the Trust are
not required to file an Exchange Offer Registration Statement or to
consummate the Exchange Offer because the Exchange Offer is not permitted
by applicable law or Commission policy (after the procedures set forth in
Section 6(a) below have been complied with), (ii) the Company has received
an opinion of a law firm having a recognized tax practice or a nationally
recognized accounting firm, to the effect that, as a result of the
Consummation of the Exchange Offer there is more than an insubstantial risk
that (x) the Trust would be subject to United States federal income tax
with respect to income received or accrued on the Junior Subordinated
Debentures or New Junior Subordinated Debentures, (y) interest payable by
the Company on such Junior Subordinated Debentures or New Junior
Subordinated Debentures would not be deductible by the Company, in whole or
in part, for United States federal income tax purposes, or (z) the Trust
would be subject to more than a de minimis amount of other taxes, duties or
other governmental charges or (iii) if any Holder of Transfer Restricted
Securities that is a "qualified institutional buyer" (as defined in Rule
144A under the Securities Act) or an "accredited investor" (as defined in
Rule 501(a)(1), (2), (3) or (7) under the Securities Act) shall notify the
Company on or before the 20th business day after the Consummation of the
Exchange Offer (A) that such Holder is prohibited by applicable law or
Commission policy from participating in the Exchange Offer, or (B) that
such Holder may not resell the New Securities acquired by it in the
Exchange Offer to the public without delivering a prospectus and that the
Prospectus contained in the Exchange Offer Registration Statement is not
appropriate or available for such resales by such Holder, or (C) that such
Holder is a Broker-Dealer and holds Securities acquired directly from the
Trust and the Company or one of its affiliates, then the Trust and the
Company shall use all commercially reasonable efforts to:
(x) cause to be filed a shelf registration
statement pursuant to Rule 415 under the Securities Act,
which may be an amendment to the Exchange Offer Registration
Statement (in either event, the "Shelf Registration
Statement"), on or prior to the earliest to occur of (1) the
30th day after the date on which the Trust and the Company
determines that they are not required to file the Exchange
Offer Registration Statement or (2) the 30th day after the
date on which the Trust and the Company receive notice from
a Holder of Transfer Restricted Securities as contemplated
by clause (iii) above (such earliest date being the "Shelf
Filing Deadline"), which Shelf Registration Statement shall
provide for resales of all Transfer Restricted Securities
the Holders of which shall have provided the information
required pursuant to Section 4(b) hereof; and
(y) cause such Shelf Registration Statement to be
declared effective by the Commission on or before the 120th
day after the Shelf Filing Deadline; PROVIDED, HOWEVER,
that, in no event shall the Company be required to cause
such Shelf Registration Statement to be declared effective
by the Commission prior to the Effectiveness Target Date;
PROVIDED, FURTHER, that, notwithstanding any other provision
of this Agreement, if at any time (x) the Company is in
possession of material non-public information regarding the
Company, (y) the Board of Directors of the Company
determines (based on the advice of counsel) that the
Prospectus included in the Shelf Registration Statement
would have to
<PAGE>
6
disclose such material non-public information in order
for the Prospectus not to be materially false or
misleading, and (z) the Board of Directors of the Company
determines in good faith that disclosure of such material
non-public information would not be in the best interests of
the Company and the holders of its common stock, the Company
may delay filing a pre-effective amendment to the Shelf
Registration Statement or requesting the effectiveness of
such Shelf Registration Statement, the period during which
such a delay occurs being referred to herein as the Shelf
Suspense Period. For purposes of this Section, the Shelf
Suspense Period shall commence upon notice to the Initial
Purchaser and shall end on the earlier of the date that the
Company (i) files a request with the Commission requesting
that the Commission declare the Shelf Registration Statement
effective, or (ii) files a pre-effective amendment to the
Shelf Registration Statement. In no event, however, shall a
Shelf Suspense Period continue for more than 30 consecutive
business days, nor shall all Shelf Suspense Periods continue
for more than an aggregate of 45 business days (whether or
not consecutive) prior to the effectiveness of the Shelf
Registration Statement.
The Trust and the Company shall use all commercially reasonable efforts to
keep such Shelf Registration Statement continuously effective, supplemented
and amended as required by the provisions of Sections 6(b) and (c) hereof
to the extent necessary to ensure that it is available for resales of
Securities by the Holders of Transfer Restricted Securities entitled to the
benefit of this Section 4(a), and to ensure that it conforms with the
requirements of this Agreement, the Securities Act and the policies, rules
and regulations of the Commission as announced from time to time, for a
period ending on the second anniversary of the Closing Date.
(b) PROVISION BY HOLDERS OF CERTAIN INFORMATION IN CONNECTION
WITH THE SHELF REGISTRATION STATEMENT. No Holder of Transfer Restricted
Securities may include any of its Transfer Restricted Securities in any
Shelf Registration Statement pursuant to this Agreement unless and until
such Holder furnishes to the Trust and the Company in writing, within 20
business days after receipt of a request therefor, such information as the
Trust and the Company may reasonably request for use in connection with any
Shelf Registration Statement or Prospectus or preliminary Prospectus
included therein. No Holder of Transfer Restricted Securities shall be
entitled to Additional Distributions pursuant to Section 5 hereof or the
Junior Subordinated Debentures unless and until such Holder shall have used
its best efforts to provide all such reasonably requested information.
Each Holder as to which any Shelf Registration Statement is being effected
agrees to furnish promptly to the Trust and the Company all information
required to be disclosed in order to make the information previously
furnished to the Trust and the Company by such Holder not materially
misleading.
5 ADDITIONAL INTEREST AND ADDITIONAL DISTRIBUTIONS UNDER CERTAIN
CIRCUMSTANCES.
(a) If (w) any of the Registration Statements required by this
Agreement is not filed with the Commission on or prior to the date specified for
such filing in this Agreement, (x) any of such Registration Statements has not
been declared effective by the Commission on or prior to the date specified for
such effectiveness in this Agreement, (y) the Exchange Offer has not been
Consummated within 30 business days after the Effectiveness Target Date with
respect to the Exchange Offer Registration Statement or (z) any Registration
Statement required by this Agreement is filed and declared effective but shall
thereafter cease to be effective or fail to be usable for its intended purpose
(other than for any reason set forth in Section 6(c)(iii)(D) which shall not
exceed 30 consecutive days, or 90 days in any twelve month period) without being
succeeded within two business days by a post-effective amendment to such
Registration Statement that cures such failure and that is itself immediately
declared effective (each such event referred to in clauses (w) through (z), a
"Registration Default"), additional interest (the "Additional Interest") shall
become payable in respect of the Junior Subordinated Debentures (including in
respect of amounts accruing during any Extension Period (as defined in the
Declaration)) and corresponding additional Distributions (the "Additional
Distributions") shall become payable to each Holder of Capital Securities (in
its capacity as such and
<PAGE>
7
not in its capacity as an indirect holder of a pro rata share of the Junior
Subordinated Debentures) with respect to the first 90-day period immediately
following the occurrence of such Registration Default at a rate of 0.50% per
annum for each day that the Registration Default continues. The amount of
Additional Interest (and the corresponding amount of Additional Distributions
payable to any Holder of Capital Securities) shall further increase at a rate
of 0.25% per annum with respect to each subsequent 90-day period until all
Registration Defaults have been cured, up to a maximum rate of Additional
Interest (and corresponding Additional Distributions) of 1.0% per annum.
Following the cure of all Registration Defaults relating to any particular
Transfer Restricted Securities, the accrual of Additional Interest (and
corresponding Additional Distributions) with respect to such Transfer
Restricted Securities will cease. Any amounts of Additional Interest (and
corresponding Additional Distributions) will be payable in cash on the same
original Interest Payment Dates (as defined in the Indenture relating to the
Junior Subordinated Debentures) as regular payments of interest on the Junior
Subordinated Debentures. The amount of Additional Interest (and
corresponding Additional Distributions) will be determined by multiplying the
applicable Additional Interest rate by the principal amount of the Junior
Subordinated Debentures multiplied by a fraction, the numerator of which is
the number of days such Additional Interest rate was applicable during such
period (determined on the basis of a 360-day year comprised of twelve 30-day
months), and the denominator of which is 360.
All obligations of the Trust and the Company set forth in the
preceding paragraph that are outstanding with respect to any Transfer Restricted
Security at the time such security ceases to be a Transfer Restricted Security
shall survive until such time as all such obligations with respect to such
Transfer Restricted Security shall have been satisfied in full.
(b) The Trust and the Company shall notify the Property Trustee within
two business days after each and every date on which an event occurs in respect
of which Additional Distributions are required to be paid (an "Event Date").
Additional Distributions shall be paid by depositing Additional Interest with
the Property Trustee, in trust, for the benefit of the Holders thereof, on or
before the applicable Interest Payment Date (whether or not any payment other
than Additional Distributions is payable on the Capital Securities), immediately
available funds in sums sufficient to pay the Additional Distributions then due
to Holders of Transfer Restricted Securities with respect to which the Property
Trustee serves. Each obligation to pay Additional Interest and Additional
Distributions shall be deemed to accrue from the applicable date of the
occurrence of the Registration Default.
6 REGISTRATION PROCEDURES.
(a) EXCHANGE OFFER REGISTRATION STATEMENT. In connection with
the Exchange Offer, the Trust and the Company shall comply with all of the
provisions of Section 6(c) below, shall use all commercially reasonable
efforts to effect such exchange to permit the sale of Transfer Restricted
Securities being sold in accordance with the intended method or methods of
distribution thereof, and shall comply with all of the following
provisions:
(i) If in the reasonable opinion of counsel to the Trust
and the Company there is a question as to whether the Exchange Offer
is permitted by applicable law, the Trust and the Company hereby agree
to use all commercially reasonable efforts to seek a no-action letter
from the Commission allowing the Trust and the Company to Consummate
an Exchange Offer for such Securities. The Trust and the Company
hereby agree to pursue the issuance of such a decision to the
Commission staff level but shall not be required to take commercially
unreasonable action to effect a change of Commission policy. The
Trust and the Company hereby agree, however, to (A) participate in
telephonic conferences with the Commission, (B) deliver to the
Commission staff an analysis prepared by counsel to the Trust and the
Company setting forth the legal bases, if any, upon which such counsel
has concluded that such an Exchange Offer should be permitted and (C)
diligently pursue a resolution (which need not be favorable) by the
Commission staff of such submission.
(ii) As a condition to its participation in the Exchange
Offer pursuant to the
<PAGE>
8
terms of this Agreement, each Holder of Transfer Restricted
Securities shall furnish, upon the request of the Trust or
the Company, prior to the Consummation thereof, a written
representation to the Trust or the Company (which may be contained in
the letter of transmittal contemplated by the Exchange Offer
Registration Statement) to the effect that (A) it is not an affiliate
of the Trust or the Company, (B) it is not engaged in, and does not
intend to engage in, and has no arrangement or understanding with any
Person to participate in, a distribution of the New Securities to be
issued in the Exchange Offer and (C) it is acquiring the New
Securities in its ordinary course of business. In addition, all such
Holders of Transfer Restricted Securities shall otherwise cooperate in
the Company's and the Trust's preparations for the Exchange Offer.
Each Holder hereby acknowledges and agrees that any Broker-Dealer and
any such Holder using the Exchange Offer to participate in a
distribution of the securities to be acquired in the Exchange Offer
(1) could not under Commission policy as in effect on the date of this
Agreement rely on the position of the Commission enunciated in MORGAN
STANLEY AND CO., INC. (available June 5, 1991) and EXXON CAPITAL
HOLDINGS CORPORATION (available May 13, 1988), as interpreted in the
Commission's letter to Shearman & Sterling dated July 2, 1993, and
similar no-action letters (including any no-action letter obtained
pursuant to clause (i) above), and (2) must comply with the
registration and prospectus delivery requirements of the Securities
Act in connection with a secondary resale transaction and that such a
secondary resale transaction should be covered by an effective
registration statement containing the selling security holder
information required by Item 507 or 508, as applicable, of Regulation
S-K if the resales are of New Securities obtained by such Holder in
exchange for Securities acquired by such Holder directly from the
Trust or the Company.
(iii) Prior to effectiveness of the Exchange Offer
Registration Statement, the Company and the Trust shall provide a
supplemental letter to the Commission (A) stating that the Company and
the Trust are registering the Exchange Offer in reliance on the
position of the Commission enunciated in EXXON CAPITAL HOLDINGS
CORPORATION (available May 13, 1988), MORGAN STANLEY AND CO., INC.
(available June 5, 1991) and, if applicable, any no-action letter
obtained pursuant to clause (i) above and (B) including a
representation that the Company and the Trust have not entered into
any arrangement or understanding with any Person to distribute the New
Securities to be received in the Exchange Offer and that, to the best
of the Company's and the Trust's information and belief, based only on
written representations received under clause (ii) above, that each
Holder participating in the Exchange Offer is acquiring the New
Securities in its ordinary course of business and has no arrangement
or understanding with any Person to participate in the distribution of
the New Securities received in the Exchange Offer.
(b) SHELF REGISTRATION STATEMENT. In connection with any Shelf
Registration Statement, the Company and the Trust shall comply with all the
provisions of Section 6(c) below and shall use all commercially reasonable
efforts to effect such registration to permit the sale of the Transfer
Restricted Securities being sold in accordance with the intended method or
methods of distribution thereof, and pursuant thereto the Company and the
Trust will as expeditiously as possible prepare and file with the
Commission a Registration Statement relating to the registration on any
appropriate form under the Securities Act, which form shall be available
for the sale of the Transfer Restricted Securities in accordance with the
intended method or methods of distribution thereof.
(c) GENERAL PROVISIONS. In connection with any Registration
Statement and any Prospectus required by this Agreement to permit the sale
or resale of Transfer Restricted Securities (including, without limitation,
any Registration Statement and the related Prospectus required to permit
resales of Securities by Broker-Dealers), the Company and the Trust shall:
(i) use all commercially reasonable efforts to keep such
Registration Statement continuously effective and provide all
requisite financial statements for the period
<PAGE>
9
specified in Section 3 or 4 of this Agreement, as applicable; upon
the occurrence of any event that would cause any such Registration
Statement or the Prospectus contained therein (A) to contain a
material misstatement or omission or (B) not to be effective and
usable for resale of Transfer Restricted Securities during the
period required by this Agreement, the Company and the Trust shall
file promptly an appropriate amendment to such Registration
Statement, in the case of clause (A), correcting any such
misstatement or omission, and, in the case of either clause (A) or
(B), use all commercially reasonable efforts to cause such
amendment to be declared effective and such Registration Statement
and the related Prospectus to become usable for their intended
purpose(s) as soon as practicable thereafter;
(ii) prepare and file with the Commission such amendments
and post-effective amendments to the Registration Statement as may
be necessary to keep the Registration Statement effective for the
applicable period set forth in Section 3 or 4 hereof, as
applicable, or such shorter period as will terminate when all
Transfer Restricted Securities covered by such Registration
Statement have been sold or cease to be Transfer Restricted
Securities within the meaning of this Agreement; cause the
Prospectus to be supplemented by any required Prospectus
supplement, and as so supplemented to be filed pursuant to Rule 424
under the Securities Act, and to comply fully with the applicable
provisions of Rules 424 and 430A under the Securities Act in a
timely manner; and comply with the provisions of the Securities Act
with respect to the disposition of all securities covered by such
Registration Statement during the applicable period in accordance
with the intended method or methods of distribution by the sellers
thereof set forth in such Registration Statement or supplement to
the Prospectus;
(iii) advise the underwriter(s), if any, and selling
Holder(s) promptly and, if requested by such Persons, to confirm
such advice in writing, (A) when the Prospectus or any Prospectus
supplement or post-effective amendment has been filed, and, with
respect to any Registration Statement or any post-effective
amendment thereto, when the same has become effective, (B) of any
request by the Commission for amendments to the Registration
Statement or amendments or supplements to the Prospectus or for
additional information relating thereto, (C) of the issuance by the
Commission of any stop order suspending the effectiveness of the
Registration Statement under the Securities Act or of the
suspension by any state securities commission of the qualification
of the Transfer Restricted Securities for offering or sale in any
jurisdiction, or the initiation of any proceeding for any of the
preceding purposes, and (D) of the existence of any fact or the
happening of any event that makes any statement of a material fact
made in the Registration Statement, the Prospectus, any amendment
or supplement thereto, or any document incorporated by reference
therein untrue, or that requires the making of any additions to or
changes in the Registration Statement or the Prospectus in order to
make the statements therein not misleading; PROVIDED that the
Company shall not be required to disclose the nature or substance
of any such fact or event as long as it is acting in good faith.
If at any time the Commission shall issue any stop order suspending
the effectiveness of the Registration Statement, or any state
securities commission or other regulatory authority shall issue an
order suspending the qualification or exemption from qualification
of the Transfer Restricted Securities under state securities or
Blue Sky laws, the Trust and the Company shall use all commercially
reasonable efforts to obtain the withdrawal or lifting of such
order at the earliest possible time;
(iv) furnish to each of the selling or exchanging Holders
and each of the underwriter(s), if any, before filing with the
Commission, copies of any Shelf Registration Statement or any
Prospectus included therein or any amendments or supplements to any
such Shelf Registration Statement or Prospectus (excluding all
documents incorporated by reference after the initial filing of
such Registration Statement), which documents will be subject to
the review of such Holders and underwriter(s), if any, for a period
of at least three business days, and the Trust
<PAGE>
10
and the Company will not file any such Registration Statement or
Prospectus or any amendment or supplement to any such Registration
Statement or Prospectus to which a selling Holder of Transfer
Restricted Securities covered by such Registration Statement or the
underwriter(s), if any, shall reasonably object within such five
business days. A selling Holder or underwriter, if any, shall be
deemed to have reasonably objected to such filing if in the
reasonable opinion of counsel to such Person such Registration
Statement, amendment, Prospectus or supplement, as applicable, as
proposed to be filed, contains a material misstatement or omission;
(v) after the filing of any document that is to be
incorporated by reference into a Registration Statement or
Prospectus, provide copies of such document to the selling Holders
and to the underwriter(s), if any, promptly upon request and make
the Trust's and the Company's representatives available for
discussion of such document and other customary due diligence
matters;
(vi) subject to the Company's prior receipt of customary
confidentiality agreements, make available at reasonable times for
inspection by the selling Holders, any underwriter participating in
any disposition pursuant to such Registration Statement, and any
attorney or accountant retained by such selling Holders or any of
the underwriter(s), all financial and other records, pertinent
corporate documents and properties of the Trust and the Company and
cause the Trust's and the Company's officers, directors, managers
and employees to supply all information reasonably requested by any
such Holder, underwriter, attorney or accountant in connection with
such Registration Statement subsequent to the filing thereof and
prior to its effectiveness;
(vii) if requested by any selling Holders under the Shelf
Registration Statement or the underwriter(s), if any, promptly
incorporate in any Shelf Registration Statement or Prospectus,
pursuant to a supplement or post-effective amendment if necessary,
such information as such selling Holders and underwriter(s), if any,
may reasonably request to have included therein, including, without
limitation, information relating to the "Plan of Distribution" of the
Transfer Restricted Securities, information with respect to the
principal amount of Transfer Restricted Securities being sold to such
underwriter(s), the purchase price being paid therefor and any other
terms of the offering of the Transfer Restricted Securities to be sold
in such offering; and make all required filings of such Prospectus
supplement or post-effective amendment as soon as practicable after
the Trust and the Company are notified of the matters to be
incorporated in such Prospectus supplement or post-effective
amendment;
(viii) furnish to each selling Holder and each of the
underwriter(s), if any, without charge, at least one copy of the
Registration Statement, as first filed with the Commission, and of
each amendment thereto, including all documents incorporated by
reference therein and all exhibits (including, upon request, all
exhibits incorporated therein by reference);
(ix) deliver to each selling Holder and each of the
underwriter(s), if any, without charge, as many copies of the
Prospectus (including each preliminary prospectus) and any
amendment or supplement thereto as such Persons reasonably may
request; the Trust and the Company hereby consent to the use of the
Prospectus and any amendment or supplement thereto by each of the
selling Holders and each of the underwriter(s), if any, in
connection with the offering and the sale of the Transfer
Restricted Securities covered by the Prospectus or any amendment or
supplement thereto;
(x) enter into such agreements (including an
underwriting agreement), and make such customary representations
and warranties, and take all such other actions in connection
<PAGE>
11
therewith in order to expedite or facilitate the disposition of the
Transfer Restricted Securities pursuant to any Registration
Statement contemplated by this Agreement, all to such extent as may
be reasonably requested by any Purchaser or by any Holder of
Transfer Restricted Securities or underwriter in connection with
any sale or resale pursuant to any Registration Statement
contemplated by this Agreement; and in connection with an
Underwritten Registration, the Trust and the Company shall:
(A) upon request, furnish to each selling Holder
and each underwriter, if any, in such substance and scope as they
may reasonably request and as are customarily made by issuers to
underwriters in primary underwritten offerings, upon the date of
the effectiveness of the Shelf Registration Statement:
(1) a certificate, dated the date of the
effectiveness of the Shelf Registration Statement, signed
by (y) the Chairman of the Board, its President or a Vice
President and (z) the Chief Financial Officer of the
Company, confirming, as of the date thereof, such matters
as such parties may reasonably request;
(2) an opinion, dated the date of the
effectiveness of the Shelf Registration Statement, of
counsel for the Company and the Trust, covering such
matters as such parties may reasonably request, and in
any event including a statement to the effect that such
counsel has participated in conferences with officers and
other representatives of the Company and the Trust,
representatives of the independent public accountants for
the Company, the Initial Purchaser's representatives and
the Initial Purchaser's counsel in connection with the
preparation of such Registration Statement and the
related Prospectus and have considered the matters
required to be stated therein and the statements
contained therein, although such counsel has not
independently verified the accuracy, completeness or
fairness of such statements; and that such counsel
advises that, on the basis of the foregoing (relying as
to materiality to a large extent upon facts provided to
such counsel by officers and other representatives of the
Company and the Trust and without independent check or
verification), no facts came to such counsel's attention
that caused such counsel to believe that the applicable
Registration Statement, at the time such Registration
Statement or any post-effective amendment thereto became
effective, contained an untrue statement of a material
fact or omitted to state a material fact required to be
stated therein or necessary to make the statements
therein not misleading, or that the Prospectus contained
in such Registration Statement as of its date, contained
an untrue statement of a material fact or omitted to
state a material fact necessary in order to make the
statements therein, in light of the circumstances under
which they were made, not misleading. Without limiting
the foregoing, such counsel may state further that such
counsel assumes no responsibility for, and has not
independently verified, the accuracy, completeness or
fairness of the financial statements, notes and schedules
and other financial data included in any Registration
Statement contemplated by this Agreement or the related
Prospectus; and
(3) a customary comfort letter, dated the date
of the effectiveness of the Shelf Registration Statement,
from the Company's independent accountants, in the
customary form and covering matters of the type customarily
covered in comfort letters by underwriters in connection
with primary
<PAGE>
12
underwritten offerings.
(B) set forth in full or incorporate by reference in
the underwriting agreement, if any, the indemnification
provisions and procedures of Section 8 hereof with respect to all
parties to be indemnified pursuant to said Section; and
(C) deliver such other documents and certificates as
may be reasonably requested by such parties to evidence
compliance with clause (A) above and with any customary
conditions contained in the underwriting agreement or other
agreement entered into by the Company and the Trust pursuant to
this clause (x), if any.
If at any time the representations and warranties of the
Company contemplated in clause (A)(1) above cease to be true and
correct, the Company shall so advise the Initial Purchaser and the
underwriter(s), if any, and each selling Holder promptly and, if
requested by such Persons, shall confirm such advice in writing;
(xi) prior to any public offering of Transfer Restricted
Securities, cooperate with the selling Holders, the underwriter(s), if
any, and their respective counsel in connection with the registration
and qualification of the Transfer Restricted Securities under the
securities or Blue Sky laws of such jurisdictions as the selling
Holders or underwriter(s) may reasonably request and do any and all
other acts or things necessary or advisable to enable the disposition
in such jurisdictions of the Transfer Restricted Securities covered by
the Shelf Registration Statement; PROVIDED, HOWEVER, that neither the
Company nor the Trust shall not be required to register or qualify as
a foreign corporation where it is not now so qualified or to take any
action that would subject it to the service of process in suits or to
taxation, other than as to matters and transactions relating to the
Registration Statement, in any jurisdiction where it is not now so
subject;
(xii) shall issue, upon the request of any Holder of
Securities covered by the Shelf Registration Statement, New Securities
in the same amount as the Securities surrendered to the Company and
the Trust by such Holder in exchange therefor or being sold by such
Holder; such New Securities to be registered in the name of such
Holder or in the name of the purchaser(s) of such Securities, as the
case may be; in return, the Securities held by such Holder shall be
surrendered to the Company and the Trust for cancellation;
(xiii) cooperate with the selling Holders and the
underwriter(s), if any, to facilitate the timely preparation and
delivery of certificates representing Transfer Restricted Securities
to be sold and not bearing any restrictive legends; and enable such
Transfer Restricted Securities to be in such denominations and
registered in such names as the Holders or the underwriter(s), if any,
may request at least two business days prior to any sale of Transfer
Restricted Securities made by such underwriter(s);
(xiv) if any fact or event contemplated by clause
(c)(iii)(D) above shall exist or have occurred, as promptly as is
practicable under the circumstances in the good faith determination of
the Company prepare a supplement or post-effective amendment to the
Registration Statement or related Prospectus or any document
incorporated therein by reference or file any other required document
so that, as thereafter delivered to the purchasers of Transfer
Restricted Securities, the Registration Statement will not contain an
untrue statement of a material fact or omit to state any material fact
necessary to make the statements therein not misleading; and any
Prospectus will not contain an untrue statement of a material fact or
omit to state any material fact necessary to make the statements
therein, in light of the circumstances under which they were made,
<PAGE>
13
not misleading;
(xv) provide CUSIP numbers for all Transfer Restricted
Securities not later than the effective date of the Registration
Statement and provide certificates for the Transfer Restricted
Securities;
(xvi) cooperate and assist in any filings required to be
made with the NASD and in the performance of any due diligence
investigation by any underwriter (including any "qualified independent
underwriter") that is required to be retained in accordance with the
rules and regulations of the NASD, and use all commercially reasonable
efforts to cause such Registration Statement to become effective and
approved by such governmental agencies or authorities as may be
necessary to enable the Holders selling Transfer Restricted Securities
to consummate the disposition of such Transfer Restricted Securities;
(xvii) otherwise use all commercially reasonable efforts
to comply with all applicable rules and regulations of the Commission,
and make generally available to its security holders, as soon as
practicable, a consolidated earnings statement meeting the
requirements of Rule 158 (which need not be audited) for the twelve-
month period (A) commencing at the end of any fiscal quarter in which
Transfer Restricted Securities are sold to underwriters in a firm or
best efforts Underwritten Offering or (B) if not sold to underwriters
in such an offering, beginning with the first month of the Company's
first fiscal quarter commencing after the effective date of the
Registration Statement;
(xviii) cause the Indenture, the Junior Subordinated
Debentures, the Guarantee and the Declaration to be qualified under
the TIA not later than the effective date of the first Registration
Statement required by this Agreement, and, in connection therewith,
cooperate with the applicable trustees and the Holders of Securities
to effect such changes, if any, to the Junior Subordinated Debentures,
the Guarantee and the Declaration as may be required for the Junior
Subordinated Debentures, the Guarantee and the Declaration to be so
qualified in accordance with the terms of the TIA; and execute, and
use their best efforts to cause the Property Trustee to execute, all
documents that may be required to effect such changes and all other
forms and documents required to be filed with the Commission to enable
such Junior Subordinated Debentures to be so qualified in a timely
manner; and
(xix) provide promptly to each Holder upon request each
document filed with the Commission pursuant to the requirements of
Section 13(a) and Section 15(d) of the Exchange Act.
Each Holder agrees by acquisition of a Transfer Restricted
Security that, upon receipt of any notice from the Company or the Trust of
the existence of any fact or event of the kind described in Section
6(c)(iii)(D) hereof, such Holder will forthwith discontinue disposition of
Transfer Restricted Securities pursuant to the applicable Registration
Statement until such Holder's receipt of the copies of the supplemented or
amended Prospectus contemplated by Section 6(c)(xv) hereof, or until it is
advised in writing (the "Advice") by the Company or the Trust that the use
of the Prospectus may be resumed, and has received copies of any additional
or supplemental filings that are incorporated by reference in the
Prospectus. If so directed by the Company or the Trust, each Holder will
deliver to the Company or the Trust (at the Company's and the Trust's
expense) all copies, other than permanent file copies then in such Holder's
possession, of the Prospectus covering such Transfer Restricted Securities
that was current at the time of receipt of such notice. In the event the
Company or the Trust shall give any such notice, the time period regarding
the effectiveness of such Registration Statement set forth in Section 3 or
4 hereof, as applicable, shall be extended by the number of days during the
period from and including the date of the giving of such notice pursuant to
Section 6(c)(iii)(D) hereof to and including the date when each selling
Holder covered by such
<PAGE>
14
Registration Statement shall have received the copies of the supplemented
or amended Prospectus contemplated by Section 6(c)(xv) hereof or shall
have received the Advice.
7 REGISTRATION EXPENSES.
All expenses incident to the Company's and the Trust's
performance of or compliance with this Agreement, other than the expenses
of any Holder or any underwriter engaged by such Holder, will be borne by
the Company and the Trust, regardless of whether a Registration Statement
becomes effective, including without limitation: (i) all registration and
filing fees and expenses (including filings made by any Holder with the
NASD (and, if applicable, the fees and expenses of any "qualified
independent underwriter" and its counsel that may be required by the rules
and regulations of the NASD)); (ii) all fees and expenses of compliance
with federal securities and state Blue Sky or securities laws; (iii) all
expenses of printing (including printing certificates for the New
Securities to be issued in the Exchange Offer and printing of
Prospectuses), and associated messenger and delivery services and
telephone; (iv) all fees and disbursements of counsel for the Company and
the Trust; and (v) all fees and disbursements of independent certified
public accountants of the Company and the Trust (including the expenses of
any special audit and comfort letters required by or incident to such
performance).
The Company and the Trust will, in any event, bear their internal
expenses (including, without limitation, all salaries and expenses of their
officers and employees performing legal or accounting duties), the expenses
of any annual audit and the fees and expenses of any Person, including
special experts, retained by the Company or the Trust.
8. INDEMNIFICATION AND CONTRIBUTION.
(i) In connection with a Shelf Registration Statement or in
connection with any delivery of a Prospectus contained in an Exchange Offer
Registration Statement by any participating Broker-Dealer or Initial
Purchaser, as applicable, who seeks to sell New Securities, the Company and
the Trust shall indemnify and hold harmless each Holder of Transfer
Restricted Securities included within any such Shelf Registration Statement
and each participating Broker-Dealer or Initial Purchaser selling New
Securities, and each Person, if any, who controls any such Person within the
meaning of Section 15 of the Securities Act (each, a "Participant") from and
against any loss, claim, damage or liability, joint or several, or any action
in respect thereof (including, but not limited to, any loss, claim, damage,
liability or action relating to purchases and sales of Securities) to which
such Participant or controlling Person may become subject, under the
Securities Act or otherwise, insofar as such loss, claim, damage, liability
or action arises out of, or is based upon, (i) any untrue statement or
alleged untrue statement of a material fact contained in any such
Registration Statement or any prospectus forming part thereof or in any
amendment or supplement thereto or (ii) the omission or alleged omission to
state therein a material fact required to be stated therein or necessary to
make the statements therein not misleading, and shall reimburse each
Participant promptly upon demand for any legal or other expenses reasonably
incurred by such Participant in connection with investigating or defending or
preparing to defend against any such loss, claim, damage, liability or action
as such expenses are incurred; PROVIDED, HOWEVER, that (i) the Company and
the Trust shall not be liable in any such case to the extent that any such
loss, claim, damage, liability or action arises out of, or is based upon, any
untrue statement or alleged untrue statement or omission or alleged omission
made in any such Registration Statement or any prospectus forming part
thereof or in any such amendment or supplement in reliance upon and in
conformity with written information furnished to the Company and the Trust by
or on behalf of any Participant specifically for inclusion therein; and
PROVIDED FURTHER that as to any preliminary Prospectus, the indemnity
agreement contained in this Section 8(a) shall not inure to the benefit of
any such Participant or any controlling Person of such Participant on account
of any loss, claim, damage, liability or action arising from the sale of the
New Securities to any Person by that Participant if (i) that Participant
failed to send or give a copy of the Prospectus, as the same may be amended
or supplemented, to that Person within the time required by the Securities
Act and (ii) the untrue statement or alleged untrue statement of a material
fact or omission or alleged omission to state a material fact in such
preliminary Prospectus was
<PAGE>
15
corrected in the Prospectus, unless, in each case, such failure resulted from
non-compliance by the Company and the Trust with Section 6(c). The foregoing
indemnity agreement is in addition to any liability which the Company and the
Trust may otherwise have to any Participant or to any controlling Person of
that Participant.
(ii) Each Participant, severally and not jointly, shall indemnify
and hold harmless the Company and the Trust, each of its directors, officers,
employees or agents and each Person, if any, who controls the Company and the
Trust within the meaning of Section 15 of the Securities Act, from and
against any loss, claim, damage or liability, joint or several, or any action
in respect thereof, to which the Company and the Trust or any such director,
officer, employees or agents or controlling Person may become subject, under
the Securities Act or otherwise, insofar as such loss, claim, damage,
liability or action arises out of, or is based upon, (i) any untrue statement
or alleged untrue statement of a material fact contained in any preliminary
Prospectus, Registration Statement or Prospectus or in any amendment or
supplement thereto or (ii) the omission or alleged omission to state therein
a material fact required to be stated therein or necessary to make the
statements therein not misleading, but in each case only to the extent that
the untrue statement or alleged untrue statement or omission or alleged
omission was made in reliance upon and in conformity with written information
furnished to the Company and the Trust by or on behalf of such Participant
specifically for inclusion herein, and shall reimburse the Company and the
Trust and any such director, officer, employees or agents or controlling
Person for any legal or other expenses reasonably incurred by the Company and
the Trust or any such director, officer, employees or agents or controlling
Person in connection with investigating or defending or preparing to defend
against any such loss, claim, damage, liability or action as such expenses
are incurred. The foregoing indemnity agreement is in addition to any
liability which any Participant may otherwise have to the Company and the
Trust or any such director, officer or controlling Person.
(iii) Promptly after receipt by an indemnified party under this
Section 8 of notice of any claim or the commencement of any action, the
indemnified party shall, if a claim in respect thereof is to be made against
the indemnifying party under this Section 8, notify the indemnifying party in
writing of the claim or the commencement of that action; PROVIDED, HOWEVER,
that the failure to notify the indemnifying party shall not relieve it from
any liability which it may have under this Section 8 except to the extent it
has been materially prejudiced by such failure and, PROVIDED FURTHER, that
the failure to notify the indemnifying party shall not relieve it from any
liability which it may have to an indemnified party otherwise than under this
Section 8. If any such claim or action shall be brought against an
indemnified party, and it shall notify the indemnifying party thereof, the
indemnifying party shall be entitled to participate therein and, to the
extent that it wishes, jointly with any other similarly notified indemnifying
party, to assume the defense thereof with counsel reasonably satisfactory to
the indemnified party. After notice from the indemnifying party to the
indemnified party of its election to assume the defense of such claim or
action, the indemnifying party shall not be liable to the indemnified party
under this Section 8 for any legal or other expenses subsequently incurred by
the indemnified party in connection with the defense thereof other than
reasonable costs of investigation; PROVIDED, HOWEVER, that any indemnified
party shall have the right to employ separate counsel in any such action and
to participate in the defense thereof but the fees and expenses of such
counsel shall be at the expense of such indemnified party unless (i) the
employment thereof has been specifically authorized by the indemnifying party
in writing, (ii) such indemnified party shall have been advised by such
counsel that there may be one or more legal defenses available to it which
are different from or additional to those available to the indemnifying party
and in the reasonable judgment of such counsel it is advisable for such
indemnified party to employ separate counsel or (iii) the indemnifying party
has failed to assume the defense of such action and employ counsel reasonably
satisfactory to the indemnified party, in which case, if such indemnified
party notifies the indemnifying party in writing that it elects to employ
separate counsel at the expense of the indemnifying party, the indemnifying
party shall not have the right to assume the defense of such action on behalf
of such indemnified party, it being understood, however, that the
indemnifying party shall not, in connection with any one such action or
separate but substantially similar or related actions in the same
jurisdiction arising out of the same general allegations or circumstances, be
liable for the reasonable fees and expenses of more than one separate firm of
attorneys (in addition to local counsel) at any time for all such indemnified
parties, which firm shall be designated in writing (A) by the Initial
Purchaser, if the indemnified parties under this Section 8 consist of, or
include the Initial Purchaser or any of its officers, employees or
controlling Persons, (B) by the Holders of a majority in aggregate
liquidation amount
<PAGE>
16
of the Capital Securities, if the indemnified parties include the Holders but
not the Initial Purchaser, or (C) by the Company, if the indemnified parties
under this Section consist of the Company, the Trust or any of their
respective directors, officers, trustees, employees or controlling Persons.
Each indemnified party, as a condition of the indemnity agreements contained
herein, shall use its best efforts to cooperate with the indemnifying party
in the defense of any such action or claim. No indemnifying party shall (i)
without the prior written consent of the indemnified parties (which consent
shall not be unreasonably withheld), 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, or (ii) be liable for any settlement of any such action
effected without its written consent (which consent shall not be unreasonably
withheld), but if settled with its written consent or if there be a final
judgment of the plaintiff in any such action, the indemnifying party agrees
to indemnify and hold harmless any indemnified party from and against any
loss of liability by reason of such settlement or judgment.
(iv) If the indemnification provided for in this Section 8 shall
for any reason be unavailable to or insufficient to hold harmless an
indemnified party under Section 8(a) or 8(b) in respect of any loss, claim,
damage or liability, or any action in respect thereof, referred to therein,
then each indemnifying party shall, in lieu of indemnifying such indemnified
party, contribute to the amount paid or payable by such indemnified party as
a result of such loss, claim, damage or liability, or action in respect
thereof, (i) in such proportion as shall be appropriate to reflect the
relative benefits received by the indemnifying party or parties on the one
hand and the indemnified party on the other from the exchange of the
Securities pursuant to the Registered Exchange Offer, or (ii) if the
allocation provided by the foregoing clause (i) is not permitted by
applicable law, in such proportion as is appropriate to reflect not only the
relative benefits referred to in clause (i) above but also the relative fault
of the indemnifying party on the one hand and the indemnified party on the
other with respect to the statements or omissions which resulted in such
loss, claim, damage or liability, or action in respect thereof, as well as
any other relevant equitable considerations. The relative fault shall be
determined by reference to whether the untrue or alleged untrue statement of
a material fact or omission or alleged omission to state a material fact
relates to information supplied by the Trust and the Company or the
Participants, the intent of the parties and their relative knowledge, access
to information and opportunity to correct or prevent such statement or
omission. The Company and the Trust and the Participants agree that it would
not be just and equitable if contributions pursuant to this Section 8(d) were
to be determined by pro rata allocation (even if the Participants were
treated as one entity for such purpose) or by any other method of allocation
which does not take into account the equitable considerations referred to
herein. The amount paid or payable by an indemnified party as a result of
the loss, claim, damage or liability, or action in respect thereof, referred
to above in this Section 8(d) shall be deemed to include, for purposes of
this Section 8(d), any legal or other expenses reasonably incurred by such
indemnified party in connection with investigating or defending any such
action or claim. Notwithstanding the provisions of this Section 8(d), no
Participant shall be required to contribute any amount in excess of the
amount by which the net proceeds received by such Participant from an
offering of the Notes exceeds the amount of any damages which such
Participant has otherwise paid or become liable to pay by reason of any
untrue or alleged untrue statement or omission or alleged omission. No
Person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act) shall be entitled to contribution from any
Person who was not guilty of such fraudulent misrepresentation. The
Participants' obligations to contribute as provided in this Section 8(d) are
several and not joint.
9. RULE 144A.
The Company and the Trust hereby agrees with each Holder, for so
long as any Transfer Restricted Securities remain outstanding, to make
available to any Holder or beneficial owner of Transfer Restricted Securities
in connection with any sale thereof and any prospective purchaser of such
Transfer Restricted Securities from such Holder or beneficial owner, upon
request, the information required by Rule 144A(d)(4) under the Securities Act
in order to permit resales of such Transfer Restricted Securities pursuant to
Rule 144A, if at the time of such request
<PAGE>
17
the Company is subject to neither Section 13 nor 15(d) of the Exchange Act.
10. PARTICIPATION IN UNDERWRITTEN REGISTRATIONS.
No Holder may participate in any Underwritten Registration
hereunder unless such Holder (a) agrees to sell such Holder's Transfer
Restricted Securities on the basis provided in any underwriting arrangements
approved by the Persons entitled hereunder to approve such arrangements and
(b) completes and executes all reasonable questionnaires, powers of attorney,
indemnities, underwriting agreements, lock-up letters and other documents
required under the terms of such underwriting arrangements.
11. SELECTION OF UNDERWRITERS.
The Holders of Transfer Restricted Securities covered by the Shelf
Registration Statement who desire to do so may sell such Transfer Restricted
Securities in an Underwritten Offering. In any such Underwritten Offering,
the investment banker or investment bankers and manager or managers that will
administer the offering will be selected by the Holders of a majority in
aggregate principal amount of the Transfer Restricted Securities included in
such offering; PROVIDED, that such investment bankers and managers must be
reasonably satisfactory to the Company.
12. MISCELLANEOUS.
(a) REMEDIES. The Company and the Trust agree that monetary
damages (including the Additional Interest and Additional Distributions
contemplated hereby) would not be adequate compensation for any loss
incurred by reason of a breach by it of the provisions of this Agreement
and hereby agree to waive the defense in any action for specific
performance that a remedy at law would be adequate.
(b) NO INCONSISTENT AGREEMENTS. The Company and the Trust will
not on or after the date of this Agreement enter into any agreement with
respect to their securities that is inconsistent with the rights granted to
the Holders in this Agreement or otherwise conflicts with the provisions
hereof. The Company and the Trust have not previously entered into any
agreement granting any registration rights with respect to their securities
to any Person. The rights granted to the Holders hereunder do not in any
way conflict with and are not inconsistent with the rights granted to the
holders of the Trust's and the Company's securities under any agreement in
effect on the date hereof.
(c) ADJUSTMENTS AFFECTING THE SECURITIES. The Company and the
Trust will not take any action, or permit any change to occur, with respect
to the Securities that would materially and adversely affect the ability of
the Holders to Consummate any Exchange Offer.
(d) AMENDMENTS AND WAIVERS. The provisions of this Agreement
may not be amended, modified or supplemented, and waivers or consents to or
departures from the provisions hereof may not be given, unless the Company
and the Trust have obtained the written consent of Holders of a majority of
the outstanding principal amount of Transfer Restricted Securities.
Notwithstanding the foregoing, a waiver or consent to departure from the
provisions hereof that relates exclusively to the rights of Holders whose
Securities are being tendered pursuant to the Exchange Offer and that does
not affect directly or indirectly the rights of other Holders whose
Securities are not being tendered pursuant to such Exchange Offer may be
given by the Holders of a majority of the outstanding principal amount of
Transfer Restricted Securities being tendered or registered.
(e) NOTICES. All notices and other communications provided for
or permitted hereunder shall be made in writing by hand-delivery, first-
class mail (registered or certified, return receipt requested), telex,
telecopier, or air courier guaranteeing overnight delivery:
<PAGE>
18
(i) if to a Holder, at the address set forth on the records
of the Property Trustee maintained pursuant to the Declaration; and
(ii) if to the Company and the Trust, at the address of the
Trust set forth in the Declaration.
All such notices and communications shall be deemed to have been
duly given: at the time delivered by hand, if personally delivered; five
business days after being deposited in the mail, postage prepaid, if
mailed; when answered back, if telexed; when receipt acknowledged, if
telecopied; and on the next business day, if timely delivered to an air
courier guaranteeing overnight delivery.
Copies of all such notices, demands or other communications shall
be concurrently delivered by the Person giving the same to the Trustee at
the address specified in the Declaration.
(f) 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 limitation and without the need for an express
assignment, subsequent Holders of Transfer Restricted Securities; PROVIDED,
HOWEVER, that this Agreement shall not inure to the benefit of or be
binding upon a successor or assign of a Holder unless and to the extent
such successor or assign acquired Transfer Restricted Securities from such
Holder.
(g) COUNTERPARTS. This Agreement may be executed in any number
of counterparts and by the parties hereto in separate counterparts, each of
which when so executed shall be deemed to be an original and all of which
taken together shall constitute one and the same agreement.
(h) HEADINGS. The headings in this Agreement are for
convenience of reference only and shall not limit or otherwise affect the
meaning hereof.
(i) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT
REGARD TO THE CONFLICTS OF LAW RULES THEREOF.
(j) SEVERABILITY. In the event that any one or more of the
provisions contained herein, or the application thereof in any
circumstance, is held invalid, illegal or unenforceable, the validity,
legality and enforceability of any such provision in every other respect
and of the remaining provisions contained herein shall not be affected or
impaired thereby.
(k) ENTIRE AGREEMENT. This Agreement together with the other
transaction documents is intended by the parties as a final expression of
their agreement and intended to be a complete and exclusive statement of
the agreement and understanding of the parties hereto in respect of the
subject matter contained herein. There are no restrictions, promises,
warranties or undertakings, other than those set forth or referred to
herein with respect to the registration rights granted by the Company and
the Trust with respect to the Transfer Restricted Securities. This
Agreement supersedes all prior agreements and understandings between the
parties with respect to such subject matter.
(l) REQUIRED CONSENTS. Whenever the consent or approval of
Holders of a specified percentage of Transfer Restricted Securities is
required hereunder, Transfer Restricted Securities held by the Company or
its affiliates (as such term is defined in Rule 405 under the Securities
Act) shall not be counted in determining whether such consent or approval
was given by the Holders of such required percentage.
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.
COMMERCE SECURITY BANCORP, INC.
By:_____________________________________
Name:
Title:
CSBI CAPITAL TRUST I
By:_____________________________________
Name:
Title: Regular Trustee
The foregoing Registration Rights
Agreement is hereby confirmed and
accepted as of the date first
above written
LEHMAN BROTHERS INC.
By:_____________________________
Name:
Title:
<PAGE>
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
CALL EXERCISE AGREEMENT
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
THIS CALL EXERCISE AGREEMENT (this "Agreement") is made and entered
into this 15th day of July, 1997 (the "Effective Date") by and among Dartmouth
Capital Group, L.P. ("DCG"), Commerce Security Bancorp, Inc. ("Company") (with
respect to Sections 6 and 7 only), Madison Dearborn Capital Partners II, L.P., a
Delaware limited partnership ("MDP"), Olympus Growth Fund II, L.P., a Delaware
limited partnership ("OGF"), and Olympus Executive Fund, L.P., a Delaware
limited partnership ("OEF" and collectively with OGF, "Olympus"). (MDP and
Olympus are called collectively the "Purchasers" and individually called
"Purchaser"; Purchasers and DCG are called collectively the "Parties.")
RECITALS
A. DCG and Purchasers are parties to that certain Shareholder
Agreement dated as of June 6, 1997 by and among Company, Purchasers, DCG, Robert
P. Keller, and certain other persons (the "Shareholder Agreement"). Terms not
otherwise defined in this Agreement shall have the meaning ascribed to them in
the Shareholder Agreement.
B. Section 11 of the Shareholder Agreement gives each Purchaser the
option to purchase the Call Securities (as defined below) held by DCG.
C. Purchasers are hereby exercising their option to purchase all of
the Call Securities held by DCG, and DCG hereby sells all of the Call Securities
to Purchasers.
AGREEMENT
NOW, THEREFORE, in consideration of the mutual covenants and
agreements herein contained and for other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the Parties hereto
covenant and agree as follows:
1. DEFINITIONS.
"CALL SECURITIES" shall mean the following securities, which are owned
by DCG:
(i) 18,647 shares of Series B Preferred Stock (as defined in the
Shareholders Agreement), and
(ii) 771,788 shares of Special Common Stock (as defined in the Shareholders
Agreement), and
<PAGE>
(iii) 639,714 Series B Warrants (as defined in the Shareholders
Agreement).
"EXERCISE PRICE" shall mean $5,529,659.75, which is the aggregate
purchase price for all Call Securities, as established pursuant to the formula
contained in Section 11(b) of the Shareholder Agreement. Of the Exercise Price,
$1,864,700.00 represents the purchase price for the Series B Preferred and the
Series B Warrant ($6,397.14 of this amount is allocated to the Series B
Warrant), $8,429.47 represents accrued dividends on the Series B Preferred Stock
for the period of June 30, 1997 to July 14, 1997, inclusive, $3,712,300.28
represents the purchase price for the Special Common Stock, and $55,770
represents a 1% commitment fee to be credited to the Purchasers.
"SECURITIES ACT" means the Securities Act of 1933, as amended.
2. EXERCISE OF CALL. Purchasers hereby exercise their right to purchase
all of the Call Securities, effective as of the Effective Date. Each of MDP,
OGF and OEF hereby purchases the Call Securities, in exchange for their
respective share of the Exercise Price as set forth in Schedule 1 to this
Agreement.
3. ACKNOWLEDGMENT OF RECEIPT OF EXERCISE PRICE. DCG hereby acknowledges
having received the full Exercise Price in immediately available funds (actual
payment to DCG being made by Lehman Brothers Inc. ("Lehman Brothers"), as
partial satisfaction of amounts owed to Purchasers by Lehman Brothers in
connection with the purchase by Lehman Brothers of all of Series A Capital
Securities owned by the Purchasers).
4. ACKNOWLEDGMENT OF RECEIPT OF CALL SECURITIES. Each of MDP, OGF and
OEF hereby acknowledges receipt of the Call Securities, registered in their name
as set forth in Schedule 1 to this Agreement.
5. WAIVER OF NOTICE AND SIGNATURE GUARANTEES. DCG hereby waives the
requirement contained in Section 11(a) of the Shareholder Agreement, which
requires Purchaser to give DCG 10 days prior notice of the exercise of its right
to purchase the Call Securities. The Purchasers hereby waive the requirement in
Section 11(b) of the Shareholder Agreement, which requires DCG to deliver stock
powers on which the signatures have been guaranteed.
6. RIGHT TO DESIGNATE DIRECTOR. The Company hereby acknowledges that,
upon consummation of the purchase of the Call Securities by the Purchasers and
the contemporaneous sale by the Purchasers of the Series A Capital Securities,
pursuant to Section 9.3(d) of the Securities Purchase Agreement each of MDP and
Olympus has the right to designate a director under Section 9.3 of the
Securities Purchase Agreement and Section 10 of the Shareholder Agreement.
-2-
<PAGE>
7. AGREEMENT TO INCREASE NUMBER OF PIE SHARES. Pursuant to Section 12 of
the Shareholder Agreement, the Purchasers hereby request, and the Company hereby
agrees, to cause the Company's Board of Directors to approve, and to submit to a
vote of the Company's shareholders, an amendment to the Company's Certificate of
Incorporation that will increase the maximum number of PIE Shares that may be
distributed in the aggregate to holders of Series B Preferred Stock to One
Million Two Hundred Fifty Thousand (1,250,000) PIE Shares. The Company hereby
acknowledges that it has reviewed evidence reasonably satisfactory to the
Company and its counsel (within the meaning of Section 12(a) of the Shareholder
Agreement) that such increase in the maximum number of PIE Shares would not
cause either Purchaser to own as of close of business on the Effective Date (as
defined herein), or have the potential ability to acquire (under the express
terms of Common Stock or other CSBI Securities that the Purchaser owns as of
close of business on the Effective Date), Common Stock or other CSBI Securities
that, currently or upon the occurrence of any subsequent event, are or may
become convertible into or exchangeable or exercisable for Common Stock, which
in the aggregate could represent twenty-five percent (25%) or more of the Common
Stock outstanding on a pro forma basis. Notwithstanding the foregoing or the
terms of Section 12 of the Shareholder Agreement, the Company agrees that at any
time and from time to time at a request of one or more Purchaser Shareholders
that own, in the aggregate, a majority in value (determined in the manner
specified in Section 2(b) of this Agreement) of the aggregate amount of Series B
Preferred Stock then held by the Purchaser Shareholders, the Company shall cause
to be approved by its Board of Directors and submitted to its shareholders an
additional amendment to the Company's Certificate of Incorporation that would
further increase the maximum number of PIE Shares that may be distributed in the
aggregate to holders of Series B Preferred Stock to such greater number as may
be specified in the request delivered by the Purchaser Shareholders, provided
that the Purchaser Shareholders deliver to the Company evidence reasonably
satisfactory to the Company and its counsel (which evidence may include
discussions with the FRB, if the Purchaser or the Company reasonably deems such
discussions to be necessary to clarify then existing statutes, regulations or
published policy guidelines) that such increase in the maximum number of PIE
Shares would not cause any Purchaser Shareholder to then own, or have the
potential ability to acquire (under the express terms of Common Stock or other
CSBI Securities that the Purchaser then owns), Common Stock or other CSBI
Securities that, currently or upon the occurrence of any subsequent event, are
or may become convertible into or exchangeable or exercisable for Common Stock,
which in the aggregate could represent twenty-five percent (25%) or more of the
Common Stock outstanding on a pro forma basis. DCG hereby acknowledges and
confirms its intent to adhere to its obligation under Section 12(b) of the
Shareholder Agreement to vote in favor of any such amendment all of the Voting
Securities held by DCG as of the applicable record date.
8. CERTAIN REPRESENTATIONS BY DCG. DCG hereby represents and warrants to
Purchasers as follows:
a. ORGANIZATION OF DCG. DCG is duly organized, validly existing, in
good standing under the laws of the jurisdiction of its formation.
b. AUTHORIZATION OF TRANSACTION. DCG has full power and authority
to execute and deliver this Agreement and to perform its obligations
hereunder. The execution and
-3-
<PAGE>
delivery of this Agreement and the consummation of the transactions
contemplated hereby have been duly authorized by all requisite action on
the part of DCG and no other proceedings on the part of DCG are necessary
to consummate the transactions contemplated hereby. This Agreement
constitutes the valid and legally binding obligation of DCG, enforceable
in accordance with its terms and conditions. DCG need not give any
notice to, make any filing with, or obtain any authorization, consent, or
approval of any government or governmental agency in order to consummate
the transactions contemplated by this Agreement.
c. NONCONTRAVENTION. Neither the execution and the delivery of this
Agreement, nor the consummation of the transactions contemplated hereby,
will (A) violate any constitution, statute, regulation, rule, injunction,
judgment, order, decree, ruling, charge, or other restriction of any
government, governmental agency, or court to which DCG is subject or any
provision of its partnership agreement, or, (B) conflict with, result in a
breach of, constitute a default (or an event which, with notice or lapse of
time, or both, would constitute a default) under, result in the
acceleration of, create in any party the right to accelerate, terminate,
modify, or cancel, or require any notice under any agreement, contract,
lease, license, instrument, note, bond, mortgage, deed of trust, or other
arrangement to which DCG is a party or by which he or it is bound or to
which any of its assets is subject.
d. BROKERS' FEES. DCG has no liability or obligation to pay any
fees or commissions to any broker, finder, or agent with respect to the
transactions contemplated by this Agreement for which Purchasers could
become liable or obligated. The Purchasers acknowledge that the Company is
obligated to pay a commission to The Shattan Group, LLC as a consequence of
the sale of the Call Securities to the Purchasers.
e. TITLE TO CALL SECURITIES. DCG holds of record and owns
beneficially all of the Call Securities, free and clear of any restrictions
on transfer (other than any restrictions under the Securities Act and state
securities laws), any taxes, security interests, options, warrants,
purchase rights, contracts, commitments, equities, claims, and demands.
With the exception of this Agreement, DCG is not a party to any option,
warrant, purchase right, call, or other contract or commitment that could
require DCG to sell, transfer, or otherwise dispose of any Call Securities.
f. NO PROHIBITED ACTIONS. DCG has not taken any of the actions
prohibited by Section 11(c) of the Shareholder Agreement (i.e., converted
any of the Call Securities, waived any right applicable to Call Securities,
Transferred any Call Securities).
9. CERTAIN REPRESENTATIONS BY MDP AND OLYMPUS. Each of MDP and Olympus
hereby represents and warrants to DCG as follows:
a. ORGANIZATION OF MDP AND OLYMPUS. The Purchaser is duly
organized, validly existing, in good standing under the laws of the
jurisdiction of their formation.
-4-
<PAGE>
b. AUTHORIZATION OF TRANSACTION. The Purchaser has full power and
authority to execute and deliver this Agreement and to perform their
obligations hereunder. The execution and delivery of this Agreement and
the consummation of the transactions contemplated hereby have been duly
authorized by all requisite action on the part of the Purchasers and no
other proceedings on the part of the Purchasers is necessary to consummate
the transactions contemplated hereby. This Agreement constitutes the valid
and legally binding obligation of the Purchaser, enforceable in accordance
with its terms and conditions. The Purchaser need not give any notice to,
make any filing with, or obtain any authorization, consent, or approval of
any government or governmental agency in order to consummate the
transactions contemplated by this Agreement.
c. NONCONTRAVENTION. Neither the execution and the delivery of this
Agreement, nor the consummation of the transactions contemplated hereby,
will (A) violate any constitution, statute, regulation, rule, injunction,
judgment, order, decree, ruling, charge, or other restriction of any
government, governmental agency, or court to which the Purchaser is subject
or any provision of its partnership agreements, or, (B) conflict with,
result in a breach of, constitute a default (or an event which, with notice
or lapse of time, or both, would constitute a default) under, result in the
acceleration of, create in any party the right to accelerate, terminate,
modify, or cancel, or require any notice under any agreement, contract,
lease, license, instrument, note, bond, mortgage, deed of trust, or other
arrangement to which the Purchaser is a party or by which it is bound or to
which any of its assets are subject.
d. BROKERS' FEES. The Purchaser has no liability or obligation to
pay any fees or commissions to any broker, finder, or agent with respect to
the transactions contemplated by this Agreement for which DCG could become
liable or obligated.
e. NO SIDE AGREEMENTS. With respect to the sale of the Series A
Capital Securities, the Purchase Agreement, dated July 10, 1997, by and
among Purchasers and Lehman Brothers, is the only agreement between the
Purchaser and Lehman. Without limiting the foregoing, the Purchaser has
not entered into any other agreement or understanding with Lehman Brothers
regarding the purchase price of the Series A Capital Securities or the
pricing of the Series A Capital Securities. In addition, the Purchaser has
not entered into any other agreement or understanding regarding Lehman
Brother's fees for the sale of the Series A Capital Securities.
f. PRIVATE PLACEMENT SECURITIES. The Purchaser intends to purchase
the Call Securities for its own account and not, in whole or in part, for
the account of any other person. The Purchaser represents and warrants to,
and covenants and agrees with, the Company and DCG that the Call Securities
to be acquired by it hereunder are being acquired for its own account for
investment and with no intention of distributing or reselling such Call
Securities or any part thereof or interest therein in any transaction which
would be in violation of the securities laws of the United States of
America or any state.
-5-
<PAGE>
10. MISCELLANEOUS.
a. COUNTERPARTS. This Agreement may be executed in any number of
the counterparts, each of which counterparts when so executed and delivered
shall be deemed to be an original, but all such respective counterparts
shall together constitute but one and the same instrument.
b. LEGAL, VALID AND BINDING OBLIGATION. The execution and delivery
of this Agreement and all documents, instruments and agreements required to
be executed in connection herewith, and the consummation of the
transactions contemplated hereby and thereby have each been duly and
validly authorized by the Parties to this Agreement.
c. SUCCESSORS AND ASSIGNS. This Agreement shall inure to the
benefit of and be binding upon the Parties hereto and their respective
successors and permitted assigns. Nothing expressed herein is intended or
shall be construed to give any person other than the persons referred to in
the preceding sentence any legal or equitable right, remedy or claim under
or in respect of this Agreement.
d. ASSIGNABILITY. This Agreement shall not be assignable by any
Party without the written consent of the other Parties.
e. NOTICES. Except as otherwise provided herein, all notices,
consents, requests, instructions, approvals and other communications
provided for herein shall be given in the manner, and to the address set
forth for in the Shareholder Agreement.
f. SEVERABILITY. Any covenant, provision, agreement or term of this
Agreement that is prohibited or is held to be void or unenforceable in any
jurisdiction shall as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions thereof.
g. WAIVER; HEADINGS. Neither this Agreement nor any term hereof may
be changed, waived, discharged or terminated orally, but only by an
instrument in writing signed by the Parties hereto. The headings in this
Agreement are for the purposes of references only and shall not limit or
otherwise affect the meaning hereof.
h. GOVERNING LAW; SUBMISSION TO JURISDICTION. This Agreement shall
be governed by, and construed in accordance with the laws of the State of
Delaware without regard to the conflict of law provisions thereof. Each of
the Parties submits to the jurisdiction of any federal court (or, if
federal jurisdiction is unavailable, a state court) sitting in Los Angeles,
California or Chicago, Illinois in any action or proceeding arising out of
or relating to this Agreement and agrees that all claims in respect of the
action or proceeding may be heard and determined in any such court. Each
Party also agrees not to bring any action or proceeding arising out of or
relating to this Agreement in any other court. Each of the Parties waives
any defense of inconvenient forum to the maintenance of any action or
-6-
<PAGE>
proceeding so brought and waives any bond, surety, or other security that
might be required of any other Party with respect thereto. Any Party may
make service on any other Party by sending or delivering a copy of the
process to the Party to be served at the address and in the manner provided
for the giving of notices in Section 10(e). Nothing in this Section 10(h),
however, shall affect the right of any Party to serve legal process in any
other manner permitted by law or at equity. Each Party agrees that a final
judgment in any action or proceeding so brought shall be conclusive and may
be enforced by suit on the judgment or in any other manner provided by law
or at equity.
i. AMENDMENT. This Agreement cannot be altered or amended, except
pursuant to an instrument in writing signed by the Parties hereto.
j. GENERAL DISCLAIMER. The Parties agree that any actions taken
under this Agreement are subject to and will be superseded by any law,
rule, regulation or requirement established by governmental agencies.
k. ENTIRE AGREEMENT. This Agreement represents the entire
understanding of the Parties with respect to the matters addressed herein
and supersedes all prior written and oral understandings concerning the
subject matter herein.
l. PRESS RELEASES AND PUBLIC ANNOUNCEMENTS. No Party shall issue
any press release or make any public announcement relating to the subject
matter of this Agreement without the prior written approval of the other
Parties hereto, which approval shall not be unreasonably withheld;
PROVIDED, HOWEVER, that any Party may make any public disclosure it
believes in good faith is required by applicable law or any listing or
trading agreement concerning its publicly-traded securities (in which case
the disclosing Party will use its best efforts to advise the other Parties
prior to making the disclosure). The Purchasers acknowledge having been
advised by the Company that the Company intends to file with the Securities
and Exchange Commission a Current Report on Form 8-K disclosing the resale
by the Purchasers and DCG of the Series A Capital Securities and the
purchase by the Purchasers of the Call Securities.
m. NO THIRD PARTY BENEFICIARIES. This Agreement shall not confer
any rights or remedies upon any person other than the Parties hereto and
their respective successors and permitted assigns. Any entity to which
Purchasers may transfer any Call Securities shall have the Purchasers'
rights under this Agreement, except as otherwise provided in this
Agreement.
n. FURTHER ASSURANCES. After the execution of this Agreement, the
Parties will execute and deliver all such powers of attorney, documents,
instruments, and do all such other acts and things as may be necessary to
carry out the provisions of this Agreement.
-7-
<PAGE>
IN WITNESS WHEREOF, each of the Parties to this Agreement has caused
this Agreement to be duly executed as of the date first above written.
DARTMOUTH CAPITAL PARTNERS, L.P.
By: Dartmouth Capital Group, Inc., its general partner
By:
---------------------------------
Name: Michael K. Krebs
Title: Secretary
COMMERCE SECURITY BANCORP, INC.
By:
---------------------------------
Name: Michael K. Krebs
Title: Secretary
MADISON DEARBORN CAPITAL PARTNERS II, L.P.
By: Madison Dearborn Partners II, L.P., its General
Partner
By: Madison Dearborn Partners, Inc., its General Partner
By: Paul R. Wood, its Vice President
By:
---------------------------------
Name: John Fitzgerald, its attorney
duly authorized
OLYMPUS GROWTH FUND II, L.P.
By: OGP II, L.P., its general partner
By: Conroy, L.L.C., its general partner
By:
---------------------------------
Name: James A. Conroy
Title: Member
OLYMPUS EXECUTIVE FUND, L.P.
By: OEF, L.P., its general partner
By: Conroy, L.L.C., its general partner
By:
---------------------------------
Name: James A. Conroy
Title: Member
-8-
<PAGE>
SCHEDULE 1
to
Call Exercise Agreement
CALL SECURITIES
MDP OGF OEF TOTAL
--- --- --- -----
Series B Preferred Stock 9,324 9,230 93 18,647
Special Common Stock 385,894 382,035 3,859 771,788
Series B Warrant 319,857 316,666 3,191 639,714
(in number of Warrant Shares)
EXERCISE PRICE
<TABLE>
<CAPTION>
MDP OGF OEF TOTAL
--- --- --- -----
<S> <C> <C> <C> <C>
Series B Preferred and
Warrant $ 932,400.00 $ 923,000.00 $ 9,300.00 $1,864,700.00
Accrued dividend on
Series B 4,214.96 4,172.47 42.04 8,429.47
Special Common Stock 1,856,150.14 1,837,588.35 18,561.79 3,712,300.28
Commitment fee credit (27,885.50) (27,605.88) (278.62) (55,770.00)
------------- ------------- ----------- -------------
TOTAL $2,764,879.60 $2,737,154.94 $27,625.21 $5,529,659.75
------------- ------------- ----------- -------------
------------- ------------- ----------- -------------
</TABLE>
-9-
<PAGE>
EXHIBIT 99.1
SCHEDULE OF PRINCIPAL SHAREHOLDERS
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The following table sets forth certain information as of July 15, 1997
about persons who are beneficial owners of more than 5% of any class of the
outstanding equity securities of Commerce Security Bancorp, Inc. (the
"Company"). The table gives effect to the sale, as of July 15, 1997, by
Dartmouth Capital Group, L.P. ("DCG"), Madison Dearborn Capital Partners II,
L.P. ("MDP"), Olympus Growth Fund II, L.P. ("OGF") and Olympus Executive Fund,
L.P. ("OEF" and together with OGF, "Olympus") of all of the outstanding shares
of Series A Capital Securities of the Company and the purchase immediately
thereafter by MDP and Olympus of certain senior securities from DCG, each as
described more fully in the Current Report on Form 8-K, dated July 10, 1997,
with respect to which this schedule is filed as an exhibit.
<TABLE>
<CAPTION> ALL CLASSES OF
VOTING SECURITIES EQUITY SECURITIES
---------------------------------- ---------------------------------
BENEFICIALLY PERCENTAGE OF BENEFICIALLY PERCENTAGE OF
INVESTOR OWNED VOTING SECURITIES OWNED SPECIFIED CLASS
-------- ---------- ---------------- ---------- ----------------
<S> <C> <C> <C> <C>
Dartmouth Capital Group, L.P.(1)
Dartmouth Capital Group, Inc.
Class B Common Stock . . . . . . . . . . . . . . 5,655,164 32.5% 5,655,164 40.6%
Special Common Stock . . . . . . . . . . . . . . -- -- -- --
Series A Capital Securities . . . . . . . . . . . -- -- -- --
Series B Preferred Stock . . . . . . . . . . . . -- -- -- --
Madison Dearborn Capital Partners II, L.P.(2)
Class B Common Stock(3) . . . . . . . . . . . . . -- -- -- --
Special Common Stock . . . . . . . . . . . . . . 1,719,991 9.9% 2,412,859 50.0%
Series A Capital Securities . . . . . . . . . . . -- -- -- --
Series B Preferred Stock . . . . . . . . . . . . -- -- 58,297 50.0%
Olympus Growth Fund II, L.P.(4)
Olympus Executive Fund, L.P.
Class B Common Stock(5) . . . . . . . . . . . . . -- -- -- --
Special Common Stock . . . . . . . . . . . . . . 1,719,991 9.9% 2,412,859 50.0%
Series A Capital Securities . . . . . . . . . . . -- -- -- --
Series B Preferred Stock . . . . . . . . . . . . -- -- 58,296 50.0%
Ernest J. Boch(6)
Class B Common Stock . . . . . . . . . . . . . . 2,260,828 13.0% 2,260,828 16.2%
Peter H. Paulsen(7)
Class B Common Stock . . . . . . . . . . . . . . 1,424,184 8.2% 1,424,184 10.2%
F. M. Kirby(8)
Class B Common Stock . . . . . . . . . . . . . . 1,027,829 5.9% 1,027,829 7.4%
Shareholders of DCG General Partner
as a Group (11 shareholders)(9)(10)
Class B Common Stock . . . . . . . . . . . . . . 5,059,451 32.6% 5,059,451 36.3%
(footnotes on following page)
</TABLE>
240
<PAGE>
(1) As the sole general partner of DCG, Dartmouth Capital Group, Inc. (the "DCG
General Partner") exercises sole control over the voting and disposition of
the shares of Common Stock held of record by DCG. DCG and the DCG General
Partner each have a business address c/o Commerce Security Bancorp, Inc.,
7777 Center Avenue, One Pacific Plaza, Huntington Beach, CA 92647.
(2) MDP's sole general partner is Madison Dearborn Partners II, L.P., whose
sole general partner is Madison Dearborn Partners, Inc. MDP's address is
Three First National Plaza, Suite 1330, Chicago, IL 60602.
(3) Does not include a currently-exercisable warrant to purchase an additional
2,000,000 shares of Common Stock which, subject to the terms of such
warrant, would be exercisable for non-voting shares of Common Stock (i.e.,
Class C Common Stock) if MDP's percentage ownership of all outstanding
voting securities would exceed 9.9%.
(4) Presentation has been combined for Olympus Growth Fund II, L.P. and Olympus
Executive Fund, L.P., as the general partners of the limited partnerships
(OGF II, L.P. and OEF, L.P., respectively) are under common control.
Olympus's address is Metro Center, One Station Place, Stamford, CT 06902.
(5) Does not include currently-exercisable warrants to purchase an additional
2,000,000 shares of Common Stock which, subject to the terms of such
warrants, would be exercisable into non-voting shares of Common Stock
(i.e., Class C Common Stock) if Olympus's percentage ownership of all
outstanding voting securities would exceed 9.9%.
(6) Mr. Boch's address is Subaru of New England, Inc., 95 Morse Street,
Norwood, MA 02062.
(7) Mr. Paulsen's address is 2746 E. Smith Road, Bellingham, WA 98226.
(8) Mr. Kirby's address is 17 DeHart Street, Morristown, NJ 07963.
(9) Includes, in one case, shares held by an affiliate of the shareholder.
(10) In the case of Robert P. Keller, a shareholder of DCG, includes 427,556
shares of restricted stock issued to Mr. Keller pursuant to the terms of
his employment agreement, but excludes shares of Common Stock subject to
employee stock options which are not exercisable within 60 days.
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