<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JULY 13, 1998
REGISTRATION NO. 333-
REGISTRATION NO. 333- -01
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
FORM S-4
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933
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<TABLE>
<S> <C>
PROVIDENT BANKSHARES CORPORATION PROVIDENT TRUST I
(Exact Name of Registrant as Specified in its (Exact Name of Registrant as Specified in its Trust
Charter) Agreement)
MARYLAND DELAWARE
(State or Other Jurisdiction (State or Other Jurisdiction
of Incorporation or Organization) of Incorporation or Organization)
6712 6719
(Primary Standard Industrial (Primary Standard Industrial
Classification Code Number) Classification Code Number)
52-158642 52-2103882
(I.R.S. Employer Identification Number) (I.R.S. Employer Identification Number)
114 EAST LEXINGTON STREET 114 EAST LEXINGTON STREET
BALTIMORE, MARYLAND 21202 BALTIMORE, MARYLAND 21202
(410) 277-7000 (410) 277-7000
(Address, including Zip Code and Telephone Number, (Address, including Zip Code and Telephone Number,
including Area Code, of Registrant's Principle including Area Code, of Registrant's Principle
Executive Offices) Executive Offices)
PETER M. MARTIN JAMES R. WALLIS
PRESIDENT AND CHIEF EXECUTIVE OFFICER TRUST ADMINISTRATOR
114 EAST LEXINGTON STREET 114 EAST LEXINGTON STREET
BALTIMORE, MARYLAND 21202 BALTIMORE, MARYLAND 21202
(410) 277-7000 (410) 277-7000
(Name, Address, including Zip Code and Telephone (Name, Address, including Zip Code and Telephone
Number, Number,
including Area Code, of Agent for Service) including Area Code, of Agent for Service)
</TABLE>
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COPIES TO:
THOMAS J. HAGGERTY, ESQ.
MARC P. LEVY, ESQ.
MULDOON, MURPHY & FAUCETTE
5101 WISCONSIN AVENUE, N.W.
WASHINGTON, D.C. 20016
(202) 362-0840
------------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: AS SOON AS
PRACTICABLE AFTER THE EFFECTIVENESS OF
THIS REGISTRATION STATEMENT BECOMES EFFECTIVE.
If any of the securities being registered on this Form are to be offered in
connection with the formation of a holding
company and there is compliance with General Instruction G, check the following
box. [ ]
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<TABLE>
<CAPTION>
Registration Fee
=================================================================================================================================
AMOUNT PROPOSED MAXIMUM PROPOSED MAXIMUM AMOUNT OF
TITLE OF EACH TO BE OFFERING PRICE AGGREGATE OFFERING REGISTRATION
CLASS OF SECURITIES BEING REGISTERED REGISTERED(1) PER SHARE PRICE(2) FEE(2)
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Exchange Capital Securities of Provident Trust I........... $40,000,000 100% $40,000,000 $12,122
- ---------------------------------------------------------------------------------------------------------------------------------
Exchange Junior Subordinated Deferrable Interest Debentures
of Provident Bankshares Corporation...................... $40,000,000 100% $40,000,000 N/A
- ---------------------------------------------------------------------------------------------------------------------------------
Provident Bankshares Corporation Guarantee with respect to
Exchange Capital Securities(3)........................... N/A N/A N/A N/A
- ---------------------------------------------------------------------------------------------------------------------------------
Total...................................................... $40,000,000 100% $40,000,000 $12,122
=================================================================================================================================
</TABLE>
(1) Estimated solely for the purpose of computing the registration fee.
(2) No separate consideration will be received for the Exchange Junior
Subordinated Deferrable Interest Debentures of Provident Bankshares
Corporation (the "Junior Subordinated Debentures") distributed upon any
liquidation of Provident Trust I in exchange for the 8.29% Exchange Capital
Securities (the "Exchange Capital Securities").
(3) No separate consideration will be received for the Provident Bankshares
Corporation Guarantee.
------------------------
THE REGISTRANTS HEREBY AMEND THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANTS
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
================================================================================
<PAGE> 2
PROSPECTUS
PROVIDENT TRUST I
OFFER TO EXCHANGE ITS
8.29% EXCHANGE CAPITAL SECURITIES
(LIQUIDATION AMOUNT $1,000 PER EXCHANGE CAPITAL SECURITY)
WHICH HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933
FOR ANY AND ALL OF ITS OUTSTANDING
8.29% CAPITAL SECURITIES
(LIQUIDATION AMOUNT $1,000 PER CAPITAL SECURITY)
UNCONDITIONALLY GUARANTEED, AS DESCRIBED HEREIN BY
PROVIDENT BANKSHARES CORPORATION
THE EXCHANGE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M., NEW YORK
TIME, ON , 1998, UNLESS EXTENDED.
------------------------
Provident Trust I, a statutory business trust created under the laws of the
State of Delaware (the "Trust" or "Issuer Trust"), hereby offers, upon the terms
and subject to the conditions set forth in this Prospectus (as the same may be
amended or supplemented from time to time, the "Prospectus") and in the
accompanying Letter of Transmittal (which together constitute the "Exchange
Offer"), to exchange up to $40,000,000 aggregate Liquidation Amount of its 8.29%
Exchange Capital Securities (the "Exchange Capital Securities") which have been
registered under the Securities Act of 1933, as amended (the "Securities Act"),
pursuant to a Registration Statement (as defined herein) of which this
Prospectus constitutes a part, for a like Liquidation Amount of its outstanding
8.29% Capital Securities (the "Original Capital Securities"), of which
$40,000,000 aggregate Liquidation Amount is outstanding. Pursuant to the
Exchange Offer, Provident Bankshares Corporation, a Maryland corporation
("Provident" or the "Company"), also is offering to exchange (i) its guarantee
of payment of cash distributions and payments on liquidation of the Trust or
redemption of the Exchange Capital Securities (the "Exchange Guarantee") for a
like guarantee in respect of the Original Capital Securities (the "Original
Guarantee") and (ii) 8.29% Exchange Junior Subordinated Deferrable Interest
Debentures due April 15, 2028 (the "Exchange Junior Subordinated Debentures")
for all of the outstanding 8.29% Original Junior Subordinated Deferrable
Interest Debentures due April 15, 2028 (the "Original Junior Subordinated
Debentures"), which Exchange Guarantee and Exchange Junior Subordinated
Debentures also have been registered under the Securities Act. The Original
Capital Securities, the Original Guarantee and the Original Junior Subordinated
Debentures are collectively referred to herein as the "Original Securities" and
the Exchange Capital Securities, the Exchange Guarantee and the Exchange Junior
Subordinated Debentures are collectively referred to herein as the "Exchange
Securities."
The terms of the Exchange Securities are identical in all material respects
to the respective terms of the Original Securities, except that (i) the Exchange
Securities have been registered under the Securities Act and therefore will not
be subject to certain restrictions on transfer under federal and state
securities laws applicable to the Original Securities, (ii) the Exchange Capital
Securities will not provide for any increase in the Distribution rate thereon
and (iii) the Exchange Junior Subordinated debentures will not provide for any
increase in the interest rate thereon. See "Description of Exchange Securities"
and "Description of Original Securities." The Exchange Capital Securities are
being offered for exchange in order to satisfy certain obligations of the
Company and the Trust under a Registration Rights Agreement, dated as of April
17, 1998 (the "Registration Rights Agreement"), among the Company, the Trust and
the Initial Purchaser (as defined herein). In the event that the Exchange Offer
is consummated, any Original Capital Securities which remain outstanding after
consummation of the Exchange Offer and the Exchange Capital Securities issued in
the Exchange Offer will vote together as a single class for purposes of
determining whether holders of the requisite percentage in outstanding
Liquidation Amount thereof have taken certain actions or exercised certain
rights under the Trust Agreement (as defined herein).
(Continued on the following page)
This Prospectus and the Letter of Transmittal are first being mailed to all
registered holders of Original Capital Securities as of July , 1998.
See "Risk Factors" commencing on page for certain information that
should be considered by holders in deciding whether to tender Original Capital
Securities in the Exchange Offer.
THESE SECURITIES ARE NOT DEPOSITS OR OTHER OBLIGATIONS OF A BANK AND ARE NOT
INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENTAL
AGENCY.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATIONS TO THE CONTRARY IS
A CRIMINAL OFFENSE.
THE DATE OF THIS PROSPECTUS IS JULY , 1998.
<PAGE> 3
(Continued from the previous page)
As used herein, (i) the "Indenture" means the Junior Subordinated
Indenture, dated as of April 17, 1998, between the Company and Bankers Trust
Company, as Debenture Trustee (the "Debenture Trustee"), as amended and
supplemented from time to time, and (ii) the "Trust Agreement" means the Amended
and Restated Trust Agreement relating to the Trust among the Company, as
Depositor Company as Property Trustee (the "Property Trustee"), Bankers Trust
(Delaware), as the Delaware Trustee (the "Delaware Trustee"), the Administrators
named therein (collectively, with the Property Trustee and the Delaware Trustee,
the "Issuer Trustees"), and the holders, from time to time, of undivided
beneficial interests in the assets of the Trust, as amended and supplemented
from time to time. In addition, as the context may require, unless otherwise
expressly stated, (i) the term "Capital Securities" means the Original Capital
Securities and the Exchange Capital Securities, (ii) the term "Trust Securities"
means the Capital Securities and the Common Securities, (iii) the term "Junior
Subordinated Debentures" means the Original Junior Subordinated Debentures and
the Exchange Junior Subordinated Debentures and (iv) the term "Guarantee" means
the Original Guarantee and the Exchange Guarantee.
The Exchange Capital Securities and the Original Capital Securities
represent undivided beneficial interests in the assets of the Trust. The Company
is the owner of all of the beneficial interests represented by common securities
of the Trust (the "Common Securities"). The Trust exists for the sole purpose of
issuing the Capital Securities and the Common Securities and investing the
proceeds thereof in the Junior Subordinated Debentures (as defined herein). The
Junior Subordinated Debentures will mature on April 15, 2028 (the "Stated
Maturity Date"). The Capital Securities will have a preference over the Common
Securities under certain circumstances with respect to cash distributions and
amounts payable on liquidation, redemption or otherwise. See "Description of
Capital Securities -- Subordination of Common Securities."
Except as provided below, the Exchange Capital Securities will be
represented by a global Capital Security in fully registered form, deposited
with a custodian for and registered in the name of a nominee of The Depository
Trust Company ("DTC"). Beneficial interests in the Exchange Capital Securities
will be shown on, and transfers thereof will be effected through, records
maintained by DTC and its participants. Beneficial interests in the Exchange
Capital Securities will trade in DTC's Same-Day Funds Settlement system and
secondary market trading activity in such interests will therefore settle in
immediately available funds. The Exchange Capital Securities will be issued, and
may be transferred, only in blocks having a Liquidation Amount of not less than
$100,000 (100 Capital Securities). See "Description of Capital
Securities -- Book-Entry, Delivery and Form."
Holders of the Exchange Capital Securities will be entitled to receive
preferential cumulative cash distributions accumulating from the date of
original issuance and payable semi-annually in arrears on the 15th day of April
and October of each year, commencing October 15, 1998, at an annual rate equal
to 8.29% on the Liquidation Amount of $1,000 per Capital Security
("Distributions"). The distribution rate and the distribution payment dates and
other payment dates for the Exchange Capital Securities will correspond to the
interest rate and interest payment dates and other payment dates on the Junior
Subordinated Debentures, which will be the sole assets of the Trust. So long as
no Event of Default (as defined in the Junior Subordinated Indenture) has
occurred and is continuing with respect to the Junior Subordinated Debenture (a
"Debenture Event of Default"), the Company has the right to defer payment of
interest on the Junior Subordinated Debentures at any time or from time to time
for a period not exceeding 10 consecutive semi-annual periods with respect to
each deferral period (each, an "Extension Period"), provided that no Extension
Period may extend beyond the Stated Maturity of the Junior Subordinated
Debentures. No interest shall be due and payable during any Extension Period,
except at the end thereof. Upon the termination of any such Extension Period and
the payment of all amounts then due, the Company may elect to begin a new
Extension Period subject to the requirements set forth herein. If interest
payments on the Junior Subordinated Debentures are so deferred, Distributions on
the Capital Securities will also be deferred and the Company will not be
permitted, subject to certain exceptions described herein, to declare or pay any
cash distributions with respect to the Company's stock or with respect to debt
securities of the Company that rank pari passu in all respects with or junior to
the Junior Subordinated Debentures. During an Extension Period, interest on the
Junior Subordinated Debentures will continue to accrue (and the amount of
Distributions to which holders of
2
<PAGE> 4
the Capital Securities are entitled will accumulate) at a rate equal to 8.29%,
compounded semi-annually, and holders of Capital Securities will be required to
accrue income, in the form of original issue discount, for United States federal
income tax purposes. See "Description of Junior Subordinated
Debentures -- Option to Extend Interest Payment Period" and "Certain Federal
Income Tax Consequences -- Interest Income and Original Issue Discount."
The Company has and will, through the Guarantee, the Trust Agreement, the
Junior Subordinated Debentures and the Junior Subordinated Indenture (each as
defined herein), taken together, fully, irrevocably and unconditionally
guarantee all the Trust's obligations under the Capital Securities as described
below. See "Relationship Among the Capital Securities, the Junior Subordinated
Debentures and the Guarantee -- Full and Unconditional Guarantee." The Guarantee
of the Company guarantees the payment of Distributions and payments on
liquidation or redemption of the Capital Securities, but only in each case to
the extent of funds held by the Trust, as described herein. See "Description of
Guarantee." If the Company does not make payments on the Junior Subordinated
Debentures held by the Trust, the Trust may have insufficient funds to pay
Distributions on the Capital Securities. The Guarantee does not cover payment of
Distributions when the Trust does not have sufficient funds to pay such
Distributions. In such event, a holder of Capital Securities may institute a
legal proceeding directly against the Company to enforce payment of such
Distributions to such holder. See "Description of Junior Subordinated
Debentures -- Enforcement of Certain Rights by Holders of Capital Securities."
The obligations of the Company under the Guarantee and the Capital Securities
are subordinate and junior in right of payment to all Senior Indebtedness (as
defined in "Description of Junior Subordinated Debentures -- Subordination") of
the Company.
The Capital Securities are subject to mandatory redemption (i) in whole,
but not in part, upon repayment of the Junior Subordinated Debentures at the
Stated Maturity or their earlier redemption in whole upon the occurrence of a
Tax Event, Investment Company Event or Capital Treatment Event (each as defined
herein) and (ii) in whole or in part at any time on or after April 15, 2008
contemporaneously with the optional redemption by the Company of the Junior
Subordinated Debentures in whole or in part. The Junior Subordinated Debentures
are redeemable prior to maturity at the option of the Company (i) on or after
April 15, 2008, in whole at any time or in part from time to time, or (ii) in
whole, but not in part, at any time within 90 days following the occurrence and
continuation of a Tax Event, Investment Company Event or Capital Treatment Event
(each as defined herein), in each case at a redemption price set forth herein,
which includes the accrued and unpaid interest on the Junior Subordinated
Debentures so redeemed to the date fixed for redemption. The ability of the
Company to exercise its rights to redeem the Junior Subordinated Debentures or
to cause the redemption of the Capital Securities prior to the Stated Maturity
may be subject to prior regulatory approval by the Board of Governors of the
Federal Reserve System (the "Federal Reserve"), if then required under
applicable Federal Reserve capital guidelines or policies. See "Description of
Junior Subordinated Debentures -- Redemption" and "Description of Capital
Securities -- Liquidation Distribution Upon Dissolution."
The holders of the outstanding Common Securities have the right at any time
to dissolve the Issuer Trust and, after satisfaction of liabilities to creditors
of the Issuer Trust as provided by applicable law, to cause the Junior
Subordinated Debentures to be distributed to the holders of the Capital
Securities and Common Securities in liquidation of the Issuer Trust. The ability
of the Company to dissolve the Issuer Trust may be subject to prior regulatory
approval of the Federal Reserve, if then required under applicable Federal
Reserve capital guidelines or policies. See "Description of Capital
Securities -- Liquidation Distribution Upon Dissolution."
In the event of the dissolution of the Issuer Trust, after satisfaction of
liabilities to creditors of the Issuer Trust as provided by applicable law, the
holders of the Capital Securities will be entitled to receive a Liquidation
Amount of $1,000 per Capital Security plus accumulated and unpaid Distributions
thereon to the date of payment, subject to certain exceptions, which may be in
the form of a distribution of such amount in Junior Subordinated Debentures. See
"Description of Capital Securities -- Liquidation Distribution Upon
Dissolution."
3
<PAGE> 5
The Junior Subordinated Debentures are unsecured and subordinated to all
Senior Indebtedness of the Company. See "Description of Junior Subordinated
Debentures -- Subordination."
The Company, as holder of the Common Securities, has the right at any time
(including, without limitation, upon the occurrence of a Tax Event (as defined
herein)) to dissolve the Trust and, after satisfaction of liabilities of
creditors of the Trust as required by applicable law, to cause a Like Amount of
the Junior Subordinated Debentures to be distributed to the holders of the Trust
Securities in liquidation of the Trust, subject to (i) the Company having
received an opinion of counsel to the effect that such distribution will not be
a taxable event to holders of Capital Securities, and (ii) the receipt of any
required regulatory approval. Unless the Junior Subordinated Debentures are
distributed to the holders of the Trust Securities, in the event of a
liquidation of the Trust as described herein, after satisfaction of liabilities
to creditors of the Trust as required by applicable law, the holders of the
Trust Securities generally will be entitled to receive a Liquidation Amount of
$1,000 per Trust Security plus accumulated and unpaid Distributions thereon to
the date of payment. See "Description of Capital Securities -- Liquidation of
Distribution Upon Dissolution."
The Trust is making the Exchange Offer of the Exchange Capital Securities
in reliance on the position of the staff of the Division of Corporation Finance
of the Securities and Exchange Commission (the "Commission") as set forth in
certain interpretive letters addressed to third parties in other transactions.
However, neither the Company nor the Trust has sought its own interpretive
letter and there can be no assurance that the staff of the Division of
Corporation Finance of the Commission would make a similar determination with
respect to the Exchange Offer as it has in such interpretive letters to third
parties. Based on these interpretations by the staff of the Division of
Corporation Finance of the Commission, and subject to the two immediately
following sentences, the Company and the Trust believe that Exchange Capital
Securities issued pursuant to this Exchange Offer in exchange for Original
Capital Securities may be offered for resale, resold and otherwise transferred
by a holder thereof (other than a holder who is a broker-dealer) without further
compliance with the registration and prospectus delivery requirements of the
Securities Act, provided that such Exchange Capital Securities are acquired in
the ordinary course of such holder's business and that such holder is not
participating, and has no arrangement or understanding with any person to
participate, in a distribution (within the meaning of the Securities Act) of
such Exchange Capital Securities. However, any holder of Original Capital
Securities who is an "affiliate" of the Company or the Trust within the meaning
of Rule 405 under the Securities Act (an "Affiliate") or who intends to
participate in the Exchange Offer for the purpose of distributing Exchange
Capital Securities, or any broker-dealer who purchased Original Capital
Securities from the Trust to resell pursuant to Rule 144A under the Securities
Act ("Rule 144A") or any other available exemption under the Securities Act, (i)
will not be able to rely on the interpretations of the staff of the Division of
Corporation Finance of the Commission set forth in the above-mentioned
interpretive letters, (ii) will not be entitled to tender such Original Capital
Securities in the Exchange Offer, and (iii) must comply with the registration
and prospectus delivery requirements of the Securities Act in connection with
any sale or other transfer of such Original Capital Securities unless such sale
is made pursuant to an exemption from such requirements. In addition, as
described below, if any broker-dealer (a "Participating Broker-Dealer") holds
Original Capital Securities acquired for its own account as a result of
market-making or other trading activities and exchanges such Original Capital
Securities for Exchange Capital Securities, then such Participating
Broker-Dealer must deliver a prospectus meeting the requirements of the
Securities Act in connection with any resales of such Exchange Capital
Securities.
Each holder of Original Capital Securities who wishes to exchange Original
Capital Securities for Exchange Capital Securities in the Exchange Offer will be
required to represent that (i) it is not an Affiliate of the Company or the
Trust, (ii) any Exchange Capital Securities to be received by it are being
acquired in the ordinary course of its business, (iii) it has no arrangement or
understanding with any person to participate in a distribution (within the
meaning of the Securities Act) of such Exchange Capital Securities, and (iv) if
such holder is not a broker-dealer, such holder is not engaged in, and does not
intend to engage in, a distribution (within the meaning of the Securities Act)
of such Exchange Capital Securities. The letter of transmittal contains the
foregoing representations. In addition, the Company and the Trust may require
such holder, as a condition to such holder's eligibility to participate in the
Exchange Offer, to furnish to the Company and the Trust (or an agent thereof) in
writing information as to the number of "beneficial owners" (within the
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<PAGE> 6
meaning of Rule 13d-3 under the Securities Exchange Act of 1934, as amended (the
"Exchange Act")) on behalf of who such holder holds Original Capital Securities
to be exchanged in the Exchange Offer. Each Participating Broker-Dealer that
receives Exchange Capital Securities for its own account pursuant to the
Exchange Offer will be deemed to have acknowledged by execution of the Letter of
Transmittal or delivery of an Agent's Message (as defined herein) that it
acquired the Original Capital Securities for its own account as the result of
market-making activities or other trading activities and must agree that it will
deliver a prospectus meeting the requirements of the Securities Act in
connection with any resale of such Exchange Capital Securities. The Letter of
Transmittal states that by so acknowledging and by delivering a prospectus, a
Participating Broker-Dealer will not be deemed to admit that it is an
"underwriter" within the meaning of the Securities Act. Based on the position
taken by the staff of the Division of Corporation Finance of the Commission in
the interpretive letters referred to above, the Company and the Trust believe
that Participating Broker-Dealers may fulfill their prospectus delivery
requirements with respect to the Exchange Capital Securities received upon
exchange of such Original Capital Securities (other than Original Capital
Securities which represent an unsold allotment from the original sale of the
Original Capital Capital Securities) with a prospectus meeting the requirements
of the Securities Act, which may be the prospectus prepared for an exchange
offer so long as it contains a description of the plan of distribution with
respect to the resale of such Exchange Capital Securities. Accordingly, this
Prospectus, as it may be amended or supplemented from time to time, may be used
by a Participating Broker-Dealer during the period referred to below in
connection with resales of Exchange Capital Securities received in exchange for
Original Capital Securities where such Original Capital Securities were acquired
by such Participating Broker-Dealer for its own account as a result of
market-making or other trading activities. Subject to certain provisions set
forth in the Registration Rights Agreement, the Company and the Trust have
agreed that this Prospectus, as it may be amended or supplemented from time to
time, may be used by a Participating Broker-Dealer in connection with resales of
such Exchange Capital Securities for a period ending 90 days after the
Expiration Date (as defined herein) (subject to extension under certain limited
circumstances described below) or, if earlier, when all such Exchange Capital
Securities have been disposed of by such Participating Broker-Dealer. See "Plan
of Distribution." However, a Participating Broker-Dealer who intends to use this
Prospectus in connection with the resale of Exchange Capital Securities received
in exchange for Original Capital Securities pursuant to the Exchange Offer must
notify the Company or the Trust, or cause the Company or the Trust to be
notified, on or prior to the Expiration Date, that it is a Participating
Broker-Dealer. Such notice may be given in the space provided for that purpose
in the Letter of Transmittal or may be delivered to the Exchange Agent at one of
the addresses set forth herein under "The Exchange Offer -- Exchange Agent." Any
person, including any Participating Broker-Dealer, who is an Affiliate of the
Company or the Trust may not rely on such interpretive letters and must comply
with the registration and prospectus delivery requirements of the Securities Act
in connection with any resale transaction. See "The Exchange Offer -- Resales of
Exchange Capital Securities."
In that regard, each Participating Broker-Dealer who surrenders Original
Capital Securities pursuant to the Exchange Offer will be deemed to have agreed,
by execution of the Letter of Transmittal or delivery of an Agent's Message,
that, upon receipt of notice from the Company or the Trust of the occurrence of
any event or the discovery of any fact which makes any statement contained or
incorporated by reference in this Prospectus untrue in any material respect or
which causes this Prospectus to omit to state a material fact necessary in order
to make the statements contained or incorporated by reference herein, in light
of the circumstances under which they were made, not misleading or of the
occurrence of certain other events specified in the Registration Rights
Agreement, such Participating Broker-Dealer will suspend the sale of Exchange
Capital Securities (or the Exchange Guarantee or the Exchange Junior
Subordinated Debentures, as applicable) pursuant to this Prospectus until the
Company or the Trust has amended or supplemented this Prospectus to correct such
misstatement or omission and has furnished copies of the amended or supplemented
Prospectus to such Participating Broker-Dealer or the Company or the Trust has
given notice that the sale of the Exchange Capital Securities (or the Exchange
Guarantee or the Exchange Junior Subordinated Debentures, as applicable) may be
resumed, as the case may be. If the Company or the Trust gives such notice to
suspend the sale of the Exchange Capital Securities (or the Exchange Guarantee
or the Exchange Junior Subordinated Debentures, as applicable), it shall extend
the 90-day period referred to above during which Participating Broker-Dealers
are entitled to use this Prospectus in connection with the resale of Exchange
Capital Securities
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<PAGE> 7
by the number of days during the period from and including the date of the
giving of such notice to and including the date when Participating
Broker-Dealers shall have received copies of the amended or supplemented
Prospectus necessary to permit resales of the Exchange Capital Securities or to
and including the date on which the Company or the Trust has given notice that
the sale of Exchange Capital Securities (or the Exchange Guarantee or the
Exchange Junior Subordinated Debentures, as applicable) may be resumed, as the
case may be.
Prior to the Exchange Offer, there has been only a limited secondary market
and no public market for the Original Capital Securities. The Exchange Capital
Securities will be a new issue of securities for which there currently is no
market. There can be no assurance as to the development or liquidity of any
market for the Exchange Capital Securities. The Company and the Trust currently
do not intend to apply for listing of the Exchange Capital Securities on any
securities exchange or for quotation through the National Association of
Securities Dealers Automated Quotation System ("Nasdaq").
Any Original Capital Securities not tendered and accepted in the Exchange
Offer will remain outstanding and will be entitled to all the same rights and
will be subject to the same limitations applicable thereto under the Trust
Agreement (except for those rights which terminate upon consummation of the
Exchange Offer). Following consummation of the Exchange Offer, the holders of
Original Capital Securities will continue to be subject to all of the existing
restrictions upon transfer thereof and neither the Company nor the Trust will
have any further obligation to such holders (other than under certain limited
circumstances) to provide for registration under the Securities Act of the
Original Capital Securities held by them. To the extent that Original Capital
Securities are tendered and accepted in the Exchange Offer, a holder's ability
to sell untendered Original Capital Securities could be adversely affected. See
"Risk Factors -- Consequences of a Failure to Exchange Original Capital
Securities."
THIS PROSPECTUS AND THE RELATED LETTER OF TRANSMITTAL CONTAIN IMPORTANT
INFORMATION. HOLDERS OF ORIGINAL CAPITAL SECURITIES ARE URGED TO READ THIS
PROSPECTUS AND THE RELATED LETTER OF TRANSMITTAL CAREFULLY BEFORE DECIDING
WHETHER TO TENDER THEIR ORIGINAL CAPITAL SECURITIES PURSUANT TO THE EXCHANGE
OFFER.
Original Capital Securities may be tendered for exchange on or prior to
5:00 p.m., Eastern Standard Time, on , 1998 (such time on such
date being hereinafter called the "Expiration Date"), unless the Exchange Offer
is extended by the Company or the Trust (in which case the term "Expiration
Date" shall mean the latest date and time to which the Exchange Offer is
extended). Tenders of Original Capital Securities may be withdrawn at any time
on or prior to the Expiration Date. The Exchange Offer is not conditioned upon
any minimum Liquidation Amount of Original Capital Securities being tendered for
exchange. However, the Exchange Offer is subject to certain events and
conditions which may be waived by the Company or the Trust and to the provisions
of the Registration Rights Agreement. Original Capital Securities may be
tendered in whole or in part having an aggregate Liquidation Amount of not less
than $100,000 (100 Capital Securities) and/or any integral multiple of $1,000
Liquidation Amount (one Capital Security) in excess thereof. The Company has
agreed to pay all expenses of the Exchange Offer. See "The Exchange
Offer -- Fees and Expenses."
Holders of Original Capital Securities as of the October 1, 1998 record
date for the initial Distribution on October 15, 1998, including such holders
who tender their Original Capital Securities pursuant to the Exchange Offer,
will be entitled to receive such Distribution. See "The Exchange Offer."
Neither the Company nor the Trust will receive any cash proceeds from the
issuance of the Exchange Capital Securities offered hereby. No dealer-manager is
being used in connection with this Exchange Offer. See "Use of Proceeds" and
"Plan of Distribution."
THE EXCHANGE CAPITAL SECURITIES WILL BE ISSUED, AND CAPITAL SECURITIES MAY
BE TRANSFERRED, ONLY IN BLOCKS HAVING A LIQUIDATION AMOUNT OF NOT LESS THAN
$100,000. ANY TRANSFER, SALE OR OTHER DISPOSITION OF CAPITAL SECURITIES IN A
BLOCK HAVING A LIQUIDATION AMOUNT OF LESS THAN $100,000 SHALL BE
6
<PAGE> 8
DEEMED TO BE VOID AND OF NO LEGAL EFFECT WHATSOEVER. ANY SUCH TRANSFEREE SHALL
BE DEEMED NOT TO BE ENTITLED TO THE RECEIPT OF DISTRIBUTIONS ON SUCH CAPITAL
SECURITIES, AND SUCH TRANSFEREE SHALL BE DEEMED TO HAVE NO INTEREST WHATSOEVER
IN SUCH CAPITAL SECURITIES.
NO EMPLOYEE BENEFIT OR OTHER PLAN SUBJECT TO TITLE I OF THE EMPLOYEE
RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR SECTION 4975 OF
THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE") (EACH, A "PLAN"), NO
ENTITY WHOSE UNDERLYING ASSETS INCLUDE "PLAN ASSETS" BY REASON OF ANY PLAN'S
INVESTMENT IN THE ENTITY (A "PLAN ASSET ENTITY", AND NO PERSON INVESTING "PLAN
ASSETS" OF ANY PLAN, MAY ACQUIRE OR HOLD THE CAPITAL SECURITIES OR ANY INTEREST
THEREIN, UNLESS SUCH PURCHASER OR HOLDER IS ELIGIBLE FOR THE EXEMPTIVE RELIEF
AVAILABLE UNDER U.S. DEPARTMENT OF LABOR PROHIBITED TRANSACTION CLASS EXEMPTION
("PTCE") 96-23, 95-60, 91-38, 90-1 OR 84-14 WITH RESPECT TO SUCH PURCHASE OR
HOLDING. ANY PURCHASER OR HOLDER OF THE CAPITAL SECURITIES OR ANY INTEREST
THEREIN WILL BE DEEMED TO HAVE REPRESENTED BY ITS PURCHASE AND HOLDING THEREOF
THAT IT EITHER (I) IS NOT A PLAN OR A PLAN ASSET ENTITY AND IS NOT PURCHASING
SUCH SECURITIES ON BEHALF OF OR WITH "PLAN ASSETS" OF ANY PLAN, OR (II) IS
ELIGIBLE FOR THE EXEMPTIVE RELIEF AVAILABLE UNDER PTCE 96-23, 95-60, 91-38, 90-1
OR 84-14 WITH RESPECT TO SUCH PURCHASE OR HOLDING.
NO DEALER, SALESPERSON OR OTHER INDIVIDUAL HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED OR
INCORPORATED BY REFERENCE IN THIS PROSPECTUS IN CONNECTION WITH THIS EXCHANGE
OFFER AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE
RELIEF UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY OR THE TRUST. NEITHER THE
DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL UNDER ANY
CIRCUMSTANCE CREATE AN IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS
OF THE COMPANY OR THE TRUST SINCE THE DATE HEREOF. THIS PROSPECTUS DOES NOT
CONSTITUTE AN OFFER OR A SOLICITATION BY ANYONE IN ANY JURISDICTION IN WHICH
SUCH OFFER OR SOLICITATION IS NOT AUTHORIZED OR IN WHICH THE PERSON MAKING SUCH
OFFER OR SOLICITATION IS NOT QUALIFIED TO DO SO OR ANYONE TO WHOM IT IS UNLAWFUL
TO MAKE SUCH OFFER OR SOLICITATION.
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Exchange
Act, and in accordance therewith files reports, proxy statements and other
information with the Securities and Exchange Commission (the "SEC" or
"Commission"). Such reports, proxy statements and other information can be
inspected and copied at the public reference facilities of the Commission at
Room 1024, 450 Fifth Street, N.W., Washington, D.C. 20549 and at the regional
offices of the Commission located at 7 World Trade Center, 13th Floor, Suite
1300, New York, New York 10048 and Citicorp Center, 14th Floor, Suite 1400, 500
West Madison Street, Chicago, Illinois 60661. Copies of such material also can
be obtained at prescribed rates by writing to the Public Reference Section of
the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549. Such
information also may be accessed through the Commission's electronic data
gathering, analysis and retrieval system ("EDGAR") via electronic means,
including the Commission's web site on the Internet (http://www.sec.gov). Such
reports, proxy statements and other information concerning the Company also can
be inspected at the National Association of Securities Dealers, Inc., 1735 K
Street, N.W., Washington, D.C. 20006.
No separate financial statements of the Trust have been included herein.
The Company and the Trust do not consider that such financial statements would
be material to holders of the Capital Securities because the
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<PAGE> 9
Trust is a newly-formed special purpose entity, has no operating history or
independent operations and is not engaged in and does not propose to engage in
any activity other than holding as Trust assets the Junior Subordinated
Debentures and issuing the Trust Securities. See "Provident Trust I" and
"Description of Exchange Securities." In addition, the Company does not expect
that the Trust will file reports, proxy statements and other information under
the Exchange Act with the Commission.
This Prospectus constitutes a part of a registration statement on Form S-4
(the "Registration Statement") filed by the Company and the Trust with the
Commission under the Securities Act. This Prospectus does not contain all the
information set forth in the Registration Statement, certain parts of which are
omitted in accordance with the rules and regulations of the Commission, and
reference is hereby made to the Registration Statement and to the exhibits
relating thereto for further information with respect to the Company, the Trust
and the Exchange Securities. Any statements contained herein concerning the
provisions of any document are not necessarily complete, and, in each instance,
reference is made to the copy of such document filed as an exhibit to the
Registration Statement or otherwise filed with the Commission. Each such
statement is qualified in its entirety by such reference.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by the Company with the Commission are
incorporated by reference in this Prospectus:
1. The Company's Annual Report on Form 10-K for the year ended December 31,
1997;
2. The Corporation's Proxy Statement dated April 15, 1998; and
3. The Company's Quarterly Report on Form 10-Q for the period ended March
31, 1998.
All documents subsequently filed by the Company pursuant to Section 13(a),
13(c), 14 or 15(d) of the Exchange Act after the date hereof and prior to the
termination of the offering of the Exchange Securities offered hereby shall be
deemed to be incorporated by reference in this Prospectus and to be a part of
this Prospectus from the date of filing of such documents. Any statement
contained herein or in a document incorporated or deemed to be incorporated by
reference herein shall be deemed to be modified or superseded for purposes of
this Prospectus to the extent that a statement contained herein (or in any other
subsequently filed document which also is or is deemed to be incorporated by
reference herein) modifies or supersedes such statement. Any statement so
modified or superseded shall not be deemed, except as so modified or superseded,
to constitute a part of this Prospectus.
As used herein, the terms "Prospectus" and "herein" mean this Prospectus,
including the documents incorporated or deemed to be incorporated herein by
reference, as the same may be amended, supplemented or otherwise modified from
time to time. Statements contained in this Prospectus as to the contents of any
contract or other document referred to herein do not purport to be complete, and
where reference is made to the particular provisions of such contract or other
document, such provisions are qualified in all respects by reference to all of
the provisions of such contract or other document.
Copies of the other documents incorporated by reference herein are
available from the Company without charge (other than exhibits to such
documents, unless such exhibits are specifically incorporated by reference into
the information that this Prospectus incorporates) to any person to whom this
Prospectus is delivered, upon written request of such person. Requests for such
copies should be directed to Robert L. Davis, General Counsel and Corporate
Secretary for the Company, at the principal executive offices located at 114
East Lexington Street, Baltimore, Maryland 21202. The Company's telephone number
is (410) 277-7000.
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<PAGE> 10
SUMMARY
The following summary is qualified in its entirety by the more detailed
information appearing elsewhere in this Prospectus.
As used herein, (i) the "Junior Subordinated Indenture" means the Junior
Subordinated Indenture, as amended and supplemented from time to time, between
the Company and Bankers Trust Company, as trustee (the "Debenture Trustee"),
pursuant to which the Junior Subordinated Debentures are issued, (ii) the "Trust
Agreement" means the Amended and Restated Trust Agreement relating to the Issuer
Trust, as amended and supplemented from time to time, among the Company, as
Depositor, Bankers Trust Company, as Property Trustee (the "Property Trustee"),
Bankers Trust (Delaware), as Delaware Trustee (the "Delaware Trustee")
(collectively, the "Issuer Trustees"), the Administrators (as defined herein)
named therein, and the holders, from time to time, of undivided beneficial
interests in the assets of the Issuer Trust, and (iii) the "Guarantee" means the
Original Guarantee Agreement and the Exchange Guarantee Agreement relating to
the Original Capital Securities and the Exchange Capital Securities, as amended
and supplemented from time to time, between the Company and Bankers Trust
Company, as Guarantee Trustee (the "Guarantee Trustee").
PROVIDENT BANKSHARES CORPORATION
The Company is a registered bank holding company, chartered under the laws
of the State of Maryland, and headquartered in Baltimore, Maryland. The Company
operates through its wholly-owned subsidiary, Provident Bank of Maryland (the
"Bank"), a Maryland-chartered commercial bank that maintains, as of March 31,
1998, 69 retail banking offices (of which 51 are traditional branch offices and
18 are in-store facilities) in seven Maryland counties in the
Baltimore/Washington, D.C. corridor, as well as Baltimore City and southern York
County, Pennsylvania. The Company provides a broad range of banking services
with an emphasis on consumer, real estate mortgage, and commercial business
loans. Through three subsidiaries, the Bank provides mortgage-banking products,
purchased annuities and mutual funds, and a variety of credit insurance
products. At March 31, 1998, the Company had total assets of approximately $4.0
billion, total deposits of $2.9 billion, and total consolidated shareholders'
equity of approximately $280.0 million.
The Company has experienced significant growth since the management team,
led by Carl W. Stearn and Peter M. Martin, was retained in 1990 to reorient the
Company's operations from a traditional thrift institution to a commercial
banking operation. In April 1998, Mr. Stearn retired as Chairman of the Board of
Directors and Chief Executive Officer of the Company and Mr. Martin assumed
those positions. Mr. Stearn remains a director of the Company. During their
tenure, the Company has grown from approximately $1.5 billion in assets and 38
banking offices to approximately $4.0 billion in assets and 69 banking offices.
In developing the Company's bank-oriented franchise, management has implemented
extensive modifications to the lending, funding, balance sheet management, and
operational functions of the Company to position the Company for future
profitable growth.
Provident Bankshares Corporation recorded net income for the quarter ended
March 31, 1998 of $9.3 million or $.38 per share basic and $.36 diluted. This
represented a 17.4% increase in net income over the same period a year ago. Net
income for the quarter ended March 31, 1997 was $7.9 million or $.33 per share
basic or $.33 diluted. The higher earnings in 1998 were mainly due to loan
growth (particularly consumer loans), increased fee income and controlled
operating expenses. Average consumer loans outstanding grew $486 million, as
total average loans increased 21% to $2.72 billion. The increase in non-interest
income from $10.3 million at March 31, 1997 to $12.8 million at March 31, 1998
was driven by a 15% increase in fee based services on higher account volume.
Even with higher account volume and continued investment in business
initiatives, operating expenses were limited to a 3.1% growth rate. There was a
$2.1 million increase in the provision for loan losses during the quarter with
net charge-offs of $2.1 million. The increase in provision was mainly related to
the loan portfolio growth.
The Company earned $33.6 million on an operating basis in 1997, excluding
an $8.6 million one-time acquisition related charge, which represents the
seventh consecutive year of double-digit increases in operating earnings. Such
earnings represent an improvement in the Company's returns on average assets and
average
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<PAGE> 11
equity from 0.62% in 1993 to 0.92% (excluding merger-related expenses) in 1997
and from 9.38% in 1993 to 13.34% (excluding merger-related expenses) in 1997,
respectively. Additionally, the Company's efficiency ratio has improved from
79.9% in 1993 to 64.8% (excluding merger-related expenses) in 1997.
The Company has transitioned its asset base into higher yielding products
since 1993, with investment securities and residential mortgages declining from
53% at year-end 1993 to 37% with loans available for sale of earning assets at
March 31, 1998. Loan growth has averaged 10-12% in recent years, supported by
consumer and commercial loan emphasis as well as disciplined wholesale purchases
of seasoned consumer portfolios. At March 31, 1998, Provident's loan balance
totaled $2.7 billion and was comprised of 61.7% consumer, 24.9% commercial and
commercial real estate, and 13.4% residential mortgage.
The Company does not believe that asset quality has been sacrificed in
recent years as a result of loan growth. At March 31, 1998, the Company had
non-performing loans of $14.3 million, or 0.51% of total loans. The allowance
for loan losses at March 31, 1998, was 1.35% of total loans and 264% of
non-performing loans. Net charge-offs at March 31, 1998 were 0.31% of average
loans. Additionally, the Company's net charge-offs to average loans ratio has
averaged 0.16% over the last five years ended December 31, 1997.
In addition to emphasizing credit quality, management has also ensured
sufficient liquidity by maintaining an investment portfolio of $989.4 million at
March 31, 1998. Of the investment portfolio, 3.9% is invested in U.S. government
obligations and 92.0% in mortgage-backed securities with a weighted average life
of 4.7 years. Total investment securities decreased $71 million during 1997 as a
result of shifting funds into higher yielding loan portfolios.
In August 1997, the Company completed its acquisition of First Citizens
Financial Corporation, a $674 million financial institution with 15 branches in
the Montgomery and Frederick Counties of Maryland. The Company will continue to
evaluate business combination opportunities. As a result, business combinations
may take place in the future involving the payment of consideration by the
Company in the form of cash, debt, or equity securities.
The Company's strategy is to continue to develop its community banking
franchise in the Baltimore/Washington, D.C. corridor as well as develop the
Northern Virginia market by emphasizing personalized and responsive banking
services in the communities in which it operates, as well as continuing to
develop its portfolio and indirect consumer lending operations. Management
believes that the increasing consolidation in the financial services industry,
particularly in its principal market area, provides the Company with significant
opportunities as the larger regional institutions focus increasingly on higher
dollar credits and less personalized forms of service delivery.
The Company's principal executive offices are located at 114 East Lexington
Street, Baltimore, Maryland 21202, and its telephone number at such address is
(410) 277-7000.
PROVIDENT TRUST I
The Issuer Trust is a statutory business Trust created under Delaware law
on April 3, 1998 and which is governed by the Trust Agreement. The Issuer Trust
exists for the exclusive purposes of (i) issuing and selling the Trust
Securities, (ii) using the proceeds from the sale of the Trust Securities to
acquire the Junior Subordinated Debentures and (iii) engaging in only those
other activities necessary, convenient or incidental thereto (such as
registering the transfer of the Trust Securities). Accordingly, the Junior
Subordinated Debentures are the sole assets of the Issuer Trust, and payments
under the Junior Subordinated Debentures are the sole source of revenue of the
Issuer Trust.
THE EXCHANGE OFFER
The Exchange Offer......... Up to $40,000,000 aggregate Liquidation Amount of
Original Capital Securities are being offered in
exchange for a like aggregate Liquidation Amount
of Exchange Capital Securities. Original Capital
Securities may be tendered for exchange in whole
or in part in a Liquidation
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<PAGE> 12
Amount of $100,000 (100 Capital Securities) or
any integral multiple of $1,000 (one Capital
Security) in excess thereof. The Company and the
Trust are making the Exchange Offer in order to
satisfy their obligations under the Registration
Rights Agreement relating to the Original Capital
Securities. For a description of the procedures
for tendering Original Capital Securities, see "
The Exchange Offer -- Procedures for Tendering
Original Capital Securities."
Expiration Date............ 5:00 p.m., Eastern Standard Time, on ,
1998, unless the Exchange Offer is extended by
the Company or the Trust (in which case the
Expiration Date will be the latest date and time
to which the Exchange Offer is extended). See
"The Exchange Offer -- Terms of the Exchange
Offer."
Conditions to the Exchange
Offer...................... The Exchange Offer is subject to certain
conditions, which may be waived by the Company
and the Trust in their sole discretion. The
Exchange Offer is not conditioned upon any
minimum Liquidation Amount of Original Capital
Securities being tendered. See "The Exchange
Offer -- Conditions to the Exchange Offer."
Terms of the Exchange
Offer...................... The Company and the Trust reserve the right in
their sole and absolute discretion, subject to
applicable law, at any time and from time to
time, (i) to delay the acceptance of the Original
Capital Securities for exchange, (ii) to
terminate the Exchange Offer if certain specified
conditions have not been satisfied, (iii) to
extend the Expiration Date of the Exchange Offer
and retain all Original Capital Securities
tendered pursuant to the Exchange Offer, subject,
however, to the right of holders of Original
Capital Securities to withdraw their tendered
Original Capital Securities or (iv) to waive any
condition or otherwise amend the terms of the
Exchange Offer in any respect. See "The Exchange
Offer -- Terms of the Exchange Offer."
Withdrawal Rights.......... Tenders of Original Capital Securities may be
withdrawn at any time on or prior to the
Expiration Date by delivering a written notice of
such withdrawal to the Exchange Agent in
conformity with certain procedures set forth
below under "The Exchange Offer -- Withdrawal
Rights."
Procedures for Tendering
Original Capital
Securities............... Certain brokers, dealers, commercial banks, trust
companies and other nominees who hold Original
Capital Securities through DTC must effect
tenders by book-entry transfer through DTC's
Automated Tender Offer Program ("ATOP").
Beneficial owners of Original Capital Securities
registered in the name of a broker, dealer,
commercial bank, trust company or other nominee
are urged to contact such person promptly if they
wish to tender Original Capital Securities
pursuant to the Exchange Offer. Tendering holders
of Original Capital Securities that do not use
ATOP must complete and sign a Letter of
Transmittal in accordance with the instructions
contained therein and forward the same by mail,
facsimile or hand delivery, together with any
other required documents, to the Exchange Agent,
either with the certificates of the Original
Capital Securities to be tendered or in
compliance with the specified procedures for
guaranteed delivery of Original Capital
Securities. Tendering holders of Original Capital
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<PAGE> 13
Securities that use ATOP will, by so doing,
acknowledge that they are bound by the terms of
the Letter of Transmittal. See "The Exchange
Offer -- Procedures for Tendering Original
Capital Securities."
Letters of Transmittal and certificates
representing Original Capital Securities should
not be sent to the Corporation or the Trust. Such
documents should only be sent to the Exchange
Agent.
Resales of Exchange Capital
Securities............... The Company and the Trust are making the Exchange
Offer in reliance on the position of the staff of
the Division of Corporation Finance of the
Commission as set forth in certain interpretive
letters addressed to third parties in other
transactions. However, neither the Company nor
the Trust has sought its own interpretive letter
and there can be no assurance that the staff of
the Division of Corporation Finance of the
Commission would make a similar determination
with respect to the Exchange Offer as it has in
such interpretive letters to third parties. Based
on these interpretations by the staff of the
Division of Corporation Finance of the
Commission, and subject to the two immediately
following sentences, the Company and the Trust
believe that Exchange Capital Securities issued
pursuant to this Exchange Offer in exchange for
Original Capital Securities may be offered for
resale, resold and otherwise transferred by a
holder thereof (other than a holder who is
broker-dealer) without further compliance with
the registration and prospectus delivery
requirements of the Securities Act, provided that
such Exchange Capital Securities are acquired in
the ordinary course of such holder's business and
that such holder is not participating, and has no
arrangement or understanding with any person to
participate, in a distribution (within the
meaning of the Securities Act) of such Exchange
Capital Securities. However, any holder of
Original Capital Securities who is an Affiliate
of the Company or the Trust or who intends to
participate in the Exchange Offer for the purpose
of distributing the Exchange Capital Securities,
or any broker-dealer who purchased the Original
Capital Securities from the Trust to resell
pursuant to Rule 144A or any other available
exemption under the Securities Act, (i) will not
be able to rely on the interpretations of the
staff of the Division of Corporation Finance of
the Commission set forth in the above-mentioned
interpretive letters, (ii) will not be permitted
or entitled to tender such Original Capital
Securities in the Exchange Offer and (iii) must
comply with the registration and prospectus
delivery requirements of the Securities Act in
connection with any sale or other transfer of
such Original Capital Securities unless such sale
is made pursuant to an exemption from such
requirements. In addition, as described below, if
any broker-dealer holds Original Capital
Securities acquired for its own account as a
result of market-making or other trading
activities and exchanges such Original Capital
Securities for Exchange Capital Securities, then
such broker-dealer must deliver a prospectus
meeting the requirements of the Securities Act in
connection with any resales of such Exchange
Capital Securities.
Each holder of Original Capital Securities who
wishes to exchange Original Capital Securities
for Exchange Capital Securities in the
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<PAGE> 14
Exchange Offer will be required to represent in
the Letter of Transmittal or by transmission of
an Agent's Message that (i) it is not an
"affiliate" of the Company or the Trust, (ii) any
Exchange Capital Securities to be received by it
are being acquired in the ordinary course of its
business, (iii) it has no arrangement or
understanding with any person to participate in a
distribution (within the meaning of the
Securities Act) of such Exchange Capital
Securities and (iv) if such holder is not a
broker-dealer, such holder is not engaged in, and
does not intend to engage in, a distribution
(within the meaning of the Securities Act) of
such Exchange Capital Securities. The Letter of
Transmittal contains the foregoing
representations. Each Participating Broker-Dealer
that receives Exchange Capital Securities for its
own account pursuant to the Exchange Offer will
be deemed to have acknowledged by execution of
the Letter of Transmittal or delivery of an
Agent's Message (as defined herein) that it
acquired the Original Capital Securities for its
own account as the result of market-making
activities or other trading activities and must
agree that it will deliver a prospectus meeting
the requirements of the Securities Act in
connection with any resale of such Exchange
Capital Securities. The Letter of Transmittal
states that, by so acknowledging and by
delivering a prospectus, a Participating
Broker-Dealer will not be deemed to admit that it
is an "underwriter" within the meaning of the
Securities Act. Based on the position taken by
the staff of the Division of Corporation Finance
of the Commission in the interpretive letters
referred to above, the Company and the Trust
believe that Participating Broker-Dealers who
acquired Original Capital Securities for their
own accounts as a result of market-making
activities or other trading activities may
fulfill their prospectus delivery requirements
with respect to the Exchange Capital Securities
received upon exchange of such Original Capital
Securities (other than Original Capital
Securities which represent an unsold allotment
from the original sale of the Original Capital
Securities) with a prospectus meeting the
requirements of the Securities Act, which may be
the prospectus prepared for an exchange offer so
long as it contains a description of the plan of
distribution with respect to the resale of such
Exchange Capital Securities. Accordingly, this
Prospectus, as it may be amended or supplemented
from time to time, may be used by a Participating
Broker-Dealer in connection with resales of
Exchange Capital Securities received in exchange
for Original Capital Securities where such
Original Capital Securities were acquired by such
Participating Broker-Dealer for its own account
as a result of market-making or other trading
activities.
Subject to certain provisions set forth in the
Registration Rights Agreement and to the
limitations described below under "The Exchange
Offer -- Resales of Exchange Capital Securities,"
the Company and the Trust have agreed that this
Prospectus, as it may be amended or supplemented
from time to time, may be used by a Participating
Broker-Dealer in connection with resales of such
Exchange Capital Securities for a period ending
90 days after the Expiration date (subject to
extension under certain limited circumstances)
or, if earlier, when all such Exchange Capital
Securities have been disposed of by such
Participating Broker-Dealer. See "Plan of
Distribution."
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<PAGE> 15
Any person, including any Participating
Broker-Dealer, who is an Affiliate of the Company
or the Trust may not rely on such interpretive
letters and must comply with the registration and
prospectus delivery requirements of the
Securities Act in connection with any resale
transaction. See "The Exchange Offer -- Resales
of Exchange Capital Securities."
Exchange Agent............. The exchange agent with respect to the Exchange
Offer is Bankers Trust Company (the "Exchange
Agent"). The addresses, and telephone and
facsimile numbers, of the Exchange Agent are set
forth in "The Exchange Offer -- Exchange Agent")
and in the Letter of Transmittal.
Use of Proceeds............ Neither the Company nor the Trust will receive any
cash proceeds from the issuance of the Exchange
Capital Securities offered hereby. See "Use of
Proceeds."
Certain Federal Income Tax
Considerations; ERISA
Considerations........... Holders of Original Capital Securities should
review the information set forth under "Certain
Federal Income Tax Considerations" and "ERISA
Considerations" prior to tendering Original
Capital Securities in the Exchange Offer.
THE EXCHANGE CAPITAL SECURITIES
Securities Offered......... Up to $40,000,000 aggregate Liquidation Amount of
the Trust's Exchange Capital Securities which
have been registered under the Securities Act
(Liquidation Amount $1,000 per Exchange Capital
Security). The Exchange Capital Securities will
be issued and the Original Capital Securities
were issued under the Trust Agreement. The
Exchange Capital Securities and any Original
Capital Securities which remain outstanding after
consummation of the Exchange Offer will vote
together as a single class for purposes of
determining whether holders of the requisite
percentage in outstanding Liquidation Amount
thereof have taken certain actions or exercised
certain rights under the Trust Agreement. See
"Description of Capital Securities -- Voting
Rights; Amendment of the Trust Agreement." The
terms of the Exchange Capital Securities are
identical in all material respects to the terms
of the Original Capital Securities, except that
the Exchange Capital Securities have been
registered under the Securities Act and therefore
will not be subject to certain restrictions on
transfer under federal and state securities laws
and will not provide for any increase in the
Distribution rate thereon. See "The Exchange
Offer."
Distribution Dates......... April 15th and October 15th of each year.
Extension Periods.......... So long as no Debenture Event of Default has
occurred and is continuing, distributions on the
Capital Securities will be deferred for the
duration of any Extension Period elected by the
Company with respect to the payment of interest
on the Junior Subordinated Debentures. No
Extension Period will exceed 10 consecutive
semi-annual periods, end on a date other than an
Interest Payment Date or extend beyond the Stated
Maturity Date. See "Description of Junior
Subordinated Debentures -- Option to Extend
Interest Payment Period" and "Certain
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<PAGE> 16
Federal Income Tax Considerations -- Interest
Income and Original Issue Discount."
Ranking.................... The Exchange Capital Securities will rank pari
passu, and payments thereon will be made pro
rata, with the Original Capital Securities and
the Common Securities except as described under
"Description of Capital
Securities -- Subordination of Common
Securities." The Exchange Junior Subordinated
Debentures will rank pari passu with the Original
Junior Subordinated Debentures, and all other
junior subordinated debentures issued by the
Company (the "Other Debentures") and sold to
other trusts established or to be established by
the Company, in each case similar to the Trust
(the "Other Trusts"), and will be unsecured and
subordinate and junior in right of payment to all
Senior Indebtedness of the Company to the extent
and in the manner set forth in the Indenture. See
"Description of Junior Subordinated Debentures."
The Exchange Guarantee will rank pari passu with
the Original Guarantee, and all other guarantees
issued by the Company with respect to capital
securities issued or to be issued by Other Trusts
(the "Other Guarantees") and will constitute an
unsecured obligation of the Company and will rank
subordinate and junior in right of payment to all
Senior Indebtedness of the Company to the extent
and in the manner set forth in the Guarantee
Agreement. See "Description of Guarantee."
Redemption................. The Trust Securities are subject to mandatory
redemption (i) in whole, but not in part, at the
Stated Maturity upon repayment of the Junior
Subordinated Debentures, (ii) in whole, but not
in part, at any time prior to April 15, 2008,
contemporaneously with the optional redemption at
any time by the Company of the Junior
Subordinated Debentures at any time within 90
days following the occurrence and during the
continuation of a Tax Event, Investment Company
Event or Capital Treatment Event in each case,
subject to possible regulatory approval and (iii)
in whole or in part, at any time on or after
April 15, 2008, contemporaneously with the
optional redemption by the Company of the Junior
Subordinated Debentures in whole or in part, in
each case at the applicable Redemption Price (as
defined herein). See "Description of Capital
Securities -- Redemption."
Ratings.................... The Exchange Capital Securities are expected to be
rated "BB" by Standard & Poor's Ratings Services
and "BB+" by Tomson BankWatch, Inc. A security
rating is not a recommendation to buy, sell, or
hold securities and may be subject to revision or
withdrawal at any time by the assigning rating
organization.
Transfer................... The Exchange Capital Securities will be issued, and
may be transferred, only in blocks having a
Liquidation Amount of not less than $100,000 (100
Exchange Capital Securities). Any transfer, sale
or other disposition of Exchange Capital
Securities resulting in a block having a
Liquidation Amount of less than $100,000 shall be
deemed to be void and of no legal effect
whatsoever.
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Absence of Market for the
Exchange Capital
Securities............... The Exchange Capital Securities will be a new issue
of securities for which there currently is no
market. Although the Initial purchaser has
informed the Issuer Trust and the Company that it
currently intends to make a market in the
Exchange Capital Securities, the Initial
Purchaser is not obligated to do so, and any such
market making may be discontinued at any time
without notice. Accordingly, there can be no
assurance as to the development or liquidity of
any market for the Exchange Capital Securities.
See "Plan of Distribution."
For additional information regarding the Exchange Capital Securities, see
"Provident Trust I," "Use of Proceeds," "Description of Capital Securities,"
"Description of Junior Subordinated Debentures," "Description of Guarantee,"
"Relationship Among the Capital Securities, the Junior Subordinated Debentures
and the Guarantee," "Certain Federal Income Tax Consequences" and "Certain ERISA
Considerations."
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<PAGE> 18
RISK FACTORS
Prospective purchasers of the Exchange Capital Securities should carefully
review the information contained elsewhere in this Prospectus and should
particularly consider the following matters. Certain statements in this
Prospectus and documents incorporated herein by reference are forward-looking
and are identified by the use of forward-looking words or phrases such as
"intended," "will be positioned," "expects," is or are "expected,"
"anticipates," and "anticipated." These forward-looking statements are based on
the Company's current expectations. To the extent any of the information
contained or incorporated by reference in this Prospectus constitutes a
"forward-looking statement" as defined in Section 21E(i)(1) of the Exchange Act,
the risk factors set forth below are cautionary statements identifying important
factors that could cause actual results to differ materially from those in the
forward-looking statement.
RANKING OF SUBORDINATED OBLIGATIONS UNDER THE EXCHANGE GUARANTEE AND THE
EXCHANGE JUNIOR SUBORDINATED DEBENTURES
The obligations of the Company under the Guarantee issued by the Company
for the benefit of the holders of Capital Securities and under the Junior
Subordinated Debentures are subordinate and junior in right of payment to all
Senior Indebtedness. At March 31, 1998, the Senior Indebtedness of the Company
aggregated approximately $488.3 million. None of the Junior Subordinated
Indenture, the Guarantee or the Trust Agreement places any limitation on the
amount of secured or unsecured debt, including Senior Indebtedness, that may be
incurred by the Company. See "Description of Guarantee -- Status of the Exchange
Guarantee" and "Description of Junior Subordinated Debentures -- Subordination."
The ability of the Issuer Trust to pay amounts due on the Capital
Securities is solely dependent upon the Company's making payments on the Junior
Subordinated Debentures as and when required.
STATUS OF THE COMPANY AS A BANK HOLDING COMPANY
Because the Company is a bank holding company, its right to participate in
any distribution of assets of the Bank upon such Bank's liquidation or
reorganization or otherwise (and thus the ability of holders of the Capital
Securities to benefit indirectly from such a distribution) is subject to the
prior claims of creditors of that Bank (including its depositors), except to the
extent that the Company may itself be recognized as a creditor of the Bank. At
March 31, 1998, the Bank had total liabilities (excluding liabilities owed to
the Company) of approximately $3.7 billion, including deposits. Accordingly, the
Capital Securities effectively will be subordinated to all existing and future
liabilities of the Bank, and holders of Capital Securities should look only to
the assets of the Company for payments on the Capital Securities. Neither the
Guarantee nor the Junior Subordinated Indenture places any limitation on the
amount of secured or unsecured debt that may be incurred by the Bank in the
future. See "Description of Junior Subordinated Debentures" and "Description of
Guarantee."
In addition, almost all of the operating assets of the Company are owned by
the Bank. The Company relies primarily on dividends from the Bank to meet its
obligations for the payment of principal and interest on its separate debt
obligations and corporate expenses and for payment of dividends on its
outstanding common stock. The payment of dividends by the Bank to the Company is
subject to certain legal and regulatory limitations, is subject to ongoing
review by banking regulators and, under certain circumstances, may require prior
approval by banking regulatory authorities. At March 31, 1998, approximately
$144.8 million was available for payment of dividends to the Company from the
Bank without prior regulatory approval. The Bank also is subject to certain
restrictions under federal law on extensions of credit to, and certain other
transactions with, the Company and certain of its other affiliates, and on
investments in the stock or other securities thereof. Such restrictions prevent
the Company and such other affiliates from borrowing from the Bank unless the
loans are secured by various types of collateral. Further, such secured loans or
other transactions and investments by the Bank are generally limited in amount
as to the Company and as to each such other affiliate to 10% of such Bank's
capital and surplus and as to the Company and all such other affiliates to an
aggregate of 20% of such Bank's capital and surplus.
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<PAGE> 19
OPTION TO EXTEND INTEREST PAYMENT PERIOD; TAX CONSEQUENCES
So long as no Debenture Event of Default has occurred and is continuing,
the Company has the right under the Junior Subordinated Indenture to defer the
payment of interest on the Junior Subordinated Debentures at any time or from
time to time for a period not exceeding 10 consecutive semi-annual periods with
respect to each Extension Period, provided that no Extension Period may extend
beyond the Stated Maturity of the Junior Subordinated Debentures. See
"Description of Junior Subordinated Debentures -- Debenture Events of Default."
As a consequence of any such deferral, semi-annual Distributions on the Capital
Securities by the Issuer Trust will be deferred during any such Extension
Period. Distributions to which holders of the Capital Securities are entitled
will accumulate additional Distributions (such additional Distributions
hereinafter are referred to as "Additional Amounts") thereon during any
Extension Period at a rate equal to 8.29% per annum, compounded semi-annually
from the relevant payment date for such Distributions, computed on the basis of
a 360-day year of twelve 30-day months and the actual days elapsed in a partial
month in such period. Additional Amounts payable for each full Distribution
period will be computed by dividing the rate per annum by two. The term
"Distributions" as used herein shall include any such Additional Amounts. During
any such Extension Period, the Company may not (i) declare or pay any dividends
or distributions on, or redeem, purchase, acquire or make a liquidation payment
with respect to, any of the Company's capital stock or (ii) make any payment of
principal of or interest or premium, if any, on or repay, repurchase or redeem
any debt securities of the Company that rank pari passu in all respects with or
junior in interest to the Junior Subordinated Debentures (other than (a)
repurchases, redemptions or other acquisitions of shares of capital stock of the
Company 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, in connection with a dividend reinvestment
or shareholder stock purchase plan or in connection with the issuance of capital
stock of the Company (or securities convertible into or exercisable for such
capital stock) as consideration in an acquisition transaction entered into prior
to the applicable Extension Period, (b) as a result of an exchange or conversion
of any class or series of the Company's capital stock (or any capital stock of a
subsidiary of the Company) for any class or series of the Company's capital
stock or of any class or series of the Company's indebtedness for any class or
series of the Company's capital stock, (c) the purchase of fractional interests
in shares of the Company's capital stock pursuant to the conversion or exchange
provisions of such capital stock or the security being converted or exchanged,
(d) any declaration of a dividend in connection with any shareholder's rights
plan, or the issuance of rights, stock or other property under any shareholder'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
ranks pari passu with or junior to such stock). Prior to the termination of any
such Extension Period, the Company may further defer the payment of interest,
provided that no Extension Period may exceed 10 consecutive semi-annual periods
or extend beyond the Stated Maturity of the Junior Subordinated Debentures. Upon
the termination of any Extension Period and the payment of all interest then
accrued and unpaid (together with interest thereon at a rate equal to 8.29% per
annum, compounded semi-annually), the Company may elect to begin a new Extension
Period subject to the above conditions. No interest shall be due and payable
during an Extension Period, except at the end thereof. The Company must give the
Issuer Trustees notice of its election of such Extension Period at least one
Business Day (as defined herein) prior to the earlier of (i) the date the
Distributions on the Capital Securities would have been payable but for the
election to begin such Extension Period and (ii) the date the Property Trustee
is required to give notice to holders of the Capital Securities of the record
date or the date such Distributions are payable, but in any event not less than
one Business Day prior to such record date. The Property Trustee will give
notice of the Company's election to begin a new Extension Period to the holders
of the Capital Securities. Subject to the foregoing, there is no limitation on
the number of times that the Company may elect to begin an Extension Period. See
"Description of Capital Securities -- Distributions" and "Description of Junior
Subordinated Debentures -- Option to Extend Interest Payment Period."
Should an Extension Period occur, a holder of Capital Securities will
continue to accrue income (in the form of original issue discount) for United
States federal income tax purposes in respect of its pro rata share of the
Junior Subordinated Debentures held by the Issuer Trust. As a result, a holder
of Capital Securities will
18
<PAGE> 20
include such original issue discount income in gross income for United States
federal income tax purposes in advance of the receipt of cash attributable to
such original issue discount interest income, and will not receive the cash
related to such income from the Issuer Trust if the holder disposes of the
Capital Securities prior to the record date for the payment of Distributions
with respect to such Extension Period. See "Certain Federal Income Tax
Consequences -- Interest Income and Original Issue Discount" and "-- Sale or
Redemption of Capital Securities."
The Company has no current intention of exercising its right to defer
payments of interest by extending the interest payment period on the Junior
Subordinated Debentures. However, should the Company elect to exercise such
right in the future, the market price of the Capital Securities is likely to be
affected. A holder that disposes of its Capital Securities during an Extension
Period, therefore, might not receive the same return on its investment as a
holder that continues to hold its Capital Securities. In addition, as a result
of the existence of the Company's right to defer interest payments, the market
price of the Capital Securities (which represent preferred undivided beneficial
interests in the assets of the Issuer Trust) may be more volatile than the
market prices of other securities on which original issue discount accrues that
are not subject to such deferrals.
TAX EVENT, INVESTMENT COMPANY EVENT OR CAPITAL TREATMENT EVENT REDEMPTION
Upon the occurrence and during the continuation of a Tax Event, Investment
Company Event or Capital Treatment Event, the Company has the right to redeem
the Junior Subordinated Debentures in whole, but not in part, at any time within
90 days following the occurrence of such Tax Event, Investment Company Event or
Capital Treatment Event and thereby cause a mandatory redemption of the Capital
Securities and Common Securities. Any such redemption shall be at a price equal
to the aggregate liquidation amount of the Capital Securities and Common
Securities, respectively, together with accumulated Distributions to but
excluding the date fixed for redemption and the related amount of the premium,
if any, paid by the Company upon the concurrent redemption of such Junior
Subordinated Debentures. The ability of the Company to exercise its rights to
redeem the Junior Subordinated Debentures prior to the Stated Maturity may be
subject to prior regulatory approval by the Federal Reserve, if then required
under applicable Federal Reserve capital guidelines or policies. See
"Description of Junior Subordinated Debentures -- Redemption" and "Description
of Capital Securities -- Liquidation Distribution Upon Dissolution."
A "Tax Event" means the receipt by the Issuer Trust of an opinion of
counsel to the Company experienced in such matters to the effect that, as a
result of any amendment to, or change (including any announced prospective
change) in, the laws (or any regulations thereunder) of the United States or any
political subdivision or taxing authority thereof or therein, or as a result of
any official or administrative pronouncement or action or judicial decision
interpreting or applying such laws or regulations, which amendment or change is
effective or which pronouncement, action, or decision is announced on or after
the date of issuance of the Capital Securities, there is more than an
insubstantial risk that (i) the Issuer Trust is, or will be within 90 days of
the delivery of such opinion, subject to United States federal income tax with
respect to income received or accrued on the Original Junior Subordinated
Debentures or Exchange Junior Subordinated Debentures, (ii) interest payable by
the Company on the Original Junior Subordinated Debentures or Exchange Junior
Subordinated Debentures is not, or within 90 days of the delivery 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 Issuer Trust is, or will be
within 90 days of the delivery of the opinion, subject to more than a de minimis
amount of other taxes, duties or other governmental charges.
"Investment Company Event" means the receipt by the Issuer Trust of an
opinion of counsel to the Company experienced in such matters to the effect
that, as a result of the occurrence of a change in law or regulation or a
written change (including any announced prospective change) in interpretation or
application of law or regulation by any legislative body, court, governmental
agency or regulatory authority, there is more than an insubstantial risk that
the Issuer Trust is or will be considered an "investment company" that is
required to be registered under the Investment Company Act of 1940, as amended
(the "Investment Company Act"), which change or prospective change becomes
effective or would become effective, as the case may be, on or after the date of
the issuance of the Capital Securities.
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<PAGE> 21
A "Capital Treatment Event" means the reasonable determination by the
Company that, as a result of the occurrence of any amendment to, or change
(including any announced prospective change) in, the laws (or any rules or
regulations thereunder) of the United States or any political subdivision
thereof or therein, or as a result of any official or administrative
pronouncement or action or judicial decision interpreting or applying such laws
or regulations, which amendment or change is effective or such pronouncement,
action or decision is announced on or after the date of issuance of the Capital
Securities, there is more than an insubstantial risk that the Company will not
be entitled to treat an amount equal to the Liquidation Amount of the Capital
Securities as "Tier 1 capital" (or the then equivalent thereof) for purposes of
the risk-based capital adequacy guidelines of the Federal Reserve, as then in
effect and applicable to the Company.
POSSIBLE TAX LAW CHANGES
In 1996 and 1997, the Clinton Administration proposed to amend the Code to
deny deductions of interest on instruments with features similar to those of the
Junior Subordinated Debentures when issued under arrangements similar to the
Issuer Trust. That proposal was not passed by Congress. The Clinton
Administration did not include this proposal in its fiscal year 1999 budget
proposal. However, there can be no assurance that future legislative proposals,
future regulations or official administrative pronouncements or future judicial
decisions will not affect the ability of the Company to deduct interest on the
Junior Subordinated Debentures. Such a change could give rise to a Tax Event,
which may permit the Company, upon approval of the Federal Reserve if then
required under applicable capital guidelines or policies of the Federal Reserve,
to cause a redemption of the Capital Securities, as described more fully under
"Description of Capital Securities -- Redemption."
EXCHANGE OF EXCHANGE CAPITAL SECURITIES FOR EXCHANGE JUNIOR SUBORDINATED
DEBENTURES
The holders of all the outstanding Common Securities have the right at any
time to dissolve the Issuer Trust and, after satisfaction of liabilities to
creditors of the Issuer Trust as provided by applicable law, cause the Junior
Subordinated Debentures to be distributed to the holders of the Capital
Securities and Common Securities in liquidation of the Issuer Trust. The ability
of the Company to dissolve the Issuer Trust may be subject to prior regulatory
approval of the Federal Reserve, if then required under applicable Federal
Reserve capital guidelines or policies. See "Description of Capital
Securities -- Liquidation Distribution Upon Dissolution."
Under current United States federal income tax law and interpretations and
assuming, as expected, that the Issuer Trust will not be taxable as a
corporation, a distribution of the Junior Subordinated Debentures upon a
liquidation of the Issuer Trust will not be a taxable event to holders of the
Capital Securities. However, if a Tax Event were to occur that would cause the
Issuer Trust to be subject to United States federal income tax with respect to
income received or accrued on the Junior Subordinated Debentures, a distribution
of the Junior Subordinated Debentures by the Issuer Trust would be a taxable
event to the Issuer Trust and the holders of the Capital Securities. See
"Certain Federal Income Tax Consequences -- Distribution of Exchange Junior
Subordinated Debentures to Holders of Exchange Capital Securities."
RIGHTS UNDER THE EXCHANGE GUARANTEE
Bankers Trust Company will act as the Guarantee Trustee under the Guarantee
and will hold the Guarantee for the benefit of the holders of the Capital
Securities. Bankers Trust Company will also act as Debenture Trustee for the
Junior Subordinated Debentures and as Property Trustee under the Trust
Agreement. Bankers Trust (Delaware) will act as Delaware Trustee under the Trust
Agreement. The Guarantee guarantees to the holders of the Capital Securities the
following payments, to the extent not paid by or on behalf of the Issuer Trust:
(i) any accumulated and unpaid Distributions required to be paid on the Capital
Securities, to the extent that the Issuer Trust has funds on hand available
therefor at such time; (ii) the Redemption Price (as defined in "Description of
Capital Securities -- Redemption") with respect to any Capital Securities called
for redemption, to the extent that the Issuer Trust has funds on hand available
therefor at such time; and (iii) upon a voluntary or involuntary dissolution of
the Issuer Trust (unless the Junior Subordinated Debentures are distributed to
holders of the Capital Securities), the lesser of (a) the
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<PAGE> 22
aggregate of the Liquidation Amount and all accumulated and unpaid Distributions
to the date of payment, to the extent that the Issuer Trust has funds on hand
available therefor at such time, and (b) the amount of assets of the Issuer
Trust remaining available for distribution to holders of the Capital Securities
on liquidation of the Issuer Trust. The Guarantee is subordinated as described
under "-- Ranking of Subordinated Obligations Under the Exchange Guarantee and
the Exchange Junior Subordinated Debentures" and "Description of
Guarantee -- Status of the Exchange Guarantee." The holders of not less than a
majority in aggregate Liquidation Amount of the outstanding Capital Securities
have the right to direct the time, method and place of conducting any proceeding
for any remedy available to the Guarantee Trustee in respect of the Guarantee or
to direct the exercise of any Trust power conferred upon the Guarantee Trustee
under the Guarantee. Any holder of the Capital Securities may institute a legal
proceeding directly against the Company to enforce its rights under the
Guarantee without first instituting a legal proceeding against the Issuer Trust,
the Guarantee Trustee or any other person or entity.
If the Company were to default on its obligation to pay amounts payable
under the Junior Subordinated Debentures, the Issuer Trust may lack funds for
the payment of Distributions or amounts payable on redemption of the Capital
Securities or otherwise, and, in such event, holders of the Capital Securities
would not be able to rely upon the Guarantee for payment of such amounts.
Instead, if a Debenture Event of Default has occurred and is continuing and such
event is attributable to the failure of the Company to pay any amounts payable
in respect of the Junior Subordinated Debentures on the payment date on which
such payment is due and payable, then a holder of Capital Securities may
institute a legal proceeding directly against the Company for enforcement of
payment to such holder of any amounts payable in respect of such Junior
Subordinated Debentures having a principal amount equal to the aggregate
Liquidation Amount of the Capital Securities of such holder (a "Direct Action").
In connection with such Direct Action, the Company will have a right of set-off
under the Junior Subordinated Indenture to the extent of any payment made by the
Company to such holder of Capital Securities in the Direct Action. Except as
described herein, holders of Capital Securities will not be able to exercise
directly any other remedy available to the holders of the Junior Subordinated
Debentures or assert directly any other rights in respect of the Junior
Subordinated Debentures. See "Description of Junior Subordinated
Debentures -- Enforcement of Certain Rights by Holders of Capital Securities,"
"-- Debenture Events of Default" and "Description of Guarantee." The Trust
Agreement provides that each holder of Capital Securities by acceptance thereof
agrees to the provisions of the Exchange Guarantee and the Exchange Junior
Subordinated Indenture.
LIMITED VOTING RIGHTS
Holders of Capital Securities will have limited voting rights relating
generally to the modification of the Capital Securities and the Guarantee and
the exercise of the Issuer Trust's rights as holder of Junior Subordinated
Debentures. Holders of Capital Securities will not be entitled to appoint,
remove or replace the Property Trustee or the Delaware Trustee except upon the
occurrence of certain events specified in the Trust Agreement and described
herein. The Property Trustee and the holders of all the Common Securities may,
subject to certain conditions, amend the Trust Agreement without the consent of
holders of Capital Securities to cure any ambiguity or make other provisions not
inconsistent with the Trust Agreement or to ensure that the Issuer Trust (i)
will not be taxable as a corporation for United States federal income tax
purposes, or (ii) will not be required to register as an "investment company"
under the Investment Company Act. See "Description of Capital
Securities -- Voting Rights; Amendment of Trust Agreement" and "-- Removal of
Issuer Trustees; Appointment of Successors."
MARKET PRICES
There can be no assurance as to the market prices for Capital Securities,
or the market prices for Junior Subordinated Debentures that may be distributed
in exchange for Capital Securities if a liquidation of the Issuer Trust occurs.
Accordingly, the Capital Securities or the Junior Subordinated Debentures that a
holder of Capital Securities may receive on liquidation of the Issuer Trust may
trade at a discount to the price that the investor paid to purchase the Capital
Securities offered hereby. Because holders of Capital Securities may receive
Junior Subordinated Debentures on termination of the Issuer Trust, prospective
purchasers of Capital
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Securities are also making an investment decision with regard to the Junior
Subordinated Debentures and should carefully review all the information
regarding the Junior Subordinated Debentures contained herein. See "Description
of Junior Subordinated Debentures."
ABSENCE OF PUBLIC MARKET
The Original Capital Securities were issued to, and the Company believes
such securities are currently owned by, a relatively small number of beneficial
owners. The Original Capital Securities have not been registered under the
Securities Act and will be subject to restrictions on transferability if they
are not exchanged for the Exchange Capital Securities. Although the Exchange
Capital Securities may be resold or otherwise transferred by the holders (who
are not affiliates of the Company or the Trust) without compliance with the
registration requirements under the Securities Act, they will constitute a new
issue of securities with no established trading market. Capital Securities may
be transferred by the holders thereof only in blocks having a Liquidation Amount
of not less than $100,000 (100 Capital Securities). The Company and the Trust
have been informed by Keefe, Bruyette & Woods, Inc. (the "Initial Purchaser")
that the Initial Purchaser intends to make a market in the Exchange Capital
Securities. However, the Initial Purchaser is not obligated to do so and any
such market-making activity may be terminated at any time without notice to the
holders of the Exchange Capital Securities. In addition, such market-making
activity will be subject to the limits of the Securities Act and may be limited
during the pendency of the Exchange Offer. Accordingly, no assurance can be
given that an active public or other market will develop for the Exchange
Capital Securities or the Original Capital Securities, or as to the liquidity of
or the trading market for the Exchange Capital Securities or the Original
Capital Securities. If an active public market does not develop, the market
price and liquidity of the Exchange Capital Securities may be adversely
affected.
If a public trading market develops for the Exchange Capital Securities,
future trading prices of the Capital Securities will depend on many factors,
including, among other things, prevailing interest rates, the Company's
operating results, and the market for similar securities. Depending on these and
other factors, the Exchange Capital Securities may trade at a discount.
Notwithstanding the registration of the Exchange Capital Securities in the
Exchange Offer, holders who are "affiliates" (as defined under Rule 405 of the
Securities Act) of the Company or the Trust may publicly offer for sale or
resell the Exchange Capital Securities only in compliance with the provisions of
Rule 144 under the Securities Act.
Each broker-dealer that receives Exchange Capital Securities for its own
account in exchange for Original Capital Securities, where such Original Capital
Securities were acquired by such broker-dealer as a result of market-making
activities or other trading activities, must acknowledge that it will deliver a
prospectus in connection with any resale of such Exchange Capital Securities.
See "Plan of Distribution."
GROWTH
The Company has grown and may seek to grow by acquiring other financial
institutions and branches. However, competition for acquisitions in the
Company's market area is highly competitive. Moreover, any acquisitions will be
subject to regulatory approval and there can be no assurance that the Company
will obtain such approvals. The Company may not be as successful in the future
as it has been in the past in identifying further acquisition candidates,
integrating acquired institutions or preventing deposit erosion at acquired
institutions or branches. Furthermore, the Company's ability to grow through
acquisitions will depend on its maintaining sufficient regulatory capital levels
and on economic conditions.
COMPETITION
The banking business is highly competitive. In its primary market area, the
Bank competes with other commercial banks, savings and loan associations, credit
unions, finance companies, mutual funds, insurance companies, and brokerage and
investment banking firms operating locally and elsewhere. Certain of the Bank's
primary competitors have substantially greater resources and lending limits than
the Bank and may
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offer certain services the Bank does not provide at this time. The profitability
of the Company depends upon the Bank's ability to continue to compete in its
primary market area.
DEVELOPMENTS IN TECHNOLOGY
The market for financial services, including banking services, is
increasingly affected by advances in technology, including developments in
telecommunications, data processing, computers, automation, Internet-based
banking, telebanking, debit cards and so-called "smart" cards. The ability of
the Company to compete successfully in its markets may depend on the extent to
which it is able to exploit such technological changes. However, there can be no
assurance that the development of these or any other new technologies, or the
Company's success or failure in anticipating or responding to such developments,
will materially affect the Company's business, financial condition and operating
results.
CONSEQUENCES OF A FAILURE TO EXCHANGE ORIGINAL CAPITAL SECURITIES
The Original Capital Securities have not been registered under the
Securities Act or any state securities laws and therefore may not be offered,
sold or otherwise transferred except in compliance with the registration
requirements of the Securities Act and any other applicable securities laws, or
pursuant to an exemption therefrom or in a transaction not subject thereto, and
in each case in compliance with certain other conditions and restrictions.
Original Capital Securities which remain outstanding after consummation of the
Exchange Offer will continue to bear a legend reflecting such restrictions on
transfer. In addition, upon consummation of the Exchange Offer, holders of
Original Capital Securities which remain outstanding will not be entitled to any
rights to have such Original Capital Securities registered under the Securities
Act or to any similar rights under the Registration Rights Agreement. The
Company and the Trust do not intend to register under the Securities Act any
Original Capital Securities which remain outstanding after consummation of the
Exchange Offer.
Although the Original Capital Securities have been designated for trading
in the Private Offerings, Resale and Trading through Automated Linkages
("PORTAL") market, to the extent that Original Capital Securities are tendered
and accepted in connection with the Exchange Offer, any trading market for
Original Capital Securities which remain outstanding after the Exchange Offer
could be adversely affected.
The Exchange Capital Securities and any Original Capital Securities which
remain outstanding after consummation of the Exchange Offer will vote together
as a single class for purposes of determining whether holders of the requisite
percentage in outstanding Liquidation Amount thereof have taken certain actions
or exercised certain rights under the Trust Agreement. See "Description of
Exchange Securities" and "Description of Capital Securities -- Voting Rights;
Amendment of the Trust Agreement."
The Original Capital Securities provide, among other things, that, if a
registration statement relating to the Exchange Offer has not been filed by
September 14, 1998 and declared effective by October 14, 1998, the Distribution
rate borne by the Original Capital Securities commencing on April 17, 1998 will
increase by 0.25% per annum until the Exchange Offer is consummated. Upon
consummation of the Exchange Offer, holders of Original Capital Securities will
not be entitled to any increase in the Distribution rate thereon or any further
registration rights under the Registration Rights Agreement. The Exchange
Capital Securities will not be entitled to any such increase in the Distribution
rate thereon. See "Description of Original Capital Securities."
EXCHANGE OFFER PROCEDURES
Subject to the conditions set forth under "The Exchange Offer -- Conditions
to the Exchange Offer," the exchange of the Original Capital Securities for
Exchange Capital Securities pursuant to the Exchange Offer will be made only
after a timely receipt by the Trust of (i) a book-entry confirmation (as defined
below) evidencing the tender of such Original Capital Securities through PORTAL
or (ii) certificates representing such Original Capital Securities, a properly
compelled and duly executed Letter of Transmittal, with any required signature
guarantees, and all other required documents. See "The Exchange
Offer -- Acceptance for Exchange and Issuance of Capital Securities" and
"-- Procedures for Tendering Original Capital Securities."
23
<PAGE> 25
Therefore, holders of the Original Capital Securities desiring to tender such
Original Capital Securities in exchange for Exchange Capital Securities should
allow sufficient time to ensure timely delivery. Neither the Company nor the
Trust is under any duty to give notification of defects or irregularities with
respect to the tenders of Original Capital Securities for exchange.
PROVIDENT TRUST I
The Trust is a statutory business trust created under Delaware law pursuant
to the filing of a certificate of Trust with the Delaware Secretary of State.
The Trust is governed by the Trust Agreement among the Company, as Depositor,
Bankers Trust (Delaware), as Delaware Trustee, Bankers Trust Company, as
Property Trustee, the Administrators named therein, and the holders, from time
to time, of undivided beneficial interests in the assets of the Trust. Two
individuals are selected by the holders of the Common Securities to act as
administrators with respect to the Trust (the "Administrators"). The Company, as
the holder of the Common Securities, has selected two individuals who are
officers of the Company to serve as the Administrators. See "Description of
Capital Securities -- Miscellaneous." The Issuer Trust exists for the exclusive
purposes of (i) issuing and selling the Trust Securities, (ii) using the
proceeds from the sale of the Trust Securities to acquire the Junior
Subordinated Debentures and (iii) engaging in only those other activities
necessary, convenient or incidental thereto (such as registering the transfer of
the Trust Securities). Accordingly, the Junior Subordinated Debentures are the
sole assets of the Issuer Trust, and payments under the Junior Subordinated
Debentures are the sole source of revenue of the Issuer Trust.
All the Common Securities are owned by the Company. The Common Securities
rank pari passu, and payments will be made thereon pro rata, with the Capital
Securities, except that upon the occurrence and during the continuation of a
Debenture Event of Default arising as a result of any failure by the Company to
pay any amounts in respect of the Junior Subordinated Debentures when due, the
rights of the holders of the Common Securities to payment in respect of
Distributions and payments upon liquidation, redemption or otherwise will be
subordinated to the rights of the holders of the Capital Securities. See
"Description of Capital Securities -- Subordination of Common Securities." The
Company acquired Common Securities in an aggregate liquidation amount equal to
3% of the total capital of the Issuer Trust. The Issuer Trust has a term of 31
years, but may dissolve earlier as provided in the Trust Agreement. The address
of the Delaware Trustee is Bankers Trust (Delaware), E.A. Delle Donne Corporate
Center, Montgomery Building, 1011 Centre Road, Suite 200, Wilmington, Delaware
19805-1266, telephone number (302) 636-3301. The address of the Property
Trustee, the Guarantee Trustee and the Debenture Trustee is Bankers Trust
Company, Four Albany Street, 4th Floor, New York, NY 10006, telephone number
(212) 250-2500.
PROVIDENT BANKSHARES CORPORATION
GENERAL
The Company is a registered bank holding company, chartered under the laws
of the State of Maryland, and headquartered in Baltimore, Maryland. The Company
operates through its wholly-owned subsidiary, the Bank, a Maryland-chartered
commercial bank that maintains, as of March 31, 1998, 69 retail banking offices
(of which 51 are traditional branch offices and 18 are in-store facilities) in
seven Maryland counties in the Baltimore/Washington D.C. corridor, as well as
Baltimore City and southern York County, Pennsylvania. The Company provides a
broad range of banking services with an emphasis on consumer, real estate
mortgage, and commercial business loans. Through three subsidiaries, the Bank
provides mortgage-banking products, purchased annuities and mutual funds, and a
variety of credit insurance products. At March 31, 1998, the Company had total
assets of approximately $4.0 billion, total deposits of $2.9 billion, and total
consolidated shareholders' equity of approximately $280.0 million.
The Company has experienced significant growth since the management team,
led by Carl W. Stearn and Peter M. Martin, was retained in 1990 to reorient the
Company's operations from a traditional thrift institution to a commercial
banking operation. In April 1998, Mr. Stearn retired as Chairman of the Board of
Directors and Chief Executive Officer of the Company, and Mr. Martin assumed
those positions. Mr. Stearn remains a
24
<PAGE> 26
director of the Company. During their tenure, the Company has grown from
approximately $1.5 billion in assets and 38 banking offices to approximately
$4.0 billion in assets and 69 banking offices. In developing the Company's
bank-oriented franchise, management has implemented extensive modifications to
the lending, funding, balance sheet management, and operational functions of the
Company to position the Company for future profitable growth.
Provident Bankshares Corporation recorded net income for the quarter ended
March 31, 1998 of $9.3 million or $.38 per share basic and $.36 diluted. This
represented a 17.4% increase in net income over the same period a year ago. Net
income for the quarter ended March 31, 1997 was $7.9 million or $.33 per share
basic and $.33 diluted. The higher earnings in 1998 were mainly due to loan
growth (particularly consumer loans), increased fee income and controlled
operating expenses. Average consumer loans outstanding grew $486 million, as
total average loans increased 21% to $2.72 billion. The increase in non-interest
income from $10.3 million at March 31, 1997 to $12.8 million at March 31, 1998
was driven by a 15% increase in fee based services on higher account volume.
Even with higher account volume and continued investment in business
initiatives, operating expenses were limited to a 3.1% growth rate. There was a
$2.1 million increase in the provision for loan losses during the quarter with
net charge-offs of $2.1 million. The increase in provision was mainly related to
the loan portfolio growth.
The Company earned $33.6 million on an operating basis in 1997, excluding
an $8.6 million one-time acquisition related charge, which represents the
seventh consecutive year of double-digit increases in operating earnings. Such
earnings represent an improvement in the Company's returns on average assets and
average equity from 0.62% in 1993 to 0.92% (excluding merger-related expenses)
in 1997 and from 9.38% in 1993 to 13.34% (excluding merger-related expenses) in
1997, respectively. Additionally, the Company's efficiency ratio has improved
from 79.9% in 1993 to 64.8% (excluding merger-related expenses) in 1997.
The Company has transitioned its asset base into higher yielding products
since 1993, with investment securities and residential mortgages declining from
53% at year-end 1993 to 37% with loans available for sale of earning assets at
March 31, 1998. Loan growth has averaged 10-12% in recent years, supported by
consumer and commercial loan emphasis as well as disciplined wholesale purchases
of seasoned consumer portfolios. At March 31, 1998, Provident's loan balance
totaled $2.7 billion and was comprised of 61.7% consumer, 24.9% commercial and
commercial real estate, and 13.4% residential mortgage.
The Company does not believe that asset quality has been sacrificed in
recent years as a result of loan growth. At March 31, 1998, the Company had
non-performing loans of $14.3 million, or 0.51% of total loans. The allowance
for loan losses at March 31, 1998, was 1.35% of total loans and 264% of
non-performing loans. Net charge-offs at March 31, 1998 were 0.31% of average
loans. Additionally, the Company's net charge-offs to average loans ratio has
averaged 0.16% over the last five years ended December 31, 1997.
In addition to emphasizing credit quality, management has also ensured
sufficient liquidity by maintaining an investment portfolio of $989.4 million at
March 31, 1998. Of the investment portfolio, 3.9% is invested in U.S. government
obligations and 92.0% in mortgage-backed securities with a weighted average life
of 4.7 years. Total investment securities decreased $71 million during 1997 as a
result of shifting funds into higher yielding loan portfolios.
In August 1997, the Company completed its acquisition of First Citizens
Financial Corporation, a $674 million institution with 15 branches in the
Montgomery and Frederick Counties of Maryland. The Company will continue to
evaluate business combination opportunities. As a result, business combinations
may take place in the future involving the payment of consideration by the
Company in the form of cash, debt, or equity securities.
The Company's strategy is to continue to develop its community banking
franchise in the Baltimore/Washington, D.C. corridor as well as develop the
Northern Virginia market by emphasizing personalized and responsive banking
services in the communities in which it operates, as well as continuing to
develop its portfolio and indirect consumer lending operations. Management
believes that the increasing consolidation in the financial services industry,
particularly in its principal market area, provides the Company with
25
<PAGE> 27
significant opportunities as the larger regional institutions focus increasingly
on higher dollar credits and less personalized forms of service delivery.
The Company's principal executive offices are located at 114 East Lexington
Street, Baltimore, Maryland 21202, and its telephone number at such address is
(410) 277-7000.
For additional information regarding the Company and its financial
condition and results of operations, see "Selected Consolidated Financial Data
and Other Information," and "Capitalization."
NEITHER THE CAPITAL SECURITIES NOR THE JUNIOR SUBORDINATED DEBENTURES ARE
OBLIGATIONS OF OR GUARANTEED BY THE BANK.
CONSOLIDATED RATIOS OF EARNINGS TO FIXED CHARGES
The following unaudited table presents the consolidated ratios of earnings
to fixed charges of the Company. The consolidated ratio of earnings to fixed
charges has been computed by dividing income before income taxes and fixed
charges by fixed charges. Fixed charges represent all interest expense (ratios
are presented both excluding and including interest on deposits). Interest
expense (other than on deposits) includes interest on borrowed funds, federal
funds purchased and securities sold under agreements to repurchase, and other
funds borrowed.
<TABLE>
<CAPTION>
AS OF AND FOR
THE THREE MONTHS YEAR ENDED DECEMBER 31,
ENDED ----------------------------------------------------
MARCH 31, 1998 1997 1996 1995 1994 1993
---------------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Earnings to fixed charges:
Excluding interest on deposits.......... 2.17% 1.76x 1.80x 1.75x 2.11x 2.37x
Including interest on deposits.......... 1.33% 1.25x 1.29x 1.27x 1.30x 1.26x
</TABLE>
26
<PAGE> 28
SELECTED CONSOLIDATED FINANCIAL DATA AND OTHER INFORMATION
Presented below is selected consolidated financial information for the
Company for the periods specified. The consolidated financial information is not
necessarily indicative of the results for any future period and is qualified in
its entirety by, and should be read in conjunction with, the detailed
information contained in the Company's consolidated financial statements
contained elsewhere herein and the other information contained in its reports
filed with the Commission under the Exchange Act. See "Available Information."
<TABLE>
<CAPTION>
AS OF AND FOR THE
THREE MONTHS ENDED
MARCH 31, AS OF AND FOR THE YEAR ENDED DECEMBER 31,
----------------------- --------------------------------------------------------------
1998 1997 1997 1996 1995 1994 1993
---------- ---------- ---------- ---------- ---------- ---------- ----------
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C> <C> <C>
Selected balance sheet data:
Total assets............. $4,024,894 $3,639,239 $3,926,739 $3,485,618 $3,170,390 $2,842,050 $2,366,199
Total stockholders'
equity................. 280,055 241,118 270,182 238,798 223,048 184,358 164,915
Loans.................... 2,788,374 2,309,745 2,701,068 2,247,873 1,752,851 1,707,389 1,524,860
Deposits................. 2,879,861 2,434,558 2,754,515 2,286,144 2,056,436 1,905,584 1,719,148
Selected results of
operations:
Interest income
(tax-equivalent)....... 74,005 66,719 $ 280,167 $ 248,311 $ 224,236 $ 172,351 $ 156,717
Interest expense......... 41,956 36,933 156,718 137,354 122,819 82,254 74,981
---------- ---------- ---------- ---------- ---------- ---------- ----------
Net interest income
(tax-equivalent)....... 32,049 29,786 123,449 110,957 101,417 90,097 81,736
Provision for loan
losses................. 2,975 834 9,953 10,011 1,517 (678) 2,845
---------- ---------- ---------- ---------- ---------- ---------- ----------
Net interest income after
provision for loan
losses................. 29,074 28,952 113,496 100,946 99,900 90,775 78,891
Non-interest income...... 11,559 10,267 41,672 44,509 34,573 29,122 28,097
Net securities gains
(losses)............... 1,209 71 2,337 5,556 (2,683) 695 2,951
Merger related
expenses(1)............ -- -- 10,047 -- -- -- --
Non-interest expense..... 27,621 26,802 107,816 110,323 97,416 95,164 89,843
---------- ---------- ---------- ---------- ---------- ---------- ----------
Income before taxes and
cumulative effect of
change in accounting
principle.............. 14,221 12,488 39,642 40,688 34,374 25,428 20,096
Income tax expense
(tax-equivalent)....... 4,916 4,559 14,683 14,500 12,242 9,263 6,863
Cumulative effect of
change in accounting
principle(2)........... -- -- -- -- -- -- 777
---------- ---------- ---------- ---------- ---------- ---------- ----------
Net income............... $ 9,305 $ 7,929 $ 24,959 $ 26,188 $ 22,132 $ 16,165 $ 14,010
========== ========== ========== ========== ========== ========== ==========
Per share amounts:
Net income before
cumulative effect of
change in accounting
principle.............. $ 0.38 $ 0.33 $ 1.05 $ 1.12 $ 0.97 $ 0.77 $ 0.65
Cumulative effect of
change in accounting
principle(2)........... -- -- -- -- -- -- .04
---------- ---------- ---------- ---------- ---------- ---------- ----------
Net income --
basic(1)........... $ 0.38 $ 0.33 $ 1.05 $ 1.12 $ 0.97 $ 0.77 $ 0.69
Net income --
diluted(1)......... 0.36 0.33 1.01 1.07 0.92 0.73 0.65
========== ========== ========== ========== ========== ========== ==========
Cash dividends
paid............... $ 0.125 $ 0.105 $ 0.42 $ 0.33 $ 0.25 $ 0.17 $ 0.12
========== ========== ========== ========== ========== ========== ==========
Tax-equivalent
adjustment(3).............. $ 309 $ 231 $ 1,055 $ 832 $ 754 $ 417 $ 317
========== ========== ========== ========== ========== ========== ==========
Ratios:
Return on average
assets(1).................. .97% .91% .68% .79% .75% .66% .62%
Return on average
equity(1).................. 14.11 13.21 9.91 11.41 10.88 9.55 9.38
Stockholders' equity to
assets..................... 6.96 6.63 6.88 6.85 7.04 6.49 6.97
Average equity to average
assets..................... 6.84 6.88 6.89 6.91 6.85 6.95 6.65
Dividend payout ratio........ 32.89 30.88 41.51 31.25 26.80 23.38 18.84
</TABLE>
- ---------------
(1) Exclusive of after tax merger related expenses incurred during 1997, net
income would have been $33.6 million. Return on average assets and return on
average equity for 1997 would have been .92% and 13.34%, respectively. Basic
net income per share and diluted net income per share would have been $1.41
and $1.36, respectively.
(2) In 1993, the cumulative effect of change in accounting principle included a
$1,510 ($.08 per share) income tax benefit and a $733 ($.04 per share) cost
of purchased mortgage servicing rights.
(3) Tax-advantaged income has been adjusted to a tax-equivalent basis using the
combined statutory federal and state income tax rate in effect of 39.55% in
1997-1994 and 38.62% in 1993.
27
<PAGE> 29
PROVIDENT TRUST I
The Trust is a statutory business Trust created under Delaware law pursuant
to the filing of a certificate of Trust with the Delaware Secretary of State.
The Issuer Trust is governed by the Trust Agreement among the Company, as
Depositor, Bankers Trust (Delaware), as Delaware Trustee, Bankers Trust Company,
as Property Trustee, the Administrators named therein, and the holders, from
time to time, of undivided beneficial interests in the assets of the Issuer
Trust. Two individuals will be selected by the holders of the Common Securities
to act as administrators with respect to the Issuer Trust. The Company, as the
holder of the Common Securities, selected two individuals who are officers of
the Company to serve as the Administrators. See "Description of Capital
Securities -- Miscellaneous." The Trust exists for the exclusive purposes of (i)
issuing and selling the Trust Securities, (ii) using the proceeds from the sale
of the Trust Securities to acquire the Junior Subordinated Debentures and (iii)
engaging in only those other activities necessary, convenient or incidental
thereto (such as registering the transfer of the Trust Securities). Accordingly,
the Junior Subordinated Debentures are the sole assets of the Issuer Trust, and
payments under the Junior Subordinated Debentures are the sole source of revenue
of the Issuer Trust.
All the Common Securities are owned by the Company. The Common Securities
rank pari passu, and payments will be made thereon pro rata, with the Exchange
Capital Securities, except that upon the occurrence and during the continuation
of a Debenture Event of Default arising as a result of any failure by the
Company to pay any amounts in respect of the Junior Subordinated Debentures when
due, the rights of the holders of the Common Securities to payment in respect of
Distributions and payments upon liquidation, redemption or otherwise will be
subordinated to the rights of the holders of the Capital Securities. See
"Description of Capital Securities -- Subordination of Common Securities." The
Company acquired Common Securities in an aggregate liquidation amount equal to
3% of the total capital of the Issuer Trust. The Issuer Trust has a term of 31
years, but may dissolve earlier as provided in the Trust Agreement. The address
of the Delaware Trustee is Bankers Trust (Delaware), E.A. Delle Donne Corporate
Center, Montgomery Building, 1011 Centre Road, Suite 200, Wilmington, Delaware
19805-1266, telephone number (302) 636-3301. The address of the Property
Trustee, the Guarantee Trustee and the Debenture Trustee is Bankers Trust
Company, Four Albany Street, 4th Floor, New York, New York 10006, telephone
number (212) 250-2500.
USE OF PROCEEDS
Neither the Company nor the Trust will receive any cash proceeds from the
issuance of the Exchange Capital Securities offered hereby. The Original Capital
Securities surrendered in exchange for the Exchange Capital Securities will be
retired and cancelled.
The proceeds to the Trust from the offering of the Original Capital
Securities were $40,000,000 (without giving effect to approximately $950,000 of
commissions and expenses paid by the Company). All of the proceeds from the sale
of Original Capital Securities were invested by the Trust in the Original Junior
Subordinated Debentures. The Company invested approximately $40.0 million of the
net proceeds to it from its sale of the Original Junior Subordinated Debentures
in equity of the Bank. Net proceeds retained by the Company will be used by the
Company for general corporate purposes, including the investment of funds in the
Company's subsidiaries and potential future acquisitions. There currently are no
agreements, arrangements or understandings with respect to any potential
acquisitions.
28
<PAGE> 30
CAPITALIZATION
The following table sets forth the consolidated capitalization of the
Company at March 31, 1998 and as adjusted to give pro forma effect to the
Exchange Offer as if it had occurred on March 31, 1998. The issuance of the
Exchange Capital Securities in the Exchange Offer will have no effect on the
capitalization of the Company. This table is based on, and is qualified in its
entirety by, the historical consolidated financial statements of Provident
Bankshares Corporation, including the related notes thereto, which are included
in documents incorporated by reference herein, and should be read in conjunction
therewith. See "Incorporation of Certain Documents by Reference."
<TABLE>
<CAPTION>
AT MARCH 31, 1998
-----------------------------------
PRO FORMA PRO FORMA
ACTUAL ADJUSTMENT AS ADJUSTED
-------- ---------- -----------
(IN THOUSANDS)
<S> <C> <C> <C>
Long term debt.............................................. $488,297 $488,297
Corporation-obligated mandatorily redeemable original
capital securities of Subsidiary trust holding solely
Original Junior Subordinated Debentures of the Company.... -- $40,000 40,000
Stockholders' equity:
Common stock, par value $1.00 per share; 30,000,000
shares authorized; 23,537,844 shares issued.......... 23,538 23,538
Capital surplus........................................ 135,079 135,079
Retained earnings...................................... 119,885 119,885
Net unrealized holding gain on debt securities......... 4,043 4,043
Treasury stock, at cost, 228,066 shares................ (2,490) (2,490)
-------- ------- --------
Total stockholders' equity........................ 280,055 280,055
-------- ------- --------
Total capitalization......................... $768,352 $40,000 $808,352
======== ======= ========
</TABLE>
ACCOUNTING TREATMENT
For financial reporting purposes, the Trust will be treated as a subsidiary
of the Company and, accordingly, the accounts of the Trust will be included in
the consolidated financial statements of the Company. The Capital Securities
will be included in the consolidated balance sheets of the Company and
appropriate disclosures about the Capital Securities, the Guarantee and the
Junior Subordinated Debentures will be included in the notes to the consolidated
financial statements of the Company. For financial reporting purposes,
distributions on the Capital Securities will be recorded in the consolidated
statements of income of the Company.
THE EXCHANGE OFFER
PURPOSE AND EFFECT OF THE EXCHANGE OFFER
In connection with the sale of the Original Capital Securities, the Company
and the Trust entered into the Registration Rights Agreement with the Initial
Purchaser, pursuant to which the Company and the Trust agreed to file and to use
their reasonable best efforts to cause to be declared effective by the
Commission a registration statement with respect to the exchange of the Exchange
Capital Securities for Original Capital Securities with terms identical in all
material respects to the terms of the Original Capital Securities. A copy of the
Registration Rights Agreement has been filed as an Exhibit to the Registration
Statement of which this Prospectus is a part.
The Exchange Offer is being made to satisfy the contractual obligations of
the Company and the Trust under the Registration Rights Agreement. The form and
terms of the Exchange Capital Securities are the same as the form and terms of
the Original Capital Securities except that the Exchange Capital Securities
29
<PAGE> 31
(i) have been registered under the Securities Act and therefore will not be
subject to certain restrictions on transfer under federal and state securities
laws and (ii) will not provide for any increase in the Distribution Rate
thereon. In that regard, the Original Capital Securities provide, among other
things, that, if a registration statement relating to the Exchange Offer has not
been filed by September 14, 1998, and declared effective by October 14, 1998,
the Distribution Rate borne by the Original Capital Securities, commencing on
April 17, 1998 will increase by 0.25% per annum until the Exchange Offer is
consummated. Upon consummation of the Exchange Offer, holders of Original
Capital Securities will not be entitled to any increase in the Distribution Rate
thereon or any further registration rights under the Registration Rights
Agreement. See "Risk Factors -- Consequences of a Failure to Exchange Original
Capital Securities" and "Description of Capital Securities."
The Exchange Offer is not being made to, nor will the Trust accept tenders
for exchange from, holders of Original Capital Securities in any jurisdiction in
which the Exchange Offer or the acceptance thereof would not be in compliance
with the securities or blue sky laws of such jurisdiction.
Unless the context requires otherwise, the term "holder" with respect to
the Exchange Offer means any person in whose name the Original Capital
Securities are registered on the books of the Trust or any other person who has
obtained a properly completed bond power from the registered holder, or any
participant in the DTC system whose name appears on a security position listing
as the holder of such Original Capital Securities and who desires to deliver
such Original Capital Securities by book-entry transfer at DTC.
Pursuant to the Exchange Offer, the Company will exchange as soon as
practicable after the date hereof, the Exchange Guarantee for the Original
Guarantee and the Exchange Junior Subordinated Debentures, in an amount
corresponding to the Original Capital Securities accepted for exchange, for a
like aggregate principal amount of the Original Junior Subordinated Debentures.
The Exchange Guarantee and the Exchange Junior Subordinated Debentures have been
registered under the Securities Act.
TERMS OF THE EXCHANGE OFFER
The Trust hereby offers, upon the terms and subject to the conditions set
forth in this Prospectus and in the accompanying Letter of Transmittal, to
exchange up to $40,000,000 aggregate Liquidation Amount of Exchange Capital
Securities for a like aggregate Liquidation Amount of Original Capital
Securities properly tendered on or prior to the Expiration Date and not properly
withdrawn in accordance with the procedures described below. The Trust will
issue, promptly after the Expiration Date, an aggregate Liquidation Amount of up
to $40,000,000 of Exchange Capital Securities in exchange for a like aggregate
Liquidation Amount of outstanding Original Capital Securities tendered and
accepted in connection with the Exchange Offer. Holders may tender their
Original Capital Securities in whole or in part in a Liquidation Amount of not
less than $100,000 (100 Capital Securities) or any integral multiple of $1,000
Liquidation Amount (one Capital Security) in excess thereof, provided that if
any Original Capital Securities are tendered in exchange for part, the
untendered Liquidation Amount must be $100,000 or any integral multiple of
$1,000 in excess thereof.
The Exchange Offer is not conditioned upon any minimum Liquidation Amount
of Original Capital Securities being tendered. As of the date of this
Prospectus, $40,000,000 aggregate Liquidation Amount of the Original Capital
Securities is outstanding.
Holders of Original Capital Securities do not have any appraisal or
dissenters' rights in connection with the Exchange Offer. Original Capital
Securities which are not tendered for or are tendered but not accepted in
connection with the Exchange Offer will remain outstanding and be entitled to
the benefits of the Trust Agreement, but will not be entitled to any further
registration rights under the Registration Rights Agreement. See "Risk
Factors -- Consequences of a Failure to Exchange Original Capital Securities"
and "Description of Original Securities."
If any tendered Original Capital Securities are not accepted for exchange
because of an invalid tender, the occurrence of certain other events set forth
herein or otherwise, certificates for any such unaccepted Original Capital
Securities will be returned, without expense, to the tendering holder thereof
promptly after the Expiration Date.
30
<PAGE> 32
Holders who tender Original Capital Securities in connection with the
Exchange Offer will not be required to pay brokerage commissions or fees or,
subject to the instructions in the Letter of Transmittal, transfer taxes with
respect to the exchange of Original Capital Securities in connection with the
Exchange Offer. The Company will pay all charges and expenses, other than
certain applicable taxes described below, in connection with the Exchange Offer.
See "-- Fees and Expenses."
NEITHER THE BOARD OF DIRECTORS OF THE COMPANY NOR ANY ISSUER TRUSTEE OF THE
TRUST MAKES ANY RECOMMENDATION TO HOLDERS OF ORIGINAL CAPITAL SECURITIES AS TO
WHETHER TO TENDER OR REFRAIN FROM TENDERING ALL OR ANY PORTION OF THEIR ORIGINAL
CAPITAL SECURITIES PURSUANT TO THE EXCHANGE OFFER. IN ADDITION, NO ONE HAS BEEN
AUTHORIZED TO MAKE ANY SUCH RECOMMENDATION. HOLDERS OF ORIGINAL CAPITAL
SECURITIES MUST MAKE THEIR OWN DECISION WHETHER TO TENDER PURSUANT TO THE
EXCHANGE OFFER AND, IF SO, THE AGGREGATE AMOUNT OF ORIGINAL CAPITAL SECURITIES
TO TENDER BASED ON SUCH HOLDERS' OWN FINANCIAL POSITION AND REQUIREMENTS.
EXPIRATION DATE; EXTENSIONS; AMENDMENTS
The term "Expiration Date" means 5:00 p.m., Eastern Standard Time, on
, 1998 unless the Exchange Offer is extended by the Company
or the Trust (in which case the term "Expiration Date" shall mean the latest
date and time which the Exchange Offer is extended).
The Company and the Trust expressly reserve the right in their sole and
absolute discretion, subject to applicable law, at anytime and from time to
time, (i) to delay the acceptance of the Original Capital Securities for
exchange, (ii) to terminate the Exchange Offer (whether or not any Original
Capital Securities have theretofore been accepted for exchange) if the Company
and the Trust determine, in their sole and absolute discretion, that any of the
events or conditions referred to under "-- Conditions to the Exchange Offer"
have occurred or exist or have not been satisfied, (iii) to extend the
Expiration Date of the Exchange Offer and retain all Original Capital Securities
tendered pursuant to the Exchange Offer, subject, however, to the right of
holders of Original Capital Securities to withdraw their tendered Original
Capital Securities as described under "-- Withdrawal Rights," and (iv) to waive
any condition or otherwise amend the terms of the Exchange Offer in any respect.
If the Exchange Offer is amended in a manner determined by the Company and the
Trust to constitute a material change, or if the Company and the Trust waive a
material condition of the Exchange Offer, the Company and the Trust will
promptly disclose such amendment by means of a Prospectus supplement that will
be distributed to the registered holders of the Original Capital Securities, and
the Company and the Trust will extend the Exchange Offer to the extent required
by Rule 14e-1 under the Exchange Act.
Any such delay in acceptance, extension, termination or amendment will be
followed promptly by oral or written notice thereof to the Exchange Agent and by
making a public announcement thereof, and such announcement in the case of an
extension will be made no later than 9:00 a.m., Eastern Standard Time, on the
next business day after the previously scheduled Expiration Date. Without
limiting the manner in which the Company and the Trust may choose to make any
public announcement and subject to applicable law, the Company and the Trust
shall have no obligation to publish, advertise or otherwise communicate any such
public announcement other than by issuing a release to an appropriate new
agency.
ACCEPTANCE FOR EXCHANGE AND ISSUANCE OF EXCHANGE CAPITAL SECURITIES
Upon the terms and subject to the conditions of the Exchange Offer, the
Trust will exchange, and will issue to the Exchange Agent, Exchange Capital
Securities for Original Capital Securities validly tendered and not withdrawn
promptly after the Expiration Date.
In all cases, delivery of Exchange Capital Securities in exchange for
Original Capital Securities tendered and accepted for exchange pursuant to the
Exchange Offer will be made only after timely receipt by the Exchange Agent of
(i) Original Capital Securities or a book-entry confirmation of a book-entry
transfer of Original Capital Securities into the Exchange Agent's account at
DTC, including an Agent's Message if the
31
<PAGE> 33
tendering holder has not delivered a Letter of Transmittal, (ii) the Letter of
Transmittal (or facsimile thereof), properly completed and duly executed, with
any required signature guarantees, or (in the case of a book-entry transfer) an
Agent's Message in lieu of the Letter of Transmittal, and (iii) any other
documents required by the Letter of Transmittal.
The term "book-entry confirmation" means a timely confirmation of a
book-entry transfer of Original Capital Securities into the Exchange Agent's
account at DTC. The term "Agent's Message" means a message, transmitted by DTC
to and received by the Exchange Agent and forming a part of a book-entry
confirmation, which states that DTC has received an express acknowledgment from
the tendering participant, which acknowledgment states that such participant has
received and agrees to be bound by the Letter of Transmittal and that the Trust
and the Company may enforce such Letter of Transmittal against such participant.
Subject to the terms and conditions of the Exchange Offer, the Company and
the Trust will be deemed to have accepted for exchange, and thereby exchanged,
Original Capital Securities validly tendered and not withdrawn as, if and when
the Trust gives oral or written notice to the Exchange Agent of the Company's
and the Trust's acceptance of such Original Capital Securities for exchange
pursuant to the Exchange Offer. The Exchange Agent will act as agent for the
Trust for the purpose of receiving tenders of Original Capital Securities,
Letters of Transmittal and related documents and transmitting Exchange Capital
Securities to validly tendering holders. Such exchange will be made promptly
after the Expiration Date. If for any reason whatsoever, acceptance for exchange
or the exchange of any Original Capital Securities tendered pursuant to the
Exchange Offer is delayed (whether before or after the Trust's acceptance for
exchange of Original Capital Securities) or the Company and the Trust extend the
Exchange Offer or are unable to accept for exchange or exchange Original Capital
Securities tendered pursuant to the Exchange Offer, then without prejudice to
the Company's and the Trust's rights set forth herein, the Exchange Agent may,
nevertheless, on behalf of the Company and the Trust subject to Rule 14e-1(c)
under the Exchange Act, retain tendered Original Capital Securities and such
Original Capital Securities may not be withdrawn except to the extent tendering
holders are entitled to withdrawal rights as described under "-- Withdrawal
Rights."
Pursuant to the Letter of Transmittal or Agent's Message in lieu thereof, a
holder of Original Capital Securities will warrant and agree in the Letter of
Transmittal that it has full power and authority to tender, exchange, sell,
assign and transfer Original Capital Securities, that the Trust will acquire
good, marketable and unencumbered title to the tendered Original Capital
Securities, free and clear of all liens, restrictions, charges and encumbrances,
and the Original Capital Securities tendered for exchange are not subject to any
adverse claims or proxies. The holder also will warrant and agree that it will,
upon request, execute and deliver any additional documents deemed by the
Company, the Trust or the Exchange Agent to be necessary or desirable to
complete the exchange, sale assignment and transfer of the Original Capital
Securities tendered pursuant to the Exchange Offer.
PROCEDURES FOR TENDERING ORIGINAL CAPITAL SECURITIES
Valid Tender. Except as set forth below, in order for Original Capital
Securities to be validly tendered pursuant to the Exchange Offer, a properly
completed and duly executed Letter of Transmittal (or facsimile thereof), with
any required signature guarantees, or (in the case of a book-entry transfer) an
Agent's Message in lieu of a Letter of Transmittal, and any other required
documents, must be received by the Exchange Agent at one of its addresses set
forth under "-- Exchange Agent," and (i) tendered Original Capital Securities
must be received by the Exchange Agent, or (ii) such Original Capital Securities
must be tendered pursuant to the procedures for book-entry transfer set forth
below and a book-entry confirmation, including an Agent's Message if the
tendering holder has not delivered a Letter of Transmittal, must be received by
the Exchange Agent, in each case on or prior to the Expiration Date, or (iii)
the guaranteed delivery procedures set forth below must be complied with.
If less than all of the Original Capital Securities are tendered, a
tendering holder should fill in the amount of Original Capital Securities being
tendered in the appropriate box on the Letter of Transmittal or so indicate in
an Agent's Message in lieu of the Letter of Transmittal and the untendered
Liquidation Amount must be
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<PAGE> 34
$100,000 or any integral multiple of $1,000 in excess thereof. The entire amount
of Original Capital Securities delivered to the Exchange Agent will be deemed to
have been tendered unless otherwise indicated.
THE METHOD OF DELIVERY OF CERTIFICATES, THE LETTER OF TRANSMITTAL AND ALL
OTHER REQUIRED DOCUMENTS IS AT THE OPTION AND SOLE RISK OF THE TENDERING HOLDER,
AND DELIVERY WILL BE DEEMED MADE ONLY WHEN ACTUALLY RECEIVED BY THE EXCHANGE
AGENT. IF DELIVERY IS BY MAIL, REGISTERED MAIL, RETURN-RECEIPT REQUESTED,
PROPERLY INSURED, OR AN OVERNIGHT DELIVERY SERVICE IS RECOMMENDED. IN ALL CASES,
SUFFICIENT TIME SHOULD BE ALLOWED TO ENSURE TIMELY DELIVERY.
Book-Entry Transfer. The Exchange Agent will establish an account with
respect to the Original Capital Securities at DTC for purposes of the Exchange
Offer within two business days after the date of this Prospectus. Any financial
institution that is a participant in DTC's book-entry transfer facility system
may make a book-entry delivery of the Original Capital Securities by causing DTC
to transfer such Original Capital Securities into the Exchange Agent's account
at DTC in accordance with DTC's procedures for transfers. However, although
delivery of Original Capital Securities may be effected through book-entry
transfer into the Exchange Agent's account at DTC, the Letter of Transmittal (or
facsimile thereof), properly completed and duly executed, with any required
signature guarantees, or an Agent's Message in lieu of the Letter of
Transmittal, and any other required documents, must in any case be delivered to
and received by the Exchange Agent at its address set forth under "-- Exchange
Agent" on or prior to the Expiration Date, or the guaranteed delivery procedure
set forth below must be complied with.
DELIVERY OF DOCUMENTS TO DTC IN ACCORDANCE WITH DTC'S PROCEDURES DOES NOT
CONSTITUTE DELIVERY TO THE EXCHANGE AGENT.
Signature Guarantees. Certificates for the Original Capital Securities
need not be endorsed and signature guarantees on the Letter of Transmittal are
unnecessary unless (i) a certificate for the Original Capital Securities is
registered in a name other than that of the person surrendering the certificate
or (ii) such holder completes the box entitled "Special Issuance Instructions"
or "Special Delivery Instructions" in the Letter of Transmittal. In the case of
(i) or (ii) above, such certificates for Original Capital Securities must be
duly endorsed or accompanied by a properly executed bond power, with the
endorsement or signature on the bond power and on the Letter of Transmittal
guaranteed by a firm or other entity identified in Rule 17Ad-15 under the
Exchange Act as an "eligible guarantor institution," including (as such terms
are defined therein): (i) a bank; (ii) a broker, dealer, municipal securities
broker or dealer or government securities broker or dealer; (iii) a credit
union; (iv) a national securities exchange, registered securities association or
clearing agency; or (v) a savings association that is a participant in a
Securities Transfer Association (an "Eligible Institution"), unless surrendered
on behalf of such Eligible Institution. See Instructions to the "Letter of
Transmittal."
Guaranteed Delivery. If a holder desires to tender Original Capital
Securities pursuant to the Exchange Offer and the certificates for such Original
Capital Securities are not immediately available or time will not permit all
required documents to reach the Exchange Agent on or prior to the Expiration
Date, or the procedure for book-entry transfer cannot be completed on a timely
basis, such Original Capital Securities may nevertheless be tendered, provided
that all of the following guaranteed delivery procedures are complied with:
(i) such tenders are made by or through an Eligible Institution;
(ii) a properly completed and duly executed Notice of Guaranteed
Delivery, substantially in the form accompanying the Letter of Transmittal,
is received by the Exchange Agent, as provided below, on or prior to the
Expiration Date; and
(iii) the certificates (or a book-entry confirmation) representing all
tendered Original Capital Securities, in proper form for transfer, together
with a properly completed and duly executed Letter of Transmittal (or
facsimile thereof), or Agent's Message in lieu thereof, with any required
signature guarantees and any other documents required by the Letter of
Transmittal, are received by the Exchange
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<PAGE> 35
Agent within three New York Stock Exchange trading days after the date of
execution of such Notice of Guaranteed Delivery.
The Notice of Guaranteed Delivery may be delivered by hand, or transmitted
by facsimile or mail to the Exchange Agent and must include a guarantee by an
Eligible Institution in the form set forth in such notice.
Notwithstanding any other provision hereof, the delivery of Exchange
Capital Securities in exchange for Original Capital Securities tendered and
accepted for exchange pursuant to the Exchange Offer will in all cases be made
only after timely receipt by the Exchange Agent of Original Capital Securities,
or of a book-entry confirmation with respect to such Original Capital
Securities, and a properly completed and duly executed Letter of Transmittal (or
facsimile thereof), or Agent's Message in lieu thereof, together with any
required signature guarantees and any other documents required by the Letter of
Transmittal. Accordingly, the delivery of Exchange Capital Securities might not
be made to all tendering holders at the same time, and will depend upon when
Original Capital Securities, book-entry confirmation with respect to Original
Capital Securities and other required documents are received by the Exchange
Agent.
The Company and the Trust's acceptance for exchange of Original Capital
Securities tendered pursuant to any of the procedures described above will
constitute a binding agreement between the tendering holder, the Company and the
Trust upon the terms and subject to the conditions of the Exchange Offer.
Determination of Validity. All questions as to the form of documents,
validity, eligibility (including time of receipt) and acceptance for exchange of
any tendered Original Capital Securities will be determined by the Company and
the Trust, in their sole discretion, whose determination shall be final and
binding of all parties. The Company and the Trust reserve the absolute right, in
their sole and absolute discretion, to reject any and all tenders determined by
them not to be in proper form or the acceptance of which, or exchange for, may,
in the opinion of counsel to the Company and the Trust, be unlawful. The Company
and the Trust also reserve the absolute right, subject to applicable law, to
waive any of the conditions of the Exchange Offer as set for thereunder
"-- Conditions to the Exchange Offer" or any condition or irregularity in any
tender of Original Capital Securities of any particular holder whether or not
similar conditions or irregularities are waived in the case of other holders.
The interpretation by the Company and the Trust of the terms and conditions
of the Exchange Offer (including the Letter of Transmittal and the instructions
thereto) will be final and binding. No tender of Original Capital Securities
will be deemed to have been validly made until all irregularities with respect
to such tender have been cured or waived. None of the Company, the Trust, any
affiliates or assigns of the Company or the Trust, the Exchange Agent or any
other person shall be under any duty to give any notification of any
irregularities in tenders or incur any liability for failure to give any such
notification.
If any Letter of Transmittal, endorsement, bond power, power of attorney or
any other document required by the Letter of Transmittal is signed by a trustee,
executor, administrator, guardian, attorney-in-fact, officer of a corporation or
other person acting in a fiduciary or representative capacity, such person
should so indicate when signing, and unless waived by the Company and the Trust,
proper evidence satisfactory to the Company and the Trust, in their sole
discretion, of such person's authority to so act must be submitted.
A beneficial owner of Original Capital Securities that are held by or
registered in the name of a broker, dealer, commercial bank, trust company or
other nominee or custodian is urged to contact such entity promptly if such
beneficial holder wishes to participate in the Exchange Offer.
RESALES OF EXCHANGE CAPITAL SECURITIES
The Trust is making the Exchange Offer for the Exchange Capital Securities
in reliance on the position of the staff of the Division of Corporation Finance
of the Commission as set forth in certain interpretive letters addressed to
third parties in other transactions. However, neither the Company nor the Trust
sought its own interpretive letter and there can be no assurance that the staff
of the Division of Corporation Finance of the Commission would make a similar
determination with respect to the Exchange Offer as it has in such interpretive
letters to third parties. Based on these interpretations by the staff of the
Division of Corporation Finance of the Commission, and subject to the two
immediately following sentences, the Company and the
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<PAGE> 36
Trust believe that Exchange Capital Securities issued pursuant to this Exchange
Offer in exchange for Original Capital Securities may be offered for resale,
resold and otherwise transferred by a holder thereof (other than a holder who is
a broker-dealer) without further compliance with the registration and prospectus
delivery requirements of the Securities Act, provided that such Exchange Capital
Securities are acquired in the ordinary course of such holder's business and
that such holder is not participating, and has no arrangement or understanding
with any person to participate, in a distribution (within the meaning of the
Securities Act) of such Exchange Capital Securities. However, any holder of
Original Capital Securities who is an Affiliate of the Company or the Trust or
who intends to participate in the Exchange Offer for the purpose of distributing
Exchange Capital Securities, or any broker-dealer who purchased Original Capital
Securities from the Trust to resell pursuant to Rule 144A or any other available
exemption under the Securities Act (i) will not be able to rely on the
interpretations of the staff of the Division of Corporation Finance of the
Commission set forth in the above-mentioned interpretive letters, (ii) will not
be permitted or entitled to tender such Original Capital Securities in the
Exchange Offer and (ii) must comply with the registration and prospectus
delivery requirements of the Securities Act in connection with any sale or other
transfer of such Original Capital Securities, unless such sale is made pursuant
to an exemption from such requirements. In addition, as described below,
Participating Broker-Dealers must deliver a prospectus meeting the requirements
of the Securities Act in connection with any resales of Exchange Capital
Securities.
Each holder of Original Capital Securities who wishes to exchange Original
Capital Securities for Exchange Capital Securities in the Exchange Offer will be
required to represent that (i) it is not an Affiliate of the Company or the
Trust, (ii) any Exchange Capital Securities to be received by it are being
acquired in the ordinary course of business, (iii) it has no arrangement or
understanding with any person to participate in a distribution (within the
meaning of the Securities Act) and such Exchange Capital Securities and (iv) if
such holder is not a broker-dealer, such holder is not engaged in, and does not
intend to engage in, a distribution (within the meaning of the Securities Act)
of such Exchange Capital Securities. The Letter of Transmittal contains the
foregoing representations. In addition, the Company and the Trust may require
such holder, as a condition to such holder's eligibility to participate in the
Exchange Offer, to furnish to the Company and the Trust (or an agent thereof) in
writing information as to the number of "beneficial owners" (within the meaning
of Rule 13d-3 under the Exchange Act) on behalf of whom such holder holds the
Capital Securities to be exchange in the Exchange Offer. Each Participating
Broker-Dealer will be deemed to have acknowledged by execution of the Letter of
Transmittal or delivery of an Agent's Message that it acquired the Original
Capital Securities for its own account as the result of market-making activities
or their trading activities and must agree that it will deliver a prospectus
meeting the requirements of the Securities Act in connection with any resale of
such Exchange Capital Securities. The Letter of Transmittal states that by so
acknowledging and by delivering a prospectus, a Participating Broker-Dealer will
not be deemed to admit that it is an "underwriter" within the meaning of the
Securities Act. Based on the position taken by the staff of the Division of
Corporation Finance of the Commission in the interpretive letters referred to
above, the Company and the Trust believe that Participating Broker-Dealers who
acquired Original Capital Securities for their own accounts as a result of
market-making activities or other trading activities may fulfill their
prospectus delivery requirements with respect to the Exchange Capital Securities
received upon exchange of such Original Capital Securities (other than Original
Capital Securities which represent an unsold allotment from the original sale of
the Original Capital Securities) with a prospectus meeting the requirements of
the Securities Act, which may be the prospectus prepared for an exchange offer
so long as it contains a description of the plan of distribution with respect to
the resale of such Exchange Capital Securities. Accordingly, this Prospectus, as
it may be amended or supplemented from time to time, may be used by a
Participating Broker-Dealer during the period referred to below in connection
with resales of Exchange Capital Securities received in exchange for Original
Capital Securities where such Original Capital Securities were acquired by such
Participating Broker-Dealer for its own account as a result of market-making or
other trading activities. Subject to certain provisions set forth in the
Registration Rights Agreement, the Company and the Trust have agreed that this
Prospectus, as it may be amended or supplemented from time to time, may be used
by a Participating Broker-Dealer in connection with resales of such Exchange
Capital Securities for a period ending 90-days after the Expiration Date
(subject to extension under certain limited circumstances described below) or,
if earlier, when all such Exchange Capital Securities have been disposed of by
such Participating Broker-Dealer. See
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"Plan of Distribution." However, a Participating Broker-Dealer who intends to
use this Prospectus in connection with the resale of Exchange Capital Securities
received in exchange for Original Capital Securities pursuant to the Exchange
Offer must notify the Company or the Trust, or cause the Company or the Trust to
be so notified, on or prior to the Expiration Date, that it is a Participating
Broker-Dealer. Such notice may be given in the space provided for that purpose
in the Letter of Transmittal or may be delivered to the Exchange Agent at one of
the addresses set forth herein under "-- Exchange Agent." Any person, including
any Participating Broker-Dealer, who is an Affiliate of the Company or the Trust
may not rely on such interpretive letters and must comply with the registration
and prospectus delivery requirements of the Securities Act in connection with
any resale transaction.
In that regard, each Participating Broker-Dealer who surrenders Original
Capital Securities pursuant to the Exchange Offer will be deemed to have agreed,
by execution of the Letter of Transmittal or delivery of an Agent's Message in
lieu thereof, that, upon receipt of notice from the Company or the Trust of the
occurrence of any event or the discovery of any fact which makes any statement
contained or incorporated by reference in this Prospectus untrue in any material
respect or which causes this Prospectus to omit to state a material fact
necessary in order to make the statements contained or incorporated by reference
herein, in light of the circumstances under which they were made, not misleading
or of the occurrence of certain other events specified in the Registration
Rights Agreement, such Participating Broker-Dealer will suspend the sale of
Exchange Capital Securities (or the Exchange Guarantee or the Exchange Junior
Subordinated Debentures, as applicable) pursuant to this Prospectus or until the
Company or the Trust has amended or supplemented this Prospectus to correct such
misstatement or omission and has furnished copies of the amended or supplemented
Prospectus to such Participating Broker-Dealer or the Company or the Trust has
given notice that the sale of the Exchange Capital Securities (or the Exchange
Guarantee or the Exchange Junior Subordinated Debentures, as applicable) may be
resumed, as the case may be. If the Company or the Trust gives such notice to
suspend the sale of the Exchange Capital Securities (or the Exchange Guarantee
or the Exchange Junior Subordinated Debentures, as applicable), it shall extend
the 90-day period referred to above during which Participating Broker-Dealers
are entitled to use this Prospectus in connection with the resale of Exchange
Capital Securities by the number of days during the period from and including
the date of the giving of such notice to and including the date when
Participating Broker-Dealers shall have received copies of the amended or
supplemented Prospectus necessary to permit resales of the Exchange Capital
Securities or to and including the date on which the Company or the Trust has
given notice that the sale of Exchange Capital Securities (or the Exchange
Guarantee or the Exchange Junior Subordinated Debentures, as applicable) may be
resumed, as the case may be.
WITHDRAWAL RIGHTS
Except as otherwise provided herein, tenders of Original Capital Securities
may be withdrawn at any time on or prior to the Expiration Date.
In order for a withdrawal to be effective a written or facsimile
transmission of such notice of withdrawal must be timely received by the
Exchange Agent at one of its addresses set forth under "-- Exchange Agent" on or
prior to the Expiration Date. Any such notice of withdrawal must specify the
name of the person who tendered the Original Capital Securities to be withdrawn,
the aggregate principal amount of Original Capital Securities to be withdrawn,
and (if certificates for such Original Capital Securities have been tendered)
the name of the registered holder of the Original Capital Securities as set
forth on the Original Capital Securities, if different from that of the person
who tendered such Original Capital Securities. If Original Capital Securities
have been delivered or otherwise identified to the Exchange Agent, then prior to
the physical release of such Original Capital Securities, the tendering holder
must submit the certificate numbers shown on the particular Original Capital
Securities to be withdrawn and the signature on the notice of withdrawal must be
guaranteed by an Eligible Institution, except in the case of Original Capital
Securities tendered for the account of an Eligible Institution. If Original
Capital Securities have been tendered pursuant to the procedures for book-entry
transfer set forth in "-- Procedures for Tendering Original Capital Securities,"
the notice of withdrawal must specify the name and number of the account at DTC
to be credited with the withdrawal of Original Capital Securities, in which case
a notice of withdrawal will be effective if delivered to
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the Exchange Agent by written or facsimile transmission. Withdrawals of tenders
of Original Capital Securities may not be rescinded. Original Capital Securities
properly withdrawn will not be deemed validly tendered for purposes of the
Exchange Offer, but may be retendered at any subsequent time on or prior to the
Expiration Date by following any of the procedures described above under
"-- Procedures for Tendering Original Capital Securities."
All questions as to the validity, form and eligibility (including time of
receipt) of such withdrawal notices will be determined by the Company and the
Trust, in their sole discretion, whose determination shall be final and binding
on all parties. None of the Company, the Trust, any affiliates or assigns of the
Company or the Trust, the Exchange Agent or any other person shall be under any
duty to give any notification of any irregularities in any notice of withdrawal
or incur any liability for failure to give any such notification. Any Original
Capital Securities which have been tendered but which are withdrawn will be
returned to the holder thereof promptly after withdrawal.
DISTRIBUTIONS ON EXCHANGE CAPITAL SECURITIES
Holders of Original Capital Securities as of October 1, 1998, the record
date for the Initial Distribution on October 15, 1998, including such holders
who tender their Original Capital Securities pursuant to the Exchange Offer,
will be entitled to receive such Distribution. Distributions on the Exchange
Capital Securities are payable semi-annually in arrears on April and October
15(th) of each year, commencing October 15, 1998, at the annual rate of 8.29% of
the Liquidation Amount to the holders of the Exchange Capital Securities on the
relevant record dates. Distributions on the Exchange Capital Securities will
accumulate from October 15, 1998, the date of the most recent Distribution on
the Original Capital Securities prior to the issuance of the Exchange Capital
Securities (or if no such Distribution is made to the Original Capital
Securities, then the Exchange Capital Securities would be entitled to
accumulated Distributions from April 17, 1998, the date of issuance of the
Original Capital Securities).
CONDITIONS TO THE EXCHANGE OFFER
Notwithstanding any other provisions of the Exchange Offer, or any
extension of the Exchange Offer, the Company and the Trust will not be required
to accept for exchange, or to exchange, any Original Capital Securities for any
Exchange Capital Securities, and, as described below, may terminate the Exchange
Offer (whether or not any Original Capital Securities have theretofore been
accepted for exchange) or may waive any conditions to or amend the Exchange
Offer, if any of the following conditions have occurred or exists or have not
been satisfied:
(a) there shall occur a change in the current interpretation by the
staff of the Commission which permits the Exchange Capital Securities
issued pursuant to the Exchange Offer in exchange for Original Capital
Securities to be offered for resale, resold and otherwise transferred by
holders thereof (other than broker-dealers and any such holder which is an
Affiliate of the Company or the Trust) without compliance with the
registration and prospectus delivery provisions of the Securities Act,
provided that such Exchange Capital Securities are acquired in the ordinary
course of such holders' business and such holders have no arrangement or
understanding with any person to participate in the distribution of such
Exchange Capital Securities; or
(b) any law, statute, rule or regulation shall have been adopted or
enacted which, in the judgment of the Company or the Trust, would
reasonably be expected to impair its ability to proceed with the Exchange
Offer;
(c) any action or proceeding shall have been instituted or threatened
in any court or by or before any governmental agency or body with respect
to the Exchange Offer, which in the Company's and the Trust's judgment,
would reasonably be expected to impair its ability to proceed with the
Exchange Offer;
(d) a banking moratorium shall have been declared by United States
federal or Maryland or New York state authorities which, in the Company's
and the Trust's judgment, would reasonably be expected to impair the
ability of the Trust or the Company to proceed with the Exchange Offer;
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(e) trading on the New York Stock Exchange or generally in the United
States over-the-counter market shall have been suspended by order of the
Commission or any other governmental authority which, in the Company's and
the Trust's judgment, would reasonably be expected to impair the ability of
the Company or the Trust to proceed with the Exchange Offer; or
(f) a stop order shall have been issued by the Commission or any state
securities authority suspending the effectiveness of the Registration
Statement or proceedings shall have been initiated or, to the knowledge of
the Company or the Trust, threatened for that purpose, or any governmental
approval which either the Company or the Trust shall, in its sole
discretion, deem necessary for the consummation of the Exchange Offer as
contemplated hereby has not been obtained.
If the Company and the Trust determine in their sole and absolute
discretion that any of the foregoing events or conditions has occurred or exists
or has not been satisfied, the Company and the Trust may, subject to applicable
law, terminate the Exchange Offer (whether or not any Original Capital
Securities have theretofore been accepted for exchange) or may waive any such
condition or otherwise amend the terms of the Exchange Offer in any respect. If
such waiver or amendment constitutes a material change to the Exchange Offer,
the Company and the Trust will promptly disclose such waiver or amendment by
means of a Prospectus supplement that will be distributed to the registered
holders of the Original Capital Securities and will extend the Exchange Offer to
the extent required by Rule 14e-1 under the Exchange Act.
EXCHANGE AGENT
Bankers Trust Company has been appointed as Exchange Agent for the Exchange
Offer. Delivery of the Letter of Transmittal and any other required documents,
questions, requests for assistance, and requests for additional copies of this
Prospectus or of the Letter of Transmittal should be directed to the Exchange
Agent as follows:
<TABLE>
<S> <C> <C>
By Mail: By Hand: By Overnight Mail or Courier:
BT Services Tennessee, Inc. Bankers Trust Company BT Services Tennessee, Inc.
Reorganization Unit Corporate Trust & Agency Group Corporate Trust & Agency Group
P.O. Box 292737 Receipt & Delivery Window Reorganization Unit
Nashville, Tennessee 37229-2737 123 Washington Street, 1st Floor 648 Grassmere Park Road
New York, New York 10006 Nashville, Tennessee 37211
</TABLE>
For Information Call:
(800) 735-7777
Confirm by Telephone:
(615) 835-3572
Facsimile Transmission:
(Eligible Institutions Only)
(615) 835-3701
Delivery to other than the above addresses or facsimile number will not
constitute a valid delivery.
FEES AND EXPENSES
The Company has agreed to pay the Exchange Agent reasonable and customary
fees for its services and will reimburse it for its reasonable out-of-pocket
expenses in connection therewith. The Company will also pay brokerage houses and
other custodians, nominees and fiduciaries the reasonable out-of-pocket expenses
incurred by them in forwarding copies of this Prospectus and related documents
to the beneficial owners of Original Capital Securities, and in handling or
tendering for their customers.
Holders who tender their Original Capital Securities for exchange will not
be obligated to pay any transfer taxes in connection therewith. If, however,
Exchange Capital Securities are to be delivered to, or are to be issued in the
name of, any person other than the registered holder of the Original Capital
Securities
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tendered, or if a transfer tax is imposed for any reason other than the exchange
of Original Capital Securities in connection with the Exchange Offer, then the
amount of any such transfer taxes (whether imposed on the registered holder or
any other persons) will be payable by the tendering holder. If satisfactory
evidence of payment of such taxes or exemption therefrom is not submitted with
the Letter of Transmittal, the amount of such transfer taxes will be billed
directly to such tendering holder.
Neither the Company nor the Trust will make any payment to brokers, dealers
or other nominees soliciting acceptances of the Exchange Offer.
DESCRIPTION OF THE EXCHANGE SECURITIES
The terms of the Original Securities are identical in all material respects
to the Exchange Securities, except that (i) the Original Securities have not
been registered under the Securities Act, are subject to certain restrictions on
transfer and are entitled to certain rights under the applicable Registration
Rights Agreement (which rights will terminate upon consummation of the Exchange
Offer, except under limited circumstances); (ii) the Exchange Capital Securities
will not contain certain restrictions on transfer applicable to Original Capital
Securities; (iii) the Exchange Capital Securities will not provide for any
increase in the Distribution rate thereon; and (iv) the Exchange Junior
Subordinated Debentures will not provide for any increase in the interest rate
thereon. The Original Securities provide that, in the event that a registration
statement relating to the Exchange Offer has not been filed by September 14,
1998 and been declared effective by October 14, 1998, or, in certain limited
circumstances, in the event a shelf registration statement (the "Shelf
Registration Statement") with respect to the resale of the Original Capital
Securities is not declared effective by the time required by the Registration
Rights Agreement, then liquidated damages will accrue at the rate of 0.25% per
annum on the principal amount of the Original Junior Subordinated Debentures and
Distributions will accrue at the rate of 0.25% per annum on the Liquidation
Amount of the Original Capital Securities, for the period from the occurrence of
such event until such time as such registration statement has been filed or
declared effective, as the case may be. The Exchange Securities are not, and
upon consummation of the Exchange Offer the Original Securities will not be,
entitled to any such additional interest or Distributions. Accordingly, holders
of Original Capital Securities should review the information set forth under
"Risk Factors -- Consequences of a Failure to Exchange Original Capital
Securities" and "Description of Exchange Securities."
DESCRIPTION OF ORIGINAL SECURITIES
The terms of the Original Securities are identical in all material respects
to the Exchange Securities, except that (i) the Original Securities have not
been registered under the Securities Act, are subject to restrictions on
transfer under federal and state securities laws and are entitled to certain
rights under the Registration Rights Agreement (which rights will terminate upon
consummation of the Exchange Offer); (ii) the Exchange Capital Securities will
not provide for any increase in the Distribution rate thereon; and (iii) the
Exchange Junior Subordinated Debentures will not provide for any increase in the
interest rate thereon. The Original Securities provide that, in the event that a
registration statement relating to the Exchange Offer has not been filed by
September 14, 1998 and declared effective by October 14, 1998, or, in certain
limited circumstances, in the event the Shelf Registration Statement with
respect to the resale of the Original Capital Securities is not declared
effective by October 14, 1998, then interest will accrue (in addition to the
stated interest rate on the Original Junior Subordinated Debentures and
Distributions will accrue (in addition to the stated Distribution rate on the
Original Capital Securities) at the rate of 0.25% per annum on the Liquidation
Amount of the Original Capital Securities, for the period from the occurrence of
such event until such time as such required Exchange Offer is consummated or any
required Shelf Registration Statement is effective. The Exchange Securities are
not, and upon consummation of the Exchange Offer the Original Securities will
not be, entitled to any such additional interest or Distributions. Accordingly,
holders of Original Capital Securities should review the information set forth
under "Risk Factors -- Consequences of a Failure to Exchange Original Capital
Securities" and "Description of Exchange Securities."
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<PAGE> 41
DESCRIPTION OF CAPITAL SECURITIES
Pursuant to the terms of the Trust Agreement for the Issuer Trust, the
Issuer Trust has issued the Original Capital Securities and the Common
Securities and will issue the Exchange Capital Securities. The Original Capital
Securities do, and the Exchange Capital Securities shall, represent preferred
undivided beneficial interests in the assets of the Issuer Trust and the holders
thereof will be entitled to a preference in certain circumstances with respect
to Distributions and amounts payable on redemption or liquidation over the
Common Securities, as well as other benefits as described in the Trust
Agreement. The Trust Agreement has been qualified under the Trust Indenture Act
of 1939, as amended (the "Trust Indenture Act"). This summary of certain
provisions of the Capital Securities and the Trust Agreement does not purport to
be complete and is subject to, and qualified in its entirety by reference to,
all the provisions of the Trust Agreement, including the definitions therein of
certain terms. Wherever particular defined terms of the Trust Agreement are
referred to herein, such defined terms are incorporated herein by reference.
GENERAL
The Capital Securities (including the Original Capital Securities and the
Exchange Capital Securities) are limited to $40,000,000 aggregate Liquidation
Amount outstanding. The Capital Securities rank pari passu, and payments will be
made thereon pro rata, with the Common Securities except as described under
"-- Subordination of Common Securities." The Junior Subordinated Debentures are
registered in the name of the Issuer Trust and held by the Property Trustee in
Trust for the benefit of the holders of the Capital Securities and Common
Securities. The Guarantee is a guarantee on a subordinated basis with respect to
the Capital Securities but does not guarantee payment of Distributions or
amounts payable on redemption or liquidation of such Capital Securities when the
Issuer Trust does not have funds on hand available to make such payments. See
"Description of Guarantee."
DISTRIBUTIONS
The Capital Securities represent preferred undivided beneficial interests
in the assets of the Issuer Trust, and Distributions on each Capital Security
will be payable at an annual rate equal to 8.29% on the stated Liquidation
Amount of $1,000, payable semi-annually in arrears on the 15th day of April and
October of each year (each a "Distribution Date"), to the holders of the Capital
Securities at the close of business on the April 1st or October 1st (whether or
not a Business Day) next preceding the relevant Distribution Date. Distributions
on the Capital Securities will be cumulative. Distributions accumulate from
April 17, 1998. The first Distribution Date for the Capital Securities will be
October 15, 1998. The amount of Distributions payable for any period less than a
full Distribution period will be computed on the basis of a 360-day year of
twelve 30-day months and the actual days elapsed in a partial month in such
period. Distributions payable for each full Distribution period will be computed
by dividing the rate per annum by two. If any date on which Distributions are
payable on the Capital Securities is not a Business Day, then payment of the
Distributions payable on such date will be made on the next succeeding day that
is a Business Day (without any additional Distributions or other payment in
respect of any such delay), with the same force and effect as if made on the
date such payment was originally payable.
So long as no Debenture Event of Default has occurred and is continuing,
the Company has the right under the Junior Subordinated Indenture to defer the
payment of interest on the Junior Subordinated Debentures at any time or from
time to time for a period not exceeding 10 consecutive semi-annual periods with
respect to each Extension Period, provided that no Extension Period may extend
beyond the Stated Maturity of the Junior Subordinated Debentures. As a
consequence of any such deferral, semi-annual Distributions on the Capital
Securities by the Issuer Trust will be deferred during any such Extension
Period. Distributions to which holders of the Capital Securities are entitled
will accumulate Additional Amounts thereon at a rate equal to 8.29% per annum,
compounded semi-annually from the relevant payment date for such Distributions,
computed on the basis of a 360-day year of twelve 30-day months and the actual
days elapsed in a partial month in such period. Additional Amounts payable for
each full Distribution period will be computed by dividing the rate per annum by
two. The term "Distributions" as used herein shall include any such Additional
Amounts. During any such Extension Period, the Company may not (i) declare or
pay any
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<PAGE> 42
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 of or interest or premium, if any, on or repay,
repurchase or redeem any debt securities of the Company that rank pari passu in
all respects with or junior in interest to the Junior Subordinated Debentures
(other than (a) repurchases, redemptions or other acquisitions of shares of
capital stock of the Company 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, in connection with a dividend
reinvestment or shareholder stock purchase plan or in connection with the
issuance of capital stock of the Company (or securities convertible into or
exercisable for such capital stock) as consideration in an acquisition
transaction entered into prior to the applicable Extension Period, (b) as a
result of an exchange or conversion of any class or series of the Company's
capital stock (or any capital stock of a subsidiary of the Company) for any
class or series of the Company's capital stock or of any class or series of the
Company's indebtedness for any class or series of the Company's capital stock,
(c) the purchase of fractional interests in shares of the Company's capital
stock pursuant to the conversion or exchange provisions of such capital stock or
the security being converted or exchanged, (d) any declaration of a dividend in
connection with any shareholder's rights plan, or the issuance of rights, stock
or other property under any shareholder'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 ranks pari passu with or junior to
such stock). Prior to the termination of any such Extension Period, the Company
may further defer the payment of interest, provided that no Extension Period may
exceed 10 consecutive semi-annual periods or extend beyond the Stated Maturity
of the Junior Subordinated Debentures. Upon the termination of any such
Extension Period and the payment of all amounts then due, the Company may elect
to begin a new Extension Period. No interest shall be due and payable during an
Extension Period, except at the end thereof. The Company must give the Issuer
Trustees notice of its election of such Extension Period at least one Business
Day prior to the earlier of (i) the date the Distributions on the Capital
Securities would have been payable but for the election to begin such Extension
Period and (ii) the date the Property Trustee is required to give notice to
holders of the Capital Securities of the record date or the date such
Distributions are payable, but in any event not less than one Business Day prior
to such record date. The Property Trustee will give notice of the Company's
election to begin a new Extension Period to the holders of the Capital
Securities. Subject to the foregoing, there is no limitation on the number of
times that the Company may elect to begin an Extension Period. See "Description
of Junior Subordinated Debentures -- Option To Extend Interest Payment Period"
and "Certain Federal Income Tax Consequences -- Interest Income and Original
Issue Discount."
The Company has no current intention of exercising its right to defer
payments of interest by extending the interest payment period on the Junior
Subordinated Debentures.
The revenue of the Issuer Trust available for distribution to holders of
the Capital Securities is limited to payments under the Junior Subordinated
Debentures in which the Issuer Trust has invested the proceeds from the issuance
and sale of the Capital Securities. See "Description of Junior Subordinated
Debentures." If the Company does not make payments on the Junior Subordinated
Debentures, the Issuer Trust may not have funds available to pay Distributions
or other amounts payable on the Capital Securities. The payment of Distributions
and other amounts payable on the Capital Securities (if and to the extent the
Issuer Trust has funds legally available for and cash sufficient to make such
payments) is guaranteed by the Company on a limited basis as set forth herein
under "Description of Guarantee."
REDEMPTION
Upon the repayment or redemption, in whole or in part, of the Junior
Subordinated Debentures, whether at maturity or upon earlier redemption as
provided in the Junior Subordinated Indenture, the proceeds from such repayment
or redemption shall be applied by the Property Trustee to redeem a Like Amount
(as defined below) of the Trust Securities, upon not less than 30 nor more than
60 days' notice, at a redemption price (the "Redemption Price") equal to the
aggregate Liquidation Amount of such Capital Securities plus accumulated but
unpaid Distributions thereon to but excluding the date of redemption (the
"Redemption Date") and the
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<PAGE> 43
related amount of the premium, if any, paid by the Company upon the concurrent
redemption of such Junior Subordinated Debentures. See "Description of Junior
Subordinated Debentures--Redemption." If less than all the Junior Subordinated
Debentures are to be repaid or redeemed on a Redemption Date, then the proceeds
from such repayment or redemption shall be allocated to the redemption pro rata
of the Capital Securities and the Common Securities. The amount of premium, if
any, paid by the Company upon the redemption of all or any part of the Junior
Subordinated Debentures to be repaid or redeemed on a Redemption Date shall be
allocated to the redemption pro rata of the Capital Securities and the Common
Securities.
The Company has the right to redeem the Junior Subordinated Debentures (i)
on or after April 15, 2008, in whole at any time or in part from time to time,
or (ii) in whole, but not in part, at any time within 90 days following the
occurrence and during the continuation of a Tax Event, Investment Company Event
or Capital Treatment Event (each as defined below), in each case subject to
possible regulatory approval. See "-- Liquidation Distribution Upon
Dissolution." A redemption of the Junior Subordinated Debentures would cause a
mandatory redemption of a Like Amount of the Capital Securities and Common
Securities at the Redemption Price.
The Redemption Price, in the case of a redemption under (i) above, shall
equal the following prices, expressed in percentages of the Liquidation Amount
(as defined below), together with accumulated Distributions to but excluding the
date fixed for redemption, if redeemed during the 12-month period beginning
April 15:
<TABLE>
<CAPTION>
YEAR REDEMPTION PRICE
---- ----------------
<S> <C>
2008........................................................ 104.1450%
2009........................................................ 103.7305%
2010........................................................ 103.3160%
2011........................................................ 102.9015%
2012........................................................ 102.4870%
2013........................................................ 102.0725%
2014........................................................ 101.6580%
2015........................................................ 101.2435%
2016........................................................ 100.8290%
2017........................................................ 100.4145%
</TABLE>
and at 100% on or after April 15, 2018.
The Redemption Price, in the case of a redemption on or after April 15,
2008 following a Tax Event, Investment Company Event or Capital Treatment Event
shall equal the Redemption Price then applicable to a redemption under (i)
above. The Redemption Price, in the case of a redemption prior to April 15, 2008
following a Tax Event, Investment Company Event or Capital Treatment Event as
described under (ii) above, will equal for each Capital Security the Make-Whole
Amount for a corresponding $1,000 principal amount of Junior Subordinated
Debentures together with accumulated Distributions to but excluding the date
fixed for redemption. The "Make-Whole Amount" will be equal to the greater of
(i) 100% of the principal amount of such Junior Subordinated Debentures and (ii)
as determined by a Quotation Agent (as defined below), the sum of the present
values of the principal amount and premium payable as part of the Redemption
Price with respect to an optional redemption of such Junior Subordinated
Debentures on April 15, 2008, together with the present values of scheduled
payments of interest (not including the portion of any such payments of interest
accrued as of the Redemption Date) from the Redemption Date to April 15, 2008
(the "Remaining Life"), in each case discounted to the Redemption Date on a
semi-annual basis (assuming a 360-day year consisting of 30-day months) at the
Adjusted Treasury Rate.
"Adjusted Treasury Rate" means, with respect to any Redemption Date, the
Treasury Rate plus (i) 1.875 basis points if such Redemption Date occurs on or
before April 15, 1999 or (ii) 1.375 basis points if such Redemption Date occurs
after April 15, 1999.
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<PAGE> 44
"Treasury Rate" means (i) the yield, under the heading which represents the
average for the week immediately prior to the calculation date, appearing in the
most recently published statistical release designated "H.15 (519)" or any
successor publication which is published weekly by the Federal Reserve and which
establishes yields on actively traded United States Treasury securities adjusted
to constant maturity under the caption "Treasury Constant Maturities," for the
maturity corresponding to the Remaining Life (if no maturity is within three
months before or after the Remaining Life, yields for the two published
maturities most closely corresponding to the Remaining Life shall be determined
and the Treasury Rate shall be interpolated or extrapolated from such yields on
a straight-line basis, rounding to the nearest month) or (ii) if such release
(or any successor release) is not published during the week preceding the
calculation date or does not contain such yields, the rate per annum equal to
the semi-annual equivalent yield to maturity of the Comparable Treasury Issue,
calculated using a price for the Comparable Treasury Issue (expressed as a
percentage of its principal amount) equal to the Comparable Treasury Price for
such Redemption Date. The Treasury Rate shall be calculated on the third
Business Day preceding the Redemption Date.
"Business Day" means a day other than (a) a Saturday or Sunday, (b) a day
on which banking institutions in the City of New York, New York or the City of
Baltimore, Maryland are authorized or required by law or executive order to
remain closed, or (c) a day on which the Property Trustee's Corporate Trust
Office or the Corporate Trust Office of the Debenture Trustee is closed for
business.
"Like Amount" means (i) with respect to a redemption of Trust Securities,
Trust Securities having a Liquidation Amount (as defined below) equal to that
portion of the principal amount of Junior Subordinated Debentures to be
contemporaneously redeemed in accordance with the Junior Subordinated Indenture,
allocated to the Common Securities and to the Capital Securities based upon the
relative Liquidation Amounts of such classes and (ii) with respect to a
distribution of Junior Subordinated Debentures to holders of Trust Securities in
connection with a dissolution or liquidation of the Issuer Trust, Junior
Subordinated Debentures having a principal amount equal to the Liquidation
Amount of the Trust Securities of the holder to whom such Junior Subordinated
Debentures are distributed.
"Liquidation Amount" means the stated amount of $1,000 per Trust Security.
"Tax Event" means the receipt by the Issuer Trust of an opinion of counsel
to the Company experienced in such matters to the effect that, as a result of
any amendment to, or change (including any announced prospective change) in, the
laws (or any regulations thereunder) of the United States or any political
subdivision or taxing authority thereof or therein, or as a result of any
official or administrative pronouncement or action or judicial decision
interpreting or applying such laws or regulations, which amendment or change is
effective or which pronouncement, action, or decision is announced on or after
the date of issuance of the Capital Securities, there is more than an
insubstantial risk that (i) the Issuer Trust is, or will be within 90 days of
the delivery of such opinion, subject to United States federal income tax with
respect to income received or accrued on the Original Junior Subordinated
Debentures or Exchange Junior Subordinated Debentures, (ii) interest payable by
the Company on the Original Junior Subordinated Debentures or Exchange Junior
Subordinated Debentures is not, or within 90 days of the delivery 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 Issuer Trust is, or will be
within 90 days of the delivery of such opinion, subject to more than a de
minimis amount of other taxes, duties or other governmental charges.
"Investment Company Event" means the receipt by the Issuer Trust of an
opinion of counsel to the Company experienced in such matters to the effect
that, as a result of the occurrence of a change in law or regulation or a
written change (including any announced prospective change) in interpretation or
application of law or regulation by any legislative body, court, governmental
agency or regulatory authority, there is more than an insubstantial risk that
the Issuer Trust is or will be considered an "investment company" that is
required to be registered under the Investment Company Act, which change or
prospective change becomes effective or would become effective, as the case may
be, on or after the date of the issuance of the Capital Securities.
"Capital Treatment Event" means the reasonable determination by the Company
that, as a result of the occurrence of any amendment to, or change (including
any announced prospective change) in, the laws (or
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<PAGE> 45
any rules or regulations thereunder) of the United States or any political
subdivision thereof or therein, or as a result of any official or administrative
pronouncement or action or judicial decision interpreting or applying such laws
or regulations, which amendment or change is effective or such pronouncement,
action or decision is announced on or after the date of issuance of the Capital
Securities, there is more than an insubstantial risk that the Company will not
be entitled to treat an amount equal to the Liquidation Amount of the Capital
Securities as "Tier 1 capital" (or the then equivalent thereof) for purposes of
the risk-based capital adequacy guidelines of the Federal Reserve, as then in
effect and applicable to the Company.
Payment of Additional Sums. If a Tax Event described in clause (i) or
(iii) of the definition of Tax Event above has occurred and is continuing and
the Issuer Trust is the holder of all the Junior Subordinated Debentures, the
Company will pay Additional Sums (as defined below), if any, on the Junior
Subordinated Debentures.
"Additional Sums" means the additional amounts as may be necessary in order
that the amount of Distributions then due and payable by the Issuer Trust on the
outstanding Capital Securities and Common Securities of the Issuer Trust will
not be reduced as a result of any additional taxes, duties and other
governmental charges to which the Issuer Trust has become subject as a result of
a Tax Event.
REDEMPTION PROCEDURES
Capital Securities redeemed on each Redemption Date shall be redeemed at
the Redemption Price with the applicable proceeds from the contemporaneous
redemption of the Junior Subordinated Debentures. Redemptions of the Capital
Securities shall be made and the Redemption Price shall be payable on each
Redemption Date only to the extent that the Issuer Trust has funds on hand
available for the payment of such Redemption Price. See also "-- Subordination
of Common Securities."
If the Issuer Trust gives a notice of redemption in respect of any Capital
Securities, then, by 12:00 noon, Eastern Standard Time, on the Redemption Date,
to the extent funds are available, in the case of Capital Securities held in
book-entry form, the Property Trustee will deposit irrevocably with DTC funds
sufficient to pay the applicable Redemption Price and will give DTC irrevocable
instructions and authority to pay the Redemption Price to the holders of the
Capital Securities. With respect to Capital Securities not held in book-entry
form, the Property Trustee, to the extent funds are available, will irrevocably
deposit with the paying agent for the Capital Securities funds sufficient to pay
the applicable Redemption Price and will give such paying agent irrevocable
instructions and authority to pay the Redemption Price to the holders thereof
upon surrender of their certificates evidencing the Capital Securities.
Notwithstanding the foregoing, Distributions payable on or prior to the
Redemption Date for any Capital Securities called for redemption shall be
payable to the holders of the Capital Securities on the relevant record dates
for the related Distribution Dates. If notice of redemption shall have been
given and funds deposited as required, then upon the date of such deposit all
rights of the holders of such Capital Securities so called for redemption will
cease, except the right of the holders of such Capital Securities to receive the
Redemption Price, and any Distribution payable in respect of the Capital
Securities, but without interest on such Redemption Price, and such Capital
Securities will cease to be outstanding. If any date fixed for redemption of
Capital Securities is not a Business Day, then payment of the Redemption Price
payable on such date will be made on the next succeeding day which is a Business
Day (without any interest or other payment in respect of any such delay), except
that, if such Business Day falls in the next calendar year, such payment will be
made on the immediately preceding Business Day. In the event that payment of the
Redemption Price in respect of Capital Securities called for redemption is
improperly withheld or refused and not paid either by the Issuer Trust or by the
Company pursuant to the Guarantee as described under "Description of Guarantee,"
Distributions on such Capital Securities will continue to accumulate at the then
applicable rate, from the Redemption Date originally established by the Issuer
Trust for such Capital Securities to the date such Redemption Price is actually
paid, in which case the actual payment date will be the date fixed for
redemption for purposes of calculating the Redemption Price.
Subject to applicable law (including, without limitation, United States
federal securities laws), the Company or its affiliates may at any time and from
time to time purchase outstanding Capital Securities by tender, in the open
market or by private agreement, and may resell such securities.
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<PAGE> 46
If less than all the Capital Securities and Common Securities are to be
redeemed on a Redemption Date, then the aggregate Liquidation Amount of such
Capital Securities and Common Securities to be redeemed shall be allocated pro
rata to the Capital Securities and the Common Securities based upon the relative
Liquidation Amounts of such classes subject to the requirement that no holder
shall hold capital securities of less than $100,000 after such redemption. The
particular Capital Securities to be redeemed shall be selected on a pro rata
basis not more than 60 days prior to the Redemption Date by the Property Trustee
from the outstanding Capital Securities not previously called for redemption, or
if the Capital Securities are then held in the form of a Global Capital Security
(as defined below), in accordance with DTC's customary procedures. The Property
Trustee shall promptly notify the securities registrar for the Trust Securities
in writing of the Capital Securities selected for redemption and, in the case of
any Capital Securities selected for partial redemption, the Liquidation Amount
thereof to be redeemed. For all purposes of the Trust Agreement, unless the
context otherwise requires, all provisions relating to the redemption of Capital
Securities shall relate, in the case of any Capital Securities 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.
Notice of any redemption will be mailed at least 30 days but not more than
60 days before the Redemption Date to each registered holder of Capital
Securities to be redeemed at its address appearing on the securities register
for the Trust Securities. Unless the Company defaults in payment of the
Redemption Price on the Junior Subordinated Debentures, on and after the
Redemption Date interest will cease to accrue on the Junior Subordinated
Debentures or portions thereof (and, unless payment of the Redemption Price in
respect of the Capital Securities is withheld or refused and not paid either by
the Issuer Trust or the Company pursuant to the Guarantee, Distributions will
cease to accumulate on the Capital Securities or portions thereof) called for
redemption.
SUBORDINATION OF COMMON SECURITIES
Payment of Distributions on, the Liquidation Distribution in respect of,
and the Redemption Price of, the Capital Securities and Common Securities, as
applicable, shall be made pro rata based on the Liquidation Amount of such
Capital Securities and Common Securities. However, if on any Distribution Date
or Redemption Date a Debenture Event of Default has occurred and is continuing
as a result of any failure by the Company to pay any amounts in respect of the
Junior Subordinated Debentures when due, no payment of any Distribution on, or
Liquidation Distribution in respect of, 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 the
outstanding Capital Securities for all Distribution periods terminating on or
prior thereto, or in the case of payment of the Redemption Price, the full
amount of such Redemption Price on all the outstanding Capital Securities then
called for redemption, or in the case of payment of the Liquidation
Distribution, the full amount of such Liquidation Distribution on all
outstanding Capital Securities, shall have been made or provided for, and all
funds immediately available to the Property Trustee shall first be applied to
the payment in full in cash of all Distributions on, Liquidation Distribution in
respect of or Redemption Price of, the Capital Securities then due and payable.
In the case of any Event of Default (as defined below) resulting from a
Debenture Event of Default, the holders of the Common Securities will be deemed
to have waived any right to act with respect to any such Event of Default under
the Trust Agreement until the effects of all such Events of Default with respect
to such Capital Securities have been cured, waived or otherwise eliminated. See
"-- Events of Default; Notice" and "Description of Junior Subordinated
Debentures -- Debenture Events of Default." Until all such Events of Default
under the Trust Agreement with respect to the Capital Securities have been so
cured, waived or otherwise eliminated, the Property Trustee will act solely on
behalf of the holders of the Capital Securities and not on behalf of the holders
of the Common Securities, and only the holders of the Capital Securities will
have the right to direct the Property Trustee to act on their behalf.
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<PAGE> 47
LIQUIDATION DISTRIBUTION UPON DISSOLUTION
The amount payable on the Capital Securities in the event of any
liquidation of the Issuer Trust is $1,000 per Capital Security plus accumulated
and unpaid Distributions to the date of payment, subject to certain exceptions,
which may be in the form of a distribution of such amount in Junior Subordinated
Debentures.
The holders of all the outstanding Common Securities have the right at any
time to dissolve the Issuer Trust and, after satisfaction of liabilities to
creditors of the Issuer Trust as provided by applicable law, cause the Junior
Subordinated Debentures to be distributed to the holders of the Capital
Securities and Common Securities in liquidation of the Issuer Trust.
The Federal Reserve's risk-based capital guidelines currently provide that
redemptions of permanent equity or other capital instruments before stated
maturity could have a significant impact on a bank holding company's overall
capital structure and that any organization considering such a redemption should
consult with the Federal Reserve before redeeming any equity or capital
instrument prior to maturity if such redemption could have a material effect on
the level or composition of the organization's capital base (unless the equity
or capital instrument were redeemed with the proceeds of, or replaced by, a like
amount of a similar or higher quality capital instrument and the Federal Reserve
considers the organization's capital position to be fully adequate after the
redemption).
In the event the Company, while a holder of Common Securities, dissolves
the Issuer Trust prior to the Stated Maturity of the Capital Securities and the
dissolution of the Issuer Trust is deemed to constitute the redemption of
capital instruments by the Federal Reserve under its risk-based capital
guidelines or policies, the dissolution of the Issuer Trust by the Company may
be subject to the prior approval of the Federal Reserve. Moreover, any changes
in applicable law or changes in the Federal Reserve's risk-based capital
guidelines or policies could impose a requirement on the Company that it obtain
the prior approval of the Federal Reserve to dissolve the Issuer Trust.
Pursuant to the Trust Agreement, the Issuer Trust will automatically
dissolve upon expiration of its term or, if earlier, will dissolve on the first
to occur of: (i) certain events of bankruptcy, dissolution or liquidation of the
Company or the holder of the Common Securities, (ii) if the holders of Common
Securities have given written direction to the Property Trustee to dissolve the
Issuer Trust (which direction, subject to the foregoing restrictions, is
optional and wholly within the discretion of the holders of Common Securities),
(iii) the repayment of all the Capital Securities in connection with the
redemption of all the Trust Securities as described under "-- Redemption" and
(iv) the entry of an order for the dissolution of the Issuer Trust by a court of
competent jurisdiction.
If dissolution of the Issuer Trust occurs as described in clause (i), (ii)
or (iv) above, the Issuer Trust will be liquidated by the Property Trustee as
expeditiously as the Property Trustee determines to be possible by distributing,
after satisfaction of liabilities to creditors of the Issuer Trust as provided
by applicable law, to the holders of such Trust Securities a Like Amount of the
Junior Subordinated Debentures, unless such distribution is not practical, in
which event such holders will be entitled to receive out of the assets of the
Issuer Trust available for distribution to holders, after satisfaction of
liabilities to creditors of the Issuer Trust as provided by applicable law, an
amount equal to, in the case of holders of Capital Securities, the aggregate of
the Liquidation Amount plus accumulated and unpaid Distributions thereon to the
date of payment (such amount being the "Liquidation Distribution"). If such
Liquidation Distribution can be paid only in part because the Issuer Trust has
insufficient assets available to pay in full the aggregate Liquidation
Distribution, then the amounts payable directly by the Issuer Trust on its
Capital 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 a Debenture
Event of Default has occurred and is continuing as a result of any failure by
the Company to pay any amounts in respect of the Junior Subordinated Debentures
when due, the Capital Securities shall have a priority over the Common
Securities. See "-- Subordination of Common Securities."
After the liquidation date is fixed for any distribution of Junior
Subordinated Debentures (i) the Capital Securities will no longer be deemed to
be outstanding, (ii) DTC or its nominee, as the registered holder of
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<PAGE> 48
Capital Securities, will receive a registered global certificate or certificates
representing the Junior Subordinated Debentures to be delivered upon such
distribution with respect to Capital Securities held by DTC or its nominee and
(iii) any certificates representing the Capital Securities not held by DTC or
its nominee will be deemed to represent the Junior Subordinated Debentures
having a principal amount equal to the stated Liquidation Amount of the Capital
Securities and bearing accrued and unpaid interest in an amount equal to the
accumulated and unpaid Distributions on the Capital Securities until such
certificates are presented to the security registrar for the Trust Securities
for transfer or reissuance.
If the Company does not redeem the Junior Subordinated Debentures prior to
the Stated Maturity and the Issuer Trust is not liquidated and the Junior
Subordinated Debentures are not distributed to holders of the Capital
Securities, the Capital Securities will remain outstanding until the repayment
of the Junior Subordinated Debentures and the distribution of the Liquidation
Distribution to the holders of the Capital Securities.
There can be no assurance as to the market prices for the Capital
Securities or the Junior Subordinated Debentures that may be distributed in
exchange for Capital Securities if a dissolution and liquidation of the Issuer
Trust were to occur. Accordingly, the Capital Securities that an investor may
purchase, or the Junior Subordinated Debentures that the investor may receive on
dissolution and liquidation of the Issuer Trust, may trade at a discount to the
price that the investor paid to purchase the Capital Securities offered hereby.
EVENTS OF DEFAULT; NOTICE
Any one of the following events constitutes an "Event of Default" under the
Trust Agreement (an "Event of Default") with respect to the Capital Securities
(whatever the reason for such Event of Default and whether it is voluntary or
involuntary or be effected by operation of law or pursuant to any judgment,
decree or order of any court or any order, rule or regulation of any
administrative or governmental body):
(i) the occurrence of a Debenture Event of Default (see "Description
of Junior Subordinated Debentures -- Debenture Events of Default"); or
(ii) default by the Issuer Trust in the payment of any Distribution
when it becomes due and payable, and continuation of such default for a
period of 30 days; or
(iii) default by the Issuer Trust in the payment of any Redemption
Price of any Trust Security when it becomes due and payable; or
(iv) default in the performance, or breach, in any material respect,
of any covenant or warranty of the Issuer Trustees in the Trust Agreement
(other than a covenant or warranty a default in the performance of which or
the breach of which is dealt with in clause (ii) or (iii) above), and
continuation of such default or breach for a period of 60 days after there
has been given, by registered or certified mail, to the Issuer Trustees and
the Company by the holders of at least 25% in aggregate Liquidation Amount
of the outstanding Capital Securities, a written notice specifying such
default or breach and requiring it to be remedied and stating that such
notice is a "Notice of Default" under the Trust Agreement; or
(v) the occurrence of certain events of bankruptcy or insolvency with
respect to the Property Trustee if a successor Property Trustee has not
been appointed within 90 days thereof.
Within five Business Days after the occurrence of any Event of Default
actually known to the Property Trustee, the Property Trustee will transmit
notice of such Event of Default to the holders of Trust Securities and the
Administrators, unless such Event of Default has been cured or waived. The
Company, as Depositor, and the Administrators are required to file annually with
the Property Trustee a certificate as to whether or not they are in compliance
with all the conditions and covenants applicable to them under the Trust
Agreement.
If a Debenture Event of Default has occurred and is continuing as a result
of any failure by the Company to pay any amounts in respect of the Junior
Subordinated Debentures when due, the Capital Securities will have a preference
over the Common Securities with respect to payments of any amounts in respect of
the Capital Securities as described above. See "-- Subordination of Common
Securities," "-- Liquidation
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Distribution Upon Dissolution" and "Description of Junior Subordinated
Debentures -- Debenture Events of Default."
REMOVAL OF ISSUER TRUSTEES; APPOINTMENT OF SUCCESSORS
The holders of at least a majority in aggregate Liquidation Amount of the
outstanding Capital Securities may remove an Issuer Trustee for cause or, if a
Debenture Event of Default has occurred and is continuing, with or without
cause. If an Issuer Trustee is removed by the holders of the outstanding Capital
Securities, the successor may be appointed by the holders of at least 25% in
Liquidation Amount of Capital Securities then outstanding. If an Issuer Trustee
resigns, such Issuer Trustee will appoint its successor. If an Issuer Trustee
fails to appoint a successor, the holders of at least 25% in Liquidation Amount
of the outstanding Capital Securities may appoint a successor. If a successor
has not been appointed by the holders, any holder of Capital Securities or
Common Securities or the other Issuer Trustee may petition a court of competent
jurisdiction to appoint a successor. Any Delaware Trustee must meet the
applicable requirements of Delaware law. Any Property Trustee must be a national
or state-chartered bank and have a combined capital and surplus of at least
$50,000,000. No resignation or removal of an Issuer Trustee and no appointment
of a successor trustee shall be effective until the acceptance of appointment by
the successor trustee in accordance with the provisions of the Trust Agreement.
MERGER OR CONSOLIDATION OF ISSUER TRUSTEES
Any entity into which the Property Trustee or the Delaware Trustee may be
merged or converted or with which it may be consolidated, or any entity
resulting from any merger, conversion or consolidation to which such Issuer
Trustee is a party, or any entity succeeding to all or substantially all of the
corporate Trust business of such Issuer Trustee, will be the successor of such
Issuer Trustee under the Trust Agreement, provided such entity is otherwise
qualified and eligible.
MERGERS, CONSOLIDATIONS, AMALGAMATIONS OR REPLACEMENTS OF THE ISSUER TRUST
The Issuer Trust may not merge with or into, consolidate, amalgamate, or be
replaced by, or convey, transfer or lease its properties and assets
substantially as an entirety to, any entity, except as described below or as
otherwise set forth in the Trust Agreement. The Issuer Trust may, at the request
of the holders of the Common Securities and with the consent of the holders of
at least a majority in aggregate Liquidation Amount of the outstanding Capital
Securities, merge with or into, consolidate, amalgamate, or be replaced by or
convey, transfer or lease its properties and assets substantially as an entirety
to a Trust organized as such under the laws of any State, so long as (i) such
successor entity either (a) expressly assumes all the obligations of the Issuer
Trust with respect to the Capital Securities or (b) substitutes for the Capital
Securities other securities having substantially the same terms as the Capital
Securities (the "Successor Securities") so long as the Successor Securities have
the same priority as the Capital Securities with respect to distributions and
payments upon liquidation, redemption and otherwise, (ii) a trustee of such
successor entity, possessing the same powers and duties as the Property Trustee,
is appointed to hold the Junior Subordinated Debentures, (iii) such merger,
consolidation, amalgamation, replacement, conveyance, transfer or lease does not
cause the Capital Securities (including any Successor Securities) to be
downgraded by any nationally recognized statistical rating organization, (iv)
such merger, consolidation, amalgamation, replacement, conveyance, transfer or
lease does not adversely affect the rights, preferences and privileges of the
holders of the Capital Securities (including any Successor Securities) in any
material respect, (v) such successor entity has a purpose substantially
identical to that of the Issuer Trust, (vi) prior to such merger, consolidation,
amalgamation, replacement, conveyance, transfer or lease, the Issuer Trust has
received an opinion from independent counsel experienced in such matters to the
effect that (a) such merger, consolidation, amalgamation, replacement,
conveyance, transfer or lease does not adversely affect the rights, preferences
and privileges of the holders of the Capital Securities (including any Successor
Securities) in any material respect and (b) following such merger,
consolidation, amalgamation, replacement, conveyance, transfer or lease, neither
the Issuer Trust nor such successor entity will be required to register as an
investment company under the Investment Company Act, and (vii) the Company or
any permitted successor or assignee
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owns all the common securities of such successor entity and guarantees the
obligations of such successor entity under the Successor Securities at least to
the extent provided by the Guarantee. Notwithstanding the foregoing, the Issuer
Trust may not, except with the consent of holders of 100% in aggregate
Liquidation Amount of the Capital Securities, consolidate, amalgamate, merge
with or into, or be replaced by or convey, transfer or lease its properties and
assets substantially as an entirety to, any other entity or permit any other
entity to consolidate, amalgamate, merge with or into, or replace it if such
consolidation, amalgamation, merger, replacement, conveyance, transfer or lease
would cause the Issuer Trust or the successor entity to be taxable other than as
a grantor Trust for United States federal income tax purposes.
VOTING RIGHTS; AMENDMENT OF TRUST AGREEMENT
Except as provided below and under "-- Removal of Issuer Trustees;
Appointment of Successors" and "Description of Exchange Guarantee -- Amendments
and Assignment" and as otherwise required by law and the Trust Agreement, the
holders of the Capital Securities will have no voting rights.
The Trust Agreement may be amended from time to time by the holders of a
majority in Liquidation Amount of the Common Securities and the Property
Trustee, without the consent of the holders of the Capital Securities, (i) to
cure any ambiguity, correct or supplement any provisions in the Trust Agreement
that may be inconsistent with any other provision, or to make any other
provisions with respect to matters or questions arising under the Trust
Agreement, provided that any such amendment does not adversely affect in any
material respect the interests of any holder of Trust Securities, or (ii) to
modify, eliminate or add to any provisions of the Trust Agreement to such extent
as may be necessary to ensure that the Issuer Trust will not be taxable other
than as a grantor Trust for United States federal income tax purposes at any
time that any Trust Securities are outstanding or to ensure that the Issuer
Trust will not be required to register as an "investment company" under the
Investment Company Act, and any such amendments of the Trust Agreement will
become effective when notice of such amendment is given to the holders of Trust
Securities. The Trust Agreement may be amended by the holders of a majority of
the Common Securities and the Property Trustee with (i) the consent of holders
representing not less than a majority in aggregate Liquidation Amount of the
outstanding Capital Securities and (ii) receipt by the Issuer Trustees of an
opinion of counsel to the effect that such amendment or the exercise of any
power granted to the Issuer Trustees in accordance with such amendment will not
affect the Issuer Trust's being taxable as a grantor Trust for United States
federal income tax purposes or the Issuer Trust's exemption from status as an
"investment company" under the Investment Company Act, except that, without the
consent of each holder of Trust Securities affected thereby, the Trust Agreement
may not be amended to (x) change the amount or timing of any Distribution on the
Trust Securities or otherwise adversely affect the amount of any Distribution
required to be made in respect of the Trust Securities as of a specified date or
(y) restrict the right of a holder of Trust Securities to institute suit for the
enforcement of any such payment on or after such date.
So long as any Junior Subordinated Debentures are held by the Issuer Trust,
the Property Trustee will not (i) direct the time, method and place of
conducting any proceeding for any remedy available to the Debenture Trustee, or
execute any Trust or power conferred on the Property Trustee with respect to the
Junior Subordinated Debentures, (ii) waive any past default that is waivable
under Section 5.13 of the Junior Subordinated Indenture, (iii) exercise any
right to rescind or annul a declaration that the Junior Subordinated Debentures
shall be due and payable or (iv) consent to any amendment, modification or
termination of the Junior Subordinated Indenture or the Junior Subordinated
Debentures, where such consent shall be required, without, in each case,
obtaining the prior approval of the holders of at least a majority in aggregate
Liquidation Amount of the Capital Securities, except that, if a consent under
the Junior Subordinated Indenture would require the consent of each holder of
Junior Subordinated Debentures affected thereby, no such consent will be given
by the Property Trustee without the prior written consent of each holder of the
Capital Securities. The Property Trustee may not revoke any action previously
authorized or approved by a vote of the holders of the Capital Securities except
by subsequent vote of the holders of the Capital Securities. The Property
Trustee will notify each holder of Capital Securities of any notice of default
with respect to the Junior Subordinated Debentures. In addition to obtaining the
foregoing approvals of the holders of the Capital Securities, before taking any
of the foregoing actions, the Property Trustee will obtain an opinion of counsel
experienced in such
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matters to the effect that the Issuer Trust will not be taxable other than as a
grantor Trust for United States federal income tax purposes on account of such
action.
Any required approval of holders of Capital Securities may be given at a
meeting of holders of Capital Securities convened for such purpose or pursuant
to written consent. The Property Trustee will cause a notice of any meeting at
which holders of Capital Securities are entitled to vote, or of any matter upon
which action by written consent of such holders is to be taken, to be given to
each registered holder of Capital Securities in the manner set forth in the
Trust Agreement.
No vote or consent of the holders of Capital Securities will be required to
redeem and cancel Capital Securities in accordance with the Trust Agreement.
Notwithstanding that holders of Capital Securities are entitled to vote or
consent under any of the circumstances described above, any of the Capital
Securities that are owned by the Company, the Issuer Trustees or any affiliate
of the Company or any Issuer Trustees, will, for purposes of such vote or
consent, be treated as if they were not outstanding.
BOOK-ENTRY, DELIVERY AND FORM
Exchange Capital Securities initially will be represented by one or more
Capital Securities in registered, global form (collectively, the "Global Capital
Securities"). The Global Capital Securities will be deposited upon issuance with
the Property Trustee as custodian for DTC, in New York, New York, and registered
in the name of DTC or its nominee, in each case for credit to an account of a
direct or indirect participant in DTC as described below.
Except as set forth below, the Global Capital Securities may be
transferred, in whole and not in part, only to another nominee of DTC or to a
successor of DTC or its nominee. Beneficial interests in the Global Capital
Securities may not be exchanged for Capital Securities in certificated form
except in the limited circumstances described below. See "-- Exchange of
Book-Entry Capital Securities for Certificated Capital Securities."
Depository Procedures. DTC has advised the Trust and the Company that DTC
is a limited purpose trust company created to hold securities for its
participating organizations (collectively, the "Participants") and to facilitate
the clearance and settlement of transactions in those securities between
Participants through electronic book-entry changes to accounts of its
Participants. The Participants include securities brokers and dealers (including
the Initial Purchasers), banks, trust companies, clearing corporations and
certain other organizations. Access to DTC's system is also available to other
entities such as banks, brokers, dealers and trust companies that clear through
or maintain a custodial relationship with a participant, either directly or
indirectly (collectively, the "Indirect Participants"). Persons who are not
Participants may beneficially own securities held by or on behalf of DTC only
through the Participants or the Indirect Participants. The ownership interest
and transfer of ownership interest of each actual purchaser of each security
held by or on behalf of DTC are recorded on the records of the Participants and
Indirect Participants.
DTC has also advised the Trust and the Company that, pursuant to procedures
established by it, (i) upon deposit of the Global Capital Securities, DTC will
credit the accounts of Participants designated by the Initial Purchasers with
portions of the principal amount of the Global Capital Securities and (ii)
ownership of such interests in the Global Capital Securities will be shown on,
and the transfer of ownership thereof will be effected only through, records
maintained by DTC (with respect to the Participants) or by the Participants and
the Indirect Participants (with respect to other owners of beneficial interests
in the Global Capital Securities).
Investors in the Global Capital Securities may hold their interests therein
directly through DTC if they are Participants in such system, or indirectly
through organizations which are Participants in such system. All interests in a
Global Capital Security will be subject to the procedures and requirements of
DTC. The laws of some states require that certain persons take physical delivery
in certificated form of securities that they own. Consequently, the ability to
transfer beneficial interests in a Global Capital Security to such persons will
be limited to that extent. Because DTC can act only on behalf of Participants,
which in turn act on behalf of
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Indirect Participants and certain banks, the ability of a person having
beneficial interests in a Global Capital Security to pledge such interests to
persons or entities that do not participate in the DTC system, or otherwise take
actions in respect of such interests, may be affected by the lack of a physical
certificate evidencing such interests. For certain other restrictions on the
transferability of the Capital Securities, see "-- Exchange of Book-Entry
Capital Securities for Certificated Capital Securities."
Except as described below, owners of beneficial interests in the Global
Capital Securities will not have Capital Securities registered in their name,
will not receive physical delivery of Capital Securities in certificated form
and will not be considered the registered owners or holders thereof under the
Trust Agreement for any purpose.
Payments in respect of the Global Capital Security registered in the name
of DTC or its nominee will be payable by the Property Trustee to DTC or its
nominee as the registered holder under the Trust Agreement. Under the terms of
the Trust Agreement, the Property Trustee will treat the persons in whose names
the Capital Securities, including the Global Capital Securities, are registered
as the owners thereof for the purpose of receiving such payments and for any and
all other purposes whatsoever. Consequently, neither the Property Trustee nor
any agent thereof has or will have any responsibility or liability for (i) any
aspect of DTC's records or any Participants's or Indirect Participants' records
relating to, or payments made on account of, beneficial ownership interests in
the Global Capital Securities, or for maintaining, supervising or reviewing any
of DTC's records or any Participants' or Indirect Participants' records relating
to the beneficial ownership interests in the Global Capital Securities, or (ii)
any other matter relating to the actions and practices of DTC or any of its
Participants or Indirect Participants. DTC has advised the Trust and the Company
that its current practice, upon receipt of any payment in respect of securities
such as the Capital Securities, is to credit the accounts of the relevant
Participants with the payment on the payment date, in amounts proportionate to
their respective holdings in Liquidation Amount of beneficial interests in the
relevant security as shown on the records of DTC, unless DTC has reason to
believe it will not receive payment on such payment date. Payments by the
Participants and the Indirect Participants to the beneficial owners of Capital
Securities will be governed by standing instructions and customary practices and
will be the responsibility of the Participants or the Indirect Participants and
will not be the responsibility of DTC, the Property Trustee, the Trust or the
Company. Neither the Trust nor the Company nor Property Trustee will be liable
for any delay by DTC or any of its Participants in identifying the beneficial
owners of the Capital Securities, and the Trust or the Company and the Property
may conclusively rely on and will be protected in relying instructions from DTC
or its nominee for all purposes.
Secondary market trading activity in interests in the Global Capital
Securities will therefore settle in immediately available funds, subject in all
cases to the rules and procedures of DTC and its Participants. Transfers between
Participants in DTC will be effected in accordance with DTC's procedures, and
will be settled in same-day funds.
DTC has advised the Trust and the Company that it will take any action
permitted to be taken by a holder of Exchange Capital Securities only at the
direction of one or more Participants to whose account with DTC interests in the
Global Capital Securities are credited and only in respect of such portion of
the Liquidation Amount of the Capital Securities as to which such Participant or
Participants has or have given such direction. However, if there is an Event of
Default under the Trust Agreement, DTC reserves the right to exchange the Global
Capital Securities for legended Exchange Capital Securities in certificated form
and to distribute such Exchange Capital Securities to its Participants.
The information in this section concerning DTC and their book-entry systems
has been obtained from sources that the Trust and the Company believe to be
reliable, but neither the Trust nor the Company takes responsibility for the
accuracy thereof.
Although DTC has agreed to the foregoing procedures to facilitate transfers
of interest in the Global Capital Securities among Participants in DTC, it is
under no obligation to perform or to continue to perform such procedures, and
such procedures may be discontinued at any time. Neither the Trust nor the
Company nor the Property trustee will have any responsibility for the
performance by DTC or its Participants or Indirect Participants of their
respective obligations under the rules and procedures governing their
operations.
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Exchange of Book-Entry Capital Securities for Certificated Capital
Securities. A Global Capital Security is exchangeable for Exchange Capital
Securities in registered certificated form if (i) DTC (x) notifies the Trust
that it is unwilling or unable to continue as Depositary for the Global Capital
Security and the Trust thereupon fails to appoint a successor Depositary within
90 days, or (y) has ceased to be a clearing agency registered under the Exchange
Act; (ii) the Trust in its sole discretion elects to cause the issuance of the
Capital Securities in certificated form; or (iii) there shall have occurred and
be continuing an Event of Default or any event which after notice or lapse of
time or both would be an Event of Default under the Trust Agreement. In
addition, beneficial interests in a Global Capital Security may be exchanged for
certificated Exchange Capital Securities upon request, but only upon at least 20
days prior written notice given to the Property Trustee by or on behalf of DTC
in accordance with customary procedures. In all cases, certificated Capital
Securities delivered in exchange for any Global Capital Security or beneficial
interests therein will be registered in the names, and issued in any approved
denominations, requested by or on behalf of the Depositary (in accordance with
its customary procedures).
Exchange of Certified Capital Securities for Book-Entry Capital
Securities. Other Capital Securities, which may be issued in certified form,
may not be exchanged for beneficial interests in any Global Capital Security
unless such exchange occurs in connection with a transfer of such Other Capital
Securities and the transferor first delivers to the Property Trustee a written
certificate (in the form provided in the Trust Agreement) to the effect that
such transfer will comply with the appropriate transfer restrictions applicable
to such Capital Securities.
EXPENSES AND TAXES
In the Trust Agreement, the Company, as borrower, has agreed to pay all
debts and other obligations (other than with respect to the Capital Securities)
and all costs and expenses of the Issuer Trust (including costs and expenses
relating to the organization of the Issuer Trust, the fees and expenses of the
Issuer Trustees and the costs and expenses relating to the operation of the
Issuer Trust) and to pay any and all taxes and all costs and expenses with
respect thereto (other than United States withholding taxes) to which the Issuer
Trust might become subject. The foregoing obligations of the Company under the
Trust Agreement are for the benefit of, and shall be enforceable by, any person
to whom any such debts, obligations, costs, expenses and taxes are owed (a
"Creditor") whether or not such Creditor has received notice thereof. Any such
Creditor may enforce such obligations of the Company directly against the
Company, and the Company has irrevocably waived any right or remedy to require
that any such Creditor take any action against the Issuer Trust or any other
person before proceeding against the Company. The Company has also agreed in the
Trust Agreement to execute such additional agreements as may be necessary or
desirable to give full effect to the foregoing.
RESTRICTIONS ON TRANSFER
The Capital Securities will be issued, and may be transferred only, in
blocks having a Liquidation Amount of not less than $100,000 (100 Capital
Securities). Any such transfer of Capital Securities in a block having a
Liquidation Amount of less than $100,000 shall be deemed to be void and of no
legal effect whatsoever. Any such transferee shall be deemed not to be the
holder of such Capital Securities for any purpose, including but not limited to
the receipt of Distributions on such Capital Securities, and such transferee
shall be deemed to have no interest whatsoever in such Capital Securities.
PAYMENT AND PAYING AGENCY
Payments in respect of the Capital Securities will be made to DTC, which
will credit the relevant accounts at DTC on the applicable Distribution Dates
or, if the Capital Securities are not held by DTC, such payments will be made by
check mailed to the address of the holder entitled thereto as such address
appears on the securities register for the Trust Securities. The paying agent
(the "Paying Agent") initially will be the Property Trustee and any co-paying
agent chosen by the Property Trustee and acceptable to the Administrators. The
Paying Agent will be permitted to resign as Paying Agent upon 30 days' written
notice to the Property Trustee and the Administrators. If the Property Trustee
is no longer the Paying Agent, the Property
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Trustee will appoint a successor (which must be a bank or trust company
reasonably acceptable to the Administrators) to act as Paying Agent.
REGISTRAR AND TRANSFER AGENT
The Property Trustee acts as registrar and transfer agent for the Capital
Securities.
Registration of transfers of Exchange Capital Securities will be effected
without charge by or on behalf of the Issuer Trust, but upon payment of any tax
or other governmental charges that may be imposed in connection with any
transfer or exchange. The Issuer Trust will not be required to register or cause
to be registered the transfer of the Capital Securities after the Capital
Securities have been called for redemption.
INFORMATION CONCERNING THE PROPERTY TRUSTEE
The Property Trustee, other than during the occurrence and continuance of
an Event of Default, undertakes to perform only such duties as are specifically
set forth in the Trust Agreement and, after such Event of Default, must exercise
the same degree of care and skill as a prudent person would exercise or use in
the conduct of his or her own affairs. Subject to this provision, the Property
Trustee is under no obligation to exercise any of the powers vested in it by the
Trust Agreement at the request of any holder of Capital Securities unless it is
offered reasonable indemnity against the costs, expenses and liabilities that
might be incurred thereby.
For information concerning the relationships between Bankers Trust Company,
the Property Trustee, and the Company, see "Description of Junior Subordinated
Debentures -- Information Concerning the Debenture Trustee."
MISCELLANEOUS
The Administrators and the Property Trustee are authorized and directed to
conduct the affairs of and to operate the Issuer Trust in such a way that the
Issuer Trust will not be deemed to be an "investment company" required to be
registered under the Investment Company Act or taxable other than as a grantor
Trust for United States federal income tax purposes and so that the Junior
Subordinated Debentures will be treated as indebtedness of the Company for
United States federal income tax purposes. In this connection, the Property
Trustee and the holders of Common Securities are authorized to take any action,
not inconsistent with applicable law, the certificate of Trust of the Issuer
Trust or the Trust Agreement, that the Property Trustee and the holders of
Common Securities determine in their discretion to be necessary or desirable for
such purposes, as long as such action does not materially adversely affect the
interests of the holders of the Capital Securities.
Holders of the Capital Securities have no preemptive or similar rights.
The Issuer Trust may not borrow money or issue debt or mortgage or pledge
any of its assets.
GOVERNING LAW
The Trust Agreement will be governed by and construed in accordance with
the laws of the State of Delaware.
DESCRIPTION OF JUNIOR SUBORDINATED DEBENTURES
The Original Junior Subordinated Debentures were issued and the Exchange
Junior Subordinated Debentures are to be issued under the Junior Subordinated
Indenture, under which Bankers Trust Company is acting as Debenture Trustee.
This summary of certain terms and provisions of the Junior Subordinated
Debentures and the Junior Subordinated Indenture does not purport to be complete
and is subject to, and is qualified in its entirety by reference to, all the
provisions of the Junior Subordinated Indenture, including the definitions
therein of certain terms. Whenever particular defined terms of the Junior
Subordinated Indenture
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(as amended or supplemented from time to time) are referred to herein, such
defined terms are incorporated herein by reference.
GENERAL
Concurrently with the issuance of the Original Capital Securities, the
Issuer Trust invested the proceeds thereof, together with the consideration paid
by the Company for the Common Securities, in the Original Junior Subordinated
Debentures issued by the Company. Pursuant to the Exchange Offer, the Company
will exchange the Exchange Junior Subordinated Debentures, in an amount
corresponding to the Original Junior Subordinated Debentures accepted for
exchange, for a like aggregate principal amount of Original Junior Subordinated
Debentures as soon as practicable after the date hereof. The Junior Subordinated
Debentures bear interest, accruing from April 17, 1998, at a rate equal to 8.29%
per annum on the principal amount thereof, payable semi-annually in arrears on
the 15th day of April and October of each year (each, an "Interest Payment
Date"), commencing October 15, 1998, to the person in whose name each Junior
Subordinated Debenture is registered at the close of business on the April 1st
or October 1st (whether or not a Business Day) next preceding such Interest
Payment Date. It is anticipated that, until the liquidation, if any, of the
Issuer Trust, each Junior Subordinated Debenture will be registered in the name
of the Issuer Trust and held by the Property Trustee in Trust for the benefit of
the holders of the Trust Securities. The amount of interest payable for any
period less than a full interest period will be computed on the basis of a
360-day year of twelve 30-day months and the actual days elapsed in a partial
month in such period. The amount of interest payable for any full interest
period will be computed by dividing the rate per annum by two. If any date on
which interest is payable on the Junior Subordinated Debentures is not a
Business Day, then payment of the interest payable on such date will be made on
the next succeeding day that is a Business Day (without any interest or other
payment in respect of any such delay), with the same force and effect as if made
on the date such payment was originally payable. Accrued interest that is not
paid on the applicable Interest Payment Date will bear additional interest on
the amount thereof (to the extent permitted by law) at a rate equal to 8.29% per
annum, compounded semi-annually and computed on the basis of a 360-day year of
twelve 30-day months and the actual days elapsed in a partial month in such
period. The amount of additional interest payable for any full interest period
will be computed by dividing the rate per annum by two. The term "interest" as
used herein includes semi-annual interest payments, interest on semi-annual
interest payments not paid on the applicable Interest Payment Date and
Additional Sums (as defined below), as applicable.
The Junior Subordinated Debentures will mature on April 15, 2028.
The Exchange Junior Subordinated Debentures will rank pari passu with the
Original Junior Subordinated Debentures and will be unsecured and will rank
junior and be subordinate in right of payment to all Senior Indebtedness of the
Company. The Junior Subordinated Debentures will not be subject to a sinking
fund and will not be eligible as collateral for any loan made by the Company.
The Junior Subordinated Indenture does not limit the incurrence or issuance of
other secured or unsecured debt by the Company, including Senior Indebtedness,
whether under the Junior Subordinated Indenture or any existing or other
indenture or agreement that the Company may enter into in the future or
otherwise. See "-- Subordination."
OPTION TO EXTEND INTEREST PAYMENT PERIOD
So long as no Debenture Event of Default has occurred and is continuing,
the Company has the right at any time during the term of the Junior Subordinated
Debentures to defer the payment of interest at any time or from time to time for
a period not exceeding 10 consecutive semi-annual periods with respect to each
Extension Period, provided that no Extension Period may extend beyond the Stated
Maturity of the Junior Subordinated Debentures. At the end of such Extension
Period, the Company must pay all interest then accrued and unpaid (together with
interest thereon at a rate equal to 8.29% per annum, compounded semi-annually
and computed on the basis of a 360-day year of twelve 30-day months and the
actual days elapsed in a partial month in such period, to the extent permitted
by applicable law). The amount of additional interest payable for any full
interest period will be computed by dividing the rate per annum by two. During
an Extension Period, interest will continue to accrue and holders of Junior
Subordinated Debentures (or holders of Capital Securities while outstanding)
will be required to accrue interest income for United States federal
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<PAGE> 56
income tax purposes. See "Certain Federal Income Tax Consequences -- Interest
Income and Original Issue Discount."
During any such Extension Period, the Company may not (i) declare or pay
any dividends or distributions on, or redeem, purchase, acquire or make a
liquidation payment with respect to, any of the Company's capital stock or (ii)
make any payment of principal of or interest or premium, if any, on or repay,
repurchase or redeem any debt securities of the Company that rank pari passu in
all respects with or junior in interest to the Junior Subordinated Debentures
(other than (a) repurchases, redemptions or other acquisitions of shares of
capital stock of the Company 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, in connection with a dividend
reinvestment or shareholder stock purchase plan or in connection with the
issuance of capital stock of the Company (or securities convertible into or
exercisable for such capital stock) as consideration in an acquisition
transaction entered into prior to the applicable Extension Period, (b) as a
result of an exchange or conversion of any class or series of the Company's
capital stock (or any capital stock of a subsidiary of the Company) for any
class or series of the Company's capital stock or of any class or series of the
Company's indebtedness for any class or series of the Company's capital stock,
(c) the purchase of fractional interests in shares of the Company's capital
stock pursuant to the conversion or exchange provisions of such capital stock or
the security being converted or exchanged, (d) any declaration of a dividend in
connection with any shareholder's rights plan, or the issuance of rights, stock
or other property under any shareholders 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 ranks pari passu with or junior to
such stock). Prior to the termination of any such Extension Period, the Company
may further defer the payment of interest, provided that no Extension Period may
exceed 10 consecutive semi-annual periods or extend beyond the Stated Maturity
of the Junior Subordinated Debentures. Upon the termination of any such
Extension Period and the payment of all amounts then due, the Company may elect
to begin a new Extension Period subject to the above conditions. No interest
shall be due and payable during an Extension Period, except at the end thereof.
The Company must give the Issuer Trustees notice of its election of such
Extension Period at least one Business Day prior to the earlier of (i) the date
the Distributions on the Capital Securities would have been payable but for the
election to begin such Extension Period and (ii) the date the Property Trustee
is required to give notice to holders of the Capital Securities of the record
date or the date such Distributions are payable, but in any event not less than
one Business Day prior to such record date. The Property Trustee will give
notice of the Company's election to begin a new Extension Period to the holders
of the Capital Securities. There is no limitation on the number of times that
the Company may elect to begin an Extension Period.
REDEMPTION
The Junior Subordinated Debentures are redeemable prior to maturity at the
option of the Company (i) on or after April 15, 2008, in whole at any time or in
part from time to time, or (ii) in whole, but not in part, at any time within 90
days following the occurrence and during the continuation of a Tax Event,
Investment Company Event or Capital Treatment Event (each as defined under
"Description of Capital Securities -- Redemption"), in each case at the
redemption price described below. The proceeds of any such redemption will be
used by the Issuer Trust to redeem the Capital Securities.
The Federal Reserve's risk-based capital guidelines, which are subject to
change, currently provide that redemptions of permanent equity or other capital
instruments before stated maturity could have a significant impact on a bank
holding company's overall capital structure and that any organization
considering such a redemption should consult with the Federal Reserve before
redeeming any equity or capital instrument prior to maturity if such redemption
could have a material effect on the level or composition of the organization's
capital base (unless the equity or capital instrument were redeemed with the
proceeds of, or replaced by, a like amount of a similar or higher quality
capital instrument and the Federal Reserve considers the organization's capital
position to be fully adequate after the redemption).
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<PAGE> 57
The redemption of the Junior Subordinated Debentures by the Company prior
to their Stated Maturity would constitute the redemption of capital instruments
under the Federal Reserve's current risk-based capital guidelines and may be
subject to the prior approval of the Federal Reserve.
The Redemption Price for Junior Subordinated Debentures in the case of a
redemption under (i) above shall equal the following prices, expressed in
percentages of the principal amount, together with accrued interest to but
excluding the date fixed for redemption. If redeemed during the 12-month period
beginning April 15:
<TABLE>
<CAPTION>
YEAR REDEMPTION PRICE
---- ----------------
<S> <C>
2008........................................................ 104.1450%
2009........................................................ 103.7305%
2010........................................................ 103.3160%
2011........................................................ 102.9015%
2012........................................................ 102.4870%
2013........................................................ 102.0725%
2014........................................................ 101.6580%
2015........................................................ 101.2435%
2016........................................................ 100.8290%
2017........................................................ 100.4145%
</TABLE>
and at 100% on or after April 15, 2018.
The Redemption Price in the case of a redemption on or after April 15, 2008
following a Tax Event, Investment Company Event or Capital Treatment Event shall
equal the Redemption Price then applicable to a redemption under (i) above. The
Redemption Price for Junior Subordinated Debentures, in the case of a redemption
prior to April 15, 2008 following a Tax Event, Investment Company Event or
Capital Treatment Event as described under (ii) above, will equal the Make-Whole
Amount (as defined under "Description of Capital Securities -- Redemption"),
together with accrued interest to but excluding the date fixed for redemption.
ADDITIONAL SUMS
The Company generally has covenanted in the Junior Subordinated Indenture
that, if and for so long as (i) the Issuer Trust is the holder of all Junior
Subordinated Debentures and (ii) the Issuer Trust is required to pay any
additional taxes, duties or other governmental charges as a result of a Tax
Event, the Company will pay as additional sums on the Junior Subordinated
Debentures such amounts as may be required so that the Distributions payable by
the Issuer Trust will not be reduced as a result of any such additional taxes,
duties or other governmental charges. See "Description of Capital
Securities -- Redemption."
REGISTRATION, DENOMINATION AND TRANSFER
The Junior Subordinated Debentures will initially be registered in the name
of the Issuer Trust. If the Junior Subordinated Debentures are distributed to
holders of Capital Securities, it is anticipated that the depositary
arrangements for the Junior Subordinated Debentures will be substantially
identical to those in effect for the Capital Securities. See "Description of
Capital Securities -- Book Entry, Delivery and Form."
Although DTC has agreed to the procedures described above, it is under no
obligation to perform or continue to perform such procedures, and such
procedures may be discontinued at any time. If DTC is at any time unwilling or
unable to continue as depositary and a successor depositary is not appointed by
the Company within 90 days of receipt of notice from DTC to such effect, the
Company will cause the Junior Subordinated Debentures to be issued in definitive
form.
Payments on Junior Subordinated Debentures represented by a global security
will be made to Cede, the nominee for DTC, as the registered holder of the
Junior Subordinated Debentures, as described under "Description of the Capital
Securities -- Book-Entry, Delivery and Form." If Junior Subordinated Deben-
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<PAGE> 58
tures are issued in certificated form, principal and interest will be payable,
the transfer of the Junior Subordinated Debentures will be registrable, and
Junior Subordinated Debentures will be exchangeable for Junior Subordinated
Debentures of other authorized denominations of a like aggregate principal
amount, at the corporate Trust office of the Debenture Trustee in New York, New
York or at the offices of any Paying Agent or transfer agent appointed by the
Company, provided that payment of interest may be made at the option of the
Company by check mailed to the address of the persons entitled thereto. However,
a holder of $1 million or more in aggregate principal amount of Junior
Subordinated Debentures may receive payments of interest (other than interest
payable at the Stated Maturity) by wire transfer of immediately available funds
upon written request to the Debenture Trustee not later than 15 calendar days
prior to the date on which the interest is payable.
The Junior Subordinated Debentures will be issuable only in registered form
without coupons in integral multiples of $1,000. The minimum purchase
requirement will be $100,000 (100 Junior Subordinated Debentures). Junior
Subordinated Debentures will be exchangeable for other Junior Subordinated
Debentures of like tenor, of any authorized denominations, and of a like
aggregate principal amount.
Junior Subordinated Debentures may be presented for exchange as provided
above, and may be presented for registration of transfer (with the form of
transfer endorsed thereon, or a satisfactory written instrument of transfer,
duly executed), at the office of the securities registrar appointed under the
Junior Subordinated Indenture or at the office of any transfer agent designated
by the Company for such purpose without service charge and upon payment of any
taxes and other governmental charges as described in the Junior Subordinated
Indenture. The Company will appoint the Debenture Trustee as securities
registrar under the Junior Subordinated Indenture. The Company may at any time
designate additional transfer agents with respect to the Junior Subordinated
Debentures.
In the event of any redemption, neither the Company nor the Debenture
Trustee shall be required to (i) issue, register the transfer of or exchange
Junior Subordinated Debentures during a period beginning at the opening of
business 15 days before the day of selection for redemption of the Junior
Subordinated Debentures to be redeemed and ending at the close of business on
the day of mailing of the relevant notice of redemption or (ii) to register the
transfer or exchange of any Junior Subordinated Debentures so selected for
redemption, except, in the case of any Junior Subordinated Debentures being
redeemed in part, any portion thereof not to be redeemed.
Any monies deposited with the Debenture Trustee or any paying agent, or
then held by the Company in Trust, for the payment of the principal of (and
premium, if any) or interest on any Junior Subordinated Debenture and remaining
unclaimed for two years after such principal (and premium, if any) or interest
has become due and payable shall, at the request of the Company, be repaid to
the Company and the holder of such Junior Subordinated Debenture shall
thereafter look, as a general unsecured creditor, only to the Company for
payment thereof.
RESTRICTIONS ON CERTAIN PAYMENTS; CERTAIN COVENANTS OF THE COMPANY
The Company has covenanted that it will not (i) declare or pay any
dividends or distributions on, or redeem, purchase, acquire, or make a
liquidation payment with respect to, any of the Company's capital stock or (ii)
make any payment of principal of or interest or premium, if any, on or repay,
repurchase or redeem any debt securities of the Company that rank pari passu in
all respects with or junior in interest to the Junior Subordinated Debentures
(other than (a) repurchases, redemptions or other acquisitions of shares of
capital stock of the Company 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, in connection with a dividend
reinvestment or shareholder stock purchase plan or in connection with the
issuance of capital stock of the Company (or securities convertible into or
exercisable for such capital stock) as consideration in an acquisition
transaction entered into prior to the applicable Extension Period or other event
referred to below, (b) as a result of an exchange or conversion of any class or
series of the Company's capital stock (or any capital stock of a subsidiary of
the Company) for any class or series of the Company's capital stock or of any
class or series of the Company's indebtedness for any class or series of the
Company's capital stock, (c) the
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<PAGE> 59
purchase of fractional interests in shares of the Company's capital stock
pursuant to the conversion or exchange provisions of such capital stock or the
security being converted or exchanged, (d) any declaration of a dividend in
connection with any shareholder's rights plan, or the issuance of rights, stock
or other property under any shareholder'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 ranks pari passu with or junior to
such stock), if at such time (x) there has occurred any event (1) of which the
Company has actual knowledge that with the giving of notice or the lapse of
time, or both, would constitute a Debenture Event of Default and (2) that the
Company has not taken reasonable steps to cure, (y) if the Junior Subordinated
Debentures are held by the Issuer Trust, the Company is in default with respect
to its payment of any obligations under the Guarantee or (z) the Company has
given notice of its election of an Extension Period as provided in the Junior
Subordinated Indenture and has not rescinded such notice, or such Extension
Period, or any extension thereof, is continuing.
The Company has covenanted in the Junior Subordinated Indenture (i) to
continue to hold, directly or indirectly, 100% of the Common Securities,
provided that certain successors that are permitted pursuant to the Junior
Subordinated Indenture may succeed to the Company's ownership of the Common
Securities, (ii) as holder of the Common Securities, not to voluntarily
terminate, windup or liquidate the Issuer Trust, other than (a) in connection
with a distribution of Junior Subordinated Debentures to the holders of the
Capital Securities in liquidation of the Issuer Trust or (b) in connection with
certain mergers, consolidations or amalgamations permitted by the Trust
Agreement and (iii) to use its reasonable efforts, consistent with the terms and
provisions of the Trust Agreement, to cause the Issuer Trust to continue to be
taxable as a grantor Trust for United States federal income tax purposes.
MODIFICATION OF JUNIOR SUBORDINATED INDENTURE
From time to time, the Company and the Debenture Trustee may, without the
consent of any of the holders of the outstanding Junior Subordinated Debentures,
amend, waive or supplement the provisions of the Junior Subordinated Indenture
to generally: (i) evidence succession of another corporation or association to
the Company and the assumption by such person of the obligations of the Company
under the Junior Subordinated Indenture and the Junior Subordinated Debentures;
(ii) add further covenants, restrictions or conditions for the protection of
holders of the Junior Subordinated Debentures; (iii) cure ambiguities or correct
the Junior Subordinated Debentures in the case of defects or inconsistencies in
the provisions thereof, so long as any such cure or correction does not
adversely affect the interest of the holders of the Junior Subordinated
Debentures in any material respect; (iv) change the terms of the Junior
Subordinated Indentures to facilitate the issuance of the Junior Subordinated
Debentures in certificated or other definitive form; (v) evidence or provide for
the appointment of a successor Debenture Trustee; (vi) qualify, or maintain the
qualification of, the Junior Subordinated Indenture under the Trust Indenture
Act; (vii) convey, transfer, assign, mortgage or pledge any property to or with
the Debenture Trustee or to surrender any right or power conferred on the
Company in the Junior Subordinated Indenture; (viii) establish the form or terms
of Junior Subordinated Debentures; or (ix) change or eliminate any provision of
the Junior Subordinated Indenture, so long as at the time of such change there
are no outstanding Junior Subordinated Debentures entitled to the benefit of
such provision or such change does not apply to then outstanding Junior
Subordinated Debentures. The Junior Subordinated Indenture contains provisions
permitting the Company and the Debenture Trustee, with the consent of the
holders of not less than a majority in principal amount of the Junior
Subordinated Debentures, to modify the Junior Subordinated Indenture in a manner
affecting the rights of the holders of the Junior Subordinated Debentures,
except that no such modification may, without the consent of the holder of each
outstanding Junior Subordinated Debenture so affected, (i) change the Stated
Maturity of the principal of, or any installment of interest on, the Junior
Subordinated Debentures, or reduce the principal amount thereof, the rate of
interest thereon or any premium payable upon the redemption thereof, or change
the place of payment where, or the currency in which, any such amount is payable
or impair the right to institute suit for the enforcement of any Junior
Subordinated Debenture or (ii) reduce the percentage of principal amount of
outstanding Junior Subordinated Debentures, the holders of which are required to
consent to any such modification of the Junior Subordinated Indenture.
Furthermore, so long as any of the Capital Securities
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<PAGE> 60
remain outstanding, no such modification may be made that adversely affects the
holders of such Capital Securities in any material respect, and no termination
of the Junior Subordinated Indenture may occur, and no waiver of any Debenture
Event of Default or compliance with any covenant under the Junior Subordinated
Indenture may 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 premium, if any, on) the
Junior Subordinated Debentures and all accrued and unpaid interest thereon have
been paid in full and certain other conditions are satisfied.
DEBENTURE EVENTS OF DEFAULT
The Junior Subordinated Indenture provides that any one or more of the
following described events with respect to the Junior Subordinated Debentures
that has occurred and is continuing constitutes an "Event of Default" with
respect to the Junior Subordinated Debentures:
(i) failure to pay any interest on the Junior Subordinated Debentures
when due and payable, and continuance of such default for a period of 30
days (subject to the deferral of any due date in the case of an Extension
Period); or
(ii) failure to pay any principal of or premium, if any, on the Junior
Subordinated Debentures when due whether at maturity, upon redemption, by
declaration of acceleration or otherwise; or
(iii) failure to duly observe or perform in any material respect
certain other covenants contained in the Junior Subordinated Indenture for
90 days after written notice to the Company from the Debenture Trustee or
the holders of at least 25% in aggregate outstanding principal amount of
the outstanding Junior Subordinated Debentures; or
(iv) certain events in bankruptcy, insolvency or reorganization of the
Company.
For purposes of the Trust Agreement and this Prospectus, each such Event of
Default under the Junior Subordinated Debenture is referred to as a "Debenture
Event of Default." As described in "Description of Exchange Capital Securities
- -- Events of Default; Notice," the occurrence of a Debenture Event of Default
will also constitute an Event of Default in respect of the Trust Securities.
The holders of at least a majority in aggregate principal amount of
outstanding Junior Subordinated Debentures have the right to direct the time,
method and place of conducting any proceeding for any remedy available to the
Debenture Trustee. The Debenture Trustee or the holders of not less than 25% in
aggregate principal amount of outstanding Junior Subordinated Debentures may
declare the principal due and payable upon a Debenture Event of Default, which
is continuing and, should the Debenture Trustee or such holders of Junior
Subordinated Debentures fail to make such declaration, the holders of at least
25% in aggregate Liquidation Amount of the outstanding Capital Securities shall
have such right. The holders of a majority in aggregate principal amount of
outstanding Junior Subordinated Debentures may annul such declaration and waive
the default if all defaults (other than the non-payment of the principal of
Junior Subordinated Debentures which has become due solely by such acceleration)
have been cured or waived and a sum sufficient to pay all matured installments
of interest and principal due otherwise than by acceleration has been deposited
with the Debenture Trustee. Should the holders of Junior Subordinated Debentures
fail to annul such declaration and waive such default, the holders of a majority
in aggregate Liquidation Amount of the outstanding Capital Securities shall have
such right.
The holders of at least a majority in aggregate principal amount of the
outstanding Junior Subordinated Debentures affected thereby, and the holders of
a majority in aggregate Liquidation Amount of the Capital Securities issued by
the Issuer Trust, may, on behalf of the holders of all the Junior Subordinated
Debentures, waive any past default, except a default in the payment of principal
(or premium, if any) or interest (unless such default has been cured and a sum
sufficient to pay all matured installments of interest and principal due
otherwise than by acceleration has been deposited with the Debenture Trustee) or
a default in respect of a covenant or provision which under the Junior
Subordinated Indenture cannot be modified or amended without the consent of the
holder of each outstanding Junior Subordinated Debenture affected thereby. See
"-- Modification of Junior Subordinated Indenture." The Company is required to
file annually with the
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Debenture Trustee a certificate as to whether or not the Company is in
compliance with all the conditions and covenants applicable to it under the
Junior Subordinated Indenture.
If a Debenture Event of Default occurs and is continuing, the Property
Trustee will have the right to declare the principal of and the interest on the
Junior Subordinated Debentures, and any other amounts payable under the Junior
Subordinated Indenture, to be forthwith due and payable and to enforce its other
rights as a creditor with respect to the Junior Subordinated Debentures.
ENFORCEMENT OF CERTAIN RIGHTS BY HOLDERS OF CAPITAL SECURITIES
If a Debenture Event of Default has occurred and is continuing and such
event is attributable to the failure of the Company to pay any amounts payable
in respect of the Junior Subordinated Debentures on the date such amounts are
otherwise payable, a registered holder of Capital Securities may institute a
legal proceeding directly against the Company for enforcement of payment to such
holder of an amount equal to the amount payable in respect of Junior
Subordinated Debentures having a principal amount equal to the aggregate
Liquidation Amount of the Capital Securities held by such holder (a "Direct
Action"). The Company may not amend the Junior Subordinated Indenture to remove
the foregoing right to bring a Direct Action without the prior written consent
of the holders of all the Capital Securities. The Company will have the right
under the Junior Subordinated Indenture to set-off any payment made to such
holder of Capital Securities by the Company in connection with a Direct Action.
With certain exceptions, the holders of the Capital Securities would not be
able to exercise directly any remedies available to the holders of the Junior
Subordinated Debentures except under the circumstances described in the
preceding paragraph. See "Description of Capital Securities -- Events of
Default; Notice."
CONSOLIDATION, MERGER, SALE OF ASSETS AND OTHER TRANSACTIONS
The Junior Subordinated Indenture provides that the Company may 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, and no Person
may consolidate with or merge into the Company or convey, transfer or lease its
properties and assets substantially as an entirety to the Company, unless (i) if
the Company consolidates with or merges into another Person or conveys,
transfers or leases its properties and assets substantially as an entirety to
any Person, the successor Person is organized under the laws of the United
States or any state thereof or the District of Columbia, and such successor
Person expressly assumes the Company's obligations in respect of the Junior
Subordinated Debentures; (ii) immediately after giving effect thereto, no
Debenture Event of Default, and no event which, after notice or lapse of time or
both, would constitute a Debenture Event of Default, has occurred and is
continuing; and (iii) certain other conditions as prescribed in the Junior
Subordinated Indenture are satisfied.
The provisions of the Junior Subordinated Indenture do not afford holders
of the Junior Subordinated Debentures protection in the event of a highly
leveraged or other transaction involving the Company that may adversely affect
holders of the Junior Subordinated Debentures.
SATISFACTION AND DISCHARGE
The Junior Subordinated Indenture provides that when, among other things,
all Junior Subordinated Debentures not previously delivered to the Debenture
Trustee for cancellation (i) (A) have become due and payable or (B) will become
due and payable at the Stated Maturity within one year or (C) are to be called
for redemption within one year under arrangements satisfactory to the Debenture
Trustee, and (ii) the Company deposits or causes to be deposited with the
Debenture Trustee funds, in Trust, for the purpose and in an amount sufficient
to pay and discharge the entire indebtedness on the Junior Subordinated
Debentures not previously delivered to the Debenture Trustee for cancellation,
for the principal (and premium, if any) and interest (including any additional
interest) to the date of the deposit or to the Stated Maturity, as the case may
be, then the Junior Subordinated Indenture will cease to be of further effect
(except as to the Company's obligations to pay all other sums due pursuant to
the Junior Subordinated Indenture and to provide the
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officers' certificates and opinions of counsel described therein), and the
Company will be deemed to have satisfied and discharged the Junior Subordinated
Indenture.
SUBORDINATION
The Original Subordinated Debentures are, and the Exchange Subordinated
Debentures will be, subordinate and junior in right of payment, to the extent
set forth in the Junior Subordinated Indenture, to all Senior Indebtedness (as
defined below) of the Company. If the Company defaults in the payment of any
principal, premium, if any, or interest, if any, on any Senior Indebtedness when
the same becomes due and payable, whether at maturity or at a date fixed for
redemption or by declaration of acceleration or otherwise, then, unless and
until such default has been cured or waived or has ceased to exist or all Senior
Indebtedness has been paid, no direct or indirect payment (in cash, property,
securities, by setoff or otherwise) may be made or agreed to be made on the
Junior Subordinated Debentures, or in respect of any redemption, repayment,
retirement, purchase or other acquisition of any of the Junior Subordinated
Debentures.
As used herein, "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,
including obligations incurred in connection with the acquisition of property,
assets or businesses; (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) every
obligation of the Company for claims (as defined in Section 101(4) of the United
States Bankruptcy 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 the payment of which the Company has
guaranteed or is responsible or liable, directly or indirectly, as obligor or
otherwise. At March 31, 1998, the Company's Senior Indebtedness aggregated
approximately $488.3 million. See "Risk Factors -- Status of the Company as a
Bank Holding Company." "Senior Indebtedness" shall not include (i) any
obligations which, by their terms, are expressly stated to rank pari passu in
right of payment with, or to not be superior in right of payment to, the Junior
Subordinated Debentures, (ii) any indebtedness of the Company which when
incurred and without respect to any election under Section 1111(b) of the United
States Bankruptcy Code of 1978, as amended, was without recourse to the Company,
(iii) any indebtedness of the Company to any of its subsidiaries, (iv)
indebtedness to any executive officer or director of the Company, or (v) any
indebtedness 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.
In the event of (i) certain events of bankruptcy, dissolution or
liquidation of the Company or the holder of the Common Securities, (ii) any
proceeding for the liquidation, dissolution or other winding up of the Company,
voluntary or involuntary, whether or not involving insolvency or bankruptcy
proceedings, (iii) any assignment by the Company for the benefit of creditors or
(iv) any other marshaling of the assets of the Company, all Senior Indebtedness
(including any interest thereon accruing after the commencement of any such
proceedings) shall first be paid in full before any payment or distribution,
whether in cash, securities or other property, shall be made on account of the
Junior Subordinated Debentures. In such event, any payment or distribution on
account of the Junior Subordinated Debentures, whether in cash, securities or
other property, that would otherwise (but for the subordination provisions) be
payable or deliverable in respect of the Junior Subordinated Debentures will be
paid or delivered directly to the holders of Senior Indebtedness in accordance
with the priorities then existing among such holders until all Senior
Indebtedness (including any interest thereon accruing after the commencement of
any such proceedings) has been paid in full.
In the event of any such proceeding, after payment in full of all sums
owing with respect to Senior Indebtedness, the holders of Junior Subordinated
Debentures, together with the holders of any obligations of the Company ranking
on a parity with the Junior Subordinated Debentures, will be entitled to be paid
from
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the remaining assets of the Company the amounts at the time due and owing on the
Junior Subordinated Debentures and such other obligations before any payment or
other distribution, whether in cash, property or otherwise, will be made on
account of any capital stock or obligations of the Company ranking junior to the
Junior Subordinated Debentures and such other obligations. If any payment or
distribution on account of the Junior Subordinated Debentures of any character
or any security, whether in cash, securities or other property is received by
any holder of any Junior Subordinated Debentures in contravention of any of the
terms hereof and before all the Senior Indebtedness has been paid in full, such
payment or distribution or security will be received in Trust for the benefit
of, and must be paid over or delivered and transferred to, the holders of the
Senior Indebtedness at the time outstanding in accordance with the priorities
then existing among such holders for application to the payment of all Senior
Indebtedness remaining unpaid to the extent necessary to pay all such Senior
Indebtedness in full. By reason of such subordination, in the event of the
insolvency of the Company, holders of Senior Indebtedness may receive more,
ratably, and holders of the Junior Subordinated Debentures may receive less,
ratably, than the other creditors of the Company. Such subordination will not
prevent the occurrence of any Event of Default in respect of the Junior
Subordinated Debentures.
The Junior Subordinated Indenture places no limitation on the amount of
additional Senior Indebtedness that may be incurred by the Company. The Company
expects from time to time to incur additional indebtedness constituting Senior
Indebtedness.
INFORMATION CONCERNING THE DEBENTURE TRUSTEE
The Debenture Trustee, other than during the occurrence and continuance of
a Debenture Event of Default, undertakes to perform only such duties as are
specifically set forth in the Junior Subordinated Indenture, is under no
obligation to exercise any of the powers vested in it by the Junior Subordinated
Indenture and, after such Event of Default, must exercise the same degree of
care and skill as a prudent person would exercise in the conduct of his or her
own affairs. The Debenture Trustee is not required to expend or risk its own
funds or otherwise incur personal financial liability in the performance of its
duties if the Debenture Trustee reasonably believes that repayment or adequate
indemnity is not reasonably assured to it.
Bankers Trust Company, the Debenture Trustee, may serve from time to time
as trustee under other indentures or Trust agreements with the Company or its
subsidiaries relating to other issues of their securities. In addition, the
Company and certain of its affiliates may have other banking relationships with
Bankers Trust Company and its affiliates.
RESTRICTIONS ON TRANSFER
The Exchange Junior Subordinated Debentures (and the Exchange Junior
Subordinated Debentures were) will be, issued, and may be transferred only, in
blocks having an aggregate principal amount of not less than $100,000 (100
Junior Subordinated Debentures). Any such transfer of Junior Subordinated
Debentures in a block having an aggregate principal amount of less than $100,000
shall be deemed to be void and of no legal effect whatsoever. Any such
transferee shall be deemed not to be the holder of such Junior Subordinated
Debentures for any purpose, including but not limited to the receipt of payments
on such Junior Subordinated Debentures, and such transferee shall be deemed to
have no interest whatsoever in such Junior Subordinated Debentures.
GOVERNING LAW
The Junior Subordinated Indenture and the Junior Subordinated Debentures
will be governed by and construed in accordance with the laws of the State of
New York.
DESCRIPTION OF GUARANTEE
The Original Guarantee was executed and delivered by the Company
concurrently with the issuance of Original Capital Securities by the Trust for
the benefit of the holders from time to time of the Original Capital Securities.
The Exchange Guarantee will be executed and delivered by the Company
concurrently with the
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issuance of the Exchange Capital Securities by the Trust for the benefit of the
holders from time to time of the Exchange Capital Securities. As soon as
practicable after the date hereof, the Exchange Guarantee will be exchanged by
the Company for the Original Guarantee for the benefit of the holders from time
to time of the Exchange Capital Securities. Bankers Trust Company will act as
Guarantee Trustee under the Guarantee. This summary of certain provisions of the
Exchange Guarantee and the Original Guarantee does not purport to be complete
and is subject to, and qualified in its entirety by reference to, all the
provisions of the Guarantee, including the definitions therein of certain terms.
A copy of the form of Guarantee is available upon request from the Guarantee
Trustee. The Guarantee Trustee will hold the Guarantee for the benefit of the
holders of the Capital Securities.
GENERAL
The Company has irrevocably agreed, with respect to the Original Guarantee,
and will irrevocably agree with respect to the Exchange Guarantee, to pay in
full on a subordinated basis, to the extent set forth herein, the Guarantee
Payments (as defined below) to the holders of the Capital Securities, as and
when due, regardless of any defense, right of set-off or counterclaim that the
Issuer Trust may have or assert other than the defense of payment. The following
payments with respect to the Capital Securities, to the extent not paid by or on
behalf of the Issuer Trust (the "Guarantee Payments"), will be subject to the
Guarantee: (i) any accumulated and unpaid Distributions required to be paid on
such Capital Securities, to the extent that the Issuer Trust has funds on hand
available therefor at such time; (ii) the Redemption Price with respect to any
Capital Securities called for redemption, to the extent that the Issuer Trust
has funds on hand available therefor at such time; and (iii) upon a voluntary or
involuntary dissolution, winding up or liquidation of the Issuer Trust (unless
the Junior Subordinated Debentures are distributed to holders of the Capital
Securities), the lesser of (a) the aggregate of the Liquidation Amount and all
accumulated and unpaid Distributions to the date of payment, to the extent that
the Issuer Trust has funds on hand available therefor at such time, and (b) the
amount of assets of the Issuer Trust remaining available for distribution to
holders of the Capital Securities on liquidation of the Issuer Trust. The
Company's obligation to make a Guarantee Payment may be satisfied by direct
payment of the required amounts by the Company to the holders of the Capital
Securities or by causing the Issuer Trust to pay such amounts to such holders.
The Original Guarantee, with respect to the Original Capital Securities,
and the Exchange Guarantee, with respect to the Exchange Capital Securities,
will be an irrevocable guarantee on a subordinated basis of the Issuer Trust's
obligations under the Capital Securities, but will apply only to the extent that
the Issuer Trust has funds sufficient to make such payments, and is not a
guarantee of collection.
If the Company does not make payments on the Junior Subordinated Debentures
held by the Issuer Trust, the Issuer Trust will not be able to pay any amounts
payable in respect of the Capital Securities and will not have funds legally
available therefor. The Guarantee will rank subordinate and junior in right of
payment to all Senior Indebtedness of the Company. See "-- Status of the
Exchange Guarantee." The Guarantee does not limit the incurrence or issuance of
other secured or unsecured debt of the Company, including Senior Indebtedness,
whether under the Junior Subordinated Indenture, any other indenture that the
Company may enter into in the future or otherwise.
The Company has, through the Guarantee, the Trust Agreement, the Junior
Subordinated Debentures and the Junior Subordinated Indenture, taken together,
fully, irrevocably and unconditionally guaranteed all the Issuer Trust's
obligations under the Capital Securities. No single document standing alone or
operating in conjunction with fewer than all the other documents constitutes
such guarantee. It is only the combined operation of these documents that has
the effect of providing a full, irrevocable and unconditional guarantee of the
Issuer Trust's obligations in respect of the Capital Securities. See
"Relationship Among the Capital Securities, the Junior Subordinated Debentures
and the Guarantee."
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STATUS OF THE EXCHANGE GUARANTEE
The Exchange Guarantee will constitute an unsecured obligation of the
Company and will rank subordinate and junior in right of payment to all Senior
Indebtedness of the Company in the same manner as the Junior Subordinated
Debentures.
The Exchange Guarantee will constitute a guarantee of payment and not of
collection (i.e., the guaranteed party may institute a legal proceeding directly
against the Guarantor to enforce its rights under the Guarantee without first
instituting a legal proceeding against any other person or entity). The
Guarantee will be held by the Guarantee Trustee for the benefit of the holders
of the Capital Securities. The Guarantee will not be discharged except by
payment of the Guarantee Payments in full to the extent not paid by the Issuer
Trust or distribution to the holders of the Capital Securities or the Junior
Subordinated Debentures.
AMENDMENTS AND ASSIGNMENT
Except with respect to any changes which do not materially adversely affect
the rights of holders of the Capital Securities (in which case no vote will be
required), the Guarantee may not be amended without the prior approval of the
holders of not less than a majority of the aggregate Liquidation Amount of the
Capital Securities. The manner of obtaining any such approval will be as set
forth under "Description of the Capital Securities -- Voting Rights; Amendment
of the Trust Agreement." All guarantees and agreements contained in the
Guarantee shall bind the successors, assigns, receivers, trustees and
representatives of the Company and shall inure to the benefit of the holders of
the Capital Securities then outstanding.
EVENTS OF DEFAULT
An event of default under the Guarantee will occur upon the failure of the
Company to perform any of its payment or other obligations thereunder, or to
perform any non-payment obligation if such non-payment default remains
unremedied for 30 days. The holders of not less than a majority in aggregate
Liquidation Amount of the Capital Securities have the right to direct the time,
method and place of conducting any proceeding for any remedy available to the
Guarantee Trustee in respect of the Guarantee or to direct the exercise of any
Trust or power conferred upon the Guarantee Trustee under the Guarantee.
Any registered holder of Capital Securities may institute a legal
proceeding directly against the Company to enforce its rights under the
Guarantee without first instituting a legal proceeding against the Issuer Trust,
the Guarantee Trustee or any other person or entity.
The Company, as guarantor, is required to file annually with the Guarantee
Trustee a certificate as to whether or not the Company is in compliance with all
the conditions and covenants applicable to it under the Guarantee.
INFORMATION CONCERNING THE GUARANTEE TRUSTEE
The Guarantee Trustee, other than during the occurrence and continuance of
a default by the Company in performance of the Guarantee, undertakes to perform
only such duties as are specifically set forth in the Guarantee and, after the
occurrence of an event of default with respect to the Guarantee, must exercise
the same degree of care and skill as a prudent person would exercise or use in
the conduct of his or her own affairs. Subject to this provision, the Guarantee
Trustee is under no obligation to exercise any of the powers vested in it by the
Guarantee at the request of any holder of the Capital Securities unless it is
offered reasonable indemnity against the costs, expenses and liabilities that
might be incurred thereby.
For information concerning the relationship between Bankers Trust Company,
the Guarantee Trustee, and the Company, see "Description of Junior Subordinated
Debentures -- Information Concerning the Debenture Trustee."
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TERMINATION OF THE EXCHANGE GUARANTEE
The Guarantee will terminate and be of no further force and effect upon
full payment of the Redemption Price of the Capital Securities, upon full
payment of the amounts payable with respect to the Capital Securities upon
liquidation of the Issuer Trust or upon distribution of Junior Subordinated
Debentures to the holders of the Capital Securities. The Guarantee will continue
to be effective or will be reinstated, as the case may be, if at any time any
holder of the Capital Securities must restore payment of any sums paid under the
Capital Securities or the Guarantee.
GOVERNING LAW
The Guarantee is governed by and construed in accordance with the laws of
the State of New York.
RELATIONSHIP AMONG THE CAPITAL SECURITIES, THE JUNIOR
SUBORDINATED DEBENTURES AND THE GUARANTEE
FULL AND UNCONDITIONAL GUARANTEE
Payments of Distributions and other amounts due on the Capital Securities
(to the extent the Issuer Trust has funds available for such payment) are
irrevocably guaranteed by the Company as and to the extent set forth under
"Description of Guarantee." Taken together, the Company's obligations under the
Junior Subordinated Debentures, the Junior Subordinated Indenture, the Trust
Agreement and the Guarantee provide, in the aggregate, a full, irrevocable and
unconditional guarantee of payments of Distributions and other amounts due on
the Capital Securities. No single document standing alone or operating in
conjunction with fewer than all the other documents constitutes such guarantee.
It is only the combined operation of these documents that has the effect of
providing a full, irrevocable and unconditional guarantee of the Issuer Trust's
obligations in respect of the Capital Securities. If and to the extent that the
Company does not make payments on the Junior Subordinated Debentures, the Issuer
Trust will not have sufficient funds to pay Distributions or other amounts due
on the Capital Securities. The Guarantee does not cover payment of amounts
payable with respect to the Capital Securities when the Issuer Trust does not
have sufficient funds to pay such amounts. In such event, the remedy of a holder
of the Capital Securities is to institute a legal proceeding directly against
the Company for enforcement of payment of the Company's obligations under Junior
Subordinated Debentures having a principal amount equal to the Liquidation
Amount of the Capital Securities held by such holder.
The obligations of the Company under the Junior Subordinated Debentures and
the Guarantee are subordinate and junior in right of payment to all Senior
Indebtedness.
SUFFICIENCY OF PAYMENTS
As long as payments are made when due on the Junior Subordinated
Debentures, such payments will be sufficient to cover Distributions and other
payments distributable on the Capital Securities, primarily because: (i) the
aggregate principal amount of the Junior Subordinated Debentures will be equal
to the sum of the aggregate stated Liquidation Amount of the Capital Securities
and Common Securities; (ii) the interest rate and interest and other payment
dates on the Junior Subordinated Debentures will match the Distribution rate,
Distribution Dates and other payment dates for the Capital Securities; (iii) the
Company will pay for all and any costs, expenses and liabilities of the Issuer
Trust except the Issuer Trust's obligations to holders of the Trust Securities;
and (iv) the Trust Agreement further provides that the Issuer Trust will not
engage in any activity that is not consistent with the limited purposes of the
Issuer Trust.
Notwithstanding anything to the contrary in the Junior Subordinated
Indenture, the Company has the right to set-off any payment it is otherwise
required to make thereunder against and to the extent the Company has
theretofore made, or is concurrently on the date of such payment making, a
payment under the Guarantee.
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ENFORCEMENT RIGHTS OF HOLDERS OF EXCHANGE CAPITAL SECURITIES
A holder of any Capital Security may institute a legal proceeding directly
against the Company to enforce its rights under the Guarantee without first
instituting a legal proceeding against the Guarantee Trustee, the Issuer Trust
or any other person or entity. See "Description of Guarantee."
A default or event of default under any Senior Indebtedness of the Company
would not constitute a default or Event of Default in respect of the Capital
Securities. However, in the event of payment defaults under, or acceleration of,
Senior Indebtedness of the Company, the subordination provisions of the Junior
Subordinated Indenture provide that no payments may be made in respect of the
Junior Subordinated Debentures until such Senior Indebtedness has been paid in
full or any payment default thereunder has been cured or waived. See
"Description of Junior Subordinated Debentures -- Subordination."
LIMITED PURPOSE OF ISSUER TRUST
The Capital Securities represent preferred undivided beneficial interests
in the assets of the Issuer Trust, and the Issuer Trust exists for the sole
purpose of issuing its Capital Securities and Common Securities and investing
the proceeds thereof in Junior Subordinated Debentures. A principal difference
between the rights of a holder of a Capital Security and a holder of a Junior
Subordinated Debenture is that a holder of a Junior Subordinated Debenture is
entitled to receive from the Company payments on Junior Subordinated Debentures
held, while a holder of Capital Securities is entitled to receive Distributions
or other amounts distributable with respect to the Capital Securities from the
Issuer Trust (or from the Company under the Guarantee) only if and to the extent
the Issuer Trust has funds available for the payment of such Distributions.
RIGHTS UPON DISSOLUTION
Upon any voluntary or involuntary dissolution of the Issuer Trust, other
than any such dissolution involving the distribution of the Junior Subordinated
Debentures, after satisfaction of liabilities to creditors of the Issuer Trust
as required by applicable law, the holders of the Capital Securities will be
entitled to receive, out of assets held by the Issuer Trust, the Liquidation
Distribution in cash. See "Description of Capital Securities -- Liquidation
Distribution Upon Dissolution." Upon any voluntary or involuntary liquidation or
bankruptcy of the Company, the Issuer Trust, as registered holder of the Junior
Subordinated Debentures, would be a subordinated creditor of the Company,
subordinated and junior in right of payment to all Senior Indebtedness as set
forth in the Junior Subordinated Indenture, but entitled to receive payment in
full of all amounts payable with respect to the Junior Subordinated Debentures
before any shareholders of the Company receive payments or distributions. Since
the Company is the guarantor under the Guarantee and has agreed under the Junior
Subordinated Indenture to pay for all costs, expenses and liabilities of the
Issuer Trust (other than the Issuer Trust's obligations to the holders of the
Trust Securities), the positions of a holder of the Capital Securities and a
holder of such Junior Subordinated Debentures relative to other creditors and to
shareholders of the Company in the event of liquidation or bankruptcy of the
Company are expected to be substantially the same.
CERTAIN FEDERAL INCOME TAX CONSEQUENCES
GENERAL
The following is a summary of the principal United States federal income
tax consequences of the purchase, ownership and disposition of Capital
Securities. The statements of law and legal conclusions set forth in this
summary regarding the tax consequences to the beneficial owners of Capital
Securities (the "Securityholders") represent the opinion of Muldoon, Murphy &
Faucette, Washington, D.C., counsel to the Company. This summary and the tax
opinion of counsel only address the tax consequences to a person that acquires
Capital Securities on their original issue at their original offering price.
This summary does not address all tax consequences that may be applicable to a
Securityholder, nor does it address the tax consequences to (i) persons that may
be subject to special treatment under United States federal income tax
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law, such as banks, insurance companies, thrift institutions, regulated
investment companies, real estate investment trusts, tax-exempt organizations
and dealers in securities or currencies, (ii) persons that will hold Capital
Securities as part of a position in a "straddle" or as part of a "hedging",
"conversion" or other integrated investment transaction for federal income tax
purposes, (iii) except with respect to the discussion under the caption "United
States Alien Securityholders", persons whose functional currency is not the
United States dollar or (iv) persons that do not hold Capital Securities as
capital assets.
This summary is based upon the Code, Treasury Regulations, Internal Revenue
Service (the "IRS") rulings and pronouncements and judicial decisions now in
effect, all of which are subject to change at any time. Such changes may be
applied retroactively in a manner that could cause the tax consequences to vary
substantially from the consequences described below, possibly adversely
affecting a beneficial owner of Capital Securities. In addition, the authorities
on which this summary is based (including authorities distinguishing debt from
equity) are subject to various interpretations, and it is therefore possible
that the federal income tax treatment of the Capital Securities may differ from
the treatment described below. No ruling has been received from the IRS
regarding the tax consequences of the Capital Securities. Counsel's opinion
regarding such tax consequences represents only counsel's best legal judgment
based on current authorities and is not binding on the IRS or the courts.
PROSPECTIVE INVESTORS ARE ADVISED TO CONSULT WITH THEIR OWN TAX ADVISORS IN
LIGHT OF THEIR OWN PARTICULAR CIRCUMSTANCES AS TO THE FEDERAL TAX CONSEQUENCES
OF THE PURCHASE, OWNERSHIP AND DISPOSITION OF CAPITAL SECURITIES, AS WELL AS THE
EFFECTS OF ANY STATE, LOCAL OR FOREIGN TAX LAWS.
EXCHANGE OF CAPITAL SECURITIES
The exchange of Exchange Capital Securities for Original Capital Securities
should not be a taxable event to holders for United States federal income tax
purposes. The exchange of Exchange Capital Securities for Original Capital
Securities pursuant to the Exchange Offer should not be treated as an "exchange"
for United States federal income tax purposes because the Original Capital
Securities should not be considered to differ materially in kind or extent from
the Exchange Capital Securities and because the exchange will occur by operation
of the terms of the Original Capital Securities. If, however, the exchange of
the Exchange Capital Securities for the Original Capital Securities were treated
as an exchange for United States federal income tax purposes, such exchange
should constitute a recapitalization for federal income tax purposes.
Accordingly, the Exchange Capital Securities should have the same issue price as
the Original Capital Securities, and a holder should have the same adjusted tax
basis and holding period in the Exchange Capital Securities as the holder had in
the Original Capital Securities immediately before the exchange.
CLASSIFICATION OF THE ISSUER TRUST
In the opinion of Muldoon, Murphy & Faucette, under current law and
assuming compliance with the terms of the Trust Agreement, the Issuer Trust will
be classified as a grantor Trust and not as an association taxable as a
corporation for United States federal income tax purposes. As a result, each
Securityholder will be treated as owning an undivided beneficial interest in the
Junior Subordinated Debentures. Accordingly, each Securityholder will be
required to include in its gross income its pro rata share of the interest,
including any original issue discount, and any other income received or accrued
with respect to the Junior Subordinated Debentures whether or not cash is
actually distributed to the Securityholders. See "Interest Income and Original
Issue Discount."
INTEREST INCOME AND ORIGINAL ISSUE DISCOUNT
Under Treasury Regulations applicable to debt instruments issued after
August 12, 1996 (the "Regulations"), a "remote" contingency that stated interest
will not be timely paid will be ignored in determining whether a debt instrument
is issued with original issue discount ("OID"). The Company believes that the
likelihood of its exercising its option to defer payments of interest on the
Junior Subordinated Debentures is remote. Based on the foregoing, in the opinion
of Muldoon, Murphy & Faucette, the Junior Subordinated
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Debentures will not be considered to be issued with OID at the time of their
original issuance, and, accordingly, a Securityholder should include in gross
income such Securityholder's allocable share of interest on the Junior
Subordinated Debentures in accordance with such Securityholder's method of tax
accounting.
Under the Regulations, if the Company should actually exercise its option
to defer any payment of interest, the Junior Subordinated Debentures would at
that time be treated as issued with OID, and all stated interest on the Junior
Subordinated Debentures would thereafter be treated as OID so long as the Junior
Subordinated Debentures remained outstanding. In such event, all of a
Securityholder's taxable interest income with respect to the Junior Subordinated
Debentures would be accounted for as OID on an economic accrual basis regardless
of such Securityholder's method of tax accounting, and actual payments of stated
interest would not be reported as taxable income. Consequently, a Securityholder
would be required to include in gross income OID even though the Company would
not make any cash payments during an Extension Period.
The Regulations have not been addressed in any rulings or other
interpretations by the IRS, and it is possible that the IRS could take a
position contrary to the interpretation herein.
Because income on the Capital Securities will constitute interest or OID on
indebtedness issued by the Company, corporate holders of the Capital Securities
will not be entitled to a dividends-received deduction with respect to any
income recognized with respect to the Capital Securities.
DISTRIBUTION OF JUNIOR SUBORDINATED DEBENTURES TO HOLDERS OF CAPITAL SECURITIES
Except as noted below, under current law, a distribution by the Issuer
Trust of the Junior Subordinated Debentures as described under the caption
"Description of Exchange Capital Securities -- Liquidation Distribution Upon
Dissolution," would be a non-taxable event to Securityholders for United States
federal income tax purposes; such a distribution would result in a
Securityholder receiving directly its pro rata share of the Junior Subordinated
Debentures previously held indirectly through the Issuer Trust, with a holding
period and aggregate tax basis equal to the holding period and aggregate tax
basis such Securityholder had in its Capital Securities before such
distribution; and a Securityholder would account for interest in respect of
Junior Subordinated Debentures received from the Issuer Trust in the manner
described above under "-- Interest Income and Original Issue Discount." If,
however, the Junior Subordinated Debentures were distributed in connection with
a Tax Event that would cause the Issuer Trust to be subject to United States
federal income tax with respect to income received or accrued on the Junior
Subordinated Debentures, the distribution likely would be a taxable event to
Securityholders. In that case, Securityholders would recognize gain or loss
equal to the difference between their adjusted bases in their Capital Securities
and the fair market value of the Junior Subordinated Debentures distributed to
the Securityholders, and they would obtain new holding periods and fair market
value bases for such Junior Subordinated Debentures.
SALE OR REDEMPTION OF CAPITAL SECURITIES
Upon a sale (including redemption) of Capital Securities, a Securityholder
will recognize gain or loss equal to the difference between its adjusted tax
basis in the Capital Securities and the amount realized on the sale of such
Capital Securities (excluding any amount attributable to any accrued interest
with respect to such Securityholder's pro rata share of the Junior Subordinated
Debentures not previously included in income, which will be taxable as ordinary
income). Provided that the Company does not exercise its option to defer payment
of interest on the Junior Subordinated Debentures, and the Capital Securities
are not considered to be issued with OID, a Securityholder's adjusted tax basis
in the Capital Securities generally will be its initial purchase price. If the
Junior Subordinated Debentures are deemed to be issued with OID as a result of
the Company's deferral of any interest payment, a Securityholder's tax basis in
the Capital Securities generally will be its initial purchase price, increased
by OID previously includable in such Securityholder's gross income to the date
of disposition and decreased by distributions or other payments received on the
Capital Securities since and including the commencement date of the first
Extension Period. Such gain or loss generally will be a capital gain or loss and
generally will be a long-term capital gain or loss if the Capital Securities
have been held for more than 12 months.
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Should the Company exercise its option to defer any payment of interest on
the Junior Subordinated Debentures, the Capital Securities may trade at a price
that does not accurately reflect the value of accrued but unpaid interest with
respect to the underlying Junior Subordinated Debentures. As a result, and
because a Securityholder will be required to include in income accrued but
unpaid interest on Junior Subordinated Debentures and to add such amount to its
adjusted tax basis, such Securityholder may recognize a capital loss on a sale
of Capital Securities during an Extension Period. Subject to certain limited
exceptions, capital losses cannot be applied to offset ordinary income for
United States federal income tax purposes.
BACKUP WITHHOLDING TAX AND INFORMATION REPORTING
The amount of interest paid and any OID accrued on the Capital Securities
to Securityholders (other than corporations and other exempt Securityholders)
will be reported to the IRS. It is expected that such income on the Capital
Securities will be reported to Securityholders on Form 1099 and mailed to
Securityholders by January 31 following each calendar year. "Backup" withholding
at a rate of 31% will apply to payments of interest and payments of disposition
(including redemption) proceeds to a non-exempt Securityholder unless the
Securityholder furnishes to the payor its taxpayer identification number,
certifies that such number is correct, and meets certain other conditions. Any
amounts withheld from a Securityholder under the backup withholding rules will
be allowable as a refund or a credit against such Securityholder's United States
federal income tax liability.
UNITED STATES ALIEN SECURITYHOLDERS
For purposes of this discussion, a United States Alien Securityholder is
any corporation, individual, partnership, estate or Trust that for United States
federal income tax purposes is a foreign corporation, non-resident alien
individual, foreign partnership, foreign estate or foreign Trust. This
discussion assumes that income with respect to the Capital Securities is not
effectively connected with a trade or business in the United States in which the
United States Alien Securityholder is engaged.
Under current United States federal income tax law:
(i) payments by the Issuer Trust or any of its paying agents to any
holder of Capital Securities that is a United States Alien Securityholder
generally will not be subject to withholding or other Untied States federal
income tax, provided that, in the case of payments with respect to interest
(including OID), (a) the beneficial owner of the Capital Securities does
not actually or constructively own 10% or more of the total combined voting
power of all classes of stock of the Company entitled to vote, (b) the
beneficial owner of the Capital Securities is not a controlled foreign
corporation that is related to the Company through stock ownership, and (c)
either (A) the beneficial owner of the Capital Securities certifies to the
Issuer Trust or its agent, under penalties of perjury, that it is a United
States Alien Securityholder and provides its name and address or (B) a
securities clearing organization, bank or other financial institution that
holds customers' securities in the ordinary course of its trade or business
(a "Financial Institution") and holds the Capital Securities in such
capacity certifies to the Issuer Trust or its agent under penalties of
perjury that such statement has been received from the beneficial owner by
it or by a Financial Institution between it and the beneficial owner and
furnishes the Issuer Trust or its agent with a copy thereof; and
(ii) a United States Alien Securityholder of Capital Securities
generally will not be subject to withholding or other United States federal
income tax on any gain realized upon the sale or other disposition of
Capital Securities.
POSSIBLE TAX LAW CHANGES
In 1996 and 1997, the Clinton Administration proposed to amend the Code to
deny deductions of interest on instruments with features similar to those of the
Junior Subordinated Debentures when issued under arrangements similar to the
Issuer Trust. That proposal was not passed by Congress. The Clinton
Administration did not include this proposal in its fiscal year 1998 budget
proposal. However, there can be no assurance that future legislative proposals,
future regulations or official administrative pronouncements or future judicial
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decisions will not affect the ability of the Company to deduct interest on the
Junior Subordinated Debentures. Such a change could give rise to a Tax Event,
which may permit the Company, upon approval of the Federal Reserve if then
required under applicable capital guidelines or policies of the Federal Reserve,
to cause a redemption of the Capital Securities, as described more fully under
"Description of Capital Securities -- Redemption."
CERTAIN ERISA CONSIDERATIONS
Before authorizing an investment in the Capital Securities, fiduciaries of
pension, profit sharing or other employee benefit plans subject to ERISA
("Plans") should consider, among other matters, (a) ERISA's fiduciary standards
(including its prudence and diversification requirements), (b) whether such
fiduciaries have authority to make such investment in the Capital Securities
under the applicable Plan investment policies and governing instruments, and (c)
rules under ERISA and the Code that prohibit Plan fiduciaries from causing a
Plan to engage in a "prohibited transaction."
Section 406 of ERISA and Section 4975 of the Code prohibit Plans, as well
as individual retirement accounts and Keogh plans subject to Section 4975 of the
Code (also "Plans"), from, among other things, engaging in certain transactions
involving "plan assets" with persons who are "parties in interest" under ERISA
or "disqualified persons" under the Code ("Parties in Interest") with respect to
such Plan. A violation of these "prohibited transaction" rules may result in an
excise tax or other liabilities under ERISA and/or Section 4975 of the Code for
such persons, unless exemptive relief is available under an applicable statutory
or administrative exemption. Employee benefit plans that are governmental plans
(as defined in Section 3(32) of ERISA), certain church plans (as defined in
Section 3(33) of ERISA) and foreign plans (as described in Section 4(b)(4) of
ERISA) are not subject to the requirements of ERISA or Section 4975 of the Code.
The Department of Labor (the "DOL") has issued a regulation (29 C.F.R.
Section 2510.3-101) (the "Plan Assets Regulation") concerning the definition of
what constitutes the assets of a Plan. The Plan Assets Regulation provides that,
as a general rule, the underlying assets and properties of corporations,
partnerships, trusts and certain other entities in which a Plan makes an
"equity" investment will be deemed, for purposes of ERISA, to be assets of the
investing Plan unless certain exceptions apply.
Pursuant to an exception contained in the Plan Assets Regulation, the
assets of the Issuer Trust would not be deemed to be "plan assets" of investing
Plans if, immediately after the most recent acquisition of any equity interest
in the Issuer Trust, less than 25% of the value of each class of equity
interests in the Issuer Trust were held by Plans, other employee benefit plans
not subject to ERISA or Section 4975 of the Code (such as governmental, church
and foreign plans), and entities holding assets deemed to be "plan assets" of
any Plan (collectively, "Benefit Plan Investors"). No assurance can be given
that the value of the Capital Securities held by Benefit Plan Investors will be
less than 25% of the total value of such Capital Securities at the completion of
the initial offering or thereafter, and no monitoring or other measures will be
taken with respect to the satisfaction of the conditions to this exception. All
the Common Securities will be purchased and held directly by the Company.
Under another exception contained in the Plan Assets Regulation, if the
Exchange Capital Securities received as a result of an Exchange Offer were to
qualify as "publicly offered securities" under the Plan Assets Regulation, the
assets of the Issuer Trust would not be deemed to be "plan assets" by reason of
a Plan's acquisition or holding of such securities. The Exchange Capital
Securities would qualify as "publicly offered securities" if, among other
things, they are offered pursuant to an effective registration statement, are
owned by 100 or more investors independent of the issuer and each other at the
time of the offering, and are subsequently registered under the Exchange Act. It
is expected that the 100 investor requirement will not be satisfied and that the
Exchange Capital Securities will not be registered under the Exchange Act.
There can be no assurance that any of the exceptions set forth in the Plan
Assets Regulation will apply to the purchase of Capital Securities offered
hereby and, as a result, an investing Plan's assets could be considered to
include an undivided interest in the Junior Subordinated Debentures held by the
Issuer Trust. In the event that assets of the Issuer Trust are considered assets
of an investing Plan, the Trustees, the Company
70
<PAGE> 72
and/or other persons, in providing services with respect to the Junior
Subordinated Debentures, could be considered fiduciaries to such Plan and
subject to the fiduciary responsibility provisions of Title I of ERISA. In
addition, certain transactions involving the Issuer Trust and/or the Capital
Securities could be deemed to constitute direct or indirect prohibited
transactions under ERISA and Section 4975 of the Code with respect to a Plan.
For example, if the Company is a Party in Interest with respect to an investing
Plan (either directly or by reason of its ownership of the Banks or other
subsidiaries), extensions of credit between the Company and the Issuer Trust (as
represented by the Junior Subordinated Debentures and the Guarantee) would
likely be prohibited by Section 406(a)(1)(B) of ERISA and Section 4975(c)(1)(B)
of the Code.
The DOL has issued five PTCEs that may provide exemptive relief for direct
or indirect prohibited transactions resulting from the purchase or holding of
the Capital Securities, assuming that assets of the Issuer Trust were deemed to
be "plan assets" of Plans investing in the Trust (see above). Those class
exemptions are PTCE 96-23 (for certain transactions determined by in-house asset
managers), PTCE 91-38 (for certain transactions involving bank collective
investment funds), PTCE 95-60 (for certain transactions involving insurance
company general accounts), PTCE 90-1 (for certain transactions involving
insurance company pooled separate accounts), and PTCE 84-14 (for certain
transactions determined by independent qualified asset managers).
Because of ERISA's prohibitions and those of Section 4975 of the Code, the
Capital Securities may not be purchased or held by any Plan, any entity whose
underlying assets include "plan assets" by reason of any Plan's investment in
the entity (a "Plan Asset Entity") or any other person investing "plan assets"
of any Plan, unless such purchase or holding is covered by the exemptive relief
provided by PTCE 96-23, 95-60, 91-38, 90-1 or 84-14 or another applicable
exemption. If a purchaser or holder of the Capital Securities that is a Plan or
a Plan Asset Entity elects to rely on an exemption other than PTCE 96-23, 95-60,
91-38, 90-1 or 84-14, the Company and the Issuer Trust may require a
satisfactory opinion of counsel or other evidence with respect to the
availability of such exemption for such purchase and holding. Any purchaser or
holder of the Capital Securities that is a Plan or a Plan Asset Entity or is
purchasing such securities on behalf of or with "plan assets" will be deemed to
have represented by its purchase and holding thereof that (a) the purchase and
holding of the Capital Securities is covered by the exemptive relief provided by
PTCE 96-23, 95-60, 91-38, 90-1 or 84-14 or another applicable exemption, (b) the
Company and the Administrators are not "fiduciaries," within the meaning of
Section 3(21) of ERISA and the regulations thereunder, with respect to such
person's interest in the Capital Securities or the Junior Subordinated
Debentures, and (c) in purchasing the Capital Securities, such person approves
the purchase of the Junior Subordinated Debentures and the appointment of the
Issuer Trustees.
Any plans or other entities whose assets include Plan assets subject to
ERISA or Section 4975 of the Code proposing to acquire Capital Securities should
consult with their own counsel.
Governmental Plans and certain church plans are not subject to ERISA, and
are also not subject to the prohibited transaction provisions of Section 4975 of
the Code. However, state laws or regulations governing the investment and
management of the assets of such plans may contain fiduciary and prohibited
transaction provisions similar to those under ERISA and the Code discussed
above. Accordingly, fiduciaries of governmental and church plans, in
consultation with the advisers, should consider the impact of their respective
state laws on investments in the Capital Securities and the considerations
discussed above to the extent applicable.
SUPERVISION, REGULATION AND OTHER MATTERS
The following information is not intended to be an exhaustive description
of the statutes and regulations applicable to the Company. The discussion is
qualified in its entirety by reference to all particular statutory or regulatory
provisions. Additional information regarding supervision and regulation is
included in the documents incorporated herein by reference. See "Available
Information."
The business of the Company is influenced by prevailing economic conditions
and governmental policies, both foreign and domestic. The actions and policy
directives of the Federal Reserve determine to a significant
71
<PAGE> 73
degree the cost and the availability of funds obtained from money market sources
for lending and investing. The Federal Reserve's policies and regulations also
influence, directly and indirectly, the rates of interest paid by commercial
banks on their time and savings deposits. The nature and impact on the Company
of future changes in economic conditions and monetary and fiscal policies, both
foreign and domestic, are not predictable.
The Company is subject to supervision and examination by federal bank
regulatory authorities. As a bank holding company regulated under the Bank
Holding Company Act of 1956 (the "BHC Act"), the Company's primary bank
regulatory authority is the Federal Reserve. Bank holding companies are expected
to serve as a source of strength to their subsidiary banks under the Federal
Reserve's regulations and policies. As a Maryland-chartered bank that is not a
member of the Federal Reserve System, the Bank's primary federal regulator is
the Federal Deposit Insurance Corporation (the "FDIC").
The federal bank regulatory authorities have each adopted risk-based
capital guidelines to which the Company and the Bank are subject. These
guidelines are based on an international agreement developed by the Basle
Committee on Banking Regulations and Supervisory Practices, which consists of
representatives of central banks and supervisory authorities in 12 countries
including the United States of America. The guidelines establish a systematic
analytical framework that makes regulatory capital requirements more sensitive
to differences in risk profiles among banking organizations, takes off-balance
sheet exposures into explicit account in assessing capital adequacy and
minimizes disincentives to holding liquid, low-risk assets. Risk-based assets
are determined by allocating assets and specified off-balance sheet commitments
and exposures into four weighted categories, with higher levels of capital being
required for the categories perceived as representing greater risk.
The Bank is required to maintain a minimum total risk-based ratio of 8%, of
which half (4%) must be Tier 1 capital. In addition, the federal bank regulators
established leverage ratio (Tier 1 capital to total adjusted average assets)
guidelines providing for a minimum leverage ratio of 3% for banks meeting
certain specified criteria, including excellent asset quality, high liquidity,
low interest rate exposure and the highest regulatory rating. Institutions not
meeting these criteria are expected to maintain a ratio which exceeds the 3%
minimum by at least 100 to 200 basis points. The federal bank regulatory
authorities may, however, set higher capital requirements when a bank's
particular circumstances warrant.
From time to time, the federal bank regulatory authorities, including the
Federal Reserve, propose amendments to and issue interpretations of their
risk-based capital guidelines and reporting instructions, which can affect
reported capital ratios and net risk-adjusted assets. Effective June 26, 1996,
the Federal Reserve, the Office of the Comptroller of the Currency and the FDIC
issued a joint policy statement that provides guidance on sound practices for
interest rate risk management and describes critical factors affecting the
agencies' evaluation of a bank's interest rate risk when making a determination
of capital adequacy.
The federal banking agencies possess broad powers to take corrective action
as deemed appropriate for an insured depository institution and its holding
companies. The extent of these powers depends upon whether the institution in
question is considered "well capitalized," "adequately capitalized,"
"undercapitalized," "significantly undercapitalized" or "critically
undercapitalized." Generally, as an institution is deemed to be less well
capitalized, the scope and severity of the agencies' powers increase. The
agencies' corrective powers can include, among other things, requiring an
insured financial institution to adopt a capital restoration plan which cannot
be approved unless guaranteed by the institution's parent holding company;
placing limits on asset growth and restrictions on activities; placing
restrictions on transactions with affiliates; restricting the interest rates the
institution may pay on deposits; prohibiting the institution from accepting
deposits from correspondent banks; prohibiting the payment of principal or
interest on subordinated debt; prohibiting the holding company from making
capital distributions without prior regulatory approval; and, ultimately,
appointing a receiver for the institution. Business activities may also be
influenced by an institution's capital classification. For instance, only a
"well capitalized" depository institution may accept brokered deposits without
prior regulatory approval and only an "adequately capitalized" depository
institution may accept brokered deposits with prior regulatory approval. At
March 31, 1998, the Bank exceeded the required capital ratios for classification
as a "well capitalized" bank.
72
<PAGE> 74
The deposits of the Bank are insured by the FDIC and are subject to FDIC
insurance assessments. The amount of FDIC assessments paid by individual insured
depository institutions is based on their relative risk as measured by
regulatory capital ratios and certain other factors. Currently, the Bank is not
assessed any premiums for deposits insured by either the Bank Insurance Fund
("BIF") or the Savings Association Insurance Fund ("SAIF"). A portion of the net
proceeds from the Company's sale of the Junior Subordinated Debentures to the
Issuer Trust likely will be used by the Company to make a capital contribution
to the Bank. See "Use of Proceeds." The Bank, however, continues to pay premiums
based on deposit levels to service debt on Financing Corporation bonds.
If any insured depository institution becomes insolvent and the FDIC is
appointed its conservator or receiver, the FDIC may disaffirm or repudiate any
contract or lease to which such institution is a party, the performance of which
is determined to be burdensome and the disaffirmance or repudiation of which is
determined to promote the orderly administration of the institution's affairs.
If Federal law were construed to permit the FDIC to apply these provisions to
debt obligations of an insured depository institution, the result could be that
such obligations would be prepaid without premium. Federal law also accords the
claims of a receiver of an insured depository institution for administrative
expenses and the claims of holders of deposit liabilities of such an institution
priority over the claims of general unsecured creditors of such an institution
in the event of a liquidation or other resolution of such institution.
The BHC Act currently permits adequately capitalized and adequately managed
bank holding companies from any state to acquire banks and bank holding
companies located in any other state, subject to certain conditions. Therefore,
the Company has the ability, subject to certain restrictions, including state
opt-out provisions, to acquire by acquisition or merger branches outside of its
home state. Competition may increase as banks branch across state lines and
enter new markets.
PLAN OF DISTRIBUTION
Each broker-dealer that receives Exchange Capital Securities for its own
account pursuant to the Exchange Offer must acknowledge that it will deliver a
prospectus in connection with any resale of such Exchange Capital Securities.
This Prospectus, as it may be amended or supplemented from time to time, may be
used by Participating Broker-Dealers during the period referred to below in
connection with resales of Exchange Capital Securities received in exchange for
Original Capital Securities if such Original Capital Securities were acquired by
such Participating Broker-Dealers for their own accounts as a result of market-
making activities or other trading activities. The Company and the Trust have
agreed that this Prospectus, as it may be amended or supplemented from time to
time, may be used by a Participating Broker-Dealer in connection with resales of
such Exchange Capital Securities for a period ending 90 days after the
Expiration Date (subject to extension under certain limited circumstances
described herein) or, if earlier, when all such Exchange Capital Securities have
been disposed of by such Participating Broker-Dealer. However, a Participating
Broker-Dealer who intends to use this Prospectus in connection with the resale
of Exchange Capital Securities received in exchange for Original Capital
Securities pursuant to the Exchange Offer must notify the Company or the Trust,
or cause the Company or the Trust to be notified, on or prior to the Expiration
Date, that it is a Participating Broker-Dealer. Such notice may be given in the
space provided for that purpose in the Letter of Transmittal or may be delivered
to the Exchange Agent at one of the addresses set forth herein under "The
Exchange Offer--Exchange Agent." See "The Exchange Offer--Resales of Exchange
Capital Securities."
The Company or the Trust will not receive any cash proceeds from the
issuance of the Exchange Capital Securities offered hereby. Exchange Capital
Securities received by broker-dealers for their own accounts in connection with
the Exchange Offer may be sold from time to time in one or more transactions in
the over-the-counter market, in negotiated transactions, through the writing of
options on the Exchange Capital Securities or a combination of such methods of
resale, at market prices prevailing at the time of resale, at prices related to
such prevailing market prices or at negotiated prices. Any such resale may be
made directly to purchasers or to or through brokers or dealers who may receive
compensation in the form of commissions or concessions from any such
broker-dealer and/or the purchasers of any such Exchange Capital Securities.
73
<PAGE> 75
Any broker-dealer that resells Exchange Capital Securities that were
received by it for its own account pursuant to the Exchange Offer and any broker
or dealer that participates in a distribution of such Exchange Capital
Securities may be deemed to be an "underwriter" within the meaning of the
Securities Act, and any profit on any such resale of Exchange Capital Securities
and any commissions or concessions received by any such persons may be deemed to
be underwriting compensation under the Securities Act. The Letter of Transmittal
states that by acknowledging that it will deliver and by delivering a
prospectus, a broker-dealer will not be deemed to admit that it is an
"underwriter" within the meaning of the Securities Act.
For a period of 90 days after the Expiration Date, the Trust and the
Company will promptly send additional copies of this Prospectus and any
amendment or supplement to this Prospectus to any broker-dealer that requests
such documents in the Letter of Transmittal. The Trust and the Company have
agreed to pay all expenses incident to the Exchange Offer (including the
expenses of one counsel for the holders of the Capital Securities) other than
commissions or concessions of any brokers or dealers and will indemnify the
holders of the Capital Securities (including any broker-dealers) against certain
liabilities, including liabilities under the Securities Act.
VALIDITY OF SECURITIES
Certain matters of Delaware law relating to the validity of the Exchange
Capital Securities, the enforceability of the Trust Agreement and the creation
of the Issuer Trust will be passed upon by Richards, Layton & Finger, P.A.,
special Delaware counsel to the Company and the Issuer Trust. The validity of
the Exchange Guarantee and the Junior Subordinated Debentures will be passed
upon for the Company by Muldoon, Murphy & Faucette, Washington, D.C., counsel to
the Company. Muldoon, Murphy & Faucette will rely as to certain matters of
Delaware law on the opinion of Richards, Layton & Finger, P.A.
INDEPENDENT ACCOUNTANTS
The consolidated balance sheets of Provident Bankshares Corporation and
subsidiaries as of December 31, 1997 and 1996, and the related consolidated
statements of income, cash flows and changes in shareholders' equity for each of
the three years in the period ended December 31, 1997, incorporated by reference
from the Company's Annual Report on Form 10-K for the fiscal year ended December
31, 1997 (which report is incorporated by reference), have been audited by
PricewaterhouseCoopers, LLP, independent accountants, as indicated in their
report thereon, which report is based in part on the report of Arthur Andersen,
LLP (independent accountants of First Citizens Financial Corporation) for the
years ended December 31, 1996 and 1995 (which report also is incorporated herein
by reference).
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<PAGE> 76
PART II
INFORMATION NOT REQUIRED IN THE PROSPECTUS
ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
In accordance with General Laws of the State of Maryland, Article Eleventh
of the Company's Amended Articles of Incorporation provides as follows:
Article Eleventh. Indemnification of Officers, Directors, Employees
and Agents.
ELEVENTH: The Company shall indemnify (A) its directors and officers,
whether serving the Company or at its request any other entity, to the fullest
extent required or permitted by the general laws of the State of Maryland now or
hereafter in force, including the advance of expenses under the procedures
required, and (B) other employees and agents to such extent as shall be
authorized by the Board of Directors or the Company's Bylaws and be permitted by
law. The foregoing rights of indemnification shall not be exclusive of any
rights to which those seeking indemnification may be entitled. The Board of
Directors may take such action as is necessary to carry out these
indemnification provisions and is expressly empowered to adopt, approve and
amend from time to time such Bylaws, resolutions or contracts implementing such
provisions or such further indemnification arrangements as may be permitted by
law. No amendment of the charter of the Company shall limit or eliminate the
right to indemnification provided hereunder with respect to acts or omissions
occurring prior to such amendment or repeal.
The Company carries a liability insurance policy for its officers and
directors.
Under the Amended and Restated Trust Agreement, the Company has agreed to
indemnify each of the Trust Administrators of the Trust, and to hold each
Administrator harmless against any loss, damage, claim, 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 Amended and Restated
Trust Agreement, including the costs and expenses of defending itself against
any claim or liability in connection with the exercise or performance of any of
its powers or duties under the Trust.
ITEM 21. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
- ----------- -----------
<C> <S>
4.1 Indenture of the Company relating to the Junior Subordinated
Debentures
4.2 Form of Certificate of Exchange Junior Subordinated
Debenture
4.3 Certificate of Trust of Provident Trust I
4.4 Amended and Restated Trust Agreement
4.5 Form of Exchange Capital Security Certificate for Provident
Trust I
4.6 Form of Exchange Guarantee Agreement of the Company relating
to the Exchange Capital Securities
4.7 Registration Rights Agreement
5.1 Opinion and consent of Muldoon, Murphy & Faucette as to
validity of the Exchange Junior Subordinated Debentures and
the Exchange Guarantee to be issued by the Company
5.2 Opinion and consent of Richards, Layton & Finger, P.A. as to
the validity of the Exchange Capital Securities to be issued
by Provident Trust I
8 Opinion of Muldoon, Murphy & Faucette as to certain federal
income tax matters
12.1 Computation of ratio of earnings to fixed charges (excluding
interest on deposits)
12.2 Computation of ratio of earnings to fixed charges (including
interest on deposits)
23.1 Consent of PricewaterhouseCoopers, LLP
23.2 Consent of Arthur Andersen, LLP
23.3 Consent of Muldoon, Murphy & Faucette (included in Exhibit
5.1)
23.4 Consent of Richards, Layton & Finger, P.A. (included in
Exhibit 5.2)
</TABLE>
II-1
<PAGE> 77
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
- ----------- -----------
<C> <S>
24 Power of Attorney of certain officers and directors of the
Company (located on the signature page hereto)
25 Form T-1 Statement of Eligibility of Bankers Trust Company
to act as trustee under the Indenture, to act as trustee
under the Certificate of Trust of Provident Trust I, and the
Exchange Guarantee for the benefit of the holders of
Exchange Capital Securities of Provident Trust I
99.1 Form of Letter of Transmittal
99.2 Form of Notice of Guaranteed Delivery
</TABLE>
- ---------------
ITEM 22. UNDERTAKINGS
Each of the undersigned Registrants hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, as amended, each
filing of a Registrant's annual report pursuant to section 13(a) or Section
15(d) of the Securities Exchange Act of 1934 (and, where applicable, each filing
of an employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in this
Registration Statement shall be deemed to be a new registration statement
relating to the securities offered herein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
Each of the undersigned Registrants hereby also undertakes:
(1) to file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement;
(i) to include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) to reflect in the prospectus any facts or events arising after
the effective date of this Registration Statement (or the most recent
post-effective amendment thereto) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in this Registration Statement. Notwithstanding the foregoing, any
increase or decrease in volume of securities offered (if the total
dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the estimated
maximum offering range may be reflected in the form of prospectus filed
with the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than a 20 percent change
in the maximum aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective Registration Statement; and
(iii) to include any material information with respect to the plan
of distribution not previously disclosed in this Registration Statement
or any material change to such information in this Registration
Statement; provided, however, that paragraphs (1) (i) and (1) (ii) do
not apply if the information required to be included in a post-effective
amendment by those paragraphs is contained in periodic reports filed by
a Registrant pursuant to Section 13 or Section 15(d) of the Securities
Exchange Act of 1934 that are incorporated by reference in this
Registration Statement.
(2) that, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed
to be the initial bona fide offering thereof.
(3) to remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
(4) to deliver or cause to be delivered with the prospectus, to each
person to whom the prospectus is sent or given, the latest annual report to
security holders that is incorporated by reference in the prospectus and
furnished pursuant to and meeting the requirements of Rule 14a-3 or Rule
14c-3 under the Securities Act of 1934, where interim financial information
to be presented by Article 3 of
II-2
<PAGE> 78
Regulation S-X are not set forth in the prospectus, to deliver, or cause to
be delivered to each person to whom the prospectus is sent or given, the
latest quarterly report that is specifically incorporated by reference in
the prospectus to provide such interim financial information.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of each
undersigned Registrant pursuant to the provisions, or otherwise, each Registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by each undersigned Registrant of
expenses incurred or paid by a director, officer of controlling person of each
Registrant in the successful defense of any action, suit or proceeding) is
asserted by such director, officer or controlling person in connection with the
securities being registered, each Registrant will, unless in the opinion of its
counsel the matter has been settled by the controlling precedent, submit to a
court of appropriate jurisdiction the question whether such indemnification by
it is against public policy as expressed in the Act and will be governed by the
final adjudication of such issue.
Each of the undersigned Registrants hereby undertakes to respond to
requests for information that is incorporated by reference into the Prospectus
pursuant to Item 4, 10(b), 11 or 13 of this Form within one business day of
receipt of such request, and to send the incorporated documents by first class
mail or other equally prompt means. This includes information contained in
documents filed subsequent to the effective date of the registration statement
through the date of responding to the request.
Each of the undersigned Registrants hereby undertakes to supply by means of
a post-effective amendment all information concerning a transaction, and the
company being acquired or involved therein, that was not the subject of and
included in the registration statement when it became effective.
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<PAGE> 79
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, Provident
Bankshares Corporation certifies that it has reasonable grounds that it meets
all of the requirements for filing on Form S-4 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Baltimore, State of Maryland on the 13th day of
July, 1998.
PROVIDENT BANKSHARES CORPORATION
By: /s/ Peter M. Martin
------------------------------------
Peter M. Martin
President and Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated. Each of the directors and/or officers of
Provident Bankshares Corporation whose signature appears below hereby appoints
Peter M. Martin, James R. Wallis and Robert L. Davis, and each of them as his or
her attorney-in-fact to sign in his or her name and behalf, in any and all
capacities stated below and to file with the Securities and Exchange Commission
any and all amendments, including post-effective amendments, to this
Registration Statement on Form S-4, making such changes in the Registration
Statement as appropriate, and generally to do all such things in their behalf in
their capacities as directors and/or officers to enable Provident Bankshares
Corporation to comply with the provisions of the Securities Act of 1933, and all
requirements of the Securities and Exchange Commission.
<TABLE>
<S> <C>
/s/ Peter M. Martin Date: July 13, 1998
- -----------------------------------------------------
Peter M. Martin Chairman of the Board, President and
Chief Executive Officer (principal executive officer)
/s/ James R. Wallis Date: July 13, 1998
- -----------------------------------------------------
James R. Wallis
Executive Vice President and Chief Financial Officer
(principal financial and accounting officer)
/s/ Carl W. Stearn Date: July 13, 1998
- -----------------------------------------------------
Carl W. Stearn
Director
/s/ Robert B. Barnhill, Jr. Date: July 13, 1998
- -----------------------------------------------------
Robert B. Barnhill, Jr.
Director
/s/ Melvin A. Bilal Date: July 13, 1998
- -----------------------------------------------------
Melvin A. Bilal
Director
/s/ Ward B. Coe, III Date: July 13, 1998
- -----------------------------------------------------
Ward B. Coe, III, Esquire
Director
</TABLE>
II-4
<PAGE> 80
<TABLE>
<S> <C>
/s/ M. Jenkins Cromwell, Jr. Date: July 13, 1998
- -----------------------------------------------------
M. Jenkins Cromwell, Jr.
Director
/s/ Frederick W. Meier, Jr. Date: July 13, 1998
- -----------------------------------------------------
Frederick W. Meier, Jr.
Director
/s/ Rosemarie Nassif Date: July 13, 1998
- -----------------------------------------------------
Sister Rosemarie Nassif
Director
/s/ Enos K. Fry Date: July 13, 1998
- -----------------------------------------------------
Enos K. Fry
Director
/s/ Herbert W. Jorgensen Date: July 13, 1998
- -----------------------------------------------------
Herbert W. Jorgensen
Director
/s/ Charles W. Cole, Jr. Date: July 13, 1998
- -----------------------------------------------------
Charles W. Cole, Jr.
Director
/s/ Barbara B. Lucas Date: July 13, 1998
- -----------------------------------------------------
Barbara B. Lucas
Director
/s/ Francis G. Riggs Date: July 13, 1998
- -----------------------------------------------------
Francis G. Riggs
Director
/s/ Calvin W. Burnett Date: July 13, 1998
- -----------------------------------------------------
Dr. Calvin W. Burnett
Director
/s/ Pierce B. Dunn Date: July 13, 1998
- -----------------------------------------------------
Pierce B. Dunn
Director
/s/ Mark K. Joseph Date: July 13, 1998
- -----------------------------------------------------
Mark K. Joseph
Director
/s/ Sheila K. Riggs Date: July 13, 1998
- -----------------------------------------------------
Sheila K. Riggs
Director
/s/ Thomas S. Bozzuto Date: July 13, 1998
- -----------------------------------------------------
Thomas S. Bozzuto
Director
</TABLE>
II-5
<PAGE> 81
Pursuant to the requirements of the Securities Act of 1933, Provident Trust
I certifies that it has reasonable grounds to believe that it meets all the
requirements for filing on Form S-4 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Baltimore, State of Maryland, on the 13th day of
July, 1998.
PROVIDENT TRUST I
By: /s/ Robert L. Davis
------------------------------------
Robert L. Davis
Administrator
By: /s/ James R. Wallis
------------------------------------
James R. Wallis
Administrator
II-6
<PAGE> 82
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
- ----------- -----------
<C> <S>
4.1 Indenture of the Company relating to the Junior Subordinated
Debentures
4.2 Form of Certificate of Exchange Junior Subordinated
Debenture
4.3 Certificate of Trust of Provident Trust I
4.4 Amended and Restated Trust Agreement
4.5 Form of Exchange Capital Security Certificate for
ProvidentTrust I
4.6 Form of Exchange Guarantee of the Company relating to the
Exchange Capital Securities
4.7 Registration Rights Agreement
5.1 Opinion and consent of Muldoon, Murphy & Faucette as to
validity of the Exchange Junior Subordinated Debentures and
the Exchange Guarantee to be issued by the Company
5.2 Opinion and consent of Richards, Layton & Finger, P.A. as to
the validity of the Exchange Capital Securities to be issued
by Provident Trust I
8 Opinion of Muldoon, Murphy & Faucette as to certain federal
income tax matters
12.1 Computation of ratio of earnings to fixed charges (excluding
interest on deposits)
12.2 Computation of ratio of earnings to fixed charges (including
interest on deposits)
23.1 Consent of PricewaterhouseCoopers, LLP
23.2 Consent of Arthur Andersen, LLP
23.3 Consent of Muldoon, Murphy & Faucette (included in Exhibit
5.1)
23.4 Consent of Richards, Layton & Finger, P.A. (included in
Exhibit 5.2)
24 Power of Attorney of certain officers and directors of the
Company (located on the signature page hereto)
25 Form T-1 Statement of Eligibility of Bankers Trust Company
to act as trustee under the Indenture, to act as trustee
under the Certificate of Trust of Provident Trust I, and the
Exchange Guarantee for the benefit of the holders of
Exchange Capital Securities of Provident Trust I
99.1 Form of Letter of Transmittal
99.2 Form of Notice of Guaranteed Delivery
</TABLE>
II-7
<PAGE> 1
EXHIBIT 4.1
JUNIOR SUBORDINATED INDENTURE
BETWEEN
PROVIDENT BANKSHARES CORPORATION
AND
BANKERS TRUST COMPANY
(AS TRUSTEE)
DATED AS OF APRIL 17, 1998
<PAGE> 2
PROVIDENT TRUST I
Certain Sections of this Junior Subordinated Indenture relating
to Sections 310 through 318 of the
Trust Indenture Act of 1939:
Trust Indenture Junior Subordinated
Act Section Indenture Section
----------- -----------------
Section 310 (a)(1)......................................... 6.9
(a)(2)......................................... 6.9
(a)(3)......................................... Not Applicable
(a)(4)......................................... Not Applicable
(a)(5)......................................... 6.9
(b)............................................ 6.8, 6.10
Section 311 (a)............................................ 6.13
(b)............................................ 6.13
(b)(2)......................................... 7.3(a)
Section 312 (a)............................................ 7.1, 7.2(a)
(b)............................................ 7.2(b)
(c)............................................ 7.2(c)
Section 313 (a)............................................ 7.3(a)
(a)(4)......................................... 7.3(a)
(b)............................................ 7.3(b)
(c)............................................ 7.3(a)
(d)............................................ 7.3(c)
Section 314 (a)............................................ 7.4
(b)............................................ 7.4
(c)(1)......................................... 1.2
(c)(2)......................................... 1.2
(c)(3)......................................... Not Applicable
(e)............................................ 1.2
Section 315 (a)............................................ 6.1(a)
(b)............................................ 6.2, 7.3
(c)............................................ 6.1(b)
(d)............................................ 6.1(c)
(e)............................................ 5.14
Section 316 (a)............................................ 5.12
(a)(1)(A)...................................... 5.12
(a)(1)(B)...................................... 5.13
(a)(2)......................................... Not Applicable
(b)............................................ 5.8
(c)............................................ 1.4(f)
Section 317 (a)(1)......................................... 5.3
(a)(2)......................................... 5.4
(b)............................................ 10.3
Section 318 (a)............................................ 1.7
Note: This reconciliation and tie shall not, for any purpose, be deemed to be
a part of the Indenture.
<PAGE> 3
TABLE OF CONTENTS
Page
----
ARTICLE I DEFINITIONS AND OTHER PROVISIONS OF
GENERAL APPLICATION....................................... 2
SECTION 1.1. Definitions............................................... 2
SECTION 1.2. Compliance Certificate and Opinions....................... 11
SECTION 1.3. Forms of Documents Delivered to Trustee................... 12
SECTION 1.4. Acts of Holders........................................... 13
SECTION 1.5. Notices, Etc. to Trustee and Company...................... 15
SECTION 1.6. Notice to Holders; Waiver................................. 15
SECTION 1.7. Conflict with Trust Indenture Act......................... 16
SECTION 1.8. Effect of Headings and Table of Contents.................. 16
SECTION 1.9. Successors and Assigns.................................... 16
SECTION 1.10. Separability Clause....................................... 16
SECTION 1.11. Benefits of Indenture..................................... 16
SECTION 1.12. Governing Law............................................. 16
SECTION 1.13. Non-Business Days......................................... 16
ARTICLE II SECURITY FORMS............................................ 17
SECTION 2.1. Forms Generally........................................... 17
SECTION 2.2. Form of Face of Security.................................. 18
SECTION 2.3. Form of Reverse of Security............................... 22
SECTION 2.4. Additional Provisions Required in Global Security......... 26
SECTION 2.5. Form of Trustee's Certificate of Authentication........... 26
ARTICLE III THE SECURITIES............................................ 27
SECTION 3.1. Title and Terms........................................... 27
SECTION 3.2. Denominations............................................. 30
SECTION 3.3. Execution, Authentication, Delivery and Dating............ 30
SECTION 3.4. Temporary Securities...................................... 31
SECTION 3.5. Global Securities......................................... 32
SECTION 3.6. Registration, Transfer and Exchange Generally;
Certain Transfers and Exchanges; Securities Act Legends... 33
SECTION 3.7. Mutilated, Lost and Stolen Securities..................... 36
SECTION 3.8. Payment of Interest and Additional Interest
Interest Rights Preserved................................. 37
SECTION 3.9. Persons Deemed Owners..................................... 38
SECTION 3.10. Cancellation.............................................. 39
SECTION 3.11. Computation of Interest................................... 39
SECTION 3.12. Deferrals of Interest Payment Dates....................... 39
SECTION 3.13. Right of Set-Off.......................................... 40
SECTION 3.14. Agreed Tax Treatment...................................... 41
SECTION 3.15. Shortening or Extension of Stated Maturity................ 41
ii
<PAGE> 4
Page
----
SECTION 3.16. CUSIP Numbers............................................. 41
ARTICLE IV SATISFACTION AND DISCHARGE................................ 41
SECTION 4.1. Satisfaction and Discharge of Indenture................... 41
SECTION 4.2. Application of Trust Money................................ 43
ARTICLE V REMEDIES.................................................. 43
SECTION 5.1. Events of Default......................................... 43
SECTION 5.2. Acceleration of Maturity; Rescission and Annulment........ 44
SECTION 5.3. Collection of Indebtedness and Suits
for Enforcement by Trustee................................ 45
SECTION 5.4. Trustee May File Proofs of Claim.......................... 46
SECTION 5.5. Trustee May Enforce Claim Without Possession of
Securities ............................................... 47
SECTION 5.6. Application of Money Collected............................ 47
SECTION 5.7. Limitation on Suits....................................... 48
SECTION 5.8. Unconditional Right of Holders to Receive Principal,
Premium and Interest; Direct Action by Holders of Capital
Securities................................................ 48
SECTION 5.9. Restoration of Rights and Remedies........................ 49
SECTION 5.10. Rights and Remedies Cumulative............................ 49
SECTION 5.11. Delay or Omission Not Waiver.............................. 49
SECTION 5.12. Control by Holders........................................ 50
SECTION 5.13. Waiver of Past Defaults................................... 50
SECTION 5.14. Undertaking for Costs..................................... 51
SECTION 5.15. Waiver of Usury, Stay or Extension Laws................... 51
ARTICLE VI THE TRUSTEE............................................... 51
SECTION 6.1. Certain Duties and Responsibilities....................... 51
SECTION 6.2. Notice of Defaults........................................ 52
SECTION 6.3. Certain Rights of Trustee................................. 53
SECTION 6.4. Not Responsible for Recitals or Issuance of Securities.... 54
SECTION 6.5. May Hold Securities....................................... 54
SECTION 6.6. Money Held in Trust....................................... 54
SECTION 6.7. Compensation and Reimbursement............................ 54
SECTION 6.8. Disqualification; Conflicting Interests................... 54
SECTION 6.9. Corporate Trustee Required; Eligibility................... 55
SECTION 6.10. Resignation and Removal; Appointment of Successor......... 56
SECTION 6.11. Acceptance of Appointment by Successor.................... 57
SECTION 6.12. Merger, Conversion, Consolidation or Succession to
Business.................................................. 59
SECTION 6.13. Preferential Collection of Claims Against Company......... 60
SECTION 6.14. Appointment of Authenticating Agent....................... 60
iii
<PAGE> 5
Page
----
ARTICLE VII HOLDER'S LISTS AND REPORTS BY TRUSTEE,
PAYING AGENT AND COMPANY.................................. 62
SECTION 7.1. Company to Furnish Trustee Names and Addresses of Holders. 62
SECTION 7.2. Preservation of Information; Communications to Holders.... 62
SECTION 7.3. Reports by Trustee and Paying Agent....................... 62
SECTION 7.4. Reports by Company........................................ 63
ARTICLE VIII CONSOLIDATION, MERGER, CONVEYANCE,
TRANSFER OR LEASE......................................... 63
SECTION 8.1. Company May Consolidate, Etc., Only on Certain Terms...... 63
SECTION 8.2. Successor Company Substituted............................. 64
ARTICLE IX SUPPLEMENTAL INDENTURES................................... 65
SECTION 9.1. Supplemental Indentures Without Consent of Holders........ 65
SECTION 9.2. Supplemental Indentures With Consent of Holders........... 66
SECTION 9.3. Execution of Supplemental Indentures...................... 67
SECTION 9.4. Effect of Supplemental Indentures......................... 68
SECTION 9.5. Conformity with Trust Indenture Act....................... 68
SECTION 9.6. Reference in Securities to Supplemental Indentures........ 68
ARTICLE X COVENANTS................................................. 68
SECTION 10.1. Payment of Principal, Premium and Interest................ 68
SECTION 10.2. Maintenance of Office or Agency........................... 68
SECTION 10.3. Money for Security Payments to be Held in Trust........... 69
SECTION 10.4. Statement as to Compliance................................ 70
SECTION 10.5. Waiver of Certain Covenants............................... 71
SECTION 10.6. Additional Sums........................................... 71
SECTION 10.7. Additional Covenants...................................... 71
SECTION 10.8. Furnishing Annual Information............................. 73
ARTICLE XI REDEMPTION OF SECURITIES.................................. 73
SECTION 11.1. Applicability of This Article............................. 73
SECTION 11.2 Election to Redeem; Notice of Trustee..................... 73
SECTION 11.3. Selection of Securities to be Redeemed.................... 74
SECTION 11.4. Notice of Redemption...................................... 74
SECTION 11.5. Deposit of Redemption Price............................... 75
SECTION 11.6. Payment of Securities Called for Redemption............... 75
SECTION 11.7. Right of Redemption of Securities
Initially Issued to an Issuer Trust....................... 76
ARTICLE XII SINKING FUNDS............................................. 76
iv
<PAGE> 6
Page
----
ARTICLE XIII SUBORDINATION OF SECURITIES............................... 76
SECTION 13.1. Securities Subordinate to Senior Indebtedness............. 76
SECTION 13.2. No Payment When Senior Indebtedness in Default;
Payment Over of Proceeds Upon Dissolution, Etc............ 77
SECTION 13.3. Payment Permitted If No Default........................... 78
SECTION 13.4. Subrogation to Rights of Holders of Senior Indebtedness... 79
SECTION 13.5. Provisions Solely to Define Relative Rights............... 79
SECTION 13.6. Trustee to Effectuate Subordination....................... 79
SECTION 13.7. No Waiver of Subordination Provisions..................... 80
SECTION 13.8. Notice to Trustee......................................... 80
SECTION 13.9. Reliance on Judicial Order or Certificate of Liquidating
Agent..................................................... 81
SECTION 13.10. Trustee Not Fiduciary for Holders of Senior Indebtedness.. 81
SECTION 13.11. Rights of Trustee as Holder of Senior
Indebtedness; Preservation of Trustee's Rights............ 81
SECTION 13.12. Article Applicable to Paying Agents....................... 82
SECTION 13.13. Certain Conversions or Exchanges Deemed Payment........... 82
ANNEX A FORM OF RESTRICTED SECURITIES
CERTIFICATE
v
<PAGE> 7
JUNIOR SUBORDINATED INDENTURE
THIS JUNIOR SUBORDINATED INDENTURE, dated as of April 17, 1998, is
between PROVIDENT BANKSHARES CORPORATION, a Maryland corporation (the
"Company"), having its principal office at 114 East Lexington Street, Baltimore,
Maryland 21202, and BANKERS TRUST COMPANY, as Trustee, having its principal
office at Four Albany Street, 4th Floor, New York, New York 10006 (the
"Trustee").
RECITALS OF THE COMPANY
WHEREAS, the Company has duly authorized the execution and delivery of
this Indenture to provide for the issuance from time to time of its unsecured
junior subordinated debt securities in series (hereinafter called the
"Securities") of substantially the tenor hereinafter provided, including
Securities issued to evidence loans made to the Company from the proceeds from
the issuance from time to time by one or more business trusts (each an "Issuer
Trust") of undivided preferred beneficial interests in the assets of such Issuer
Trusts (the "Capital Securities") and common undivided interests in the assets
of such Issuer Trusts (the "Common Securities" and, collectively with the
Capital Securities, the "Trust Securities"), and to provide the terms and
conditions upon which the Securities are to be authenticated, issued and
delivered; and
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 (as such term is defined in Section 1.1 hereof)
thereof, it is mutually covenanted and agreed, for the equal and proportionate
benefit of all Holders of the Securities or of any series thereof, and intending
to be legally bound hereby, as follows:
1
<PAGE> 8
ARTICLE I
DEFINITIONS AND OTHER PROVISIONS
OF GENERAL APPLICATION
SECTION 1.1. Definitions.
For all purposes of this Indenture, except as otherwise expressly
provided or unless the context otherwise requires:
(1) The terms defined in this Article have the meanings assigned to
them in this Article, and include the plural as well as the singular;
(2) All other terms used herein that are defined in the Trust Indenture
Act, either directly or by reference therein, have the meanings assigned to them
therein;
(3) The words "include", "includes" and "including" shall be deemed to
be followed by the phrase "without limitation";
(4) All accounting terms not otherwise defined herein have the meanings
assigned to them in accordance with generally accepted accounting principles as
in effect at the time of computation;
(5) Whenever the context may require, any gender shall be deemed to
include the other;
(6) Unless the context otherwise requires, any reference to an
"Article" or a "Section" refers to an Article or a Section, as the case may be,
of this Indenture; and
(7) The words "hereby", "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.
"Accredited Investor" means an institutional accredited investor within
the meaning of Rule 501(a)(1), (2), (3) or (7) of Regulation D under the
Securities Act.
"Act" when used with respect to any Holder has the meaning specified in
Section 1.4(a).
"Additional Interest" means the interest, if any, that shall accrue on
any interest on the Securities of any series the payment of which has not been
made on the applicable Interest Payment Date and which shall accrue at the rate
per annum specified or determined as specified in such Security.
"Additional Sums" has the meaning specified in Section 10.6.
2
<PAGE> 9
"Additional Taxes" means any additional taxes, duties and other
governmental charges to which an Issuer Trust has become subject from time to
time as a result of a Tax Event.
"Administrator" means, in respect of any Issuer Trust, each Person
appointed in accordance with the related Trust Agreement, solely in such
Person's capacity as Administrator of such Issuer Trust and not in such Person's
individual capacity, or any successor Administrator appointed as therein
provided.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"Agent Member" means any member of, or participant in, the Depositary.
"Applicable Procedures" means, with respect to any transfer or
transaction involving a Global Security or beneficial interest therein, the
rules and procedures of the Depositary for such Global Security, in each case to
the extent applicable to such transaction and as in effect from time to time.
"Authenticating Agent" means any Person authorized by the Trustee
pursuant to Section 6.14 to act on behalf of the Trustee to authenticate
Securities of one or more series.
"Board of Directors" means the board of directors of the Company or the
Executive Committee of the board of directors of the Company (or any other
committee of the board of directors of the Company performing similar functions)
or, for purposes of this Indenture, a committee designated by the board of
directors of the Company (or such committee), comprised of two or more members
of the board of directors of the Company or officers of the Company, or both.
"Board Resolution" means a copy of a resolution certified by the
Secretary or any Assistant Secretary of the Company to have been duly adopted by
the Board of Directors, or such committee of the Board of Directors or officers
of the Company to which authority to act on behalf of the Board of Directors has
been delegated, and to be in full force and effect on the date of such
certification, and delivered to the Trustee.
"Business Day" means any day other than (i) a Saturday or Sunday, (ii)
a day on which banking institutions in the City of New York, New York, or the
City of Baltimore, Maryland, are authorized or required by law or executive
order to remain closed, or (iii) a day on which the Corporate Trust Office of
the Trustee, or, with respect to the Securities of a series initially issued to
an Issuer Trust, the "Corporate Trust Office" (as defined in the related Trust
Agreement) of the Property Trustee or the Delaware Trustee under the related
Trust Agreement, is closed for business.
3
<PAGE> 10
"Capital Securities" has the meaning specified in the first recital of
this Indenture.
"Capital Treatment Event" means, in respect of any Issuer Trust, the
reasonable determination by the Company that, as a result of the occurrence of
any amendment to, or change (including any announced prospective change) in, the
laws (or any rules or regulations thereunder) of the United States or any
political subdivision thereof or therein, or as a result of any official or
administrative pronouncement or action or judicial decision interpreting or
applying such laws or regulations, which amendment or change is effective or
such pronouncement, action or decision is announced on or after the date of the
issuance of the Capital Securities of such Issuer Trust, there is more than an
insubstantial risk that the Company will not be entitled to treat an amount
equal to the Liquidation Amount of such Capital Securities as "Tier 1 Capital"
(or the then equivalent thereof) for purposes of the risk-based capital adequacy
guidelines of the Board of Governors of the Federal Reserve System, as then in
effect and applicable to the Company.
"Commission" means the Securities and Exchange Commission, as from time
to time constituted, created under the Exchange Act, or, if at any time after
the execution of this instrument such Commission is not existing and performing
the duties now assigned to it under the Trust Indenture Act, then the body
performing such duties on such date.
"Common Securities" has the meaning specified in the first recital of
this Indenture.
"Common Stock" means the common stock, $1.00 par value per share, of
the Company.
"Company" means the Person named as the "Company" in the first
paragraph of this instrument until a successor entity shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Company" shall mean such successor entity.
"Company Request" and "Company Order" mean, respectively, the written
request or order signed in the name of the Company by its Chairman of the Board
of Directors, any Vice Chairman of the Board of Directors, its President, Chief
Operating Officer, or a Senior Vice President, Executive Vice President, or Vice
President, and by its Chief Financial Officer, its Treasurer or an Assistant
Treasurer, or its Secretary or an Assistant Secretary, and delivered to the
Trustee.
"Corporate Trust Office" means the principal office of the Trustee at
which at any particular time its corporate trust business shall be administered.
"Creditor" has the meaning specified in Section 6.7(c).
"Defaulted Interest" has the meaning specified in Section 3.8.
"Delaware Trustee" means, with respect to any Issuer Trust, the Person
identified as the "Delaware Trustee" in the related Trust Agreement, solely in
its capacity as Delaware Trustee of
4
<PAGE> 11
such Issuer Trust under such Trust Agreement and not in its individual capacity,
or its successor in interest in such capacity, or any successor Delaware trustee
appointed as therein provided.
"Depositary" means, with respect to the Securities of any series
issuable or issued in whole or in part in the form of one or more Global
Securities, the Person designated as Depositary by the Company pursuant to
Section 3.1 with respect to such series (or any successor thereto).
"Discount Security" means any security that provides for an amount less
than the principal amount thereof to be due and payable upon a declaration of
acceleration of the Maturity thereof pursuant to Section 5.2.
"Dollar" or "$" means the currency of the United States of America
that, as at the time of payment, is legal tender for the payment of public and
private debts.
The term "entity" includes a bank, corporation, association, company,
limited liability company, joint-stock company or business trust.
"Event of Default," unless otherwise specified in the supplemental
indenture creating a series of Securities, has the meaning specified in Article
V.
"Exchange Act" means the Securities Exchange Act of 1934 and any
statute successor thereto, in each case as amended from time to time.
"Expiration Date" has the meaning specified in Section 1.4(f).
"Extension Period" has the meaning specified in Section 3.12.
"Global Security" means a Security in the form prescribed in Section
2.4 evidencing all or part of a series of Securities, issued to the Depositary
or its nominee for such series, and registered in the name of such Depositary or
its nominee.
"Guarantee" means, with respect to any Issuer Trust, the Guarantee
Agreement executed by the Company for the benefit of the Holders of the Capital
Securities issued by such Issuer Trust, as modified, amended or supplemented
from time to time.
"Holder" means a Person in whose name a Security is registered in the
Securities Register.
"Indenture" means this instrument as originally executed or as it may
from time to time be supplemented or amended by one or more indentures
supplemental hereto entered into pursuant to the applicable provisions hereof
and shall include the terms of each particular series of Securities established
as contemplated by Section 3.1.
5
<PAGE> 12
"Interest Payment Date" means, as to each series of Securities, the
Stated Maturity of an installment of interest on such Securities.
"Investment Company Act" means the Investment Company Act of 1940 and
any statute successor thereto, in each case as amended from time to time.
"Investment Company Event" means the receipt by an Issuer Trust of an
Opinion of Counsel (as defined in the relevant Trust Agreement) experienced in
such matters to the effect that, as a result of the occurrence of a change in
law or regulation or a written change (including any announced prospective
change) in interpretation or application of law or regulation by any legislative
body, court, governmental agency or regulatory authority, there is more than an
insubstantial risk that such Issuer Trust is or will be considered an
"investment company" that is required to be registered under the Investment
Company Act, which change or prospective change becomes effective or would
become effective, as the case may be, on or after the date of the issuance of
the Capital Securities of such Issuer Trust.
"Issuer Trust" has the meaning specified in the first recital of this
Indenture.
"Liquidation Amount" shall have the meaning assigned in the applicable
related Trust Agreement.
"Maturity" when used with respect to any Security means the date on
which the principal of such Security becomes due and payable as therein or
herein provided, whether at the Stated Maturity or by declaration of
acceleration, call for redemption or otherwise.
"Notice of Default" means a written notice of the kind specified in
Section 5.1(3).
"Officers' Certificate" means a certificate signed by the Chairman of
the Board of Directors, Vice Chairman of the Board of Directors , Chief
Executive Officer, the President, Chief Operating Officer, Executive Vice
President or a Vice President, and by the Chief Financial Officer, the
Treasurer, an Assistant Treasurer, the Secretary or an Assistant Secretary, of
the Company, and delivered to the party provided herein. Any Officers'
Certificate delivered with respect to compliance with a condition or covenant
provided for in this Indenture shall include:
(a) a statement by each officer signing the Officers' Certificate that
such officer has read the covenant or condition and the definitions relating
thereto;
(b) a brief statement of the nature and scope of the examination or
investigation undertaken by such officer in rendering the Officers' Certificate;
(c) a statement that such officer has made such examination or
investigation as, in such officer's opinion, is necessary to enable such officer
to express an informed opinion as to whether or not such covenant or condition
has been complied with; and
6
<PAGE> 13
(d) a statement as to whether, in the opinion of each such officer,
such condition or covenant has been complied with.
"Opinion of Counsel" means a written opinion of counsel, who may be
counsel for or an employee of the Company or any Affiliate of the Company.
"Original Issue Date" means the date of issuance specified as such in
each Security.
"Outstanding" means, when used in reference to any Securities, as of
the date of determination, all Securities theretofore authenticated and
delivered under this Indenture, except:
(i) Securities theretofore canceled by the Trustee or delivered to
the Trustee for cancellation;
(ii) Securities for whose payment money in the necessary amount has
been theretofore deposited with the Trustee or any Paying Agent in trust for the
Holders of such Securities; and
(iii) Securities in substitution for or in lieu of which other
Securities have been authenticated and delivered or that have been paid pursuant
to Section 3.6, unless proof satisfactory to the Trustee is presented that any
such Securities are held by Holders in whose hands such Securities are valid,
binding and legal obligations of the Company;
provided, however, that in determining whether the Holders of the requisite
principal amount of Outstanding Securities have given any request, demand,
authorization, direction, notice, consent or waiver hereunder, Securities owned
by the Company or any other obligor upon the Securities or any Affiliate of the
Company or such other obligor (other than, for the avoidance of doubt, the
Issuer Trust to which Securities of the applicable series were initially issued)
shall be disregarded and deemed not to be Outstanding, except that, in
determining whether the Trustee shall be protected in relying upon any such
request, demand, authorization, direction, notice, consent or waiver, only
Securities that the Trustee knows to be so owned shall be so disregarded.
Securities so owned that have been pledged in good faith may be regarded as
Outstanding if the pledgee establishes to the satisfaction of the Trustee the
pledgee's right so to act with respect to such Securities and that the pledgee
is not the Company or any other obligor upon the Securities or any Affiliate of
the Company or such other obligor (other than, for the avoidance of doubt, such
Issuer Trust). Upon the written request of the Trustee, the Company shall
furnish to the Trustee promptly an Officers' Certificate listing and identifying
all Securities, if any, known by the Company to be owned or held by or for the
account of the Company, or any other obligor on the Securities or any Affiliate
of the Company or such obligor (other than, for the avoidance of doubt, such
Issuer Trust), and, subject to the provisions of Section 6.1, the Trustee shall
be entitled to accept such Officers' Certificate as conclusive evidence of the
facts therein set forth and of the fact that all Securities not listed therein
are Outstanding for the purpose of any such determination.
7
<PAGE> 14
"Paying Agent" means the Trustee or any Person authorized by the
Company to pay the principal of (or premium, if any) or interest on, or other
amounts in respect of any Securities on behalf of the Company.
"Person" means any individual, corporation, partnership, joint venture,
trust, unincorporated organization or government or any agency or political
subdivision thereof.
"Place of Payment" means, with respect to the Securities of any series,
the place or places where the principal of (and premium, if any) and interest on
the Securities of such series are payable pursuant to Section 3.1.
"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. For the purposes of this definition, any security
authenticated and delivered under Section 3.7 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.
"Principal Subsidiary Bank" means each of (i) Provident Bank of
Maryland, a Maryland banking corporation, (ii) any other banking subsidiary of
the Company the consolidated assets of which constitute 20% or more of the
consolidated assets of the Company and its consolidated subsidiaries, (iii) any
other banking subsidiary designated as a Principal Subsidiary Bank pursuant to a
Board Resolution and set forth in an Officers' Certificate delivered to the
Trustee, and (iv) any subsidiary of the Company that owns, directly or
indirectly, any voting securities, or options, warrants or rights to subscribe
for or purchase voting securities, of any Principal Subsidiary Bank under clause
(i), (ii), (iii), or (iv), and in the case of clause (i), (ii), (iii), or (iv),
their respective successors (whether by consolidation, merger, conversion,
transfer of substantially all their assets and business or otherwise) so long as
any such successor is a banking subsidiary (in the case of clause (i), (ii), or
(iii)) or a subsidiary (in the case of clause (iv)) of the Company.
"Proceeding" has the meaning specified in Section 13.2.
"Property Trustee" means, with respect to any Issuer Trust, the Person
identified as the "Property Trustee" in the related Trust Agreement, solely in
its capacity as Property Trustee of such Issuer Trust under such Trust Agreement
and not in its individual capacity, or its successor in interest in such
capacity, or any successor property trustee appointed as therein provided.
"Redemption Date", when used with respect to any Security to be
redeemed, means the date fixed for such redemption by or pursuant to this
Indenture or the terms of such Security.
"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.
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"Regular Record Date" for the interest payable on any Interest Payment
Date with respect to the Securities of a series means, unless otherwise provided
pursuant to Section 3.1 with respect to Securities of such series, the close of
business on the first day of the month in which such Interest Payment Date
occurs (whether or not a Business Day).
"Responsible Officer", when used with respect to the Property Trustee
means any officer assigned to the Corporate Trust Office, including any managing
director, vice president, principal, assistant vice president, assistant
treasurer, assistant secretary or any other officer of the Trustee customarily
performing functions similar to those performed by any of the above designated
officers and having direct responsibility for the administration of this
Indenture, and also, with respect to a particular matter, any other officer to
whom such matter is referred because of such officer's knowledge of and
familiarity with the particular subject.
"Restricted Security" means each Security required pursuant to Section
3.6(c) to bear a Restricted Securities Legend.
"Restricted Securities Certificate" means a certificate substantially
in the form set forth in Annex A.
"Restricted Securities Legend" means a legend substantially in the form
of the legend required in the form of Security set forth in Section 2.2 to be
placed upon a Restricted Security.
"Rights Plan" means any plan of the Company providing for the issuance
by the Company to all holders of its Common Stock, of rights entitling the
holders thereof to subscribe for or purchase shares of any class or series of
capital stock of the Company which rights (i) are deemed to be transferred with
such shares of such Common Stock, (ii) are not exercisable, and (iii) are also
issued in respect of future issuances of such Common Stock, in each case until
the occurrence of a specified event or events.
"Securities" or "Security" means any debt securities or debt security,
as the case may be, authenticated and delivered under this Indenture.
"Securities Act" means the Securities Act of 1933, as modified, amended
or supplemented from time to time.
"Securities Register" and "Securities Registrar" have the respective
meanings specified in Section 3.6(a).
"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, including obligations
incurred in connection with the acquisition of property, assets or businesses;
(iii) every reimbursement obligation of the Company with respect to letters of
credit,
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<PAGE> 16
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) every obligation of the Company
for claims (as defined in Section 101(4) of the United States Bankruptcy 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 the payment of which, the Company has guaranteed or is responsible or
liable, directly or indirectly, as obligor or otherwise. "Senior Indebtedness"
shall not include (i) any obligations which, by their terms, are expressly
stated to rank pari passu in right of payment with, or to not be superior in
right of payment to, the Securities, (ii) any Senior Indebtedness of the Company
which when incurred and without respect to any election under Section 1111(b) of
the United States Bankruptcy Code of 1978, as amended, was without recourse to
the Company, (iii) any indebtedness of the Company to any of its subsidiaries,
(iv) indebtedness to any executive officer or director of the Company, or (v)
any indebtedness 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 Record Date" for the payment of any Defaulted Interest means a
date fixed by the Trustee pursuant to Section 3.8.
"Stated Maturity", when used with respect to any Security or any
installment of principal thereof or interest thereon, means the date specified
pursuant to the terms of such Security as the fixed date on which the principal
of such Security or such installment of principal or interest is due and
payable, as such date may, in the case of such principal, be shortened or
extended as provided pursuant to the terms of such Security and this Indenture.
"Subsidiary" means an entity more than 50% of the outstanding voting
stock of which is owned, directly or indirectly, by the Company or by one or
more other Subsidiaries, or by the Company and one or more other Subsidiaries.
For purposes of this definition, "voting stock" means stock that ordinarily has
voting power for the election of directors, whether at all times or only so long
as no senior class of stock has such voting power by reason of any contingency.
"Successor Security" of any particular Security means every Security
issued after, and evidencing all or a portion of the same debt as that evidenced
by, such particular Security; and, for the purposes of this definition, any
Security authenticated and delivered under Section 3.7 in exchange for or in
lieu of a mutilated, destroyed, lost or stolen Security shall be deemed to
evidence the same debt as the mutilated, destroyed, lost or stolen Security.
"Tax Event" means the receipt by an Issuer Trust of an Opinion of
Counsel (as defined in the relevant Trust Agreement) experienced in such matters
to the effect that, as a result of any amendment to, or change (including any
announced prospective change) in, the laws (or any
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<PAGE> 17
regulations thereunder) of the United States or any political subdivision or
taxing authority thereof or therein, or as a result of any official or
administrative pronouncement or action or judicial decision interpreting or
applying such laws or regulations, which amendment or change is effective or
which pronouncement or decision is announced on or after the date of issuance of
the Capital Securities of such Issuer Trust, there is more than an insubstantial
risk that (i) such Issuer Trust is, or will be within 90 days of the delivery of
such Opinion of Counsel, subject to United States Federal income tax with
respect to income received or accrued on the corresponding series of Securities
issued by the Company to such Issuer Trust, (ii) interest payable by the Company
on such corresponding series of Securities is not, or within 90 days of the
delivery of such Opinion of Counsel will not be, deductible by the Company, in
whole or in part, for United States Federal income tax purposes, or (iii) such
Issuer Trust is, or will be within 90 days of the delivery of such Opinion of
Counsel, subject to more than a de minimis amount of other taxes, duties or
other governmental charges.
"Trust Agreement" means, with respect to any Issuer Trust, the trust
agreement or other governing instrument of such Issuer Trust.
"Trustee" means the Person named as the "Trustee" in the first
paragraph of this Indenture, solely in its capacity as such and not in its
individual capacity, until a successor Trustee shall have become such pursuant
to the applicable provisions of this Indenture, and thereafter "Trustee" shall
mean or include each Person who is then a Trustee hereunder and, if at any time
there is more than one such Person, "Trustee" as used with respect to the
Securities of any series shall mean the Trustee with respect to Securities of
that series.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as
modified, amended or supplemented from time to time, except as provided in
Section 9.5.
"Trust Securities" has the meaning specified in the first recital of
this Indenture.
"Vice President," when used with respect to the Company, means any duly
appointed vice president, whether or not designated by a number or a word or
words added before or after the title "vice president."
SECTION 1.2. Compliance Certificate and Opinions.
Upon any application or request by the Company to the Trustee to take
any action under any provision of this Indenture, the Company shall furnish to
the Trustee an Officers' Certificate stating that all conditions precedent
(including covenants compliance with which constitutes a condition precedent),
if any, provided for in this Indenture relating to the proposed action have been
complied with and an Opinion of Counsel stating that, in the opinion of such
counsel, all such conditions precedent (including covenants compliance with
which constitutes a condition precedent), if any, have been complied with,
except that in the case of any such application or request as to which the
furnishing of such documents is specifically required by any provision of this
Indenture relating to such particular application or request, no additional
certificate or opinion need be furnished.
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Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture (other than the
certificates provided pursuant to Section 10.4) shall include:
(1) a statement by each individual signing such certificate or opinion
that such individual has read such covenant or condition and the definitions
herein relating thereto;
(2) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions of such individual contained
in such certificate or opinion are based;
(3) a statement that, in the opinion of such individual, he or she has
made such examination or investigation as is necessary to enable him or her to
express an informed opinion as to whether or not such covenant or condition has
been complied with; and
(4) a statement as to whether, in the opinion of such individual, such
condition or covenant has been complied with.
SECTION 1.3. Forms of Documents Delivered to Trustee.
In any case where several matters are required to be certified by, or
covered by an opinion of, any specified Person, it is not necessary that all
such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several documents.
Any certificate or opinion of an officer of the Company may be based,
insofar as it relates to legal matters, upon a certificate or opinion of, or
representations by, counsel, unless such officer knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations
with respect to matters upon which his or her 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.
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SECTION 1.4. Acts of Holders.
(a) Any request, demand, authorization, direction, notice, consent,
waiver or other action provided by this Indenture to be given to or taken by
Holders may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Holders in person or by an agent duly
appointed in writing; and, except as herein otherwise expressly provided, such
action shall become effective when such instrument or instruments is or are
delivered to the Trustee, and, where it is hereby expressly required, to the
Company. Such instrument or instruments (and the action embodied therein and
evidenced thereby) are herein sometimes referred to as the "Act" of the Holders
signing such instrument or instruments. Proof of execution of any such
instrument or of a writing appointing any such agent shall be sufficient for any
purpose of this Indenture and (subject to Section 6.1) conclusive in favor of
the Trustee and the Company, if made in the manner provided in this Section.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness of such
execution or by the certificate of any notary public or other officer authorized
by law to take acknowledgments of deeds, certifying that the individual signing
such instrument or writing acknowledged to him or her the execution thereof.
Where such execution is by a Person acting in other than his or her individual
capacity, such certificate or affidavit shall also constitute sufficient proof
of his or her authority.
(c) The fact and date of the execution by any Person of any such
instrument or writing, or the authority of the Person executing the same, may
also be provided in any other manner that the Trustee deems sufficient and in
accordance with such reasonable rules as the Trustee may determine.
(d) The ownership of Securities shall be proved by the Securities
Register.
(e) Any request, demand, authorization, direction, notice, consent,
waiver or other action by the Holder of any Security shall bind every future
Holder of the same Security and the Holder of every Security issued upon the
transfer thereof or in exchange therefor or in lieu thereof in respect of
anything done or suffered to be done by the Trustee or the Company in reliance
thereon, whether or not notation of such action is made upon such Security.
(f) The Company may set any day as a record date for the purpose of
determining the Holders of Outstanding Securities of any series entitled to
give, make or take any request, demand, authorization, direction, notice,
consent, waiver or other action provided or permitted by this Indenture to be
given, made or taken by Holders of Securities of such series, provided that the
Company may not set a record date for, and the provisions of this paragraph
shall not apply with respect to, the giving or making of any notice,
declaration, request or direction referred to in the next succeeding paragraph.
If any record date is set pursuant to this paragraph, the Holders of Outstanding
Securities of the relevant series on such record date, and no other Holders,
shall be entitled to take the relevant action, whether or not such Holders
remain Holders after such record date, provided that no such action shall be
effective hereunder unless taken on or prior to the
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<PAGE> 20
applicable Expiration Date (as defined below) by Holders of the requisite
principal amount of Outstanding Securities of such series on such record date.
Nothing in this paragraph shall be construed to prevent the Company from setting
a new record date for any action for which a record date has previously been set
pursuant to this paragraph (whereupon the record date previously set shall
automatically and with no action by any Person be cancelled and of no effect),
and nothing in this paragraph shall be construed to render ineffective any
action taken by Holders of the requisite principal amount of Outstanding
Securities of the relevant series on the date such action is taken. Promptly
after any record date is set pursuant to this paragraph, the Company, at its own
expense, shall cause notice of such record date, the proposed action by Holders
and the applicable Expiration Date to be given to the Trustee in writing and to
each Holder of Securities of the relevant series in the manner set forth in
Section 1.6.
The Trustee may set any day as a record date for the purpose of
determining the Holders of Outstanding Securities of any series entitled to join
in the giving or making of (i) any Notice of Default, (ii) any declaration of
acceleration referred to in Section 5.2, (iii) any request to institute
proceedings referred to in Section 5.7(2), or (iv) any direction referred to in
Section 5.12, in each case with respect to Securities of such series. If any
record date is set pursuant to this paragraph, the Holders of Outstanding
Securities of such series on such record date, and no other Holders, shall be
entitled to join in such notice, declaration, request or direction, whether or
not such Holders remain Holders after such record date, provided that no such
action shall be effective hereunder unless taken on or prior to the applicable
Expiration Date by Holders of the requisite principal amount of Outstanding
Securities of such series on such record date. Nothing in this paragraph shall
be construed to prevent the Trustee from setting a new record date for any
action for which a record date has previously been set pursuant to this
paragraph (whereupon the record date previously set shall automatically and with
no action by any Person be cancelled and of no effect) and nothing in this
paragraph shall be construed to render ineffective any action taken by Holders
of the requisite principal amount of Outstanding Securities of the relevant
series on the date such action is taken. Promptly after any record date is set
pursuant to this paragraph, the Trustee, at the Company's expense, shall cause
notice of such record date, the proposed action by Holders and the applicable
Expiration Date to be given to the Company in writing and to each Holder of
Securities of the relevant series in the manner set forth in Section 1.6.
With respect to any record date set pursuant to this Section, the party
hereto that sets such record date may designate any day as the "Expiration Date"
and from time to time may change the Expiration Date to any earlier or later
day, provided that no such change shall be effective unless notice of the
proposed new Expiration Date is given to the other party hereto in writing, and
to each Holder of Securities of the relevant series in the manner set forth in
Section 1.6 on or prior to the existing Expiration Date. If an Expiration Date
is not designated with respect to any record date set pursuant to this Section,
the party hereto that set such record date shall be deemed to have initially
designated the 180th day after such record date as the Expiration Date with
respect thereto, subject to its right to change the Expiration Date as provided
in this paragraph. Notwithstanding the foregoing, no Expiration Date shall be
later than the 180th day after the applicable record date.
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(g) Without limiting the foregoing, a Holder entitled hereunder to take
any action hereunder with regard to any particular Security may do so with
regard to all or any part of the principal amount of such Security or by one or
more duly appointed agents each of which may do so pursuant to such appointment
with regard to all or any part of such principal amount.
SECTION 1.5. Notices, Etc. to Trustee and Company.
Any request, demand, authorization, direction, notice, consent, waiver
or Act of Holders or other document provided or permitted by this Indenture to
be made upon, given or furnished to, or filed with,
(1) the Trustee by any Holder, any holder of Capital Securities or the
Company shall be sufficient for every purpose hereunder if made, given,
furnished or filed in writing to or with the Trustee at its Corporate Trust
Office, or
(2) the Company by the Trustee, any Holder or any holder of Capital
Securities shall be sufficient for every purpose (except as otherwise provided
in Section 5.1) hereunder if in writing and mailed, first class, postage
prepaid, to the Company addressed to it at the address of its principal office
specified in the first paragraph of this instrument or at any other address
previously furnished in writing to the Trustee by the Company.
SECTION 1.6. Notice to Holders; Waiver.
Where this Indenture provides for notice to Holders of any event, such
notice shall be sufficiently given (unless otherwise herein expressly provided)
if in writing and mailed, first class postage prepaid, to each Holder affected
by such event, at the address of such Holder as it appears in the Securities
Register, not later than the latest date, and not earlier than the earliest
date, prescribed for the giving of such notice. If, by reason of the suspension
of or irregularities in regular mail services or for any other reason, it shall
be impossible or impracticable to mail notice of any event to Holders when said
notice is required to be given pursuant to any provision of this Indenture or of
the relevant Securities, then any manner of giving such notice as shall be
satisfactory to the Trustee shall be deemed to be a sufficient giving of such
notice. 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.
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SECTION 1.7. 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 so modified or to be excluded, as
the case may be.
SECTION 1.8. Effect of Headings and Table of Contents.
The Article and Section headings herein and the Table of Contents are
for convenience only and shall not affect the construction hereof.
SECTION 1.9. Successors and Assigns.
All covenants and agreements in this Indenture by the Company shall
bind its successors and assigns, whether so expressed or not.
SECTION 1.10. Separability Clause.
If 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 1.11. Benefits of Indenture.
Nothing in this Indenture or in the Securities, express or implied,
shall give to any Person, other than the parties hereto and their successors and
assigns, the holders of Senior Indebtedness, the Holders of the Securities and,
to the extent expressly provided in Sections 5.2, 5.8, 5.9, 5.11, 5.13, 9.1 and
9.2, the holders of Capital Securities, any benefit or any legal or equitable
right, remedy or claim under this Indenture.
SECTION 1.12. Governing Law.
THIS INDENTURE AND THE SECURITIES SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
SECTION 1.13. Non-Business Days.
If any Interest Payment Date, Redemption Date or Stated Maturity of any
Security shall not be a Business Day, then (notwithstanding any other provision
of this Indenture or the Securities) payment of interest or principal (and
premium, if any) or other amounts in respect of such Security need not be made
on such date, but may be made on the next succeeding Business Day (and no
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<PAGE> 23
interest shall accrue in respect of the amounts whose payment is so delayed for
the period from and after such Interest Payment Date, Redemption Date or Stated
Maturity, as the case may be, until such next succeeding Business Day) except
that, if such Business Day is in the next succeeding calendar year, such payment
shall be made on the immediately preceding Business Day (in each case with the
same force and effect as if made on the Interest Payment Date or Redemption Date
or at the Stated Maturity).
ARTICLE II
SECURITY FORMS
SECTION 2.1. Forms Generally.
The Securities of each series and the Trustee's certificate of
authentication shall be in substantially the forms set forth in this Article, or
in such other form or forms as shall be established by or pursuant to a Board
Resolution or in one or more indentures supplemental hereto, in each case with
such appropriate insertions, omissions, substitutions and other variations as
are required or permitted by this Indenture and may have such letters, numbers
or other marks of identification and such legends or endorsements placed thereon
as may be required to comply with applicable tax laws or the rules of any
securities exchange or as may, consistently herewith, be determined by the
officers executing such securities, as evidenced by their execution of the
Securities. If the form of Securities of any series is established by action
taken pursuant to a Board Resolution, a copy of an appropriate record of such
action shall be certified by the Secretary or an Assistant Secretary of the
Company and delivered to the Trustee at or prior to the delivery of the Company
Order contemplated by Section 3.3 with respect to the authentication and
delivery of such Securities.
The Trustee's certificates of authentication shall be substantially in
the form set forth in this Article.
The definitive Securities shall be printed, lithographed or engraved or
produced by any combination of these methods, if required by any securities
exchange on which the Securities may be listed, on a steel engraved border or
steel engraved borders or may be produced in any other manner permitted by the
rules of any securities exchange on which the Securities may be listed, all as
determined by the officers executing such Securities, as evidenced by their
execution of such Securities.
Securities distributed to holders of Global Capital Securities (as
defined in the applicable Trust Agreement) upon the dissolution of an Issuer
Trust shall be distributed in the form of one or more Global Securities
registered in the name of a Depositary or its nominee, and deposited with the
Securities Registrar, as custodian for such Depositary, or with such Depositary,
for credit by the Depositary to the respective accounts of the beneficial owners
of the Securities represented thereby (or such other accounts as they may
direct). Securities distributed to holders of Capital Securities other than
Global Capital Securities upon the dissolution of an Issuer Trust shall not be
issued in the form of a Global Security or any other form intended to facilitate
book-entry trading in beneficial interests in such Securities.
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SECTION 2.2. Form of Face of Security.
PROVIDENT BANKSHARES CORPORATION
___% JUNIOR SUBORDINATED DEFERRABLE INTEREST DEBENTURES
DUE _______, ____
THE SECURITIES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT") AND MAY NOT BE
OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT (A) BY ANY INITIAL
INVESTOR THAT IS NOT A QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE
144A UNDER THE SECURITIES ACT, (I) TO A PERSON WHOM THE TRANSFEROR REASONABLY
BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER PURCHASING FOR ITS OWN ACCOUNT OR
FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 144A, (II) IN AN OFFSHORE TRANSACTION COMPLYING WITH THE
PROVISIONS OF RULE 903 OR RULE 904 OF REGULATION S UNDER THE SECURITIES ACT, OR
(III) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT
PROVIDED BY RULE 144 THEREUNDER (IF AVAILABLE), OR (B) BY AN INITIAL INVESTOR
THAT IS A QUALIFIED INSTITUTIONAL BUYER OR BY ANY SUBSEQUENT INVESTOR, AS SET
FORTH IN (A) ABOVE AND, IN ADDITION, TO AN ACCREDITED INVESTOR IN A TRANSACTION
EXEMPT FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, AND, IN EACH
CASE IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF THE STATES AND OTHER
JURISDICTIONS OF THE UNITED STATES. THE HOLDER OF THIS SECURITY AGREES THAT IT
WILL COMPLY WITH THE FOREGOING RESTRICTIONS. SECURITIES OWNED BY AN INITIAL
INVESTOR THAT IS NOT A QUALIFIED INSTITUTIONAL BUYER MAY NOT BE HELD IN GLOBAL
FORM AND MAY NOT BE TRANSFERRED WITHOUT CERTIFICATION THAT THE TRANSFER COMPLIES
WITH THE FOREGOING RESTRICTIONS, AS PROVIDED IN THE INDENTURE REFERRED TO BELOW.
NO REPRESENTATION CAN BE MADE AS TO THE AVAILABILITY OF THE EXEMPTION PROVIDED
BY RULE 144 FOR RESALES OF THE CAPITAL SECURITIES.
No. $
PROVIDENT BANKSHARES CORPORATION, a Maryland corporation (hereinafter
called the "Company", which term includes any successor Person under the
Indenture hereinafter referred to), for value received, hereby promises to pay
to , or registered assigns, the principal sum of __________Dollars on ,
or such other principal amount represented hereby as may be set forth in the
records of the Securities Registrar hereinafter referred to in accordance with
the Indenture. The Company further promises to pay interest on said principal
from _____ __, ____ or from the most recent Interest Payment Date to which
interest has been paid or duly provided for semi-annually (subject to deferral
as set forth herein) in arrears on ______________ of each year, commencing
______________, ____ at the rate of ____% per annum, together with Additional
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Sums, if any, as provided in Section 10.6 of the Indenture, until the principal
hereof is paid or duly provided for or made available for payment; provided that
any overdue principal, premium or Additional Sums and any overdue installment of
interest shall bear Additional Interest at the rate of ____% per annum (to the
extent that the payment of such interest shall be legally enforceable),
compounded semi-annually, from the dates such amounts are due until they are
paid or made available for payment, and such interest shall be payable on
demand. The amount of interest payable for any period less than a full interest
period shall be computed on the basis of a 360-day year of twelve 30-day months
and the actual days elapsed in a partial month in such period. The amount of
interest payable for any full interest period shall be computed by dividing the
applicable rate per annum by two. The interest so payable, and punctually paid
or duly provided for, on any Interest Payment Date will, as provided in the
Indenture, be paid to the Person in whose name this Security (or one or more
Predecessor Securities) is registered at the close of business on the Regular
Record Date for such interest installment, which shall be ________ __ or _______
__ (whether or not a Business Day), as the case may be, next preceding such
Interest Payment Date. Any such interest not so punctually paid or duly provided
for shall forthwith cease to be payable to the Holder on such Regular Record
Date and may either be paid to the Person in whose name this Security (or one or
more Predecessor Securities) is registered at the close of business on a Special
Record Date for the payment of such Defaulted Interest to be fixed by the
Trustee (notice whereof shall be given to Holders of Securities of this series
not less than 10 days prior to such Special Record Date) or be paid at any time
in any other lawful manner not inconsistent with the requirements of any
securities exchange on which the Securities of this series may be listed, and
upon such notice as may be required by such exchange, all as more fully provided
in said Indenture.
So long as no Event of Default has occurred and is continuing, the
Company shall have the right, at any time during the term of this Security, from
time to time to defer the payment of interest on this Security for up to 10
consecutive semi-annual interest payment periods with respect to each deferral
period (each an "Extension Period") during which Extension Periods the Company
shall have the right to make partial payments of interest on any Interest
Payment Date, and at the end of which the Company shall pay all interest then
accrued and unpaid including Additional Interest, as provided below; provided,
however, that no Extension Period shall extend beyond the Stated Maturity of the
principal of this Security as then in effect, and no such Extension Period may
end on a date other than an Interest Payment Date; and provided, further,
however, that during any such Extension Period, the Company shall not (i)
declare or pay any dividends or distributions on, or redeem, purchase, acquire
or make a liquidation payment with respect to, any of the Company's capital
stock, or (ii) make any payment of principal of or interest or premium, if any,
on or repay, repurchase or redeem any debt securities of the Company that rank
pari passu in all respects with or junior in interest to this Security (other
than (a) repurchases, redemptions or other acquisitions of shares of capital
stock of the Company 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, in connection with a dividend reinvestment
or shareholder stock purchase plan or in connection with the issuance of capital
stock of the Company (or securities convertible into or exercisable for such
capital stock) as consideration in an acquisition transaction entered into prior
to the applicable Extension Period, (b) as a result of an exchange or conversion
of any class or series of the Company's capital stock (or any capital stock of a
Subsidiary of the Company) for any class
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<PAGE> 26
or series of the Company's capital stock or of any class or series of the
Company's indebtedness for any class or series of the Company's capital stock,
(c) the purchase of fractional interests in shares of the Company's capital
stock pursuant to the conversion or exchange provisions of such capital stock or
the security being converted or exchanged, (d) any declaration of a dividend in
connection with any Rights Plan, or the issuance of rights, stock or other
property under any 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 ranks pari passu with or junior to such stock). Prior
to the termination of any such Extension Period, the Company may further defer
the payment of interest, provided that no Extension Period shall exceed 10
consecutive semi-annual interest payment periods, extend beyond the Stated
Maturity of the principal of this Security or end on a date other than an
Interest Payment Date. Upon the termination of any such Extension Period and
upon the payment of all accrued and unpaid interest and any Additional Interest
then due on any Interest Payment Date, the Company may elect to begin a new
Extension Period, subject to the above conditions. No interest shall be due and
payable during an Extension Period, except at the end thereof, but each
installment of interest that would otherwise have been due and payable during
such Extension Period shall bear Additional Interest (to the extent that the
payment of such interest shall be legally enforceable) at the rate of ____% per
annum, compounded semi-annually and calculated as set forth in the first
paragraph of this Security, from the date on which such amounts would otherwise
have been due and payable until paid or made available for payment. The Company
shall give the Holder of this Security and the Trustee notice of its election to
begin any Extension Period at least one Business Day prior to the next
succeeding Interest Payment Date on which interest on this Security would be
payable but for such deferral or so long as such securities are held by
Provident Trust I (the "Issuer Trust"), at least one Business Day prior to the
earlier of (i) the next succeeding date on which Distributions on the Capital
Securities of such Issuer Trust would be payable but for such deferral, and (ii)
the date on which the Property Trustee of such Issuer Trust is required to give
notice to holders of such Capital Securities of the record date or the date such
Distributions are payable, but in any event not less than one Business Day prior
to such record date.
Payment of the principal of (and premium, if any) and interest on this
Security will be made at the office or agency of the Company maintained for that
purpose in the United States, in such coin or currency of the United States of
America as at the time of payment is legal tender for payment of public and
private debts; provided, however that at the option of the Company payment of
interest may be made (i) by check mailed to the address of the Person entitled
thereto as such address shall appear in the Securities Register, or (ii) if to a
Holder of $1,000,000 or more in aggregate principal amount of this Security, by
wire transfer in immediately available funds upon written request to the Trustee
not later than 15 calendar days prior to the date on which the interest is
payable.
The indebtedness evidenced by this Security is, to the extent provided
in the Indenture, subordinate and subject in right of payments 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 his or her behalf to take
such actions as may be necessary
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<PAGE> 27
or appropriate to effectuate the subordination so provided, and (c) appoints the
Trustee his or her attorney-in-fact for any and all such purposes. Each Holder
hereof, by his or her acceptance hereof, 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.
Reference is hereby made to the further provisions of this Security set
forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been executed by
the Trustee referred to on the reverse hereof by manual signature, this Security
shall not be entitled to any benefit under the Indenture or be valid or
obligatory for any purpose.
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed under its corporate seal.
PROVIDENT BANKSHARES CORPORATION
By:
Name:
Title:
Attest:
_______________________
Secretary or Assistant Secretary
This is one of the Securities of the 8.29% Junior Subordinated
Deferrable Interest Debentures series designated therein referred to in the
within-mentioned Indenture.
BANKERS TRUST COMPANY,
as Trustee
By:
Authorized Secretary
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<PAGE> 28
SECTION 2.3. Form of Reverse of Security.
This Security is one of a duly authorized issue of securities of the
Company (herein called the "Securities"), issued and to be issued in one or more
series under the Junior Subordinated Indenture, dated as of _______, ____
(herein called the "Indenture"), between the Company and Bankers Trust Company,
as Trustee (herein called the "Trustee", which term includes any successor
trustee under the Indenture), to which Indenture and all indentures supplemental
thereto reference is hereby made for a statement of the respective rights,
limitations of rights, duties and immunities thereunder of the Company, the
Trustee, the holders of Senior Indebtedness and the Holders of the Securities,
and of the terms upon which the Securities are, and are to be, authenticated and
delivered. This Security is one of the __% ______ Debentures (the "Junior
Subordinated Debentures") series designated herein limited in aggregate
principal amount to $_________.
All terms used in this Security that are defined in the Indenture, in
the Amended and Restated Trust Agreement, dated as of _____________ (as
modified, amended or supplemented from time to time the "Trust Agreement"),
relating to Provident Trust I the ("Issuer Trust") among the Company, as
Depositor, the Trustees named therein, the Administrators named therein, and the
Holders from time to time of the Trust Securities issued pursuant thereto or in
the Registration Rights Agreement dated as of ______________ among the
Company,__________ and__________, shall have the meanings assigned to them in
the Indenture or the Trust Agreement, or the Registration Rights Agreement, as
the case may be.
The Company has the right to redeem this Security (i) on or after
_____________, in whole at any time or in part from time to time, or (ii) in
whole (but not in part), at any time within 90 days following the occurrence and
during the continuation of a Tax Event, Investment Company Event, or Capital
Treatment Event, in each case at the Redemption Price described below, and
subject to possible regulatory approval.
In the case of a redemption on or after __________________, the
Redemption Price shall equal the following prices, expressed in percentages of
the principal amount hereof, together with accrued interest to but excluding the
date fixed for redemption, if redeemed during the 12-month period beginning
___________:
<TABLE>
<CAPTION>
Redemption
Year Price
---- -----
<S> <C>
</TABLE>
and 100% on or after __________.
In the case of a redemption on or after ______________ following a Tax
Event, Investment Company Event or Capital Treatment Event, the Redemption Price
shall equal the Redemption Price then applicable to a redemption under the
preceding paragraph.
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<PAGE> 29
In the case of a redemption prior to ________________ following a Tax
Event, Investment Company Event or Capital Treatment Event in respect of the
Issuer Trust, the Redemption Price shall equal the Make-Whole Amount for a
corresponding $1,000 principal amount hereof, together with accrued interest to
but excluding the date fixed for redemption, which Make-Whole Amount will be
equal to the greater of (i) 100% of the principal amount hereof, and (ii) as
determined by a Quotation Agent (as defined in the Trust Agreement), the sum of
the present values of the principal amount hereof and premium, if any, payable
as part of the Redemption Price with respect to an optional redemption hereof on
_______________, together with the present values of scheduled payments of
interest from the Redemption Date to _____________, in each case discounted to
the Redemption Date on a semi-annual basis (assuming a 360-day year consisting
of 30-day months) at the Adjusted Treasury Rate (as defined in the Trust
Agreement).
In the event of redemption of this Security in part only, a new
Security or Securities of this series for the unredeemed portion hereof will be
issued in the name of the Holder hereof upon the cancellation hereof.
Pursuant to the Registration Rights Agreement, in the event that: (i)
(A) neither the Exchange Offer Registration Statement nor a Shelf Registration
Statement is filed with the Commission on or prior to the 150th day after the
Issue Date or (B) notwithstanding that the Company and __________ have
consummated or will consummate an Exchange Offer, the Company and the__________
are required to file a Shelf Registration Statement and such Shelf Registration
Statement is not filed on or prior to the date required by the Registration
Rights Agreement, then commencing on the day after the applicable required
filing date, liquidated damages shall accrue on the principal amount of the
Junior Subordinated Debentures and, if the Exchange Offer has been consummated,
the Exchange Junior Subordinated Debentures, each at a rate of 0.25% per annum;
or (ii) (A) neither the Exchange Offer Registration Statement nor a Shelf
Registration Statement is declared effective by the Commission on or prior to
the 180th day after the Issue Date or (B) notwithstanding that the Company and
the Issuer Trust have consummated or will consummate an Exchange Offer, the
Company and the Issuer Trust are required to file a Shelf Registration Statement
and such Shelf Registration Statement is not declared effective by the
Commission on or prior to the 30th day after the date such Shelf Registration
Statement was required to be filed, then, commencing on the 31st day after the
applicable filing date, liquidated damages shall accrue on the principal amount
of the Junior Subordinated Debentures and, if the Exchange Offer has been
consummated, the Exchange Junior Subordinated Debentures, each at a rate of
0.25% per annum; or (iii) (A) the Issuer Trust has not exchanged Exchange
Capital Securities for all Capital Securities validly tendered for exchange by
their respective Holders or the Company has not exchanged the Exchange Guarantee
or Exchange Junior Subordinated Debentures for the Guarantee or Junior
Subordinated Debentures validly tendered, in accordance with the terms of the
Exchange Offer on or prior to the 30th day after the date on which the Exchange
Offer Registration Statement was declared effective or (B) if applicable, the
Shelf Registration Statement has been declared effective and such Shelf
Registration Statement ceases to be effective at any time prior to the
expiration of the Rule 144(K) Period (other than after such time as all Capital
Securities have been disposed of thereunder or otherwise cease to be Registrable
Securities), then liquidated damages shall accrue on the principal amount of the
Junior Subordinated Debentures and, if the Exchange
23
<PAGE> 30
Offer has been consummated, the Exchange Junior Subordinated Debentures, each at
a rate of 0.25% per annum commencing on (x) the 31st business day after such
effective date, in the case of (A) above, or (y) the day such Shelf Registration
Statement ceases to be effective in the case of B above; provided, however, that
the liquidated damages on the Junior Subordinated Debentures and, if the
Exchange Offer has been consummated, the Exchange Junior Subordinated
Debentures, each may not exceed in the aggregate 0.25% per annum; provided,
further, however, that (1) upon the filing of the Exchange Offer Registration
Statement or a Shelf Registration Statement (in the case of clause (i) above),
(2) upon the effectiveness of the Exchange Offer Registration Statement or a
Shelf Registration Statement (in the case of clause (ii) above), or (3) upon the
exchange of Exchange Capital Securities, the Exchange Guarantee and Exchange
Junior Subordinated Debentures for all Capital Securities, the Guarantee and all
Junior Subordinated Debentures tendered (in the case of clause (iii)(A) above),
or upon the effectiveness of the Shelf Registration Statement which had ceased
to remain effective (in the case of clause (iii)(B) above) liquidated damages on
the Junior Subordinated Debentures and, if the Exchange Offer has been
consummated, the Exchange Junior Subordinated Debentures, shall cease to accrue
and accumulate.
Any amounts of liquidated damages due pursuant to the preceding
paragraph, will be payable in cash on the next succeeding Interest Payment Date
to Holders on the relevant Regular Record Date.
The Indenture permits, with certain exceptions as therein provided, the
Company and the Trustee at any time to enter into a supplemental indenture or
indentures for the purpose of modifying in any manner the rights and obligations
of the Company and of the Holders of the Securities, with the consent of the
Holders of not less than a majority in principal amount of the Outstanding
Securities of each series to be affected by such supplemental indenture. The
Indenture also contains provisions permitting Holders of specified percentages
in principal amount of the Securities of each series at the time Outstanding, on
behalf of the Holders of all Securities of such series, to waive compliance by
the Company with certain provisions of the Indenture and certain past defaults
under the Indenture and their consequences. Any such consent or waiver by the
Holder of this Security shall be conclusive and binding upon such Holder and
upon all future Holders of this Security and of any Security issued upon the
registration of transfer hereof or in exchange herefor or in lieu hereof,
whether or not notation of such consent or waiver is made upon this Security.
As provided in and subject to the provisions of the Indenture, if an
Event of Default with respect to the Securities of this series at the time
Outstanding occurs and is continuing, then and in every such case the Trustee or
the Holders of not less than 25% in aggregate principal amount of the
Outstanding Securities of this series may declare the principal amount of all
the Securities of this series to be due and payable immediately, by a notice in
writing to the Company (and to the Trustee if given by Holders), provided that,
if upon an Event of Default, the Trustee or such Holders fail to declare the
principal of all the Outstanding Securities of this series to be immediately due
and payable, the Holders of at least 25% in aggregate Liquidation Amount of the
Capital Securities then outstanding shall have the right to make such
declaration by a notice in writing to the Company and the Trustee; and upon any
such declaration the principal amount of and the accrued interest (including any
Additional Interest) on all the Securities of this series shall become
immediately due
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<PAGE> 31
and payable, provided that the payment of principal and interest (including any
Additional Interest) on such Securities shall remain subordinated to the extent
provided in Article XIII of the Indenture.
No reference herein to the Indenture and no provision of this Security
or of the Indenture shall alter or impair the obligation of the Company, which
is absolute and unconditional, to pay the principal of (and premium, if any) and
interest (including Additional Interest) on this Security at the times, place
and rate, and in the coin or currency, herein prescribed.
As provided in the Indenture and subject to certain limitations therein
set forth, the transfer of this Security is registrable in the Securities
Register, upon surrender of this Security for registration of transfer at the
office or agency of the Company maintained under Section 10.2 of the Indenture
for such purpose, duly endorsed by, or accompanied by a written instrument of
transfer in form satisfactory to the Company and the Securities Registrar duly
executed by, the Holder hereof or such Holder's attorney duly authorized in
writing, and thereupon one or more new Securities of this series, of like tenor,
of authorized denominations and for the same aggregate principal amount, will be
issued to the designated transferee or transferees.
The Securities of this series are issuable only in registered form
without coupons in denominations of $100,000 and any integral multiple of $1,000
in excess thereof. Securities or portions thereof may be transferred or
exchanged only in principal amounts of not less than $100,000. Any transfer,
exchange or other disposition of Securities in contravention of Section
3.6(b)(v) of the Indenture shall be deemed to be void and of no legal effect
whatsoever, any such transferee shall be deemed not to be the Holder or owner of
any beneficial interest in such Securities for any purpose, including but not
limited to the receipt of interest payable on such Securities, and such
transferee shall be deemed to have no interest whatsoever in such Securities. As
provided in the Indenture and subject to certain limitations therein set forth,
Securities of this series are exchangeable for a like aggregate principal amount
of Securities of this series and of like tenor of a different authorized
denomination, as requested by the Holder surrendering the same.
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 Company and, by its acceptance of this Security or a beneficial
interest therein, the Holder of, and any Person that acquires a beneficial
interest in, this Security agrees that for United States Federal, state and
local tax purposes it is intended that this Security constitute indebtedness.
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<PAGE> 32
THIS SECURITY SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF NEW YORK.
THIS SECURITY IS A DIRECT AND UNSECURED OBLIGATION OF THE COMPANY, DOES
NOT EVIDENCE DEPOSITS AND IS NOT INSURED BY THE FEDERAL DEPOSIT INSURANCE
CORPORATION OR ANY OTHER INSURER OR GOVERNMENT AGENCY.
SECTION 2.4. Additional Provisions Required in Global Security.
Unless otherwise specified as contemplated by Section 3.1, any Global
Security issued hereunder shall, in addition to the provisions contained in
Sections 2.2 and 2.3, bear a legend in substantially the following form:
THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING
OF THE INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN
THE NAME OF A DEPOSITARY OR A NOMINEE OF A DEPOSITARY. THIS
SECURITY IS EXCHANGEABLE FOR SECURITIES REGISTERED IN THE NAME
OF A PERSON OTHER THAN THE DEPOSITARY OR ITS NOMINEE ONLY IN
THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE AND MAY
NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A
NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO
THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY, EXCEPT IN
THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE.
SECTION 2.5. Form of Trustee's Certificate of Authentication.
The Trustee's certificates of authentication shall be in substantially
the following form:
This is one of the Securities of the series designated therein referred
to in the within-mentioned Indenture.
Dated:____________________ BANKERS TRUST COMPANY,
as Trustee
By: ____________________________
Authorized Signatory
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<PAGE> 33
ARTICLE III
THE SECURITIES
SECTION 3.1. Title and Terms.
The aggregate principal amount of Securities that may be authenticated
and delivered under this Indenture is unlimited.
The Securities may be issued in one or more series. There shall be
established in or pursuant to a Board Resolution and, subject to Section 3.3,
set forth or determined in the manner provided, in an Officers' Certificate, or
established in one or more indentures supplemental hereto, prior to the issuance
of Securities as a series:
(a) the title of the securities of such series, which shall distinguish
the Securities of the series from all other Securities;
(b) the limit, if any, upon the aggregate principal amount of the
Securities of such series that may be authenticated and delivered under this
Indenture (except for Securities authenticated and delivered upon registration
of transfer of, or in exchange for, or in lieu of, other Securities of the
series pursuant to Section 3.4, 3.5, 3.6, 9.6 or 11.6 and except for any
Securities that, pursuant to Section 3.3, are deemed never to have been
authenticated and delivered hereunder); provided, however, that the authorized
aggregate principal amount of such series may be increased above such amount by
a Board Resolution to such effect;
(c) the Person to whom any interest on a Security of the series shall
be payable, if other than 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;
(d) the Stated Maturity or Maturities on which the principal of the
Securities of such series is payable or the method of determination thereof, and
any dates on which or circumstances under which, the Company shall have the
right to extend or shorten such Stated Maturity or Maturities;
(e) the rate or rates, if any, at which the Securities of such series
shall bear interest, if any, the rate or rates and extent to which Additional
Interest, if any, shall be payable with respect to any Securities of such
series, the date or dates from which any such interest or Additional Interest
shall accrue, the Interest Payment Dates on which such interest shall be
payable, the right, pursuant to Section 3.12 or as otherwise set forth therein,
of the Company to defer or extend an Interest Payment Date, and the Regular
Record Date for the interest payable on any Interest Payment Date or the method
by which any of the foregoing shall be determined;
(f) the place or places where the principal of (and premium, if any)
and interest or Additional Interest on the Securities of such series shall be
payable, the place or places where the Securities of such series may be
presented for registration of transfer or exchange, any restrictions
27
<PAGE> 34
that may be applicable to any such transfer or exchange in addition to or in
lieu of those set forth herein and the place or places where notices and demands
to or upon the Company in respect of the Securities of such series may be made;
(g) the period or periods within or the date or dates on which, if any,
the price or prices at which and the terms and conditions upon which the
Securities of such series may be redeemed, in whole or in part, at the option of
the Company, and if other than by a Board Resolution, the manner in which any
election by the Company to redeem such Securities shall be evidenced;
(h) the obligation or the right, if any, of the Company to redeem,
repay or purchase the Securities of such series pursuant to any sinking fund,
amortization or analogous provisions, or at the option of a Holder thereof, and
the period or periods within which, the price or prices at which, the currency
or currencies (including currency unit or units) in which and the other terms
and conditions upon which Securities of the series shall be redeemed, repaid or
purchased, in whole or in part, pursuant to such obligation;
(i) the denominations in which any Securities of such series shall be
issuable, if other than denominations of $1,000 and any integral multiple
thereof;
(j) if other than Dollars, the currency or currencies (including any
currency unit or units) in which the principal of (and premium, if any) and
interest and Additional Interest, if any, on the Securities of the series shall
be payable, or in which the Securities of the series shall be denominated and
the manner of determining the equivalent thereof in Dollars for purposes of the
definition of Outstanding;
(k) the additions, modifications or deletions, if any, in the Events of
Default or covenants of the Company set forth herein with respect to the
Securities of such series;
(l) if other than the principal amount thereof, the portion of the
principal amount of Securities of such series that shall be payable upon
declaration of acceleration of the Maturity thereof;
(m) if the principal amount payable at the Stated Maturity of any
Securities of the series will not be determinable as of any one or more dates
prior to the Stated Maturity, the amount which shall be deemed to be the
principal amount of such Securities as of any such date for any purpose
thereunder or hereunder, including the principal amount thereof which shall be
due and payable upon any Maturity other than the Stated Maturity or which shall
be deemed to be Outstanding as of any date prior to the Stated Maturity (or, in
any such case, the manner in which such amount deemed to be the principal amount
shall be determined);
(n) if applicable, that the Securities of the series, in whole or in
any specified part, shall be defeasible and, if other than by a Board
Resolution, the manner in which any election by the Company to defease such
Securities shall be evidenced;
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<PAGE> 35
(o) the additions or changes, if any, to this Indenture with respect to
the Securities of such series as shall be necessary to permit or facilitate the
issuance of the Securities of such series in bearer form, registrable or not
registrable as to principal, and with or without interest coupons;
(p) any index or indices used to determine the amount of payments of
principal of and premium, if any, on the Securities of such series or the manner
in which such amounts will be determined;
(q) if applicable, that any Securities of the series shall be issuable
in whole or in part in the form of one or more Global Securities and, in such
case, the respective Depositaries for such Global Securities, the form of any
legend or legends that shall be borne by any such Global Security in addition to
or in lieu of that set forth in Section 2.4 and any circumstances in addition to
or in lieu of those set forth in Section 3.5 in which any such Global Security
may be exchanged in whole or in part for Securities registered, and any transfer
of such Global Security in whole or in part may be registered, in the name or
names of Persons other than the Depositary for such Global Security or a nominee
thereof;
(r) the appointment of any Paying Agent or agents for the Securities of
such series;
(s) the terms of any right to convert or exchange Securities of such
series into any other securities or property of the Company, and the additions
or changes, if any, to this Indenture with respect to the Securities of such
series to permit or facilitate such conversion or exchange;
(t) if such Securities are to be issued to an Issuer Trust, the form or
forms of the Trust Agreement and Guarantee relating thereto;
(u) if other than as set forth herein, the relative degree, if any, to
which the Securities or the series shall be senior to or be subordinated to
other series of Securities in right of payment, whether such other series of
Securities are Outstanding or not;
(v) any addition to or change in the Events of Default which applies to
any Securities of the series and any change in the right of the Trustee or the
requisite Holders of such Securities to declare the principal amount thereof due
and payable pursuant to Section 5.2;
(w) any addition to or change in the covenants set forth in Article X
which applies to Securities of the series; and
(x) any other terms of the Securities of such series (which terms shall
not be inconsistent with the provisions of this Indenture, except as permitted
by Section 9.1).
All Securities of any one series shall be substantially identical
except as to denomination and except as may otherwise be provided herein or in
or pursuant to such Board Resolution and set forth, or determined in the manner
provided, in such Officers' Certificate or in any indenture supplemental hereto.
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<PAGE> 36
If any of the terms of the series are established by action taken
pursuant to a Board Resolution, a copy of an appropriate record of such action
shall be certified by the Secretary or an Assistant Secretary of the Company and
delivered to the Trustee at or prior to the delivery of the Officers'
Certificate setting forth the terms of the series.
The securities shall be subordinated in right of payment to Senior
Indebtedness as provided in Article XIII.
SECTION 3.2. Denominations.
The Securities of each series shall be in registered form without
coupons and shall be issuable in minimum denominations of $100,000 and any
integral multiples of $1,000 in excess thereof, unless otherwise specified as
contemplated by Section 3.1(i).
SECTION 3.3. Execution, Authentication, Delivery and Dating.
The Securities shall be executed on behalf of the Company by its
Chairman of the Board of Directors, its Vice Chairman of the Board of Directors,
its President, Chief Operating Officer or one of its Vice Presidents, under its
corporate seal reproduced or impressed thereon and attested by its Secretary or
one of its Assistant Secretaries. The signature of any of these officers on the
Securities may be manual or facsimile.
Securities bearing the manual or facsimile signatures of individuals
who were at any time the proper officers of the Company shall bind the Company,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Securities or did not
hold such offices at the date of such Securities. At any time and from time to
time after the execution and delivery of this Indenture, the Company may deliver
Securities of any series 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 the Company
Order shall authenticate and deliver such Securities. If the form or terms of
the Securities of the series have been established by or pursuant to one or more
Board Resolutions as permitted by Sections 2.1 and 3.1, in authenticating such
Securities, and accepting the additional responsibilities under this Indenture
in relation to such Securities, the Trustee shall be entitled to receive, and
(subject to Section 6.1) shall be fully protected in relying upon, an Opinion of
Counsel stating,
(1) if the form of such Securities has been established by or
pursuant to Board Resolution as permitted by Section 2.1, that such
form has been established in conformity with the provisions of this
Indenture;
(2) if the terms of such Securities have been established by
or pursuant to Board Resolution as permitted by Section 3.1, that such
terms have been established in conformity with the provisions of this
Indenture; and
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(3) that such Securities, when authenticated and delivered by
the Trustee and issued by the Company in the manner and subject to any
conditions specified in such Opinion of Counsel, will constitute valid
and legally binding obligations of the Company enforceable in
accordance with their terms, subject to bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium and similar laws of
general applicability relating to or affecting creditors' rights and to
general equity principles.
If such form or terms have been so established, the Trustee shall not be
required to authenticate such Securities if the issue of such Securities
pursuant to this Indenture will affect the Trustee's own rights, duties or
immunities under the Securities and this Indenture or otherwise in a manner that
is not reasonably acceptable to the Trustee.
Notwithstanding the provisions of Section 3.1 and the preceding
paragraph, if all Securities of a series are not to be originally issued at one
time, it shall not be necessary to deliver the Officers' Certificate otherwise
required pursuant to Section 3.1 or the Company Order and Opinion of Counsel
otherwise required pursuant to such preceding paragraph at or prior to the
authentication of each Security of such series if such documents are delivered
at or prior to the authentication upon original issuance of the first Security
of such series to be issued.
Each Security shall be dated the date of its authentication.
No Security shall be entitled to any benefit under this Indenture or be
valid or obligatory for any purpose, unless there appears on such Security a
certificate of authentication substantially in the form provided for herein
executed by the Trustee by the manual signature of one of its authorized
officers or signatories, and such certificate upon any Security shall be
conclusive evidence, and the only evidence, that such Security has been duly
authenticated and delivered hereunder. Notwithstanding the foregoing, if any
Security shall have been authenticated and delivered hereunder but never issued
and sold by the Company, and the Company shall deliver such Security to the
Trustee for cancellation as provided in Section 3.10, for all purposes of this
Indenture such Security shall be deemed never to have been authenticated and
delivered hereunder and shall never be entitled to the benefits of this
Indenture.
SECTION 3.4. Temporary Securities.
Pending the preparation of definitive Securities of any series, the
Company may execute, and upon receipt of a Company Order the Trustee shall
authenticate and deliver, temporary Securities that are printed, lithographed,
typewritten, mimeographed or otherwise produced, in any authorized denomination,
substantially of the tenor of the definitive Securities of such series in lieu
of which they are issued and with such appropriate insertions, omissions,
substitutions and other variations as the officers executing such Securities may
determine, as evidenced by their execution of such Securities.
If temporary Securities of any series are issued, the Company will
cause definitive Securities of such series to be prepared without unreasonable
delay. After the preparation of definitive
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Securities, the temporary Securities shall be exchangeable for definitive
Securities upon surrender of the temporary Securities at the office or agency of
the Company designated for that purpose without charge to the Holder. Upon
surrender for cancellation of any one or more temporary Securities, the Company
shall execute and the Trustee shall authenticate and deliver in exchange
therefor one or more definitive securities of the same series, of any authorized
denominations having the same Original Issue Date and Stated Maturity and having
the same terms as such temporary Securities. Until so exchanged, the temporary
Securities of any series shall in all respects be entitled to the same benefits
under this Indenture as definitive Securities of such series.
SECTION 3.5. Global Securities.
(a) Each Global Security issued under this Indenture shall be
registered in the name of the Depositary designated by the Company for such
Global Security or a nominee thereof and delivered to such Depositary or a
nominee thereof or custodian therefor, and each such Global Security shall
constitute a single Security for all purposes of this Indenture.
(b) Notwithstanding any other provision in this Indenture, no Global
Security may be exchanged in whole or in part for Securities registered, and no
transfer of a Global Security in whole or in part may be registered, in the name
of any Person other than the Depositary for such Global Security or a nominee
thereof unless (i) such Depositary advises the Trustee in writing that such
Depositary is no longer willing or able to properly discharge its
responsibilities as Depositary with respect to such Global Security, and the
Company is unable to locate a qualified successor, (ii) the Company executes and
delivers to the Trustee a Company Order stating that the Company elects to
terminate the book-entry system through the Depositary, or (iii) there shall
have occurred and be continuing an Event of Default.
(c) If any Global Security is to be exchanged for other Securities or
cancelled in whole, it shall be surrendered by or on behalf of the Depositary or
its nominee to the Securities Registrar for exchange or cancellation as provided
in this Article III. If any Global Security is to be exchanged for other
Securities or cancelled in part, or if another Security is to be exchanged in
whole or in part for a beneficial interest in any Global Security, then either
(i) such Global Security shall be so surrendered for exchange or cancellation as
provided in this Article III or (ii) the principal amount thereof shall be
reduced, subject to Section 3.6(b)(v), or increased by an amount equal to the
portion thereof to be so exchanged or cancelled, or equal to the principal
amount of such other Security to be so exchanged for a beneficial interest
therein, as the case may be, by means of an appropriate adjustment made on the
records of the Securities Registrar, whereupon the Trustee, in accordance with
the Applicable Procedures, shall instruct the Depositary or its authorized
representative to make a corresponding adjustment to its records. Upon any such
surrender or adjustment of a Global Security by the Depositary, accompanied by
registration instructions, the Trustee shall, subject to Section 3.6(b) and as
otherwise provided in this Article III, authenticate and deliver any Securities
issuable in exchange for such Global Security (or any portion thereof) in
accordance with the instructions of the Depositary. The Trustee shall not be
liable for any delay in delivery of such instructions and may conclusively rely
on, and shall be fully protected in relying on, such instructions.
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(d) Every Security authenticated and delivered upon registration of
transfer of, or in exchange for or in lieu of, a Global Security or any portion
thereof, whether pursuant to this Article III, Section 9.6 or 11.6 or otherwise,
shall be authenticated and delivered in the form of, and shall be, a Global
Security, unless such Security is registered in the name of a Person other than
the Depositary for such Global Security or a nominee thereof.
(e) The Depositary or its nominee, as the registered owner of a Global
Security, shall be the Holder of such Global Security for all purposes under
this Indenture and the Securities, and owners of beneficial interests in a
Global Security shall hold such interests pursuant to the Applicable Procedures.
Accordingly, any such owner's beneficial interest in a Global Security shall be
shown only on, and the transfer of such interest shall be effected only through,
records maintained by the Depositary or its nominee or agent. Neither the
Trustee nor the Securities Registrar shall have any liability in respect of any
transfers effected by the Depositary.
(f) The rights of owners of beneficial interests in a Global Security
shall be exercised only through the Depositary and shall be limited to those
established by law and agreements between such owners and the Depositary and/or
its Agent Members.
SECTION 3.6. Registration, Transfer and Exchange Generally; Certain
Transfers and Exchanges; Securities Act Legends.
(a) The Company shall cause to be kept at the Corporate Trust Office of
the Trustee a register in which, subject to such reasonable regulations as it
may prescribe, the Company shall provide for the registration of Securities and
transfers of Securities. Such register is herein sometimes referred to as the
"Securities Register." The Trustee is hereby appointed "Securities Registrar"
for the purpose of registering Securities and transfers of Securities as herein
provided.
Upon surrender for registration of transfer of any Security at the
offices or agencies of the Company designated for that purpose, the Company
shall execute, and the Trustee shall authenticate and deliver, in the name of
the designated transferee or transferees, one or more new Securities of the same
series of any authorized denominations of like tenor and aggregate principal
amount and bearing such restrictive legends as may be required by this
Indenture.
At the option of the Holder, Securities may be exchanged for other
Securities of the same series in any authorized denominations, of like tenor and
aggregate principal amount and bearing such restrictive legends as may be
required by this Indenture, upon surrender of the Securities to be exchanged at
such office or agency. Whenever any securities are so surrendered for exchange,
the Company shall execute, and the Trustee shall authenticate and deliver, the
Securities that the Holder making the exchange is entitled to receive.
All Securities issued upon any transfer or exchange of Securities shall
be the valid obligations of the Company, evidencing the same debt, and entitled
to the same benefits under this Indenture, as the Securities surrendered upon
such transfer or exchange.
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Every Security presented or surrendered for transfer or 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 Securities Registrar, duly executed by the Holder thereof or
such Holder's attorney duly authorized in writing.
No service charge shall be made to a Holder for any transfer or
exchange of Securities, but the Company may require payment of a sum sufficient
to cover any tax or other governmental charge that may be imposed in connection
with any transfer or exchange of Securities.
Neither the Company nor the Trustee shall be required, pursuant to the
provisions of this Section, (i) to issue, register the transfer of or exchange
any Security of any series during a period beginning at the opening of business
15 days before the day of selection for redemption of Securities of that series
pursuant to Article XI and ending at the close of business on the day of mailing
of the notice of redemption, or (ii) to register the transfer of or exchange any
Security so selected for redemption in whole or in part, except, in the case of
any such Security to be redeemed in part, any portion thereof not to be
redeemed.
(b) Certain Transfers and Exchanges. Notwithstanding any other
provision of this Indenture, transfers and exchanges of Securities and
beneficial interests in a Global Security shall be made only in accordance with
this Section 3.6(b).
(i) Restricted Non-Global Security to Global Security. If the
Holder of a Restricted Security (other than a Global Security) wishes
at any time to transfer all or any portion of such Security to a Person
who wishes to take delivery thereof in the form of a beneficial
interest in a Global Security, such transfer may be effected only in
accordance with the provisions of this clause (b)(i) and subject to the
Applicable Procedures. Upon receipt by the Securities Registrar of (A)
such Security as provided in Section 3.6(a) and instructions
satisfactory to the Securities Registrar directing that a beneficial
interest in the Global Security in a specified principal amount not
greater than the principal amount of such Security be credited to a
specified Agent Member's account and (B) a Restricted Securities
Certificate duly executed by such Holder or such Holder's attorney duly
authorized in writing, then the Securities Registrar shall cancel such
Security (and issue a new Security in respect of any untransferred
portion thereof) as provided in Section 3.10 and increase the aggregate
principal amount of the Global Security by the specified principal
amount as provided in Section 3.5(c).
(ii) Non-Global Security to Non-Global Security. A Security
that is not a Global Security may be transferred, in whole or in part,
to a Person who takes delivery in the form of another Security that is
not a Global Security as provided in Section 3.6(a), provided that if
the Security to be transferred in whole or in part is a Restricted
Security, the Securities Registrar shall have received a Restricted
Securities Certificate duly executed by the transferor Holder or such
Holder's attorney duly authorized in writing.
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(iii) Exchanges Between Global Security and Non-Global
Security. A beneficial interest in a Global Security may be exchanged
for a Security that is not a Global Security as provided in Section
3.5.
(iv) Certain Initial Transfers of Non-Global Securities. In
the case of Securities initially issued other than in global form, an
initial transfer or exchange of such Securities that does not involve
any change in beneficial ownership may be made to an Accredited
Investor or Investors as if such transfer or exchange were not an
initial transfer or exchange; provided that written certification shall
be provided by the transferee and transferor of such Securities to the
Securities Registrar that such transfer or exchange does not involve a
change in beneficial ownership.
(v) Limitations Relating to Principal Amount. Notwithstanding
any other provision of this Indenture and unless otherwise specified as
permitted by Section 3.1; Securities or portions thereof may be
transferred or exchanged only in principal amounts of not less than
$100,000. Any transfer, exchange or other disposition of Securities in
contravention of this Section 3.6(b)(v) shall be deemed to be void and
of no legal effect whatsoever, any such transferee shall be deemed not
to be the Holder or owner of any beneficial interest in such Securities
for any purpose, including but not limited to the receipt of interest
payable on such Securities, and such transferee shall be deemed to have
no interest whatsoever in such Securities.
(c) Restricted Securities Legend. Except as set forth below, all
Securities shall bear a Restricted Securities Legend:
(i) subject to the following clauses of this Section 3.6(c), a
Security or any portion thereof that is exchanged, upon transfer or
otherwise, for a Global Security or any portion thereof shall bear the
Restricted Securities Legend while represented thereby;
(ii) subject to the following clauses of this Section 3.6(c),
a new Security which is not a Global Security and is issued in exchange
for another Security (including a Global Security) or any portion
thereof, upon transfer or otherwise, shall, if such new Security is
required pursuant to Section 3.6(b)(ii) or (iii) to be issued in the
form of a Restricted Security, bear a Restricted Securities Legend;
(iii) a new Security (other than a Global Security) that does
not bear a Restricted Securities Legend may be issued in exchange for
or in lieu of a Restricted Security or any portion thereof that bears
such a legend if, in the Company's judgment, placing such a legend upon
such new Security is not necessary to ensure compliance with the
registration requirements of the Securities Act, and the Trustee, at
the written direction of the Company in the form of an Officers'
Certificate, shall authenticate and deliver such a new Security as
provided in this Article III;
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(iv) notwithstanding the foregoing provisions of this Section
3.6(c), a Successor Security of a Security that does not bear a
Restricted Securities Legend shall not bear such form of legend unless
the Company has reasonable cause to believe that such Successor
Security is a "restricted security" within the meaning of Rule 144, in
which case the Trustee, at the written direction of the Company in the
form of an Officers' Certificate, shall authenticate and deliver a new
Security bearing a Restricted Securities Legend in exchange for such
Successor Security as provided in this Article III; and
(v) Securities distributed to a holder of Capital Securities
upon dissolution of an Issuer Trust shall bear a Restricted Securities
Legend if the Capital Securities so held bear a similar legend.
SECTION 3.7. Mutilated, Lost and Stolen Securities.
If any mutilated Security is surrendered to the Trustee together with
such security or indemnity as may be required by the Company or the Trustee to
save each of them harmless, the Company shall execute and the Trustee shall
authenticate and deliver in exchange therefor a new Security of the same series,
of like tenor and aggregate principal amount, bearing the same legends, and
bearing a number not contemporaneously outstanding.
If there shall be delivered to the Company and to the Trustee (i)
evidence to their satisfaction of the destruction, loss or theft of any
Security, and (ii) such security or indemnity as may be required by them to save
each of them harmless, then, in the absence of notice to the Company or the
Trustee that such Security has been acquired by a bona fide purchaser, the
Company shall execute and upon its request the Trustee shall authenticate and
deliver, in lieu of any such destroyed, lost or stolen Security, a new Security
of the same series, of like tenor and aggregate principal amount and bearing the
same legends as such destroyed, lost or stolen Security, and bearing a number
not contemporaneously Outstanding.
If any such mutilated, destroyed, lost or stolen Security has become or
is about to become due and payable, the Company in its discretion may, instead
of issuing a new Security, pay such Security.
Upon the issuance of any new Security under this Section 3.7, the
Company may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Trustee) connected therewith.
Every new Security issued pursuant to this Section in lieu of any
destroyed, lost or stolen Security shall constitute an original additional
contractual obligation of the Company, whether or not the destroyed, lost or
stolen Security shall be at any time enforceable by anyone, and shall be
entitled to all the benefits of this Indenture equally and proportionately with
any and all other Securities of such series duly issued hereunder.
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The provisions of this Section are exclusive and shall preclude (to the
extent lawful) all other rights and remedies with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Securities.
SECTION 3.8. Payment of Interest and Additional Interest; Interest
Rights Preserved.
Interest and Additional Interest on any Security of any series that is
payable, and is punctually paid or duly provided for, on any Interest Payment
Date, shall be paid to the Person in whose name that Security (or one or more
Predecessor Securities) is registered at the close of business on the Regular
Record Date for such interest in respect of Securities of such series, except
that, unless otherwise provided in the Securities of such series, interest
payable on the Stated Maturity of the principal of a Security shall be paid to
the Person to whom principal is paid. The initial payment of interest on any
Security of any series that is issued between a Regular Record Date and the
related Interest Payment Date shall be payable as provided in such Security or
in the Board Resolution pursuant to Section 3.1 with respect to the related
series of Securities.
Any interest on any Security that is due and payable, but is not timely
paid or duly provided for, on any Interest Payment Date for Securities of such
series (herein called "Defaulted Interest"), shall forthwith cease to be payable
to the registered Holder on the relevant Regular Record Date by virtue of having
been such Holder, and such Defaulted Interest may be paid by the Company, at its
election in each case, as provided in clause (1) or (2) below:
(1) The Company may elect to make payment of any Defaulted
Interest to the Persons in whose names the Securities of such series in
respect of which interest is in default (or their respective
Predecessor Securities) are registered at the close of business on a
Special Record Date for the payment of such Defaulted Interest, which
shall be fixed in the following manner. The Company shall notify the
Trustee in writing of the amount of Defaulted Interest proposed to be
paid on each Security and the date of the proposed payment, and at the
same time the Company shall deposit with the Trustee an amount of money
equal to the aggregate amount proposed to be paid in respect of such
Defaulted Interest or shall make arrangements satisfactory to the
Trustee for such deposit prior to the date of the proposed payment,
such money when deposited to be held in trust for the benefit of the
Persons entitled to such Defaulted Interest as in this clause provided.
Thereupon, the Trustee shall fix a Special Record Date for the payment
of such Defaulted Interest, which shall 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 of a Security of such series at the address of
such Holder as it appears in the Securities Register not less than 10
days prior to such Special Record Date. The Trustee may, in its
discretion, in the name and at the expense of the
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Company, cause a similar notice to be published at least once in a
newspaper, customarily published in the English language on each
Business Day and of general circulation in the Borough of Manhattan,
The City of New York, New York, and Baltimore City, Maryland but such
publication shall not be a condition precedent to the establishment of
such Special Record Date. Notice of the proposed payment of such
Defaulted Interest and the Special Record Date therefor having been
mailed as aforesaid, such Defaulted Interest shall be paid to the
Persons in whose names the Securities of such series (or their
respective Predecessor Securities) are registered on such Special
Record Date and shall no longer be payable pursuant to the following
clause (2).
(2) The Company may make payment of any Defaulted Interest in
any other lawful manner not inconsistent with the requirements of any
securities exchange on which the Securities of the series in respect of
which interest is in default may be listed and, upon such notice as may
be required by such exchange (or by the Trustee if the Securities are
not listed), if, after notice given by the Company to the Trustee of
the proposed payment pursuant to this clause (2), such payment shall be
deemed practicable by the Trustee.
Subject to the foregoing provisions of this Section, each Security
delivered under this Indenture upon transfer of or in exchange for or in lieu
of any other Security shall carry the rights to interest accrued and unpaid,
and to accrue interest, that were carried by such other Security.
SECTION 3.9. Persons Deemed Owners.
The Company, the Trustee and any agent of the Company or the Trustee
shall treat the Person in whose name any Security is registered as the owner of
such Security for the purpose of receiving payment of principal of and (subject
to Section 3.8) any interest on such Security and for all other purposes
whatsoever, whether or not such Security be overdue, and neither the Company,
the Trustee nor any agent of the Company or the Trustee shall be affected by
notice to the contrary.
No holder of any beneficial interest in any Global Security held on its
behalf by a Depositary shall have any rights under this Indenture with respect
to such Global Security, and such Depositary may be treated by the Company, the
Trustee and any agent of the Company or the Trustee as the owner of such Global
Security for all purposes whatsoever. Notwithstanding the foregoing, nothing
herein shall prevent the Company, the Trustee or any agent of the Company or the
Trustee from giving effect to any written certification, proxy or other
authorization furnished by a Depositary or impair, as between a Depositary and
such holders of beneficial interests, the operation of customary practices
governing the exercise of the rights of the Depositary (or its nominee) as
Holder of any Security.
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SECTION 3.10. Cancellation.
All Securities surrendered for payment, redemption, transfer or
exchange shall, if surrendered to any Person other than the Trustee, be
delivered to the Trustee, and any such Securities and Securities surrendered
directly to the Trustee for any such purpose shall be promptly canceled by it.
The Company may at any time deliver to the Trustee for cancellation any
Securities previously authenticated and delivered hereunder that the Company may
have acquired in any manner whatsoever, and all Securities so delivered shall be
promptly canceled by the Trustee. No Securities shall be authenticated in lieu
of or in exchange for any Securities canceled as provided in this Section,
except as expressly permitted by this Indenture. All canceled Securities shall
be destroyed by the Trustee and the Trustee shall deliver to the Company a
certificate of such destruction.
SECTION 3.11. Computation of Interest.
Except as otherwise specified as contemplated by Section 3.1 for
Securities of any series, interest on the Securities of each series for any
period shall be computed on the basis of a 360-day year of twelve 30-day months
and the actual number of days elapsed in any partial month in such period, and
interest on the Securities of each series for a full period shall be computed by
dividing the rate per annum by the number of interest periods that together
constitute a full twelve months.
SECTION 3.12. Deferrals of Interest Payment Dates.
If specified as contemplated by Section 2.1 or Section 3.1 with respect
to the Securities of a particular series, so long as no Event of Default has
occurred and is continuing, the Company shall have the right, at any time during
the term of such series, from time to time to defer the payment of interest on
such Securities for such period or periods (each an "Extension Period") not to
exceed 10 consecutive semi-annual periods with respect to each Extension Period,
during which Extension Periods the Company shall, if so specified as
contemplated by Section 3.1, have the right to make partial payments of interest
on any Interest Payment Date. No Extension Period shall end on a date other than
an Interest Payment Date. At the end of any such Extension Period, the Company
shall pay all interest then accrued and unpaid on the Securities (together with
Additional Interest thereon, if any, at the rate specified for the Securities of
such series to the extent permitted by applicable law); provided, however, that
no Extension Period shall extend beyond the Stated Maturity of the principal of
the Securities of such series; and provided further, however, that, during any
such Extension Period, the Company shall not (i) declare or pay any dividends or
distributions on, or redeem, purchase, acquire or make a liquidation payment
with respect to, any of the Company's capital stock, or (ii) make any payment of
principal of or interest or premium, if any, on or repay, repurchase or redeem
any debt securities of the Company that rank pari passu in all respects with or
junior in interest to the Securities of such series (other than (a) repurchases,
redemptions or other acquisitions of shares of capital stock of the Company 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, in connection with a dividend reinvestment or
shareholder stock purchase plan or in connection with the issuance of capital
stock of the Company (or securities convertible into or
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exercisable for such capital stock) as consideration in an acquisition
transaction entered into prior to the applicable Extension Period, (b) as a
result of an exchange or conversion of any class or series of the Company's
capital stock (or any capital stock of a Subsidiary of the Company) for any
class or series of the Company's capital stock or of any class or series of the
Company's indebtedness for any class or series of the Company's capital stock,
(c) the purchase of fractional interests in shares of the Company's capital
stock pursuant to the conversion or exchange provisions of such capital stock or
the security being converted or exchanged, (d) any declaration of a dividend in
connection with any Rights Plan, or the issuance of rights, stock or other
property under any 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 ranks pari passu with or junior to such stock). Prior
to that termination of any such Extension Period, the Company may further defer
the payment of interest, provided that no Event of Default has occurred and is
continuing and provided further, that no Extension Period shall exceed the
period or periods specified in such Securities, extend beyond the Stated
Maturity of the principal of such Securities or end on a date other than an
Interest Payment Date. Upon the termination of any such Extension Period and
upon the payment of all accrued and unpaid interest and any Additional Interest
then due on any Interest Payment Date, the Company may elect to begin a new
Extension Period, subject to the above conditions. No interest or Additional
Interest shall be due and payable during an Extension Period, except at the end
thereof, but each installment of interest that would otherwise have been due and
payable during such Extension Period shall bear Additional Interest as and to
the extent as may be specified as contemplated by Section 3.1. The Company shall
give the Holders of the Securities of such series and the Trustee notice of its
election to begin any such Extension Period at least one Business Day prior to
the next succeeding Interest Payment Date on which interest on Securities of
such series would be payable but for such deferral or, with respect to any
Securities of a series issued to an Issuer Trust, so long as any such Securities
are held by such Issuer Trust, at least one Business Day prior to the earlier of
(i) the next succeeding date on which Distributions on the Capital Securities of
such Issuer Trust would be payable but for such deferral, and (ii) the date on
which the Property Trustee of such Issuer Trust is required to give notice to
holders of such Capital Securities of the record date or the date such
Distributions are payable, but in any event not less than one Business Day prior
to such record date.
The Trustee shall promptly give notice of the Company's election to
begin any such Extension Period to the Holders of the Outstanding Securities of
such series.
SECTION 3.13. Right of Set-Off.
With respect to the Securities of a series initially issued to an
Issuer Trust, notwithstanding anything to the contrary herein, the Company shall
have the right to set off any payment it is otherwise required to make in
respect of any such Security to the extent the Company has theretofore made, or
is concurrently on the date of such payment making, a payment under the
Guarantee relating to such Security or to a holder of Capital Securities
pursuant to an action undertaken under Section 5.8 of this Indenture.
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SECTION 3.14. Agreed Tax Treatment.
Each Security issued hereunder shall provide that the Company and, by
its acceptance of a Security or a beneficial interest therein, the Holder of,
and any Person that acquires a beneficial interest in, such Security agree that
for United States Federal, state and local tax purposes it is intended that such
Security constitutes indebtedness.
SECTION 3.15. Shortening or Extension of Stated Maturity.
If specified as contemplated by Section 2.1 or Section 3.1 with respect
to the Securities of a particular series, the Company shall have the right to
(i) shorten the Stated Maturity of the principal of the Securities of such
series at any time to any date and (ii) extend the Stated Maturity of the
principal of the Securities of such series at any time at its election for one
or more periods, provided that, if the Company elects to exercise its right to
extend the Stated Maturity of the principal of the Securities of such series
pursuant to clause (ii) above, at the time such election is made and at the time
of extension, such conditions as may be specified in such Securities shall have
been satisfied.
SECTION 3.16. 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
notice of redemption and other similar or related materials as a convenience to
Holders; provided that any such notice or other materials 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 redemption or other materials
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.
ARTICLE IV
SATISFACTION AND DISCHARGE
SECTION 4.1. Satisfaction and Discharge of Indenture.
This Indenture shall, upon Company Request, 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 as otherwise provided
in this Section 4.1) and the Trustee, on demand of and at the expense of the
Company, shall execute proper instruments acknowledging satisfaction and
discharge of this Indenture, when
(1) either
(A) all Securities theretofore authenticated and
delivered (other than (i) Securities that have been destroyed,
lost or stolen and that have been replaced or paid as provided
in Section 3.7 and (ii) Securities for whose payment money has
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theretofore been deposited in trust or segregated and held in
trust by the Company and thereafter repaid to the Company or
discharged from such trust, as provided in Section 10.3) have
been delivered to the Trustee for cancellation; or
(B) all such Securities not theretofore delivered to
the Trustee for cancellation
(i) have become due and payable, or
(ii) will become due and payable at their
Stated Maturity within one year of the date of deposit,
or
(iii) are to be called for redemption within one
year under arrangements satisfactory to the Trustee for
the giving of notice of redemption by the Trustee in the
name, and at the expense, of the Company,
and the Company, in the case of subclause (B)(i), (ii) or (iii) above,
has deposited or caused to be deposited with the Trustee as trust funds
in trust for such purpose an amount in the currency or currencies in
which the Securities of such series are payable sufficient to pay and
discharge the entire indebtedness on such Securities not theretofore
delivered to the Trustee for cancellation, for the principal (and
premium, if any) and interest (including any Additional Interest) to
the date of such deposit (in the case of Securities that have become
due and payable) or to the Stated Maturity or 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 relating to the satisfaction and discharge of
this Indenture have been complied with.
Notwithstanding the satisfaction and discharge of this Indenture, the
obligations of the Company to the Trustee under Section 6.7, the
obligations of the Trustee to any Authenticating Agent under Section
6.14 and, if money shall have been deposited with the Trustee pursuant
to subclause (B) of clause (1) of this Section, the obligations of the
Trustee under Section 4.2 and the last paragraph of Section 10.3 shall
survive.
Notwithstanding the foregoing, in any case where the Securities are not due and
payable and have not been called for redemption, such Securities shall remain
recourse obligations of the Company.
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SECTION 4.2 Application of Trust Money.
Subject to the provisions of the last paragraph of Section 10.3, all
money deposited with the Trustee pursuant to Section 4.1 shall be held in trust
and applied by the Trustee, in accordance with the provisions of the Securities
and this Indenture, to the payment, either directly or through any Paying Agent
(including the Company acting as its own Paying Agent) as the Trustee may
determine, to the Persons entitled thereto, of the principal (and premium, if
any) and interest and Additional Interest for the payment of which such money or
obligations have been deposited with or received by the Trustee.
ARTICLE V
REMEDIES
SECTION 5.1. Events of Default.
"Event of Default", wherever used herein with respect to the Securities
of any series, means any one of the following events (whatever the reason for
such Event of Default and whether it shall be voluntary or involuntary or be
effected by operation of law or pursuant to any judgment, decree or order of any
court or any order, rule or regulation of any administrative or governmental
body):
(1) default in the payment of any interest upon any Security
of that series, including any Additional Interest in respect thereof,
when it becomes due and payable, and continuance of such default for a
period of 30 days (subject to the deferral of any due date in the case
of any Extension Period); or
(2) default in the payment of the principal of (or premium, if
any, on) any Security of that series at its Maturity; or
(3) failure on the part of the Company duly to observe or
perform any other of the covenants or agreements on the part of the
Company in the Securities of that series or in this Indenture for a
period of 90 days after the date on which written notice of such
failure, requiring the Company to remedy the same, shall have been
given to the Company by the Trustee by registered or certified mail or
to the Company and the Trustee by the Holders of at least 25% in
aggregate principal amount of the Outstanding Securities of that
series; 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, at 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
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liquidation of its affairs, and the continuance of any such decree of
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 or the entry of a decree of 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 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; or
(6) any other Event of Default provided with respect to
Securities of that series.
SECTION 5.2. Acceleration of Maturity; Rescission and Annulment.
If an Event of Default (other than an Event of Default specified in
Section 5.1(4) or 5.1(5)) with respect to Securities of any series at the time
Outstanding occurs and is continuing, then, and in every such case, the Trustee
or the Holders of not less than 25% in aggregate principal amount of the
Outstanding Securities of that series may declare the principal amount (or, if
the Securities of that series are Discount Securities, such portion of the
principal amount as may be specified in the terms of that series) of all the
Securities of that series to be due and payable immediately, by a notice in
writing to the Company (and to the Trustee if given by Holders), provided that,
in the case of the Securities of a series issued to an Issuer Trust, if, upon an
Event of Default, the Trustee or the Holders of not less than 25% in principal
amount of the Outstanding Securities of such series fail to declare the
principal of all the Outstanding Securities of such series to be immediately due
and payable, the holders of at least 25% in aggregate Liquidation Amount of the
related series of Capital Securities issued by such Issuer Trust then
outstanding shall have the right to make such declaration by a notice in writing
to the Company and the Trustee; and upon any such declaration such principal
amount (or specified portion thereof) of and the accrued interest (including any
Additional Interest) on all the Securities of such series shall become
immediately due and payable. If an Event of Default specified in Section 5.1(4)
or 5.1(5) with respect to Securities of any series at the time Outstanding
occurs, the principal amount of all the Securities of such series (or, if the
Securities of such series are Discount Securities, such portion of the principal
amount of such Securities as may be specified by the terms of that series) shall
automatically, and without any declaration or other action on the part of the
Trustee or any Holder, become immediately due and payable. Payment of principal
and interest (including any Additional Interest) on such Securities shall remain
subordinated to the extent provided in Article XIII notwithstanding that such
amount shall become immediately due and payable as herein provided.
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At any time after such a declaration of acceleration with respect to
Securities of any series has been made and before a judgment or decree for
payment of the money due has been obtained by the Trustee as hereinafter in this
Article provided, the Holders of a majority in aggregate principal amount of the
Outstanding Securities of that series, by written notice to the Company and the
Trustee, may rescind and annul such declaration and its consequences if:
(1) the Company has paid or deposited with the Trustee a sum
sufficient to pay:
(A) all overdue installments of interest on all
Securities of such series;
(B) any accrued Additional Interest on all Securities
of such series;
(C) the principal of (and premium, if any, on) any
Securities of such series that have become due otherwise than
by such declaration of acceleration and interest and
Additional Interest thereon 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 with respect to Securities of that
series, other than the non-payment of the principal of Securities of
that series that has become due solely by such acceleration, have been
cured or waived as provided in Section 5.13.
In the case of Securities of a series initially issued to an Issuer
Trust, if the Holders of such Securities fail to annul such declaration and
waive such default, the holders of a majority in aggregate Liquidation Amount of
the related series of Capital Securities issued by such Issuer Trust then
outstanding shall also have the right to rescind and annul such declaration and
its consequences by written notice to the Company and the Trustee, subject to
the satisfaction of the conditions set forth in clauses (1) and (2) above of
this section 5.2.
No such rescission shall affect any subsequent default or Event of Default or
impair any right consequent thereon.
SECTION 5.3. Collection of Indebtedness and Suits for Enforcement by
Trustee.
The Company covenants that if:
(1) default is made in the payment of any installment of
interest (including any Additional Interest) on any Security of any
series when such interest becomes due and payable and such default
continues for a period of 30 days, or
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(2) default is made in the payment of the principal of (and
premium, if any, on) any Security at the Maturity thereof,
the Company will, upon demand of the Trustee, pay to the Trustee, for
the benefit of the Holders of such Securities, the whole amount then
due and payable on such Securities for principal (and premium, if any)
and interest (including any Additional Interest), and, in addition
thereto, all amounts owing the Trustee under Section 6.7.
If the Company fails to pay such amounts forthwith upon such demand,
the Trustee, in its own name and as trustee of an express trust, may institute a
judicial proceeding for the collection of the sums so due and unpaid, and may
prosecute such proceeding to judgment or final decree, and may enforce the same
against the Company or any other obligor upon such Securities and collect the
monies adjudged or decreed to be payable in the manner provided by law out of
the property of the Company or any other obligor upon the Securities, wherever
situated.
If an Event of Default with respect to Securities of any series occurs
and is continuing, the Trustee may in its discretion proceed to protect and
enforce its rights and the rights of the Holders of Securities of such series by
such appropriate judicial proceedings as the Trustee shall deem most effectual
to protect and enforce any such rights, whether for the specific enforcement of
any covenant or agreement in this Indenture or in aid of the exercise of any
power granted herein, or to enforce any other proper remedy.
SECTION 5.4. Trustee May File Proofs of Claim.
In case of any receivership, insolvency, liquidation, bankruptcy,
reorganization, arrangement, adjustment, composition or other judicial or
administrative proceeding relative to the Company or any other obligor upon the
Securities or the property of the Company or of such other obligor or their
creditors,
(a) the Trustee (irrespective of whether the principal of the
Securities of any series shall then be due and payable as therein expressed or
by declaration or otherwise and irrespective of whether the Trustee shall have
made any demand on the Company for the payment of overdue principal (and
premium, if any) or interest (including any Additional Interest)) shall be
entitled and empowered, by intervention in such proceeding or otherwise,
(i) to file and prove a claim for the whole amount of
principal (and premium, if any) and interest (including any Additional
Interest) owing and unpaid in respect to the Securities and to file
such other papers or documents as may be necessary or advisable and to
take any and all actions as are authorized under the Trust Indenture
Act in order to have the claims of the Holders and any predecessor to
the Trustee under Section 6.7 allowed in any such judicial or
administrative proceedings; and
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(ii) in particular, the Trustee shall be authorized to collect
and receive any monies or other property payable or deliverable on any
such claims and to distribute the same in accordance with Section 5.6;
and
(b) any custodian, receiver, assignee, trustee, liquidator,
sequestrator, conservator (or other similar official) in any such judicial or
administrative proceeding is hereby authorized by each Holder to make such
payments to the Trustee for distribution in accordance with Section 5.6, and in
the event that the Trustee shall consent to the making of such payments directly
to the Holders, to pay to the Trustee any amount due to it and any predecessor
Trustee under Section 6.7.
Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to 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; provided, however,
that the Trustee may, on behalf of the Holders, vote for the election of a
trustee in bankruptcy or similar official and be a member of a creditors' or
other similar committee.
SECTION 5.5. Trustee May Enforce Claim Without Possession of
Securities.
All rights of action and claims under this Indenture or the Securities
may be prosecuted and enforced by the Trustee without the possession of any of
the Securities or the production thereof in any proceeding relating thereto, and
any such proceeding instituted by the Trustee shall be brought in its own name
as trustee of an express trust, and any recovery of judgment shall, subject to
Article XIII and after provision for the payment of all the amounts owing the
Trustee and any predecessor Trustee under Section 6.7, its agents and counsel,
be for the ratable benefit of the Holders of the Securities in respect of which
such judgment has been recovered.
SECTION 5.6 Application of Money Collected.
Any money or property collected or to be applied by the Trustee with
respect to a series of Securities pursuant to this Article shall be applied in
the following order, at the date or dates fixed by the Trustee and, in case of
the distribution of such money or property on account of principal (or premium,
if any) or interest (including any Additional Interest), upon presentation of
the Securities and the notation thereon of the payment if only partially paid
and upon surrender thereof if fully paid:
FIRST: To the payment of all amounts due the Trustee and any
predecessor Trustee under Section 6.7;
SECOND: Subject to Article XIII, to the payment of the amounts then
due and unpaid upon Securities of such series for principal (and premium, if
any) and interest (including any Additional Interest) in respect of which or for
the benefit of which such money has been collected, ratably, without preference
or priority of any kind, according to the amounts due and payable on
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such series of Securities for principal (and premium, if any) and interest
(including any Additional Interest), respectively; and
THIRD: The balance, if any, to the Person or Persons entitled
thereto.
SECTION 5.7 Limitation on Suits.
Subject to Section 5.8, no Holder of any Securities of any series shall
have any right to institute any proceeding, judicial or otherwise, with respect
to this Indenture or for the appointment of a receiver, assignee, trustee,
liquidator, sequestrator (or other similar official) or for any other remedy
hereunder, unless:
(1) such Holder has previously given written notice to the
Trustee of a continuing Event of Default with respect to the Securities
of that series;
(2) the Holders of not less than 25% in aggregate principal
amount of the Outstanding Securities of that series shall have made
written request to the Trustee to institute proceedings in respect of
such Event of Default in its own name as Trustee hereunder;
(3) such Holder or Holders have offered to the Trustee
reasonable indemnity against the costs, expenses and liabilities to be
incurred in compliance with such request;
(4) the Trustee for 60 days after its receipt of such notice,
request and offer of indemnity has failed to institute any such
proceeding; and
(5) no direction inconsistent with such written request has
been given to the Trustee during such 60-day period by the Holders of a
majority in aggregate principal amount of the Outstanding Securities of
that series;
it being understood and intended that no one or more of such Holders
shall have any right in any manner whatever by virtue of, or by
availing itself of, any provision of this Indenture to affect, disturb
or prejudice the rights of any other Holders of Securities, or to
obtain or to seek to obtain priority or preference over any other of
such Holders or to enforce any right under this Indenture, except in
the manner herein provided and for the equal and ratable benefit of all
such Holders.
SECTION 5.8. Unconditional Right of Holders to Receive Principal,
Premium and Interest; Direct Action by Holders of Capital
Securities.
Notwithstanding any other provision in this Indenture, the Holder of
any Security of any series shall have the right, which is absolute and
unconditional, to receive payment of the principal of (and premium, if any) and
(subject to Sections 3.8 and 3.12) interest (including any Additional
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Interest) on such Security on the respective Stated Maturities 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 right shall not be
impaired without the consent of such Holder. In the case of Securities of a
series issued to an Issuer Trust, any registered holder of the series of Capital
Securities issued by such Issuer Trust shall have the right, upon the occurrence
of an Event of Default described in Section 5.1(1) or 5.1(2), to institute a
suit directly against the Company for enforcement of payment to such holder of
principal of (premium, if any) and (subject to Sections 3.8 and 3.12) interest
(including any Additional Interest) on the Securities having a principal amount
equal to the aggregate Liquidation Amount of such Capital Securities held by
such holder.
SECTION 5.9. Restoration of Rights and Remedies.
If the Trustee, any Holder or any holder of Capital Securities issued
by any Issuer Trust 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, such Holder or such
holder of Capital Securities, then, and in every such case, the Company, the
Trustee, such Holders and such holder of Capital Securities shall, subject to
any determination in such proceeding, be restored severally and respectively to
their former positions hereunder, and thereafter all rights and remedies of the
Trustee, such Holder and such holder of Capital Securities shall continue as
though no such proceeding had been instituted.
SECTION 5.10. Rights and Remedies Cumulative.
Except as otherwise provided in the last paragraph of Section 3.7, no
right or remedy herein conferred upon or reserved to the Trustee or 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 5.11. Delay or Omission Not Waiver.
No delay or omission of the Trustee, any Holder of any Security with
respect to the Securities of the related series or any holder of any Capital
Security to exercise any right or remedy accruing upon any Event of Default with
respect to the Securities of the related series 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 and the right and remedy given to the holders of Capital
Securities by Section 5.8 may be exercised from time to time, and as often as
may be deemed expedient, by the Trustee, the Holders or the holders of Capital
Securities, as the case may be.
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SECTION 5.12. Control by Holders.
The Holders of not less than a majority in aggregate principal amount
of the Outstanding Securities of any series shall have the right to direct the
time, method and place of conducting any proceeding for any remedy available to
the Trustee or exercising any trust or power conferred on the Trustee, with
respect to the Securities of such series, provided that:
(1) such direction shall not be in conflict with any rule of
law or with this Indenture;
(2) the Trustee may take any other action deemed proper by the
Trustee that is not inconsistent with such direction; and
(3) subject to the provisions of Section 6.1, the Trustee
shall have the right to decline to follow such direction if a
Responsible Officer or Officers of the Trustee shall, in good faith,
determine that the proceeding so directed would be unjustly prejudicial
to the Holders not joining in any such direction or would involve the
Trustee in personal liability.
SECTION 5.13. Waiver of Past Defaults.
The Holders of not less than a majority in aggregate principal amount
of the Outstanding Securities of any series affected thereby and, in the case of
any Securities of a series initially issued to an Issuer Trust, the holders of a
majority in aggregate Liquidation Amount of the Capital Securities issued by
such Issuer Trust may waive any past default hereunder and its consequences with
respect to such series except a default:
(1) in the payment of the principal of (or premium, if any) or
interest (including any Additional Interest) on any Security of such
series (unless such default has been cured and the Company has paid to
or deposited with the Trustee a sum sufficient to pay all matured
installments of interest (including Additional Interest) and all
principal of (and premium, if any, on) all Securities of that series
due otherwise than by acceleration); or
(2) in respect of a covenant or provision hereof that under
Article IX cannot be modified or amended without the consent of each
Holder of any Outstanding Security of such series affected.
Any such waiver shall be deemed to be on behalf of the Holders of all
the Securities of such series, or in the case of waiver by holders of Capital
Securities issued by such Issuer Trust, by all holders of Capital Securities
issued by such Issuer Trust.
Upon any such waiver, such default shall cease to exist, and any Event
of Default arising therefrom shall be deemed to have been cured, for every
purpose of this Indenture, but no such
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waiver shall extend to any subsequent or other default or Event of Default or
impair any right consequent thereon.
SECTION 5.14. Undertaking for Costs.
All parties to this Indenture agree, and each Holder of any Security by
his acceptance thereof shall be deemed to have agreed, that any court may, in
its discretion, require, in any suit for the enforcement of any right or remedy
under this Indenture, or in any suit against the Trustee for any action taken or
omitted by it as Trustee, the filing by any party litigant in such suit of an
undertaking to pay the costs of such suit, and that such court may, in its
discretion, assess reasonable costs, including reasonable attorneys' fees,
against any party litigant in such suit, having due regard to the merits and
good faith of the claims or defenses made by such party litigant, but the
provisions of this Section shall not apply to any suit instituted by the
Trustee, to any suit instituted by any Holder, or group of Holders, holding in
the aggregate more than 10% in aggregate principal amount of the Outstanding
Securities of any series, or to any suit instituted by any Holder for the
enforcement of the payment of the principal of (or premium, if any) or interest
(including any Additional Interest) on any Security on or after the respective
Stated Maturities expressed in such Security.
SECTION 5.15. Waiver of Usury, Stay or Extension Laws.
The Company covenants (to the extent that it may lawfully do so) that
it will not at any time insist upon, or plead, or in any manner whatsoever claim
or take the benefit or advantage of, any usury, stay or extension law wherever
enacted, now or at any time hereafter in force, which may affect the covenants
or the performance of this Indenture; and the Company (to the extent that it may
lawfully do so) hereby expressly waives all benefit or advantage of any such
law, and covenants that it will not hinder, delay or impede the execution of any
power herein granted to the Trustee, but will suffer and permit the execution of
every such power as though no such law had been enacted.
ARTICLE VI
THE TRUSTEE
SECTION 6.1. Certain Duties and Responsibilities.
(a) Except during the continuance of an Event of Default,
(1) the Trustee undertakes to perform such duties and only
such duties as are specifically set forth in this Indenture, and no
implied covenants or obligations shall be read into this Indenture
against the Trustee; and
(2) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon certificates or
opinions furnished to the Trustee and conforming to the requirements of
this Indenture, but in the case of any such certificates or opinions
that by any provisions hereof
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are specifically required to be furnished to the Trustee, the Trustee
shall be under a duty to examine the same to determine whether or not
they conform to the requirements of this Indenture.
(b) In case an Event of Default has occurred and is continuing, the
Trustee shall exercise such of the rights and powers vested in it by this
Indenture, and use the same degree of care and skill in their exercise, as a
prudent person would exercise or use under the circumstances in the conduct of
his or her own affairs.
(c) No provision of this Indenture shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent failure
to act or its own willful misconduct except that
(1) this subsection shall not be construed to limit the effect
of subsection (a) of this Section;
(2) the Trustee shall not be liable for any error of judgment
made in good faith by a Responsible Officer, unless it shall be proved
that the Trustee was negligent in ascertaining the pertinent facts; and
(3) the Trustee shall not be liable with respect to any action
taken or omitted to be taken by it in good faith in accordance with the
direction of Holders pursuant to Section 5.12 relating to the time,
method and place of conducting any proceeding for any remedy available
to the Trustee, or exercising any trust or power conferred upon the
Trustee, under this Indenture with respect to the Securities of a
series.
(d) No provision of this Indenture shall require the Trustee to expend
or risk its own funds or otherwise incur any financial liability in the
performance of any of its duties hereunder, or in the exercise of any of its
rights or powers, if there shall be reasonable grounds for believing that
repayment of such funds or adequate indemnity against such risk or liability is
not reasonably assured to it.
(e) Whether or not therein expressly so provided, every provision of
this Indenture relating to the conduct or affecting the liability of or
affording protection to the Trustee shall be subject to the provisions of this
Section.
SECTION 6.2. Notice of Defaults.
Within 90 days after actual knowledge by a Responsible Officer of the
Trustee of the occurrence of any default hereunder with respect to the
Securities of any series, the Trustee shall transmit by mail to all Holders of
Securities of such series, as their names and addresses appear in the Securities
Register, notice of such default, unless such default shall have been cured or
waived; provided, however, that, except in the case of a default in the payment
of the principal of (or premium, if any) or interest (including any Additional
Interest) on any Security of such series, the
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Trustee shall be protected in withholding such notice if and so long as the
board of directors, the executive committee or a trust committee of directors
and/or Responsible Officers of the Trustee in good faith determines that the
withholding of such notice is in the interests of the Holders of Securities of
such series; and provided further, that, in the case of any default of the
character specified in Section 5.1(3), no such notice to Holders of Securities
of such series shall be given until at least 30 days after the occurrence
thereof. For the purpose of this Section, the term "default" means any event
that is, or after notice or lapse of time or both would become, an Event of
Default with respect to Securities of such series.
SECTION 6.3. Certain Rights of Trustee.
Subject to the provisions of Section 6.1:
(a) the Trustee may rely and shall be protected in acting or refraining
from acting upon any resolution, certificate, statement, instrument, opinion,
report, notice, request, direction, consent, order, bond, debenture, Security or
other paper or document believed by it to be genuine and to have been signed or
presented by the proper party or parties;
(b) any request or direction of the Company mentioned herein shall be
sufficiently evidenced by a Company Request or Company Order and any resolution
of the Board of Directors may be sufficiently evidenced by a Board Resolution;
(c) whenever in the administration of this Indenture the Trustee shall
deem it desirable that a matter be proved or established prior to taking,
suffering or omitting any action hereunder, the Trustee (unless other evidence
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 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 that might be incurred by it in compliance with such
request or direction;
(f) the Trustee shall not be bound to make any investigation into the
facts or matters stated in any resolution, certificate, statement, instrument,
opinion, report, notice, request, direction, consent, order, bond, indenture,
Security or other paper or document, but the Trustee in its discretion may make
such inquiry or investigation into such facts or matters as it may see fit, and,
if the Trustee shall determine to make such inquiry or investigation, it shall
be entitled to examine the books, records and premises of the Company,
personally or by agent or attorney; and
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(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.
SECTION 6.4. 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 neither the Trustee nor any Authenticating Agent assumes any
responsibility for their correctness. The Trustee makes no representations as to
the validity or sufficiency of this Indenture or of the Securities. Neither the
Trustee nor any Authenticating Agent shall be accountable for the use or
application by the Company of the Securities or the proceeds thereof.
SECTION 6.5. May Hold Securities.
The Trustee, any Authenticating Agent, any Paying Agent, any Securities
Registrar or any other agent of the Company, in its individual or any other
capacity, may become the owner or pledgee of Securities and, subject to Sections
6.8 and 6.13, may otherwise deal with the Company with the same rights it would
have if it were not Trustee, Authenticating Agent, Paying Agent, Securities
Registrar or such other agent.
SECTION 6.6. Money Held in Trust.
Money held by the Trustee in trust hereunder need not be segregated
from other funds except to the extent required by law. The Trustee shall be
under no liability for interest on any money received by it hereunder except as
otherwise agreed with the Company.
SECTION 6.7. Compensation and Reimbursement.
(a) The Company agrees to pay to the Trustee from time to time
reasonable compensation for all services rendered by it hereunder in such
amounts as the Company and the Trustee shall agree from time to time (which
compensation shall not be limited by any provision of law in regard to the
compensation of a trustee of an express trust).
(b) The Company agrees to reimburse the Trustee upon its request for
all reasonable expenses, disbursements and advances incurred or made by the
Trustee in accordance with any provision of this Indenture (including the
reasonable compensation and the expenses and disbursements of its agents and
counsel), except any such expense, disbursement or advance as may be
attributable to its negligence or bad faith.
(c) Since the Issuer Trust is being formed solely to facilitate an
investment in the Trust Securities, the Company, as Holder of the Common
Securities, hereby covenants to pay all debts and
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obligations (other than with respect to the Capital Securities and the Common
Securities) and all reasonable costs and expenses of the Issuer Trust (including
without limitation all reasonable costs and expenses relating to the
organization of the Issuer Trust, the fees and expenses of the trustees and all
costs and expenses relating to the operation of the Issuer Trust) and to pay any
and all taxes, duties, assessments or governmental charges of whatever nature
(other than withholding taxes) imposed on the Issuer Trust by the United States,
or any taxing authority, so that the net amounts received and retained by the
Issuer Trust and the Property Trustee after paying such expenses will be equal
to the amounts the Issuer Trust and the Property Trustee would have received had
no such costs or expenses been incurred by or imposed on the Issuer 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 directly
against the Company, and the Company irrevocably waives any right or remedy to
require that any such Creditor take any action against the Issuer 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.
(d) The Company shall indemnify the Trustee for, and hold it harmless
against, any loss, liability or expense (including the reasonable compensation
and the expenses and disbursements of its agents and counsel) incurred without
negligence or bad faith, arising out of or in connection with the acceptance or
administration of this trust or the performance of its duties hereunder,
including the reasonable 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. This indemnification shall survive the termination
of this Indenture or the resignation or removal of the Trustee.
When the Trustee incurs expenses or renders services after an Event of
Default specified in Section 5.1(4) or 5.1(5) occurs, the expenses and the
compensation for the services are intended to constitute expenses of
administration under the Bankruptcy Reform Act of 1978 or any successor statute.
SECTION 6.8. Disqualification; Conflicting Interests.
The Trustee for the Securities of any series issued hereunder shall be
subject to the provisions of Section 310(b) of the Trust Indenture Act. Nothing
herein shall prevent the Trustee from filing with the Commission the application
referred to in the second to last paragraph of said Section 310(b).
SECTION 6.9. Corporate Trustee Required; Eligibility.
There shall at all times be a Trustee hereunder which shall be:
(a) an entity organized and doing business under the laws of the United
States of America or of any state or territory thereof or of the District of
Columbia, authorized under such laws to
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exercise corporate trust powers and subject to supervision or examination by
Federal, state, territorial or District of Columbia authority; or
(b) an entity or other Person organized and doing business under the
laws of a foreign government that is permitted to act as Trustee pursuant to a
rule, regulation or order of the Commission, authorized under such laws to
exercise corporate trust powers, and subject to supervision or examination by
authority of such foreign government or a political subdivision thereof
substantially equivalent to supervision or examination applicable to United
States institutional trustees;
in either case having a combined capital and surplus of at least
$50,000,000 and subject to supervision or examination by Federal or state
authority. If such entity publishes reports of condition at least annually,
pursuant to law or to the requirements of the aforesaid supervising or
examining authority, then, for the purposes of this Section, the combined
capital and surplus of such entity shall be deemed to be its combined capital
and surplus as set forth in its most recent report of condition so published.
If at any time the Trustee shall cease to be eligible in accordance with the
provisions of this Section, it shall resign immediately in the manner and with
the effect hereinafter specified in this Article. Neither the Company nor any
Person directly or indirectly controlling, controlled by or under common
control with the Company shall serve as Trustee for the Securities of any
series issued hereunder.
SECTION 6.10. Resignation and Removal; Appointment of Successor.
(a) No resignation or removal of the Trustee and no appointment of a
successor Trustee pursuant to this Article shall become effective until the
acceptance of appointment by the successor Trustee under Section 6.11.
(b) The Trustee may resign at any time with respect to the Securities
of one or more series by giving written notice thereof to the Company. If an
instrument of acceptance by a successor Trustee shall not have been delivered to
the Trustee within 30 days after the giving of such notice of resignation, the
resigning Trustee may petition any court of competent jurisdiction for the
appointment of a successor Trustee with respect to the Securities of such
series.
(c) The Trustee may be removed at any time with respect to the
Securities of any series by Act of the Holders of a majority in aggregate
principal amount of the Outstanding Securities of such series, delivered to the
Trustee and to the Company.
(d) If at any time:
(1) the Trustee shall fail to comply with Section 6.8 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
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(2) the Trustee shall cease to be eligible under Section 6.9
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, acting pursuant to the
authority of a Board Resolution, may remove the Trustee with respect to the
Securities of all series issued hereunder, or (ii) subject to Section 5.14, any
Holder who has been a bona fide Holder of a Security for at least six months
may, on behalf of such Holder and all others similarly situated, petition any
court of competent jurisdiction for the removal of the Trustee with respect to
the Securities of all series issued hereunder and the appointment of a
successor Trustee or Trustees.
(e) If the Trustee shall resign, be removed or become incapable of
acting, or if a vacancy shall occur in the office of Trustee for any cause with
respect to the Securities of one or more series, the Company, by a Board
Resolution, shall promptly appoint a successor Trustee with respect to the
Securities of that or those series. If, within one year after such resignation,
removal or incapability, or the occurrence of such vacancy, a successor Trustee
with respect to the Securities of any series shall be appointed by Act of the
Holders of a majority in aggregate principal amount of the Outstanding
Securities of such series delivered to the Company and the retiring Trustee, the
successor Trustee so appointed shall, forthwith upon its acceptance of such
appointment, become the successor Trustee with respect to the Securities of such
series and supersede the successor Trustee appointed by the Company. If no
successor Trustee with respect to the Securities of any series shall have been
so appointed by the Company or the Holders and accepted appointment in the
manner hereinafter provided, any Holder who has been a bona fide Holder of a
Security of such series for at least six months may, subject to Section 5.14, on
behalf of such Holder and all others similarly situated, petition any court of
competent jurisdiction for the appointment of a successor Trustee with respect
to the Securities of such series.
(f) The Company shall give notice of each resignation and each removal
of the Trustee with respect to the Securities of any series and each appointment
of a successor Trustee with respect to the Securities of any series by mailing
written notice of such event by first-class mail, postage prepaid, to the
Holders of Securities of such series as their names and addresses appear in the
Securities Register. Each notice shall include the name of the successor Trustee
with respect to the Securities of such series and the address of its Corporate
Trust Office.
SECTION 6.11. Acceptance of Appointment by Successor.
(a) In case of the appointment hereunder of a successor Trustee with
respect to all Securities, every such successor Trustee so appointed shall
execute, acknowledge and deliver to the Company and to the retiring Trustee an
instrument accepting such appointment, and thereupon the
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resignation or removal of the retiring Trustee shall become effective and such
successor Trustee, without any further act, deed or conveyance, shall become
vested with all the rights, powers, trusts and duties of the retiring Trustee;
but, on the request of the Company or the successor Trustee, such retiring
Trustee shall, upon payment of its charges, execute and deliver an instrument
transferring to such successor Trustee all the rights, powers and trusts of the
retiring Trustee and shall duly assign, transfer and deliver to such successor
Trustee all property and money held by such retiring Trustee hereunder.
(b) In case of the appointment hereunder of a successor Trustee with
respect to the Securities of one or more (but not all) series, the Company, the
retiring Trustee and each successor Trustee with respect to the Securities of
one or more series shall execute and deliver an indenture supplemental hereto
wherein each successor Trustee shall accept such appointment and which (1) shall
contain such provisions as shall be necessary or desirable to transfer and
confirm to, and to vest in, each successor Trustee all the rights, powers,
trusts and duties of the retiring Trustee with respect to the Securities of that
or those series to which the appointment of such successor Trustee relates, (2)
if the retiring Trustee is not retiring with respect to all Securities, shall
contain such provisions as shall be deemed necessary or desirable to confirm
that all the rights, powers, trusts and duties of the retiring Trustee with
respect to the Securities of that or those series as to which the retiring
Trustee is not retiring shall continue to be vested in the retiring Trustee, and
(3) shall add to or change any of the provisions of this Indenture as shall be
necessary to provide for or facilitate the administration of the trusts
hereunder by more than one Trustee, it being understood that nothing herein or
in such supplemental indenture shall constitute such Trustees or co-trustees of
the same trust and that each such Trustee shall be trustee of a trust or trusts
hereunder separate and apart from any trust or trusts hereunder administered by
any other such Trustee; and upon the execution and delivery of such supplemental
indenture the resignation or removal of the retiring Trustee shall become
effective to the extent provided therein and each removal of the retiring
Trustee, without any further act, deed or conveyance, shall become vested with
all the rights, powers, trusts, and duties of the retiring Trustee with respect
to the Securities of that or those series to which the appointment of such
successor Trustee relates; but, on request of the Company or any successor
Trustee, such retiring Trustee shall duly assign, transfer and deliver to such
successor Trustee all property and money held by such retiring Trustee hereunder
with respect to the Securities of that or those series to which the appointment
of such successor Trustee relates.
(c) Upon request of any such successor Trustee, the Company shall
execute any and all instruments for more fully and certainly vesting in and
confirming to such successor Trustee all rights, powers and trusts referred to
in paragraph (a) or (b) of this Section, as the case may be.
(d) No successor Trustee shall accept its appointment unless, at the
time of such acceptance, such successor Trustee shall be qualified and eligible
under this Article.
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SECTION 6.12. Merger, Conversion, Consolidation or Succession to
Business.
Any entity into which the Trustee may be merged or converted or with
which it may be consolidated, or any entity resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any entity
succeeding to all or substantially all of the corporate trust business of the
Trustee, shall be the successor of the Trustee hereunder, provided such entity
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
delivered, by the Trustee then in office, any successor by merger, conversion or
consolidation to such authenticating Trustee may adopt such authentication and
deliver the Securities so authenticated, and in case any Securities shall not
have been authenticated, any successor to the Trustee may authenticate such
Securities either in the name of any predecessor Trustee or in the name of such
successor Trustee, and in all cases the certificate of authentication shall have
the full force which it is provided anywhere in the Securities or in this
Indenture that the certificate of the Trustee shall have.
SECTION 6.13. Preferential Collection of Claims Against Company.
If and when the Trustee shall be or become a creditor of the Company
(or any other obligor upon the Securities), the Trustee shall be subject to the
provisions of the Trust Indenture Act regarding the collection of claims against
the Company (or any such other obligor).
SECTION 6.14. Appointment of Authenticating Agent.
The Trustee may appoint an Authenticating Agent or Agents with respect
to one or more series of Securities, which shall be authorized to act on behalf
of the Trustee to authenticate Securities of such series issued upon original
issue and upon exchange, registration of transfer or partial redemption thereof
or pursuant to Section 3.6, and Securities so authenticated shall be entitled to
the benefits of this Indenture and shall be valid and obligatory for all
purposes as if authenticated by the Trustee hereunder. Wherever reference is
made in this Indenture to the authentication and delivery of Securities by the
Trustee or the Trustee's certificate of authentication, such reference shall be
deemed to include authentication and delivery on behalf of the Trustee by an
Authenticating Agent. Each Authenticating Agent shall be acceptable to the
Company and shall at all times be an entity organized and doing business under
the laws of the United States of America, or of any state or territory thereof
or of the District of Columbia, authorized under such laws to act as
Authenticating Agent, having a combined capital and surplus of not less than
$50,000,000 and subject to supervision or examination by Federal or state
authority. If such Authenticating Agent publishes reports of condition at least
annually, pursuant to law or to the requirements of said supervising or
examining authority, then for the purposes of this Section the combined capital
and surplus of such Authenticating Agent shall be deemed to be its combined
capital and surplus as set forth in its most recent report of condition so
published. If at any time an Authenticating Agent shall cease to be eligible in
accordance with the provisions of this Section, such Authenticating Agent shall
resign immediately in the manner and with the effect specified in this Section.
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Any entity into which an Authenticating Agent may be merged or
converted or with which it may be consolidated, or any entity resulting from any
merger, conversion or consolidation to which such Authenticating Agent shall be
a party, or any entity succeeding to all or substantially all of the corporate
trust business of an Authenticating Agent shall be the successor Authenticating
Agent hereunder, provided such entity shall be otherwise eligible under this
Section, without the execution or filing of any paper or any further act on the
part of the Trustee or the Authenticating Agent.
An Authenticating Agent may resign at any time by giving written notice
thereof to the Trustee and to the Company. The Trustee may at any time terminate
the agency of an Authenticating Agent by giving written notice thereof to such
Authenticating Agent and to the Company. Upon receiving such a notice of
resignation or upon such a termination, or in case at any time such
Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section, the Trustee may appoint a successor Authenticating
Agent, which shall be acceptable to the Company and shall give notice of such
appointment in the manner provided in Section 1.6 to all Holders of Securities
of the series with respect to which such Authenticating Agent will serve. Any
successor Authenticating Agent upon acceptance hereunder shall become vested
with all the rights, powers and duties of its predecessor hereunder, with like
effect as if originally named as an Authenticating Agent. No successor
Authenticating Agent shall be appointed unless eligible under the provision of
this Section.
The Company agrees to pay to each Authenticating Agent from time to
time reasonable compensation for its services under this Section, and the
Trustee shall be entitled to be reimbursed for such payment, subject to the
provisions of Section 6.7.
If an appointment with respect to one or more series is made pursuant
to this Section, the Securities of such series may have endorsed thereon, in
addition to the Trustee's certificate of authentication, an alternative
certificate of authentication in the following form:
This is one of the Securities referred to in the within mentioned
Indenture.
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Dated: __________________ BANKERS TRUST COMPANY,
as Trustee
By: ____________________________
As Authenticating Agent
Name:
Title:
By: ____________________________
As Authenticating Agent
Name:
Title:
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HOLDER'S LISTS AND REPORTS BY TRUSTEE,
PAYING AGENT AND COMPANY
SECTION 7.1. Company to Furnish Trustee Names and Addresses of Holders.
The Company will furnish or cause to be furnished to the Trustee:
(a) semi-annually, as soon as practicable after April 1 and October 1
in each year, a list, in such form as the Trustee may reasonably require, of the
names and addresses of the Holders as of such date; and
(b) at such other times as the Trustee may request in writing, within
30 days after the receipt by the Company of any such request, a list of similar
form and content as of a date not more than 15 days prior to the time such list
is furnished, excluding from any such list names and addresses received by the
Trustee in its capacity as Securities Registrar.
SECTION 7.2. Preservation of Information; Communications to Holders.
(a) The Trustee shall preserve, in as current a form as is reasonably
practicable, the names and addresses of Holders contained in the most recent
list furnished to the Trustee as provided in Section 7.1 and the names and
addresses of Holders received by the Trustee in its capacity as Securities
Registrar. The Trustee may destroy any list furnished to it as provided in
Section 7.1 upon receipt of a new list so furnished.
(b) The rights of Holders to communicate with other Holders with
respect to their rights under this Indenture or under the Securities, and the
corresponding rights and privileges of the Trustee, shall be as provided in the
Trust Indenture Act.
(c) Every Holder of Securities, by receiving and holding the same,
agrees with the Company and the Trustee that neither the Company nor the Trustee
nor any agent of either of them shall be held accountable by reason of the
disclosure of information as to the names and addresses of the Holders made
pursuant to the Trust Indenture Act.
SECTION 7.3. Reports by Trustee and Paying Agent.
(a) The Trustee shall transmit to Holders such reports concerning the
Trustee and its actions under this Indenture as may be required pursuant to the
Trust Indenture Act, at the times and in the manner provided pursuant thereto.
(b) Reports so required to be transmitted at stated intervals of not
more than 12 months shall be transmitted no later than January 31 in each
calendar year, commencing with the first January 31 after the first issuance of
Securities under this Indenture.
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(c) A copy of each such report shall, at the time of such transmission
to Holders, be filed by the Trustee with each securities exchange upon which any
Securities are listed and also with the Commission. The Company will notify the
Trustee when any Securities are listed on any securities exchange.
(d) The Paying Agent shall comply with all withholding, backup
withholding, tax and information reporting requirements under the Internal
Revenue Code of 1986, as amended, and the Treasury Regulations issued thereunder
with respect to payments on, or with respect to, the Securities.
SECTION 7.4. Reports by Company.
The Company shall file or cause to be filed with the Trustee and with
the Commission, and transmit to Holders, such information, documents and other
reports, and such summaries thereof, as may be required pursuant to the Trust
Indenture Act at the times and in the manner provided in the Trust Indenture
Act. In the case of information, documents or reports required to be filed with
the Commission pursuant to Section 13(a) or Section 15(d) of the Exchange Act,
the Company shall file or cause the filing of such information documents or
reports with the Trustee within 15 days after the same are required to be filed
with the Commission.
ARTICLE VIII
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
SECTION 8.1. 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, and no Person shall consolidate with or merge into the
Company or convey, transfer or lease its properties and assets substantially as
an entirety to the Company, unless:
(1) If the Company shall consolidate with or merge into
another Person or convey, transfer or lease its properties and assets
substantially as an entirety to any Person, the entity formed by such
consolidation or into which the Company is merged or the Person that
acquires by conveyance or transfer, or that leases, the properties and
assets of the Company substantially as an entirety shall be an entity
organized and existing under the laws of the United States of America
or any state thereof 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 of every
series and the performance of every covenant of this Indenture on the
part of the Company to be performed or observed; provided, however,
that nothing herein shall be deemed to restrict or prohibit, and no
supplemental indenture shall be required in the case of, the merger of
a Principal Subsidiary Bank with and into a Principal Subsidiary Bank
or
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the Company, the consolidation of Principal Subsidiary Banks into a
Principal Subsidiary Bank or the Company, or the sale or other
disposition of all or substantially all of the assets of any Principal
Subsidiary Bank to another Principal Subsidiary Bank or the Company,
if, in any such case in which the surviving, resulting or acquiring
entity is not the Company, the Company would own, directly or
indirectly, at least 80% of the voting securities of the Principal
Subsidiary Bank (and of any other Principal Subsidiary Bank any voting
securities of which are owned, directly or indirectly, by such
Principal Subsidiary Bank) surviving such merger, resulting from such
consolidation or acquiring such assets;
(2) immediately after giving effect to such transaction, no
Event of Default, and no event that, after notice or lapse of time, or
both, would constitute an Event of Default, shall have occurred and be
continuing; and
(3) the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that such
consolidation, merger, conveyance, transfer or lease and any such
supplemental indenture comply with this Article and that all conditions
precedent herein provided for relating to such transaction have been
complied with and, in the case of a transaction subject to this Section
8.1 but not requiring a supplemental indenture under paragraph (1) of
this Section 8.1, an Officer's Certificate or Opinion of Counsel to the
effect that the surviving, resulting or successor entity is legally
bound by the Indenture and the Securities; and the Trustee, subject to
Section 6.1, may rely upon such Officers' Certificates and Opinions of
Counsel as conclusive evidence that such transaction complies with this
Section 8.1.
SECTION 8.2. Successor Company Substituted.
Upon any consolidation or merger by the Company with or into any other
Person, or any conveyance, transfer or lease by the Company of its properties
and assets substantially as an entirety to any Person in accordance with Section
8.1, the successor entity 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.
Such successor Person may cause to be executed, and may issue either in
its own name or in the name of the Company, any or all of the Securities
issuable hereunder that theretofore shall not have been signed by the Company
and delivered to the Trustee; and, upon the order of such successor Person
instead of the Company and subject to all the terms, conditions and limitations
in this Indenture prescribed, the Trustee shall authenticate and shall deliver
any Securities that previously shall have been signed and delivered by the
officers of the Company to the Trustee for authentication pursuant to such
provisions and any Securities that such successor Person thereafter shall cause
to be executed and delivered to the Trustee on its behalf for the purpose
pursuant to such
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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.
In case of any such consolidation, merger, sale, conveyance or lease,
such changes in phraseology and form may be made in the Securities thereafter to
be issued as may be appropriate.
ARTICLE IX
SUPPLEMENTAL INDENTURES
SECTION 9.1. 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 amend
or waive any provision of this Indenture or 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 contained; or
(2) to convey, transfer, assign, mortgage or pledge any
property to or with the Trustee or to surrender any right or power
herein conferred upon the Company; or
(3) to establish the form or terms of Securities of any series
as permitted by Sections 2.1 or 3.1; or
(4) to facilitate the issuance of Securities of any series in
certificated or other definitive form; or
(5) to add to the covenants of the Company for the benefit of
the Holders of all or any series of Securities (and if such covenants
are to be for the benefit of less than all series of Securities,
stating that such covenants are expressly being included solely for the
benefit of the series specified) or to surrender any right or power
herein conferred upon the Company; or
(6) to add any additional Events of Default for the benefit of
the Holders of all or any series of Securities (and if such additional
Events of Defaults are to be for the benefit of less than all series of
Securities, stating that such additional Events of Default are
expressly being included solely for the benefit of the series
specified); or
(7) to change or eliminate any of the provisions of this
Indenture, provided that any such change or elimination shall (a)
become effective only when there is no Security
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Outstanding of any series created prior to the execution of such
supplemental indenture that is entitled to the benefit of such
provision or (b) not apply to any Outstanding Securities; or
(8) to cure any ambiguity, to correct or supplement any
provision herein that may be defective or inconsistent with any other
provision herein, or to make any other provisions with respect to
matters or questions arising under this Indenture, provided that such
action pursuant to this clause (8) shall not adversely affect the
interest of the Holders of Securities of any series in any material
respect or, in the case of the Securities of a series issued to an
Issuer Trust and for so long as any of the corresponding series of
Capital Securities issued by such Issuer Trust shall remain
outstanding, the holders of such Capital Securities; or
(9) to evidence and provide for the acceptance of appointment
hereunder by a successor Trustee with respect to the Securities of one
or more series and to add to or change any of the provisions of this
Indenture as shall be necessary to provide for or facilitate the
administration of the trusts hereunder by more than one Trustee,
pursuant to the requirements of Section 6.11(b); or
(10) to comply with the requirements of the Commission in
order to effect or maintain the qualification of this Indenture under
the Trust Indenture Act.
SECTION 9.2. Supplemental Indentures with Consent of Holders.
With the consent of the Holders of not less than a majority in
aggregate principal amount of the Outstanding Securities of each series affected
by such supplemental indenture, by Act of said Holders delivered to the Company
and the Trustee, the Company, when authorized by a Board Resolution, and the
Trustee may enter into an indenture or indentures supplemental hereto for the
purpose of adding any provisions to or changing in any manner or eliminating any
of the provisions of this Indenture or of modifying in any manner the rights of
the Holders of Securities of such series under this Indenture; provided,
however, that no such supplemental indenture shall, without the consent of the
Holder of each Outstanding Security of each series affected thereby,
(1) change the Stated Maturity of the principal of, or any
installment of interest (including any Additional Interest) on, any
Security, or reduce the principal amount thereof or the rate of
interest thereon or any premium payable upon the redemption thereof, or
reduce the amount of principal of a Discount Security that would be due
and payable upon a declaration of acceleration of the Maturity thereof
pursuant to Section 5.2, 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
(2) reduce the percentage in aggregate principal amount of the
Outstanding Securities of any series, the consent of whose Holders is
required for any such supplemental
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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 5.13
or Section 10.5, except to increase any such percentage or to provide
that certain other provisions of this Indenture cannot be modified or
waived without the consent of the Holder of each Security affected
thereby;
provided, further, that, in the case of the Securities of a series
issued to an Issuer Trust, so long as any of the corresponding series
of Capital Securities issued by such Issuer Trust remains outstanding,
(i) no such amendment shall be made that adversely affects the holders
of such Capital Securities in any material respect, and no termination
of this Indenture shall occur, and no waiver of any Event of Default or
compliance with any covenant under this Indenture shall be effective,
without the prior consent of the holders of at least a majority of the
aggregate Liquidation Amount of such Capital Securities then
outstanding unless and until the principal of (and premium, if any, on)
the Securities of such series and all accrued and (subject to Section
3.8) unpaid interest (including any Additional Interest) thereon have
been paid in full, and (ii) no amendment shall be made to Section 5.8
of this Indenture that would impair the rights of the holders of
Capital Securities issued by an Issuer Trust provided therein without
the prior consent of the holders of each such Capital Security then
outstanding unless and until the principal of (and premium, if any, on)
the Securities of such series and all accrued and (subject to Section
3.8) unpaid interest (including any Additional Interest) thereon have
been paid in full.
A supplemental indenture that changes or eliminates any covenant or
other provision of this Indenture that has expressly been included solely for
the benefit of one or more particular series of Securities or any corresponding
series of Capital Securities of an Issuer Trust that holds the Securities of any
series, or that modifies the rights of the Holders of Securities of such series
or holders of such Capital Securities of such corresponding series with respect
to such covenant or other provision, shall be deemed not to affect the rights
under this Indenture of the Holders of Securities of any other series or holders
of Capital Securities of any other such corresponding series.
It shall not be necessary for any Act of Holders under this Section to
approve the particular form of any proposed supplemental indenture, but it shall
be sufficient if such Act shall approve the substance thereof.
SECTION 9.3. Execution of Supplemental Indentures.
In executing or accepting the additional trusts created by any
supplemental indenture permitted by this Article or the modifications thereby of
the trusts created by this Indenture, the Trustee shall be entitled to receive,
and (subject to Section 6.1) shall be fully protected in relying upon, an
Officers' Certificate and an Opinion of Counsel stating that the execution of
such
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supplemental indenture is authorized or permitted by this Indenture, and that
all conditions precedent herein provided for relating to such action have been
complied with. The Trustee may, but shall not be obligated to, enter into any
such supplemental indenture that affects the Trustee's own rights, duties or
immunities under this Indenture or otherwise.
SECTION 9.4. Effect of Supplemental Indentures.
Upon the execution of any supplemental indenture under this Article,
this Indenture shall be modified in accordance therewith, and such supplemental
indenture shall form a part of this Indenture for all purposes; and every Holder
of Securities theretofore or thereafter authenticated and delivered hereunder
shall be bound thereby.
SECTION 9.5. Conformity with Trust Indenture Act.
Every supplemental indenture executed pursuant to this Article shall
conform to the requirements of the Trust Indenture Act as then in effect.
SECTION 9.6. Reference in Securities to Supplemental Indentures.
Securities authenticated and delivered after the execution of any
supplemental indenture pursuant to this Article may, and shall if required by
the Company, bear a notation in form approved by the Company as to any matter
provided for in such supplemental indenture. If the Company shall so determine,
new Securities of any series so modified as to conform, in the opinion of the
Company, to any such supplemental indenture may be prepared and executed by the
Company and authenticated and delivered by the Trustee in exchange for
Outstanding Securities of such series.
ARTICLE X
COVENANTS
SECTION 10.1. Payment of Principal, Premium and Interest.
The Company covenants and agrees for the benefit of each series of
Securities that it will duly and punctually pay the principal of (and premium,
if any) and interest (including any Additional Interest) on the Securities of
that series in accordance with the terms of such Securities and this Indenture.
SECTION 10.2. Maintenance of Office or Agency.
The Company will maintain in each Place of Payment for any series of
Securities an office or agency where Securities of that series may be presented
or surrendered for payment, where Securities of that series may be surrendered
for registration of transfer or exchange and where notices and demands to or
upon the Company in respect of the Securities of that series and this Indenture
may be served. The Company initially appoints the Trustee, acting through its
Corporate Trust
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Office, as its agent for said purposes. The Company will give prompt written
notice to the Trustee of any change in the location of any such office or
agency. If at any time the Company shall fail to maintain such office or agency
or shall fail to furnish the Trustee with the address thereof, such
presentations, surrenders, notices and demands may be made or served at the
Corporate Trust Office of the Trustee, and the Company hereby appoints the
Trustee as its agent to receive all such presentations, surrenders, notices and
demands.
The Company may also from time to time designate one or more other
offices or agencies where the Securities may be presented or surrendered for any
or all of such purposes, and may from time to time rescind such designations;
provided, however, that no such designation or rescission shall in any manner
relieve the Company of its obligation to maintain an office or agency in each
Place of Payment for Securities of any series for such purposes. The Company
will give prompt written notice to the Trustee of any such designation and any
change in the location of any such office or agency.
SECTION 10.3. Money for Security Payments to be Held in Trust.
If the Company shall at any time act as its own Paying Agent with
respect to any series of Securities, it will, on or before each due date of the
principal of (and premium, if any) or interest (including Additional Interest)
on any of the Securities of such series, segregate and hold in trust for the
benefit of the Persons entitled thereto a sum sufficient to pay the principal
(and premium, if any) or interest (including Additional Interest) so becoming
due until such sums shall be paid to such Persons or otherwise disposed of as
herein provided, and will promptly notify the Trustee of its failure so to act.
Whenever the Company shall have one or more Paying Agents, it will,
prior to 10:00 a.m., New York City time, on each due date of the principal of
(or premium, if any) or interest, including Additional Interest on any
Securities, deposit with a Paying Agent a sum sufficient to pay the principal
(and premium, if any) or interest, including Additional Interest so becoming
due, such sum to be held in trust for the benefit of the Persons entitled to
such principal (and premium, if any) or interest, including Additional Interest,
and (unless such Paying Agent is the Trustee) the Company will promptly notify
the Trustee of its failure so to act.
The Company will cause each Paying Agent other than the Trustee to
execute and deliver to the Trustee an instrument in which such Paying Agent
shall agree with the Trustee, subject to the provisions of this Section, that
such Paying Agent will:
(1) hold all sums held by it for the payment of the principal of (and
premium, if any) or interest (including Additional Interest) on the Securities
of a series in trust for the benefit of the Persons entitled thereto until such
sums shall be paid to such Persons or otherwise disposed of as herein provided;
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(2) give the Trustee notice of any default by the Company (or any other
obligor upon such Securities) in the making of any payment of principal (and
premium, if any) or interest (or Additional Interest) in respect of any Security
of any Series;
(3) at any time during the continuance of any default with respect to a
series of Securities, upon the written request of the Trustee, forthwith pay to
the Trustee all sums so held in trust by such Paying Agent with respect to such
series; and
(4) comply with the provisions of the Trust Indenture Act applicable to
it as a Paying Agent.
The Company may, at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, pay, or
by Company Order direct any Paying Agent to pay, to the Trustee all sums held in
trust by the Company or such Paying Agent, such sums to be held by the Trustee
upon the same terms 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 Paying Agent shall be released from all further liability with respect to
such money.
Any money deposited with the Trustee or any Paying Agent, or then held
by the Company in trust for the payment of the principal of (and premium, if
any) or interest (including Additional Interest) on any Security and remaining
unclaimed for two years after such principal (and premium, if any) or interest
(including Additional Interest) has become due and payable shall (unless
otherwise required by mandatory provision of applicable escheat or abandoned or
unclaimed property law) be paid on Company Request to the Company, or (if then
held by the Company) shall (unless otherwise required by mandatory provision of
applicable escheat or abandoned or unclaimed property law) be discharged from
such trust; and the Holder of such Security shall thereafter, as an unsecured
general creditor, look only to the Company for payment thereof, and all
liability of the Trustee or such Paying Agent with respect to such trust money,
and all liability of the Company as trustee thereof, shall thereupon cease;
provided, however, that the Trustee or such Paying Agent, before being required
to make any such repayment, may at the expense of the Company cause to be
published once, in a newspaper published in the English language, customarily
published on each Business Day and of general circulation in the Borough of
Manhattan, the City of New York, notice that such money remains unclaimed and
that, after a date specified therein, which shall not be less than 30 days from
the date of such publication, any unclaimed balance of such money then remaining
will be repaid to the Company.
SECTION 10.4. Statement as to Compliance.
The Company shall 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 covering the preceding calendar year, stating whether or not to the
best knowledge of the signers thereof the Company is in default in the
performance, observance or fulfillment of or compliance with any of the terms,
provisions, covenants and conditions of this Indenture, and if the Company shall
be in default, specifying all
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such defaults and the nature and status thereof of which they may have
knowledge. For the purpose of this Section 10.4, compliance shall be determined
without regard to any grace period or requirement of notice provided pursuant to
the terms of this Indenture.
SECTION 10.5. Waiver of Certain Covenants.
Subject to the rights of holders of Capital Securities specified in
Section 9.2, if any, the Company may omit in any particular instance to comply
with any covenant or condition provided pursuant to Section 3.1 with respect to
the Securities of any series, if before or after the time for such compliance
the Holders of at least a majority in aggregate principal amount of the
Outstanding Securities of such series shall, by Act of such Holders, either
waive such compliance in such instance or generally waive compliance with such
covenant or condition, but no such waiver shall extend to or affect such
covenant or condition except to the extent so expressly waived, and, until such
waiver shall become effective, the obligations of the Company in respect of any
such covenant or condition shall remain in full force and effect.
SECTION 10.6. Additional Sums.
In the case of the Securities of a series initially issued to an Issuer
Trust, so long as no Event of Default has occurred and is continuing and except
as otherwise specified as contemplated by Section 2.1 or Section 3.1, if (i) an
Issuer Trust is the Holder of all of the Outstanding Securities of such series,
and (ii) a Tax Event has occurred and is continuing in respect of such Issuer
Trust, the Company shall pay to such Issuer Trust (and its permitted successors
or assigns under the related Trust Agreement) for so long as such Issuer Trust
(or its permitted successor or assignee) is the registered holder of the
Outstanding Securities of such series, such additional sums as may be necessary
in order that the amount of Distributions (including any Additional Amounts (as
defined in such Trust Agreement)) then due and payable by such Issuer Trust on
the related Capital Securities and Common Securities that at any time remain
outstanding in accordance with the terms thereof shall not be reduced as a
result of such Additional Taxes (the "Additional Sums"). Whenever in this
Indenture or the Securities there is a reference in any context to the payment
of principal of or interest on the Securities, such mention shall be deemed to
include mention of the payments of the Additional Sums provided for in this
paragraph to the extent that, in such context, Additional Sums are, were or
would be payable in respect thereof pursuant to the provisions of this paragraph
and express mention of the payment of Additional Sums (if applicable) in any
provisions hereof shall not be construed as excluding Additional Sums in those
provisions hereof where such express mention is not made; provided, however,
that the deferral of the payment of interest pursuant to Section 3.12 on the
Securities shall not defer the payment of any Additional Sums that may be due
and payable.
SECTION 10.7. Additional Covenants.
The Company covenants and agrees with each Holder of Securities of each
series that it shall not (x) declare or pay any dividends or distributions on,
or redeem, purchase, acquire or make a
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liquidation payment with respect to, any shares of the Company's capital stock,
or (y) make any payment of principal of or interest or premium, if any, on or
repay, repurchase or redeem any debt securities of the Company that rank pari
passu in all respects with or junior in interest to the Securities of such
series (other than (a) repurchases, redemptions or other acquisitions of shares
of capital stock of the Company 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, in connection with a
dividend reinvestment or shareholder stock purchase plan or in connection with
the issuance of capital stock of the Company (or securities convertible into or
exercisable for such capital stock) as consideration in an acquisition
transaction entered into prior to the applicable Extension Period or other event
referred to below, (b) as a result of an exchange or conversion of any class or
series of the Company's capital stock (or any capital stock of a Subsidiary of
the Company) for any class or series of the Company's capital stock or of any
class or series of the Company's indebtedness for any class or series of the
Company's capital stock, (c) the purchase of fractional interests in shares of
the Company's capital stock pursuant to the conversion or exchange provisions of
such capital stock or the security being converted or exchanged, (d) any
declaration of a dividend in connection with any Rights Plan, or the issuance of
rights, stock or other property under any 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 ranks pari passu with or junior to
such stock) if at such time (i) there shall have occurred any event (A) of which
the Company has actual knowledge that with the giving of notice or the lapse of
time, or both, would constitute an Event of Default with respect to the
Securities of such series, and (B) which the Company shall not have taken
reasonable steps to cure, (ii) if the Securities of such series are held by an
Issuer Trust, the Company shall be in default with respect to its payment of any
obligations under the Guarantee relating to the Capital Securities issued by
such Issuer Trust, or (iii) the Company shall have given notice of its election
to begin an Extension Period with respect to the Securities of such series as
provided herein and shall not have rescinded such notice, or such Extension
Period, or any extension thereof, shall be continuing.
The Company also covenants with each Holder of Securities of a series
issued to an Issuer Trust (i) to hold, directly or indirectly, 100% of the
Common Securities of such Issuer Trust, provided that any permitted successor of
the Company as provided under Section 8.2 may succeed to the Company's ownership
of such Common Securities, (ii) as holder of such Common Securities, not to
voluntarily terminate, windup or liquidate such Issuer Trust, other than (a) in
connection with a distribution of the Securities of such series to the holders
of the related Capital Securities in liquidation of such Issuer Trust, or (b) in
connection with certain mergers, consolidations or amalgamations permitted by
the related Trust Agreement, and (iii) to use its reasonable efforts, consistent
with the terms and provisions of such Trust Agreement, to cause such Issuer
Trust to continue to be taxable as a grantor trust for United States Federal
income tax purposes.
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SECTION 10.8 Furnishing Annual Information.
On or before December 15 of each year during which any Securities are
outstanding, the Company shall furnish to each Paying Agent such information as
may be reasonably requested by each Paying Agent in order that each Paying Agent
may prepare the information which it is required to report for such year on
Internal Revenue Service Forms 1096 and 1099 pursuant to Section 6049 of the
Internal Revenue Code of 1986, as amended. Such information shall include the
amount of original issue discount includable in income for each authorized
minimum denomination of principal amount at Stated Maturity of outstanding
Securities during such year.
ARTICLE XI
REDEMPTION OF SECURITIES
SECTION 11.1. Applicability of This Article.
Redemption of Securities of any series as permitted or required by any
form of Security issued pursuant to this Indenture shall be made in accordance
with such form of Security and this Article; provided, however, that, if any
provision of any such form of Security shall conflict with any provision of this
Article, the provision of such form of Security shall govern. Except as
otherwise set forth in the form of Security for such series, each Security of a
series shall be subject to partial redemption only in the amount of $100,000 or
any integral multiples of $1,000 in excess thereof.
SECTION 11.2. Election to Redeem; Notice to Trustee.
The election of the Company to redeem any Securities shall be evidenced
by or pursuant to a Board Resolution. In case of any redemption at the election
of the Company, the Company shall, not less than 30 nor more than 60 days prior
to the Redemption Date (unless a shorter notice shall be satisfactory to the
Trustee), notify the Trustee and, in the case of Securities of a series held by
an Issuer Trust, the Property Trustee under the related Trust Agreement, of such
date and of the principal amount of Securities of the applicable series to be
redeemed and provide the additional information required to be included in the
notice or notices contemplated by Section 11.4; provided that, in the case of
any series of Securities initially issued to an Issuer Trust, for so long as
such Securities are held by such Issuer Trust, such notice shall be given not
less than 45 nor more than 75 days prior to such Redemption Date (unless a
shorter notice shall be satisfactory to the Property Trustee under the related
Trust Agreement). In the case of any redemption of Securities prior to the
expiration of any restriction on such redemption provided in the terms of such
Securities, the Company shall furnish the Trustee with an Officers' Certificate
and an Opinion of Counsel evidencing compliance with such restriction.
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SECTION 11.3. Selection of Securities to be Redeemed.
If less than all the Securities of any series are to be redeemed, the
particular Securities to be redeemed shall be selected not more than 60 days
prior to the Redemption Date by the Trustee, from the Outstanding Securities of
such series not previously called for redemption, by such method as the Trustee
shall deem fair and appropriate and which may provide for the selection for
redemption of a portion of the principal amount of any Security of such series,
provided that the unredeemed portion of the principal amount of any Security
shall be in an authorized denomination (which shall not be less than the minimum
authorized denomination) for such Security.
The Trustee shall promptly notify the Company in writing of the
Securities selected for partial redemption and the principal amount thereof to
be redeemed. For all purposes of this Indenture, unless the context otherwise
requires, all provisions relating to the redemption of Securities shall relate,
in the case of any Security redeemed or to be redeemed only in part, to the
portion of the principal amount of such Security that has been or is to be
redeemed.
SECTION 11.4. Notice of Redemption.
Notice of redemption shall be given by first-class mail, postage
prepaid, mailed not later than the thirtieth day, and not earlier than the
sixtieth day, prior to the Redemption Date, to each Holder of Securities to be
redeemed, at the address of such Holder as it appears in the Securities
Register.
With respect to Securities of such series to be redeemed, each notice
of redemption shall state:
(a) the Redemption Date;
(b) the Redemption Price or, if the Redemption Price cannot be
calculated prior to the time the notice is required to be sent, the estimate of
the Redemption Price provided pursuant to the Indenture together with a
statement that it is an estimate and that the actual Redemption Price will be
calculated on the third Business Day prior to the Redemption Date (if such an
estimate of the Redemption Price is given, a subsequent notice shall be given as
set forth above setting forth the Redemption Price promptly following the
calculation thereof);
(c) if less than all Outstanding Securities of such particular series
are to be redeemed, the identification (and, in the case of partial redemption,
the respective principal amounts) of the particular Securities to be redeemed;
(d) that, on the Redemption Date, the Redemption Price will become due
and payable upon each such Security or portion thereof, and that interest
thereon, if any, shall cease to accrue on and after said date;
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(e) the place or places where such Securities are to be surrendered for
payment of the Redemption Price;
(f) such other provisions as may be required in respect of the terms of
a particular series of Securities; and
(g) that the redemption is for a sinking fund, if such is the case.
Notice of redemption of Securities to be redeemed at the election of
the Company shall be given by the Company or, at the Company's request, by the
Trustee in the name and at the expense of the Company and shall be irrevocable.
The notice, if mailed in the manner provided above, shall be conclusively
presumed to have been duly given, whether or not the Holder receives such
notice. In any case, a failure to give such notice by mail or any defect in the
notice to the Holder of any Security designated for redemption as a whole or in
part shall not affect the validity of the proceedings for the redemption of any
other Security.
SECTION 11.5. Deposit of Redemption Price.
Prior to 10:00 a.m., New York City time, on the Redemption Date
specified in the notice of redemption given as provided in Section 11.4, the
Company will deposit with the Trustee or with one or more Paying Agents (or if
the Company is acting as its own Paying Agent, the Company will segregate and
hold in trust as provided in Section 10.3) an amount of money sufficient to pay
the Redemption Price of, and any accrued interest (including Additional
Interest) on, all the Securities (or portions thereof) that are to be redeemed
on that date.
SECTION 11.6. Payment of Securities Called for Redemption.
If any notice of redemption has been given as provided in Section 11.4,
the Securities or portion of Securities with respect to which such notice has
been given shall become due and payable on the date and at the place or places
stated in such notice at the applicable Redemption Price, together with accrued
interest (including any Additional Interest) to the Redemption Date. On
presentation and surrender of such Securities at a Place of Payment in said
notice specified, the said Securities or the specified portions thereof shall be
paid and redeemed by the Company at the applicable Redemption Price, together
with accrued interest (including any Additional Interest) to the Redemption
Date; provided, however, that, unless otherwise specified as contemplated by
Section 3.1, installments of interest (including Additional Interest) whose
Stated Maturity is on or prior to the Redemption Date will 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 3.8.
Upon presentation of any Security redeemed in part only, the Company
shall execute and the Trustee shall authenticate and deliver to the Holder
thereof, at the expense of the Company, a new Security or Securities of the same
series, of authorized denominations, in aggregate principal amount
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equal to the unredeemed portion of the Security so presented and having the same
Original Issue Date, Stated Maturity and terms.
If any Security called for redemption shall not be so paid under
surrender thereof for redemption, the principal of and premium, if any, on such
Security shall, until paid, bear interest from the Redemption Date at the rate
prescribed therefor in the Security.
SECTION 11.7. Right of Redemption of Securities Initially Issued to an
Issuer Trust.
In the case of the Securities of a series initially issued to an Issuer
Trust, except as otherwise specified as contemplated by Section 3.1, the
Company, at its option, may redeem such Securities (i) on or after the date
specified in such Security, in whole at any time or in part from time to time,
or (ii) upon the occurrence and during the continuation of a Tax Event, an
Investment Company Event or a Capital Treatment Event, at any time within 90
days following the occurrence and during the continuation of such Tax Event,
Investment Company Event or Capital Treatment Event, in whole (but not in part),
in each case at a Redemption Price specified in such Security, together with
accrued interest (including Additional Interest) to the Redemption Date.
If less than all the Securities of any such series are to be redeemed,
the aggregate principal amount of such Securities remaining Outstanding after
giving effect to such redemption shall be sufficient to satisfy any provisions
of the Trust Agreement related to the Issuer Trust to which such Securities were
issued.
ARTICLE XII
SINKING FUNDS
Except as may be provided in any supplemental or amended indenture, no
sinking fund shall be established or maintained for the retirement of Securities
of any series.
ARTICLE XIII
SUBORDINATION OF SECURITIES
SECTION 13.1. 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, the payment of the principal
of (and premium, if any) and interest (including any Additional Interest) on
each and all of the Securities of each and every series are hereby expressly
made subordinate and junior in right of payment to the prior payment in full of
all Senior Indebtedness.
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SECTION 13.2. No Payment When Senior Indebtedness in Default; Payment
Over of Proceeds Upon Dissolution, Etc.
If the Company shall default in the payment of any principal of (or
premium, if any) or interest on any Senior Indebtedness when the same becomes
due and payable, whether at maturity or at a date fixed for prepayment or by
declaration of acceleration or otherwise, then, upon written notice of such
default to the Company by the holders of Senior Indebtedness or any trustee
therefor, unless and until such default shall have been cured or waived or shall
have ceased to exist, or all Senior Indebtedness has been paid, no direct or
indirect payment (in cash, property, securities, by set-off or otherwise) shall
be made or agreed to be made on account of the principal of (or premium, if any)
or interest (including Additional Interest) on any of the Securities, or in
respect of any redemption, repayment, retirement, purchase or other acquisition
of any of the Securities.
In the event of (i) any insolvency, bankruptcy, receivership,
liquidation, reorganization, readjustment, composition or other similar
proceeding relating to the Company, its creditors or its property, (ii) any
proceeding for the liquidation, dissolution or other winding-up of the Company,
voluntary or involuntary, whether or not involving insolvency or bankruptcy
proceedings, (iii) any assignment by the Company for the benefit of creditors or
(iv) any other marshalling of the assets of the Company (each such event, if
any, herein sometimes referred to as a "Proceeding"), all Senior Indebtedness
(including any interest thereon accruing after the commencement of any such
proceedings) shall first be paid in full before any payment or distribution,
whether in cash, securities or other property, shall be made to any Holder of
any of the Securities on account thereof. Any payment or distribution, whether
in cash, securities or other property (other than securities of the Company or
any other entity provided for by a plan of reorganization or readjustment, the
payment of which is subordinate, at least to the extent provided in these
subordination provisions with respect to the indebtedness evidenced by the
Securities, to the payment of all Senior Indebtedness at the time outstanding
and to any securities issued in respect thereof under any such plan of
reorganization or readjustment), which would otherwise (but for these
subordination provisions) be payable or deliverable in respect of the Securities
of any series shall be paid or delivered directly to the holders of Senior
Indebtedness in accordance with the priorities then existing among such holders
until all Senior Indebtedness (including any interest thereon accruing after the
commencement of any Proceeding) shall have been paid in full.
In the event of any Proceeding, after payment in full of all sums owing
with respect to Senior Indebtedness, the Holders of the Securities, together
with the holders of any obligations of the Company ranking on a parity with the
Securities, shall be entitled to be paid from the remaining assets of the
Company the amounts at the time due and owing on account of unpaid principal of
(and premium, if any) and interest on the Securities and such other obligations
before any payment or other distribution, whether in cash, property or
otherwise, shall be made on account of any capital stock or any obligations of
the Company ranking junior to the Securities and such other obligations. If,
notwithstanding the foregoing, any payment or distribution of any character or
any security, whether in cash, securities or other property (other than
securities of the Company or any other entity provided for by a plan of
reorganization or readjustment the payment of which is subordinate, at least
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to the extent provided in these subordination provisions with respect to the
indebtedness evidenced by the Securities, to the payment of all Senior
Indebtedness at the time outstanding and to any securities issued in respect
thereof under any plan of reorganization or readjustment), shall be received by
the Trustee or any Holder in contravention of any of the terms hereof and before
all Senior Indebtedness shall have been paid in full, such payment or
distribution or security shall be received in trust for the benefit of, and
shall be paid over or delivered and transferred to, the holders of the Senior
Indebtedness at the time outstanding in accordance with the priorities then
existing among such holders for application to the payment of all Senior
Indebtedness remaining unpaid, to the extent necessary to pay all such Senior
Indebtedness in full. In the event of the failure of the Trustee or any Holder
to endorse or assign any such payment, distribution or security, each holder of
Senior Indebtedness is hereby irrevocably authorized to endorse or assign the
same.
The Trustee and the Holders shall take such action (including, without
limitation, the delivery of this Indenture to an agent for the holders of Senior
Indebtedness or consent to the filing of a financing statement with respect
hereto) as may, in the opinion of counsel designated by the holders of a
majority in principal amount of the Senior Indebtedness at the time outstanding,
be necessary or appropriate to assure the effectiveness of the subordination
effected by these provisions.
The provisions of this Section 13.2 shall not impair any rights,
interests, remedies or powers of any secured creditor of the Company in respect
of any security interest the creation of which is not prohibited by the
provisions of this Indenture.
The securing of any obligations of the Company, otherwise ranking on a
parity with the Securities or ranking junior to the Securities shall not be
deemed to prevent such obligations from constituting, respectively, obligations
ranking on a parity with the Securities or ranking junior to the Securities.
SECTION 13.3. Payment Permitted If No Default.
Nothing contained in this Article or elsewhere in this Indenture or in
any of the Securities shall prevent (a) the Company, at any time, except during
the pendency of the conditions described in the first paragraph of Section 13.2
or of any Proceeding referred to in Section 13.2, from making payments at any
time of principal of (and premium, if any) or interest (including Additional
Interest) on the Securities, or (b) the application by the Trustee of any monies
deposited with it hereunder to the payment of or on account of the principal of
(and premium, if any) or interest (including any Additional Interest) on the
Securities or the retention of such payment by the Holders, if, at the time of
such application by the Trustee, it did not have knowledge that such payment
would have been prohibited by the provisions of this Article.
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<PAGE> 85
SECTION 13.4. Subrogation to Rights of Holders of Senior Indebtedness.
Subject to the payment in full of all amounts due or to become due on
all Senior Indebtedness, or the provision for such payment in cash or cash
equivalents or otherwise in a manner satisfactory to the holders of Senior
Indebtedness, the Holders of the Securities shall be subrogated to the extent of
the payments or distributions made to the holders of such Senior Indebtedness
pursuant to the provisions of this Article (equally and ratably with the holders
of all indebtedness of the Company that by its express terms is subordinated to
Senior Indebtedness of the Company to substantially the same extent as the
Securities are subordinated to the Senior Indebtedness and is entitled to like
rights of subrogation by reason of any payments or distributions made to holders
of such Senior Indebtedness) to the rights of the holders of such Senior
Indebtedness to receive payments and distributions of cash, property and
securities applicable to the Senior Indebtedness until the principal of (and
premium if any) and interest (including Additional Interest) on the Securities
shall be paid in full. For 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, and no payments over
pursuant to the provisions of this Article to the holders of Senior Indebtedness
by Holders of the Securities or the Trustee, shall, as among the Company, its
creditors other than holders of Senior Indebtedness, and the Holders of the
Securities, be deemed to be a payment or distribution by the Company to or on
account of the Senior Indebtedness.
SECTION 13.5. Provisions Solely to Define Relative Rights.
The provisions of this Article are and are intended solely for the
purpose of defining the relative rights of the Holders of the Securities on the
one hand and the holders of Senior Indebtedness on the other hand. Nothing
contained in this Article or elsewhere in this Indenture or in the Securities is
intended to or shall: (a) impair, as between the Company and the Holders of the
Securities, the obligations of the Company, which are absolute and
unconditional, to pay to the Holders of the Securities the principal of (and
premium, if any) and interest (including any Additional Interest) on the
Securities as and when the same shall become due and payable in accordance with
their terms; or (b) affect the relative rights against the Company of the
Holders of the Securities and creditors of the Company other than their rights
in relation to the holders of Senior Indebtedness; or (c) prevent the Trustee or
the Holder of any Security (or to the extent expressly provided herein, the
holder of any Capital Security) from exercising all remedies otherwise permitted
by applicable law upon default under this Indenture, including filing and voting
claims in any Proceeding, subject to the rights, if any, under this Article of
the holders of Senior Indebtedness to receive cash, property and securities
otherwise payable or deliverable to the Trustee or such Holder.
SECTION 13.6. Trustee to Effectuate Subordination.
Each Holder of a Security by his or her acceptance thereof authorizes
and directs the Trustee on his or her behalf to take such action as may be
necessary or appropriate to acknowledge or
79
<PAGE> 86
effectuate the subordination provided in this Article and appoints the Trustee
his or her attorney-in-fact for any and all such purposes.
SECTION 13.7. No Waiver of Subordination Provisions.
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
be otherwise charged with.
Without in any way limiting the generality of the immediately preceding
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 of any series, without incurring responsibility to such Holders of
the Securities and without impairing or releasing the subordination provided in
this Article or the obligations hereunder of such 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 extent 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.
SECTION 13.8. Notice to Trustee.
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 to or by the Trustee in respect of the Securities.
Notwithstanding the provisions of this Article or any other provision of this
Indenture, the Trustee shall not be charged with knowledge of the existence of
any facts that would prohibit the making of any payment to or by the Trustee in
respect of the Securities, unless and until the Trustee shall have received
written notice thereof from the Company or a holder of Senior Indebtedness or
from any trustee, agent or representative therefor; provided, however, that if
the Trustee shall not have received the notice provided for in this Section at
least two Business Days prior to the date upon which by the terms hereof any
monies may become payable for any purpose (including, the payment of the
principal of (and premium, if any, on) or interest (including any Additional
Interest) on any Security), then, anything herein contained to the contrary
notwithstanding, the Trustee shall have full power and authority to receive such
monies and to apply the same to the purpose for which they were received and
shall not be affected by any notice to the contrary that may be received by it
within two Business Days prior to such date.
Subject to the provisions of Section 6.1, the Trustee shall be entitled
to rely on the delivery to it of a written notice by a Person representing
himself or herself to be a holder of Senior
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<PAGE> 87
Indebtedness (or a trustee or attorney-in-fact therefor) to establish that such
notice has been given by a holder of Senior Indebtedness (or a trustee or
attorney-in-fact therefor). 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, 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, 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 13.9. Reliance on Judicial Order or Certificate of Liquidating
Agent.
Upon any payment or distribution of assets of the Company referred to
in this Article, the Trustee, subject to the provisions of Section 6.1, and the
Holders of the Securities shall be entitled to rely upon any order or decree
entered by any court of competent jurisdiction in which such Proceeding is
pending, or a certificate of the trustee in bankruptcy, receiver, conservator,
liquidating trustee, custodian, assignee for the benefit of creditors, agent or
other Person making such payment or distribution, delivered to the Trustee or to
the Holders of Securities, for the purpose of ascertaining the Persons entitled
to participate in such payment or distribution, the holders of the Senior
Indebtedness and other indebtedness of the Company, the amount thereof or
payable thereon, the amount or amounts paid or distributed thereon and all other
facts pertinent thereto or to this Article.
SECTION 13.10. Trustee Not Fiduciary for Holders of Senior
Indebtedness.
The Trustee, in its capacity as trustee under this Indenture, shall not
be deemed to owe any fiduciary duty to the holders of Senior Indebtedness and
shall not be liable to any such holders if it shall in good faith mistakenly pay
over or distribute to Holders of Securities or to the Company or to any other
Person cash, property or securities to which any holders of Senior Indebtedness
shall be entitled by virtue of this Article or otherwise.
SECTION 13.11. Rights of Trustee as Holder of Senior Indebtedness;
Preservation of Trustee's Rights.
The Trustee in its individual capacity shall be entitled to all the
rights set forth in this Article with respect to any Senior Indebtedness that
may at any time be 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.
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<PAGE> 88
SECTION 13.12. Article Applicable to Paying Agents.
In case at any time any Paying Agent other than the Trustee shall have
been appointed by the Company and be then acting hereunder, the term "Trustee"
as used in this Article shall in such case (unless the context otherwise
requires) be construed as extending to and including such Paying Agent within
its meaning as fully for all intents and purposes as if such Paying Agent were
named in this Article in addition to or in place of the Trustee.
SECTION 13.13. Certain Conversions or Exchanges Deemed Payment.
For purposes of this Article only, (a) the issuance and delivery of
junior securities upon conversion or exchange of Securities of any series shall
not be deemed to constitute a payment or distribution on account of the
principal of (or premium, if any, on) or interest (including any Additional
Interest) on such Securities or on account of the purchase or other acquisition
of such Securities, and (b) the payment, issuance or delivery of cash, property
or securities (other than junior securities) upon conversion or exchange of a
Security of any series shall be deemed to constitute payment on account of the
principal of such security. For the purposes of this Section, the term "junior
securities" means (i) shares of any stock of any class of the Company, and (ii)
securities of the Company that are subordinated in right of payment to all
Senior Indebtedness that may be outstanding at the time of issuance or delivery
of such securities to substantially the same extent as, or to a greater extent
than, the Securities are so subordinated as provided in this Article.
* * * *
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 left intentionally blank; signatures appear on
following page.]
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<PAGE> 89
ARTICLE VII
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed, and their respective corporate seals to be hereunto affixed and
attested, all as of the day and year first above written.
PROVIDENT BANKSHARES
CORPORATION
By: /s/ James R. Wallis
------------------------------------
Attest: Name: James R. Wallis
Title: Executive Vice President and
/s/ Robert L. Davis Chief Financial Officer
- ----------------------------------
BANKERS TRUST COMPANY,
as Trustee, and not in its individual
capacity
By: /s/ Sandra J. Shaffer
------------------------------------
Name: Sandra J. Shaffer
Attest: Title: Assistant Vice President
/s/ Susan Johnson
- ----------------------------------
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<PAGE> 90
ANNEX A
FORM OF RESTRICTED SECURITIES CERTIFICATE
RESTRICTED SECURITIES CERTIFICATE
(For transfers pursuant to Section 3.6(b) of
the Indenture referred to below)
[____________________________],
as Securities Registrar
[address]
Re: [Title of Securities] of Provident Bankshares Corporation
(the "Securities")
Reference is made to the Junior Subordinated Indenture, dated as of
April 17, 1998 (the "Indenture"), between Provident Bankshares Corporation, a
Maryland corporation, and Bankers Trust Company, as Trustee. Terms used herein
and defined in the Indenture or in Regulation S, Rule 144A or Rule 144 under the
U.S. Securities Act of 1933 (the "Securities Act") are used here as so defined.
This certificate relates to $ ____________ aggregate principal amount
of Securities, which are evidenced by the following certificate(s) (the
"Specified Securities"):
CUSIP No(s).____________________________
CERTIFICATE No(s).______________________
CURRENTLY IN GLOBAL FORM: Yes _____ No _____ (check one)
The person in whose name this certificate is executed below (the "Undersigned")
hereby certifies that either (i) it is the sole beneficial owner of the
Specified Securities or (ii) it is acting on behalf of all the beneficial owners
of the Specified Securities and is duly authorized by them to do so. Such
beneficial owner or owners are referred to herein collectively as the "Owner".
If the Specified Securities are represented by a Global Security, they are held
through a Depositary or an Agent Member in the name of the Undersigned, as or on
behalf of the Owner. If the Specified Securities are not represented by a Global
Security, they are registered in the name of the Undersigned, as or on behalf of
the Owner. The Owner has requested that the Specified Securities be transferred
to a
<PAGE> 91
person (the "Transferee") who will take delivery in the form of a Restricted
Security. In connection with such transfer, the Owner hereby certifies that,
unless such transfer is being effected pursuant to an effective registration
statement under the Securities Act, it is being effected in accordance with Rule
144A, Rule 904 of Regulation S or Rule 144 under the Securities Act and all
applicable securities laws of the states of the United States and other
jurisdictions. Accordingly, the Owner hereby further certifies that
(1) Rule 144A Transfers. If the transfer is being effected in accordance with
Rule 144A:
(A) the Specified Securities are being transferred to a person that the
Owner and any person acting on its behalf reasonably believe is a "qualified
institutional buyer" within the meaning of Rule 144A, acquiring for its own
account or for the account of a qualified institutional buyer; and
(B) the Owner and any person acting on its behalf have taken reasonable
steps to ensure that the Transferee is aware that the Owner may be relying on
Rule 144A in connection with the transfer; and
(2) Rule 904 Transfers. If the transfer is being effected in accordance with
Rule 904:
(A) the Owner is not a distributor of the Securities, an affiliate of
the Company or any such distributor or a person acting in behalf of any of the
foregoing;
(B) the offer of the Specified Securities was not made to a person in
the United States;
(C) either;
(i) at the time the buy order was originated, the Transferee was
outside the United States or the Owner and any person acting on its
behalf reasonably believed that the Transferee was outside the United
States, or
(ii) the transaction is being executed in, on or through the
facilities of the Eurobond market, as regulated by the Association of
International Bond Dealers, or another designated offshore securities
market and neither the Owner nor any person acting on its behalf know
that the transaction has been prearranged with a buyer in the United
States;
(D) no directed selling efforts within the meaning of Rule 902 of
Regulation S have been made in the United States by or on behalf of the Owner or
any affiliate thereof; and
(E) the transaction is not part of a plan or scheme to evade the
registration requirements of the Securities Act.
2
<PAGE> 92
(3) Rule 144 Transfers. If the transfer is being effected pursuant to Rule
144:
(A) the transfer is occurring after a holding period of at least two
years (computed in accordance with paragraph (d) of Rule 144) has elapsed since
the date the Specified Securities were acquired from the Company or from an
affiliate (as such term is defined in Rule 144), or such shorter period as Rule
144 may hereinafter require, of the Company, whichever is later, and is being
effected in accordance with the applicable amount, manner of sale and notice
requirements of paragraphs (e), (f) and (h) of Rule 144;
(B) the transfer is occurring after a holding period by the Owner of at
least three years has elapsed since the date the Specified Securities were
acquired from the Company or from an affiliate (as such term is defined in Rule
144) of the Company, whichever is later, and the Owner is not, and during the
preceding three months has not been, an affiliate of the Company; or
(C) the Owner is a Qualified Institutional Buyer under Rule 144A or has
acquired the Securities otherwise in accordance with Sections (1), (2) or (3)
hereof and is transferring the Securities to an accredited investor in a
transaction exempt from the requirements of the Securities Act.
This certificate and the statements contained herein are made for your
benefit and the benefit of the Company and the Initial Purchasers (as defined in
the Trust Agreement relating to the Issuer Trust to which the Securities were
initially issued).
Dated:___________________ ______________________________________________
(Print the name of the Undersigned, as such
term is defined in the second paragraph of
this certificate.)
By:___________________________________________
Name:
Title:
(If the Undersigned is a corporation,
partnership or fiduciary, the title of the
person signing on behalf of the Undersigned
must be stated.)
3
<PAGE> 1
EXHIBIT 4.2
(FACE OF EXCHANGE JUNIOR SUBORDINATED
DEFERRABLE INTEREST DEBENTURES)
THE SECURITIES WILL BE ISSUED AND MAY BE TRANSFERRED ONLY IN BLOCKS
HAVING AN AGGREGATE PRINCIPAL AMOUNT OF NOT LESS THAN $100,000 (100 SECURITIES).
ANY SUCH TRANSFER OF SECURITIES IN A BLOCK HAVING AN AGGREGATE PRINCIPAL AMOUNT
OF LESS THAN $100,000 SHALL BE DEEMED TO BE VOID AND OF NO LEGAL EFFECT
WHATSOEVER. ANY SUCH TRANSFEREE SHALL BE DEEMED NOT TO BE THE HOLDER OF SUCH
SECURITIES FOR ANY PURPOSE, INCLUDING BUT NOT LIMITED TO THE RECEIPT OF
PRINCIPAL, PREMIUM (IF ANY) OR INTEREST OF SUCH SECURITIES, AND SUCH TRANSFEREE
SHALL BE DEEMED TO HAVE NO INTEREST WHATSOEVER IN SUCH SECURITIES.
THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE
HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A
NOMINEE OF A DEPOSITARY. THIS SECURITY IS EXCHANGEABLE FOR SECURITIES REGISTERED
IN THE NAME OF A PERSON OTHER THAN THE DEPOSITARY OR ITS NOMINEE ONLY IN THE
LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE AND MAY NOT BE TRANSFERRED
EXCEPT AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A
NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE
DEPOSITARY.
No. 1 $40,000,000 CUSIP NO.
PROVIDENT BANKSHARES CORPORATION, a Maryland corporation
(hereinafter called the "Company", which term includes any successor Person
under the Indenture hereinafter referred to), for value received, hereby
promises to pay to PROVIDENT TRUST I, or registered assigns, the principal sum
of Forty Million Dollars ($40,000,000) on April 15, 2028, or such other
principal amount represented hereby as may be set forth in the records of the
Securities Registrar hereinafter referred to in accordance with the Indenture.
The Company further promises to pay interest on said principal from April 17,
1998, or from the most recent Interest Payment Date to which interest has been
paid or duly provided for with respect to this security, or the 8.29% Junior
Subordinated Deferrable Interest Debenture which was exchanged for this
security, semi-annually (subject to deferral as set forth herein) in arrears on
April 15 and October 15 of each year, commencing on October 15, 1998 at the rate
of 8.29% per annum, together with Additional Sums, if any, as provided in
Section 10.6 of the Indenture, until the principal hereof is paid or duly
provided for or made available for payment; provided that any overdue principal,
premium or Additional Sums and any overdue installment of interest shall bear
Additional Interest at the rate of 8.29% per annum (to the extent that the
payment of such interest shall be legally enforceable), compounded semiannually,
from the dates such amounts are due until they are paid or made available for
payment, and such interest shall be payable on demand. The amount of interest
payable for any period less than a full interest period shall be computed on the
basis of a 360-day year of twelve 30-day months and the actual days elapsed in a
partial month in such period. The amount of interest payable for any full
interest period shall be computed by dividing the applicable rate per annum by
two. The interest so payable, and punctually paid or duly provided for, on any
Interest Payment Date will, as provided in the Indenture, be paid to the Person
in whose name this Security (or one or more Predecessor
<PAGE> 2
Securities) is registered at the close of business on the Regular Record Date
for such interest installment, which shall be April 1 or October 1 (whether or
not a Business Day). Any such interest not so punctually paid or duly provided
for shall forthwith cease to be payable to the Holder on such Regular Record
Date and may either be paid to the Person in whose name this Security (or one or
more Predecessor Securities) is registered at the close of business on a Special
Record Date for the payment of such Defaulted Interest to be fixed by the
Trustee (notice whereof shall be given to Holders of Securities of this series
not less than 10 days prior to such Special Record Date) or be paid at any time
in any other lawful manner not inconsistent with the requirements of any
securities exchange on which the Securities of this series may be listed, and
upon such notice as may be required by such exchange, all as more fully provided
in said Indenture.
So long as no Event of Default has occurred and is continuing,
the Company shall have the right, at any time during the term of this Security,
from time to time to defer the payment of interest on this Security for up to 10
consecutive semi-annual interest payment periods with respect to each deferral
period (each an "Extension Period"), during which Extension Periods the Company
shall have the right to make partial payments of interest on any Interest
Payment Date, and at the end of which the Company shall pay all interest then
accrued and unpaid including Additional Interest, as provided below; provided,
however; that no Extension Period shall extend beyond the Stated Maturity of the
principal of this Security as then in effect, and no such Extension Period may
end on a date other than an Interest Payment Date; and provided, further;
however, that, during any such Extension Period the Company shall not (i)
declare or pay any dividends or distributions on, or redeem, purchase, acquire
or make a liquidation payment with respect to, any of the Company's capital
stock, or (ii) make any payment of principal of or interest or premium, if any,
on or repay, repurchase or redeem any debt securities of the Company that rank
pari passu in all respects with or junior in interest to this Security (other
than (a) repurchases, redemptions or other acquisitions of shares of capital
stock of the Company 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, in connection with a dividend reinvestment
or shareholder stock purchase plan or in connection with the issuance of capital
stock of the Company (or securities convertible into or exercisable for such
capital stock) as consideration in an acquisition transaction entered into prior
to the applicable Extension Period, (b) as a result of an exchange or conversion
of any class or series of the Company's capital stock (or any capital stock of a
Subsidiary of the Company) for any class or series of the Company's capital
stock or of any class or series of the Company's indebtedness for any class or
series of the Company's capital stock, (c) the purchase of fractional interests
in shares of the Company's capital stock pursuant to the conversion or exchange
provisions of such capital stock or the security being converted or exchanged,
(d) any declaration of a dividend in connection with any Rights Plan, or the
issuance of rights, stock or other property under any 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 ranks pari passu with
or junior to such stock). Prior to the termination of any such Extension Period,
the Company may further defer the payment of interest, provided that no
Extension Period shall exceed 10 consecutive semi-annual interest payment
periods, extend beyond the Stated Maturity of
2
<PAGE> 3
the principal of this Security or end on a date other than an Interest Payment
Date. Upon the termination of any such Extension Period and upon the payment of
all accrued and unpaid interest and any Additional Interest then due on any
Interest Payment Date, the Company may elect to begin a new Extension Period,
subject to the above conditions. No interest shall be due and payable during an
Extension Period, except at the end thereof, but each installment of interest
that would otherwise have been due and payable during such Extension Period
shall bear Additional Interest (to the extent that the payment of such interest
shall be legally enforceable) at the rate of 8.29% per annum, compounded
semiannually and calculated as set forth in the first paragraph of this
Security, from the date on which such amounts would otherwise have been due and
payable until paid or made available for payment. The Company shall give the
Holder of this Security and the Trustee notice of its election to begin any
Extension Period at least one Business Day prior to the next succeeding Interest
Payment Date on which interest on this Security would be payable but for such
deferral or, so long as such securities are held by Provident Trust I (the
"Issuer Trust"), at least one Business Day prior to the earlier of (i) the next
succeeding date on which Distributions on the Capital Securities of such Issuer
Trust would be payable but for such deferral, and (ii) the date on which the
Property Trustee of such Issuer Trust is required to give notice to holders of
such Capital Securities of the record date or the date such Distributions are
payable, but in any event not less than one Business Day prior to such record
date.
Payment of the principal of (and premium, if any) and interest
on this Security will be made at the office or agency of the Company maintained
for that purpose in the United States, in such coin or currency of the United
States of America as at the time of payment is legal tender for payment of
public and private debts; provided, however; that, at the option of the Company,
payment of interest may be made (i) by check mailed to the address of the Person
entitled thereto as such address shall appear in the Securities Register, or
(ii) if to a Holder of $1,000,000 or more in aggregate principal amount of this
Security, by wire transfer in immediately available funds upon written request
to the Trustee not later than 15 calendar days prior to the date on which the
interest is payable.
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 his or her behalf to take
such actions as may be necessary or appropriate to effectuate the subordination
so provided, and (c) appoints the Trustee his or her attorney-in-fact for any
and all such purposes. Each Holder hereof, by his or her acceptance hereof,
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.
Reference is hereby made to the further provisions of this
Security set forth on the reverse hereof, which further provisions shall for all
purposes have the same effect as if set forth at this place.
3
<PAGE> 4
Unless the certificate of authentication hereon has been
executed by the Trustee referred to on the reverse hereof by manual signature,
this Security shall not be entitled to any benefit under the Indenture or be
valid or obligatory for any purpose.
IN WITNESS WHEREOF, the Company has caused this instrument to
be duly executed under its corporate seal.
PROVIDENT BANKSHARES CORPORATION
[SEAL]
By: ______________________________
Name: James R. Wallis
Title: Executive Vice President and
Chief Financial Officer
Attest:
_________________________________
Secretary or Assistant Secretary
This is one of the Securities of the 8.29% Junior Subordinated
Deferrable Interest Debentures series designated therein referred to in the
within-mentioned Indenture.
Dated: ________, 1998 BANKERS TRUST COMPANY,
as Trustee
By: _________________________
Authorized Signatory
4
<PAGE> 5
(Reverse of Exchange Junior Subordinated
Deferrable Interest Debenture)
This Security is one of a duly authorized issue of securities
of the Company (herein called the "Securities"), issued and to be issued in one
or more series under the Junior Subordinated Indenture, dated as of April 17,
1998 (herein called the "Indenture"), between the Company and Bankers Trust
Company, as Trustee (herein called the "Trustee", which term includes any
successor trustee under the Indenture), to which Indenture and all indentures
supplemental thereto reference is hereby made for a statement of the respective
rights, limitations of rights, duties and immunities thereunder of the Company,
the Trustee, the holders of Senior Indebtedness and the Holders of the
Securities, and of the terms upon which the Securities are, and are to be,
authenticated and delivered. This Security is one of the 8.29% Exchange Junior
Subordinated Deferrable Interest Debentures (the "Exchange Junior Subordinated
Debentures") series designated herein, limited in aggregate principal amount to
$40,000,000.
All terms used in this Security that are defined in the
Indenture, in the Amended and Restated Trust Agreement, dated as of April 17,
1998, (as modified, amended or supplemented from time to time, the "Trust
Agreement"), relating to Provident Trust I (the "Issuer Trust") among the
Company, as Depositor, the Trustees named therein, the Administrators named
therein and the Holders from time to time of the Trust Securities issued
pursuant thereto, or in the Registration Rights Agreement, dated as of April 17,
1998 (the "Registration Rights Agreement"), among the Company, Provident Trust I
and Keefe, Bruyette & Woods, Inc., shall have the meanings assigned to them in
the Indenture, the Trust Agreement, or the Registration Rights Agreement, as the
case may be.
The Company has the right to redeem this Security (i) on or
after April 15, 2008, in whole at any time or in part from time to time, or (ii)
in whole (but not in part), at any time within 90 days following the occurrence
and during the continuation of a Tax Event, Investment Company Event, or Capital
Treatment Event, in each case at the Redemption Price described below, and
subject to possible regulatory approval.
In the case of a redemption on or after April 15, 2008, the
Redemption Price shall equal the following prices, expressed in percentages of
the principal amount hereof, together with accrued interest to but excluding the
date fixed for redemption, if redeemed during the 12-month period beginning
April 15:
Year Redemption Price
2008 104.1450%
2009 103.7305%
2010 103.3160%
2011 102.9015%
5
<PAGE> 6
2012 102.4870%
2013 102.0725%
2014 101.6580%
2015 101.2435%
2016 100.8290%
2017 100.4145%
and 100% on or after April 15, 2018.
In the case of a redemption on or after April 15, 2008
following a Tax Event, Investment Company Event or Capital Treatment Event, the
Redemption Price shall equal the Redemption Price then applicable to a
redemption under the preceding paragraph.
In the case of a redemption prior to April 15, 2008 following
a Tax Event, Investment Company Event or Capital Treatment Event in respect of
the Issuer Trust, the Redemption Price shall equal the Make-Whole Amount for a
corresponding $1,000 principal amount hereof, together with accrued interest to
but excluding the date fixed for redemption, which Make-Whole Amount will be
equal to the greater of (i) 100% of the principal amount hereof, and (ii) as
determined by a Quotation Agent (as defined in the Trust Agreement), the sum of
the present values of the principal amount hereof and premium, if any, payable
as part of the Redemption Price with respect to an optional redemption hereof on
April 15, 2008, together with the present values of scheduled payments of
interest from the Redemption Date to April 15, 2008, in each case discounted to
the Redemption Date on a semi-annual basis (assuming a 360-day year consisting
of 30-day months) at the Adjusted Treasury Rate (as defined in the Trust
Agreement).
In the event of redemption of this Security in part only, a
new Security or Securities of this series for the unredeemed portion hereof will
be issued in the name of the Holder hereof upon the cancellation hereof.
The Indenture permits, with certain exceptions as therein
provided, the Company and the Trustee at any time to enter into a supplemental
indenture or indentures for the purpose of modifying in any manner the rights
and obligations of the Company and of the Holders of the Securities, with the
consent of the Holders of not less than a majority in principal amount of the
Outstanding Securities of each series to be affected by such supplemental
indenture. The Indenture also contains provisions permitting Holders of
specified percentages in principal amount of the Securities of each series at
the time Outstanding, on behalf of the Holders of all Securities of such series,
to waive compliance by the Company with certain provisions of the Indenture and
certain past defaults under the Indenture and their consequences. Any such
consent or waiver by the Holder of this Security shall be conclusive and binding
upon such Holder and upon all future Holders of this Security and of any
Security issued upon the registration of transfer hereof or in exchange herefor
or in lieu hereof, whether or not notation of such consent or waiver is made
upon this Security.
6
<PAGE> 7
As provided in and subject to the provisions of the Indenture,
if an Event of Default with respect to the Securities of this series at the time
Outstanding occurs and is continuing, then and in every such case the Trustee or
the Holders of not less than 25% in aggregate principal amount of the
Outstanding Securities of this series may declare the principal amount of all
the Securities of this series to be due and payable immediately, by a notice in
writing to the Company (and to the Trustee if given by Holders), provided that,
if upon an Event of Default, the Trustee or such Holders fail to declare the
principal of all the Outstanding Securities of this series to be immediately due
and payable, the Holders of at least 25% in aggregate Liquidation Amount of the
Capital Securities then outstanding shall have the right to make such
declaration by a notice in writing to the Company and the Trustee; and upon any
such declaration the principal amount of and the accrued interest (including any
Additional Interest) on all the Securities of this series shall become
immediately due and payable, provided that the payment of principal and interest
(including any Additional Interest) on such Securities shall remain subordinated
to the extent provided in Article XIII of the Indenture.
No reference herein to the Indenture and no provision of this
Security or of the Indenture shall alter or impair the obligation of the
Company, which is absolute and unconditional, to pay the principal of (and
premium, if any) and interest (including Additional Interest) on this Security
at the times, place and rate, and in the coin or currency, herein prescribed.
As provided in the Indenture and subject to certain
limitations therein set forth, the transfer of this Security is registrable in
the Securities Register, upon surrender of this Security for registration of
transfer at the office or agency of the Company maintained under Section 10.2 of
the Indenture for such purpose, duly endorsed by, or accompanied by a written
instrument of transfer in form satisfactory to the Company and the Securities
Registrar duly executed by, the Holder hereof or such Holder's attorney duly
authorized in writing, and thereupon one or more new Securities of this series,
of like tenor, of authorized denominations and for the same aggregate principal
amount, will be issued to the designated transferee or transferees.
The Securities of this series are issuable, only in registered
form without coupons in denominations of $100,000 and any integral multiple of
$1,000 in excess thereof. Securities or portions thereof may be transferred or
exchanged only in principal amounts of not less than $100,000. Any transfer,
exchange or other disposition of Securities in contravention of Section
3.6(b)(v) of the Indenture shall be deemed to be void and of no legal effect
whatsoever, any such transferee shall be deemed not to be the Holder or owner of
any beneficial interest in such Securities for any purpose, including but not
limited to the receipt of interest payable on such Securities, and such
transferee shall be deemed to have no interest whatsoever in such Securities. As
provided in the Indenture and subject to certain limitations therein set forth,
Securities of this series are exchangeable for a like aggregate principal amount
of Securities of this series and of like tenor of a different authorized
denomination, as requested by the Holder surrendering the same.
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.
7
<PAGE> 8
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 Company and, by its acceptance of this Security or a
beneficial interest therein, the Holder of and any Person that acquires a
beneficial interest in, this Security agrees that for United States Federal,
state and local tax purposes it is intended that this Security constitute
indebtedness.
THIS SECURITY SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF NEW YORK.
THIS SECURITY IS A DIRECT AND UNSECURED OBLIGATION OF THE
COMPANY, DOES NOT EVIDENCE DEPOSITS AND IS NOT INSURED BY THE FEDERAL DEPOSIT
INSURANCE CORPORATION OR ANY OTHER INSURER OR GOVERNMENT AGENCY.
8
<PAGE> 1
EXHIBIT 4.3
CERTIFICATE OF TRUST
OF
PROVIDENT TRUST I
THIS CERTIFICATE OF TRUST of Provident Trust I (the "Trust"),
dated as of April 3, 1998, is being duly executed and filed by the undersigned,
as trustee, to form a business trust under the Delaware Business Trust Act (12
Del. C. Section 3801, et seq.).
(i) Name. The name of the business trust being formed hereby
is Provident Trust I.
(ii) Delaware Trustee. The name and business address of the
trustee of the Trust in the State of Delaware are Bankers Trust (Delaware), E.A.
Delle Donne Corporate Center, Montgomery Bldg., 1011 Centre Road, Suite 200,
Wilmington, Delaware 19805-1266.
(iii) Effective Date. This certificate of Trust shall be
effective as of its filing.
IN WITNESS WHEREOF, the undersigned, being the trustee of the
Trust, has executed this certificate of Trust as of the date first above
written.
BANKERS TRUST (DELAWARE), not in its
individual capacity but solely as trustee of the Trust
By: /s/ M. Lisa Wilkins
------------------------------
Name: M. Lisa Wilkins
Title: Assistant Secretary
<PAGE> 1
EXHIBIT 4.4
AMENDED AND RESTATED
TRUST AGREEMENT
AMONG
PROVIDENT BANKSHARES CORPORATION
AS DEPOSITOR,
BANKERS TRUST COMPANY
AS PROPERTY TRUSTEE,
AND
BANKERS TRUST (DELAWARE),
AS DELAWARE TRUSTEE
DATED AS OF APRIL 17, 1998
PROVIDENT TRUST I
<PAGE> 2
PROVIDENT TRUST I
Certain Sections of this Trust Agreement relating, to
Sections 310 through 318 of the
Trust Indenture Act of 1939:
Trust Indenture Act
Section Trust Agreement Section
Section 310 (a)(1)........................................... 8.7
(a)(2)........................................... 8.7
(a)(3)........................................... 8.9
(a)(4)...........................................2.7(a)(ii)
(b)...................................... 8.8, 10.10(b)
Section 311 (a)......................................8.13, 10.10
(b)......................................8.13, 10.10(b)
Section 312 (a)............................................10.10(b)
(b)............................................10.10(b), (f)
(c)............................................. 5.7
Section 313 (a) 8.15(a)
(a)(4).........................................10.10(c)
(b)...................................8.15(c), 10.10(c)
(c)......................................10.8, 10.10(c)
(d)............................................10.10(c)
Section 314 (a)......................................8.16, 10.10(d)
(b)...................................Not Applicable
(c)(1)...................................8.17, 10.10(d), (e)
(c)(2)...................................8.17, 10.10(d), (e)
(c)(3)...................................8.17, 10.10(d), (e)
(e)......................................8.17, 10.10(e)
Section 315 (a)..............................................8.1(d)
(b)............................................. 8.2
(c)..............................................8.1(c)
(d)..............................................8.1(d)
(e)...................................Not Applicable
Section 316 (a)...................................Not Applicable
(a)(1)(A).............................Not Applicable
(a)(1)(B).............................Not Applicable
(a)(2)................................Not Applicable
(b).............................................5.13
(c)............................................. 6.7
Section 317 (a)(1)................................Not Applicable
(a)(2)..........................................8.14
(b).............................................5.10
Section 318 (a)............................................10.10(a)
Note: This reconciliation and tie shall not, for any purpose, be deemed to be a
part of the Trust Agreement.
<PAGE> 3
TABLE OF CONTENTS
<TABLE>
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Page
<S> <C>
ARTICLE I. DEFINED TERMS
SECTION 1.1. Definitions....................................................................................2
ARTICLE II. CONTINUATION OF THE ISSUER TRUST
SECTION 2.1. Name...........................................................................................14
SECTION 2.2. Office of the Delaware Trustee; Principal Place of Business....................................14
SECTION 2.3. Initial Contribution of Trust Property; Organizational Expenses...............................14
SECTION 2.4. Issuance of the Capital Securities.............................................................14
SECTION 2.5. Issuance of the Common Securities; Subscription and
Purchase of Junior Subordinated Debentures............................................15
SECTION 2.6. Declaration of Trust...........................................................................15
SECTION 2.7. Authorization to Enter into Certain Transactions...............................................15
SECTION 2.8. Assets of Trust................................................................................19
SECTION 2.9. Title to Trust Property........................................................................19
ARTICLE III. PAYMENT ACCOUNT
SECTION 3.1. Payment Account................................................................................19
ARTICLE IV. DISTRIBUTIONS; REDEMPTION
SECTION 4.1. Distributions..................................................................................19
SECTION 4.2. Redemption.....................................................................................21
SECTION 4.3. Subordination of Common Securities.............................................................23
SECTION 4.4. Payment Procedures.............................................................................23
SECTION 4.5. Tax Returns and Reports........................................................................24
SECTION 4.6. Payment of Taxes, Duties, Etc. of the Issuer Trust.............................................24
SECTION 4.7. Payments under Indenture or Pursuant to Direct Actions.........................................24
SECTION 4.8. Liability of the Holder of Common Securities...................................................24
ARTICLE V. TRUST SECURITIES CERTIFICATES
SECTION 5.1. Initial Ownership..............................................................................25
SECTION 5.2. The Trust Securities Certificates..............................................................25
SECTION 5.3. Execution and Delivery of Trust Securities Certificates........................................25
SECTION 5.4. Global Capital Security........................................................................26
SECTION 5.5. Registration of Transfer and Exchange Generally; Certain
Transfers and Exchanges; Capital Securities Certificates;
Securities Act Legends................................................................27
SECTION 5.6. Mutilated, Destroyed, Lost or Stolen Trust Securities Certificates.............................31
SECTION 5.7. Persons Deemed Holders.........................................................................31
SECTION 5.8. Access to List of Holders' Names and Addresses.................................................31
SECTION 5.9. Maintenance of Office or Agency................................................................31
SECTION 5.10. Appointment of Paying Agent....................................................................32
SECTION 5.11. Ownership of Common Securities by Depositor....................................................32
SECTION 5.12. Notices to Clearing Agency.....................................................................32
SECTION 5.13. Rights of Holders..............................................................................33
</TABLE>
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<TABLE>
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ARTICLE VI. ACTS OF HOLDERS; MEETINGS; VOTING
SECTION 6.1. Limitations on Holder's Voting Rights..........................................................34
SECTION 6.2. Notice of Meetings.............................................................................35
SECTION 6.3. Meetings of Holders............................................................................35
SECTION 6.4. Voting Rights..................................................................................36
SECTION 6.5. Proxies, etc...................................................................................36
SECTION 6.6. Holder Action by Written Consent...............................................................36
SECTION 6.7. Record Date for Voting and Other Purposes......................................................36
SECTION 6.8. Acts of Holders................................................................................37
SECTION 6.9. Inspection of Records..........................................................................37
ARTICLE VII. REPRESENTATIONS AND WARRANTIES
SECTION 7.1. Representations and Warranties of the Property Trustee and
the Delaware Trustee..................................................................38
SECTION 7.2. Representations and Warranties of Depositor....................................................39
ARTICLE VIII. THE ISSUER TRUSTEES; THE ADMINISTRATORS
SECTION 8.1. Certain Duties and Responsibilities............................................................39
SECTION 8.2. Certain Notices................................................................................42
SECTION 8.3. Certain Rights of Property Trustee.............................................................42
SECTION 8.4. Not Responsible for Recitals or Issuance of Securities.........................................43
SECTION 8.5. May Hold Securities............................................................................43
SECTION 8.6. Compensation; Indemnity; Fees..................................................................44
SECTION 8.7. Corporate Property Trustee Required; Eligibility
of Trustees and Administrators........................................................45
SECTION 8.8. Conflicting Interests..........................................................................45
SECTION 8.9. Co-Trustees and Separate Trustee...............................................................45
SECTION 8.10. Resignation and Removal; Appointment of Successor..............................................47
SECTION 8.11. Acceptance of Appointment by Successor.........................................................48
SECTION 8.12. Merger, Conversion, Consolidation or Succession to Business...................................48
SECTION 8.13. Preferential Collection of Claims Against Depositor or Issuer Trust............................48
SECTION 8.14. Trustee May File Proofs of Claims..............................................................48
SECTION 8.15. Reports by Property Trustee....................................................................49
SECTION 8.16. Reports to the Property Trustee................................................................50
SECTION 8.17. Evidence of Compliance with Conditions Precedent...............................................50
SECTION 8.18. Number of Issuer Trustees......................................................................50
SECTION 8.19. Delegation of Power............................................................................50
SECTION 8.20. Appointment of Administrators..................................................................50
ARTICLE IX. DISSOLUTION, LIQUIDATION AND MERGER
SECTION 9.1. Termination Upon Expiration Date...............................................................51
SECTION 9.2. Early Termination..............................................................................51
SECTION 9.3. Termination....................................................................................52
SECTION 9.4. Liquidation....................................................................................52
SECTION 9.5. Mergers, Consolidations, Amalgamations or Replacements
of the Issuer Trust...................................................................53
ARTICLE X. MISCELLANEOUS PROVISIONS
SECTION 10.1. Limitation of Rights of Holders................................................................54
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<TABLE>
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SECTION 10.2. Amendment......................................................................................54
SECTION 10.3. Separability...................................................................................56
SECTION 10.4. Governing Law..................................................................................56
SECTION 10.5. Payments Due on Non-Business Day...............................................................56
SECTION 10.6. Successors.....................................................................................57
SECTION 10.7. Headings.......................................................................................57
SECTION 10.8. Reports, Notices and Demands...................................................................57
SECTION 10.9. Agreement Not to Petition......................................................................57
SECTION 10.10. Trust Indenture Act; Conflict with Trust Indenture Act.........................................58
SECTION 10.11. Acceptance of Terms of Trust Agreement, Guarantee
and Indenture................................................................................59
ARTICLE XI. REGISTRATION RIGHTS
SECTION 11.1 Registration Rights............................................................................59
Exhibit A Certificate of Trust
Exhibit B Form of Certificate Depositary Agreement
Exhibit C Form of Common Securities Certificate
Exhibit D Form of Capital Securities Certificate
Exhibit E Form of Restricted Securities Certificate
</TABLE>
-iii-
<PAGE> 6
AGREEMENT
THIS AMENDED AND RESTATED TRUST AGREEMENT, dated as of April
17, 1998, is by and among (i) Provident Bankshares Corporation, a Maryland
corporation (including any successors or assigns, the "Depositor"), (ii) Bankers
Trust Company, a New York banking corporation, as property trustee, (in such
capacity, the "Property Trustee" and, in its separate corporate capacity and not
in its capacity as Property Trustee, the "Bank"), (iii) Bankers Trust
(Delaware), a Delaware banking corporation, as Delaware trustee (the "Delaware
Trustee") (the Property Trustee and the Delaware Trustee are referred to
collectively herein as the "Issuer Trustees"), (iv) the Administrators, as
hereinafter defined, and (v) the several Holders, as hereinafter defined.
WITNESSETH
WHEREAS, the Depositor and the Delaware Trustee have
heretofore duly declared and established a business trust pursuant to the
Delaware Business Trust Act by entering into a certain Trust Agreement, dated as
of April 3, 1998 (the "Original Trust Agreement"), and by the execution and
filing by the Delaware Trustee with the Secretary of State of the State of
Delaware of the Certificate of Trust, filed on April 3, 1998 (the "Certificate
of Trust"), attached as Exhibit A; and
WHEREAS, the Depositor and the Delaware Trustee desire to
amend and restate the Original Trust Agreement in its entirety as set forth
herein to provide for, among other things, (i) the issuance of the Common
Securities by the Issuer Trust to the Depositor, (ii) the issuance and sale of
the Capital Securities by the Issuer Trust pursuant to the Purchase Agreement,
(iii) the acquisition by the Issuer Trust from the Depositor of all of the
right, title and interest in the Junior Subordinated Debentures, (iv) the
appointment of the Administrators and (v) the addition of the Property Trustee
as a party to this Trust Agreement.
NOW THEREFORE, in consideration of the agreements and
obligations set forth herein and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, each party, for the
benefit of the other parties and for the benefit of the Holders, hereby amends
and restates the Original Trust Agreement in its entirety and agrees, intending
to be legally bound, as follows:
<PAGE> 7
ARTICLE I
DEFINED TERMS
SECTION 1.1. Definitions.
For all purposes of this Trust Agreement, except as otherwise
expressly provided or unless the context otherwise requires:
(a) The terms defined in this Article have the meanings
assigned to them in this Article and include the plural as well as the singular;
(b) All other terms used herein that are defined in the Trust
Indenture Act, either directly or by reference therein, have the meanings
assigned to them therein;
(c) The words "include," "includes" and "including" shall be
deemed to be followed by the phrase "without limitation";
(d) All accounting terms used but not defined herein have the
meanings assigned to them in accordance with United States generally accepted
accounting principles as in effect at the time of computation;
(e) Unless the context otherwise requires, any reference to an
"Article" or a "Section" refers to an Article or a Section, as the case may be,
of this Trust Agreement;
(f) The words "herein", "hereof" and "hereunder" and other
words of similar import refer to this Trust Agreement as a whole and not to any
particular Article, Section or other subdivision; and
(g) all references to the date the Capital Securities were
originally issued shall refer to the date the 8.29% Capital Securities were
originally issued.
"Act" has the meaning specified in Section 6.8.
"Additional Amounts" means, with respect to Trust Securities
of a given Liquidation Amount and/or a given period, the amount of Additional
Interest (as defined in the Indenture) paid by the Depositor on a Like Amount of
Junior Subordinated Debentures for such period.
"Additional Sums" has the meaning specified in Section 10.6 of
the Indenture.
"Adjusted Treasury Rate" means, with respect to any Redemption
Date, the Treasury Rate plus (i) 1.875% if such Redemption Date occurs on or
before April 15, 1999 or (ii) 1.375% if such Redemption Date occurs after April
15, 1999.
"Administrators" means each Person appointed in accordance
with Section 8.20 solely in such Person's capacity as Administrator of the
Issuer Trust continued hereunder and not in such Person's
-2-
<PAGE> 8
individual capacity, or any successor Administrator appointed as herein
provided; with the initial Administrators being Robert L. Davis and James R.
Wallis.
"Affiliate" of any specified Person means any other Person
directly or indirectly controlling or controlled by or under direct or indirect
common control with such specified Person. For the purposes of this definition,
"control" when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"Applicable Procedures" means, with respect to any transfer or
transaction involving a Global Capital Security or beneficial interest therein,
the rules and procedures of the Depositary for such Capital Security, in each
case to the extent applicable to such transaction and as in effect from time to
time.
"Bank" has the meaning specified in the preamble to this Trust
Agreement.
"Bankruptcy Event" means, with respect to any Person:
(a) the entry of a decree or order by a court having
jurisdiction in the premises judging such Person a bankrupt or insolvent, or
approving as properly filed a petition seeking reorganization, arrangement,
adjudication or composition of or in respect of such Person under any applicable
federal or State bankruptcy, insolvency, reorganization or other similar law, or
appointing a receiver, liquidator, assignee, trustee, sequestrator (or other
similar official) of such Person or of any substantial part of its property or
ordering the winding-up or liquidation of its affairs, and the continuance of
any such decree or order unstayed and in effect for a period of 60 consecutive
days; or
(b) the institution by such Person of proceedings to be
adjudicated a bankrupt or insolvent, or the consent by it to the institution of
bankruptcy or insolvency proceedings against it, or the filing by it of a
petition or answer or consent seeking reorganization or relief under any
applicable federal or State bankruptcy, insolvency, reorganization or other
similar law, or the consent by it to the filing of any such petition or to the
appointment of a receiver, liquidator, assignee, trustee, sequestrator (or
similar official) of such Person or of any substantial part of its property or
the making by it of an assignment for the benefit of creditors, or the admission
by it in writing of its inability to pay its debts generally as they become due
and its willingness to be adjudicated a bankrupt, or the taking of corporate
action by such Person in furtherance of any such action.
"Bankruptcy Laws" has the meaning specified in Section 10.9.
"Board of Directors" means the board of directors of the
Depositor or the Executive Committee of the board of directors of the Depositor
(or any other committee of the board of directors of the Depositor performing
similar functions) or a committee designated by the board of directors of the
Depositor (or any such committee), comprised of two or more members of the board
of directors of the Depositor or officers of the Depositor, or both.
"Board Resolution" means a copy of a resolution certified by
the Secretary or an Assistant Secretary of the Depositor to have been duly
adopted by the Depositor's Board of Directors, or such
-3-
<PAGE> 9
committee of the Board of Directors or officers of the Depositor to which
authority to act on behalf of the Board of Directors has been delegated, and to
be in full force and effect on the date of such certification, and delivered to
the Issuer Trustees.
"Business Day" means a day other than (a) a Saturday or
Sunday, (b) a day on which banking institutions in the City of New York, New
York, or the City of Baltimore, Maryland are authorized or required by law or
executive order to remain closed or (c) a day on which the Property Trustee's
Corporate Trust Office or the Delaware Trustee's corporate trust office or the
corporate trust office of the Debenture Trustee is closed for business.
"Capital Securities Certificate" means a certificate
evidencing ownership of Capital Securities, substantially in the form attached
as Exhibit D.
"Capital Security" means a preferred undivided beneficial
interest in the assets of the Issuer Trust, having a Liquidation Amount of
$1,000 and having the rights provided therefor in this Trust Agreement,
including the right to receive Distributions and a Liquidation Distribution as
provided herein.
"Capital Treatment Event" means, in respect of the Issuer
Trust, the reasonable determination by the Depositor that, as a result of the
occurrence of any amendment to, or change (including any announced prospective
change) in, the laws (or any rules or regulations thereunder) of the United
States or any political subdivision thereof or therein, or as a result of any
official or administrative pronouncement or action or judicial decision
interpreting or applying such laws or regulations, which amendment or change is
effective or such pronouncement, action or decision is announced on or after the
date of the issuance of the Capital Securities of the Issuer Trust, there is
more than an insubstantial risk that the Depositor will not be entitled to treat
an amount equal to the Liquidation Amount of such Capital Securities as "Tier 1
Capital" (or the then equivalent thereof) for purposes of the risk-based capital
adequacy guidelines of the Board of Governors of the Federal Reserve System, as
then in effect and applicable to the Depositor.
"Cede" means Cede & Co.
"Certificate Depositary Agreement" means the agreement among
the Issuer Trust, the Depositor and the Depositary, as the initial Clearing
Agency, dated as of the Closing Date, substantially in the form attached as
Exhibit B, as the same may be amended and supplemented from time to time.
"Certificate of Trust" has the meaning specified in the
preamble to this Trust Agreement.
"Clearing Agency" means an organization registered as a
"clearing agency" pursuant to Section 17A of the Exchange Act. The Depositary
shall be the initial Clearing Agency.
"Clearing Agency Participant" means a broker, dealer, bank,
other financial institution or other Person for whom from time to time a
Clearing Agency effects book-entry transfers and pledges of securities deposited
with the Clearing Agency.
"Closing Date" means the Closing Time, which date is also the
date of execution and delivery of this Trust Agreement.
-4-
<PAGE> 10
"Closing Time" has the meaning in the Purchase Agreement.
"Code" means the Internal Revenue Code of 1986, as amended.
"Commission" means the Securities and Exchange Commission, as
from time to time constituted, created under the Exchange Act, as amended, or,
if at any time after the execution of this instrument such Commission is not
existing and performing the duties now assigned to it under the Trust Indenture
Act, then the body performing such duties at such time.
"Common Securities Certificate" means a certificate evidencing
ownership of Common Securities, substantially in the form attached as Exhibit C.
"Common Securities Purchase Agreement" means the Common
Securities Purchase Agreement dated as of April 17, 1998 between the Issuer
Trust and the Depositor, as the same may be amended from time to time.
"Common Security" means an undivided beneficial interest in
the assets of the Issuer Trust, having a Liquidation Amount of $1,000 and having
the rights provided therefor in this Trust Agreement, including the right to
receive Distributions and a Liquidation Distribution as provided herein.
"Comparable Treasury Issue" means with respect to any
Redemption Date the United States Treasury security selected by the Quotation
Agent as having a maturity comparable to the Remaining Life that would be
utilized, at the time of selection and in accordance with customary financial
practice, in pricing new issues of corporate debt securities of comparable
maturity to the Remaining Life. If no United States Treasury security has a
maturity which is within a period from three months before to three months after
April 15, 2008, the two most closely corresponding United States Treasury
securities shall be used as the Comparable Treasury Issue, and the Treasury Rate
shall be interpolated or extrapolated on a straight-line basis, rounding to the
nearest month using such securities.
"Comparable Treasury Price" means (A) the average of five
Reference Treasury Dealer Quotations for such Redemption Date, after excluding
the highest and lowest of such Reference Treasury Dealer Quotations, or (B) if
the Debenture Trustee obtains fewer than five such Reference Treasury Dealer
Quotations, the average of all such Reference Treasury Dealer Quotations.
"Corporate Trust Office" means the principal office of the
Property Trustee located in the City of New York which at the time of the
execution of this Trust Agreement is located at Four Albany Street, New York,
New York 10006; Attention: Corporate Trust and Agency Group - Corporate Market
Services.
"Debenture Event of Default" means an "Event of Default" as
defined in the Indenture.
"Debentures Purchase Agreement" means the Junior Subordinated
Deferrable Interest Debentures Purchase Agreement dated as of April 17, 1998
between the Depositor and the Issuer Trust, as the same may be amended from time
to time.
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<PAGE> 11
"Debenture Redemption Date" means, with respect to any Junior
Subordinated Debentures to be redeemed under the Indenture, the date fixed for
redemption of such Junior Subordinated Debentures under the Indenture.
"Debenture Trustee" means Bankers Trust Company, a New York
banking corporation and any successor.
"Delaware Business Trust Act" means Chapter 38 of Title 12 of
the Delaware Code, 12 Del. C. Section 3801, et seq., as it may be amended from
time to time.
"Delaware Trustee" means the corporation identified as the
"Delaware Trustee" in the preamble to this Trust Agreement solely in its
capacity as Delaware Trustee of the Issuer Trust continued hereunder and not in
its individual capacity, or its successor in interest in such capacity, or any
successor trustee appointed as herein provided.
"Depositary" means The Depository Trust Company or any
successor thereto.
"Depositor" has the meaning specified in the preamble to this
Trust Agreement.
"Distribution Date" has the meaning specified in Section
4.1(a).
"Distributions" means amounts payable in respect of the Trust
Securities as provided in Section 4.1.
"Early Termination Event" has the meaning specified in Section
9.2.
"Event of Default" means any one of the following events
(whatever the reason for such Event of Default and whether it shall be voluntary
or involuntary or be effected by operation of law or pursuant to any judgment,
decree or order of any court or any order, rule or regulation of any
administrative or governmental body):
(a) the occurrence of a Debenture Event of Default; or
(b) default by the Issuer Trust in the payment of any
Distribution when it becomes due and payable, and continuation of such default
for a period of 30 days; or
(c) default by the Issuer Trust in the payment of any
Redemption Price of any Trust Security when it becomes due and payable; or
(d) default in the performance, or breach, in any material
respect, of any covenant or warranty of the Issuer Trustees in this Trust
Agreement (other than a covenant or warranty a default in the performance of
which or the breach of which is dealt with in clause (b) or (c) above) and
continuation of such default or breach for a period of 60 days after there has
been given, by registered or certified mail, to the Issuer Trustees and the
Depositor by the Holders of at least 25% in aggregate Liquidation Amount of the
Outstanding Capital Securities, a written notice specifying such default or
breach and requiring it to be remedied and stating that such notice is a "Notice
of Default" hereunder; or
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(e) the occurrence of any Bankruptcy Event with respect to the
Property Trustee or all or substantially all of its property if a successor
Property Trustee has not been appointed within a period of 90 days thereof.
"Exchange Act" shall mean the Securities Exchange Act of 1934,
as amended, and any successor statute thereto, as amended from time to time.
"Exchange Capital Securities" has the meaning specified in
Section 5.5(d).
"Exchange Offer" has the meaning specified in the Registration
Rights Agreement.
"Expiration Date" has the meaning specified in Section 9.1.
"Global Capital Securities Certificate" means a Capital
Securities Certificate evidencing ownership of Global Capital Securities.
"Global Capital Security" means a Capital Security, the
ownership and transfers of which shall be made through book entries by a
Clearing Agency as described in Section 5.4.
"Guarantee" means the Guarantee Agreement executed and
delivered by the Depositor and Bankers Trust Company, as trustee,
contemporaneously with the execution and delivery of this Trust Agreement, for
the benefit of the holders of the Capital Securities, as amended from time to
time.
"Holder" means a Person in whose name a Trust Security or
Trust Securities is registered in the Securities Register; any such Person shall
be deemed to be a beneficial owner within the meaning of the Delaware Business
Trust Act.
"Indenture" means the Junior Subordinated Indenture, dated as
of April 17, 1998, between the Depositor and the Debenture Trustee (as amended
or supplemented from time to time) relating to the issuance of the Junior
Subordinated Debentures.
"Initial Purchaser" has the meaning specified in the Purchase
Agreement.
"Institutional Accredited Investor" means an institutional
accredited investor within the meaning of Rule 501(a)(1), (2), (3) or (7) of
Regulation D under the Securities Act.
"Investment Company Act" means the Investment Company Act of
1940, as amended.
"Investment Company Event" means the receipt by the Issuer
Trust of an Opinion of Counsel experienced in such matters to the effect that,
as a result of the occurrence of a change in law or regulation or a written
change (including any announced prospective change) in interpretation or
application of law or regulation by any legislative body, court, governmental
agency or regulatory authority, there is more than an insubstantial risk that
the Issuer Trust is or will be considered an "investment company" that is
required to be registered under the Investment Company Act, which change or
prospective change becomes effective or would become effective, as the case may
be, on or after the date of the issuance of the Capital Securities.
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"Issuer Trust" means Provident Trust I.
"Issuer Trustees" means, collectively, the Property Trustee
and the Delaware Trustee.
"Junior Subordinated Debentures" means the aggregate principal
amount of the Depositor's 8.29% Junior Subordinated Deferrable Interest
Debentures, due April 15, 2028, issued pursuant to the Indenture.
"Lien" means any lien, pledge, charge, encumbrance, mortgage,
deed of trust, adverse ownership interest, hypothecation, assignment, security
interest or preference, priority or other security agreement or preferential
arrangement of any kind or nature whatsoever.
"Like Amount" means (a) with respect to a redemption of Trust
Securities, Trust Securities having a Liquidation Amount equal to that portion
of the principal amount of Junior Subordinated Debentures to be
contemporaneously redeemed in accordance with the Indenture, allocated
to the Common Securities and to the Capital Securities based upon the relative
Liquidation Amounts of such classes and (b) with respect to a distribution of
Junior Subordinated Debentures to Holders of Trust Securities in connection with
a dissolution or liquidation of the Issuer Trust, Junior Subordinated Debentures
having a principal amount equal to the Liquidation Amount of the Trust
Securities of the Holder to whom such Junior Subordinated Debentures are
distributed.
"Liquidation Amount" means the stated amount of $1,000 per
Trust Security.
"Liquidation Date" means the date on which Junior Subordinated
Debentures are to be distributed to Holders of Trust Securities in connection
with a dissolution and liquidation of the Issuer Trust pursuant to Section 9.4.
"Liquidation Distribution" has the meaning specified in
Section 9.4(d).
"Majority in Liquidation Amount of the Capital Securities" or
"Majority in Liquidation Amount of the Common Securities" means, except as
provided by the Trust Indenture Act, Capital Securities or Common Securities, as
the case may be, representing more than 50% of the aggregate Liquidation Amount
of all then Outstanding Capital Securities or Common Securities, as the case may
be.
"Officers' Certificate" means a certificate signed by the
Chairman of the Board, Vice Chairman of the Board, Chief Executive Officer,
President or an Executive Vice President, a Senior Vice President or Vice
President, and by the Treasurer, Chief Financial Officer, an Assistant
Treasurer, the Secretary or an Assistant Secretary, of the Depositor, and
delivered to the party provided herein. Any Officers' Certificate delivered with
respect to compliance with a condition or covenant provided for in this Trust
Agreement shall include:
(a) a statement by each officer signing the Officers'
Certificate that such officer has read the covenant or condition and the
definitions relating thereto;
(b) a brief statement of the nature and scope of the
examination or investigation undertaken by such officer in rendering the
Officers' Certificate;
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<PAGE> 14
(c) a statement that such officer has made such examination or
investigation as, in such officer's opinion, is necessary to enable such officer
to express an informed opinion as to whether or not such covenant or condition
has been complied with; and
(d) a statement as to whether, in the opinion of 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 or an employee of the Depositor or any Affiliate of the
Depositor.
"Original Trust Agreement" has the meaning specified in the
preamble to this Trust Agreement.
"Other Capital Securities" means the Capital Securities sold
by the Initial Purchaser in the initial offering contemplated by the Purchase
Agreement to Institutional Accredited Investors in reliance on an exemption from
the registration requirement of the Securities Act other than Rule 144A.
"Outstanding," with respect to Trust Securities, means, as of
the date of determination, all Trust Securities theretofore executed and
delivered under this Trust Agreement, except:
(a) Trust Securities theretofore canceled by the Property
Trustee or delivered to the Property Trustee for cancellation;
(b) Trust Securities for whose payment or redemption money in
the necessary amount has been theretofore deposited with the Property Trustee or
any Paying Agent for the Holders of such Capital Securities, provided that if
such Trust Securities are to be redeemed, notice of such redemption has been
duly given pursuant to this Trust Agreement; and
(c) Trust Securities which have been paid, or in exchange for,
or in lieu of which, other Trust Securities have been executed and delivered
pursuant to Sections 5.4, 5.5 and 5.6;
provided, however, that in determining whether the Holders of the requisite
Liquidation Amount of the Outstanding Capital Securities have given any request,
demand, authorization, direction, notice, consent or waiver hereunder, Capital
Securities owned by the Depositor, any Issuer Trustee, any Administrator or any
Affiliate of the Depositor, shall be disregarded and deemed not to be
Outstanding, except that (a) in determining whether any Issuer Trustee or any
Administrator shall be protected in relying upon any such request, demand,
authorization, direction, notice, consent or waiver, only Capital Securities
that such Issuer Trustee or such Administrator, as the case may be, knows to be
so owned shall be so disregarded and (b) the foregoing shall not apply at any
time when all of the Outstanding Capital Securities are owned by the Depositor,
one or more of the Issuer Trustees, one or more of the Administrators and/or any
such Affiliate. Capital Securities so owned which have been pledged in good
faith may be regarded as Outstanding if the pledgee establishes to the
satisfaction of the Administrators the pledgee's right so to act with respect to
such Capital Securities and that the pledgee is not the Depositor or any
Affiliate of the Depositor.
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<PAGE> 15
"Owner" means each Person who is the beneficial owner of
Global Capital Securities as reflected in the records of the Clearing Agency or,
if a Clearing Agency Participant is not the Owner, then as reflected in the
records of a Person maintaining an account with such Clearing Agency (directly
or indirectly), in accordance with the rules of such Clearing Agency.
"Paying Agent" means any paying agent or co-paying agent
appointed pursuant to Section 5.10 and shall initially be the Property Trustee.
"Payment Account" means a segregated non-interest-bearing
corporate trust account maintained with the Property Trustee in its trust
department for the benefit of the Holders in which all amounts paid in respect
of the Junior Subordinated Debentures will be held and from which the Property
Trustee, through the Paying Agent, shall make payments to the Holders in
accordance with Sections 4.1 and 4.2.
"Person" means a legal person, including any individual,
corporation, estate, partnership, joint venture, association, joint stock
company, company, limited liability company, trust, unincorporated organization
or government or any agency or political subdivision thereof, or any other
entity of whatever nature.
"Property Trustee" means the Person identified as the
"Property Trustee" in the preamble to this Trust Agreement solely in its
capacity as Property Trustee of the Issuer Trust continued hereunder and not in
its individual capacity, or its successor in interest in such capacity, or any
successor property trustee appointed as herein provided.
"Purchase Agreement" means the Purchase Agreement, dated as of
April 14, 1998, among the Issuer Trust, the Depositor and the Initial Purchaser,
as the same may be amended from time to time.
"Quotation Agent" means Keefe, Bruyette & Woods, Inc. and its
successors; provided, however, that if the foregoing shall cease to be a primary
U.S. Government securities dealer in New York City (a "Primary Treasury
Dealer"), the Depositor shall substitute therefor another Primary Treasury
Dealer.
"Redemption Date" means, with respect to any Trust Security to
be redeemed, the date fixed for such redemption by or pursuant to this Trust
Agreement; provided that each Debenture Redemption Date and the stated maturity
of the Junior Subordinated Debentures shall be a Redemption Date for a Like
Amount of Trust Securities, including but not limited to any date of redemption
pursuant to the occurrence of any Special Event.
"Redemption Price" means:
(a) in the case of a redemption, other than as provided in
paragraph (b) below, the following prices expressed in percentages of the
Liquidation Amount, together with accumulated Distributions to but excluding the
date fixed for redemption, if redeemed during the 12-month period beginning
April 15:
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<PAGE> 16
<TABLE>
<CAPTION>
Year Redemption Price
---- ----------------
<S> <C>
2008 ............................................ 104.1450%
2009 ............................................ 103.7305%
2010 ............................................ 103.3160%
2011 ............................................ 102.9015%
2012 ............................................ 102.4870%
2013 ............................................ 102.0725%
2014 ............................................ 101.6580%
2015 ............................................ 101.2435%
2016 ............................................ 100.8290%
2017 ............................................ 100.4145%
</TABLE>
and 100% on or after April 15, 2018.
(b) in the case of a redemption prior to April 15, 2008
following a Tax Event, Investment Company Event or Capital Treatment Event, an
amount equal to for each Capital Security the Make-Whole Amount for a
corresponding $1,000 principal amount of Junior Subordinated Debentures together
with accumulated Distributions to but excluding the date fixed for redemption.
The "Make-Whole Amount" will be equal to the greater of (i) 100% of the
principal amount of such Junior Subordinated Debentures, and (ii) as determined
by a Quotation Agent, the sum of the present values of the principal amount and
premium payable as part of the Redemption Price with respect to an optional
redemption of such Junior Subordinated Debentures on April 15, 2008, together
with the present values of scheduled payments of interest (not including the
portion of any such payments of interest accrued as of the Redemption Date) from
the Redemption Date to March 1, 2008 (the "Remaining Life"), in each case
discounted to the Redemption Date on a semi-annual basis (assuming a 360-day
year consisting of 30-day months) at the Adjusted Treasury Rate. The Redemption
Price in the case of a redemption on or after April 15, 2008 following a Tax
Event, Investment Company Event or Capital Treatment Event shall equal the
Redemption Price then applicable to a redemption under paragraph (a) above.
"Reference Treasury Dealer" means (i) the Quotation Agent and
(ii) any other Primary Treasury Dealer selected by the Debenture Trustee after
consultation with the Depositor.
"Reference Treasury Dealer Quotations" means, with respect to
each Reference Treasury Dealer and any Redemption Date, the average, as
determined by the Debenture Trustee, of the bid and asked prices for the
Comparable Treasury Issue (expressed in each case as a percentage of its
principal amount) quoted in writing to the Debenture Trustee by such Reference
Treasury Dealer at 5:00 p.m., New York City time, on the third Business Day
preceding such Redemption Date.
"Registration Rights Agreement" means the Registration Rights
Agreement dated as of April 17, 1998 among the Depositor, the Issuer Trust and
the Initial Purchaser as the same may be amended from time to time.
"Regulation D" means Regulation D under the Securities Act (or
any successor provision), as it may be amended from time to time.
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"Relevant Trustee" has the meaning specified in Section 8.10.
"Responsible Officer" when used with respect to the Property
Trustee means any officer assigned to the Corporate Trust Office, including any
managing director, vice president, principal, assistant vice president,
assistant treasurer, assistant secretary or any other officer of the Property
Trustee customarily performing functions similar to those performed by any of
the above designated officers and having direct responsibility for the
administration of the Trust Agreement, and also, with respect to a particular
matter, any other officer to whom such matter is referred because of such
officer's knowledge of and familiarity with the particular subject.
"Restricted Capital Securities" means all Capital Securities,
the Capital Securities Certificate for which is required pursuant to Section
5.5(c) to bear a Restricted Capital Securities Legend. Such term includes the
Global Capital Securities Certificate.
"Restricted Capital Securities Legend" means a legend
substantially in the form of the legend required in the form of a Capital
Securities Certificate set forth in Exhibit D to be placed upon a Restricted
Capital Security.
"Restricted Securities Certificate" means a certificate
substantially in the form set forth in Exhibit E.
"Rule 144A" means Rule 144A under the Securities Act (or any
successor provision), as it may be amended from time to time.
"Rule 144A Capital Securities" means the Capital Securities
purchased by the Initial Purchaser from the Issuer Trust pursuant to the
Purchase Agreement, other than the Other Capital Securities.
"Securities Act" means the Securities Act of 1933, as amended,
and any successor statute thereto, in each case as amended from time to time.
"Senior Indebtedness" has the meaning specified in the
Indenture.
"Securities Register" and "Securities Registrar" have the
respective meanings specified in Section 5.5.
"Special Event" means any Tax Event, Capital Treatment Event
or Investment Company Event.
"Successor Capital Securities Certificate" of any particular
Capital Securities Certificate means every Capital Securities Certificate issued
after, and evidencing all or a portion of the same beneficial interest in the
Issuer Trust as that evidenced by, such particular Capital Securities
Certificate; and, for the purposes of this definition, any Capital Securities
Certificate executed and delivered under Section 5.6 in exchange for or in lieu
of a mutilated, destroyed, lost or stolen Capital Securities Certificate shall
be deemed to evidence the same beneficial interest in the Issuer Trust as the
mutilated, destroyed, lost or stolen Capital Securities Certificate.
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<PAGE> 18
"Successor Capital Security" has the meaning specified in
Section 9.5.
"Tax Event" means the receipt by the Issuer Trust of an
Opinion of Counsel experienced in such matters to the effect that, as a result
of any amendment to, or change (including any announced prospective change) in,
the laws (or any regulations thereunder) of the United States or any political
subdivision or taxing authority thereof or therein, or as a result of any
official or administrative pronouncement or action or judicial decision
interpreting or applying such laws or regulations, which amendment or change is
effective or which pronouncement, action or decision is announced on or after
the date of issuance of the Capital Securities, there is more than an
insubstantial risk that (i) the Issuer Trust is, or will be within 90 days of
the delivery of such Opinion of Counsel, subject to United States federal income
tax with respect to income received or accrued on the Junior Subordinated
Debentures, (ii) interest payable by the Depositor on the Junior Subordinated
Debentures is not, or within 90 days of the delivery of such Opinion of Counsel
will not be, deductible by the Depositor, in whole or in part, for United States
federal income tax purposes, or (iii) the Issuer Trust is, or will be within 90
days of the delivery of such Opinion of Counsel, subject to more than a de
minimis amount of other taxes, duties or other governmental charges.
"Treasury Rate" means (i) the yield, under the heading which
represents the average for the week immediately prior to the calculation date,
appearing in the most recently published statistical release designated "H.15
(519)" or any successor publication which is published weekly by the Board of
Governors of the Federal Reserve System and which establishes yields on actively
traded United States Treasury securities adjusted to constant maturity under the
caption "Treasury Constant Maturities," for the maturity corresponding to the
Remaining Life (if no maturity is within three months before or after the
Remaining Life, yields for the two published maturities most closely
corresponding to the Remaining Life shall be determined and the Treasury Rate
shall be interpolated or extrapolated from such yields on a straight-line basis,
rounding to the nearest month) or (ii) if such release (or any successor
release) is not published during the week preceding the calculation date or does
not contain such yields, the rate per annum equal to the semi-annual equivalent
yield to maturity of the Comparable Treasury Issue, calculated using a price for
the Comparable Treasury Issue (expressed as a percentage of its principal
amount) equal to the Comparable Treasury Price for such Redemption Date. The
Treasury Rate shall be calculated on the third Business Day preceding the
Redemption Date.
"Trust Agreement" means this Amended and Restated Trust
Agreement, as the same may be modified, amended or supplemented in accordance
with the applicable provisions hereof, including (i) all exhibits hereto, and
(ii) for all purposes of this Amended and Restated Trust Agreement and any such
modification, amendment or supplement, the provisions of the Trust Indenture Act
that are deemed to be a part of and govern this Amended and Restated Trust
Agreement and any modification, amendment or supplement, respectively.
"Trust Indenture Act" means the Trust Indenture Act of 1939 or
any successor statute, in each case as amended from time to time.
"Trust Property" means (a) the Junior Subordinated Debentures,
(b) any cash on deposit in, or owing to, the Payment Account, (c) all proceeds
and rights in respect of the foregoing and (d) any other property and assets for
the time being held or deemed to be held by the Property Trustee pursuant to the
trusts of this Trust Agreement.
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<PAGE> 19
"Trust Securities Certificate" means any one of the Common
Securities Certificates or the Capital Securities Certificates.
"Trust Security" means any one of the Common Securities or the
Capital Securities.
ARTICLE II
CONTINUATION OF THE ISSUER TRUST
SECTION 2.1. Name.
The Issuer Trust continued hereby shall be known as "Provident
Trust I", as such name may be modified from time to time by the Administrators
following written notice to the Holders of Trust Securities and the Issuer
Trustees, in which name the Administrators and the Issuer Trustees may engage in
the transactions contemplated hereby, make and execute contracts and other
instruments on behalf of the Issuer Trust and sue and be sued.
SECTION 2.2. Office of the Delaware Trustee; Principal Place
of Business.
The address of the Delaware Trustee in the State of Delaware
is Bankers Trust (Delaware), E.A. Delle Donne Corporate Center, Montgomery
Building, 1011 Centre Road, Suite 200, Wilmington, Delaware 19805-1266,
Attention: Lisa Wilkins, or such other address in the State of Delaware as the
Delaware Trustee may designate by written notice to the Holders and the
Depositor. The principal executive office of the Issuer Trust is in care of
Provident Bankshares Corporation, 114 East Lexington Street, Baltimore, Maryland
21222, Attention: James R. Wallis.
SECTION 2.3. Initial Contribution of Trust Property;
Organizational Expenses.
The Property Trustee acknowledges receipt in trust from the
Depositor in connection with this Trust Agreement of the sum of $10, which
constitutes the initial Trust Property. The Depositor shall pay all
organizational expenses of the Issuer Trust as they arise or shall, upon request
of any Issuer Trustee, promptly reimburse such Issuer Trustee for any such
expenses paid by such Issuer Trustee. The Depositor shall make no claim upon the
Trust Property for the payment of such expenses.
SECTION 2.4. Issuance of the Capital Securities.
The Depositor and the Issuer Trust executed and delivered the
Purchase Agreement pursuant to the Original Trust Agreement. Contemporaneously
with the execution and delivery of this Trust Agreement, an Administrator, on
behalf of the Issuer Trust, shall manually execute in accordance with Section
5.3 and the Property Trustee shall authenticate in accordance with Section 5.3
and deliver to the Initial Purchaser, Capital Securities Certificates,
registered in the names requested by the Initial Purchaser, in an aggregate
amount of 40,000 Capital Securities having an aggregate Liquidation Amount of
$40,000,000, against receipt of the aggregate purchase price of such Capital
Securities of $40,000,000 by the Property Trustee.
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<PAGE> 20
An Administrator, on behalf of the Issuer Trust, shall
manually execute in accordance with Section 5.3 and the Property Trustee shall
authenticate in accordance with Section 5.3, the Exchange Capital Securities in
exchange for such Capital Securities accepted for exchange in the Exchange
Offer.
SECTION 2.5. Issuance of the Common Securities; Subscription
and Purchase of Junior Subordinated Debentures.
Contemporaneously with the execution and delivery of this
Trust Agreement, an Administrator, on behalf of the Issuer Trust, shall execute
or cause to be executed in accordance with Section 5.3 and the Property Trustee
shall authenticate in accordance with Section 5.3 and deliver to the Depositor
Common Securities Certificates, registered in the name of the Depositor, in an
aggregate amount of 1,238 Common Securities having an aggregate Liquidation
Amount of $1,238,000 against receipt of the aggregate purchase price of such
Common Securities of $1,238,000 by the Property Trustee. Contemporaneously
therewith, an Administrator, on behalf of the Issuer Trust, shall subscribe for
and purchase from the Depositor the Junior Subordinated Debentures, registered
in the name of Provident Trust I and having an aggregate principal amount equal
to $40,000,000, and, in satisfaction of the purchase price for such Junior
Subordinated Debentures, the Property Trustee, on behalf of the Issuer Trust,
shall deliver to the Depositor the sum of $41,238,000 (being the sum of the
amounts delivered to the Property Trustee pursuant to (i) the second sentence of
Section 2.4, and (ii) the first sentence of this Section 2.5) and receive on
behalf of the Issuer Trust the Junior Subordinated Debentures.
SECTION 2.6. Declaration of Trust.
The exclusive purposes and functions of the Issuer Trust are
to (a) issue and sell Trust Securities and use the proceeds from such sale to
acquire the Junior Subordinated Debentures, and (b) engage in only those other
activities necessary, convenient or incidental thereto. The Depositor hereby
appoints the Issuer Trustees as trustees of the Issuer Trust, to have all the
rights, powers and duties to the extent set forth herein, and the Issuer
Trustees hereby accept such appointment. The Property Trustee hereby declares
that it will hold the Trust Property in trust upon and subject to the conditions
set forth herein for the benefit of the Issuer Trust and the Holders. The
Depositor hereby appoints the Administrators, with such Administrators having
all rights, powers and duties set forth herein with respect to accomplishing the
purposes of the Issuer Trust, and the Administrators hereby accept such
appointment; provided, however, that it is the intent of the parties hereto that
such Administrators shall not be trustees or, to the fullest extent permitted by
law, fiduciaries with respect to the Issuer Trust and this Trust Agreement shall
be construed in a manner consistent with such intent. The Property Trustee shall
have the right and power to perform those duties assigned to the Administrators.
The Delaware Trustee shall not be entitled to exercise any powers, nor shall the
Delaware Trustee have any of the duties and responsibilities, of the Property
Trustee or the Administrators set forth herein. The Delaware Trustee shall be
one of the trustees of the Issuer Trust for the sole and limited purpose of
fulfilling the requirements of Section 3807 of the Delaware Business Trust Act
and for taking such actions as are required to be taken by a Delaware trustee
under the Delaware Business Trust Act.
SECTION 2.7. Authorization to Enter into Certain Transactions.
(a) The Issuer Trustees and the Administrators shall conduct
the affairs of the Issuer Trust in accordance with the terms of this Trust
Agreement. Subject to the limitations set forth in
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paragraph (b) of this Section and in accordance with the following provisions
(i), (ii) and (iii), the Issuer Trustees and the Administrators shall act as
follows:
(i) each Administrator, acting jointly or
singly, shall:
(A) comply with the Purchase Agreement
regarding the issuance and sale of the Trust
Securities;
(B) assist in compliance with the Securities
Act, applicable state securities or blue sky
laws, and the Trust Indenture Act;
(C) assist in the listing of the Capital
Securities upon such securities exchange or
exchanges as shall be determined by the
Depositor, with the registration of the Capital
Securities under the Exchange Act, if required,
and the preparation and filing of all periodic
and other reports and other documents pursuant to
the foregoing;
(D) execute the Trust Securities on behalf
of the Issuer Trust in accordance with this Trust
Agreement;
(E) execute and deliver an application for a
taxpayer identification number for the Issuer
Trust;
(F) execute the Registration Rights
Agreement on behalf of the Issuer Trust;
(G) execute and file with the Commission, at
such time as determined by the Depositor, any
registration statement, including any amendments
thereto, as contemplated by the Registration
Rights Agreement;
(H) unless otherwise required by the
Delaware Business Trust Act or the Trust
Indenture Act, execute on behalf of the Issuer
Trust any documents that the Administrators have
the power to execute pursuant to this Trust
Agreement, including without limitation, the
Debentures Purchase Agreement and the Common
Securities Purchase Agreement; and
(I) take any action incidental to the
foregoing as necessary or advisable to give
effect to the terms of this Trust Agreement.
(ii) The Property Trustee shall have the power and
authority to act on behalf of the Issuer Trust with respect to
the following matters:
(A) the establishment of the Payment
Account;
(B) the receipt of the Junior Subordinated
Debentures;
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(C) the receipt and collection of interest,
principal and any other payments made in respect
of the Junior Subordinated Debentures in the
Payment Account;
(D) the distribution of amounts owed to the
Holders in respect of the Trust Securities;
(E) the exercise of all of the rights,
powers and privileges of a holder of the Junior
Subordinated Debentures;
(F) the sending of notices of default and
other information regarding the Trust Securities
and the Junior Subordinated Debentures to the
Holders in accordance with this Trust Agreement;
(G) the distribution of the Trust Property
in accordance with the terms of this Trust
Agreement;
(H) to the extent provided in this Trust
Agreement, the winding-up of the affairs of and
liquidation of the Issuer Trust and the
preparation, execution and filing of the
certificate of cancellation with the Secretary of
State of the State of Delaware; and
(I) after an Event of Default (other than
under paragraph (b), (c), (d), or (e) of the
definition of such term if such Event of Default
is by or with respect to the Property Trustee),
comply with the provisions of this Trust
Agreement and take any action to give effect to
the terms of this Trust Agreement and protect and
conserve the Trust Property for the benefit of
the Holders (without consideration of the effect
of any such action on any particular Holder);
provided, however, that nothing in this Section 2.7(a)(ii)
shall require the Property Trustee to take any action that is
not otherwise required in this Trust Agreement.
(iii) The Property Trustee shall comply with the
listing requirements of the Capital Securities upon such
securities exchange or exchanges as shall be determined by the
Depositor, the registration of the Capital Securities under
the Exchange Act, if required, and the preparation and filing
of all periodic and other reports and other documents pursuant
to the foregoing.
(b) So long as this Trust Agreement remains in effect, the
Issuer Trust (or the Issuer Trustees or Administrators acting on behalf of the
Issuer Trust) shall not undertake any business, activities or transaction except
as expressly provided herein or contemplated hereby. In particular, neither the
Issuer Trustees nor the Administrators shall (i) acquire any investments or
engage in any activities not authorized by this Trust Agreement, (ii) sell,
assign, transfer, exchange, mortgage, pledge, set-off or otherwise dispose of
any of the Trust Property or interests therein, including to Holders, except as
expressly provided herein, (iii) take any action that would cause the Issuer
Trust to become taxable other than as a grantor trust for
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United States Federal income tax purposes, (iv) incur any indebtedness for
borrowed money or issue any other debt, or (v) take or consent to any action
that would result in the placement of a Lien on any of the Trust Property. The
Property Trustee shall defend all claims and demands of all Persons at any time
claiming any Lien on any of the Trust Property adverse to the interest of the
Issuer Trust or the Holders in their capacity as Holders.
(c) In connection with the issue and sale of the Capital
Securities, the Depositor shall have the right and responsibility to assist the
Issuer Trust with respect to, or effect on behalf of the Issuer Trust, the
following (and any actions taken by the Depositor in furtherance of the
following prior to the date of this Trust Agreement are hereby ratified and
confirmed in all respects):
(i) the preparation by the Issuer Trust of an
offering memorandum in relation to the Capital Securities,
including any amendments thereto and the taking of any action
necessary or desirable to sell the Capital Securities in a
transaction or a series of transactions exempt from the
registration requirements of the Securities Act;
(ii) the determination of the states in which to take
appropriate action to qualify or register for sale all or part
of the Capital Securities and the determination of any and all
such acts, other than actions that must be taken by or on
behalf of the Issuer Trust, and the advice to the Issuer
Trustees of actions they must take on behalf of the Issuer
Trust, and the preparation for execution and filing of any
documents to be executed and filed by the Issuer Trust or on
behalf of the Issuer Trust, as the Depositor deems necessary
or advisable in order to comply with the applicable laws of
any such States in connection with the sale of the Capital
Securities;
(iii) the negotiation of the terms of, and the
execution and delivery of, the Purchase Agreement providing
for the sale of the Capital Securities; and
(iv) the taking of any other actions necessary or
desirable to carry out any of the foregoing activities.
(d) Notwithstanding anything herein to the contrary, the
Administrators and the Property Trustee are authorized and directed to conduct
the affairs of the Issuer Trust and to operate the Issuer Trust so that the
Issuer Trust will not be deemed to be an "investment company" required to be
registered under the Investment Company Act, and will not be taxable other than
as a grantor trust for the United States Federal income tax purposes and so that
the Junior Subordinated Debentures will be treated as indebtedness of the
Depositor for United States Federal income tax purposes. In this connection, the
Property Trustee and the Holders of Common Securities are authorized to take any
action, not inconsistent with applicable law, the Certificate of Trust or this
Trust Agreement, that the Property Trustee and Holders of Common Securities
determine in their discretion to be necessary or desirable for such purposes, as
long as such action does not adversely affect in any material respect the
interests of the Holders of the Outstanding Capital Securities. In no event
shall the Administrators or the Issuer Trustees be liable to the Issuer Trust or
the Holders for any failure to comply with this Section that results from a
change in law or regulations or in the interpretation thereof.
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SECTION 2.8. Assets of Trust.
The assets of the Issuer Trust shall consist solely of the
Trust Property.
SECTION 2.9. Title to Trust Property.
Legal title to all Trust Property shall be vested at all times
in the Property Trustee (in its capacity as such) and shall be held and
administered by the Property Trustee for the benefit of the Issuer Trust and the
Holders in accordance with this Trust Agreement.
ARTICLE III
PAYMENT ACCOUNT
SECTION 3.1. Payment Account.
(a) On or prior to the Closing Date, the Property Trustee
shall establish the Payment Account. The Property Trustee and its agents shall
have exclusive control and sole right of withdrawal with respect to the Payment
Account for the purpose of making deposits in and withdrawals from the Payment
Account in accordance with this Trust Agreement. All monies and other property
deposited or held from time to time in the Payment Account shall be held by the
Property Trustee in the Payment Account for the exclusive benefit of the Holders
and for distribution as herein provided, including (and subject to) any priority
of payments provided for herein.
(b) The Property Trustee shall deposit in the Payment
Account, promptly upon receipt, all payments of principal of or interest on, and
any other payments or proceeds with respect to, the Junior Subordinated
Debentures. Amounts held in the Payment Account shall not be invested by the
Property Trustee pending distribution thereof.
ARTICLE IV
DISTRIBUTIONS; REDEMPTION
SECTION 4.1. Distributions.
(a) The Trust Securities represent undivided beneficial
interests in the Trust Property, and Distributions (including of Additional
Amounts) will be made on the Trust Securities at the rate and on the dates that
payments of interest (including of Additional Interest, as defined in the
Indenture) are made on the Junior Subordinated Debentures. Accordingly:
(i) Distributions on the Trust Securities shall be
cumulative and will accumulate whether or not there are funds
of the Issuer Trust available for the payment of
Distributions. Distributions shall accumulate from April 15,
1998, and, except in the event (and to the extent) that the
Depositor exercises its right to defer the payment of interest
on the Junior Subordinated Debentures pursuant to the
Indenture, shall be payable
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semi-annually in arrears on April 15 and October 15 of each
year, commencing on October 15, 1998. If any date on which a
Distribution is otherwise payable on the Trust Securities is
not a Business Day, then the payment of such Distribution
shall be made on the next succeeding day that is a Business
Day (without any additional Distributions or other payment in
respect of any such delay), with the same force and effect as
if made on the date on which such payment was originally
payable (each date on which Distributions are payable in
accordance with this Section 4.1(a), a "Distribution Date").
(ii) The Trust Securities shall be entitled to
Distributions payable at a rate of 8.29% per annum of the
Liquidation Amount of the Trust Securities. The amount of
Distributions payable for any period less than a full
Distribution period shall be computed on the basis of a
360-day year of twelve 30-day months and the actual number of
days elapsed in a partial month in a period. Distributions
payable for each full Distribution period will be computed by
dividing the rate per annum by two. The amount of
Distributions payable for any period shall include any
Additional Amounts in respect of such period.
(iii) So long as no Debenture Event of Default has
occurred and is continuing, the Depositor has the right under
the Indenture to defer the payment of interest on the Junior
Subordinated Debentures at any time and from time to time for
a period not exceeding 10 consecutive semi-annual periods (an
"Extension Period"), provided that no Extension Period may
extend beyond April 15, 2028. As a consequence of any such
deferral, semi-annual Distributions on the Trust Securities by
the Issuer Trust will also be deferred (and the amount of
Distributions to which Holders of the Trust Securities are
entitled will accumulate additional Distributions thereon at a
rate of 8.29% per annum, compounded semi-annually from the
relevant payment date for such Distributions, computed on the
basis of a 360-day year of twelve 30-day months and the actual
days elapsed in a partial month in such period). Additional
Distributions payable for each full Distribution period will
be computed by dividing the rate per annum by two. The term
"Distributions" as used in Section 4.1 shall include any such
additional Distributions provided pursuant to this Section
4.1(a)(iii).
(iv) Distributions on the Trust Securities shall be
made by the Property Trustee from the Payment Account and
shall be payable on each Distribution Date only to the extent
that the Issuer Trust has funds then on hand and available in
the Payment Account for the payment of such Distributions.
(b) Distributions on the Trust Securities with respect to
a Distribution Date shall be payable to the Holders thereof as they appear on
the Securities Register for the Trust Securities at the close of business on the
relevant record date, which shall be at the close of business on April 1 or
October 1 (whether or not a Business Day).
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SECTION 4.2. Redemption.
(a) On each Debenture Redemption Date and on the stated
maturity of the Junior Subordinated Debentures, the Issuer Trust will be
required to redeem a Like Amount of Trust Securities at the Redemption Price.
(b) Notice of redemption shall be given by the Property
Trustee by first-class mail, postage prepaid, mailed not less than 30 nor more
than 60 days prior to the Redemption Date to each Holder of Trust Securities to
be redeemed, at such Holder's address appearing in the Security Register. All
notices of redemption shall state:
(i) the Redemption Date;
(ii) the Redemption Price, or if the Redemption Price
cannot be calculated prior to the time the notice is required
to be sent, the estimate of the Redemption Price provided
pursuant to the Indenture together with a statement that it is
an estimate and that the actual Redemption Price will be
calculated on the third Business Day prior to the Redemption
Date (and if an estimate is provided, a further notice shall
be sent of the actual Redemption Price on the date, or as soon
as practicable thereafter, that notice of such actual
Redemption Price is received pursuant to the Indenture);
(iii) the CUSIP number or CUSIP numbers of the
Capital Securities affected;
(iv) if less than all the Outstanding Trust
Securities are to be redeemed, the identification and the
total Liquidation Amount of the particular Trust Securities to
be redeemed;
(v) that on the Redemption Date the Redemption Price
will become due and payable upon each such Trust Security to
be redeemed and that Distributions thereon will cease to
accumulate on and after said date, except as provided in
Section 4.2(d) below; and
(vi) the place or places where Trust Securities are
to be surrendered for the payment of the Redemption Price.
The Issuer Trust in issuing the Trust Securities may use
"CUSIP" or "private placement" numbers (if then generally in use), and, if so,
the Property Trustee shall indicate the "CUSIP" or "private placement" numbers
of the Trust Securities in notices of redemption and related materials as a
convenience to 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 Trust Securities or as contained in any notice of redemption and related
material.
(c) The Trust Securities redeemed on each Redemption Date
shall be redeemed at the Redemption Price with the applicable proceeds from the
contemporaneous redemption of Junior Subordinated Debentures. Redemptions of the
Trust Securities shall be made and the Redemption Price shall be payable on each
Redemption Date only to the extent that the Issuer Trust has funds then on hand
and available in the Payment Account for the payment of such Redemption Price.
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(d) If the Issuer Trust gives a notice of redemption in
respect of any Capital Securities, then, by 12:00 noon, New York City time, on
the Redemption Date, subject to Section 4.2(c), the Property Trustee will, with
respect to Capital Securities held in global form, irrevocably deposit with the
Clearing Agency for such Capital Securities, to the extent available therefor,
funds sufficient to pay the applicable Redemption Price and will give such
Clearing Agency irrevocable instructions and authority to pay the Redemption
Price to the Owners of the Capital Securities. With respect to Capital
Securities that are not held in global form, the Property Trustee, subject to
Section 4.2(c), will irrevocably deposit with the Paying Agent, to the extent
available therefor, funds sufficient to pay the applicable Redemption Price and
will give the Paying Agent irrevocable instructions and authority to pay the
Redemption Price to the Holder of the Capital Securities upon surrender of their
Capital Securities Certificates. Notwithstanding the foregoing, Distributions
payable on or prior to the Redemption Date for any Trust Securities called for
redemption shall be payable to the Holders of such Trust Securities as they
appear on the Securities Register for the Trust Securities on the relevant
record dates for the related Distribution Dates. If notice of redemption shall
have been given and funds deposited as required, then, upon the date of such
deposit, all rights of Holders holding Trust Securities so called for redemption
will cease, except the right of such Holders to receive the Redemption Price and
any Distribution payable in respect of the Trust Securities on or prior to the
Redemption Date, but without interest, and such Trust Securities will cease to
be Outstanding. In the event that any date on which any applicable Redemption
Price is payable is not a Business Day, then payment of the applicable
Redemption Price payable on such date will be made on the next succeeding day
that is a Business Day (and without any interest or other payment in respect of
any such delay), except that, if such Business Day falls in the next calendar
year, such payment will be made on the immediately preceding Business Day, in
each case, with the same force and effect as if made on such date. In the event
that payment of the Redemption Price in respect of any Trust Securities called
for redemption is improperly withheld or refused and not paid either by the
Issuer Trust or by the Depositor pursuant to the Guarantee, Distributions on
such Trust Securities will continue to accumulate, as set forth in Section 4.1
and in accordance with the continued accrual of interest on the Junior
Subordinated Debentures, from the Redemption Date originally established by the
Issuer Trust for such Trust Securities to the date such applicable Redemption
Price is actually paid, in which case the actual payment date will be the date
fixed for redemption for purposes of calculating the applicable Redemption
Price.
(e) Subject to Section 4.3(a), if less than all the
Outstanding Trust Securities are to be redeemed on a Redemption Date, then the
aggregate Liquidation Amount of such Trust Securities to be redeemed shall be
allocated pro rata to the Common Securities and the Capital Securities based on
the relative Liquidation Amounts of such classes, subject to the requirement
that no Holder shall hold Capital Securities with an aggregate Liquidation
Amount of less than $100,000 after such redemption. The particular Capital
Securities to be redeemed shall be selected on a pro rata basis based on their
respective Liquidation Amounts not more than 60 days prior to the Redemption
Date by the Property Trustee from the Outstanding Capital Securities not
previously called for redemption, or if the Capital Securities are then held in
the form of a Global Capital Security in accordance with the customary
procedures for the Clearing Agency, provided that, after giving effect to such
redemption, no Holder shall hold Capital Securities with an aggregate
Liquidation Amount of less than $100,000, provided, however, that with respect
to Holders that would be required to hold less than 100 but more than zero
Capital Securities as a result of such pro rata redemption, the Property Trustee
shall redeem each such Holder to either 100 Capital Securities or zero Capital
Securities and shall use such method (including, without limitation, by lot) as
the Property Trustee shall deem fair and appropriate. The Property Trustee shall
promptly notify the Securities Registrar in
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writing of the Capital Securities selected for redemption and, in the case of
any Capital Securities selected for partial redemption, the Liquidation Amount
thereof to be redeemed. For all purposes of this Trust Agreement, unless the
context otherwise requires, all provisions relating to the redemption of Capital
Securities shall relate, in the case of any Capital Securities redeemed or to be
redeemed only in part, to the portion of the aggregate Liquidation Amount of
Capital Securities that has been or is to be redeemed.
SECTION 4.3. Subordination of Common Securities.
(a) Payment of Distributions (including Additional Amounts, if
applicable) on, the Redemption Price of, and the Liquidation Distribution in
respect of, the Trust Securities, as applicable, shall be made, subject to
Section 4.2(e), pro rata among the Common Securities and the Capital Securities
based on the Liquidation Amount of such Trust Securities; provided, however,
that if on any Distribution Date or Redemption Date any Event of Default
resulting from a Debenture Event of Default in Section 5.1(1) or 5.1(2) of the
Indenture shall have occurred and be continuing, no payment of any Distribution
(including any Additional Amounts) on, Redemption Price of, or Liquidation
Distribution in respect of, any Common Security, and no other payment on account
of the redemption, liquidation or other acquisition of Common Securities, shall
be made unless payment in full in cash of all accumulated and unpaid
Distributions (including any Additional Amounts) on all Outstanding Capital
Securities for all Distribution periods terminating on or prior thereto, or, in
the case of payment of the Redemption Price, the full amount of such Redemption
Price on all Outstanding Capital Securities then called for redemption, or in
the case of payment of the Liquidation Distribution the full amount of such
Liquidation Distribution on all Outstanding Capital Securities, shall have been
made or provided for, and all funds immediately available to the Property
Trustee shall first be applied to the payment in full in cash of all
Distributions (including any Additional Amounts) on, or the Redemption Price of,
or Liquidation Distribution in respect of, Capital Securities then due and
payable. The existence of an Event of Default does not entitle the Holders of
Capital Securities to accelerate the maturity thereof.
(b) In the case of the occurrence of any Event of Default
resulting from any Debenture Event of Default, the Holders of the Common
Securities shall be deemed to have waived any right to act with respect to any
such Event of Default under this Trust Agreement until the effects of all such
Events of Default with respect to the Capital Securities have been cured, waived
or otherwise eliminated. Until all such Events of Default under this Trust
Agreement with respect to the Capital Securities have been so cured, waived or
otherwise eliminated, the Property Trustee shall act solely on behalf of the
Holders of the Capital Securities and not on behalf of the Holder of the Common
Securities, and only the Holders of the Capital Securities will have the right
to direct the Property Trustee to act on their behalf.
SECTION 4.4. Payment Procedures.
Payments of Distributions (including any Additional Amounts)
in respect of the Capital Securities shall be made by check mailed to the
address of the Person entitled thereto as such address shall appear on the
Securities Register or, if the Capital Securities are held by a Clearing Agency,
such Distributions shall be made to the Clearing Agency in immediately available
funds, which will credit the relevant accounts on the applicable Distribution
Dates. Payments of Distributions to Holders of $1,000,000 or more in aggregate
Liquidation Amount of Capital Securities may be made by wire transfer of
immediately available funds upon written request of such Holder to the
Securities Registrar not later than 15 calendar days prior to the date on which
the Distribution is payable. Payments in respect of the Common Securities shall
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be made in such manner as shall be mutually agreed between the Property Trustee
and the Holder of the Common Securities.
SECTION 4.5. Tax Returns and Reports.
The Administrators shall prepare (or cause to be prepared), at
the Depositor's expense, and file all United States Federal, state and local tax
and information returns and reports required to be filed by or in respect of the
Issuer Trust. In this regard, the Administrators shall (a) prepare and file (or
cause to be prepared and filed) all Internal Revenue Service forms required to
be filed in respect of the Issuer Trust in each taxable year of the Issuer Trust
and (b)prepare and furnish (or cause to be prepared and furnished) to each
Holder all Internal Revenue Service forms required to be provided by the Issuer
Trust. The Administrators shall provide the Depositor and the Property Trustee
with a copy of all such returns and reports promptly after such filing or
furnishing. The Issuer Trustees shall comply with United States Federal
withholding and backup withholding tax laws and information reporting
requirements with respect to any payments to Holders under the Trust Securities.
On or before December 15 of each year during which any Capital
Securities are Outstanding, the Administrators shall furnish to the Property
Trustee such information as may be reasonably requested by the Property Trustee
in order that the Property Trustee may prepare the information which it is
required to report for such year on Internal Revenue Service Forms 1096 and 1099
pursuant to Section 6049 of the Code. Such information shall include the amount
of original issue discount includable in income for each outstanding Capital
Security during such year, if any.
SECTION 4.6. Payment of Taxes, Duties, Etc. of the Issuer
Trust.
Upon receipt under the Junior Subordinated Debentures of
Additional Sums, the Property Trustee shall promptly pay any taxes, duties or
governmental charges of whatsoever nature (other than withholding taxes) imposed
on the Issuer Trust by the United States or any other taxing authority.
SECTION 4.7. Payments under Indenture or Pursuant to Direct
Actions.
Any amount payable hereunder to any Holder of Capital
Securities shall be reduced by the amount of any corresponding payment such
Holder has directly received pursuant to Section 5.8 of the Indenture or Section
5.13 of this Trust Agreement.
SECTION 4.8. Liability of the Holder of Common Securities.
The Holder of Common Securities shall be liable for the debts
and obligations of the Issuer Trust as set forth in Section 6.7 of the Indenture
regarding allocation of expenses.
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ARTICLE V
TRUST SECURITIES CERTIFICATES
SECTION 5.1. Initial Ownership.
Upon the creation of the Issuer Trust and the contribution by
the Depositor pursuant to Section 2.3 and until the issuance of the Trust
Securities, and at any time during which no Trust Securities are Outstanding,
the Depositor shall be the sole beneficial owner of the Issuer Trust.
SECTION 5.2. The Trust Securities Certificates.
(a) The Capital Securities Certificates shall be issued in
fully registered form in minimum blocks of at least 100 (representing a minimum
of $100,000 aggregate Liquidation Amount and multiples of $1,000 in excess
thereof), and shall be at all times held in minimum blocks of 100, and the
Common Securities Certificates shall be issued in minimum blocks of 100
(representing a minimum of $100,000 aggregate Liquidation Amount). The Trust
Securities Certificates shall be executed on behalf of the Issuer Trust by
manual or facsimile signature of at least one Administrator except as provided
in Section 5.3. Trust Securities Certificates bearing the manual or facsimile
signatures of individuals who were, at the time when such signatures shall have
been affixed, authorized to sign on behalf of the Issuer Trust, shall be validly
issued and entitled to the benefits of this Trust Agreement, notwithstanding
that such individuals or any of them shall have ceased to be so authorized prior
to the delivery of such Trust Securities Certificates or did not hold such
offices at the date of delivery of such Trust Securities Certificates. A
transferee of a Trust Securities Certificate shall become a Holder, and shall be
entitled to the rights and subject to the obligations of a Holder hereunder,
upon due registration of such Trust Securities Certificate in such transferee's
name pursuant to Section 5.5.
(b) Upon their original issuance, Capital Securities
Certificates representing Rule 144A Capital Securities shall be issued in the
form of a Global Capital Securities Certificate registered in the name of Cede
as Depositary's nominee and deposited with or on behalf of Depositary for credit
by Depositary to the respective accounts of the Owners thereof (or such other
accounts as they may direct). Except as set forth herein, record ownership of
the Global Capital Security may be transferred, in whole or in part, only to
another nominee of Depository or to a successor of Depository or its nominee.
(c) Upon their original issuance, Capital Securities
Certificates representing Other Capital Securities shall be issued in definitive
form and may not be represented by the Global Capital Security.
(d) A single Common Securities Certificate representing the
Common Securities shall be issued to the Depositor in the form of a definitive
Common Securities Certificate.
SECTION 5.3. Execution and Delivery of Trust Securities
Certificates.
At the Closing Time, and upon consummation of the Exchange
Offer, an Administrator shall cause Trust Securities Certificates, in an
aggregate Liquidation Amount as provided in Sections 2.4 and 2.5, to be executed
on behalf of the Issuer Trust and delivered to the Property Trustee and upon
such delivery the
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Property Trustee shall authenticate such Trust Securities Certificates and
deliver such Trust Securities Certificates upon the written order of the Issuer
Trust, executed by an Administrator thereof, without further corporate action by
the Depositor, in authorized denominations.
SECTION 5.4. Global Capital Security.
(a) The Global Capital Security issued under this Trust
Agreement shall be registered in the name of the nominee of the Clearing Agency
and delivered to such custodian therefor, and such Global Capital Security shall
constitute a single Capital Security for all purposes of this Trust Agreement.
(b) Notwithstanding any other provision in this Trust
Agreement, the Global Capital Security may not be exchanged in whole or in part
for Capital Securities registered, and no transfer of the Global Capital
Security in whole or in part may be registered, in the name of any Person other
than the Clearing Agency for such Global Capital Security, Cede, or other
nominee thereof unless (i) such Clearing Agency advises the Depositor and the
Property Trustee in writing that such Clearing Agency is no longer willing or
able to properly discharge its responsibilities as Clearing Agency with respect
to such Global Capital Security, and the Depositor is unable to locate a
qualified successor, (ii) the Issuer Trust at its option advises the Depositary
in writing that it elects to terminate the book-entry system through the
Clearing Agency, or (iii) there shall have occurred and be continuing an Event
of Default.
(c) If the Global Capital Security is to be exchanged for
Other Capital Securities or canceled in whole, it shall be surrendered by or on
behalf of the Clearing Agency or its nominee to the Securities Registrar for
exchange or cancellation as provided in this Article V. If the Global Capital
Security is to be exchanged for Other Capital Securities or canceled in part, or
if another Capital Security is to be exchanged in whole or in part for a
beneficial interest in the Global Capital Security, then either (i) such Global
Capital Security shall be so surrendered for exchange or cancellation as
provided in this Article V or (ii) the Liquidation Amount thereof shall be
reduced or increased by an amount equal to the portion thereof to be so
exchanged or canceled or equal to the Liquidation Amount of such other Capital
Security to be so exchanged for a beneficial interest therein, as the case may
be, by means of an appropriate adjustment made on the records of the Security
Registrar, whereupon the Property Trustee, in accordance with the Applicable
Procedures, shall instruct the Clearing Agency or its authorized representative
to make a corresponding adjustment to its records. Upon any such surrender or
adjustment of the Global Capital Security by the Clearing Agency, accompanied by
registration instructions, an Administrator and the Property Trustee shall,
subject to Section 5.4(b) and as otherwise provided in this Article V, execute
and authenticate and deliver any Capital Securities issuable in exchange for
such Global Capital Security (or any portion thereof) in accordance with the
instructions of the Clearing Agency. The Property Trustee shall not be liable
for any delay in delivery of such instructions and may conclusively rely on, and
shall be fully protected in relying on, such instructions.
(d) Every Capital Security executed, authenticated and
delivered upon registration of transfer of, or in exchange for or in lieu of,
the Global Capital Security or any portion thereof, whether pursuant to this
Article V or Article IV or otherwise, shall be executed, authenticated and
delivered in the form of, and shall be, a Global Capital Security, unless such
Global Capital Security is registered in the name of a Person other than the
Clearing Agency for such Global Capital Security or a nominee thereof.
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(e) The Clearing Agency or its nominee, as the registered
Holder of the Global Capital Security, shall be considered the Holder of the
Capital Securities represented by the Global Capital Security for all purposes
under this Trust Agreement and the Capital Securities, and owners of
beneficial interests in the Global Capital Security shall hold such interests
pursuant to the Applicable Procedures and, except as otherwise provided herein,
shall not be entitled to have any of the individual Capital Securities
represented by the Global Capital Security registered in their names, shall not
receive nor be entitled to receive physical delivery of any such Capital
Securities in definitive form and shall not be considered the Holders thereof
under this Trust Agreement. Accordingly, any such Owner's beneficial interest in
the Global Capital Security shall be shown only on, and the transfer of such
interest shall be effected only through, records maintained by the Clearing
Agency or its nominee. Neither the Property Trustee nor the Securities Registrar
shall have any liability in respect of any transfers effected by the Clearing
Agency.
(f) The rights of Owners of beneficial interests in the Global
Capital Security shall be exercised only through the Clearing Agency and shall
be limited to those established by law and agreements between such owners and
the Clearing Agency.
SECTION 5.5. Registration of Transfer and Exchange Generally;
Certain Transfers and Exchanges; Capital Securities Certificates; Securities Act
Legends.
(a) The Property Trustee shall keep or cause to be kept at its
Corporate Trust Office a register or registers for the purpose of registering
Capital Securities Certificates and transfers and exchanges of Capital
Securities Certificates in which the registrar and transfer agent with respect
to the Capital Securities (the "Securities Registrar"), subject to such
reasonable regulations as it may prescribe, shall provide for the registration
of Capital Securities Certificates and Common Securities Certificates (subject
to Section 5.11 in the case of Common Securities Certificates) and registration
of transfers and exchanges of Capital Securities Certificates as herein
provided. Such register is herein sometimes referred to as the "Securities
Register." The Property Trustee is hereby appointed Securities Registrar for the
purpose of registering Capital Securities and transfers of Capital Securities as
herein provided.
Upon surrender for registration of transfer of any Capital
Security at the offices or agencies of the Property Trustee designated for that
purpose the Administrators shall execute, and the Property Trustee shall
authenticate and deliver, in the name of the designated transferee or
transferees, one or more Exchange Capital Securities of the same series of any
authorized denominations of like tenor and aggregate principal amount and
bearing such restrictive legends as may be required by this Trust Agreement.
At the option of the Holder, Capital Securities may be
exchanged for other Capital Securities of any authorized denominations, of like
tenor and aggregate Liquidation Amount and bearing such restrictive legends as
may be required by this Trust Agreement, upon surrender of the Capital
Securities to be exchanged at such office or agency. Whenever any securities are
so surrendered for exchange, the Administrators shall execute and the Property
Trustee shall authenticate and deliver the Capital Securities that the Holder
making the exchange is entitled to receive.
All Capital Securities issued upon any transfer or exchange of
Capital Securities shall be the valid obligations of the Issuer Trust,
evidencing the same debt, and entitled to the same benefits under this Trust
Agreement, as the Capital Securities surrendered upon such transfer or exchange.
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Every Capital Security presented or surrendered for transfer
or exchange shall (if so required by the Property Trustee) be duly endorsed, or
be accompanied by a written instrument of transfer in form satisfactory to the
Property Trustee and the Securities Registrar, duly executed by the Holder
thereof or such Holder's attorney duly authorized in writing.
No service charge shall be made to a Holder for any transfer
or exchange of Capital Securities, but the Property Trustee may require payment
of a sum sufficient to cover any tax or other governmental charge that may be
imposed in connection with any transfer or exchange of Capital Securities.
Neither the Issuer Trust, the Securities Registrar nor the
Property Trustee shall be required, pursuant to the provisions of this Section,
(i) to issue, register the transfer of or exchange any Capital Security during a
period beginning at the opening of business 15 days before the day of selection
for redemption of Capital Securities pursuant to Article IV and ending at the
close of business on the day of mailing of the notice of redemption, or (ii) to
register the transfer of or exchange any Capital Security so selected for
redemption in whole or in part, except, in the case of any such Capital Security
to be redeemed in part, any portion thereof not to be redeemed.
(b) Certain Transfers and Exchanges. Notwithstanding any
other provision of this Trust Agreement, transfers and exchanges of Capital
Securities and beneficial interests in a Global Capital Security shall be
subject to this Section 5.5(b).
(i) Non-Global Restricted Capital Security to Global
Security. If the Holder of a Restricted Capital Security
(other than the Global Capital Security) wishes at any time to
transfer all or any portion of such Trust Security to a Person
who wishes to take delivery thereof in the form of a
beneficial interest in the Global Capital Security, such
transfer may be effected only in accordance with the
provisions of this clause (b)(i) and subject to the Applicable
Procedures. Upon receipt by the Securities Registrar of (A)
such Trust Security as provided in Section 5.5(a) and
instructions satisfactory to the Security Registrar directing
that a beneficial interest in the Global Capital Security in a
specified Liquidation Amount not greater than the Liquidation
Amount of such Trust Security to be credited to a specified
Clearing Agency Participant's account and (B) a Restricted
Securities Certificate duly executed by such Holder or such
Holder's attorney duly authorized in writing, then the
Securities Registrar shall cancel such Trust Security (and the
Issuer Trust shall issue a new Trust Security in respect of
any untransferred portion thereof) as provided in Section
5.5(a) and increase the aggregate Liquidation Amount of the
Global Capital Security by the specified Liquidation Amount as
provided in Section 5.4(c).
(ii) Non-Global Capital Security to Non-Global
Capital Security. A Trust Security that is not a Global
Capital Security may be transferred, in whole or in part, to a
Person who takes delivery in the form of another Trust
Security that is not a Global Capital Security as provided in
Section 5.5(a) provided that if the Trust Security to be
transferred in whole or in part is a Restricted Capital
Security, the Securities Registrar shall have received a
Restricted Securities Certificate duly executed by the
transferor Holder or such Holder's attorney duly authorized in
writing.
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(iii) Exchanges Between Global Capital Security and
Non-Global Trust Security. A beneficial interest in the Global
Capital Security may be exchanged for a Trust Security that is
not a Global Capital Security as provided in Section 5.4.
(iv) Certain Initial Transfers of Non-Global Trust
Securities. In the case of Trust Securities initially issued
other than in global form, an initial transfer or exchange of
such Trust Securities that does not involve any change in
beneficial ownership may be made to an Institutional
Accredited Investor or Investors as if such transfer or
exchange were not an initial transfer or exchange; provided
that written certification shall be provided by the transferee
and transferor of such Trust Securities to the Securities
Registrar that such transfer or exchange does not involve a
change in beneficial ownership.
(v) Limitations Relating to Principal Amount.
Notwithstanding any other provision of this Trust Agreement
and unless otherwise specified as permitted by this Trust
Agreement, Trust Securities or portions thereof may be
transferred or exchanged only in aggregate Liquidation Amounts
of not less than $100,000. Any transfer, exchange or other
disposition of Trust Securities in contravention of this
Section 5.5(b)(v) shall be deemed to be void and of no legal
effect whatsoever, any such transferee shall be deemed not to
be the Holder or Owner of any beneficial interest in such
Trust Securities for any purpose, including but not limited to
the receipt of interest payable on such Trust Securities, and
such transferee shall be deemed to have no interest whatsoever
in such Trust Securities.
(c) Restricted Securities Legend.
(i) Except as set forth below, all Capital
Securities shall bear a Restricted Capital Securities Legend:
(A) subject to the following Clauses of this
Section 5.5(c), a Capital Security or any portion
thereof that is exchanged, upon transfer or
otherwise, for a Global Capital Security or any
portion thereof shall bear the Restricted Capital
Securities Legend while represented thereby;
(B) subject to the following Clauses of this
Section 5.5(c), a new Capital Security which is
not a Global Capital Security and is issued in
exchange for another Capital Security (including
a Global Capital Security) or any portion
thereof, upon transfer or otherwise, shall, if
such new Capital Security is required to be
issued in the form of a Restricted Capital
Security, bear a Restricted Capital Securities
Legend;
(C) a new Capital Security (other than a
Global Capital Security) that does not bear a
Restricted Capital Securities Legend may be
issued in exchange for or in lieu of a Restricted
Capital Security or any portion thereof that
bears such a legend if, in the Depositor's
judgment, placing such a legend upon such new
Capital Security is not necessary to ensure
compliance with the registration requirements of
the Securities Act, and the Property Trustee, at
the written direction of the Issuer Trust in the
form of an Officers' Certificate, shall
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authenticate and deliver such new Capital
Security as provided in this Article V; and
(D) notwithstanding the foregoing provisions
of this Section 5.5(c), a Successor Capital
Security of a Capital Security that does not bear
a Restricted Capital Securities Legend shall not
bear such form of legend unless the Depositor has
reasonable cause to believe that such Successor
Capital Security is a "restricted security"
within the meaning of Rule 144 under the
Securities Act, in which case the Property
Trustee, at the written direction of the Issuer
Trust in the form of an Officers' Certificate,
shall authenticate and deliver a new Capital
Security bearing a Restricted Capital Securities
Legend in exchange for such Successor Capital
Security as provided in this Article V; and
(ii) In addition, Junior Subordinated Debentures
distributed to a holder of Capital Securities upon liquidation
of the Issuer Trust shall bear a legend equivalent to the
Restricted Capital Securities Legend except as to
modifications to reflect that the security legended is a
Junior Subordinated Debenture, if the Capital Securities with
respect to which the Junior Subordinated Debentures are
distributed bear a similar legend.
(d) Exchange of Capital Securities. The Capital
Securities may be exchanged for other capital securities (the "Exchange Capital
Securities") pursuant to the terms of the Exchange Offer. In such an exchange,
the Property Trustee shall make the exchange as follows:
The Depositor shall present the Property Trustee with an
Officers' Certificate certifying as follows:
(i) upon issuance of the Exchange Capital
Securities, the transactions contemplated by the
Exchange Offer have been consummated; and
(ii) the number of Capital Securities properly
tendered in the Exchange Offer that are
represented by a Global Capital Security and the
number of Capital Securities properly tendered in
the Exchange Offer that are represented by
definitive Capital Securities, the name of each
Holder of such definitive Capital Securities, the
Liquidation Amount of Capital Securities properly
tendered in the Exchange Offer by each such
Holder and the name and address to which
definitive Capital Securities for Exchange
Capital Securities shall be registered and sent
for each such Holder.
The Property Trustee, upon receipt of (i) such Officers'
Certificate and (ii) an Opinion of Counsel (x) to the effect that the Exchange
Capital Securities have been registered under the Securities Act and the Trust
Agreement has been qualified under the Trust Indenture Act and (y) with respect
to the matters set forth in the Registration Rights Agreement, shall
authenticate (A) a Global Capital Security representing the Exchange Capital
Securities in aggregate Liquidation Amount equal to the aggregate Liquidation
Amount of the Capital Securities so exchanged represented by a Global Capital
Security indicated in such Officers' Certificate and (B) definitive Capital
Securities representing the Exchange Capital Securities registered in the names
of, and in the Liquidation Amounts indicated in such Officers' Certificate.
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If, upon consummation of the Exchange Offer, less than all the
then Outstanding Capital Securities shall have properly tendered and not
withdrawn, the Property Trustee shall reflect on the Securities Register such
untendered Capital Securities indicating the reduction in the number and
aggregate Liquidation Amount represented thereby as a result of the Exchange
Offer.
SECTION 5.6. Mutilated, Destroyed, Lost or Stolen Trust
Securities Certificates.
If (a) any mutilated Trust Securities Certificate shall be
surrendered to the Securities Registrar, or if the Securities Registrar shall
receive evidence to its satisfaction of the destruction, loss or theft of any
Trust Securities Certificate and (b) there shall be delivered to the Securities
Registrar and the Administrators such security or indemnity as may be required
by them to save each of them harmless, then in the absence of notice that such
Trust Securities Certificate shall have been acquired by a bona fide purchaser,
the Administrators, or any one of them, on behalf of the Issuer Trust shall
execute and make available for delivery, and the Property Trustee shall
authenticate and deliver, in exchange for or in lieu of any such mutilated,
destroyed, lost or stolen Trust Securities Certificate, a new Trust Securities
Certificate of like class, tenor and denomination. In connection with the
issuance of any new Trust Securities Certificate under this Section, the
Administrators or the Securities Registrar may require the payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
connection therewith. Any duplicate Trust Securities Certificate issued pursuant
to this Section shall constitute conclusive evidence of an undivided beneficial
interest in the assets of the Issuer Trust corresponding to that evidenced by
the lost, stolen or destroyed Trust Securities Certificate, as if originally
issued, whether or not the lost, stolen or destroyed Trust Securities
Certificate shall be found at any time.
SECTION 5.7. Persons Deemed Holders.
The Issuer Trustees or the Securities Registrar shall treat
the Person in whose name any Trust Securities are registered in the Securities
Register as the owner of such Trust Securities for the purpose of receiving
Distributions and for all other purposes whatsoever, and none of the Issuer
Trustees, the Administrators nor the Securities Registrar shall be bound by any
notice to the contrary.
SECTION 5.8. Access to List of Holders' Names and Addresses.
Each Holder and each Owner shall be deemed to have agreed not
to hold the Depositor, the Property Trustee, or the Administrators accountable
by reason of the disclosure of its name and address, regardless of the source
from which such information was derived.
SECTION 5.9. Maintenance of Office or Agency.
The Property Trustee shall designate, with the consent of the
Administrators, which consent shall not be unreasonably withheld, an office or
offices or agency or agencies where Capital Securities Certificates may be
surrendered for registration of transfer or exchange and where notices and
demands to or upon the Issuer Trustees in respect of the Trust Securities
Certificates may be served. The Property Trustee initially designates its
Corporate Trust Office at Four Albany Street, New York, NY 10006, Attention:
Corporate Trust and Agency Group - Corporate Market Services, as its corporate
trust office for such purposes. The Property Trustee shall give prompt written
notice to the Depositor, the Administrators
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and to the Holders of any change in the location of the Securities Register or
any such office or agency.
SECTION 5.10. Appointment of Paying Agent.
The Paying Agent shall make Distributions to Holders from the
Payment Account and shall report the amounts of such Distributions to the
Property Trustee and the Administrators. Any Paying Agent shall have the
revocable power to withdraw funds from the Payment Account solely for the
purpose of making the Distributions referred to above. The Property Trustee may
revoke such power and remove any Paying Agent in its sole discretion. The Paying
Agent shall initially be the Property Trustee. Any Person acting as Paying Agent
shall be permitted to resign as Paying Agent upon 30 days' written notice to the
Administrators, and the Property Trustee. In the event that the Property Trustee
shall no longer be the Paying Agent or a successor Paying Agent shall resign or
its authority to act be revoked, the Property Trustee shall appoint a successor
(which shall be a bank or trust company) that is reasonably acceptable to the
Administrators to act as Paying Agent. Such successor Paying Agent or any
additional Paying Agent appointed by the Administrators shall execute and
deliver to the Issuer Trustees an instrument in which such successor Paying
Agent or additional Paying Agent shall agree with the Issuer Trustees that as
Paying Agent, such successor Paying Agent or additional Paying Agent will hold
all sums, if any, held by it for payment to the Holders in trust for the benefit
of the Holders entitled thereto until such sums shall be paid to such Holders.
The Paying Agent shall return all unclaimed funds to the Property Trustee and
upon removal of a Paying Agent such Paying Agent shall also return all funds in
its possession to the Property Trustee. The provisions of Sections 8.1, 8.3 and
8.6 herein shall apply to the Bank also in its role as Paying Agent, for so long
as the Bank shall act as Paying Agent and, to the extent applicable, to any
other paying agent appointed hereunder. Any reference in this Trust Agreement to
the Paying Agent shall include any co-paying agent chosen by the Property
Trustee unless the context requires otherwise.
SECTION 5.11. Ownership of Common Securities by Depositor.
At each Closing Time, the Depositor shall acquire and retain
beneficial and record ownership of the Common Securities. Neither the Depositor
nor any successor Holder of the Common Securities may transfer less than all the
Common Securities, and the Depositor or any such successor Holder may transfer
the Common Securities only (i) in connection with a consolidation or merger of
the Depositor into another corporation or any conveyance, transfer or lease by
the Depositor of its properties and assets substantially as an entirety to any
Person, pursuant to Section 8.1 of the Indenture, or (ii) to an Affiliate of the
Depositor in compliance with applicable law (including the Securities Act and
applicable state securities and blue sky laws). To the fullest extent permitted
by law, any attempted transfer of the Common Securities, other than as set forth
in the immediately preceding sentence, shall be void. The Administrators shall
cause each Common Securities Certificate issued to the Depositor to contain a
legend stating "THIS CERTIFICATE IS NOT TRANSFERABLE EXCEPT TO THE DEPOSITOR OR
AN AFFILIATE OF THE DEPOSITOR IN COMPLIANCE WITH APPLICABLE LAW AND SECTION 5.11
OF THE TRUST AGREEMENT."
SECTION 5.12. Notices to Clearing Agency.
To the extent that a notice or other communication to the
Holders is required under this Trust Agreement, for so long as Capital
Securities are represented by a Global Capital Securities Certificate, the
Administrators and the Issuer Trustees shall give all such notices and
communications specified herein to be given to the Clearing Agency, and shall
have no obligations to the Owners.
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SECTION 5.13. Rights of Holders.
(a) The legal title to the Trust Property is vested
exclusively in the Property Trustee (in its capacity as such) in accordance with
Section 2.9, and the Holders shall not have any right or title therein other
than the undivided beneficial ownership interest in the assets of the Issuer
Trust conferred by their Trust Securities and they shall have no right to call
for any partition or division of property, profits or rights of the Issuer Trust
except as described below. The Trust Securities shall be personal property
giving only the rights specifically set forth therein and in this Trust
Agreement. The Trust Securities shall have no preemptive or similar rights and
when issued and delivered to Holders against payment of the purchase price
therefor, as provided herein, will be fully paid and nonassessable by the Issuer
Trust. Except as otherwise provided in Section 4.8, the Holders of the Trust
Securities, in their capacities as such, shall be entitled to the same
limitation of personal liability extended to stockholders of private
corporations for profit organized under the General Corporation Law of the State
of Delaware.
(b) For so long as any Capital Securities remain Outstanding,
if, upon a Debenture Event of Default, the Debenture Trustee fails or the
holders of not less than 25% in principal amount of the outstanding Junior
Subordinated Debentures fail to declare the principal of all of the Junior
Subordinated Debentures to be immediately due and payable, the Holders of at
least 25% in Liquidation Amount of the Capital Securities then Outstanding shall
have such right to make such declaration by a notice in writing to the Property
Trustee, the Depositor and the Debenture Trustee.
At any time after such a declaration of acceleration with
respect to the Junior Subordinated Debentures has been made and before a
judgment or decree for payment of the money due has been obtained by the
Debenture Trustee as provided in the Indenture, the Holders of a Majority in
Liquidation Amount of the Capital Securities, by written notice to the Property
Trustee, the Depositor and the Debenture Trustee, may rescind and annul such
declaration and its consequences if:
(i) the Depositor has paid or deposited with the Debenture
Trustee a sum sufficient to pay (A) all overdue installments of interest on all
of the Junior Subordinated Debentures, (B) any accrued Additional Interest on
all of the Junior Subordinated Debentures, (C) the principal of (and premium, if
any, on) any Junior Subordinated Debentures which have become due otherwise than
by such declaration of acceleration and interest and Additional Interest thereon
at the rate borne by the Junior Subordinated Debentures, and (D) all sums paid
or advanced by the Debenture Trustee under the Indenture and the reasonable
compensation, expenses, disbursements and advances of the Debenture Trustee and
the Property Trustee, their agents and counsel; and
(ii) all Events of Default with respect to the Junior
Subordinated Debentures, other than the non-payment of the principal of the
Junior Subordinated Debentures which has become due solely by such acceleration,
have been cured or waived as provided in Section 5.13 of the Indenture.
If the Property Trustee fails to annul any such declaration
and waive such default, the Holders of at least a Majority in Liquidation Amount
of the Capital Securities shall also have the right to rescind and annul such
declaration and its consequences by written notice to the Depositor, the
Property Trustee and the Debenture Trustee, subject to the satisfaction of the
conditions set forth in clauses (i) and (ii) of this Section 5.13(b).
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The Holders of at least a Majority in Liquidation Amount of
the Capital Securities may, on behalf of the Holders of all the Capital
Securities, waive any past default under the Indenture, except a default in the
payment of principal or interest (unless such default has been cured and a sum
sufficient to pay all matured installments of interest and principal due
otherwise than by acceleration has been deposited with the Debenture Trustee) or
a default in respect of a covenant or provision which under the Indenture cannot
be modified or amended without the consent of the holder of each outstanding
Junior Subordinated Debentures. No such rescission shall affect any subsequent
default or impair any right consequent thereon.
Upon receipt by the Property Trustee of written notice
declaring such an acceleration, or rescission and annulment thereof, by Holders
of the Capital Securities all or part of which is represented by Global Capital
Securities, a record date shall be established for determining Holders of
Outstanding Capital Securities entitled to join in such notice, which record
date shall be at the close of business on the day the Property Trustee receives
such notice. The Holders on such record date, or their duly designated proxies,
and only such Persons, shall be entitled to join in such notice, whether or not
such Holders remain Holders after such record date; provided, that, unless such
declaration of acceleration, or rescission and annulment, as the case may be,
shall have become effective by virtue of the requisite percentage having joined
in such notice prior to the day which is 90 days after such record date, such
notice of declaration of acceleration, or rescission and annulment, as the case
may be, shall automatically and without further action by any Holder be canceled
and of no further effect. Nothing in this paragraph shall prevent a Holder, or a
proxy of a Holder, from giving, after expiration of such 90-day period, a new
written notice of declaration of acceleration, or rescission and annulment
thereof, as the case may be, that is identical to a written notice which has
been canceled pursuant to the proviso to the preceding sentence, in which event
a new record date shall be established pursuant to the provisions of this
Section 5.13(b).
(c) For so long as any Capital Securities remain Outstanding,
to the fullest extent permitted by law and subject to the terms of this Trust
Agreement and the Indenture, upon a Debenture Event of Default specified in
Section 5.1(1) or 5.1(2) of the Indenture, any Holder of Capital Securities
shall have the right to institute a proceeding directly against the Depositor,
pursuant to Section 5.8 of the Indenture, for enforcement of payment to such
Holder of the principal amount of or interest on Junior Subordinated Debentures
having an aggregate principal amount equal to the aggregate Liquidation Amount
of the Capital Securities of such Holder (a "Direct Action"). Except as set
forth in Sections 5.13(b) and 5.13(c), the Holders of Capital Securities shall
have no right to exercise directly any right or remedy available to the holders
of, or in respect of, the Junior Subordinated Debentures.
ARTICLE VI
ACTS OF HOLDERS; MEETINGS; VOTING
SECTION 6.1. Limitations on Holder's Voting Rights.
(a) Except as provided in this Trust Agreement and in the
Indenture and as otherwise required by law, no Holder of Capital Securities
shall have any right to vote or in any manner otherwise control the
administration, operation and management of the Issuer Trust or the obligations
of the parties hereto, nor shall anything herein set forth or contained in the
terms of the Trust Securities Certificates be construed so as to constitute the
Holders from time to time as members of an association.
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(b) So long as any Junior Subordinated Debentures are held by
the Property Trustee on behalf of the Issuer Trust, the Property Trustee shall
not (i) direct the time, method and place of conducting any proceeding for any
remedy available to the Debenture Trustee, or execute any trust or power
conferred on the Property Trustee with respect to such Junior Subordinated
Debentures, (ii) waive any past default that may be waived under Section 5.13 of
the Indenture, (iii) exercise any right to rescind or annul a declaration that
the principal of all the Junior Subordinated Debentures shall be due and payable
or (iv) consent to any amendment, modification or termination of the Indenture
or the Junior Subordinated Debentures, where such consent shall be required,
without, in each case, obtaining the prior approval of the Holders of at least a
Majority in Liquidation Amount of the Capital Securities, provided, however,
that where a consent under the Indenture would require the consent of each
holder of Junior Subordinated Debentures affected thereby, no such consent shall
be given by the Property Trustee without the prior written consent of each
Holder of Capital Securities. The Property Trustee shall not revoke any action
previously authorized or approved by a vote of the Holders of Capital
Securities, except by a subsequent vote of the Holders of Capital Securities.
The Property Trustee shall notify all Holders of the Capital Securities of any
notice of default received with respect to the Junior Subordinated Debentures.
In addition to obtaining the foregoing approvals of the Holders of the Capital
Securities, prior to taking any of the foregoing actions, the Property Trustee
shall, at the expense of the Depositor, obtain an Opinion of Counsel experienced
in such matters to the effect that such action will not cause the Issuer Trust
to be taxable other than as a grantor trust for United States Federal income tax
purposes.
(c) If any proposed amendment to the Trust Agreement provides
for, or the Issuer Trust otherwise proposes to effect, (i) any action that would
adversely affect in any material respect the interests, powers, preferences or
special rights of the Capital Securities, whether by way of amendment to the
Trust Agreement or otherwise, or (ii) the dissolution, winding-up or termination
of the Issuer Trust, other than pursuant to the terms of this Trust Agreement,
then the Holders of Outstanding Trust Securities as a 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 the Holders of at least a Majority in
Liquidation Amount of the Capital Securities. Notwithstanding any other
provision of this Trust Agreement, no amendment to this Trust Agreement may be
made if, as a result of such amendment, it would cause the Issuer Trust to be
taxable other than as a grantor trust for United States Federal income tax
purposes.
SECTION 6.2. Notice of Meetings.
Notice of all meetings of the Holders, stating the time, place
and purpose of the meeting, shall be given by the Property Trustee pursuant to
Section 10.8 to each Holder of record, at his registered address, at least 15
days and not more than 90 days before the meeting. At any such meeting, any
business properly before the meeting may be so considered whether or not stated
in the notice of the meeting. Any adjourned meeting may be held as adjourned
without further notice.
SECTION 6.3. Meetings of Holders.
No annual meeting of Holders is required to be held. The
Property Trustee, however, shall call a meeting of Holders to vote on any matter
upon the written request of the Holders of record of at least 25% of the
aggregate Liquidation Amount of the Capital Securities and the Administrators or
the Property Trustee may, at any time in their discretion, call a meeting of
Holders of Capital Securities to vote on any matters as to which Holders are
entitled to vote.
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Holders of at least a Majority in Liquidation Amount of the
Capital Securities, present in person or represented by proxy, shall constitute
a quorum at any meeting of Holders of the Capital Securities.
If a quorum is present at a meeting, an affirmative vote by
the Holders of record present, in person or by proxy, holding Capital Securities
representing at least a Majority in Liquidation Amount of the Capital Securities
held by the Holders present, either in person or by proxy, at such meeting shall
constitute the action of the Holders of Capital Securities, unless this Trust
Agreement requires a greater number of affirmative votes.
SECTION 6.4. Voting Rights.
Holders shall be entitled to one vote for each $1,000 of
Liquidation Amount represented by their Outstanding Trust Securities in respect
of any matter as to which such Holders are entitled to vote.
SECTION 6.5. Proxies, etc.
At any meeting of Holders, any Holder entitled to vote thereat
may vote by proxy, provided that no proxy shall be voted at any meeting unless
it shall have been placed on file with the Property Trustee, or with such other
officer or agent of the Issuer Trust as the Property Trustee may direct, for
verification prior to the time at which such vote shall be taken. Pursuant to a
resolution of the Property Trustee, proxies may be solicited in the name of the
Property Trustee or one or more officers of the Property Trustee. Only Holders
of record shall be entitled to vote. When Trust Securities are held jointly by
several persons, any one of them may vote at any meeting in person or by proxy
in respect of such Trust Securities, but if more than one of them shall be
present at such meeting in person or by proxy, and such joint owners or their
proxies so present disagree as to any vote to be cast, such vote shall not be
received in respect of such Trust Securities. A proxy purporting to be executed
by or on behalf of a Holder shall be deemed valid unless challenged at or prior
to its exercise, and the burden of proving invalidity shall rest on the
challenger. No proxy shall be valid more than three years after its date of
execution.
SECTION 6.6. Holder Action by Written Consent.
Any action which may be taken by Holders at a meeting may be
taken without a meeting if Holders holding at least a Majority in Liquidation
Amount of all Trust Securities entitled to vote in respect of such action (or
such larger proportion thereof as shall be required by any other provision of
this Trust Agreement) shall consent to the action in writing.
SECTION 6.7. Record Date for Voting and Other Purposes.
For the purposes of determining the Holders who are entitled
to notice of and to vote at any meeting or by written consent, or to participate
in any distribution on the Trust Securities in respect of which a record date is
not otherwise provided for in this Trust Agreement, or for the purpose of any
other action, the Administrators or Property Trustee may from time to time fix a
date, not more than 90 days prior to the date of any meeting of Holders or the
payment of a distribution or other action, as the case may be, as a record date
for the determination of the identity of the Holders of record for such
purposes.
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SECTION 6.8. Acts of Holders.
Any request, demand, authorization, direction, notice,
consent, waiver or other action provided or permitted by this Trust Agreement to
be given, made 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 otherwise expressly
provided herein, such action shall become effective when such instrument or
instruments are delivered to the Property Trustee. 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 Trust
Agreement and (subject to Section 8.1) conclusive in favor of the Issuer
Trustees, if made in the manner provided in this Section.
The fact and date of the execution by any Person of any such
instrument or writing may be 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 any Issuer Trustee or Administrator receiving the same
deems sufficient.
The ownership of Trust Securities shall be proved by the
Securities Register.
Any request, demand, authorization, direction, notice,
consent, waiver or other Act of the Holder of any Trust Security shall bind
every future Holder of the same Trust Security and the Holder of every Trust
Security issued upon the registration of transfer thereof or in exchange
therefor or in lieu thereof in respect of anything done, omitted or suffered to
be done by the Issuer Trustees, the Administrators or the Issuer Trust in
reliance thereon, whether or not notation of such action is made upon such Trust
Security.
Without limiting the foregoing, a Holder entitled hereunder to
take any action hereunder with regard to any particular Trust Security may do so
with regard to all or any part of the Liquidation Amount of such Trust Security
or by one or more duly appointed agents each of which may do so pursuant to such
appointment with regard to all or any part of such Liquidation Amount.
If any dispute shall arise among the Holders, the
Administrators or the Issuer Trustees with respect to the authenticity, validity
or binding nature of any request, demand, authorization, direction, consent,
waiver or other Act of such Holder or Issuer Trustee under this Article VI, then
the determination of such matter by the Property Trustee shall be conclusive
with respect to such matter.
SECTION 6.9. Inspection of Records.
Upon reasonable notice to the Administrators and the Property
Trustee, the records of the Issuer Trust shall be open to inspection by Holders
during normal business hours for any purpose reasonably related to such Holder's
interest as a Holder.
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ARTICLE VII
REPRESENTATIONS AND WARRANTIES
SECTION 7.1. Representations and Warranties of the Property
Trustee and the Delaware Trustee.
The Property Trustee and the Delaware Trustee, each severally
on behalf of and as to itself, hereby represents and warrants for the benefit of
the Depositor and the Holders that:
(a) The Property Trustee is a banking corporation with trust
powers, duly organized, validly existing and in good standing under the laws of
New York, with trust power and authority to execute and deliver, and to carry
out and perform its obligations under the terms of this Trust Agreement.
(b) The execution, delivery and performance by the Property
Trustee of this Trust Agreement has been duly authorized by all necessary
corporate action on the part of the Property Trustee; and this Trust Agreement
has been duly executed and delivered by the Property Trustee, and constitutes a
legal, valid and binding obligation of the Property Trustee, enforceable against
it in accordance with its terms, subject to applicable bankruptcy,
reorganization, moratorium, insolvency, and other similar laws affecting
creditors' rights generally and to general principles of equity and the
discretion of the court (regardless of whether the enforcement of such remedies
is considered in a proceeding in equity or at law).
(c) The execution, delivery and performance of this Trust
Agreement by the Property Trustee does not conflict with or constitute a breach
of the certificate of incorporation or by-laws of the Property Trustee.
(d) At the Closing Time, the Property Trustee has not
knowingly created any Liens on the Trust Securities.
(e) No consent, approval or authorization of, or registration
with or notice to, any New York State or federal banking authority is required
for the execution, delivery or performance by the Property Trustee, of this
Trust Agreement.
(f) The Delaware Trustee is duly organized, validly existing
and in good standing under the laws of the State of Delaware, with trust power
and authority to execute and deliver, and to carry out and perform its
obligations under the terms of, this Trust Agreement.
(g) The execution, delivery and performance by the Delaware
Trustee of this Trust Agreement has been duly authorized by all necessary
corporate action on the part of the Delaware Trustee; and this Trust Agreement
has been duly executed and delivered by the Delaware Trustee, and constitutes a
legal, valid and binding obligation of the Delaware Trustee, enforceable against
it in accordance with its terms, subject to applicable bankruptcy,
reorganization, moratorium, insolvency, and other similar laws affecting
creditors' right generally and to general principles of equity and the
discretion of the court (regardless of whether the enforcement of such remedies
is considered in a proceeding in equity or at law).
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(h) The execution, delivery and performance of this Trust
Agreement by the Delaware Trustee does not conflict with or constitute a breach
of the certificate of incorporation or by-laws of the Delaware Trustee.
(i) No consent, approval or authorization of, or registration
with or notice to any state or Federal banking authority is required for the
execution, delivery or performance by the Delaware Trustee, of this Trust
Agreement.
(j) The Delaware Trustee is an entity which has its principal
place of business in the State of Delaware.
SECTION 7.2. Representations and Warranties of Depositor.
The Depositor hereby represents and warrants for the benefit
of the Holders that:
(a) the Trust Securities Certificates issued at the Closing
Time on behalf of the Issuer Trust have been duly authorized and will have been
duly and validly executed, and, subject to payment therefor, issued and
delivered by the Issuer Trustees pursuant to the terms and provisions of, and in
accordance with the requirements of, this Trust Agreement, and the Holders will
be, as of each such date, entitled to the benefits of this Trust Agreement; and
(b) there are no taxes, fees or other governmental charges
payable by the Issuer Trust (or the Issuer Trustees on behalf of the Issuer
Trust) under the laws of the State of Delaware or any political subdivision
thereof in connection with the execution, delivery and performance by either the
Property Trustee or the Delaware Trustee, as the case may be, of this Trust
Agreement.
ARTICLE VIII
THE ISSUER TRUSTEES; THE ADMINISTRATORS
SECTION 8.1. Certain Duties and Responsibilities.
(a) The duties and responsibilities of the Issuer Trustees and
the Administrators shall be as provided by this Trust Agreement and, in the case
of the Property Trustee, by the Trust Indenture Act. Notwithstanding the
foregoing, no provision of this Trust Agreement shall require the Issuer
Trustees or the Administrators to expend or risk their own funds or otherwise
incur any financial liability in the performance of any of their duties
hereunder, or in the exercise of any of their rights or powers, if they shall
have reasonable grounds for believing that repayment of such funds or adequate
indemnity against such risk or liability is not reasonably assured to it.
Whether or not therein expressly so provided, every provision of this Trust
Agreement relating to the conduct or affecting the liability of or affording
protection to the Issuer Trustees or the Administrators shall be subject to the
provisions of this Section. Nothing in this Trust Agreement shall be construed
to release an Administrator or an Issuer Trustee from liability for its own
negligent action, its own negligent failure to act, or its own willful
misconduct. To the extent that, at law or in equity, an Issuer Trustee or
Administrator has duties and liabilities relating to the Issuer Trust or to the
Holders, such Issuer Trustee or Administrator shall not be liable to the Issuer
Trust or to any Holder for such Issuer Trustee's or Administrator's good faith
reliance on the provisions of this Trust Agreement. The
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provisions of this Trust Agreement, to the extent that they restrict the duties
and liabilities of the Issuer Trustees and Administrators otherwise existing at
law or in equity, are agreed by the Depositor and the Holders to replace such
other duties and liabilities of the Issuer Trustees and Administrators.
(b) All payments made by the Property Trustee or a Paying
Agent in respect of the Trust Securities shall be made only from the revenue and
proceeds from the Trust Property and only to the extent that there shall be
sufficient revenue or proceeds from the Trust Property to enable the Property
Trustee or a Paying Agent to make payments in accordance with the terms hereof.
Each Holder, by its acceptance of a Trust Security, agrees that it will look
solely to the revenue and proceeds from the Trust Property to the extent legally
available for distribution to it as herein provided and that neither the Issuer
Trustees nor the Administrators are personally liable to it for any amount
distributable in respect of any Trust Security or for any other liability in
respect of any Trust Security. This Section 8.1(b) does not limit the liability
of the Issuer Trustees expressly set forth elsewhere in this Trust Agreement or,
in the case of the Property Trustee, in the Trust Indenture Act.
(c) The Property Trustee, before the occurrence of any Event
of Default and after the curing of all Events of Default that may have occurred,
shall undertake to perform only such duties as are specifically set forth in
this Trust Agreement (including pursuant to Section 10.10), and no implied
covenants shall be read into this Trust Agreement against the Property Trustee.
If an Event of Default has occurred (that has not been cured or waived pursuant
to Section 5.13 of the Indenture), the Property Trustee shall enforce this Trust
Agreement for the benefit of the Holders and shall exercise such of the rights
and powers vested in it by this Trust Agreement, and use the same degree of care
and skill in its exercise thereof, as a prudent person would exercise or use
under the circumstances in the conduct of his or her own affairs.
(d) No provision of this Trust Agreement 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 any Event of Default
and after the curing or waiving of all such Events of Default
that may have occurred:
(A) the duties and obligations of the
Property Trustee shall be determined solely by
the express provisions of this Trust Agreement
(including pursuant to Section 10.10), and the
Property Trustee shall not be liable except for
the performance of such duties and obligations as
are specifically set forth in this Trust
Agreement (including pursuant to Section 10.10);
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 Trust
Agreement; but in the case of any such
certificates or opinions that by any provision
hereof or of the Trust Indenture Act are
specifically required to be furnished to the
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 Trust Agreement;
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(ii) the Property Trustee shall not be liable for any
error of judgment made in good faith by an authorized officer
of the Property Trustee, unless it shall be proved that the
Property Trustee was negligent in ascertaining the pertinent
facts;
(iii) the Property Trustee shall not be liable with
respect to any action taken or omitted to be taken by it in
good faith in accordance with the direction of the Holders of
at least a Majority in Liquidation Amount of the Capital
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 Trust Agreement;
(iv) the Property Trustee's sole duty with respect to
the custody, safe keeping and physical preservation of the
Junior Subordinated Debentures and the Payment Account shall
be to deal with such property in a similar manner as the
Property Trustee deals with similar property for its own
account, subject to the protections and limitations on
liability afforded to the Property Trustee under this Trust
Agreement and the Trust Indenture Act;
(v) the Property Trustee shall not be liable for any
interest on any money received by it except as it may
otherwise agree with the Depositor; and money held by the
Property Trustee need not be segregated from other funds held
by it except in relation to the Payment Account maintained by
the Property Trustee pursuant to Section 3.1 and except to the
extent otherwise required by law;
(vi) the Property Trustee shall not be responsible
for monitoring the compliance by the Administrators or the
Depositor with their respective duties under this Trust
Agreement, nor shall the Property Trustee be liable for the
default or misconduct of any other Issuer Trustee, the
Administrators or the Depositor; and
(vii) no provision of this Trust Agreement 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 the Property Trustee shall have
reasonable grounds for believing that the repayment of such
funds or liability is not reasonably assured to it under the
terms of this Trust Agreement or adequate indemnity against
such risk or liability is not reasonably assured to it.
(e) The Administrators shall not be responsible for
monitoring the compliance by the Issuer Trustees or the Depositor with their
respective duties under this Trust Agreement, nor shall either Administrator be
liable for the default or misconduct of any other Administrator, the Issuer
Trustees or the Depositor.
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SECTION 8.2. Certain Notices.
(a) Within five Business Days after the occurrence of any
Event of Default actually known to a Responsible Officer of the Property
Trustee, the Property Trustee shall transmit, in the manner and to the extent
provided in Section 10.8, notice of such Event of Default to the Holders and the
Administrators, unless such Event of Default shall have been cured or waived.
(b) Within five Business Days after the receipt of notice of
the Depositor's exercise of its right to defer the payment of interest on the
Junior Subordinated Debentures pursuant to the Indenture, the Property Trustee
shall transmit, in the manner and to the extent provided in Section 10.8, notice
of such exercise to the Holders and the Administrators, unless such exercise
shall have been revoked.
SECTION 8.3. Certain Rights of Property Trustee.
Subject to the provisions of Section 8.1:
(a) the Property Trustee may conclusively rely and shall be
fully protected in acting or refraining from acting in good faith upon any
resolution, Opinion of Counsel, certificate, written representation of a Holder
or transferee, certificate of auditors or any other certificate, statement,
instrument, opinion, report, notice, request, consent, order, appraisal, bond,
debenture, note, other evidence of indebtedness or other paper or document
believed by it to be genuine and to have been signed or presented by the proper
party or parties;
(b) any direction or act of the Depositor contemplated by this
Trust Agreement shall be sufficiently evidenced by an Officers' Certificate;
(c) the Property Trustee shall have no duty to see to any
recording, filing or registration of any instrument (including any financing or
continuation statement or any filing under tax or securities laws) or any
re-recording, refiling or re-registration thereof;
(d) the Property Trustee may consult with counsel of its own
choosing (which counsel may be counsel to the Depositor or any of its
Affiliates, and may include any of its employees) and the advice of such counsel
shall be full and complete authorization and protection in respect of any action
taken suffered or omitted by it hereunder in good faith and in reliance thereon
and in accordance with such advice; the Property Trustee shall have the right at
any time to seek instructions concerning the administration of this Trust
Agreement from any court of competent jurisdiction;
(e) the Property Trustee shall be under no obligation to
exercise any of the rights or powers vested in it by this Trust Agreement at the
request or direction of any of the Holders pursuant to this Trust Agreement,
unless such Holders shall have offered to the Property Trustee security or
indemnity satisfactory to it against the costs, expenses and liabilities which
might be incurred by it in compliance with such request or direction; provided
that, nothing contained in this Section 8.3(e) shall be taken to relieve the
Property Trustee, upon the occurrence of an Event of Default, of its obligation
to exercise the rights and powers vested in it by this Trust Agreement;
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(f) the Property Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolution, certificate,
statement, instrument, opinion, report, notice, request, consent, order,
approval, bond, debenture, note or other evidence of indebtedness or other paper
or document, unless requested in writing to do so by one or more Holders, but
the Property Trustee may make such further inquiry or investigation into such
facts or matters as it may see fit;
(g) the Property Trustee may execute any of the trusts or
powers hereunder or perform any of its duties hereunder either directly or by or
through its agents or attorneys, provided that 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;
(h) whenever in the administration of this Trust Agreement the
Property Trustee shall deem it desirable to receive instructions with respect to
enforcing any remedy or right or taking any other action hereunder, the Property
Trustee (i) may request instructions from the Holders (which instructions may
only be given by the Holders of the same proportion in Liquidation Amount of the
Trust Securities as would be entitled to direct the Property Trustee under the
terms of the Trust Securities in respect of such remedy, right or action), (ii)
may refrain from enforcing such remedy or right or taking such other action
until such instructions are received, and (iii) shall be fully protected in
acting in accordance with such instructions; and
(i) except as otherwise expressly provided by this Trust
Agreement, the Property Trustee shall not be under any obligation to take any
action that is discretionary under the provisions of this Trust Agreement.
No provision of this Trust Agreement shall be deemed to impose
any duty or obligation on any Issuer Trustee or Administrator 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 any Issuer Trustee or
Administrator shall be construed to be a duty.
SECTION 8.4. Not Responsible for Recitals or Issuance of
Securities.
The recitals contained herein and in the Trust Securities
Certificates shall be taken as the statements of the Issuer Trust, and the
Issuer Trustees and the Administrators do not assume any responsibility for
their correctness. The Issuer Trustees and the Administrators shall not be
accountable for the use or application by the Depositor of the proceeds of the
Junior Subordinated Debentures.
SECTION 8.5. May Hold Securities.
Except as provided in the definition of the term "Outstanding"
in Article I, the Administrators, any Issuer Trustee or any other agent of any
Issuer Trustee or the Issuer Trust, in its individual or any other capacity, may
become the owner or pledgee of Trust Securities and, subject to Sections 8.8 and
8.13, may otherwise deal with the Issuer Trust with the same rights it would
have if it were not an Administrator, Issuer Trustee or such other agent.
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SECTION 8.6. Compensation; Indemnity; Fees.
The Depositor, as borrower, agrees:
(a) to pay to the Issuer Trustees from time to time reasonable
compensation for all services rendered by them hereunder (which compensation
shall not be limited by any provision of law in regard to the compensation of a
trustee of an express trust);
(b) to reimburse the Issuer Trustees upon request for all
reasonable expenses, disbursements and advances incurred or made by the Issuer
Trustees in accordance with any provision of this Trust Agreement (including the
reasonable compensation, expenses and disbursements of its agents and counsel),
except any such expense, disbursement or advance as may be attributable to their
negligence or willful misconduct; and
(c) to the fullest extent permitted by applicable law, to
indemnify and hold harmless (i) each Issuer Trustee, (ii) each Administrator,
(iii) any Affiliate of any Issuer Trustee, (iv) any officer, director,
shareholder, employee, representative or agent of any Issuer Trustee, and (v)
any employee or agent of the Issuer Trust, (referred to herein as an
"Indemnified Person") from and against any loss, damage, liability, tax,
penalty, expense or claim of any kind or nature whatsoever incurred by such
Indemnified Person arising out of or in connection with the creation, operation
or dissolution of the Issuer Trust or any act or omission performed or omitted
by such Indemnified Person in good faith on behalf of the Issuer Trust and in a
manner such Indemnified Person reasonably believed to be within the scope of
authority conferred on such Indemnified Person by this Trust Agreement, except
that no Indemnified Person shall be entitled to be indemnified in respect of any
loss, damage or claim incurred by such Indemnified Person by reason of
negligence or willful misconduct with respect to such acts or omissions.
The provisions of this Section 8.6 shall survive the
termination of this Trust Agreement.
No Issuer Trustee may claim any Lien on any Trust Property as
a result of any amount due pursuant to this Section 8.6.
The Depositor, any Administrator and any Issuer Trustee may
engage in or possess an interest in other business ventures of any nature or
description, independently or with others, similar or dissimilar to the business
of the Issuer Trust, and the Issuer Trust and the Holders of Trust Securities
shall have no rights by virtue of this Trust Agreement in and to such
independent ventures or the income or profits derived therefrom, and the pursuit
of any such venture, even if competitive with the business of the Issuer Trust,
shall not be deemed wrongful or improper. Neither the Depositor, any
Administrator, nor any Issuer Trustee shall be obligated to present any
particular investment or other opportunity to the Issuer Trust even if such
opportunity is of a character that, if presented to the Issuer Trust, could be
taken by the Issuer Trust, and the Depositor, any Administrator or any Issuer
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 Issuer Trustee may engage or be interested in any
financial or other transaction with the Depositor or any Affiliate of the
Depositor, or may act as depository for, trustee or agent for, or act on any
committee or body of holders of, securities or other obligations of the
Depositor or its Affiliates.
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SECTION 8.7. Corporate Property Trustee Required; Eligibility
of Trustees and Administrators.
(a) There shall at all times be a Property Trustee hereunder
with respect to the Trust Securities. The Property Trustee shall be a Person
that is a national or state chartered bank and eligible pursuant to the Trust
Indenture Act to act as such and has a combined capital and surplus of at least
$50,000,000. If any such Person publishes reports of condition at least
annually, pursuant to law or to the requirements of its supervising or examining
authority, then for the purposes of this Section, the combined capital and
surplus of such Person shall be deemed to be its combined capital and surplus as
set forth in its most recent report of condition so published. If at any time
the Property Trustee with respect to the Trust Securities shall cease to be
eligible in accordance with the provisions of this Section, it shall resign
immediately in the manner and with the effect hereinafter specified in this
Article VIII. At the time of appointment, the Property Trustee must have
securities rated in one of the three highest rating categories by a nationally
recognized statistical rating organization.
(b) There shall at all times be one or more Administrators
hereunder. Each Administrator shall be either a natural person who is at least
21 years of age or a legal entity that shall act through one or more persons
authorized to bind that entity. An employee, officer or Affiliate of the
Depositor may serve as an Administrator.
(c) There shall at all times be a Delaware Trustee. The
Delaware Trustee shall either be (i) a natural person who is at least 21 years
of age and a resident of the State of Delaware or (ii) a legal entity with its
principal place of business in the State of Delaware and that otherwise meets
the requirements of applicable Delaware law that shall act through one or more
persons authorized to bind such entity.
SECTION 8.8. Conflicting Interests.
(a) If the Property Trustee has or shall acquire a conflicting
interest within the meaning of the Trust Indenture Act, the Property Trustee
shall either eliminate such interest or resign, to the extent and in the manner
provided by, and subject to the provisions of, the Trust Indenture Act and this
Trust Agreement.
(b) The Guarantee and the Indenture shall be deemed to be
sufficiently described in this Trust Agreement for the purposes of clause (i) of
the first proviso contained in Section 310(b) of the Trust Indenture Act.
SECTION 8.9. Co-Trustees and Separate Trustee.
Unless an Event of Default shall have occurred and be
continuing, at any time or times, for the purpose of meeting the legal
requirements of the Trust Indenture Act or of any jurisdiction in which any part
of the Trust Property may at the time be located, the Property Trustee shall
have power to appoint, and upon the written request of the Property Trustee, the
Depositor and the Administrators shall for such purpose join with the Property
Trustee in the execution, delivery, and performance of all instruments and
agreements necessary or proper to appoint, one or more Persons approved by the
Property Trustee either to act as co-trustee, jointly with the Property Trustee,
of all or any part of such Trust Property, or to the extent required by law to
act as separate trustee of any such property, in either case with such powers as
may be provided
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in the instrument of appointment, and to vest in such Person or Persons in the
capacity aforesaid, any property, title, right or power deemed necessary or
desirable, subject to the other provisions of this Section. Any co-trustee or
separate trustee appointed pursuant to this Section shall either be (i) a
natural person who is at least 21 years of age and a resident of the United
States or (ii) a legal entity with its principal place of business in the United
States that shall act through one or more persons authorized to bind such
entity.
Should any written instrument from the Depositor be required
by any co-trustee or separate trustee so appointed for more fully confirming to
such co-trustee or separate trustee such property, title, right, or power, any
and all such instruments shall, on request, be executed, acknowledged and
delivered by the Depositor.
Every co-trustee or separate trustee shall, to the extent
permitted by law, but to such extent only, be appointed subject to the following
terms, namely:
(a) The Trust Securities shall be executed by one or more
Administrators, and the Trust Securities shall be authenticated and delivered
and all rights, powers, duties, and obligations hereunder in respect of the
custody of securities, cash and other personal property held by, or required to
be deposited or pledged with, the Property Trustee specified hereunder, shall be
exercised, solely by the Property Trustee and not by such co-trustee or separate
trustee.
(b) The rights, powers, duties, and obligations hereby
conferred or imposed upon the Property Trustee in respect of any property
covered by such appointment shall be conferred or imposed upon and exercised or
performed by the Property Trustee and such co-trustee or separate trustee
jointly, as shall be provided in the instrument appointing such co-trustee or
separate trustee, except to the extent that under any law of any jurisdiction in
which any particular act is to be performed, the Property Trustee shall be
incompetent or unqualified to perform such act, in which event such rights,
powers, duties and obligations shall be exercised and performed by such
co-trustee or separate trustee.
(c) The Property Trustee at any time, by an instrument in
writing executed by it, with the written concurrence of the Depositor, may
accept the resignation of or remove any co-trustee or separate trustee appointed
under this Section, and, in case a Debenture Event of Default has occurred and
is continuing, the Property Trustee shall have power to accept the resignation
of, or remove, any such co-trustee or separate trustee without the concurrence
of the Depositor. Upon the written request of the Property Trustee, the
Depositor shall join with the Property Trustee in the execution, delivery and
performance of all instruments and agreements necessary or proper to effectuate
such resignation or removal. A successor to any co-trustee or separate trustee
so resigned or removed may be appointed in the manner provided in this Section
8.9.
(d) No co-trustee or separate trustee hereunder shall be
personally liable by reason of any act or omission of the Property Trustee or
any other trustee hereunder.
(e) The Property Trustee shall not be liable by reason of any
act of a co-trustee or separate trustee.
(f) Any Act of Holders delivered to the Property Trustee shall
be deemed to have been delivered to each such co-trustee and separate trustee.
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SECTION 8.10. Resignation and Removal; Appointment of
Successor.
No resignation or removal of any Issuer Trustee (the "Relevant
Trustee") and no appointment of a successor trustee pursuant to this Article
shall become effective until the acceptance of appointment by the successor
trustee in accordance with the applicable requirements of Section 8.11.
Subject to the immediately preceding paragraph, a Relevant
Trustee may resign at any time by giving written notice thereof to the Holders.
The Relevant Trustee shall appoint a successor by requesting from at least three
Persons meeting the eligibility requirements its expenses and charges to serve
as the successor trustee on a form provided by the Administrators, and selecting
the Person who agrees to the lowest expenses and charges, subject to the prior
consent of the Depositor which consent shall not be unreasonably withheld. If
the instrument of acceptance by the successor trustee required by Section 8.11
shall not have been delivered to the Relevant Trustee within 60 days after the
giving of such notice of resignation, the Relevant Trustee may petition, at the
expense of the Issuer Trust, any court of competent jurisdiction for the
appointment of a successor Relevant Trustee.
The Property Trustee or the Delaware Trustee may be removed at
any time by Act of the Holders of at least a Majority in Liquidation Amount of
the Capital Securities, delivered to the Relevant Trustee (in its individual
capacity and on behalf of the Issuer Trust) (i) for cause (including upon the
occurrence of an Event of Default described in subparagraph (e) of the
definition thereof with respect to the Relevant Trustee), or (ii) if a Debenture
Event of Default shall have occurred and be continuing at any time.
If any Issuer Trustee shall resign, it shall appoint its
successor. If a resigning Relevant Trustee shall fail to appoint a successor, or
if a Relevant Trustee shall be removed or become incapable of acting as Issuer
Trustee, or if any vacancy shall occur in the office of any Issuer Trustee for
any cause, the Holders of the Capital Securities, by Act of the Holders of
record of not less than 25% in aggregate Liquidation Amount of the Capital
Securities then Outstanding delivered to such Relevant Trustee, shall promptly
appoint a successor Relevant Trustee or Trustees, and such successor Issuer
Trustee shall comply with the applicable requirements of Section 8.11. If no
successor trustee shall have been so appointed by the Holders of the Capital
Securities and accepted appointment in the manner required by Section 8.11, any
Holder, on behalf of himself and all others similarly situated, or any other
Issuer Trustee, may petition any court of competent jurisdiction for the
appointment of a successor trustee.
The Property Trustee shall give notice of each resignation and
each removal of a Relevant Trustee and each appointment of a successor trustee
to all Holders in the manner provided in Section 10.8 and shall give notice to
the Depositor and to the Administrators. Each notice shall include the name of
the Relevant Trustee and the address of its Corporate Trust Office if it is the
Property Trustee.
Notwithstanding the foregoing or any other provision of this
Trust Agreement, in the event any Delaware Trustee who is a natural person dies
or becomes, in the opinion of the Holders of the Common Securities, incompetent
or incapacitated, the vacancy created by such death, incompetence or incapacity
may be filled by the Property Trustee following the procedures regarding
expenses and charges set forth above (with the successor in each case being a
Person who satisfies the eligibility requirement for the Delaware Trustee, as
the case may be, set forth in Section 8.7).
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SECTION 8.11. Acceptance of Appointment by Successor.
In case of the appointment hereunder of a successor Relevant
Trustee, the retiring Relevant Trustee and each such successor Relevant Trustee
with respect to the Trust Securities shall execute, acknowledge and deliver an
amendment hereto wherein each successor Relevant Trustee shall accept such
appointment and which (a) shall contain such provisions as shall be necessary or
desirable to transfer and confirm to, and to vest in, each successor Relevant
Trustee all the rights, powers, trusts and duties of the retiring Relevant
Trustee with respect to the Trust Securities and the Issuer Trust, and (b) shall
add to or change any of the provisions of this Trust Agreement as shall be
necessary to provide for or facilitate the administration of the Issuer Trust by
more than one Relevant Trustee, it being understood that nothing herein or in
such amendment shall constitute such Relevant Trustee a co-trustee and upon the
execution and delivery of such amendment the resignation or removal of the
retiring Relevant Trustee shall become effective to the extent provided therein
and each such successor Relevant Trustee, without any further act, deed or
conveyance, shall become vested with all the rights, powers, trusts and duties
of the retiring Relevant Trustee; but, on request of the Issuer Trust or any
successor Relevant Trustee such retiring Relevant Trustee shall duly assign,
transfer and deliver to such successor Relevant Trustee all Trust Property, all
proceeds thereof and money held by such retiring Relevant Trustee hereunder with
respect to the Trust Securities and the Issuer Trust.
Upon request of any such successor Relevant Trustee, the
Issuer Trust shall execute any and all instruments for more fully and certainly
vesting in and confirming to such successor Relevant Trustee all such rights,
powers and trusts referred to in the first or second preceding paragraph, as the
case may be.
No successor Relevant Trustee shall accept its appointment
unless at the time of such acceptance such successor Relevant Trustee shall be
qualified and eligible under this Article VIII.
SECTION 8.12. Merger, Conversion, Consolidation or Succession
to Business.
Any Person into which the Property Trustee or the Delaware
Trustee may be merged or converted or with which it may be consolidated, or any
Person resulting from any merger, conversion or consolidation to which such
Relevant Trustee shall be a party, or any Person succeeding to all or
substantially all the corporate trust business of such Relevant Trustee, shall
be the successor of such Relevant Trustee hereunder, provided that such Person
shall be otherwise qualified and eligible under this Article VIII, without the
execution or filing of any paper or any further act on the part of any of the
parties hereto.
SECTION 8.13. Preferential Collection of Claims Against
Depositor or Issuer Trust.
If and when the Property Trustee shall be or become a creditor
of the Depositor (or any other obligor upon the Trust Securities), the Property
Trustee shall be subject to the provisions of the Trust Indenture Act regarding
the collection of claims against the Depositor (or any such other obligor) only
if this Trust Agreement is subject to the Trust Indenture Act.
SECTION 8.14. 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 Issuer Trust or any
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other obligor upon the Trust Securities or the property of the Issuer Trust or
of such other obligor, the Property Trustee (irrespective of whether any
Distributions on the Trust Securities shall then be due and payable and
irrespective of whether the Property Trustee shall have made any demand on the
Issuer Trust for the payment of any past due Distributions) shall be entitled
and empowered, to the fullest extent permitted by law, by intervention in such
proceeding or otherwise:
(a) to file and prove a claim for the whole amount of any
Distributions owing and unpaid in respect of the Trust Securities and to file
such other papers or documents as may be necessary or advisable in order to have
the claims of the Property Trustee (including any claim for the reasonable
compensation, expenses, disbursements and advances of the Property Trustee, its
agents and counsel) and of the Holders allowed in such judicial proceeding; and
(b) to collect and receive any monies or other property
payable or deliverable on any such claims and to distribute the same; and any
custodian, receiver, assignee, trustee, liquidator, sequestrator or other
similar official in any such judicial proceeding is hereby authorized by each
Holder to make such payments to the Property Trustee and, in the event the
Property Trustee shall consent to the making of such payments directly to the
Holders, to pay to the Property Trustee any amount due it for the reasonable
compensation, expenses, disbursements and advances of the Property Trustee, its
agents and counsel, and any other amounts due the Property Trustee.
Nothing herein contained shall be deemed to authorize the
Property Trustee to authorize or consent to or accept or adopt on behalf of any
Holder any plan of reorganization, arrangement, adjustment or compensation
affecting the Trust Securities or the rights of any Holder thereof or to
authorize the Property Trustee to vote in respect of the claim of any Holder in
any such proceeding.
SECTION 8.15. Reports by Property Trustee.
(a) Not later than January 31 of each year commencing with
January 31, 1999, the Property Trustee shall transmit to all Holders in
accordance with Section 10.8, and to the Depositor, a brief report dated as of
the immediately preceding December 31 with respect to:
(i) its eligibility under Section 8.7 or, in lieu
thereof, if to the best of its knowledge it has continued to
be eligible under said Section, a written statement to such
effect; and
(ii) any change in the property and funds in its
possession as Property Trustee since the date of its last
report and any action taken by the Property Trustee in the
performance of its duties hereunder which it has not
previously reported and which in its opinion materially
affects the Trust Securities.
(b) In addition the Property Trustee shall transmit to
Holders such reports concerning the Property Trustee and its actions under this
Trust Agreement as may be required pursuant to the Trust Indenture Act at the
times and in the manner provided pursuant thereto.
(c) A copy of each such report shall, at the time of such
transmission to Holders, be filed by the Property Trustee with the Depositor.
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SECTION 8.16. Reports to the Property Trustee.
The Depositor and the Administrators on behalf of the Issuer
Trust shall provide to the Property Trustee such documents, reports and
information as required by Section 314 of the Trust Indenture Act (if any) and
the compliance certificate required by Section 314(a) of the Trust Indenture Act
in the form, in the manner and at the times required by Section 314 of the Trust
Indenture Act. The Depositor and the Administrators shall annually file with the
Property Trustee a certificate specifying whether such Person is in compliance
with all the terms and covenants applicable to such Person hereunder.
SECTION 8.17. Evidence of Compliance with Conditions
Precedent.
Each of the Depositor and the Administrators on behalf of the
Issuer Trust shall provide to the Property Trustee such evidence of compliance
with any conditions precedent, if any, provided for in this Trust Agreement that
relate to any of the matters set forth in Section 314(c) of the Trust Indenture
Act. Any certificate or opinion required to be given by an officer pursuant to
Section 314(c)(1) of the Trust Indenture Act shall be given in the form of an
Officers' Certificate.
SECTION 8.18. Number of Issuer Trustees.
(a) The number of Issuer Trustees shall be two. The Property
Trustee and the Delaware Trustee may be the same Person, in which case, the
number of Issuer Trustees may be one.
(b) If an Issuer Trustee ceases to hold office for any reason,
a vacancy shall occur. The vacancy shall be filled with an Issuer Trustee
appointed in accordance with Section 8.10.
(c) The death, resignation, retirement, removal, bankruptcy,
incompetence or incapacity to perform the duties of an Issuer Trustee shall not
operate to dissolve, terminate or annul the Issuer Trust or terminate this Trust
Agreement.
SECTION 8.19. Delegation of Power.
(a) Any Administrator may, by power of attorney consistent
with applicable law, delegate to any other natural person over the age of 21 his
or her power for the purpose of executing any documents contemplated in Section
2.7(a) or making any governmental filing; and
(b) The Administrators shall have power to delegate from time
to time to such of their number the doing of such things and the execution of
such instruments either in the name of the Issuer Trust or the names of the
Administrators or otherwise as the Administrators may deem expedient, to the
extent such delegation is not prohibited by applicable law or contrary to the
provisions of this Trust Agreement.
SECTION 8.20. Appointment of Administrators.
(a) The Administrators shall be appointed by the Holders of a
Majority in Liquidation Amount of the Common Securities and may be removed by
the Holders of a Majority in
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Liquidation Amount of the Common Securities or may resign at any time. Upon any
resignation or removal, the Depositor shall appoint a successor Administrator.
Each Administrator shall execute this Trust Agreement thereby agreeing to comply
with, and be legally bound by, all of the terms, conditions and provisions of
this Trust Agreement. If at any time there is no Administrator, the Property
Trustee or any Holder who has been a Holder of Trust Securities for at least six
months may petition any court of competent jurisdiction for the appointment of
one or more Administrators.
(b) Whenever a vacancy in the number of Administrators shall
occur, until such vacancy is filled by the appointment of an Administrator in
accordance with this Section 8.20, the Administrators in office, regardless of
their number (and notwithstanding any other provision of this Agreement), shall
have all the powers granted to the Administrators and shall discharge all the
duties imposed upon the Administrators by this Trust Agreement.
(c) Notwithstanding the foregoing, or any other provision of
this Trust Agreement, in the event any Administrator who is a natural person
dies or becomes, in the opinion of the Holders of a Majority in Liquidation
Amount of the Common Securities, incompetent, or incapacitated, the vacancy
created by such death, incompetence or incapacity may be filled by the remaining
Administrators, if there were at least two of them prior to such vacancy, and by
the Depositor, if there were not two such Administrators immediately prior to
such vacancy (with the successor in each case being a Person who satisfies the
eligibility requirement for Administrators, as the case may be, set forth in
Section 8.7).
Except as otherwise provided in this Trust Agreement, or by
applicable law, any one Administrator may execute any document or otherwise take
any action which the Administrators are authorized to take under this Trust
Agreement.
ARTICLE IX
DISSOLUTION, LIQUIDATION AND MERGER
SECTION 9.1. Dissolution Upon Expiration Date.
Unless earlier dissolved, the Issuer Trust shall automatically
dissolve on April 3, 2029 (the "Expiration Date"), and thereafter the Trust
Property shall be distributed in accordance with Section 9.4.
SECTION 9.2. Early Dissolution.
The first to occur of any of the following events is an "Early
Termination Event," upon the occurrence of which the Issuer Trust shall
dissolve:
(a) the occurrence of the appointment of a receiver or other
similar official in any liquidation, insolvency or similar proceeding with
respect to the Depositor or all or substantially all of its property, or a court
or other governmental agency shall enter a decree or order and such decree or
order shall remain unstayed and undischarged for a period of 60 days, unless the
Depositor shall transfer the Common Securities as provided by Section 5.11, in
which case this provision shall refer instead to any such successor Holder of
the Common Securities;
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(b) the written direction to the Property Trustee from the
Holder of the Common Securities at any time to dissolve the Issuer Trust and to
distribute the Junior Subordinated Debentures to Holders in exchange for the
Capital Securities (which direction, subject to Section 9.4(a), is optional and
wholly within the discretion of the Holder of the Common Securities);
(c) the redemption of all of the Capital Securities in
connection with the redemption of all the Junior Subordinated Debentures; and
(d) the entry of an order for dissolution of the Issuer
Trust by a court of competent jurisdiction.
SECTION 9.3. Termination.
As soon as is practicable after the occurrence of an event
referred to in Section 9.1 or 9.2, and upon the completion of the winding-up and
liquidation of the Issuer Trust, the Administrators and the Issuer Trustees
(each of whom is hereby authorized to take such action) shall file a certificate
of cancellation with the Secretary of State of the State of Delaware terminating
the Issuer Trust and, upon such filing, the respective obligations and
responsibilities of the Issuer Trustees, the Administrators and the Issuer Trust
created and continued hereby shall terminate.
SECTION 9.4. Liquidation.
(a) If an Early Termination Event specified in clause (a),
(b) or (Debentures) of Section 9.2 occurs or upon the Expiration Date, the
Issuer Trust shall be wound-up and liquidated by the Property Trustee as
expeditiously as the Property Trustee determines to be possible by distributing,
after paying or making reasonable provision to pay all claims and obligations of
the Issuer Trust in accordance with Section 3808(e) of the Delaware Business
Trust Act, to each Holder a Like Amount of Junior Subordinated Debentures,
subject to Section 9.4(d). Notice of liquidation shall be given by the Property
Trustee by first-class mail, postage prepaid, mailed not later than 15 nor more
than 45 days prior to the Liquidation Date to each Holder of Trust Securities at
such Holder's address appearing in the Securities Register. All notices of
liquidation shall:
(i) state the Liquidation Date;
(ii) state that, from and after the Liquidation
Date, the Trust Securities will no longer be deemed to be
Outstanding and any Trust Securities Certificates not
surrendered for exchange will be deemed to represent a Like
Amount of Junior Subordinated Debentures; and
(iii) provide such information with respect to the
mechanics by which Holders may exchange Trust Securities
Certificates for Junior Subordinated Debentures, or if Section
9.4(d) applies receive a Liquidation Distribution, as the
Administrators or the Property Trustee shall deem appropriate.
(b) Except where Section 9.2(c) or 9.4(d) applies, in
order to effect the liquidation of the Issuer Trust and distribution of the
Junior Subordinated Debentures to Holders, the Property Trustee
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shall establish a record date for such distribution (which shall be not more
than 30 days prior to the Liquidation Date) and, either itself acting as
exchange agent or through the appointment of a separate exchange agent, shall
establish such procedures as it shall deem appropriate to effect the
distribution of Junior Subordinated Debentures in exchange for the Outstanding
Trust Securities Certificates.
(c) Except where Section 9.2(c) or 9.4(d) applies, after the
Liquidation Date, (i) the Trust Securities will no longer be deemed to be
Outstanding, (ii) the Clearing Agency for the Capital Securities or its nominee,
as the registered holder of the Global Capital Securities Certificate, shall
receive a registered global certificate or certificates representing the Junior
Subordinated Debentures to be delivered upon such distribution with respect to
Capital Securities held by the Clearing Agency or its nominee, and, (iii) any
Trust Securities Certificates not held by the Clearing Agency for the Capital
Securities or its nominee as specified in clause (ii) above will be deemed to
represent Junior Subordinated Debentures having a principal amount equal to the
stated Liquidation Amount of the Trust Securities represented thereby and
bearing accrued and unpaid interest in an amount equal to the accumulated and
unpaid Distributions on such Trust Securities until such certificates are
presented to the Securities Registrar for transfer or reissuance.
(d) If, notwithstanding the other provisions of this Section
9.4, whether because of an order for dissolution entered by a court of competent
jurisdiction or otherwise, distribution of the Junior Subordinated Debentures is
not practical, or if any Early Termination Event specified in clause (c) of
Section 9.2 occurs, the Issuer Trust shall be dissolved, and the Trust Property
shall be liquidated, by the Property Trustee in such manner as the Property
Trustee determines. In such event, on the date of the dissolution of the Issuer
Trust, Holders will be entitled to receive out of the assets of the Issuer Trust
available for distribution to Holders, after paying or making reasonable
provision to pay all claims and obligations of the Issuer Trust in accordance
with Section 3808(e) of the Delaware Business Trust Act, an amount equal to the
aggregate of Liquidation Amount per Trust Security plus accumulated and unpaid
Distributions thereon to the date of payment (such amount being the "Liquidation
Distribution"). If, upon any such dissolution, the Liquidation Distribution can
be paid only in part because the Issuer Trust has insufficient assets available
to pay in full the aggregate Liquidation Distribution, then, subject to the next
succeeding sentence, the amounts payable by the Issuer Trust on the Trust
Securities shall be paid on a pro rata basis (based upon Liquidation Amounts).
The Holders of the Common Securities will be entitled to receive Liquidation
Distributions upon any such dissolution, pro rata (determined as aforesaid) with
Holders of Capital Securities, except that, if a Debenture Event of Default has
occurred and is continuing, the Capital Securities shall have a priority over
the Common Securities as provided in Section 4.3.
SECTION 9.5. Mergers, Consolidations, Amalgamations or
Replacements of the Issuer Trust.
The Issuer Trust may not merge with or into, consolidate,
amalgamate, or be replaced by, or convey, transfer or lease its properties and
assets substantially as an entirety to, any entity, except pursuant to this
Section 9.5 or Section 9.4. At the request of the Holders of the Common
Securities, and with the consent of the Holders of at least a Majority in
Liquidation Amount of the Capital Securities, but without the consent of the
Issuer Trustees, the Issuer Trust may merge with or into, consolidate,
amalgamate, or be replaced by or convey, transfer or lease its properties and
assets substantially as an entirety to a trust organized as such under the laws
of any state; provided, however, that (i) such successor entity either (a)
expressly assumes all of the obligations of the Issuer Trust with respect to the
Capital Securities or (b) substitutes for the Capital Securities other
securities having substantially the same terms as the Capital Securities (the
"Successor Capital Securities") so long as the Successor Capital Securities have
the same
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priority as the Capital Securities with respect to distributions and payments
upon liquidation, redemption and otherwise, (ii) a trustee of such successor
entity possessing the same powers and duties as the Property Trustee is
appointed to hold the Junior Subordinated Debentures, (iii) such merger,
consolidation, amalgamation, replacement, conveyance, transfer or lease does not
cause the Capital Securities (including any Successor Capital Securities) to be
downgraded by any nationally recognized statistical rating organization, (iv)
such merger, consolidation, amalgamation, replacement, conveyance, transfer or
lease does not adversely affect the rights, preferences and privileges of the
holders of the Capital Securities (including any Successor Capital Securities)
in any material respect, (v) such successor entity has a purpose substantially
identical to that of the Issuer Trust, (vi) prior to such merger, consolidation,
amalgamation, replacement, conveyance, transfer or lease, the Issuer Trustee has
received an Opinion of Counsel from independent counsel 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 Capital Securities) in any material respect, and (b) following
such merger, consolidation, amalgamation, replacement, conveyance, transfer or
lease, neither the Issuer Trust nor such successor entity will be required to
register as an "investment company" under the Investment Company Act and (vii)
the Depositor or any permitted transferee to whom it has transferred the Common
Securities hereunder owns all of the common securities of such successor entity
and guarantees the obligations of such successor entity under the Successor
Capital Securities at least to the extent provided by the Guarantee.
Notwithstanding the foregoing, the Issuer Trust shall not, except with the
consent of holders of 100% in Liquidation Amount of the Capital Securities,
consolidate, amalgamate, merge with or into, or be replaced by or convey,
transfer or lease its properties and assets substantially as an entirety to, any
other entity or permit any other entity to consolidate, amalgamate, merge with
or into, or replace it if such consolidation, amalgamation, merger, replacement,
conveyance, transfer or lease would cause the Issuer Trust or the successor
entity to be taxable other than as a grantor trust for United States Federal
income tax purposes.
ARTICLE X
MISCELLANEOUS PROVISIONS
SECTION 10.1. Limitation of Rights of Holders.
Except as set forth in Section 9.2, the bankruptcy,
dissolution, termination, death or incapacity of any Person having an interest,
beneficial or otherwise, in Trust Securities shall not operate to terminate this
Trust Agreement, or dissolve, terminate, or annul the Issuer Trust, nor entitle
the legal representatives or heirs of such person or any Holder for such person,
to claim an accounting, take any action or bring any proceeding in any court for
a partition or winding-up of the arrangements contemplated hereby, nor otherwise
affect the rights, obligations and liabilities of the parties hereto or any of
them. Any merger or similar agreement shall be executed by the Administrators on
behalf of the Issuer Trust.
SECTION 10.2. Amendment.
(a) This Trust Agreement may be amended from time to time by
the Property Trustee and the Holders of a Majority in Liquidation Amount of the
Common Securities, without the consent of any Holder of the Capital Securities
(i) to cure any ambiguity, correct or supplement any provision herein which may
be inconsistent with any other provision herein, or to make any other provisions
with respect to
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matters or questions arising under this Trust Agreement, provided, however, that
such amendment shall not adversely affect in any material respect the interests
of any Holder or (ii) to modify, eliminate or add to any provisions of this
Trust Agreement to such extent as shall be necessary to ensure that the Issuer
Trust will not be taxable other than as a grantor trust for United States
Federal income tax purposes at any time that any Trust Securities are
Outstanding or to ensure that the Issuer Trust will not be required to register
as an investment company under the Investment Company Act.
(b) Except as provided in Section 10.2(c) hereof, any
provision of this Trust Agreement may be amended by the Property Trustee and the
Holders of a Majority in Liquidation Amount of the Common Securities with (i)
the consent of Holders of at least a Majority in Liquidation Amount of the
Capital Securities and (ii) receipt by the Issuer Trustees of an Opinion of
Counsel to the effect that such amendment or the exercise of any power granted
to the Issuer Trustees in accordance with such amendment will not affect the
Issuer Trust's being taxable as a grantor trust for United States Federal income
tax purposes or the Issuer Trust's exemption from status of an "investment
company" under the Investment Company Act.
(c) In addition to and notwithstanding any other provision in
this Trust Agreement, without the consent of each affected Holder (such consent
being obtained in accordance with Section 6.3 or 6.6 hereof), this Trust
Agreement may not be amended to (i) change the amount or timing of any
Distribution on the Trust Securities or otherwise adversely affect the amount of
any Distribution required to be made in respect of the Trust Securities as of a
specified date or (ii) restrict the right of a Holder to institute suit for the
enforcement of any such payment on or after such date.
(d) Notwithstanding any other provisions of this Trust
Agreement, no Issuer Trustee shall enter into or consent to any amendment to
this Trust Agreement which would cause the Issuer Trust to fail or cease to
qualify for the exemption from status as an "investment company" under the
Investment Company Act or be taxable other than as a grantor trust for United
States Federal income tax purposes.
(e) Notwithstanding anything in this Trust Agreement to the
contrary, without the consent of the Depositor and the Administrators, this
Trust Agreement may not be amended in a manner which imposes any additional
obligation on the Depositor or the Administrators.
(f) In the event that any amendment to this Trust Agreement is
made, the Administrators or the Property Trustee shall promptly provide to the
Depositor a copy of such amendment.
(g) Neither the Property Trustee nor the Delaware Trustee
shall be required to enter into any amendment to this Trust Agreement which
affects its own rights, duties or immunities under this Trust Agreement. The
Property Trustee shall be entitled to receive an Opinion of Counsel and an
Officers' Certificate stating that any amendment to this Trust Agreement is in
compliance with this Trust Agreement.
(h) Any amendments to this Trust Agreement pursuant to Section
10.2(a) shall become effective when notice of such amendment is given to the
Holders of the Trust Securities.
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SECTION 10.3. Separability.
In case any provision in this Trust Agreement or in the Trust
Securities Certificates shall be invalid, illegal or unenforceable, the
validity, legality and enforceability of the remaining provisions shall not in
any way be affected or impaired thereby.
SECTION 10.4. Governing Law.
THIS TRUST AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF EACH OF
THE HOLDERS, THE ISSUER TRUST, THE DEPOSITOR, THE ISSUER TRUSTEES AND THE
ADMINISTRATORS SHALL BE GOVERNED BY AND INTERPRETED IN ACCORDANCE WITH THE LAWS
OF THE STATE OF DELAWARE AND ALL RIGHTS AND REMEDIES SHALL BE GOVERNED BY SUCH
LAWS WITHOUT REGARD TO THE PRINCIPLES OF CONFLICT OF LAWS OF THE STATE OF
DELAWARE OR ANY OTHER JURISDICTION THAT WOULD CALL FOR THE APPLICATION OF THE
LAW OF ANY JURISDICTION OTHER THAN THE STATE OF DELAWARE; PROVIDED, HOWEVER,
THAT THERE SHALL NOT BE APPLICABLE TO THE HOLDERS, THE ISSUER TRUST, THE
DEPOSITOR, THE ISSUER TRUSTEES, THE ADMINISTRATORS OR THIS TRUST AGREEMENT ANY
PROVISION OF THE LAWS (STATUTORY OR COMMON) OF THE STATE OF DELAWARE PERTAINING
TO TRUSTS OTHER THAN THE DELAWARE BUSINESS TRUST ACT THAT RELATE TO OR REGULATE,
IN A MANNER INCONSISTENT WITH THE TERMS HEREOF (A) THE FILING WITH ANY COURT OR
GOVERNMENTAL BODY OR AGENCY OF TRUSTEE ACCOUNTS OR SCHEDULES OF TRUSTEE FEES AND
CHARGES, (B) AFFIRMATIVE REQUIREMENTS TO POST BONDS FOR TRUSTEES, OFFICERS,
AGENTS OR EMPLOYEES OF A TRUST, (C) THE NECESSITY FOR OBTAINING COURT OR OTHER
GOVERNMENTAL APPROVAL CONCERNING THE ACQUISITION, HOLDING OR DISPOSITION OF REAL
OR PERSONAL PROPERTY, (D) FEES OR OTHER SUMS PAYABLE TO TRUSTEES, OFFICERS,
AGENTS OR EMPLOYEES OF A TRUST, (E) THE ALLOCATION OF RECEIPTS AND EXPENDITURES
TO INCOME OR PRINCIPAL, (F) RESTRICTIONS OR LIMITATIONS ON THE PERMISSIBLE
NATURE, AMOUNT OR CONCENTRATION OF TRUST INVESTMENTS OR REQUIREMENTS RELATING TO
THE TITLING, STORAGE OR OTHER MANNER OF HOLDING OR INVESTING TRUST ASSETS OR (G)
THE ESTABLISHMENT OF FIDUCIARY OR OTHER STANDARDS OF RESPONSIBILITY OR
LIMITATIONS ON THE ACTS OR POWERS OF TRUSTEES THAT ARE INCONSISTENT WITH THE
LIMITATIONS OR LIABILITIES OR AUTHORITIES AND POWERS OF THE ISSUER TRUSTEES OR
THE ADMINISTRATOR AS SET FORTH OR REFERENCED IN THIS TRUST AGREEMENT. SECTION
3540 OF TITLE 12 OF THE DELAWARE CODE SHALL NOT APPLY TO THE ISSUER TRUST.
SECTION 10.5. Payments Due on Non-Business Day.
If the date fixed for any payment on any Trust Security shall
be a day that is not a Business Day, then such payment need not be made on such
date but may be made on the next succeeding day that is a Business Day (except
as otherwise provided in Sections 4.2(Debentures)), with the same force and
effect as though made on the date fixed for such payment, and no Distributions
shall accumulate on such unpaid amount for the period after such date.
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SECTION 10.6. Successors.
This Trust Agreement shall be binding upon and shall inure to
the benefit of any successor to the Depositor, the Issuer Trust, the
Administrators and any Issuer Trustee, including any successor by operation of
law. Except in connection with a consolidation, merger or sale involving the
Depositor that is permitted under Article VIII of the Indenture and pursuant to
which the assignee agrees in writing to perform the Depositor's obligations
hereunder, the Depositor shall not assign its obligations hereunder.
SECTION 10.7. Headings.
The Article and Section headings are for convenience only and
shall not affect the construction of this Trust Agreement.
SECTION 10.8. Reports, Notices and Demands.
Any report, notice, demand or other communication that by any
provision of this Trust Agreement is required or permitted to be given or served
to or upon any Holder or the Depositor may be given or served in writing by
deposit thereof, first class postage prepaid, in the United States mail, hand
delivery or facsimile transmission, in each case, addressed, (a) in the case of
a Holder of Capital Securities, to such Holder as such Holder's name and address
may appear on the Securities Register; and (b) in the case of the Holder of
Common Securities or the Depositor, to Provident Bankshares Corporation, 114
East Lexington Street, Baltimore, Maryland 21202, Attention: James R. Wallis,
facsimile no.: (410) 277-2887 or to such other address as may be specified in a
written notice by the Depositor to the Property Trustee. Such notice, demand or
other communication to or upon a Holder shall be deemed to have been
sufficiently given or made, for all purposes, upon hand delivery, mailing or
transmission. Such notice, demand or other communication to or upon the
Depositor shall be deemed to have been sufficiently given or made only upon
actual receipt of the writing by the Depositor.
Any notice, demand or other communication which by any
provision of this Trust Agreement is required or permitted to be given or served
to or upon the Property Trustee, the Delaware Trustee, the Administrators, or
the Issuer Trust shall be given in writing addressed (until another address is
published by the Issuer Trust) as follows: (a) with respect to the Property
Trustee to Bankers Trust Company, Four Albany Street, 4th Floor, New York, NY
10006, Attention: Corporate Trust and Agency Group-Corporate Market Services;
(b) with respect to the Delaware Trustee to Bankers Trust (Delaware), E.A. Delle
Donne Corporate Center, Montgomery Building, 1011 Centre Road, Suite 200,
Wilmington, Delaware 19805-1266, Attention: Lisa Wilkins; (c) with respect to
the Administrators, to them at the address above for notices to the Depositor,
marked "Attention: Office of the Secretary"; and (d) with respect to the Issuer
Trust, to Provident Trust I, 114 East Lexington Street, Baltimore, Maryland,
21202, Attention: James R. Wallis. Such notice, demand or other communication to
or upon the Property Trustee or the Administrator shall be deemed to have been
sufficiently given or made only upon actual receipt of the writing by the Issuer
Trust, the Property Trustee, or such Administrator.
SECTION 10.9. Agreement Not to Petition.
Each of the Issuer Trustees, the Administrators and the
Depositor agree for the benefit of the Holders that, until at least one year and
one day after the Issuer Trust has been terminated in accordance
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<PAGE> 63
with Article IX, they shall not file, or join in the filing of, a petition
against the Issuer Trust under any bankruptcy, insolvency, reorganization or
other similar law (including, without limitation, the United States Bankruptcy
Code) (collectively, "Bankruptcy Laws") or otherwise join in the commencement of
any proceeding against the Issuer Trust under any Bankruptcy Law. In the event
the Depositor takes action in violation of this Section 10.9, the Property
Trustee agrees, for the benefit of Holders, that at the expense of the
Depositor, it shall file an answer with the bankruptcy court or otherwise
properly contest the filing of such petition by the Depositor against the Issuer
Trust or the commencement of such action and raise the defense that the
Depositor has agreed in writing not to take such action and should be estopped
and precluded therefrom and such other defenses, if any, as counsel for the
Issuer Trustee or the Issuer Trust may assert. If any Issuer Trustee or
Administrator takes action in violation of this Section 10.9, the Depositor
agrees, for the benefit of the Holders, that at the expense of the Depositor, it
shall file an answer with the bankruptcy court or otherwise properly contest the
filing of such petition by such Person against the Issuer Trust or the
commencement of such action and raise the defense that such Person has agreed in
writing not to take such action and should be estopped and precluded therefrom
and such other defenses, if any, as counsel for the Depositor or the Issuer
Trust may assert. The provisions of this Section 10.9 shall survive the
termination of this Trust Agreement.
SECTION 10.10. Trust Indenture Act; Conflict with Trust
Indenture Act.
(a) Trust Indenture Act; Application. (i) This Trust Agreement
is subject to the provisions of the Trust Indenture Act that are required to be
a part of this Trust Agreement and shall, to the extent applicable, be governed
by such provisions; (ii) if and to the extent that any provision of this Trust
Agreement limits, qualifies or conflicts with the duties imposed by Sections 310
to 317, inclusive, of the Trust Indenture Act, such imposed duties shall
control; (iii) for purposes of this Trust Agreement, the Property Trustee, to
the extent permitted by applicable law and/or the rules and regulations of the
Commission, shall be the only Issuer Trustee which is a trustee for the purposes
of the Trust Indenture Act; and (iv) the application of the Trust Indenture Act
to this Trust Agreement shall not affect the nature of the Capital Securities
and the Common Securities as equity securities representing undivided beneficial
interests in the assets of the Issuer Trust.
(b) Lists of Holders of Preferred Securities. (i) Each of the
Depositor and the Administrators on behalf of the Trust shall provide the
Property Trustee with such information as is required under Section 312(a) of
the Trust Indenture Act at the times and in the manner provided in Section
312(a) and (ii) the Property Trustee shall comply with its obligations under
Sections 310(b), 311 and 312(b) of the Trust Indenture Act.
(c) Reports by the Property Trustee. Within 60 days after May
15 of each year, the Property Trustee shall provide to the Holders of the Trust
Securities such reports as are required by Section 313 of the Trust Indenture
Act, if any, in the form, in the manner and at the times 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.
(d) Periodic Reports to Property Trustee. Each of the
Depositor and the Administrators on behalf of the Issuer Trust shall provide to
the Property Trustee, the Commission and the Holders of the Trust Securities, as
applicable, such documents, reports and information as required by Section
315(a)(1) - (3) (if any) of the Trust Indenture Act and the compliance
certificates required by
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<PAGE> 64
Section 314(a)(4) and (c) of the Trust Indenture Act (provided that any
certificate to be provided pursuant to Section 314(a)(4) of the Trust Indenture
Act shall be provided within 120 days of the end of each fiscal year of the
Issuer Trust).
(e) Evidence of Compliance with Conditions Precedent. Each of
the Depositor and the Administrators on behalf of the Issuer Trust shall provide
to the Property Trustee such evidence of compliance with any conditions
precedent, if any, provided for in this Trust Agreement which 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 pursuant to Section 314(c) shall
comply with Section 314(e) of the Trust Indenture Act.
(f) Disclosure Information. The disclosure of information as
to the names and addresses of the Holders of Trust 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 Property 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 10.11. Acceptance of Terms of Trust Agreement,
Guarantee and Indenture.
THE RECEIPT AND ACCEPTANCE OF A TRUST SECURITY OR ANY INTEREST
THEREIN BY OR ON BEHALF OF A HOLDER OR ANY BENEFICIAL OWNER, WITHOUT ANY
SIGNATURE OR FURTHER MANIFESTATION OF ASSENT, SHALL CONSTITUTE THE UNCONDITIONAL
ACCEPTANCE BY THE HOLDER AND ALL OTHERS HAVING A BENEFICIAL INTEREST IN SUCH
TRUST SECURITY OF ALL THE TERMS AND PROVISIONS OF THIS TRUST AGREEMENT, THE
GUARANTEE AND THE INDENTURE, AND THE AGREEMENT TO THE SUBORDINATION PROVISIONS
AND OTHER TERMS OF THE GUARANTEE AND THE INDENTURE, AND SHALL CONSTITUTE THE
AGREEMENT OF THE ISSUER TRUST, SUCH HOLDER AND SUCH OTHERS THAT THE TERMS AND
PROVISIONS OF THIS TRUST AGREEMENT SHALL BE BINDING, OPERATIVE AND EFFECTIVE AS
BETWEEN THE ISSUER TRUST AND SUCH HOLDER AND SUCH OTHERS.
ARTICLE XI
REGISTRATION RIGHTS
Section 11.1. Registration Rights. The Holders of the Capital
Securities and the holders of the Junior Subordinated Debentures are entitled to
the benefits of the Registration Rights Agreement. In certain limited
circumstances set forth in the Registration Rights Agreement, the Depositor
shall be required to pay liquidated damages with respect to the Junior
Subordinated Debentures and, therefore, the Issuer Trust also shall be required
to pay additional Distributions on the Capital Securities.
* * * *
This instrument may be executed in any number of counterparts,
each of which so executed shall be deemed to be an original, but all such
counterparts shall together constitute but one and the same instrument.
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<PAGE> 65
IN WITNESS WHEREOF, the parties hereto have caused this Trust
Agreement to be duly executed, all as of the day and year first above written.
PROVIDENT BANKSHARES CORPORATION
as Depositor
By: /s/ James R. Wallis
----------------------------------------
Name: James R. Wallis
Title: Executive Vice President and
Chief Financial Officer
BANKERS TRUST COMPANY,
as Property Trustee, and not in its individual
capacity
By: /s/ Sandra J. Shaffer
----------------------------------------
Name: Sandra J. Shaffer
Title: Assistant Vice President
BANKERS TRUST (DELAWARE),
as Delaware Trustee, and not
in its individual capacity
By: /s/ James H. Stallkamp
----------------------------------------
Name: James H. Stallkamp
Title: President
Agreed to and Accepted by,
/s/ James R. Wallis
- --------------------------
Name: James R. Wallis
Title: Administrator
/s/ Robert L. Davis
- ---------------------------
Name: Robert L. Davis
Title: Administrator
-60-
<PAGE> 1
EXHIBIT 4.5
GLOBAL
EXCHANGE CAPITAL SECURITIES CERTIFICATE
This Exchange Capital Securities Certificate is an Exchange
Global Capital Securities Certificate within the meaning of the Trust Agreement
hereinafter referred to and is registered in the name of a Depositary or a
nominee of a Depositary. This Exchange Capital Securities Certificate is
exchangeable for Exchange Capital Securities Certificates registered in the
name of a Person other than the Depositary or its nominee only in the limited
circumstances described in the Trust Agreement and may not be transferred
except as a whole by the Depositary to a nominee of the Depositary or by a
nominee of the Depositary to the Depositary or another nominee of the
Depositary, except in the limited circumstances described in the Trust
Agreement.
Unless this Exchange Capital Securities Certificate is
presented by an authorized representative of The Depository Trust Company, a New
York Corporation ("DTC"), to Provident Trust I or its agent for registration of
transfer, exchange or payment, and any Exchange Capital Securities Certificate
issued is registered in the name of Cede & Co. or such other name as is
requested by an authorized representative of DTC (and any payment is made to
Cede & Co. or to such other entity as is requested by an authorized
representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO A PERSON IS WRONGFUL inasmuch as the registered owner hereof,
Cede & Co., has an interest herein.
THE EXCHANGE CAPITAL SECURITIES WILL BE ISSUED AND MAY BE
TRANSFERRED ONLY IN BLOCKS HAVING A LIQUIDATION AMOUNT OF NOT LESS THAN $100,000
(100 CAPITAL SECURITIES). ANY SUCH TRANSFER OF EXCHANGE CAPITAL SECURITIES IN A
BLOCK HAVING A LIQUIDATION AMOUNT OF LESS THAN $100,000 SHALL BE DEEMED TO BE
VOID AND OF NO LEGAL EFFECT WHATSOEVER. ANY SUCH TRANSFEREE SHALL BE DEEMED NOT
TO BE THE HOLDER OF SUCH EXCHANGE CAPITAL SECURITIES FOR ANY PURPOSE, INCLUDING
BUT NOT LIMITED TO THE RECEIPT OF DISTRIBUTIONS OF SUCH EXCHANGE CAPITAL
SECURITIES, AND SUCH TRANSFEREE SHALL BE DEEMED TO HAVE NO INTEREST WHATSOEVER
IN SUCH EXCHANGE CAPITAL SECURITIES.
NO EMPLOYEE BENEFIT OR OTHER PLAN OR INDIVIDUAL RETIREMENT
ACCOUNT SUBJECT TO TITLE I OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF
1974, AS AMENDED ("ERISA"), OR SECTION 4975 OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED (THE "CODE") (EACH, A "PLAN"), NO ENTITY WHOSE UNDERLYING
ASSETS INCLUDE "PLAN ASSETS" BY REASON OF ANY PLAN'S INVESTMENT IN THE ENTITY (A
"PLAN ASSET ENTITY"), AND NO PERSON INVESTING
1
<PAGE> 2
"PLAN ASSETS" OF ANY PLAN, MAY ACQUIRE OR HOLD THIS EXCHANGE CAPITAL SECURITIES
CERTIFICATE OR ANY INTEREST HEREIN, UNLESS SUCH PURCHASE OR HOLDING IS COVERED
BY THE EXEMPTIVE RELIEF PROVIDED BY U.S. DEPARTMENT OF LABOR PROHIBITED
TRANSACTION CLASS EXEMPTION ("PTCE") 96-23, 95-60, 91-38, 90-1 OR 84-14 OR
ANOTHER APPLICABLE EXEMPTION WITH RESPECT TO SUCH PURCHASE OR HOLDING. ANY
PURCHASER OR HOLDER OF THIS EXCHANGE CAPITAL SECURITIES CERTIFICATE OR ANY
INTEREST HEREIN THAT IS A PLAN OR A PLAN ASSET ENTITY OR IS PURCHASING SUCH
SECURITIES ON BEHALF OF OR WITH "PLAN ASSETS" WILL BE DEEMED TO HAVE REPRESENTED
BY ITS PURCHASE AND HOLDING HEREOF THAT (A) THE PURCHASE AND HOLDING OF THE
EXCHANGE CAPITAL SECURITIES IS COVERED BY THE EXEMPTIVE RELIEF PROVIDED BY PTCE
96-23, 95-60, 91-38, 90-1 OR 84-14 OR ANOTHER APPLICABLE EXEMPTION, (B) THE
COMPANY AND THE ADMINISTRATORS ARE NOT "FIDUCIARIES" WITHIN THE MEANING OF
SECTION 3(21) OF ERISA AND THE REGULATIONS THEREUNDER, WITH RESPECT TO SUCH
PERSON'S INTEREST IN THE EXCHANGE CAPITAL SECURITIES OR THE JUNIOR SUBORDINATED
DEBENTURES, AND (C) IN PURCHASING THE EXCHANGE CAPITAL SECURITIES SUCH PERSON
APPROVES THE PURCHASE OF THE JUNIOR SUBORDINATED DEBENTURES AND THE APPOINTMENT
OF THE ISSUER TRUSTEES.
2
<PAGE> 3
CERTIFICATE NUMBER AGGREGATE LIQUIDATION AMOUNT
1
--- (CAPITAL SECURITIES)
CUSIP NO. _________
CERTIFICATE EVIDENCING CAPITAL SECURITIES
OF
PROVIDENT TRUST I
8.29% EXCHANGE CAPITAL SECURITIES
(LIQUIDATION AMOUNT $1,000 PER CAPITAL SECURITY)
Provident Trust I, a statutory trust created under the laws of
the State of Delaware (the "Issuer Trust"), hereby certifies that Cede & Co.,
(the "Holder") is the registered owner of aggregate liquidation amount of
capital securities of the Issuer Trust representing a preferred undivided
beneficial interest in the assets of the Issuer Trust and designated the
Provident Trust I 8.29% Exchange Capital Securities (liquidation amount $1,000
per Exchange Capital Security) (the "Exchange Capital Securities"). The Exchange
Capital Securities are transferable on the books and records of the Issuer
Trust, in person or by a duly authorized attorney, upon surrender of this
certificate duly endorsed and in proper form for transfer as provided in Section
5.5 of the Trust Agreement (as defined below). The designations, rights,
privileges, restrictions, preferences and other terms and provisions of the
Exchange Capital Securities are set forth in, and this certificate and the
Exchange Capital Securities represented hereby are issued and shall in all
respects be subject to the terms and provisions of, the Amended and Restated
Trust Agreement of the Issuer Trust, dated as of April 17, 1998, as the same may
be amended from time to time (the "Trust Agreement"), among Provident Bankshares
Corporation, as Depositor, Bankers Trust Company, as Property Trustee, Bankers
Trust (Delaware), as Delaware Trustee, the Administrators named herein and the
Holders of Trust Securities, including the designation of the terms of the
Exchange Capital Securities as set forth therein. The Holder is entitled to the
benefits of the Exchange Guarantee Agreement entered into by Provident
Bankshares Corporation, as Guarantor, and Bankers Trust Company, as Exchange
Guarantee Trustee, dated as of ______________, 1998 (the "Exchange Guarantee
Agreement"), to the extent provided therein. The Issuer Trust will furnish a
copy of the Trust
3
<PAGE> 4
Agreement and the Exchange Guarantee Agreement to the Holder without charge upon
written request to the Issuer Trust by contacting the Issuer Trustees.
Upon receipt of this certificate, the Holder is bound by the
Trust Agreement and is entitled to the benefits thereunder.
Terms used but not defined herein have the meanings set forth
in the Trust Agreement.
IN WITNESS WHEREOF, one of the Administrators of the Issuer
Trust has executed this certificate this ___ day of ______, 1998.
PROVIDENT TRUST I
By:_________________________________
Name: James R. Wallis
Administrator
AUTHENTICATED:
BANKERS TRUST COMPANY,
as Property Trustee
By: ________________________
Authorized Signatory
4
<PAGE> 5
Distributions payable on each Exchange Capital Security will
be fixed at a rate per annum of 8.29% (the "Coupon Rate") of the liquidation
amount of $1,000 per Exchange Capital Security, such rate being the rate of
interest payable on the Debentures to be held by the Property Trustee.
Distributions in arrears for more than one semi-annual period will bear interest
thereon compounded semi-annually at the Coupon Rate (to the extent permitted by
applicable law). The term "Distributions," as used herein, includes such cash
distributions and any such interest payable unless otherwise stated. A
Distribution is payable only to the extent that payments are made in respect of
the Debentures held by the Property Trustee and to the extent the Property
Trustee has funds on hand legally available therefor.
Distributions on the Exchange Capital Securities will be
cumulative, will accumulate from the most recent date to which Distributions
have been paid or duly provided for, with respect to the Exchange Capital
Securities or the Original Capital Securities exchanged for this Exchange
Capital Security, if no Distributions have been paid or duly provided for, from
April 17, 1998 and will be payable semi-annually in arrears, on April 15 and
October 15 of each year, commencing on October 15, 1998, except as otherwise
described below. Distributions will be computed on the basis of a 360-day year
consisting of twelve 30-day months and, for any period less than a full calendar
month, the number of days elapsed in such month. As long as no Event of Default
has occurred and is continuing under the Indenture, the Debenture Issuer has the
right under the Indenture to defer payments of interest by extending the
interest payment period at any time and from time to time on the Debentures for
a period not exceeding 10 consecutive calendar semi-annual periods, including
the first such semi-annual period during such extension period (each an
"Extension Period"), provided that no Extension Period shall end on a date other
than an Interest Payment Date for the Debentures or extend beyond the Maturity
Date of the Debentures. As a consequence of such deferral, Distributions also
will be deferred. Despite such deferral, semi-annual Distributions will continue
to accumulate with interest thereon (to the extent permitted by applicable law,
but not at a rate exceeding the rate of interest then accruing on the
Debentures) at the Coupon Rate compounded semi-annually during any such
Extension Period. Prior to the termination of any such Extension Period, the
Debenture Issuer may further defer payments of interest by further extending
such Extension Period; provided that such Extension Period, together with all
such previous and further extensions within such Extension Period, may not
exceed 10 consecutive semi-annual periods, including the first semi-annual
period during such Extension Period, end on a date other than an Interest
Payment Date for the Debentures or extend beyond the Maturity Date of the
Debentures. Payments of accumulated Distributions will be payable to Holders as
they appear on the books and records of the Trust on the first record date after
the end of the Extension Period. Upon the termination of any Extension Period
and the payment of all amounts then due, the Debenture Issuer may commence a new
Extension Period, subject to the above requirements.
5
<PAGE> 6
Subject to the receipt of any required regulatory approval and
to certain other conditions set forth in the Amended and Restated Trust
Agreement and the Indenture, the Property Trustee may, at the direction of the
Sponsor, at any time dissolve the Trust and, after satisfaction of liabilities
to creditors of the Trust, cause the Debentures to be distributed to the holders
of the Securities in liquidation of the Trust, or simultaneously with any
redemption of the Debentures, cause a Like Amount of the Securities to be
redeemed by the Trust.
The Exchange Capital Securities shall be redeemable as
provided in the Amended and Restated Trust Agreement.
6
<PAGE> 7
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this Exchange Capital
Security to:
________________________________________________________________________________
(Insert assignee's social security or tax identification number)
________________________________________________________________________________
________________________________________________________________________________
(Insert address and zip code of assignee)
and irrevocably appoints
________________________________________________________________________________
________________________________________________________________________________
agent to transfer this Exchange Capital Securities Certificate on the books of
the Issuer Trust. The agent may substitute another to act for him or her.
Date: _________________
Signature: _________________________________________________________
(Sign exactly as your name appears on the other side of
this Exchange Capital Securities Certificate)
The signature(s) should be guaranteed by an eligible guarantor institution
(banks, stockbrokers, savings and loan associations and credit unions with
membership in an approved signature guarantee medallion program), pursuant to
S.E.C. Rule 17Ad-15.
_______________________________
Signature
7
<PAGE> 1
EXHIBIT 4.6
FORM OF
EXCHANGE GUARANTEE AGREEMENT
BETWEEN
PROVIDENT BANKSHARES CORPORATION
AS GUARANTOR,
AND
BANKERS TRUST COMPANY
AS GUARANTEE TRUSTEE,
DATED AS OF ________, 1998
<PAGE> 2
PROVIDENT TRUST I
Certain Sections of this Exchange Guarantee Agreement relating to
Sections 310 through 318 of the
Trust Indenture Act of 1939:
Trust Indenture Guarantee Agreement
Act Section Section
- ------------------- ---------------------------
Section 310(a) (1)................................4.1 (a)
(a) (2)...........................4.1 (a)
(a) (3)...........................Not Applicable
(a) (4)...........................Not Applicable
(b)...............................2.8, 4.1 (c)
Section 311(a)....................................Not Applicable
(b)...............................Not Applicable
Section 312(a)....................................2.2 (a)
(b)...............................2.2 (b)
(c)...............................Not Applicable
Section 313(a)....................................2.3
(a) (4)...........................2.3
(b)...............................2.3
(c)...............................2.3
(d)...............................2.3
Section 314(a)....................................2.4
(b)...............................2.4
(c) (1)...........................2.5
(c) (2)...........................2.5
(c) (3)...........................2.5
(e)...............................1.1, 2.5, 3.2
Section 315(a)....................................3.1 (d)
(b)...............................2.7
(c)...............................3.1 (c)
(d)...............................3.1 (d)
(e)...............................Not Applicable
Section 316(a)....................................1.1, 2.6, 5.4
(a) (1) (A).......................5.4
(a) (1) (B).......................5.4
(a) (2)...........................Not Applicable
(b)...............................5.3
(c)...............................Not Applicable
Section 317(a) (1)................................Not Applicable
(a) (2)...........................Not Applicable
(b)...............................Not Applicable
Section 318(a)....................................2.1
Note: This reconciliation and tie shall not, for any purpose, be deemed to be a
part of the Exchange Guarantee Agreement.
<PAGE> 3
TABLE OF CONTENTS
PAGE
----
ARTICLE I. DEFINITIONS
Section 1.1. Definitions................................... 1
ARTICLE II. TRUST INDENTURE ACT
Section 2.1 Trust Indenture Act; Application ................. 4
Section 2.2 List of Holders .................................. 5
Section 2.3 Reports by the Guarantee Trustee ................. 5
Section 2.4 Periodic Reports to the Guarantee Trustee ........ 5
Section 2.5 Evidence of Compliance with Conditions Precedent.. 5
Section 2.6 Events of Default; Waiver ........................ 6
Section 2.7 Event of Default; Notice ......................... 6
Section 2.8 Conflicting Interests ............................ 6
ARTICLE III. POWERS, DUTIES AND RIGHTS OF THE GUARANTEE TRUSTEE
Section 3.1.Powers and Duties of the Guarantee Trustee........ 6
Section 3.2 Certain Rights of Guarantee Trustee .............. 8
Section 3.3 Indemnity ........................................ 9
Section 3.4 Expenses ......................................... 9
ARTICLE IV GUARANTEE TRUSTEE
Section 4.1 Guarantee Trustee; Eligibility ................... 10
Section 4.2 Appointment, Removal and Resignation
of the Guarantee Trustee ................... 10
ARTICLE V. GUARANTEE
Section 5.1 Exchange Guarantee ............................... 11
Section 5.2 Waiver of Notice and Demand ...................... 11
Section 5.3 Obligations Not Affected ......................... 11
Section 5.4 Rights of Holders ................................ 12
Section 5.5 Guarantee of Payment ............................. 12
Section 5.6 Subrogation ...................................... 13
Section 5.7 Independent Obligations .......................... 13
ARTICLE VI. COVENANTS AND SUBORDINATION
Section 6.1 Subordination .................................... 13
Section 6.2 Pari Passu Guarantees ............................ 13
ARTICLE VII. TERMINATION
Section 7.1. Termination ......... ........................... 14
<PAGE> 4
ARTICLE VIII. MISCELLANEOUS
Section 8.1. Successors and Assigns...............................14
Section 8.2. Amendments...........................................14
Section 8.3. Notices..............................................14
Section 8.4. Benefit..............................................16
Section 8.5. Interpretation.......................................16
Section 8.6. Governing Law........................................16
Section 8.7. Counterparts.........................................16
<PAGE> 5
GUARANTEE AGREEMENT
This EXCHANGE GUARANTEE AGREEMENT, dated as of ________, 1998
is executed and delivered by PROVIDENT BANKSHARES CORPORATION, a Maryland
corporation (the "Guarantor") having its principal office at 114 East Lexington
Street, Baltimore, Maryland 21202, and BANKERS TRUST COMPANY, a New York banking
corporation, as trustee (the "Guarantee Trustee"), for the benefit of the
Holders (as defined herein) from time to time of the Capital Securities (as
defined herein) of Provident Trust I, a Delaware statutory business trust (the
"Issuer Trust").
WHEREAS, pursuant to an Amended and Restated Trust Agreement
(the "Trust Agreement"), dated as of April 17, 1998, among Provident Bankshares
Corporation, as Depositor, Bankers Trust Company, as Property Trustee (the
"Property Trustee"), Bankers Trust (Delaware), as Delaware Trustee (the
"Delaware Trustee") (collectively, the "Issuer Trustees"), the Administrators
named therein and the Holders from time to time of preferred undivided
beneficial ownership interests in the assets of the Issuer Trust, intends to
issue capital securities designated the "8.29% Exchange Capital Securities"
(each an "Exchange Capital Security") in exchange for its outstanding 8.29%
Original Capital Securities (collectively, the "8.29% Capital Securities") upon
consummation of the Exchange Offer (as defined in the Trust Agreement) and such
Exchange Capital Securities to be issued in a number, up to 40,000, in exchange
for the 8.29% Original Capital Securities tendered in exchange for such 8.29%
Exchange Capital Securities, each having a liquidation amount of $1,000 per
Exchange Capital Security, pursuant to the Exchange Offer;
WHEREAS, the Guarantor has executed and delivered a Capital
Securities Guarantee Agreement, dated as of April 17, 1998, between the
Guarantor and the Capital Securities Guarantee Trustee (the "Capital Securities
Guarantee"), in each case with terms substantially identical to this Exchange
Capital Securities Guarantee and for the benefit of the holder(s) of the Capital
Securities, except that if an Event of Default (as defined in the Amended and
Restated Trust Agreement) has occurred and is continuing, the rights of
holder(s) of the Common Securities to receive Guarantee Payments under the
Common Securities Guarantee are subordinated, to the extent and in the manner
set forth in the Common Securities Guarantee, to the rights of holders of the
Exchange Capital Securities and the Capital Securities to receive Guarantee
Payments under this Exchange Capital Securities Guarantee and the Capital
Securities Guarantee, respectively;
WHEREAS, the Issuer Trust has issued the Common Securities,
the Original Capital Securities and the Capital Security Guarantee, and used the
proceeds thereof for the purchase of the Junior Subordinated Deferrable Interest
Debentures;
WHEREAS, in connection with such issuance, under the terms of
the Registration Rights Agreement, the Guarantor and the Issuer Trust are
obligated to undertake an Exchange Offer whereby the Exchange Capital Securities
and the Exchange Guarantee Agreement will be exchanged for the Original Capital
Securities and the Guarantee Agreement, respectively; and
WHEREAS, as incentive for the Holders of Exchange Capital
Securities to exchange the Capital Securities for the Exchange Capital
Securities in the Exchange Offer, the Guarantor desires irrevocably and
unconditionally to pay to the Holders of the Exchange Capital Securities the
<PAGE> 6
Guarantee Payments (as defined below) and to make certain other payments on the
terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the return by each Holder,
which return the Guarantor hereby acknowledges shall benefit the Guarantor, the
Guarantor executes and delivers this Exchange Capital Securities Guarantee for
the benefit of the Holders of the Exchange Capital Securities.
ARTICLE I. DEFINITIONS
SECTION 1.1. Definitions.
As used in this Exchange Guarantee Agreement, the terms set
forth below shall, unless the context otherwise requires, have the following
meanings. Capitalized terms used but not otherwise defined herein shall have the
meanings assigned to such terms in the Trust Agreement as in effect on the date
hereof.
"Affiliate" of any specified Person means any other Person
directly or indirectly controlling or controlled by or under direct or indirect
common control with such specified Person. For the purposes of this definition,
"control" when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"Capital Securities" means the Exchange Capital Securities and
the Original Capital Securities.
"Common Securities" means the securities representing common
undivided beneficial interests in the assets of the Issuer Trust.
"Distributions" means preferential cumulative cash
distributions accumulating from April 17, 1998 and payable semiannually in
arrears on April 15 and October 15 of each year, commencing October 15, 1998, at
an annual rate of 8.29% of the Liquidation Amount.
"Event of Default" means (i) a default by the Guarantor in any
of its payment obligations under this Guarantee Agreement, or (ii) a default by
the Guarantor in any other obligation hereunder that remains unremedied for 30
days.
"Exchange Capital Securities" shall have the meaning specified
in the first recital of this Guarantee Agreement.
"Exchange Guarantee Agreement" or "Guarantee Agreement" means
this Guarantee Agreement, as modified, amended or supplemented from time to
time.
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"Guarantee Payments" means the following payments or
distributions, without duplication, with respect to the Exchange Capital
Securities, to the extent not paid or made by or on behalf of the Issuer Trust:
(i) any accumulated and unpaid Distributions (as defined in the Trust Agreement)
required to be paid on the Exchange Capital Securities, to the extent the Issuer
Trust shall have funds on hand available therefor at such time, (ii) the
Redemption Price, with respect to the Exchange Capital Securities called for
redemption by the Issuer Trust to the extent that the Issuer Trust shall have
funds on hand available therefor at such time, and (iii) upon a voluntary or
involuntary termination, winding-up or liquidation of the Issuer Trust, unless
the Exchange Junior Subordinated Debentures are distributed to the Holders, the
lesser of (a) the aggregate of the Liquidation Amount and all accumulated and
unpaid Distributions to the date of payment to the extent the Issuer Trust shall
have funds on hand available to make such payment at such time and (b) the
amount of assets of the Issuer Trust remaining available for distribution to
Holders on liquidation of the Issuer Trust (in either case, the "Liquidation
Distribution").
"Guarantee Trustee" means Bankers Trust Company, until a
Successor Guarantee Trustee has been appointed and has accepted such appointment
pursuant to the terms of this Guarantee Agreement and thereafter means each such
Successor Guarantee Trustee.
"Guarantor" shall have the meaning specified in the first
paragraph of this Exchange Guarantee Agreement.
"Holder" means any holder, as registered on the books and
records of the Issuer Trust, of any Capital Securities; 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, the Guarantee Trustee, or any Affiliate of the
Guarantor or the Guarantee Trustee.
"Indenture" means the Junior Subordinated Indenture dated as
of April 17, 1998, between Provident Bankshares Corporation and Bankers Trust
Company, as trustee, as may be modified, amended or supplemented from time to
time.
"Issuer Trust" shall have the meaning specified in the first
paragraph of this Guarantee Agreement.
"Junior Subordinated Debentures" means the Original Junior
Subordinated Deferrable Interest Debentures and the Exchange Junior Subordinated
Deferrable Interest Debentures.
"Like Amount" means (a) with respect to a redemption of Trust
Securities, Trust Securities having a Liquidation Amount equal to that portion
of the principal amount of Junior Subordinated Debentures to be
contemporaneously redeemed in accordance with the Indenture, allocated to the
Common Securities and to the Exchange Capital Securities based upon the relative
Liquidation Amounts of such classes and (b) with respect to a distribution of
Exchange Junior Subordinated Debentures to Holders of Trust Securities in
connection with a dissolution or liquidation of the Issuer Trust, Exchange
Junior Subordinated Debentures having a principal amount
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equal to the Liquidation Amount of the Trust Securities of the Holder to whom
such Junior Subordinated Debentures are distributed.
"Liquidation Amount" means the stated amount of $1,000 per
Capital Security.
"Majority in Liquidation Amount of the Capital Securities"
means, except as provided by the Trust Indenture Act, Capital Securities
representing more than 50% of the aggregate Liquidation Amount of all then
outstanding Capital Securities issued by the Issuer Trust.
"Officers' Certificate" means a certificate signed by the
Chairman of the Board, Chief Executive Officer, President, Chief Operating
Officer, Executive Vice President, Senior Vice President or Vice President, and
by the Secretary or an Assistant Secretary of the Guarantor, and delivered to
the Guarantee Trustee. Any Officers' Certificate delivered with respect to
compliance with a condition or covenant provided for in this Guarantee Agreement
shall include:
(a) a statement by each officer signing the Officers'
Certificate that such officer has read the covenant or condition and the
definitions relating thereto;
(b) a brief statement of the nature and scope of the
examination or investigation undertaken by such officer in rendering the
Officers' Certificate;
(c) a statement that such officer has made such examination or
investigation as, in such officer's opinion, is necessary to enable such officer
to express an informed opinion as to whether or not such covenant or condition
has been complied with; and
(d) a statement as to whether, in the opinion of such officer,
such condition or covenant has been complied with.
"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.
"Redemption Date" means, with respect to any Capital Security
to be redeemed, the date fixed for such redemption by or pursuant to the Trust
Agreement; provided that each Junior Subordinated Debenture Redemption Date and
the stated maturity of the Exchange Junior Subordinated Debentures shall be a
Redemption Date for a Like Amount of Exchange Capital Securities.
"Redemption Price" shall have the meaning specified in the
Trust Agreement.
"Responsible Officer" means, when used with respect to the
Guarantee Trustee, any officer assigned to the Corporate Trust Office, including
any managing director, vice president, principal, assistant vice president,
assistant treasurer, assistant secretary or any other officer of the Guarantee
Trustee customarily performing functions similar to those performed by any of
the above
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designated officers and having direct responsibility for the administration of
this Indenture, and also, with respect to a particular matter, any other officer
to whom such matter is referred because of such officer's knowledge of and
familiarity with the particular subject.
"Senior Indebtedness" shall have the meaning specified in the
Indenture.
"Successor Guarantee Trustee" means a successor Guarantee
Trustee possessing the qualifications to act as Guarantee Trustee under Section
4.1.
"Trust Agreement" means the Amended and Restated Trust
Agreement, dated April 17, 1998, executed by Provident Bankshares Corporation,
as Depositor, Bankers Trust (Delaware), as Delaware Trustee, Bankers Trust
Company, as Property Trustee, the Administrators named therein and the Holders
defined therein.
"Trust Indenture Act" means the Trust Indenture Act of 1939
(15 U.S.C. Sections 77aaa-77bbbb), as amended.
"Trust Securities" means the Common Securities and the
Exchange Capital Securities.
ARTICLE II. TRUST INDENTURE ACT
SECTION 2.1. Trust Indenture Act; Application.
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 Exchange Guarantee Agreement, the provision of the Trust
Indenture Act shall control. If any provision of this Exchange Guarantee
Agreement 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 Exchange Guarantee Agreement as so modified or excluded, as the case may
be.
SECTION 2.2. List of Holders.
(a) The Guarantor will furnish or cause to be furnished to the
Guarantee Trustee a list of Holders at the following times:
(i) semiannually, as soon as practicable after April
1 and October 1 in each year, a list, in such form as the Guarantee Trustee may
reasonably require, of the names and addresses of the Holders as of April 1 and
October 1; and
(ii) at such other times as the Guarantee Trustee may
request in writing, within 30 days after the receipt by the Guarantor of any
such request, a list of similar form and content as of a date not more than 15
days prior to the time such list is furnished.
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(b) The Guarantee Trustee shall comply with the requirements
of Section 312(b) of the Trust Indenture Act.
SECTION 2.3. Reports by the Guarantee Trustee.
Not later than January 31 of each year, commencing January 31,
1999, the Guarantee Trustee shall provide to the Holders such reports, if any,
as are required by Section 313 of the Trust Indenture Act in the form and in the
manner provided by Section 313 of the Trust Indenture Act. If this Guarantee
Agreement shall have been qualified under the Trust Indenture Act, the Guarantee
Trustee shall also comply with the requirements of Section 313(d) of the Trust
Indenture Act.
SECTION 2.4. Periodic Reports to the Guarantee Trustee.
The Guarantor shall provide to the Guarantee Trustee, and the
Holders such documents, reports and information, if any, as required by Section
314 of the Trust Indenture Act and the compliance certificate required by
Section 314 of the Trust Indenture Act, in the form, in the manner and at the
times required by Section 314 of the Trust Indenture Act, provided that such
documents, reports and information shall be required to be provided to the
Securities and Exchange Commission only if this Guarantee Agreement shall have
been qualified under 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 such conditions precedent, if any, provided for in
this Guarantee Agreement that relate to any of the matters set forth in Section
314(c) of the Trust Indenture Act. Any certificate or opinion required to be
given by an officer pursuant to Section 314(c)(1) may be given in the form of an
Officers' Certificate.
SECTION 2.6. Events of Default; Waiver.
The Holders of a Majority in Liquidation Amount of the Capital
Securities may, by vote, on behalf of the Holders, waive any past Event of
Default and its consequences. Upon such waiver, any such Event of Default shall
cease to exist, and any Event of Default arising therefrom shall be deemed to
have been cured, for every purpose of this Guarantee Agreement, but no such
waiver shall extend to any subsequent or other default or Event of Default or
impair any right consequent therefrom.
SECTION 2.7. Event of Default; Notice.
(a) The Guarantee Trustee shall, within 90 days after the
occurrence of an Event of Default, transmit by mail, first class postage
prepaid, to the Holders, notice of all Events of Default known to the Guarantee
Trustee, unless such Events of Default have been cured before the giving of such
notice; provided that, except in the case of a default in the payment of a
Guarantee Payment, the Guarantee Trustee shall be protected in withholding such
notice if and so long as the
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Board of Directors, the executive committee or a trust committee of directors
and/or Responsible Officers of the Guarantee Trustee in good faith determines
that the withholding of such notice is in the interests of the Holders.
(b) The Guarantee Trustee shall not be deemed to have
knowledge of any Event of Default unless a Responsible Officer charged with the
administration of this Guarantee Agreement shall have received written notice of
such Event of Default.
SECTION 2.8. Conflicting Interests.
The Trust Agreement shall be deemed to be specifically
described in this Guarantee Agreement for the purposes of clause (i) of the
first proviso contained in Section 310(b) of the Trust Indenture Act.
ARTICLE III. POWERS, DUTIES AND RIGHTS OF THE GUARANTEE TRUSTEE
SECTION 3.1. Powers and Duties of the Guarantee Trustee.
(a) This Guarantee Agreement shall be held by the Guarantee
Trustee for the benefit of the Holders, and the Guarantee Trustee shall not
transfer this Guarantee Agreement to any Person except a Holder exercising his
or her rights pursuant to Section 5.4(iv) or to a Successor Guarantee Trustee on
acceptance by such Successor Guarantee Trustee of its appointment to act as
Successor Guarantee Trustee hereunder. The right, title and interest of the
Guarantee Trustee, as such, hereunder shall automatically vest in any Successor
Guarantee Trustee, upon acceptance by such Successor Guarantee Trustee of its
appointment hereunder, and such vesting and cessation of title shall be
effective whether or not conveyancing documents have been executed and delivered
pursuant to the appointment of such Successor Guarantee Trustee.
(b) If an Event of Default has occurred and is continuing, the
Guarantee Trustee shall enforce this Guarantee Agreement for the benefit of the
Holders.
(c) The Guarantee Trustee, before the occurrence of any Event
of Default and after the curing of all Events of Default that may have occurred,
shall be obligated to perform only such duties as are specifically set forth in
this Guarantee Agreement (including pursuant to Section 2.1), and no implied
covenants shall be read into this Guarantee Agreement against the Guarantee
Trustee. If an Event of Default has occurred (that has not been cured or waived
pursuant to Section 2.6), the Guarantee Trustee shall exercise such of the
rights and powers vested in it by this Guarantee Agreement, 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 Agreement shall be
construed to relieve the Guarantee Trustee from liability for its own negligent
action, its own negligent failure to act or its own willful misconduct, except
that:
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(i) Prior to the occurrence of any Event of Default and after
the curing or waiving of all such Events of Default that may have occurred:
(A) the duties and obligations of the Guarantee
Trustee shall be determined solely by the express provisions of this Guarantee
Agreement (including pursuant to Section 2.1), and the Guarantee Trustee shall
not be liable except for the performance of such duties and obligations as are
specifically set forth in this Guarantee Agreement (including pursuant to
Section 2.1); and
(B) in the absence of bad faith on the part of the
Guarantee Trustee, the Guarantee Trustee may conclusively rely, as to the truth
of the statements and the correctness of the opinions expressed therein, upon
any certificates or opinions furnished to the Guarantee Trustee and conforming
to the requirements of this Guarantee Agreement; but in the case of any such
certificates or opinions that by any provision hereof or of the Trust Indenture
Act are specifically required to be furnished to the Guarantee Trustee, the
Guarantee Trustee shall be under a duty to examine the same to determine whether
or not they conform to the requirements of this Guarantee Agreement;
(ii) The Guarantee Trustee shall not be liable for any error
of judgment made in good faith by a Responsible Officer of the Guarantee
Trustee, unless it shall be proved that the Guarantee Trustee was negligent in
ascertaining the pertinent facts upon which such judgment was made;
(iii) The Guarantee Trustee shall not be liable with respect
to any action taken or omitted to be taken by it in good faith in accordance
with the direction of the Holders of not less than a Majority in Liquidation
Amount of the Capital Securities relating to the time, method and place of
conducting any proceeding for any remedy available to the Guarantee Trustee, or
exercising any trust or power conferred upon the Guarantee Trustee under this
Guarantee Agreement; and
(iv) No provision of this Guarantee Agreement shall require
the Guarantee Trustee to expend or risk its own funds or otherwise incur
personal financial liability in the performance of any of its duties or in the
exercise of any of its rights or powers if the Guarantee Trustee shall have
reasonable grounds for believing that the repayment of such funds or liability
is not assured to it under the terms of this Guarantee Agreement or adequate
indemnity 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, bond, debenture, note, other evidence of
indebtedness or other paper or document reasonably believed by it to be genuine
and to have been signed, sent or presented by the proper party or parties.
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(ii) Any direction or act of the Guarantor
contemplated by this Guarantee Agreement shall be sufficiently evidenced by an
Officers' Certificate unless otherwise prescribed herein.
(iii) Whenever, in the administration of this
Guarantee Agreement, the Guarantee Trustee shall deem it desirable that a matter
be proved or established before taking, suffering or omitting to take any action
hereunder, the Guarantee Trustee (unless other evidence is herein specifically
prescribed) may, in the absence of bad faith on its part, request and
conclusively rely upon an Officers' Certificate which, upon receipt of such
request from the Guarantee Trustee, shall be promptly delivered by the
Guarantor.
(iv) The Guarantee Trustee may consult with legal
counsel, and the advice or written opinion of such legal counsel with respect to
legal matters shall be full and complete authorization and protection in respect
of any action taken, suffered or omitted to be taken by it hereunder in good
faith and in accordance with such advice or opinion. Such legal counsel may be
legal counsel to the Guarantor or any of its Affiliates and may be one of its
employees. The Guarantee Trustee shall have the right at any time to seek
instructions concerning the administration of this Guarantee Agreement from any
court of competent jurisdiction.
(v) The Guarantee Trustee shall be under no
obligation to exercise any of the rights or powers vested in it by this
Guarantee Agreement at the request or direction of any Holder, unless such
Holder shall have provided to the Guarantee Trustee such security and indemnity
as would satisfy a reasonable person in the position of the Guarantee Trustee,
against the costs, expenses (including attorneys' fees and expenses) and
liabilities that might be incurred by it in complying with such request or
direction, including such reasonable advances as may be requested by the
Guarantee Trustee.
(vi) The Guarantee Trustee shall not be bound to make
any investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice, request, direction,
consent, order, bond, debenture, note, other evidence of indebtedness or other
paper or document, but the Guarantee Trustee, in its discretion, may make such
further inquiry or investigation into such facts or matters as it may see fit.
(vii) The Guarantee Trustee may execute any of the
trusts or powers hereunder or perform any duties hereunder either directly or by
or through its agents or attorneys, and the Guarantee Trustee shall not be
responsible for any negligence or wilful misconduct on the part of any such
agent or attorney appointed with due care by it hereunder.
(viii) Whenever in the administration of this
Guarantee Agreement the Guarantee Trustee shall deem it desirable to receive
instructions with respect to enforcing any remedy or right or taking any other
action hereunder, the Guarantee Trustee (A) may request instructions from the
Holders, (B) may refrain from enforcing such remedy or right or taking such
other action until such instructions are received and (C) shall be fully
protected in acting in accordance with such instructions.
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(b) No provision of this Guarantee Agreement shall be deemed
to impose any duty or obligation on the Guarantee Trustee to perform any act or
acts or exercise any right, power, duty or obligation conferred or imposed on it
in any jurisdiction in which it shall be illegal, or in which the Guarantee
Trustee shall be unqualified or incompetent in accordance with applicable law,
to perform any such act or acts or to exercise any such right, power, duty or
obligation. No permissive power or authority available to the Guarantee Trustee
shall be construed to be a duty to act in accordance with such power and
authority.
SECTION 3.3. Indemnity.
The Guarantor agrees to indemnify the Guarantee Trustee for,
and to hold it harmless against, any loss, liability or expense incurred without
negligence, wilful misconduct or bad faith on the part of the Guarantee Trustee,
arising out of or in connection with the acceptance or administration of this
Guarantee Agreement, including the costs and expenses of defending itself
against any claim or liability in connection with the exercise or performance of
any of its powers or duties hereunder. The Guarantee Trustee will not claim or
exact any lien or charge on any Guarantee Payments as a result of any amount due
to it under this Guarantee Agreement.
SECTION 3.4. Expenses.
The Guarantor shall from time to time reimburse the Guarantee
Trustee for its expenses and costs (including reasonable attorneys' or agents'
fees) incurred in connection with the performance of its duties hereunder.
ARTICLE IV. GUARANTEE TRUSTEE
SECTION 4.1. Guarantee Trustee; Eligibility.
(a) There shall at all times be a Guarantee Trustee which
shall:
(i) not be an Affiliate of the Guarantor; and
(ii) be a Person that is eligible pursuant to the
Trust Indenture Act to act as such and has a combined capital and surplus of at
least $50,000,000, and shall be a corporation meeting the requirements of
Section 310(c) of the Trust Indenture Act. If such corporation publishes reports
of condition at least annually, pursuant to law or to the requirements of the
supervising or examining authority, then, for the purposes of this Section and
to the extent permitted by the Trust Indenture Act, the combined capital and
surplus of such corporation shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so published.
(b) If at any time the Guarantee Trustee shall cease to be
eligible to so act under Section 4.1(a), the Guarantee Trustee shall immediately
resign in the manner and with the effect set out in Section 4.2.
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(c) If the Guarantee Trustee has or shall acquire any
"conflicting interest" within the meaning of Section 310(b) of the Trust
Indenture Act, the Guarantee Trustee and Guarantor shall in all respects comply
with the provisions of Section 310(b) of the Trust Indenture Act.
SECTION 4.2. Appointment, Removal and Resignation of the Guarantee
Trustee.
(a) 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. The Guarantee Trustee shall appoint a successor by requesting from at
least three Persons meeting the eligibility requirements such Person's expenses
and charges to serve as the Guarantee Trustee, and selecting the Person who
agrees to the lowest expenses and charges. If the instrument of acceptance by
the Successor Guarantee Trustee shall not have been delivered to the Guarantee
Trustee within 60 days after the giving of such notice of resignation, the
Guarantee Trustee may petition, at the expense of the Guarantor, any court of
competent jurisdiction for the appointment of a Successor Guarantee Trustee.
(c) The Guarantee Trustee may be removed for cause at any time
by Act (within the meaning of Section 6.8 of the Trust Agreement) of the Holders
of at least a Majority in Liquidation Amount of the Capital Securities,
delivered to the Guarantee Trustee.
(d) If a resigning Guarantee Trustee shall fail to appoint a
successor, or if a Guarantee Trustee shall be removed or become incapable of
acting as Guarantee Trustee, or if any vacancy shall occur in the office of any
Guarantee Trustee for any cause, the Holders of the Capital Securities, by Act
of the Holders of record of not less than 25% in aggregate Liquidation Amount of
the Capital Securities then outstanding delivered to such Guarantee Trustee,
shall promptly appoint a successor Guarantee Trustee. If no Successor Guarantee
Trustee shall have been so appointed by the Holders of the Capital Securities
and such appointment accepted by the Successor Guarantee Trustee, any Holder, on
behalf of himself and all others similarly situated, may petition any court of
competent jurisdiction for the appointment of a Successor Guarantee Trustee.
ARTICLE V. GUARANTEE
SECTION 5.1. Guarantee.
The Guarantor irrevocably and unconditionally agrees to pay in
full to the Holders the Guarantee Payments (without duplication of amounts
theretofore paid by or on behalf of the Issuer Trust), as and when due,
regardless of any defense, right of set-off or counterclaim which the Issuer
Trust may have or assert, except the defense of payment. The Guarantor's
obligation to make a Guarantee Payment may be satisfied by direct payment of the
required amounts by the Guarantor to the Holders or by causing the Issuer Trust
to pay such amounts to the Holders. The Guarantor
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shall give prompt written notice to the Guarantee Trustee in the event it makes
any direct payment hereunder.
SECTION 5.2. Waiver of Notice and Demand.
The Guarantor hereby waives notice of acceptance of the
Guarantee Agreement and of any liability to which it applies or may apply,
presentment, demand for payment, any right to require a proceeding first against
the Guarantee Trustee, the Issuer 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.
SECTION 5.3. Obligations Not Affected.
The obligations, covenants, agreements and duties of the
Guarantor under this Guarantee Agreement shall in no way be affected or impaired
by reason of the happening from time to time of any of the following:
(a) the release or waiver, by operation of law or otherwise,
of the performance or observance by the Issuer Trust of any express or implied
agreement, covenant, term or condition relating to the Capital Securities to be
performed or observed by the Issuer Trust;
(b) the extension of time for the payment by the Issuer Trust
of all or any portion of the Distributions (other than an extension of time for
payment of Distributions that results from the extension of any interest payment
period on the Junior Subordinated Debentures as so provided in the Indenture),
Redemption Price, Liquidation Distribution or any other sums payable under the
terms of the Capital Securities or the extension of time for the performance of
any other obligation under, arising out of, or in connection with, the Capital
Securities;
(c) any failure, omission, delay or lack of diligence on the
part of the Holders to enforce, assert or exercise any right, privilege, power
or remedy conferred on the Holders pursuant to the terms of the Capital
Securities, or any action on the part of the Issuer 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 Issuer Trust or any of
the assets of the Issuer Trust;
(e) any invalidity of, or defect or deficiency in, the Capital
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 (other than
payment of the underlying obligation), it
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being the intent of this Section 5.3 that the obligations of the Guarantor
hereunder shall be absolute and unconditional under any and all circumstances.
There shall be no obligation of the Holders to give notice to,
or obtain the consent of, the Guarantor with respect to the happening of any of
the foregoing.
SECTION 5.4. Rights of Holders.
The Guarantor expressly acknowledges that: (i) this Guarantee
Agreement will be deposited with the Guarantee Trustee to be held for the
benefit of the Holders; (ii) the Guarantee Trustee has the right to enforce this
Guarantee Agreement on behalf of the Holders; (iii) the Holders of a Majority in
Liquidation Amount of the Capital Securities have the right to direct the time,
method and place of conducting any proceeding for any remedy available to the
Guarantee Trustee in respect of this Guarantee Agreement or exercising any trust
or power conferred upon the Guarantee Trustee under this Guarantee Agreement;
and (iv) any Holder may institute a legal proceeding directly against the
Guarantor to enforce its rights under this Guarantee Agreement, without first
instituting a legal proceeding against the Guarantee Trustee, the Issuer Trust
or any other Person.
SECTION 5.5. Guarantee of Payment.
This Guarantee Agreement creates a guarantee of payment and
not of collection. This Guarantee Agreement will not be discharged except by
payment of the Guarantee Payments in full (without duplication of amounts
theretofore paid by the Issuer Trust) or upon the distribution of Exchange
Junior Subordinated Debentures to Holders as provided in the Trust Agreement.
SECTION 5.6. Subrogation.
The Guarantor shall be subrogated to all rights (if any) of
the Holders against the Issuer Trust in respect of any amounts paid to the
Holders by the Guarantor under this Guarantee Agreement; provided, however, that
the Guarantor shall not (except to the extent required by mandatory provisions
of law) be entitled to enforce or exercise any rights which it may acquire by
way of subrogation or any indemnity, reimbursement or other agreement, in all
cases as a result of payment under this Guarantee Agreement, if at the time of
any such payment, any amounts are due and unpaid under this Guarantee Agreement.
If any amount shall be paid to the Guarantor in violation of the preceding
sentence, the Guarantor agrees to hold such amount in trust for the Holders and
to pay over such amount to the Holders.
SECTION 5.7. Independent Obligations.
The Guarantor acknowledges that its obligations hereunder are
independent of the obligations of the Issuer Trust with respect to the Capital
Securities and that the Guarantor shall be liable as principal and as debtor
hereunder to make Guarantee Payments pursuant to the terms of this Guarantee
Agreement notwithstanding the occurrence of any event referred to in subsections
(a) through (g), inclusive, of Section 5.3 hereof.
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ARTICLE VI. COVENANTS AND SUBORDINATION
SECTION 6.1. Subordination.
This Guarantee Agreement will constitute an unsecured
obligation of the Guarantor and will rank subordinate and junior in right of
payment to all Senior Indebtedness of the Guarantor to the extent and in the
manner set forth in the Indenture with respect to the Junior Subordinated
Debentures, and the provisions of Article XIII of the Indenture will apply,
mutatis mutandis, to the obligations of the Guarantor hereunder. The obligations
of the Guarantor hereunder do not constitute Senior Indebtedness of the
Guarantor.
SECTION 6.2. Pari Passu Guarantees.
The obligations of the Guarantor under this Guarantee
Agreement shall rank pari passu with any similar guarantee agreements issued by
the Guarantor on behalf of the holders of preferred or capital securities issued
by the Issuer Trust and with any other security, guarantee or other obligation
that is expressly stated to rank pari passu with the obligations of the
Guarantor under this Guarantee Agreement.
ARTICLE VII. TERMINATION
SECTION 7.1. Termination.
This Guarantee Agreement shall terminate and be of no further
force and effect upon (i) full payment of the Redemption Price of all Exchange
Capital Securities, (ii) the distribution of Exchange Junior Subordinated
Debentures to the Holders in exchange for all of the Exchange Capital Securities
or (iii) full payment of the amounts payable in accordance with Article IX of
the Trust Agreement upon liquidation of the Issuer Trust. Notwithstanding the
foregoing, this Guarantee Agreement will continue to be effective or will be
reinstated, as the case may be, if at any time any Holder is required to restore
payment of any sums paid under the Exchange Capital Securities or this Guarantee
Agreement.
ARTICLE VIII. MISCELLANEOUS
SECTION 8.1. Successors and Assigns.
All guarantees and agreements contained in this Guarantee
Agreement shall bind the successors, assigns, receivers, trustees and
representatives of the Guarantor and shall inure to the benefit of the Holders
of the Exchange Capital Securities then outstanding. Except in connection with a
consolidation, merger or sale involving the Guarantor that is permitted under
Article VIII of the Indenture and pursuant to which the assignee agrees in
writing to perform the Guarantor's
14
<PAGE> 19
obligations hereunder, the Guarantor shall not assign its obligations hereunder,
and any purported assignment that is not in accordance with these provisions
shall be void.
SECTION 8.2. 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 Agreement may only be amended with the
prior approval of the Holders of not less than a Majority in Liquidation Amount
of the Exchange Capital Securities. The provisions of Article VI of the Trust
Agreement concerning meetings of the Holders shall apply to the giving of such
approval.
SECTION 8.3. Notices.
Any notice, request or other communication required or
permitted to be given hereunder shall be in writing, duly signed by the party
giving such notice, and delivered, telecopied (confirmed by delivery of the
original) or mailed by first class mail as follows:
(a) if given to the Guarantor, to the address or telecopy
number set forth below or such other address or telecopy number or to the
attention of such other Person as the Guarantor may give notice to the Holders:
Provident Bankshares Corporation
114 East Lexington Street
Baltimore, Maryland 21202
Facsimile No.: (410) 576-2854
Attention: James R. Wallis
(b) if given to the Issuer Trust, in care of the Guarantee
Trustee, at the Issuer Trust's (and the Guarantee Trustee's) address set forth
below or such other address or telecopy number or to the attention of such other
Person as the Guarantee Trustee on behalf of the Issuer Trust may give notice to
the Holders:
Provident Trust I
c/o Provident Bankshares Corporation
114 East Lexington Street
Baltimore, Maryland 21202
Facsimile No.: (410) 576-2854
Attention: Robert L. Davis
with a copy to:
15
<PAGE> 20
Bankers Trust Company
Four Albany Street - 4th Floor
New York, NY 10006
Facsimile No.: (212) 250-6961
Attention: Corporate Trust and Agency Group;
Corporate Market Services
(c) if given to the Guarantee Trustee:
Bankers Trust Company
Four Albany Street - 4th Floor
New York, NY 10006
Facsimile No.: (212) 250-6961
Attention: Corporate Trust and Agency Group;
Corporate Market Services
(d) if given to any Holder, at the address set forth on the
books and records of the Issuer Trust.
All notices hereunder shall be deemed to have been given when
received in person, telecopied with receipt confirmed, or mailed by first class
mail, postage prepaid, except that if a notice or other document is refused
delivery or cannot be delivered because of a changed address of which no notice
was given, such notice or other document shall be deemed to have been delivered
on the date of such refusal or inability to deliver.
SECTION 8.4. Benefit.
This Guarantee Agreement is solely for the benefit of the
Holders and is not separately transferable from the Exchange Capital Securities.
SECTION 8.5. Interpretation.
In this Guarantee Agreement, unless the context otherwise
requires:
(a) capitalized terms used in this Guarantee Agreement but not
defined in the preamble hereto have the respective meanings assigned to them in
Section 1.1;
(b) a term defined anywhere in this Guarantee Agreement has
the same meaning throughout;
(c) all references to "the Guarantee Agreement" or "this
Guarantee Agreement" are to this Guarantee Agreement as modified, supplemented
or amended from time to time;
(d) all references in this Guarantee Agreement to Articles and
Sections are to Articles and Sections of this Guarantee Agreement unless
otherwise specified;
16
<PAGE> 21
(e) a term defined in the Trust Indenture Act has the same
meaning when used in this Guarantee Agreement unless otherwise defined in this
Guarantee Agreement or unless the context otherwise requires;
(f) a reference to the singular includes the plural and vice
versa; and
(g) the masculine, feminine or neuter genders used herein
shall include the masculine, feminine and neuter genders.
SECTION 8.6. Governing Law.
THIS EXCHANGE GUARANTEE AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK
WITHOUT REGARD TO THE CONFLICT OF LAW PRINCIPLES THEREOF.
SECTION 8.7. Counterparts.
This instrument may be executed in any number of counterparts,
each of which so executed shall be deemed to be an original, but all such
counterparts shall together constitute but one and the same instrument.
THIS GUARANTEE AGREEMENT is executed as of the day and year
first above written.
PROVIDENT BANKSHARES CORPORATION
as Guarantor
By:
---------------------------
Name: James R. Wallis
Title: Executive Vice President and Chief Financial
Officer
17
<PAGE> 22
BANKERS TRUST COMPANY,
as Guarantee Trustee, and not
in its individual capacity
By:
-------------------------------
Name: Sandra J. Shaffer
Title: Assistant Vice President
18
<PAGE> 1
EXHIBIT 4.7
REGISTRATION RIGHTS AGREEMENT
Dated April 17, 1998
among
PROVIDENT BANKSHARES CORPORATION
PROVIDENT TRUST I
and
KEEFE, BRUYETTE & WOODS, INC.
as Initial Purchaser
<PAGE> 2
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (the "Agreement") is made and
entered into as of April 17, 1998, among PROVIDENT BANKSHARES CORPORATION a
registered bank holding company organized under the laws of the State of
Maryland (the "Company"), PROVIDENT TRUST I, a statutory business trust created
under the laws of the state of Delaware (the "Issuer Trust"), and KEEFE,
BRUYETTE & WOODS, INC. (the "Initial Purchaser").
This Agreement is made pursuant to the Purchase Agreement dated
April 14, 1998 (the "Purchase Agreement"), among the Company, as issuer of the
8.29% Junior Subordinated Deferrable Interest Debentures due April 15, 2028 (the
"Junior Subordinated Debentures"), the Issuer Trust and the Initial Purchaser,
which provides for among other things, the sale by the Issuer Trust to the
Initial Purchaser of 40,000 of the Issuer Trust's 8.29% Capital Securities,
liquidation amount $1,000 per Capital Security (the "Capital Securities"), the
proceeds of which will be used by the Issuer Trust to purchase the Junior
Subordinated Debentures. The Capital Securities, together with the Junior
Subordinated Debentures and the Company's guarantee of the Capital Securities
(the "Guarantee") are collectively referred to as the "Securities." In order to
induce the Initial Purchaser to enter into the Purchase Agreement, the Company
and the Issuer Trust have agreed to provide to the Initial Purchaser and its
direct and indirect transferees the registration rights set forth in this
Agreement. The execution and delivery of this Agreement is a condition to the
closing under the Purchase Agreement.
In consideration of the foregoing, the parties hereto agree as
follows:
1. Definitions. As used in this Agreement, the following
capitalized defined terms shall have the following meanings:
"Advice" shall have the meaning set forth in the last paragraph of
Section 3 hereof.
"Applicable Period" shall have the meaning set forth in Section 3(t)
hereof.
"Business Day" shall mean a day that is not a Saturday, a Sunday, or
a day on which banking institutions in New York, New York or in Baltimore,
Maryland are authorized or required to be closed.
"Closing Time" shall mean the Closing Time as defined in the
Purchase Agreement.
"Commission" shall mean the Securities and Exchange Commission.
"Company" shall have the meaning set forth in the preamble to this
Agreement and also includes the Company's successors and permitted assigns.
<PAGE> 3
"Depositary" shall mean The Depository Trust Company, or any other
depositary appointed by the Issuer Trust; provided, however, that such
depositary must have an address in the Borough of Manhattan, in The City of New
York.
"Effectiveness Period" shall have the meaning set forth in Section
2(b) hereof.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended from time to time.
"Exchange Offer" shall mean the offer by the Company and the Issuer
Trust to the Holders to exchange all of the Registrable Securities (other than
Private Exchange Securities) for a like principal amount of Exchange Securities
pursuant to Section 2(a) hereof.
"Exchange Offer Registration" shall mean a registration under the
Securities Act effected pursuant to Section 2(a) hereof.
"Exchange Offer Registration Statement" shall mean an exchange offer
registration statement on Form S-4 (or, if applicable, on another appropriate
form), and all amendments and supplements to such registration statement, in
each case including the Prospectus contained therein, all exhibits thereto and
all material incorporated by reference therein.
"Exchange Period" shall have the meaning set forth in Section 2(a)
hereof.
"Exchange Securities" shall mean (i) with respect to the Junior
Subordinated Debentures, the 8.29% New Junior Subordinated Deferrable Interest
Debentures due April 15, 2028 (the "New Junior Subordinated Debentures")
containing terms substantially identical to the Junior Subordinated Debentures
(except that they will not contain terms with respect to the transfer
restrictions under the Securities Act and will not provide for any liquidated
damages thereon), (ii) with respect to the Capital Securities, the Issuer
Trust's 8.29% New Capital Securities, liquidation amount $1,000 per Capital
Security (the "New Capital Securities") which will have terms substantially
identical to the Capital Securities (except that they will not contain terms
with respect to transfer restrictions under the Securities Act (other than
required minimum transfers thereof to be in blocks of $100,000 liquidation
amount) and will not provide for any increase in the distribution rate thereon)
and (iii) with respect to the Guarantee, the Company's guarantee (the "New
Guarantee") of the New Capital Securities which will have terms substantially
identical to the Guarantee.
"Holder" shall mean the Initial Purchaser, for so long as it owns
any Registrable Securities, and each of its successors, assigns and direct and
indirect transferees who become registered owners of Registrable Securities
under the Indenture or the Trust Agreement.
"Indenture" shall mean the Junior Subordinated Indenture dated as of
April 17, 1998 relating to the Junior Subordinated Debentures and the New Junior
Subordinated Debentures among the Company, as issuer, and Bankers Trust Company,
as trustee, as the same may be amended from time to time in accordance with the
terms thereof.
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<PAGE> 4
"Initial Purchaser" shall have the meaning set forth in the preamble
to this Agreement.
"Inspectors" shall have the meaning set forth in Section 3(n)
hereof.
"Issue Date" shall mean the date of original issuance of the
Securities.
"Liquidated Damages" shall have the meaning set forth in Section
2(e) hereof.
"Majority Holders" shall mean the Holders of a majority of the
aggregate liquidation amount of outstanding Capital Securities.
"Participating Broker-Dealer" shall have the meaning set forth in
Section 3(t) hereof.
"Person" shall mean an individual, partnership, corporation, trust
or unincorporated organization, limited liability company, or a government or
agency or political subdivision thereof.
"Private Exchange" shall have the meaning set forth in Section 2(a)
hereof.
"Private Exchange Securities" shall have the meaning set forth in
Section 2(a) hereof.
"Prospectus" shall mean the prospectus included in a Registration
Statement, including any preliminary prospectus, and any such prospectus as
amended or supplemented by any prospectus supplement, including a prospectus
supplement with respect to the terms of the offering of any portion of the
Registrable Securities covered by a Registration Statement, and by all other
amendments and supplements to a prospectus, including post-effective amendments,
and in each case including all material incorporated by reference therein.
"Purchase Agreement" shall have the meaning set forth in the
preamble to this Agreement.
"Records" shall have the meaning set forth in Section 3(n) hereof.
"Registrable Securities" shall mean the Securities and, if issued,
the Private Exchange Securities; provided, however, that Securities or Private
Exchange Securities, as the case may be, shall cease to be Registrable
Securities when (i) a Registration Statement with respect to such Securities or
Private Exchange Securities for the exchange or resale thereof, as the case may
be, shall have been declared effective under the Securities Act and such
Securities or Private Exchange Securities, as the case may be, shall have been
exchanged or disposed of pursuant to such Registration Statement, (ii) such
Securities or Private Exchange Securities, as the case may be, shall have been
sold to the public pursuant to Rule 144(k) (or any similar provision then in
force, but not Rule 144A) under the Securities Act, or (iii) such Securities or
Private Exchange Securities, as the case may be, shall have ceased to be
outstanding or (iv) with respect to the Securities, such Securities shall have
been exchanged for Exchange Securities upon consummation of the Exchange Offer
and are thereafter freely tradeable by the holder thereof (other than an
affiliate of the Company).
-3-
<PAGE> 5
"Registration Expenses" shall mean any and all expenses incident to
performance of or compliance by the Company with this Agreement, including
without limitation: (i) all Commission or National Association of Securities
Dealers, Inc. (the "NASD") registration and filing fees, including, if
applicable, the fees and expenses of any "qualified independent underwriter"
(and its counsel) that is required to be retained by any Holder of Registrable
Securities in accordance with the rules and regulations of the NASD, (ii) all
fees and expenses incurred in connection with compliance with state securities
or blue sky laws (including reasonable fees and disbursements of a counsel for
any underwriters or Holders as a group in connection with blue sky qualification
of any of the Exchange Securities or Registrable Securities) and compliance with
the rules of the NASD, (iii) all expenses of any Persons in preparing or
assisting in preparing, word processing, printing and distributing the
Registration Statement, any Prospectus and any amendments or supplements
thereto, and in preparing or assisting in preparing, printing and distributing
any underwriting agreements, securities sales agreements and other documents
relating to the performance of and compliance with this Agreement, (iv) all
rating agency fees, (v) the fees and disbursements of counsel for the Company
and of the independent certified public accountants of the Company, including
the expenses of any "cold comfort" letters required by or incident to such
performance and compliance, (vi) the fees and expenses of the Trustee, and any
exchange agent or custodian, (vii) all fees and expenses incurred in connection
with the listing, if any, of any of the Registrable Securities on any securities
exchange or exchanges, and (viii) the reasonable fees and expenses of any
special experts retained by the Company in connection with the Registration
Statement.
"Registration Statement" shall mean any registration statement of
the Company and the Issuer Trust which covers any of the Exchange Securities or
Registrable Securities pursuant to the provisions of this Agreement, and all
amendments and supplements to any such Registration Statement, including
post-effective amendments, in each case including the Prospectus contained
therein, all exhibits thereto and all material incorporated by reference
therein.
"Rule 144(k) Period" shall mean the period of two years (or such
other period as may hereafter be referred to in Rule 144(k) under the Securities
Act (or similar successor rule)) commencing on the Issue Date.
"Securities" shall have the meaning set forth in the preamble to
this Agreement.
"Securities Act" shall mean the Securities Act of 1933, as amended
from time to time.
"Shelf Registration" shall mean a registration effected pursuant to
Section 2(b) hereof.
"Shelf Registration Event" shall have the meaning set forth in
Section 2(b) hereof.
"Shelf Registration Event Date" shall have the meaning set forth in
Section 2(b) hereof.
"Shelf Registration Statement" shall mean a "shelf registration"
statement of the Company and the Issuer Trust pursuant to the provisions of
Section 2(b) hereof which covers all of the Registrable Securities or all of the
Private Exchange Securities, as the case may be, on an appropriate form under
Rule 415 under the Securities Act, or any similar rule that may be adopted
-4-
<PAGE> 6
by the Commission, and all amendments and supplements to such registration
statement, including post-effective amendments, in each case including the
Prospectus contained therein, all exhibits thereto and all material incorporated
by reference therein.
"TIA" shall have the meaning set forth in Section 3(l) hereof.
"Trust Agreement" shall mean the Amended and Restated Trust
Agreement, dated as of April 17, 1998, by the trustees named therein and the
Company as depositor.
"Trustees" shall mean any and all trustees with respect to (i) the
Capital Securities under the Trust Agreement, (ii) the Junior Subordinated
Debentures under the Indenture and (iii) the Guarantee.
2. Registration Under the Securities Act.
(a) Exchange Offer. To the extent not prohibited by
any applicable law or applicable interpretation of the staff of the Commission,
the Company and the Issuer Trust shall, for the benefit of the Holders, at the
Company's cost, use their respective best efforts to (i) cause to be filed with
the Commission within 150 days after the Issue Date an Exchange Offer
Registration Statement on an appropriate form under the Securities Act covering
the Exchange Offer, (ii) cause such Exchange Offer Registration Statement to be
declared effective under the Securities Act by the Commission not later than the
date which is 180 days after the Issue Date, and (iii) keep such Exchange Offer
Registration Statement effective for not less than 30 Business Days (or longer
if required by applicable law) after the date notice of the Exchange Offer is
mailed to the Holders. Upon the effectiveness of the Exchange Offer Registration
Statement, the Company and the Issuer Trust shall promptly commence the Exchange
Offer and use their respective best efforts to enable each Holder eligible and
electing to exchange Registrable Securities for a like principal amount of New
Junior Subordinated Debentures or a like liquidation amount of New Capital
Securities, together with the New Guarantee, as applicable (assuming that such
Holder is not an affiliate of the Company within the meaning of Rule 405 under
the Securities Act and is not a broker-dealer tendering Registrable Securities
acquired directly from the Company for its own account, acquires the Exchange
Securities in the ordinary course of such Holder's business and has no
arrangements or understandings with any Person to participate in the Exchange
Offer for the purpose of distributing the Exchange Securities) to transfer such
Exchange Securities from and after their receipt without any limitations or
restrictions under the Securities Act and under state securities or blue sky
laws.
In connection with the Exchange Offer, the Company and
the Issuer Trust shall:
(i) mail to each Holder a copy of the
Prospectus forming part of the Exchange Offer Registration Statement, together
with an appropriate letter of transmittal and related documents;
-5-
<PAGE> 7
(ii) keep the Exchange Offer open for
acceptance for a period of not less than 30 days after the date
notice thereof is mailed to the Holders (or longer if required by
applicable law) (such period referred to herein as the "Exchange
Period");
(iii) utilize the services of the Depositary
for the Exchange Offer;
(iv) permit Holders to withdraw tendered
Securities at any time prior to the close of business, New York
City time, on the last Business Day of the Exchange Period, by
sending to the institution specified in the notice, a telegram,
telex, facsimile transmission or letter setting forth the name of
such Holder, the principal amount of Securities delivered for
exchange, and a statement that such Holder is withdrawing his
election to have such Securities exchanged;
(v) notify each Holder that any Security not
tendered by such Holder in the Exchange Offer will remain
outstanding and continue to accrue interest or accumulate
distributions, as the case may be, but will not retain any rights
under this Agreement (except in the case of the Initial Purchaser
and Participating Broker-Dealers as provided herein); and
(vi) otherwise comply in all respects with
all applicable laws relating to the Exchange Offer.
If the Initial Purchaser determines upon advice of its outside
counsel that it is not eligible to participate in the Exchange Offer with
respect to the exchange of Securities constituting any portion of an unsold
allotment in the initial distribution, as soon as practicable upon receipt by
the Company and the Issuer Trust of a written request from such Initial
Purchaser, the Company and the Issuer Trust, as applicable, shall issue and
deliver to such Initial Purchaser in exchange (the "Private Exchange") for the
Securities held by such Initial Purchaser, a like liquidation amount of New
Capital Securities of the Issuer Trust, together with the New Guarantee, or a
like principal amount of the Junior Subordinated Debentures of the Company, as
applicable, that are identical (except that such securities may bear a customary
legend with respect to restrictions on transfer pursuant to the Securities Act)
to the Exchange Securities (the "Private Exchange Securities") and which are
issued pursuant to the Indenture, the Trust Agreement or the Guarantee (which
provides that the Exchange Securities will not be subject to the transfer
restrictions set forth in the Indenture or the Trust Agreement, as applicable
(other than to require minimum transfers thereof to be in blocks of $100,000
principal amount or liquidation amount, as the case may be), and that the
Exchange Securities, the Private Exchange Securities and the Securities will
vote and consent together on all matters as one class and that neither the
Exchange Securities, the Private Exchange Securities nor the Securities will
have the right to vote or consent as a separate class on any matter). The
Private Exchange Securities shall be of the same series as the Exchange
Securities and the Company and the Issuer Trust will seek to cause the CUSIP
Service Bureau to issue the same CUSIP Numbers for the Private Exchange
Securities as for the Exchange Securities issued pursuant to the Exchange Offer.
-6-
<PAGE> 8
As soon as practicable after the close of the Exchange Offer and, if
applicable, the Private Exchange, the Company and the Issuer Trust, as the case
requires, shall:
(i) accept for exchange all Securities or
portions thereof tendered and not validly withdrawn pursuant to the
Exchange Offer or the Private Exchange;
(ii) deliver, or cause to be delivered, to the
applicable Trustee for cancellation all Securities or portions
thereof so accepted for exchange by the Company; and
(iii) issue, and cause the applicable Trustee
under the Indenture, the Trust Agreement or the Guarantee, as
applicable, to promptly authenticate and deliver to each Holder,
new Exchange Securities or Private Exchange Securities, as
applicable, equal in principal amount to the principal amount of
the Junior Subordinated Debentures or equal in liquidation amount
to the liquidation amount of the Capital Securities (together with
the guarantee thereof) as are surrendered by such Holder.
Distributions on each New Capital Security and interest on each New
Junior Subordinated Debenture issued pursuant to the Registered Exchange Offer
and Distributions or interest, as the case may be, on each Private Exchange
Security issued in the Private Exchange will accrue from the last date on which
a Distribution or interest was paid on the Capital Security or the Junior
Subordinated Debenture surrendered in exchange therefor or, if no Distribution
or interest has been paid on such Capital Security or Junior Subordinated
Debenture, from the Issue Date. To the extent not prohibited by any law or
applicable interpretation of the staff of the Commission, the Company and the
Issuer Trust shall use their best efforts to complete the Exchange Offer as
provided above, and shall comply with the applicable requirements of the
Securities Act, the Exchange Act and other applicable laws in connection with
the Exchange Offer. The Exchange Offer shall not be subject to any conditions,
other than that the Exchange Offer does not violate applicable law or any
applicable interpretation of the staff of the Commission. Each Holder of
Registrable Securities who wishes to exchange such Registrable Securities for
Exchange Securities in the Exchange Offer will be required to make certain
customary representations in connection therewith, including, in the case of any
Holder of Capital Securities, representations that (i) it is not an affiliate of
the Issuer Trust or the Company, (ii) the Exchange Securities to be received by
it were acquired in the ordinary course of its business and (iii) at the time of
the Exchange Offer, it has no arrangement with any person to participate in the
distribution (within the meaning of the Securities Act) of the New Capital
Securities. The Company and the Issuer Trust shall inform the Initial Purchaser,
after consultation with the Trustee, of the names and addresses of the Holders
to whom the Exchange Offer is made, and the Initial Purchaser shall have the
right to contact such Holders and otherwise facilitate the tender of Registrable
Securities in the Exchange Offer.
Upon consummation of the Exchange Offer in accordance with this
Section 2(a), the provisions of this Agreement shall continue to apply, mutatis
mutandis, solely with respect to Registrable Securities that are Private
Exchange Securities and Exchange Securities held by Participating
Broker-Dealers, and the Company and the Issuer Trust shall have no further
-7-
<PAGE> 9
obligation to register the Registrable Securities (other than Private Exchange
Securities) pursuant to Section 2(b) of this Agreement.
(b) Shelf Registration. In the event that: (i) the
Company, the Issuer Trust or the Majority Holders reasonably determine, after
conferring with counsel, that the Exchange Offer Registration provided in
Section 2(a) above is not available because of any change in law or in currently
prevailing interpretations of the staff of the Commission; (ii) the Company has
received an opinion of counsel, rendered by a law firm, experienced in such
matters, to the effect that, as a result of the consummation of the Exchange
Offer, there is more than an insubstantial risk that (x) the Issuer 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 Issuer Trust would be subject to more than a de minimis amount of other
taxes, duties or other governmental charges; (iii) the Exchange Offer
Registration Statement is not declared effective within 180 days of the Issue
Date; or (iv) upon notice from any Holder on or before the 20th Business Day
following the consummation of the Exchange Offer that (A) it is prohibited by
law or Commission policy from participating in the Exchange Offer, (B) it may
not resell the New Capital Securities, the New Guarantee and the New Junior
Subordinated Debentures 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 or (C) it is a broker-dealer and owns Capital Securities acquired
directly from the Issuer Trust or an affiliate of the Issuer Trust, (any of the
events specified in clauses (i) through (iv) being a "Shelf Registration Event"
and the date of occurrence thereof, the "Shelf Registration Event Date"), the
Company and the Issuer Trust shall, at their cost, use their respective best
efforts to cause to be filed as promptly as practicable after such Shelf
Registration Event Date, as the case may be, and, in event, within 45 days after
such Shelf Registration Event Date (which shall be no earlier than 75 days after
the Closing Time), a Shelf Registration Statement providing for the sale by the
Holders of all of the Registrable Securities, and shall use their respective
best efforts to have such Shelf Registration Statement declared effective by the
Commission as soon as practicable. No Holder of Registrable Securities shall be
entitled to include any of its Registrable Securities in any Shelf Registration
pursuant to this Agreement unless and until such Holder agrees in writing to be
bound by all of the provisions of this Agreement applicable to such Holder and
furnishes to the Company and the Issuer Trust in writing, within 15 days after
receipt of a request therefor, such information as the Company and the Issuer
Trust may, after conferring with counsel with regard to information relating to
Holders that would be required by the Commission to be included in such Shelf
Registration Statement or Prospectus included therein, reasonably request for
inclusion in the Shelf Registration Statement or Prospectus included therein.
Each Holder as to which any Shelf Registration is being effected agrees to
furnish to the Company and the Issuer Trust all information with respect to such
Holder necessary to make the information previously furnished to the Company by
such Holder not materially misleading.
The Company and the Issuer Trust agree to use their respective best
efforts to keep the Shelf Registration Statement continuously effective for the
Rule 144(k) Period (subject to
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<PAGE> 10
extension pursuant to the last paragraph of Section 3 hereof) or for such
shorter period which will terminate when all of the Registrable Securities
covered by the Shelf Registration Statement have been sold pursuant to the Shelf
Registration Statement or cease to be outstanding (the "Effectiveness Period").
The Company and the Issuer Trust shall not permit any securities other than
Registrable Securities to be included in the Shelf Registration. The Company and
the Issuer Trust will, in the event a Shelf Registration Statement is declared
effective, provide to each Holder a reasonable number of copies of the
Prospectus which is a part of the Shelf Registration Statement, notify each such
Holder when the Shelf Registration has become effective and use their respective
best efforts to take certain other actions as are required to permit certain
unrestricted resales of the Registrable Securities. The Company and the Issuer
Trust further agree, if necessary, to supplement or amend the Shelf Registration
Statement, if required by the rules, regulations or instructions applicable to
the registration form used by the Company for such Shelf Registration Statement
or by the Securities Act or by any other rules and regulations thereunder for
shelf registrations, and the Company and the Issuer Trust agree to furnish to
the Holders of Registrable Securities copies of any such supplement or amendment
promptly after its being used or filed with the Commission.
(c) Expenses. The Company, as issuer of the Junior
Subordinated Debentures, shall pay all Registration Expenses in connection with
any Registration Statement pursuant to Section 2(a) or 2(b) hereof and will
reimburse the Initial Purchaser for the reasonable fees and disbursements of
Alston & Bird LLP, counsel for the Initial Purchaser, incurred in connection
with the Exchange Offer and, if applicable, the Private Exchange, and either
Alston & Bird LLP or any one other counsel designated in writing by the Majority
Holders to act as counsel for the Holders of the Registrable Securities in
connection with a Shelf Registration Statement, which other counsel shall be
reasonably satisfactory to the Company. Except as provided herein, each Holder
shall pay all expenses of its counsel, underwriting discounts and commissions
and transfer taxes, if any, relating to the sale or disposition of such Holder's
Registrable Securities pursuant to the Shelf Registration Statement.
(d) Effective Registration Statement. An Exchange
Offer Registration Statement pursuant to Section 2(a) hereof or a Shelf
Registration Statement pursuant to Section 2(b) will not be deemed to have
become effective unless it has been declared effective by the Commission;
provided, however, that if, after it has been declared effective, the offering
of Registrable Securities pursuant to a Shelf Registration Statement is
interfered with by any stop order, injunction or other order or requirement of
the Commission or any other governmental agency or court, such Registration
Statement will be deemed not to have been effective during the period of such
interference, until the offering of Registrable Securities pursuant to such
Registration Statement may legally resume. The Company and the Issuer Trust will
be deemed not to have used their best efforts to cause the Exchange Offer
Registration Statement or the Shelf Registration Statement, as the case may be,
to become, or to remain, effective during the requisite period if either of them
voluntarily takes any action that would result in such any Registration
Statement not being declared effective or in the Holders of Registrable
Securities covered thereby not being able to exchange or offer and sell such
Registrable Securities during that period unless such action is required by
applicable law.
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<PAGE> 11
(e) Additional Interest. In the event that:
(i) (A) neither the Exchange Offer
Registration Statement nor a Shelf Registration
Statement is filed with the Commission on or prior to
the 150th day after the Issue Date or (B)
notwithstanding that the Company and the Issuer Trust
have consummated or will consummate an Exchange Offer,
if pursuant to a Shelf Registration Event the Company
and the Issuer Trust are required to file a Shelf
Registration Statement and such Shelf Registration
Statement is not filed on or prior to the date required
by Section 2(b) hereof, then commencing on the day after
the applicable required filing date, liquidated damages
shall accrue on the principal amount of the Junior
Subordinated Debentures and, if the Exchange Offer has
been consummated, the New Junior Subordinated
Debentures, and additional Distributions shall
accumulate on the liquidation amount of the Capital
Securities and, if the Exchange Offer has been
consummated, the New Capital Securities, each at a rate
of 0.25% per annum; or
(ii) (A) neither the Exchange Offer
Registration Statement nor a Shelf Registration
Statement is declared effective by the Commission on or
prior to the 180th day after the Issue Date or (B)
notwithstanding that the Company and the Issuer Trust
have consummated or will consummate an Exchange Offer,
if pursuant to a Shelf Registration Event the Company
and the Issuer Trust are required to file a Shelf
Registration Statement and such Shelf Registration
Statement is not declared effective by the Commission on
or prior to the 30th day after the date such Shelf
Registration Statement was required to be filed, then,
commencing on the 31st day after the required filing
date, liquidated damages shall accrue on the principal
amount of the Junior Subordinated Debentures and, if the
Exchange Offer has been consummated, the New Junior
Subordinated Debentures, and additional Distributions
shall accumulate on the liquidation amount of the
Capital Securities and, if the Exchange Offer has been
consummated, the New Capital Securities, each at a rate
of 0.25% per annum; or
(iii) (A) the Issuer Trust has not exchanged
New Capital Securities for all Capital Securities
validly tendered for exchange by their respective
Holders or the Company has not exchanged the New
Guarantee or New Junior Subordinated Debentures for the
Guarantee or Junior Subordinated Debentures validly
tendered, in accordance with the terms of the Exchange
Offer on or prior to the 30th business day after the
date on which the Exchange Offer Registration Statement
was declared effective or (B) if applicable, the Shelf
Registration Statement has been declared effective and
such Shelf Registration Statement ceases to be effective
at any time prior to the expiration of the Rule 144(k)
Period (other than after such time as all Capital
Securities have been disposed of thereunder or otherwise
cease to be Registrable Securities), then liquidated
damages shall accrue on the principal amount of the
Junior Subordinated Debentures and, if the Exchange
Offer has been consummated, the New Junior Subordinated
Debentures, and additional Distributions shall
accumulate on the liquidation amount of the
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<PAGE> 12
Capital Securities and, if the Exchange Offer has been
consummated, the New Capital Securities, each at a rate
of 0.25% per annum commencing on (x) the 31st business
day after such effective date, in the case of (A) above,
or (y) the day such Shelf Registration Statement ceases
to be effective in the case of (B) above;
provided, however, that neither the liquidated damages on the Junior
Subordinated Debentures and any outstanding New Junior Subordinated Debentures,
nor the additional distribution rate on the liquidation amount of the Capital
Securities and any outstanding New Capital Securities, may exceed in the
aggregate 0.25% per annum; provided, further, however, that (1) upon the filing
of the Exchange Offer Registration Statement or a Shelf Registration Statement
(in the case of clause (i) above), (2) upon the effectiveness of the Exchange
Offer Registration Statement or a Shelf Registration Statement (in the case of
clause (ii) above), or (3) upon the exchange of New Capital Securities, the New
Guarantee and New Junior Subordinated Debentures for all Capital Securities, the
Guarantee and all Junior Subordinated Debentures tendered (in the case of clause
(iii)(A) above), or upon the effectiveness of the Shelf Registration Statement
which had ceased to remain effective (in the case of clause (iii)(B) above)
liquidated damages on the Junior Subordinated Debentures and any outstanding New
Junior Subordinated Debentures, and additional distributions on the liquidation
amount of the Capital Securities and any outstanding New Capital Securities as a
result of such clause (or relevant subclause thereof), as the case may be, shall
cease to accrue and accumulate.
Any amounts of liquidated damages and additional distributions due
pursuant to Section 2(e)(i), (ii) or (iii) above ("Liquidated Damages"), will be
payable in cash on the next succeeding April 15 or October 15, as the case may
be, to Holders on the relevant record dates for the payment of interest and
distributions pursuant to the Indenture and the Trust Agreement, respectively.
(f) Specific Enforcement. Without limiting the
remedies available to the Holders, the Company and the Issuer Trust acknowledge
that any failure by the Company or the Issuer Trust to comply with its
obligations under Section 2(a) and Section 2(b) hereof may result in material
irreparable injury to the Holders for which there is no adequate remedy at law,
that it would not be possible to measure damages for such injuries precisely and
that, in the event of any such failure, any Holder may obtain such relief as may
be required to specifically enforce the Company's and the Issuer Trust's
obligations under Section 2(a) and Section 2(b) hereof.
3. Registration Procedures. In connection with the obligations
of the Company and the Issuer Trust with respect to the Registration
Statements pursuant to Sections 2(a) and 2(b) hereof, the Company and the
Issuer Trust shall use their best efforts to:
(a) prepare and file with the Commission a Registration
Statement or Registration Statements as prescribed by Sections 2(a) and 2(b)
hereof within the relevant time period specified in Section 2 hereof on the
appropriate form under the Securities Act, which form (i) shall be selected by
the Company and the Issuer Trust, (ii) shall, in the case of a Shelf
Registration, be available for the sale of the Registrable Securities by the
selling Holders thereof and, in the case of an Exchange Offer, be available for
the exchange of the Registrable Securities, and (iii) shall comply as to form in
all material respects with the requirements of the applicable form and include
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<PAGE> 13
all financial statements required by the Commission to be filed therewith; and
use their best efforts to cause such Registration Statement to become effective
and remain effective in accordance with Section 2 hereof, provided, however,
that if (1) such filing is pursuant to Section 2(b), or (2) a Prospectus
contained in an Exchange Offer Registration Statement filed pursuant to Section
2(a) is required to be delivered under the Securities Act by any Participating
Broker-Dealer who seeks to sell Exchange Securities, before filing any
Registration Statement or Prospectus or any amendments or supplements thereto,
the Company and the Issuer Trust shall furnish to and afford the Holders of the
Registrable Securities and each Participating Broker-Dealer, as the case may be,
covered by such Registration Statement, their counsel and the managing
underwriters, if any, a reasonable opportunity to review copies of all such
documents (including copies of any documents to be incorporated by reference
therein and all exhibits thereto) proposed to be filed. The Company and the
Issuer Trust shall not file any Registration Statement or Prospectus or any
amendments or supplements thereto in respect of which the Holders must be
afforded an opportunity to review prior to the filing of such document if the
Majority Holders or such Participating Broker-Dealer, as the case may be, their
counsel or the managing underwriters, if any, shall reasonably object;
(b) prepare and file with the Commission such
amendments and post-effective amendments to each Registration Statement as may
be necessary to keep such Registration Statement effective for the Effectiveness
Period or the Applicable Period, as the case may be; and cause each Prospectus
to be supplemented, if so determined by the Company or the Issuer Trust or
requested by the Commission, by any required prospectus supplement and as so
supplemented to be filed pursuant to Rule 424 (or any similar provision then in
force) under the Securities Act, and comply with the provisions of the
Securities Act, the Exchange Act and the rules and regulations promulgated
thereunder applicable to it with respect to the disposition of all securities
covered by each Registration Statement during the Effectiveness Period or the
Applicable Period, as the case may be, in accordance with the intended method or
methods of distribution by the selling Holders thereof described in this
Agreement (including sales by any Participating Broker-Dealer);
(c) in the case of a Shelf Registration, (i) notify
each Holder of Registrable Securities included in the Shelf Registration
Statement, at least three Business Days prior to filing, that a Shelf
Registration Statement with respect to the Registrable Securities is being filed
and advising such Holder that the distribution of Registrable Securities will be
made in accordance with the method selected by the Majority Holders; and (ii)
furnish to each Holder of Registrable Securities included in the Shelf
Registration Statement and to each underwriter of an underwritten offering of
Registrable Securities, if any, without charge, as many copies of each
Prospectus, including each preliminary Prospectus, and any amendment or
supplement thereto and such other documents as such Holder or underwriter may
reasonably request, in order to facilitate the public sale or other disposition
of the Registrable Securities; and (iii) consent to the use of the Prospectus or
any amendment or supplement thereto by each of the selling Holders of
Registrable Securities included in the Shelf Registration Statement in
connection with the offering and sale of the Registrable Securities covered by
the Prospectus or any amendment or supplement thereto;
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<PAGE> 14
(d) in the case of a Shelf Registration, register or
qualify the Registrable Securities under all applicable state securities or
"blue sky" laws of such jurisdictions by the time the applicable Registration
Statement is declared effective by the Commission as any Holder of Registrable
Securities covered by a Registration Statement and each underwriter of an
underwritten offering of Registrable Securities shall reasonably request in
writing in advance of such date of effectiveness, and do any and all other acts
and things which may be reasonably necessary or advisable to enable such Holder
and underwriter to consummate the disposition in each such jurisdiction of such
Registrable Securities owned by such Holder; provided, however, that the Company
and the Issuer Trust shall not be required to (i) qualify as a foreign
corporation or as a dealer in securities in any jurisdiction where it would not
otherwise be required to qualify but for this Section 3(d), (ii) file any
general consent to service of process in any jurisdiction where it would not
otherwise be subject to such service of process or (iii) subject itself to
taxation in any such jurisdiction if it is not then so subject;
(e) in the case of (1) a Shelf Registration or (2)
Participating Broker-Dealers from whom the Company or the Issuer Trust has
received prior written notice that they will be utilizing the Prospectus
contained in the Exchange Offer Registration Statement as provided in Section
3(t) hereof, are seeking to sell Exchange Securities and are required to deliver
Prospectuses, notify each Holder of Registrable Securities or such Participating
Broker-Dealers, as the case may be, their counsel and the managing underwriters,
if any, promptly and promptly confirm such notice in writing (i) when a
Registration Statement has become effective and when any post-effective
amendments and supplements thereto become effective, (ii) of any request by the
Commission or any state securities authority for amendments and supplements to a
Registration Statement or Prospectus or for additional information after the
Shelf Registration Statement has become effective, (iii) of the issuance by the
Commission or any state securities authority of any stop order suspending the
effectiveness of a Registration Statement or the qualification of the
Registrable Securities or the Exchange Securities to be offered or sold by the
Participating Broker-Dealer in any jurisdiction described in paragraph 3(d)
hereof or the initiation of any proceedings for that purpose, (iv) in the case
of a Shelf Registration, if, between the effective date of a Registration
Statement and the closing of any sale of Registrable Securities covered thereby,
any of the representations and warranties of the Company and the Issuer Trust
contained in any purchase agreement, securities sales agreement or other similar
agreement shall cease to be true and correct in all material respects, (v) of
the happening of any event or the failure of any event to occur or the discovery
of any facts or otherwise, during the Effectiveness Period which makes any
statement made in such Registration Statement or the related Prospectus untrue
in any material respect or which causes such Registration Statement or
Prospectus to omit to state a material fact necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading, and (vi) the Company and the Issuer Trust's reasonable determination
that a post-effective amendment to the Registration Statement would be
appropriate;
(f) make every reasonable effort to obtain the
withdrawal of any order suspending the effectiveness of a Registration Statement
at the earliest possible moment;
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<PAGE> 15
(g) in the case of a Shelf Registration, furnish to
each Holder of Registrable Securities included within the coverage of such
Registration Statement, without charge, at least one conformed copy of each
Registration Statement relating to such Shelf Registration and any
post-effective amendment thereto (without documents incorporated therein by
reference or exhibits thereto, unless requested);
(h) in the case of a Shelf Registration, cooperate
with the selling Holders of Registrable Securities to facilitate the timely
preparation and delivery of certificates representing Registrable Securities to
be sold and not bearing any restrictive legends and in such denominations
(consistent with the provisions of the Indenture and the Trust Agreement) and
registered in such names as the selling Holders or the underwriters may
reasonably request at least two Business Days prior to the closing of any sale
of Registrable Securities pursuant to such Shelf Registration Statement;
(i) in the case of a Shelf Registration or an Exchange
Offer Registration, upon the occurrence of any circumstance contemplated by
Section 3(e)(ii), 3(e)(iii), 3(e)(v) or 3(e)(vi) hereof, use its best efforts to
prepare a supplement or post-effective amendment to such Registration Statement
or the related Prospectus or any document incorporated therein by reference or
file any other required document so that, as thereafter delivered to the
purchasers of the Registrable Securities, such Prospectus will not contain any
untrue statement of a material fact or omit to state a material fact necessary
to make the statements therein, in the light of the circumstances under which
they were made, not misleading; and to notify each Holder to suspend use of the
Prospectus as promptly as practicable after the occurrence of such an event;
(j) in the case of a Shelf Registration, a reasonable
time prior to the filing of any document which is to be incorporated by
reference into a Registration Statement or a Prospectus after the initial filing
of a Registration Statement, provide a reasonable number of copies of such
document to the Holders; and make such of the representatives of the Company and
the Issuer Trust as shall be reasonably requested by the Holders of Registrable
Securities or the Initial Purchaser on behalf of such Holders available for
discussion of such document;
(k) obtain a CUSIP number for all New Capital
Securities and the Capital Securities (and if the Issuer Trust has made a
distribution of the Junior Subordinated Debentures or New Junior Subordinated
Debentures to the Holders of the Capital Securities, the Junior Subordinated
Debentures), not later than the effective date of an Exchange Offer Registration
Statement, and provide the Trustee with printed certificates for the Exchange
Securities or the Registrable Securities in a form eligible for deposit with the
Depositary;
(1) cause the Indenture, the Trust Agreement, the
Guarantee, and the New Guarantee to be qualified under the Trust Indenture Act
of 1939 (the "TIA") in connection with the registration of the Exchange
Securities or Registrable Securities, as the case may be, and effect such
changes to such documents as may be required for them to be so qualified in
accordance with the terms of the TIA and execute, and use its best efforts to
cause the relevant trustee to execute, all documents as may be required to
effect such changes, and all other forms
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<PAGE> 16
and documents required to be filed with the Commission to enable such documents
to be so qualified in a timely manner;
(m) in the case of a Shelf Registration, enter into
such agreements (including underwriting agreements) as are customary in
underwritten offerings and take all such other appropriate actions as are
reasonably requested in order to expedite or facilitate the registration or the
disposition of such Registrable Securities, and in such connection, whether or
not an underwriting agreement is entered into and whether or not the
registration is an underwritten registration, if requested by (x) the Initial
Purchaser, in the case where such Initial Purchaser holds Securities acquired by
it as part of its initial distribution and (y) other Holders of Securities
covered thereby: (i) make such representations and warranties to Holders of such
Registrable Securities and the underwriters (if any), with respect to the
business of the Issuer Trust, the Company and its subsidiaries as then conducted
and the Shelf Registration Statement, Prospectus and documents, if any,
incorporated or deemed to be incorporated by reference therein, in each case, as
are customarily made by issuers to underwriters in underwritten offerings, and
confirm the same if and when requested; (ii) obtain opinions of counsel to the
Company and the Issuer Trust and updates thereof (which may be in the form of a
reliance letter) in form and substance reasonably satisfactory to the managing
underwriters (if any) and the Holders of a majority in principal amount of the
Registrable Securities being sold, addressed to each selling Holder and the
underwriters (if any) covering the matters customarily covered in opinions
requested in underwritten offerings and such other matters as may be reasonably
requested by such underwriters (it being agreed that the matters to be covered
by such opinions may be subject to customary qualifications and exceptions);
(iii) obtain "cold comfort" letters and updates thereof in form and substance
reasonably satisfactory to the managing underwriters from the independent
certified public accountants of the Company and the Issuer Trust (and, if
necessary, any other independent certified public accountants of any subsidiary
of the Company and the Issuer Trust or of any business acquired by the Company
and the Issuer Trust for which financial statements and financial data are, or
are required to be, included in the Shelf Registration Statement), addressed to
each of the underwriters, such letters to be in customary form and covering
matters of the type customarily covered in "cold comfort" letters in connection
with underwritten offerings and such other matters as reasonably requested by
such underwriters in accordance with Statement on Auditing Standards No. 72; and
(iv) if an underwriting agreement is entered into, the same shall contain
indemnification provisions and procedures no less favorable than those set forth
in Section 4 hereof (or such other provisions and procedures acceptable to
Holders of a majority in aggregate principal amount of Registrable Securities
covered by such Shelf Registration Statement and the managing underwriters or
agents) with respect to all parties to be indemnified pursuant to said Section
(including, without limitation, such underwriters and selling Holders). The
above shall be done at each closing under such underwriting agreement, or as and
to the extent required thereunder;
(n) if (1) a Shelf Registration is filed pursuant to
Section 2(b) or (2) a Prospectus contained in an Exchange Offer Registration
Statement filed pursuant to Section 2(a) is required to be delivered under the
Securities Act by any Participating Broker-Dealer who seeks to sell Exchange
Securities during the Applicable Period, make reasonably available for
inspection by any selling Holder of such Registrable Securities being sold or
each such Participating Broker-
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<PAGE> 17
Dealer, as the case may be, any underwriter participating in any such
disposition of Registrable Securities, and any attorney, accountant or other
agent retained by any such selling Holder or each such Participating
Broker-Dealer, as the case may be, or underwriter (collectively, the
"Inspectors"), at the offices where normally kept, during reasonable business
hours, all financial and other records, pertinent corporate documents and
properties of the Issuer Trust, the Company and its subsidiaries (collectively,
the "Records") as shall be reasonably necessary to enable them to exercise any
applicable due diligence responsibilities, and cause the officers, directors and
employees of the Issuer Trust, the Company and its subsidiaries to supply all
relevant information in each case reasonably requested by any such Inspector in
connection with such Shelf Registration Statement provided, however, that the
foregoing inspection and information gathering shall be coordinated by the
Initial Purchaser and, on behalf of the selling Holders of Registrable
Securities, by one counsel designated as described in Section 2(c) hereof.
Records which the Company and the Issuer Trust determine, in good faith, to be
confidential and any records which either of them notifies the Inspectors are
confidential shall not be disclosed by the Inspectors unless (i) the disclosure
of such Records is necessary to avoid or correct a material misstatement or
omission in such Registration Statement, (ii) the release of such Records is
ordered pursuant to a subpoena or other order from a court of competent
jurisdiction or is necessary in connection with any action, suit or proceeding
or (iii) the information in such Records has been made generally available to
the public. Each selling Holder of such Registrable Securities and each such
Participating Broker-Dealer will be required to agree in writing that
information obtained by it as a result of such inspections shall be deemed
confidential and shall not be used by it as the basis for any market
transactions in the securities of the Issuer Trust or the Company unless and
until such is made generally available to the public. Each selling Holder of
such Registrable Securities and each such Participating Broker-Dealer will be
required to further agree in writing that it will, upon learning that disclosure
of such Records is sought in a court of competent jurisdiction, give notice to
the Company and allow the Company at its expense to undertake appropriate action
to prevent disclosure of the Records deemed confidential;
(o) comply with all applicable rules and regulations
of the Commission so long as any provision of this Agreement shall be applicable
and make generally available to their respective security holders earning
statements satisfying the provisions of Section 11(a) of the Securities Act and
Rule 158 thereunder (or any similar rule promulgated under the Securities Act)
no later than 45 days after the end of any 12-month period (or 90 days after the
end of any 12-month period if such period is a fiscal year) (i) commencing at
the end of any fiscal quarter in which Registrable Securities are sold to
underwriters in a firm commitment or best efforts underwritten offering and (ii)
if not sold to underwriters in such an offering, commencing on the first day of
the first fiscal quarter of the Company after the effective date of a
Registration Statement, which statements shall cover said 12-month periods;
(p) upon consummation of an Exchange Offer or a
Private Exchange, if requested by a Trustee, obtain an opinion of counsel to the
Company addressed to the Trustee for the benefit of all Holders of Registrable
Securities participating in the Exchange Offer or the Private Exchange, as the
case may be, and which includes an opinion that (i) the Company or the Issuer
Trust, as the case requires, has duly authorized, executed and delivered the
Exchange Securities or the Private Exchange Securities, as the case may be, and
(ii) each of the Exchange
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<PAGE> 18
Securities or the Private Exchange Securities, as the case may be, constitute a
legal, valid and binding obligation of the Company or the Issuer Trust, as the
case requires, enforceable against the Company or the Issuer Trust, as the case
requires, in accordance with their respective terms (in each case, with
customary exceptions);
(q) if an Exchange Offer or a Private Exchange is to
be consummated, upon delivery of the Registrable Securities by Holders to the
Company or the Issuer Trust, as applicable (or to such other Person as directed
by the Company or the Issuer Trust, respectively), in exchange for the Exchange
Securities or the Private Exchange Securities, as the case may be, mark, or
cause to be marked, on such Registrable Securities delivered by such Holders
that such Registrable Securities are being cancelled in exchange for the
Exchange Securities or the Private Exchange Securities, as the case may be; in
no event shall such Registrable Securities be marked as paid or otherwise
satisfied;
(r) cooperate with each seller of Registrable
Securities covered by any Registration Statement and each underwriter, if any,
participating in the disposition of such Registrable Securities and their
respective counsel in connection with any filings required to be made with the
NASD;
(s) use its best efforts to take all other steps
necessary to effect the registration of the Registrable Securities covered by a
Registration Statement contemplated hereby;
(t) (A) in the case of the Exchange Offer Registration
Statement (i) include in the Exchange Offer Registration Statement a section
entitled "Plan of Distribution," which section shall be reasonably acceptable to
the Initial Purchaser or another representative of the Participating
Broker-Dealers, and which shall contain a summary statement of the positions
taken or policies made by the staff of the Commission with respect to the
potential "underwriter" status of any broker-dealer (a "Participating
Broker-Dealer") that holds Registrable Securities acquired for its own account
as a result of market-making activities or other trading activities and that
will be the beneficial owner (as defined in Rule 13d-3 under the Exchange Act)
of Exchange Securities to be received by such broker-dealer in the Exchange
Offer, whether such positions or policies have been publicly disseminated by the
staff of the Commission or such positions or policies, in the reasonable
judgment of the Initial Purchaser or such other representative, represent the
prevailing views of the staff of the Commission, including a statement that any
such broker-dealer who receives Exchange Securities for Registrable Securities
pursuant to the Exchange Offer may be deemed a statutory underwriter and must
deliver a prospectus meeting the requirements of the Securities Act in
connection with any resale of such Exchange Securities, (ii) furnish to each
Participating Broker-Dealer who has delivered to the Company the notice referred
to in Section 3(e), without charge, as many copies of each Prospectus included
in the Exchange Offer Registration Statement, including any preliminary
prospectus, and any amendment or supplement thereto, as such Participating
Broker-Dealer may reasonably request (each of the Company and the Issuer Trust
hereby consents to the use of the Prospectus forming part of the Exchange Offer
Registration Statement or any amendment or supplement thereto by any Person
subject to the prospectus delivery requirements of the Securities Act, including
all Participating Broker-Dealers, in connection with the sale or transfer of the
Exchange Securities covered by the Prospectus or
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<PAGE> 19
any amendment or supplement thereto), (iii) keep the Exchange Offer Registration
Statement effective and amend and supplement the Prospectus contained therein in
order to permit such Prospectus to be lawfully delivered by all Persons subject
to the prospectus delivery requirements of the Securities Act for such period of
time as such Persons must comply with such requirements under the Securities Act
and applicable rules and regulations in order to resell the Exchange Securities;
provided, however, that such period shall not be required to exceed 90 days (or
such longer period if extended pursuant to the last sentence of Section 3
hereof) (the "Applicable Period"), and (iv) include in the transmittal letter or
similar documentation to be executed by an exchange offeree in order to
participate in the Exchange Offer (x) the following provision:
"If the exchange offeree is a broker-dealer holding
Registrable Securities acquired for its own account as a result of
market-making activities or other trading activities, it will
deliver a prospectus meeting the requirements of the Securities Act
in connection with any resale of Exchange Securities received in
respect of such Registrable Securities pursuant to the Exchange
Offer";
and (y) a statement to the effect that by a broker-dealer making the
acknowledgment described in clause (x) and by delivering a Prospectus in
connection with the exchange of Registrable Securities, the broker-dealer will
not be deemed to admit that it is an underwriter within the meaning of the
Securities Act; and
(B) in the case of any Exchange Offer Registration
Statement, the Company and the Issuer Trust agree to deliver to the Initial
Purchaser or to another representative of the Participating Broker-Dealers, if
requested by such Initial Purchaser or such other representative of the
Participating Broker-Dealers, on behalf of the Participating Broker-Dealers upon
consummation of the Exchange Offer (i) an opinion of counsel in form and
substance reasonably satisfactory to the Initial Purchaser or such other
representative of the Participating Broker-Dealers, covering the matters
customarily covered in opinions requested in connection with Exchange Offer
Registration Statements and such other matters as may be reasonably requested
(it being agreed that the matters to be covered by such opinion may be subject
to customary qualifications and exceptions), (ii) an officers' certificate
containing certifications substantially similar to those set forth in Section
5(f) of the Purchase Agreement and such additional certifications as are
customarily delivered in a public offering of debt securities and (iii) as well
as upon the effectiveness of the Exchange Offer Registration Statement, a
comfort letter, in each case, in customary form if permitted by Statement on
Auditing Standards No. 72.
The Company or the Issuer Trust may require each seller of
Registrable Securities as to which any registration is being effected to furnish
to the Company or the Issuer Trust, as applicable, such information regarding
such seller as may be required by the staff of the Commission to be included in
a Registration Statement. The Company or the Issuer Trust may exclude from such
registration the Registrable Securities of any seller who unreasonably fails to
furnish such information within a reasonable time after receiving such request.
The Company shall have no obligation to register under the Securities Act the
Registrable Securities of a seller who so fails to furnish such information.
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<PAGE> 20
In the case of (1) a Shelf Registration Statement or (2)
Participating Broker-Dealers who have notified the Company and the Issuer Trust
that they will be utilizing the Prospectus contained in the Exchange Offer
Registration Statement as provided in Section 3(t) hereof and are seeking to
sell Exchange Securities and are required to deliver Prospectuses, each Holder
agrees that, upon receipt of any notice from the Company or the Issuer Trust of
the happening of any event of the kind described in Section 3(e)(ii), 3(e)(iii),
3(e)(v) or 3(e)(vi) hereof, such Holder will forthwith suspend use of the
Prospectus and discontinue disposition of Registrable Securities pursuant to a
Registration Statement until such Holder's receipt of the copies of the
supplemented or amended Prospectus contemplated by Section 3(i) hereof or until
it is advised in writing (the "Advice") by the Company and the Issuer Trust that
the use of the applicable Prospectus may be resumed, and, if so directed by the
Company and the Issuer Trust, such Holder will deliver to the Company or the
Issuer Trust (at the Company's or the Issuer Trust's expense, as the case
requires) all copies in such Holder's possession, other than permanent file
copies then in such Holder's possession, of the Prospectus covering such
Registrable Securities or Exchange Securities, as the case may be, current at
the time of receipt of such notice. If the Company or the Issuer Trust shall
give any such notice to suspend the disposition of Registrable Securities, or
Exchange Securities, as the case may be, pursuant to a Registration Statement,
the Company and the Issuer Trust shall use their best efforts to file and have
declared effective (if an amendment) as soon as practicable an amendment or
supplement to the Registration Statement and shall extend the period during
which such Registration Statement shall be maintained effective pursuant to this
Agreement by the number of days in the period from and including the date of the
giving of such notice to and including the date when the Company and the Issuer
Trust shall have made available to the Holders (x) copies of the supplemented or
amended Prospectus necessary to resume such dispositions or (y) the Advice.
4. Indemnification and Contribution.
(a) In connection with any Registration Statement,
the Company and the Issuer Trust shall, jointly and severally,
indemnify and hold harmless the Initial Purchaser, each Holder, each
underwriter who participates in an offering of the Registrable Securities, each
Participating Broker-Dealer, each Person, if any, who controls any of such
parties within the meaning of Section 15 of the Securities Act or Section 20 of
the Exchange Act and each of their respective directors, officers, employees
and agents, as follows:
(i) from and against any and all loss,
liability, claim, damage and expense whatsoever, joint or several,
as incurred, arising out of any untrue statement or alleged untrue
statement of a material fact contained in any Registration Statement
(or any amendment thereto), covering Registrable Securities or
Exchange Securities, including all documents incorporated therein by
reference, or the omission or alleged omission therefrom of a
material fact required to be stated therein or necessary to make the
statements therein not misleading or arising out of any untrue
statement or alleged untrue statement of a material fact contained
in any Prospectus (or any amendment or supplement thereto) or the
omission or alleged omission therefrom of a material fact necessary
in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading;
-19-
<PAGE> 21
(ii) from and against any and all loss,
liability, claim, damage and expense whatsoever, joint or several,
as incurred, to the extent of the aggregate amount paid in
settlement of any litigation, or any investigation or proceeding by
any court or governmental agency or body, commenced or threatened,
or of any claim whatsoever based upon any such untrue statement or
omission, or any such alleged untrue statement or omission, if such
settlement is effected with the prior written consent of the
Company; and
(iii) from and against any and all expenses
whatsoever, as incurred (including reasonable fees and disbursements
of counsel chosen by such Holder, such Participating Broker-Dealer,
or any underwriter (except to the extent otherwise expressly
provided in Section 4(c) hereof)), reasonably incurred in
investigating, preparing or defending against any litigation, or any
investigation or proceeding by any court or governmental agency or
body, commenced or threatened, or any claim whatsoever based upon
any such untrue statement or omission, or any such alleged untrue
statement or omission, to the extent that any such expense is not
paid under subparagraph (i) or (ii) of this Section 4(a);
provided, however, that (i) this indemnity does not apply to any loss,
liability, claim, damage or expense to the extent arising out of an untrue
statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with written information furnished in writing to the
Company or the Issuer Trust by such Holder, such Participating Broker-Dealer, or
any underwriter with respect to such Holder, Participating Broker-Dealer or any
underwriter, as the case may be, expressly for use in a Registration Statement
(or any amendment thereto) or any Prospectus (or any amendment or supplement
thereto) and (ii) the Company and the Issuer Trust shall not be liable to any
such Holder, Participating Broker-Dealer, any underwriter or controlling person,
with respect to any untrue statement or alleged untrue statement or omission or
alleged omission in any preliminary Prospectus to the extent that any such loss,
liability, claim, damage or expense of any Holder, Participating Broker-Dealer,
any underwriter or controlling person results from the fact that such Holder,
any underwriter or Participating Broker-Dealer, sold Securities to a person to
whom there was not sent or given, at or prior to the written confirmation of
such sale, a copy of the final Prospectus as then amended or supplemented if the
Company had previously furnished copies thereof to such Holder, underwriter, or
Participating Broker-Dealer, and the loss, liability, claim, damage or expense
of such Holder, underwriter, Participating Broker-Dealer, or controlling person
results from an untrue statement or omission of a material fact contained in the
preliminary Prospectus which was corrected in the final Prospectus. Any amounts
advanced by the Company or the Issuer Trust to an indemnified party pursuant to
this Section 4 as a result of such losses shall be returned to the Company or
the Issuer Trust if it shall be finally determined by such a court in a judgment
not subject to appeal or final review that such indemnified party was not
entitled to indemnification by the Company or the Issuer Trust.
(b) Each Holder agrees, severally and not jointly, to indemnify
and hold harmless the Company, the Issuer Trust, any underwriter and the other
selling Holders and each of their respective directors, officers (including each
officer of the Company and the Issuer Trust
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<PAGE> 22
who signed the Registration Statement), employees and agents and each Person, if
any, who controls the Company, the Issuer Trust, any underwriter or any other
selling Holder within the meaning of Section 15 of the Securities Act or Section
20 of the Exchange Act, from and against any and all loss, liability, claim,
damage and expense whatsoever described in the indemnity contained in Section
4(a) hereof, as incurred, but only with respect to untrue statements or
omissions, or alleged untrue statements or omissions, made in a Registration
Statement (or any amendment thereto) or any Prospectus (or any amendment or
supplement thereto) in reliance upon and in conformity with written information
furnished to the Company or the Issuer Trust by such selling Holder with respect
to such Holder expressly for use in such Registration Statement (or any
amendment thereto), or any such Prospectus (or any amendment or supplement
thereto); provided, however, that, in the case of a Shelf Registration
Statement, no such Holder shall be liable for any amount hereunder in excess of
the amount of net proceeds received by such Holder from the sale of Registrable
Securities pursuant to such Shelf Registration Statement.
(c) Each indemnified party shall give prompt notice to each
indemnifying party of any action commenced against it in respect of which
indemnity may be sought hereunder, enclosing a copy of all papers properly
served on such indemnified party, but failure to so notify an indemnifying party
shall not relieve such indemnifying party from any liability which it may have
under this Section 4, except to the extent that it is materially prejudiced by
such failure. An indemnifying party may participate at its own expense in the
defense of such action. If an indemnifying party so elects within a reasonable
time after receipt of such notice, an indemnifying party, severally or jointly
with any other indemnifying parties receiving such notice, may assume the
defense of such action with counsel chosen by it and reasonably acceptable to
the indemnified parties defendant in such action, provided, however, that if (i)
representation of such indemnified party by the same counsel would present a
conflict of interest or (ii) the actual or potential defendants in, or targets
of, any such action include both the indemnified party and the indemnifying
party and any such indemnified party reasonably determines that there may be
legal defenses available to such indemnified party which are different from or
in addition to those available to such indemnifying party, then in the case of
clauses (i) and (ii) of this Section 4(c) such indemnifying party and counsel
for each indemnifying party or parties shall not be entitled to assume such
defense. If an indemnifying party is not entitled to assume the defense of such
action as a result of the proviso to the preceding sentence, counsel for such
indemnifying party and counsel for each indemnified party or parties shall be
entitled to conduct the defense of such indemnified party or parties. If an
indemnifying party assumes the defense of such action, in accordance with and as
permitted by the provisions of this paragraph, such indemnifying parties shall
not be liable for any fees and expenses of counsel for the indemnified parties
incurred thereafter in connection with such action. In no event shall the
indemnifying parties be liable for the fees and expenses of more than one
counsel (in addition to local counsel), separate from its own counsel, for all
indemnified parties in connection with any one action or separate but similar or
related actions in the same jurisdiction arising out of the same general
allegations or circumstances. No indemnifying party shall, without the prior
written consent of the indemnified parties, settle or compromise or consent to
the entry of any judgment with respect to any litigation, or any investigation
or proceeding by any governmental agency or body, commenced or threatened, or
any claim whatsoever in respect of which indemnification or contribution could
be sought under this Section 4 (whether or not the indemnified parties are
actual or potential parties
-21-
<PAGE> 23
thereto), unless such settlement, compromise or consent (i) includes an
unconditional written release in form and substance satisfactory to the
indemnified parties of each indemnified party from all liability arising out of
such litigation, investigation, proceeding or claim and (ii) does not include a
statement as to or an admission of fault, culpability or a failure to act by or
on behalf of any indemnified party.
(d) Notwithstanding the last sentence of Section 4(c), if at any
time an indemnified party shall have requested an indemnifying party to
reimburse the indemnified party for reasonable fees and expenses of counsel
pursuant to Section 4(a)(iii) above, such indemnifying party agrees that it
shall be liable for any settlement effected without its written consent if (i)
such settlement is entered into more than 45 days after receipt by such
indemnifying party of the aforesaid request, (ii) such indemnifying party shall
have received notice of the terms of such settlement at least 30 days prior to
such settlement being entered into and (iii) such indemnifying party shall not
have reimbursed such indemnified party in accordance with such request prior to
the date of such settlement; provided that an indemnifying party shall not be
liable for any such settlement effected without its consent if such indemnifying
party (1) reimburses such indemnified party in accordance with such request to
the extent it considers reasonable and (2) provides written notice to the
indemnified party substantiating the unpaid balance as unreasonable, in each
case prior to the date of such settlement.
(e) In order to provide for just and equitable contribution in
circumstances under which any of the indemnity provisions set forth in this
Section 4 is for any reason held to be unavailable to the indemnified parties
although applicable in accordance with its terms, the Company, the Issuer Trust,
and the Holders shall contribute to the aggregate losses, liabilities, claims,
damages and expenses of the nature contemplated by such indemnity agreement
incurred by the Company, the Issuer Trust, and the Holders, as incurred;
provided that no Person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the 1933 Act) shall be entitled to contribution from
any Person that was not guilty of such fraudulent misrepresentation. As between
the Company, the Issuer Trust, and the Holders, such parties shall contribute to
such aggregate losses, liabilities, claims, damages and expenses of the nature
contemplated by such indemnity agreement in such proportion as shall be
appropriate to reflect the relative fault of the Company and Issuer Trust, on
the one hand, and the Holders, on the other hand, with respect to the statements
or omissions which resulted in such loss, liability, claim, damage or expense,
or action in respect thereof, as well as any other relevant equitable
considerations. The relative fault of the Company and the Issuer Trust, on the
one hand, and of the Holders, on the other hand, shall be determined by
reference to, among other things, whether the untrue or alleged untrue statement
of a material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Company or the Issuer Trust, on the one
hand, or by or on behalf of the Holders, on the other, and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission. The Company, the Issuer Trust and the Holders of the
Registrable Securities agree that it would not be just and equitable if
contribution pursuant to this Section 4 were to be determined by pro rata
allocation or by any other method of allocation that does not take into account
the relevant equitable considerations. For purposes of this Section 4, each
affiliate of a Holder, and each director, officer, employee, agent and Person,
if any, who controls a Holder or such affiliate within the meaning of Section 15
-22-
<PAGE> 24
of the Securities Act or Section 20 of the Exchange Act shall have the same
rights to contribution as such Holder, and each director of each of the Company
or the Issuer Trust, each officer of each of the Company or the Issuer Trust who
signed the Registration Statement, and each Person, if any, who controls each of
the Company and the Issuer Trust within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act shall have the same rights to
contribution as each of the Company or the Issuer Trust.
5. Participation in Underwritten Registrations. No Holder may
participate in any underwritten registration hereunder unless such Holder (a)
agrees to sell such Holder's Registrable Securities on the basis provided in any
underwriting arrangements approved by the Persons entitled hereunder to approve
such arrangements and (b) completes and executes all reasonable questionnaires,
powers of attorney, indemnities, underwriting agreements, lock-up letters and
other documents reasonably required under the terms of such underwriting
arrangements.
6. Selection of Underwriters. The Holders of Registrable
Securities covered by a Shelf Registration Statement who desire to do so may
sell the securities covered by such Shelf Registration in an underwritten
offering. In any such underwritten offering, the underwriter or underwriters and
manager or managers that will administer the offering will be selected by the
Holders of a majority in aggregate principal amount of the Registrable
Securities included in such offering; provided, however, that such underwriters
and managers must be reasonably satisfactory to the Company and the Issuer
Trust.
7. Miscellaneous.
(a) Rule 144 and Rule 144A. For so long as the
Company or the Issuer Trust is subject to the reporting requirements of Section
13 or 15 of the Exchange Act and any Registrable Securities remain outstanding,
each of the Company and the Issuer Trust, as the case may be, will use its best
efforts to file the reports required to be filed by it under the Securities Act
and Section 13(a) or 15(d) of the Exchange Act and the rules and regulations
adopted by the Commission thereunder, or, if it ceases to be so required to file
such reports, it will, upon the request of any Holder of Registrable Securities
(a) make publicly available such information as is necessary to permit sales of
their securities pursuant to Rule 144 under the Securities Act, (b) deliver such
information to a prospective purchaser as is necessary to permit sales of their
securities pursuant to Rule 144A under the Securities Act and it will take such
further action as any Holder of Registrable Securities may reasonably request,
and (c) take such further action that is reasonable in the circumstances, in
each case, to the extent required from time to time to enable such Holder to
sell its Registrable Securities without registration under the Securities Act
within the limitation of the exemptions provided by (i) Rule 144 under the
Securities Act, as such rule may be amended from time to time, (ii) Rule 144A
under the Securities Act, as such rule may be amended from time to time, or
(iii) any similar rules or regulations hereafter adopted by the Commission. Upon
the request of any Holder of Registrable Securities, the Company or the Issuer
Trust, as the case may be, will deliver to such Holder a written statement as to
whether it has complied with such requirements.
-23-
<PAGE> 25
(b) No Inconsistent Agreements. The Company or the
Issuer Trust has not entered into nor will the Company or the Issuer Trust on or
after the date of this Agreement enter into any agreement which is inconsistent
with the rights granted to the Holders of Registrable Securities in this
Agreement or otherwise conflicts with the provisions hereof. The rights granted
to the Holders hereunder do not in any way conflict with and are not
inconsistent with the rights granted to the holders of the Company's or the
Issuer Trust's other issued and outstanding securities under any such
agreements.
(c) Amendments and Waivers. The provisions of this
Agreement, including the provisions of this sentence, may not be amended,
modified or supplemented, and waivers or consents to departures from the
provisions hereof may not be given unless the Company and the Issuer Trust have
obtained the written consent of Holders of at least a majority in aggregate
principal amount of the outstanding Registrable Securities affected by such
amendment, modification, supplement, waiver or departure; provided no amendment,
modification or supplement or waiver or consent to the departure with respect to
the provisions of Section 4 hereof shall be effective as against any Holder of
Registrable Securities unless consented to in writing by such Holder of
Registrable Securities. Notwithstanding the foregoing sentence, (i) this
Agreement may be amended, without the consent of any Holder of Registrable
Securities, by written agreement signed by the Company, the Issuer Trust and the
Initial Purchaser, to cure any ambiguity, correct or supplement any provision of
this Agreement that may be inconsistent with any other provision of this
Agreement or to make any other provisions with respect to matters or questions
arising under this Agreement which shall not be inconsistent with other
provisions of this Agreement, (ii) this Agreement may be amended, modified or
supplemented, and waivers and consents to departures from the provisions hereof
may be given, by written agreement signed by the Company, the Issuer Trust and
the Initial Purchaser to the extent that any such amendment, modification,
supplement, waiver or consent is, in their reasonable judgment, necessary or
appropriate to comply with applicable law (including any interpretation of the
Staff of the Commission) or any change therein and (iii) to the extent any
provision of this Agreement relates to the Initial Purchaser, such provision may
be amended, modified or supplemented, and waivers or consents to departures from
such provisions may be given, by written agreement signed by the Initial
Purchaser, the Company and the Issuer Trust.
(d) Notices. All notices and other communications
provided for or permitted hereunder shall be made in writing by hand-delivery,
registered first-class mail, telex, telecopier, or any courier guaranteeing
overnight delivery (i) if to a Holder, at the most current address given by such
Holder to the Company or the Issuer Trust by means of a notice given in
accordance with the provisions of this Section 7(d), which address initially is,
with respect to the Initial Purchaser, the address set forth in the Purchase
Agreement; and (ii) if to the Company or the Issuer Trust, initially at the
Company's address set forth in the Purchase Agreement and thereafter at such
other address, notice of which is given in accordance with the provisions of
this Section 7(d).
All such notices and communications shall be deemed to have been
duly given: at the time delivered by hand, if personally delivered; five
Business Days after being deposited in the mail, postage prepaid, if mailed;
when answered back, if telexed; when receipt is acknowledged, if
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<PAGE> 26
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 Indenture.
(e) Successors and Assigns. This Agreement shall inure
to the benefit of and be binding upon the successors, assigns and transferees of
the Initial Purchaser, including, without limitation and without the need for an
express assignment, subsequent Holders; provided, however, that nothing herein
shall be deemed to permit any assignment, transfer or other disposition of
Registrable Securities in violation of the terms of the Purchase Agreement or
the Indenture. If any transferee of any Holder shall acquire Registrable
Securities, in any manner, whether by operation of law or otherwise, such
Registrable Securities shall be held subject to all of the terms of this
Agreement, and by taking and holding such Registrable Securities, such Person
shall be conclusively deemed to have agreed to be bound by and to perform all of
the terms and provisions of this Agreement and such Person shall be entitled to
receive the benefits hereof.
(f) Third-Party Beneficiary. The Initial
Purchaser shall be a third party beneficiary of the agreements made
hereunder between the Company and the Issuer Trust, on the one hand, and the
Holders, on the other hand, and shall have the right to enforce such agreements
directly to the extent it deems such enforcement necessary or advisable to
protect its rights or the rights of Holders hereunder.
(g) Counterparts. This Agreement may be executed in
any number of counterparts and by the parties hereto in separate counterparts,
each of which when so executed shall be deemed to be an original and all of
which taken together shall constitute one and the same agreement.
(h) Headings. The headings in this Agreement are for
convenience of reference only and shall not limit or otherwise affect the
meaning hereof.
(i) GOVERNING LAW. THIS AGREEMENT SHALL BE DEEMED TO
HAVE BEEN MADE IN THE STATE OF MARYLAND. THE VALIDITY AND INTERPRETATION OF THIS
AGREEMENT, AND THE TERMS AND CONDITIONS SET FORTH HEREIN, SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF MARYLAND WITHOUT
GIVING EFFECT TO ANY PROVISIONS RELATING TO CONFLICTS OF LAWS. EACH OF THE
PARTIES HERETO AGREES TO SUBMIT TO THE JURISDICTION OF THE COURTS OF THE STATE
OF MARYLAND IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS
AGREEMENT.
(j) Severability. In the event that any one or more of
the provisions contained herein, or the application thereof in any
circumstance, is held invalid, illegal or unenforceable, the
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<PAGE> 27
validity, legality and enforceability of any such provision in every other
respect and of the remaining provisions contained herein shall not be affected
or impaired thereby.
(k) Securities Held by the Company, the Issuer Trust
or its Affiliates. Whenever the consent or approval of Holders of a specified
percentage of Registrable Securities is required hereunder, Registrable
Securities held by the Company, the Issuer Trust 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.
IN WITNESS WHEREOF, the parties have executed this Agreement as of
the date first written above.
PROVIDENT BANKSHARES CORPORATION
By: /s/ Peter M. Martin
----------------------------
Name: Peter M. Martin
--------------------------
Title: President
-------------------------
PROVIDENT TRUST I
By: /s/ Robert L. Davis
-----------------------------
Name: Robert L. Davis
---------------------------
Title: Administrator
Confirmed and accepted as of the date first above written:
KEEFE, BRUYETTE & WOODS, INC.
By:/s/ Peter J. Wirth
-------------------------
Name: Peter J. Wirth
-----------------------
Title: Senior Vice President
----------------------
<PAGE> 1
EXHIBIT 5.1
[LETTERHEAD OF MULDOON, MURPHY & FAUCETTE]
July 10, 1998
Board of Directors
Provident Bankshares Corporation
114 East Lexington Street
Baltimore, Maryland 21202
Ladies and Gentlemen:
In connection with the registration under the Securities Act of 1933,
as amended (the "Act"), of $40,000,000 aggregate principal amount of Exchange
Junior Subordinated Deferrable Interest Debentures (the "Debt Securities") of
Provident Bankshares Corporation, a Maryland corporation (the "Company"),
$40,000,000 aggregate liquidation amount of Exchange Capital Securities (the
"Exchange Capital Securities") of Provident Trust I, a business trust created
under the laws of the State of Maryland (the "Issuer"), and the Exchange
Guarantee with respect to the Exchange Capital Securities (the "Guarantee") to
be executed and delivered by the Company for the benefit of the holders from
time to time of the Exchange Capital Securities, we, as your counsel, have
examined such corporate records, certificates and other documents, and such
questions of law, as we have considered necessary or appropriate for the
purposes of this opinion.
Upon the basis of such examination, we advise you that, when:
(i) the Registration Statement relating to the Debt
Securities, the Exchange Capital Securities and the Exchange Guarantee
has become effective under the Act;
(ii) the Exchange Guarantee Agreement relating to the
Exchange Guarantee with respect to the Exchange Capital Securities of
the Issuer has been duly executed and delivered;
(iii) the Debt Securities have been duly executed and
authenticated in accordance with the Indenture and issued and delivered
as contemplated in the Registration Statement; and
(iv) The Exchange Capital Securities have been duly
executed in accordance with the Amended and Restated Trust Agreement of
the Issuer and issued and delivered as contemplated in the Registration
Statement, the Debt Securities and the Exchange Guarantee relating to
the Exchange Capital Securities of the Issuer will constitute valid and
legally binding obligations of the Company, subject to bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium and similar
laws of general applicability relating to or affecting creditors'
rights and to general equity principles.
<PAGE> 2
Board of Directors
Provident Bankshares Corporation
July 10, 1998
Page 2
We understand that you have received an opinion regarding the Exchange
Capital Securities from Richards, Layton & Finger, P.A., special Delaware
counsel for the Company and the Issuer. We are expressing no opinion with
respect to the matters contained in such opinion.
Also, we have relied as to certain Company matters on information
obtained from public officials, officers of the Company and other sources
believed by us to be responsible.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the references to us under the heading "Validity
of Exchange Securities" in the Prospectus. In giving such consent, we do not
thereby admit that we are in the category of persons whose consent is required
under Section 7 of the Act.
Very truly yours,
MULDOON, MURPHY & FAUCETTE
By: /s/ MULDOON, MURPHY & FAUCETTE
------------------------------
<PAGE> 1
EXHIBIT 5.2
[Letterhead of Richards, Layton & Finger]
July 13, 1998
Provident Trust I
Provident Bankshares Corporation
114 East Lexington Street
Baltimore, Maryland 21202
Re: Provident Trust I
Ladies and Gentlemen:
We have acted as special Delaware counsel for Provident Bankshares
Corporation, a Maryland corporation (the "Company"), and Provident Trust I, a
Delaware business trust (the "Trust"), in connection with the matters set forth
herein. At your request, this opinion is being furnished to you.
For purposes of giving the opinions hereinafter set forth, our
examination of documents has been limited to the examination of originals or
copies of the following:
(a) The Certificate of Trust of the Trust, dated as of April 3,
1998 (the "Certificate"), as filed in the office of the Secretary of State of
the State of Delaware (the "Secretary of State") on April 3, 1998;
(b) The Trust Agreement Provident Trust I, dated as of April 3,
1998, between the Company, as depositors, and the trustees of the Trust named
therein;
(c) The Amended and Restated Trust Agreement, dated as of April
17, 1998 (including Exhibits A, C and D thereto) (the "Trust Agreement"),
among the Company, as depositor, the trustees of the Trust named therein, the
administrators named therein and the holders, from time to time, of undivided
beneficial interests in the assets of the Trust;
(d) The Registration Statement on Form S-4 (the "Registration
Statement"), including a preliminary prospectus (the "Prospectus") relating to
the 8.29% Exchange Capital Securities of the Trust, representing undivided
beneficial interests in the assets of the Trust (each, an "Exchange Capital
Security" and collectively, the "Exchange Capital Securities"), as proposed to
be filed by the Company and the Trust with the Securities and Exchange
Commission on or about July 13, 1998; and
<PAGE> 2
(e) A Certificate of Good Standing for the Trust, dated
July 13, 1998, obtained from the Secretary of State.
Initially capitalized terms used herein and not otherwise defined are
used as defined in the Trust Agreement.
For purposes of this opinion, we have not reviewed any documents other
than the documents listed in paragraphs (a) through (e) above. In particular, we
have not reviewed any document (other than the documents listed in paragraphs
(a) through (e) above) that is referred to in or incorporated by reference into
the documents reviewed by us. We have assumed that there exists no provision in
any document that we have not reviewed that is inconsistent with the opinions
stated herein. We have conducted no independent factual investigation of our own
but rather have relied solely upon the foregoing documents, the statements and
information set forth therein and the additional matters recited or assumed
herein, all of which we have assumed to be true, complete and accurate in all
material respects.
With respect to all documents examined by us, we have assumed (i) the
authenticity of all documents submitted to us as authentic originals, (ii) the
conformity with the originals of all documents submitted to us as copies or
forms, and (iii) the genuineness of all signatures.
For purposes of this opinion, we have assumed (i) that the Trust
Agreement constitutes the entire agreement among the parties thereto with
respect to the subject matter thereof, including with respect to the creation,
operation and termination of the Trust, and that the Trust Agreement and the
Certificate are in full force and effect and have not been amended, (ii) except
to the extent provided in paragraph 1 below, the due creation or due
organization or due formation, as the case may be, and valid existence in good
standing of each party to the documents examined by us under the laws of the
jurisdiction governing its creation, organization or formation, (iii) the legal
capacity of natural persons who are parties to the documents examined by us,
(iv) that each of the parties to the documents examined by us has the power and
authority to execute and deliver, and to perform its obligations under, such
documents, (v) the due authorization, execution and delivery by all parties
thereto of all documents examined by us, (vi) the receipt by each Person to whom
an Exchange Capital Security is to be issued by the Trust (collectively, the
"Exchange Capital Security Holders") of a Capital Securities Certificate,
in accordance with the Trust Agreement, and so described in the Registration
Statement, and (vii) that the Exchange Capital Securities are issued to the
Exchange Capital Security Holders in accordance with the Trust Agreement, and
as described in the Registration Statement. We have not participated in the
preparation of the Registration Statement and assume no responsibility for its
contents.
This opinion is limited to the laws of the State of Delaware (excluding
the securities laws of the State of Delaware), and we have not considered and
express no opinion on the laws of any other jurisdiction, including federal laws
and rules and regulations relating thereto. Our opinions are rendered only with
respect to Delaware laws and rules, regulations and orders thereunder which are
currently in effect.
<PAGE> 3
Based upon the foregoing, and upon our examination of such questions of
law and statutes of the State of Delaware as we have considered necessary or
appropriate, and subject to the assumptions, qualifications, limitations and
exceptions set forth herein, we are of the opinion that:
1. The Trust has been duly created and is validly existing in
good standing as a business trust under the Delaware Business Trust Act.
2. The Exchange Capital Securities will represent valid and,
subject to the qualifications set forth in paragraph 3 below, fully paid and
nonassessable undivided beneficial interests in the assets of the Trust.
3. The Exchange Capital Security Holders, as beneficial owners of
the Trust, will be entitled to the same limitation of personal liability
extended to stockholders of private corporations for profit organized under the
General Corporation Law of the State of Delaware. We note that Exchange Capital
Security Holders may be obligated to make payments as set forth in the Trust
Agreement.
We consent to the filing of this opinion with the Securities and
Exchange Commission as an exhibit to the Registration Statement. In addition, we
hereby consent to the use of our name under the heading "Validity of Exchange
Securities" in the Prospectus. In giving the foregoing consents, we do not
thereby admit that we come within the category of Persons whose consent is
required under Section 7 of the Securities Act of 1933, as amended, or the rules
and regulations of the Securities and Exchange Commission thereunder. Except as
stated above, without our prior written consent, this opinion may not be
furnished or quoted to, or relied upon by, any other Person for any purpose.
Very truly yours,
/s/ Richards, Layton & Finger
------------------------------------
<PAGE> 1
EXHIBIT 8
[LETTERHEAD OF MULDOON, MURPHY & FAUCETTE]
July 10, 1998
Board of Directors
Provident Bankshares Corporation
114 East Lexington Street
Baltimore, Maryland 21202
Ladies and Gentlemen:
As special federal tax counsel to Provident Trust I (the "Issuer") and
Provident Bankshares Corporation in connection with the exchange offer by the
Issuer of $40,000,000 of its 8.29% Exchange Capital Securities pursuant to the
prospectus (the "Prospectus") contained in the Registration Statement for the
Exchange Offer, and assuming the operative documents described in the Prospectus
will be performed in accordance with the terms described therein, we hereby
confirm to you our opinion as set forth under the heading "Certain Federal
Income Tax Considerations" in the Prospectus, subject to the limitations set
forth therein.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the references to us under the heading "Certain
Federal Income Tax Consequences" in the Prospectus. In giving such consent, we
do not thereby admit that we are in the category of persons whose consent is
required under Section 7 of the Act.
Very truly yours,
MULDOON, MURPHY & FAUCETTE
By: /s/ MULDOON, MURPHY & FAUCETTE
------------------------------
<PAGE> 1
EXHIBIT 12.1
COMPUTATION OF CONSOLIDATED RATIO OF EARNINGS TO FIXED CHARGES
(Excluding Interest on Deposits)
The Company's ratios of earnings to fixed charges (excluding interest
on deposits) for the periods indicated were as follows:
<TABLE>
<CAPTION>
AS OF AND FOR
THE
THREE MONTHS
ENDED
MARCH 31, YEAR ENDED DECEMBER 31,
------------ --------------------------------------------------------------
1998 1997 1996 1995 1994 1993
------------ ----------- ---------- ---------- ------------ ----------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C>
Net income........................... $ 9,305 $24,959 $26,188 $22,132 $16,165 $14,010
Cumulative effect of changes in
accounting for income taxes....... -- -- -- -- -- (777)
Income tax expense................... 4,607 38,587 39,856 33,620 25,011 19,779
--------- -------- -------- -------- -------- --------
Pretax earnings................... 13,912 13,628 13,668 11,488 8,846 6,546
Fixed charges:
Interest on borrowed funds........... 11,909 50,714 49,618 44,603 22,568 14,484
-------- -------- -------- -------- -------- --------
Total fixed charges........... 11,909 50,714 49,618 44,603 22,568 14,484
-------- -------- -------- -------- -------- --------
Earnings (for ratio calculation)..... 25,821 89,301 89,474 78,223 47,579 34,263
-------- -------- -------- -------- -------- --------
Ratio of earnings to fixed charges... 2.17x 1.76x 1.80x 1.75x 2.11x 2.37x
</TABLE>
For purposes of computing the consolidated ratio of earnings to fixed
charges, "earnings" represent net income (loss) before extraordinary items and
cumulative effect of changes in accounting principles plus applicable income
taxes and fixed charges. Fixed charges, excluding interest on deposits, include
gross interest expense (other than on deposits). Fixed charges, including gross
interest on deposits, include all interest expense.
<PAGE> 1
EXHIBIT 12.2
COMPUTATION OF CONSOLIDATED RATIO OF EARNINGS TO FIXED CHARGES
(Including Interest on Deposits)
The Company's ratios of earnings to fixed charges (including interest
on deposits) for the periods indicated were as follows:
<TABLE>
<CAPTION>
AS OF AND FOR
THE
THREE MONTHS
ENDED
MARCH 31, YEAR ENDED DECEMBER 31,
------------ --------------------------------------------------------------
1998 1997 1996 1995 1994 1993
------------ ----------- ---------- ---------- ------------ ----------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C>
Net income........................... $ 9,305 $24,959 $26,188 $22,132 $16,165 $14,010
Cumulative effect of change in
accounting for income taxes....... -- -- -- -- -- (777)
Income tax expense................... 4,607 13,628 13,668 11,488 8,846 6,546
--------- -------- -------- -------- -------- ---------
Pretax earnings................... 13,912 38,587 39,856 33,620 25,011 19,779
Fixed charges:
Interest on deposits................. 30,047 106,004 87,736 78,216 59,686 60,497
Interest on borrowed funds........... 11,909 50,714 49,618 44,603 22,568 14,484
--------- -------- -------- -------- -------- ---------
Total fixed charges........... 41,956 156,718 137,354 122,819 82,254 74,981
--------- -------- -------- -------- -------- ---------
Earnings (for ratio calculation)..... 55,868 195,305 177,210 156,439 107,265 94,760
--------- -------- -------- -------- -------- ---------
Ratio of earnings to fixed charges... 1.33x 1.25x 1.29x 1.27x 1.30x 1.26x
</TABLE>
For purposes of computing the consolidated ratio of earnings to fixed
charges, "earnings" represent net income (loss) before extraordinary items and
cumulative effect of changes in accounting principles plus applicable income
taxes and fixed charges. Fixed charges, excluding interest on deposits, include
gross interest expense (other than on deposits). Fixed charges, including gross
interest on deposits, include all interest expense.
<PAGE> 1
EXHIBIT 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in the Registration
Statement of Provident Bankshares Corporation on Form S-4 (File No.
333-________) of our report dated January 21, 1998 on our audits of the
consolidated financial statements of Provident Bankshares Corporation as of
December 31, 1997 and 1996, and for each of the three years in the period ended
December 31, 1997, which report is included in the Annual Report on Form 10-K
for the year ended December 31, 1997, of Provident Bankshares Corporation. We
also consent to the reference to our firm under the caption "Independent
Accountants."
PricewaterhouseCoopers, LLP
Baltimore, Maryland
July 9, 1998
<PAGE> 1
EXHIBIT 23.2
INDEPENDENT AUDITORS' CONSENT
As independent public accountants, we hereby consent to the
incorporation by reference in this registration statement of our report dated
January 22, 1997, except with respect to Note 19 as to which the date is March
10, 1997 incorporated by reference in Provident Bankshares annual report on
Form 10-K for the year ended December 31, 1997 and to all references to our
Firm included in this registration statement.
/s/ Arthur Andersen LLP
Washington, D.C.
July 9, 1998
<PAGE> 1
EXHIBIT 25
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-------------------------------------
FORM T-1
STATEMENT OF ELIGIBILITY UNDER THE TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A TRUSTEE PURSUANT
TO SECTION 305(b)(2) ___________
-------------------------------------
-------------------------------------
BANKERS TRUST COMPANY
(Exact name of trustee as specified in its charter)
NEW YORK 13-4941247
(Jurisdiction of Incorporation or (I.R.S. Employer
organization if not a U.S. national bank) Identification no.)
FOUR ALBANY STREET
NEW YORK, NEW YORK 10006
(Address of principal (Zip Code)
executive offices)
BANKERS TRUST COMPANY
LEGAL DEPARTMENT
130 LIBERTY STREET, 31ST FLOOR
NEW YORK, NEW YORK 10006
(212) 250-2201
(Name, address and telephone number of agent for service)
-------------------------------------
-------------------------------------
<TABLE>
<S> <C>
PROVIDENT BANKSHARES CORPORATION PROVIDENT TRUST I
(Exact name of Registrant as specified in its charter) (Exact name of Registrant as specified in its charter)
MARYLAND 52-158642 DELAWARE 52-2103882
(State or other jurisdiction of (I.R.S. employer (State or other jurisdiction of (I.R.S. employer
Incorporation or organization) Identification no.) incorporation or organization) Identification no.)
114 EAST LEXINGTON STREET C/O PROVIDENT BANKSHARES CORPORATION
BALTIMORE, MD 21202 114 EAST LEXINGTON STREET
BALTIMORE, MD 21202
(Address, including zip code (Address, including zip code of
of principal executive offices) principal executive offices)
</TABLE>
PROVIDENT TRUST I EXCHANGE CAPITAL SECURITIES
PROVIDENT BANKSHARES CORPORATION EXCHANGE SUBORDINATED DEFERRABLE INTEREST
DEBENTURES GUARANTEE OF PROVIDENT BANKSHARES CORPORATION WITH RESPECT TO
EXCHANGE CAPITAL SECURITIES
(Title of the indenture securities)
<PAGE> 2
ITEM 1. GENERAL INFORMATION.
Furnish the following information as to the trustee.
(a) Name and address of each examining or supervising authority
to which it is subject.
NAME ADDRESS
---- -------
Federal Reserve Bank (2nd District) New York, NY
Federal Deposit Insurance Corporation Washington, D.C.
New York State Banking Department Albany, NY
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
ITEM 2. AFFILIATIONS WITH OBLIGOR.
If the obligor is an affiliate of the Trustee, describe each such
affiliation.
None.
ITEM 3. -15. NOT APPLICABLE
ITEM 16. LIST OF EXHIBITS.
EXHIBIT 1 - Restated Organization Certificate of Bankers Trust
Company dated August 7, 1990, Certificate of
Amendment of the Organization Certificate of Bankers
Trust Company dated June 21, 1995 - Incorporated
herein by reference to Exhibit 1 filed with Form T-1
Statement, Registration No. 33-65171, Certificate of
Amendment of the Organization Certificate of Bankers
Trust Company dated March 20, 1996, incorporate by
referenced to Exhibit 1 filed with Form T-1
Statement, Registration No. 333-25843 and Certificate
of Amendment of the Organization Certificate of
Bankers Trust Company dated June 19, 1997, copy
attached.
EXHIBIT 2 - Certificate of Authority to commence business -
Incorporated herein by reference to Exhibit 2 filed
with Form T-1 Statement, Registration No. 33-21047.
EXHIBIT 3 - Authorization of the Trustee to exercise corporate
trust powers - Incorporated herein by reference to
Exhibit 2 filed with Form T-1 Statement, Registration
No. 33-21047.
EXHIBIT 4 - Existing By-Laws of Bankers Trust Company, as amended
on November 18, 1997. Copy attached.
EXHIBIT 5 - Not applicable.
EXHIBIT 6 - Consent of Bankers Trust Company required by Section
321(b) of the Act. - Incorporated herein by reference
to Exhibit 4 filed with Form T-1 Statement,
Registration No. 22-18864.
EXHIBIT 7 - The latest report of condition of Bankers Trust
Company dated as of December 31, 1997. Copy attached.
2
<PAGE> 3
EXHIBIT 8 - Not Applicable.
EXHIBIT 9 - Not Applicable.
3
<PAGE> 4
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939, as
amended, the trustee, Bankers Trust Company, a corporation organized and
existing under the laws of the State of New York, has duly caused this statement
of eligibility to be signed on its behalf by the undersigned, thereunto duly
authorized, all in The City of New York, and State of New York, on the 29th day
of May, 1998.
BANKERS TRUST COMPANY
By: /s/ Sandra J. Shaffer
---------------------
Sandra J. Shaffer
Assistant Vice President
4
<PAGE> 5
STATE OF NEW YORK,
BANKING DEPARTMENT
I, MANUEL KURSKY, Deputy Superintendent of Banks of the State of New
York, DO HEREBY APPROVE the annexed Certificate entitled "CERTIFICATE OF
AMENDMENT OF THE ORGANIZATION CERTIFICATE OF BANKERS TRUST COMPANY UNDER SECTION
8005 OF THE BANKING LAW," dated June 19, 1997, providing for an increase in
authorized capital stock from $1,601,666,670 consisting of 100,166,667 shares
with a par value of $10 each designated as Common Stock and 600 shares with a
par value of $1,000,000 each designated as Series Preferred Stock to
$2,001,666,670 consisting of 100,166,667 shares with a par value of $10 each
designated as Common Stock and 1,000 shares with a par value of $1,000,000 each
designated as Series Preferred Stock.
WITNESS, my hand and official seal of the Banking Department at the City of New
York, this 27TH day of June in the Year of our Lord one thousand nine hundred
and NINETY-SEVEN.
/s/ Manuel Kursky
------------------------------
Deputy Superintendent of Banks
5
<PAGE> 6
CERTIFICATE OF AMENDMENT
OF THE
ORGANIZATION CERTIFICATE
OF BANKERS TRUST
Under Section 8005 of the Banking Law
------------------------------
We, James T. Byrne, Jr. and Lea Lahtinen, being respectively a Managing
Director and an Assistant Secretary of Bankers Trust Company, do hereby certify:
1. The name of the corporation is Bankers Trust Company.
2. The organization certificate of said corporation was filed by the
Superintendent of Banks on the 5th of march, 1903.
3. The organization certificate as heretofore amended is hereby amended
to increase the aggregate number of shares which the corporation shall have
authority to issue and to increase the amount of its authorized capital stock in
conformity therewith.
4. Article III of the organization certificate with reference to the
authorized capital stock, the number of shares into which the capital stock
shall be divided, the par value of the shares and the capital stock outstanding,
which reads as follows:
"III. The amount of capital stock which the corporation is hereafter to
have is One Billion, Six Hundred and One Million, Six Hundred Sixty-Six
Thousand, Six Hundred Seventy Dollars ($1,601,666,670), divided into
One Hundred Million, One Hundred Sixty-Six Thousand, Six Hundred
Sixty-Seven (100,166,667) shares with a par value of $10 each
designated as Common Stock and 600 shares with a par value of One
Million Dollars ($1,000,000) each designated as Series Preferred
Stock."
is hereby amended to read as follows:
"III. The amount of capital stock which the corporation is hereafter to
have is Two Billion One Million, Six Hundred Sixty-Six Thousand, Six
Hundred Seventy Dollars ($2,001,666,670), divided into One Hundred
Million, One Hundred Sixty-Six Thousand, Six Hundred Sixty-Seven
(100,166,667) shares with a par value of $10 each designated as Common
Stock and 1000 shares with a par value of One Million Dollars
($1,000,000) each designated as Series Preferred Stock."
6
<PAGE> 7
5. The foregoing amendment of the organization certificate was
authorized by unanimous written consent signed by the holder of all outstanding
shares entitled to vote thereon.
IN WITNESS WHEREOF, we have made and subscribed this certificate this
19th day of June, 1997.
/s/ James T. Byrne, Jr.
----------------------------------
James T. Byrne, Jr.
Managing Director
/s/ Lea Lahtinen
----------------------------------
Lea Lahtinen
Assistant Secretary
State of New York )
) ss:
County of New York )
Lea Lahtinen, being fully sworn, deposes and says that she is an
Assistant Secretary of Bankers Trust Company, the corporation described in the
foregoing certificate; that she has read the foregoing certificate and knows the
contents thereof, and that the statements herein contained are true.
/s/ Lea Lahtinen
----------------------------------
Lea Lahtinen
Sworn to before me this 19th day
of June, 1997.
/s/ Sandra L. West
- ----------------------------------
Notary Public
SANDRA L. WEST
Notary Public State of New York
No. 31-4942101
Qualified in New York County
Commission Expires September 19, 1998
7
<PAGE> 8
BY-LAWS
NOVEMBER 18, 1997
BANKERS TRUST COMPANY
NEW YORK
8
<PAGE> 9
BY-LAWS
OF
BANKERS TRUST COMPANY
ARTICLE I
MEETINGS OF STOCKHOLDERS
SECTION 1. The annual meeting of the stockholders of this Company shall be held
at the office of the Company in the Borough of Manhattan, City of New York, on
the third Tuesday in January of each year, for the election of directors and
such other business as may properly come before said meeting.
SECTION 2. Special meetings of stockholders other than those regulated by
statute may be called at any time by a majority of the directors. It shall be
the duty of the Chairman of the Board, the Chief Executive Officer or the
President to call such meetings whenever requested in writing to do so by
stockholders owning a majority of the capital stock.
SECTION 3. At all meetings of stockholders, there shall be present, either in
person or by proxy, stockholders owning a majority of the capital stock of the
Company, in order to constitute a quorum, except at special elections of
directors, as provided by law, but less than a quorum shall have power to
adjourn any meeting.
SECTION 4. The Chairman of the Board or, in his absence, the Chief Executive
Officer or, in his absence, the President or, in their absence, the senior
officer present, shall preside at meetings of the stockholders and shall direct
the proceedings and the order of business. The Secretary shall act as secretary
of such meetings and record the proceedings.
ARTICLE II
DIRECTORS
SECTION 1. The affairs of the Company shall be managed and its corporate powers
exercised by a Board of Directors consisting of such number of directors, but
not less than ten nor more than twenty-five, as may from time to time be fixed
by resolution adopted by a majority of the directors then in office, or by the
stockholders. In the event of any increase in the number of directors,
additional directors may be elected within the limitations so fixed, either by
the stockholders
9
<PAGE> 10
or within the limitations imposed by law, by a majority of directors then in
office. One-third of the number of directors, as fixed from time to time, shall
constitute a quorum. Any one or more members of the Board of Directors or any
Committee thereof may participate in a meeting of the Board of Directors or
Committee thereof by means of a conference telephone or similar communications
equipment which allows all persons participating in the meeting to hear each
other at the same time. Participation by such means shall constitute presence in
person at such a meeting.
All directors hereafter elected shall hold office until the next annual meeting
of the stockholders and until their successors are elected and have qualified.
No person who shall have attained age 72 shall be eligible to be elected or
re-elected a director. Such director may, however, remain a director of the
Company until the next annual meeting of the stockholders of Bankers Trust New
York Corporation (the Company's parent) so that such director's retirement will
coincide with the retirement date from Bankers Trust New York Corporation.
No Officer-Director who shall have attained age 65, or earlier relinquishes his
responsibilities and title, shall be eligible to serve as a director.
SECTION 2. Vacancies not exceeding one-third of the whole number of the Board of
Directors may be filled by the affirmative vote of a majority of the directors
then in office, and the directors so elected shall hold office for the balance
of the unexpired term.
SECTION 3. The Chairman of the Board shall preside at meetings of the Board of
Directors. In his absence, the Chief Executive Officer or, in his absence, such
other director as the Board of Directors from time to time may designate shall
preside at such meetings.
SECTION 4. The Board of Directors may adopt such Rules and Regulations for the
conduct of its meetings and the management of the affairs of the Company as it
may deem proper, not inconsistent with the laws of the State of New York, or
these By-Laws, and all officers and employees shall strictly adhere to, and be
bound by, such Rules and Regulations.
SECTION 5. Regular meetings of the Board of Directors shall be held from time to
time on the third Tuesday of the month. If the day appointed for holding such
regular meetings shall be a legal holiday, the regular meeting to be held on
such day shall be held on the next business day thereafter. Special meetings of
the Board of Directors may be called upon at least two day's notice whenever it
may be deemed proper by the Chairman of the Board or, the Chief Executive
Officer
10
<PAGE> 11
or, in their absence, by such other director as the Board of Directors may have
designated pursuant to Section 3 of this Article, and shall be called upon like
notice whenever any three of the directors so request in writing.
SECTION 6. The compensation of directors as such or as members of committees
shall be fixed from time to time by resolution of the Board of Directors.
11
<PAGE> 12
ARTICLE III
COMMITTEES
SECTION 1. There shall be an Executive Committee of the Board consisting of not
less than five directors who shall be appointed annually by the Board of
Directors. The Chairman of the Board shall preside at meetings of the Executive
Committee. In his absence, the Chief Executive Officer or, in his absence, such
other member of the Committee as the Committee from time to time may designate
shall preside at such meetings.
The Executive Committee shall possess and exercise to the extent permitted by
law all of the powers of the Board of Directors, except when the latter is in
session, and shall keep minutes of its proceedings, which shall be presented to
the Board of Directors at its next subsequent meeting. All acts done and powers
and authority conferred by the Executive Committee from time to time shall be
and be deemed to be, and may be certified as being, the act and under the
authority of the Board of Directors.
A majority of the Committee shall constitute a quorum, but the Committee may act
only by the concurrent vote of not less than one-third of its members, at least
one of whom must be a director other than an officer. Any one or more directors,
even though not members of the Executive Committee, may attend any meeting of
the Committee, and the member or members of the Committee present, even though
less than a quorum, may designate any one or more of such directors as a
substitute or substitutes for any absent member or members of the Committee, and
each such substitute or substitutes shall be counted for quorum, voting, and all
other purposes as a member or members of the Committee.
SECTION 2. There shall be an Audit Committee appointed annually by resolution
adopted by a majority of the entire Board of Directors which shall consist of
such number of directors, who are not also officers of the Company, as may from
time to time be fixed by resolution adopted by the Board of Directors. The
Chairman shall be designated by the Board of Directors, who shall also from time
to time fix a quorum for meetings of the Committee. Such Committee shall conduct
the annual directors' examinations of the Company as required by the New York
State Banking Law; shall review the reports of all examinations made of the
Company by public authorities and report thereon to the Board of Directors; and
shall report to the Board of Directors such other matters as it deems advisable
with respect to the Company, its various departments and the conduct of its
operations.
12
<PAGE> 13
In the performance of its duties, the Audit Committee may employ or retain, from
time to time, expert assistants, independent of the officers or personnel of the
Company, to make studies of the Company's assets and liabilities as the
Committee may request and to make an examination of the accounting and auditing
methods of the Company and its system of internal protective controls to the
extent considered necessary or advisable in order to determine that the
operations of the Company, including its fiduciary departments, are being
audited by the General Auditor in such a manner as to provide prudent and
adequate protection. The Committee also may direct the General Auditor to make
such investigation as it deems necessary or advisable with respect to the
Company, its various departments and the conduct of its operations. The
Committee shall hold regular quarterly meetings and during the intervals thereof
shall meet at other times on call of the Chairman.
SECTION 3. The Board of Directors shall have the power to appoint any other
Committees as may seem necessary, and from time to time to suspend or continue
the powers and duties of such Committees. Each Committee appointed pursuant to
this Article shall serve at the pleasure of the Board of Directors.
13
<PAGE> 14
ARTICLE IV
OFFICERS
SECTION 1. The Board of Directors shall elect from among their number a Chairman
of the Board and a Chief Executive Officer; and shall also elect a President,
and may also elect a Senior Vice Chairman, one or more Vice Chairmen, one or
more Executive Vice Presidents, one or more Senior Managing Directors, one or
more Managing Directors, one or more Senior Vice Presidents, one or more
Principals, one or more Vice Presidents, one or more General Managers, a
Secretary, a Controller, a Treasurer, a General Counsel, one or more Associate
General Counsels, a General Auditor, a General Credit Auditor, and one or more
Deputy Auditors, who need not be directors. The officers of the corporation may
also include such other officers or assistant officers as shall from time to
time be elected or appointed by the Board. The Chairman of the Board or the
Chief Executive Officer or, in their absence, the President, the Senior Vice
Chairman or any Vice Chairman, may from time to time appoint assistant officers.
All officers elected or appointed by the Board of Directors shall hold their
respective offices during the pleasure of the Board of Directors, and all
assistant officers shall hold office at the pleasure of the Board or the
Chairman of the Board or the Chief Executive Officer or, in their absence, the
President, the Senior Vice Chairman or any Vice Chairman. The Board of Directors
may require any and all officers and employees to give security for the faithful
performance of their duties.
SECTION 2. The Board of Directors shall designate the Chief Executive Officer of
the Company who may also hold the additional title of Chairman of the Board,
President, Senior Vice Chairman or Vice Chairman and such person shall have,
subject to the supervision and direction of the Board of Directors or the
Executive Committee, all of the powers vested in such Chief Executive Officer by
law or by these By-Laws, or which usually attach or pertain to such office. The
other officers shall have, subject to the supervision and direction of the Board
of Directors or the Executive Committee or the Chairman of the Board or, the
Chief Executive Officer, the powers vested by law or by these By-Laws in them as
holders of their respective offices and, in addition, shall perform such other
duties as shall be assigned to them by the Board of Directors or the Executive
Committee or the Chairman of the Board or the Chief Executive Officer.
The General Auditor shall be responsible, through the Audit Committee, to the
Board of Directors for the determination of the program of the internal audit
function and the evaluation of the adequacy of the system of internal controls.
Subject to the Board of Directors, the General Auditor shall have and may
exercise all the powers and shall
14
<PAGE> 15
perform all the duties usual to such office and shall have such other powers as
may be prescribed or assigned to him from time to time by the Board of Directors
or vested in him by law or by these By-Laws. He shall perform such other duties
and shall make such investigations, examinations and reports as may be
prescribed or required by the Audit Committee. The General Auditor shall have
unrestricted access to all records and premises of the Company and shall
delegate such authority to his subordinates. He shall have the duty to report to
the Audit Committee on all matters concerning the internal audit program and the
adequacy of the system of internal controls of the Company which he deems
advisable or which the Audit Committee may request. Additionally, the General
Auditor shall have the duty of reporting independently of all officers of the
Company to the Audit Committee at least quarterly on any matters concerning the
internal audit program and the adequacy of the system of internal controls of
the Company that should be brought to the attention of the directors except
those matters responsibility for which has been vested in the General Credit
Auditor. Should the General Auditor deem any matter to be of special immediate
importance, he shall report thereon forthwith to the Audit Committee. The
General Auditor shall report to the Chief Financial Officer only for
administrative purposes.
The General Credit Auditor shall be responsible to the Chief Executive Officer
and, through the Audit Committee, to the Board of Directors for the systems of
internal credit audit, shall perform such other duties as the Chief Executive
Officer may prescribe, and shall make such examinations and reports as may be
required by the Audit Committee. The General Credit Auditor shall have
unrestricted access to all records and may delegate such authority to
subordinates.
SECTION 3. The compensation of all officers shall be fixed under such plan or
plans of position evaluation and salary administration as shall be approved from
time to time by resolution of the Board of Directors.
SECTION 4. The Board of Directors, the Executive Committee, the Chairman of the
Board, the Chief Executive Officer or any person authorized for this purpose by
the Chief Executive Officer, shall appoint or engage all other employees and
agents and fix their compensation. The employment of all such employees and
agents shall continue during the pleasure of the Board of Directors or the
Executive Committee or the Chairman of the Board or the Chief Executive Officer
or any such authorized person; and the Board of Directors, the Executive
Committee, the Chairman of the Board, the Chief Executive Officer or any such
authorized person may discharge any such employees and agents at will.
15
<PAGE> 16
ARTICLE V
INDEMNIFICATION OF DIRECTORS, OFFICERS AND OTHERS
SECTION 1. The Company shall, to the fullest extent permitted by Section 7018 of
the New York Banking Law, indemnify any person who is or was made, or threatened
to be made, a party to an action or proceeding, whether civil or criminal,
whether involving any actual or alleged breach of duty, neglect or error, any
accountability, or any actual or alleged misstatement, misleading statement or
other act or omission and whether brought or threatened in any court or
administrative or legislative body or agency, including an action by or in the
right of the Company to procure a judgment in its favor and an action by or in
the right of any other corporation of any type or kind, domestic or foreign, or
any partnership, joint venture, trust, employee benefit plan or other
enterprise, which any director or officer of the Company is servicing or served
in any capacity at the request of the Company by reason of the fact that he, his
testator or intestate, is or was a director or officer of the Company, or is
serving or served such other corporation, partnership, joint venture, trust,
employee benefit plan or other enterprise in any capacity, against judgments,
fines, amounts paid in settlement, and costs, charges and expenses, including
attorneys' fees, or any appeal therein; provided, however, that no
indemnification shall be provided to any such person if a judgment or other
final adjudication adverse to the director or officer establishes that (i) his
acts were committed in bad faith or were the result of active and deliberate
dishonesty and, in either case, were material to the cause of action so
adjudicated, or (ii) he personally gained in fact a financial profit or other
advantage to which he was not legally entitled.
SECTION 2. The Company may indemnify any other person to whom the Company is
permitted to provide indemnification or the advancement of expenses by
applicable law, whether pursuant to rights granted pursuant to, or provided by,
the New York Banking Law or other rights created by (i) a resolution of
stockholders, (ii) a resolution of directors, or (iii) an agreement providing
for such indemnification, it being expressly intended that these By-Laws
authorize the creation of other rights in any such manner.
SECTION 3. The Company shall, from time to time, reimburse or advance to any
person referred to in Section 1 the funds necessary for payment of expenses,
including attorneys' fees, incurred in connection with any action or proceeding
referred to in Section 1, upon receipt of a written undertaking by or on behalf
of such person to repay such amount(s) if a judgment or other final adjudication
adverse to the
16
<PAGE> 17
director or officer establishes that (i) his acts were committed in bad faith or
were the result of active and deliberate dishonesty and, in either case, were
material to the cause of action so adjudicated, or (ii) he personally gained in
fact a financial profit or other advantage to which he was not legally entitled.
SECTION 4. Any director or officer of the Company serving (i) another
corporation, of which a majority of the shares entitled to vote in the election
of its directors is held by the Company, or (ii) any employee benefit plan of
the Company or any corporation referred to in clause (i) in any capacity shall
be deemed to be doing so at the request of the Company. In all other cases, the
provisions of this Article V will apply (i) only if the person serving another
corporation or any partnership, joint venture, trust, employee benefit plan or
other enterprise so served at the specific request of the Company, evidenced by
a written communication signed by the Chairman of the Board, the Chief Executive
Officer or the President, and (ii) only if and to the extent that, after making
such efforts as the Chairman of the Board, the Chief Executive Officer or the
President shall deem adequate in the circumstances, such person shall be unable
to obtain indemnification from such other enterprise or its insurer.
SECTION 5. Any person entitled to be indemnified or to the reimbursement or
advancement of expenses as a matter of right pursuant to this Article V may
elect to have the right to indemnification (or advancement of expenses)
interpreted on the basis of the applicable law in effect at the time of
occurrence of the event or events giving rise to the action or proceeding, to
the extent permitted by law, or on the basis of the applicable law in effect at
the time indemnification is sought.
SECTION 6. The right to be indemnified or to the reimbursement or advancement of
expense pursuant to this Article V (i) is a contract right pursuant to which the
person entitled thereto may bring suit as if the provisions hereof were set
forth in a separate written contract between the Company and the director or
officer, (ii) is intended to be retroactive and shall be available with respect
to events occurring prior to the adoption hereof, and (iii) shall continue to
exist after the rescission or restrictive modification hereof with respect to
events occurring prior thereto.
SECTION 7. If a request to be indemnified or for the reimbursement or
advancement of expenses pursuant hereto is not paid in full by the Company
within thirty days after a written claim has been received by the Company, the
claimant may at any time thereafter bring suit against the Company to recover
the unpaid amount of the claim and, if successful in whole or in part, the
claimant shall be entitled also to be paid the expenses of prosecuting such
claim. Neither the
17
<PAGE> 18
failure of the Company (including its Board of Directors, independent legal
counsel, or its stockholders) to have made a determination prior to the
commencement of such action that indemnification of or reimbursement or
advancement of expenses to the claimant is proper in the circumstance, nor an
actual determination by the Company (including its Board of Directors,
independent legal counsel, or its stockholders) that the claimant is not
entitled to indemnification or to the reimbursement or advancement of expenses,
shall be a defense to the action or create a presumption that the claimant is
not so entitled.
SECTION 8. A person who has been successful, on the merits or otherwise, in the
defense of a civil or criminal action or proceeding of the character described
in Section 1 shall be entitled to indemnification only as provided in Sections 1
and 3, notwithstanding any provision of the New York Banking Law to the
contrary.
ARTICLE VI
SEAL
SECTION 1. The Board of Directors shall provide a seal for the Company, the
counterpart dies of which shall be in the charge of the Secretary of the Company
and such officers as the Chairman of the Board, the Chief Executive Officer or
the Secretary may from time to time direct in writing, to be affixed to
certificates of stock and other documents in accordance with the directions of
the Board of Directors or the Executive Committee.
SECTION 2. The Board of Directors may provide, in proper cases on a specified
occasion and for a specified transaction or transactions, for the use of a
printed or engraved facsimile seal of the Company.
ARTICLE VII
CAPITAL STOCK
SECTION 1. Registration of transfer of shares shall only be made upon the books
of the Company by the registered holder in person, or by power of attorney, duly
executed, witnessed and filed with the Secretary or other proper officer of the
Company, on the surrender of the certificate or certificates of such shares
properly assigned for transfer.
18
<PAGE> 19
ARTICLE VIII
CONSTRUCTION
SECTION 1. The masculine gender, when appearing in these By-Laws, shall be
deemed to include the feminine gender.
ARTICLE IX
AMENDMENTS
SECTION 1. These By-Laws may be altered, amended or added to by the Board of
Directors at any meeting, or by the stockholders at any annual or special
meeting, provided notice thereof has been given.
19
<PAGE> 20
I, Marc Parilla, Assistant Secretary of Bankers Trust Company, New York, New
York, hereby certify that the foregoing is a complete, true and correct copy of
the By-Laws of Bankers Trust Company, and that the same are in full force and
effect at this date.
/s/ Marc Parilla
-------------------
Marc Parilla
ASSISTANT SECRETARY
DATED: May 18, 1998
20
<PAGE> 21
<TABLE>
<S> <C> <C> <C> <C> <C>
Legal Title of Bank: Bankers Trust Company Call Date: 03/31/98 ST-BK: 36-4840 FFIEC
031
Address: 130 Liberty Street Vendor ID: D CERT: 00623
Page RC-1
City, State ZIP: New York, NY 10006
11
FDIC Certificate No.: | 0 | 0 | 6 | 2 | 3
</TABLE>
Consolidated Report of Condition for Insured Commercial
and State-Chartered Savings Banks for March 31, 1998
All schedules are to be reported in thousands of dollars. Unless otherwise
indicated, reported the amount outstanding as of the last business day of the
quarter.
Schedule RC--Balance Sheet
- ---------------
<TABLE>
<CAPTION>
C400 |
Dollar Amounts in Thousands | RCFD Bil Mil
<S> <C>
Thou |
ASSETS | / / / / / / / / / / / / / / /
/ / / |
1. Cash and balances due from depository institutions (from Schedule RC-A): | / / / / / / /
/ / / / / / / / / / / |
a. Noninterest-bearing balances and currency and coin (1) .............................. | 0081
1,458,000 |1.a.
b. Interest-bearing balances (2) ....................................................... | 0071
2,253,000 |1.b.
2. Securities: | / / / / / / / / / / / / / / /
/ / / |
a. Held-to-maturity securities (from Schedule RC-B, column A) .......................... | 1754
0 |2.a.
b. Available-for-sale securities (from Schedule RC-B, column D) ........................ | 1773
6,444,000 |2.b.
3. Federal funds sold and securities purchased under agreements to resell ..................... | 1350
30,836,000|3.
4. Loans and lease financing receivables: | / / / / / / / / / / / / / /
/ / / / |
a. Loans and leases, net of unearned income (from Schedule RC-C) RCFD 2122 19,993,000 | / / / / / / / / / / / / / /
/ / / / |4.a.
b. LESS: Allowance for loan and lease losses RCFD 3123 647,000 | / / / / / / / / / / / / / /
/ / / / |4.b.
c. LESS: Allocated transfer risk reserve RCFD 3128 0 | / / / / / / / / / / / / / /
/ / / / |4.c.
d. Loans and leases, net of unearned income, | / / / / / / / / / / / / / /
/ / / / |
allowance, and reserve (item 4.a minus 4.b and 4.c) .................................. | 2125
19,346,000 |4.d.
5. Trading Assets (from schedule RC-D) ........................................................ | 3545
45,690,000 |5.
6. Premises and fixed assets (including capitalized leases) ................................... | 2145
791,000 |6.
7. Other real estate owned (from Schedule RC-M) ............................................... | 2150
184,000 |7.
8. Investments in unconsolidated subsidiaries and associated companies (from Schedule RC-M) | 2130
104,000 |8.
9. Customers' liability to this bank on acceptances outstanding ............................... | 2155
542,000 |9.
10. Intangible assets (from Schedule RC-M) .................................................... | 2143
81,000 |10.
11. Other assets (from Schedule RC-F) ......................................................... | 2160
5,339,000 |11.
12. Total assets (sum of items 1 through 11) .................................................. | 2170
113,068,000 |12. ----
</TABLE>
21
<PAGE> 22
- --------------------------
(1) Includes cash items in process of collection and unposted debits.
(2) Includes time certificates of deposit not held for trading.
22
<PAGE> 23
<TABLE>
<S> <C> <C>
Legal Title of Bank: Bankers Trust Company Call Date: 03/31/98 ST-BK: 36-4840
FFIEC 031
Address: 130 Liberty Street Vendor ID: D CERT: 00623
Page RC-2
City, State Zip: New York, NY 10006
12
FDIC Certificate No.: | 0 | 0 | 6 | 2 | 3
</TABLE>
Schedule RC--Continued
- -----------------------------------
<TABLE>
<CAPTION>
Dollar Amounts in Thousands | / / / / / / / /
<S> <C>
Bil Mil Thou _____________|
LIABILITIES | / / / / / / / / / / / / /
/ / / / / / / / / |
13. Deposits: | / / / / / / / / / / / / /
/ / / / / / / / |
a. In domestic offices (sum of totals of columns A and C from Schedule RC-E, part I) | RCON
2200 26,465,000 |13.a.
(1) Noninterest-bearing(1) RCON 6631 3,005,000 ................................. | / / / / / / /
/ / / / / / / / / / / / / / / / |13.a.(1)
(2) Interest-bearing RCON 6636 23,460,000. ............................... | / / / / / / /
/ / / / / / / / / / / / / / / / |13.a.(2)
b. In foreign offices, Edge and Agreement subsidiaries, and IBFs (from Schedule RC-E | / / / / / / / / / / / / /
/ / / / / / / / |
part II) | RCFN 2200
21,993,000 |13.b.
(1) Noninterest-bearing RCFN 6631 1,712,000 | / / / / / / /
/ / / / / / / / / / / / / / / / |13.b.(1)
(2) Interest-bearing RCFN 6636 20,281,000 | / / / / / / / / / / /
/ / / / / / / / / / / /
|13.b.(2)
14. Federal funds purchased and securities sold under agreements to repurchase | RCFD 2800
12,125,000 |14.
15. a. Demand notes issued to the U.S. Treasury ............................................ | RCON
2840 0 |15.a.
b. Trading liabilities (from Schedule RC-D) ............................................ | RCFD 3548
25,701,000 |15.b.
16. Other borrowed money (includes mortgage indebtedness and obligations under capitalized leases): | / / / / / / / / / / / / /
/ / / / / / / / |
a. With a remaining maturity of one year or less ....................................... | RCFD
2332 6,773,000 |16.a.
b. With a remaining maturity of more than one year through three years. ............... | A547
3,754,000 |16.b.
c. With a remaining maturity of more than three years. .................................. | A548
2,212,000 |16.c
17. Not Applicable. | / / / / / / /
/ / / / / / / / / / / / / / / / / / |17.
18. Bank's liability on acceptances executed and outstanding ................................... | RCFD
2920 542,000 |18.
19. Subordinated notes and debentures (2) ...................................................... | RCFD
3200 1,308,000 |19.
20. Other liabilities (from Schedule RC-G) ..................................................... | RCFD
2930 6,135,000 |20.
21. Total liabilities (sum of items 13 through 20) ............................................. | RCFD
2948 107,008,000 |21.
22. Not Applicable | / / / / / / / / / / / / /
/ / / / / / / / |
| / / / / / / / / / / / / /
/ / / / / / / / / / |22.
EQUITY CAPITAL | / / / / / / / / / / / / /
/ / / / / / / / |
23. Perpetual preferred stock and related surplus .............................................. | RCFD
3838 1,000,000 |23.
24. Common stock .. ............................................................................ | RCFD
3230 1,352,000 |24.
</TABLE>
23
<PAGE> 24
<TABLE>
<S> <C>
25. Surplus (exclude all surplus related to preferred stock) | RCFD
3839 544,000 |25.
26. a. Undivided profits and capital reserves | RCFD
3632 3,583,000 |26.a.
b. Net unrealized holding gains (losses) on available-for-sale securities | RCFD
8434 ( 41,000) |26.b.
27. Cumulative foreign currency translation adjustments | RCFD
3284 ( 378,000) |27.
28. Total equity capital (sum of items 23 through 27) | RCFD
3210 6,060,000 |28.
29. Total liabilities and equity capital (sum of items 21 and 28). | RCFD
3300 113,068,000 |29
|________________________
|
</TABLE>
Memorandum
To be reported only with the March Report of Condition.
1. Indicate in the box at the right the number of the statement below that
best describes the most comprehensive level of auditing work performed
for the bank by independent external
Number
auditors as of any date during 1997 | RCFD 6724
1 | M.1 ____________
<TABLE>
<S> <C>
1 = Independent audit of the bank conducted in accordance 4 = Directors' examination of the bank
performed by other
with generally accepted auditing standards by a certified external auditors (may be required by state
chartering
public accounting firm which submits a report on the bank authority)
2 = Independent audit of the bank's parent holding company 5 = Review of the bank's financial statements by
external
conducted in accordance with generally accepted auditing auditors
standards by a certified public accounting firm which 6 = Compilation of the bank's financial statements
by external
submits a report on the consolidated holding company auditors
(but not on the bank separately) 7 = Other audit procedures (excluding tax
preparation work)
3 = Directors' examination of the bank conducted in 8 = No external audit work
accordance with generally accepted auditing standards
by a certified public accounting firm (may be required by
state chartering authority)
</TABLE>
- ----------------------
(1) Including total demand deposits and noninterest-bearing time and
savings deposits.
(2) Includes limited-life preferred stock and related surplus.
24
<PAGE> 1
EXHIBIT 99.1
FORM OF
LETTER OF TRANSMITTAL
PROVIDENT TRUST I
Offer to Exchange its
8.29% Exchange Capital Securities
(Liquidation Amount $1,000 per Exchange Capital Security)
which have been registered under the Securities Act of 1933
for any and all of its outstanding
8.29% Capital Securities
(Liquidation Amount $1,000 per Capital Security)
Pursuant to the Prospectus
dated July __, 1998
THE EXCHANGE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE
AT 5:00 P.M., EASTERN STANDARD TIME, ON ______________, 1998,
UNLESS THE OFFER IS EXTENDED.
The Exchange Agent for the Exchange Offer is:
Bankers Trust Company
<TABLE>
<S> <C> <C>
By Mail: By Hand: By Overnight Mail or Courier:
BT Services Tennessee, Inc. Bankers Trust Company BT Services, Tennessee, Inc.
Reorganization Unit Corporate Trust & Agency Group Corporate Trust & Agency Group
P.O. Box 292737 Receipt & Delivery Window Reorganization Unit
Nashville, Tennessee 37229-2737 123 Washington Street, 1st Floor 648 Grassmere Park Road
New York, New York 10006 Nashville, Tennessee 37211
</TABLE>
For Information Call:
(800) 735-7777
Confirm by Telephone:
(615) 835-3572
Facsimile Transmissions:
(Eligible Institutions Only)
(615) 835-3701
DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS OTHER THAN AS SET
FORTH ABOVE OR TRANSMISSION OF THIS LETTER OF TRANSMITTAL VIA FACSIMILE TO A
NUMBER OTHER THAN AS SET FORTH ABOVE DOES NOT CONSTITUTE A VALID DELIVERY. THE
INSTRUCTIONS CONTAINED HEREIN SHOULD BE READ CAREFULLY BEFORE THIS LETTER OF
TRANSMITTAL IS COMPLETED.
This Letter of Transmittal is to be completed by holders of Original
Capital Securities (as defined below) either if (i) Original Capital Securities
are to be forwarded herewith or (ii) tenders of Original Capital Securities are
to be made by book-entry transfer to an account maintained by Bankers Trust
Company (the
<PAGE> 2
"Exchange Agent") at The Depository Trust Company ("DTC") pursuant to the
procedures set forth in "The Exchange Offer--Procedures for Tendering Original
Capital Securities" in the Prospectus.
Holders of Original Capital Securities whose certificates (the
"Certificates") for such Original Capital Securities are not immediately
available or who cannot deliver their Certificates and all other required
documents to the Exchange Agent on or prior to the Expiration Date (as defined
in the Prospectus) or who cannot complete the procedures for book-entry transfer
on or prior to the Expiration Date, must tender their Original Capital
Securities according to the guaranteed delivery procedures set forth in "The
Exchange Offer--Procedures for Tendering Original Capital Securities" in the
Prospectus.
DELIVERY OF DOCUMENTS TO DTC DOES NOT CONSTITUTE DELIVERY TO THE
EXCHANGE AGENT.
NOTE: SIGNATURES MUST BE PROVIDED BELOW
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY
ALL TENDERING HOLDERS COMPLETE THIS BOX:
DESCRIPTION OF ORIGINAL CAPITAL SECURITIES TENDERED
(See Instruction 4)
<TABLE>
<CAPTION>
If blank, please print name and Original Capital Securities tendered
address of registered holder (Attach additional list if necessary)
- ------------------------------------ -----------------------------------------------------------------------
<S> <C> <C> <C>
Liquidation Amount of
Original Capital
Aggregate Securities
Liquidation Amount Tendered**
Certificate of Original Capital (if less than all are
Number(s)* Securities Held tendered)
-------------- ----------------------- --------------------------
-------------- ----------------------- --------------------------
-------------- ----------------------- --------------------------
-------------- ----------------------- --------------------------
-------------- ----------------------- --------------------------
TOTAL
AMOUNT
TENDERED:
- ------------------------------------ -------------- --------------------------
</TABLE>
* Need not be completed by book-entry holders.
** Original Capital Securities may be tendered in whole or in part in
denominations of $100,000 and integral multiples of $1,000 in excess
thereof, provided that if any Original Capital Securities are tendered for
exchange in part, the untendered principal amount thereof must be $100,000
or any integral multiple of $1,000 in excess thereof. All Original Capital
Securities held shall be deemed tendered unless a lesser number is specified
in this column.
2
<PAGE> 3
(BOXES BELOW TO BE CHECKED BY ELIGIBLE INSTITUTIONS ONLY)
[ ] CHECK HERE IF TENDERED ORIGINAL CAPITAL SECURITIES ARE BEING DELIVERED
BY BOOK-ENTRY TRANSFER MADE TO THE ACCOUNT MAINTAINED BY THE EXCHANGE
AGENT WITH DTC AND COMPLETE THE FOLLOWING:
Name of Tendering Institution___________________________________________
DTC Account Number______________________________________________________
Transaction Code Number_________________________________________________
[ ] CHECK HERE AND ENCLOSE A PHOTOCOPY OF THE NOTICE OF GUARANTEED DELIVERY
IF TENDERED ORIGINAL CAPITAL SECURITIES ARE BEING DELIVERED PURSUANT TO
A NOTICE OF GUARANTEED DELIVERY PREVIOUSLY SENT TO THE EXCHANGE AGENT
AND COMPLETE THE FOLLOWING:
Name of Registered Holder(s)____________________________________________
Window Ticket Number (if any)___________________________________________
Date of Execution of Notice of Guaranteed Delivery______________________
Name of Institution which Guaranteed Delivery
Name of Tendering__________________________________________________
Institution________________________________________________________
DTC Account Number_________________________________________________
Transaction Code Number____________________________________________
[ ] CHECK HERE IF TENDERED BY BOOK-ENTRY TRANSFER AND NONEXCHANGED OR
NONTENDERED ORIGINAL CAPITAL SECURITIES ARE TO BE RETURNED BY CREDITING
THE DTC ACCOUNT NUMBER SET FORTH ABOVE.
[ ] CHECK HERE IF YOU ARE A BROKER-DEALER WHO ACQUIRED THE ORIGINAL CAPITAL
SECURITIES FOR ITS OWN ACCOUNT AS A RESULT OF MARKET MAKING OR OTHER
TRADING ACTIVITIES (A "PARTICIPATING BROKER-DEALER") AND WISH TO
RECEIVE 10 ADDITIONAL COPIES OF THE PROSPECTUS AND 10 COPIES OF ANY
AMENDMENTS OR SUPPLEMENTS THERETO.
Name____________________________________________________________________
Address_________________________________________________________________
________________________________________________________________________
3
<PAGE> 4
Area Code and Telephone Number__________________________________________________
Contact Person__________________________________________________________________
Ladies and Gentlemen:
The undersigned hereby tenders to Provident Trust I, a trust created
under the laws of Delaware (the "Trust") and Provident Bankshares Corporation,
a Maryland corporation (the "Company"), the above-described aggregate
Liquidation Amount of the Trust's 8.29% Capital Securities (the "Original
Capital Securities") in exchange for a like aggregate Liquidation Amount of the
Trust's 8.29% Exchange Capital Securities (the "Exchange Capital Securities")
which have been registered under the Securities Act of 1933 (the "Securities
Act"), upon the terms and subject to the conditions set forth in the
Prospectus, dated July ___, 1998 (as the same may be amended or supplemented
from time to time, the "Prospectus"), receipt of which is acknowledged, and in
this Letter of Transmittal (which, together with the Prospectus, constitute the
"Exchange Offer").
Subject to and effective upon the acceptance for exchange of all or any
portion of the Original Capital Securities tendered herewith in accordance with
the terms and conditions of the Exchange Offer (including, if the Exchange Offer
is extended or amended, the terms and conditions of any such extension or
amendment), the undersigned hereby sells, assigns and transfers to, or upon the
order of the Trust all right, title and interest in and to such Original Capital
Securities as are being tendered herewith. The undersigned hereby irrevocably
constitutes and appoints the Exchange Agent as its agent and attorney-in-fact
(with full knowledge that the Exchange Agent also is acting as agent of the
Company and the Trust in connection with the Exchange Offer) with respect to the
tendered Original Capital Securities, with full power of substitution (such
power of attorney being deemed to be an irrevocable power coupled with an
interest), subject only to the right of withdrawal described in the Prospectus,
to (i) deliver Certificates for Original Capital Securities to the Company or
the Trust together with all accompanying evidences of transfer and authenticity
to, or upon the order of, the Trust, upon receipt by the Exchange Agent, as the
undersigned's agent, of the Exchange Capital Securities to be issued in exchange
for such Original Capital Securities, (ii) present Certificates for such
Original Capital Securities for transfer, and to transfer the Original Capital
Securities on the books of the Trust, and (iii) receive for the account of the
Trust all benefits and otherwise exercise all rights of beneficial ownership of
such Original Capital Securities, all in accordance with the terms and
conditions of the Exchange Offer.
The undersigned hereby represents and warrants that the undersigned has
full power and authority to tender, exchange, sell, assign and transfer the
Original Capital Securities tendered hereby and that, when the same are accepted
for exchange, the Trust will acquire good, marketable and unencumbered title
thereto, free and clear of all liens, restrictions, charges and encumbrances,
and that the Original Capital Securities tendered hereby are not subject to any
adverse claims or proxies. The undersigned will, upon request, execute and
deliver any additional documents deemed by the Company, the Trust or the
Exchange Agent to be necessary or desirable to complete the exchange assignment
and transfer of the Original Capital Securities tendered hereby, and the
undersigned will comply with its obligations under the Registration Rights
Agreement. The undersigned has read and agrees to all of the terms of the
Exchange Offer.
The name(s) and address(es) of the registered holder(s) of the Original
Capital Securities tendered hereby should be printed above, if they are not
already set forth above, as they appear on the Certificates representing such
Original Capital Securities. The Certificate number(s) of the Original Capital
Securities than the undersigned wishes to tender should be indicated in the
appropriate boxes above.
If any tendered Original Capital Securities are not exchanged pursuant
to the Exchange Offer for any reason, or if Certificates are submitted for more
Original Capital Securities than are tendered or accepted for exchange,
Certificates for such nonexchanged or nontendered Original Capital Securities
will be returned (or, in the case of Original Capital Securities tendered by
book-entry transfer, such Original Capital Securities will be credited to an
account maintained at DTC), without expense to the tendering holder, promptly
following the expiration or termination of the Exchange Offer.
4
<PAGE> 5
The undersigned understands that tenders of Original Capital Securities
pursuant to any one of the procedures described in "The Exchange
Offer--Procedures for Tendering Original Capital Securities" in the Prospectus
and in the Instructions herein will, upon the Company's and the Trust's
acceptance for exchange of such tendered Original Capital Securities, constitute
a binding agreement between the undersigned, the Company and the Trust upon the
terms and subject to the conditions of the Exchange Offer. The undersigned
recognizes that, under certain circumstances set forth in the Prospectus, the
Company and the Trust may not be required to accept for exchange any of the
Original Capital Securities tendered hereby.
Unless otherwise indicated herein in the box entitled "Special Issuance
Instructions" below, the undersigned hereby directs that the Exchange Capital
Securities be issued in the name(s) of the undersigned or, in the case of a
book-entry transfer of Original Capital Securities, that such Exchange Capital
Securities be credited to the account indicated above maintained at DTC, if
applicable, substitute Certificates representing Original Capital Securities not
exchanged or not accepted for exchange will be issued to the undersigned or, in
the case of a book-entry transfer of Original Capital Securities, will be
credited to the account indicated above maintained at DTC. Similarly, unless
otherwise indicated under "Special Delivery Instructions," please deliver
Exchange Capital Securities to the undersigned at the address shown below the
undersigned's signature.
By tendering Original Capital Securities and executing this Letter of
Transmittal, the undersigned hereby represents and agrees that (i) the
undersigned is not an "affiliate" of the Company or the Trust within the meaning
of Rule 405 under the Securities Act, (ii) any Exchange Capital Securities to be
received by the undersigned are being acquired in the ordinary course of its
business, (iii) the undersigned has no arrangement or understanding with any
person to participate in the distribution (within the meaning of the Securities
Act) of Exchange Capital Securities to be received in the Exchange Offer and
(iv) if the undersigned is not a broker-dealer, the undersigned is not engaged
in, and does not intend to engage in, a distribution (within the meaning of the
Securities Act) of such Exchange Capital Securities. By tendering Original
Capital Securities pursuant to the Exchange Offer and executing this Letter of
Transmittal, a holder of Original Capital Securities which is a broker-dealer
represents and agrees, consistent with certain interpretive letters issued by
the staff of the Division of Corporation Finance of the Securities and Exchange
Commission to third parties, that (a) such Original Capital Securities held by
the broker-dealer are held only as a nominee or (b) such Original Capital
Securities were acquired by such broker-dealer for its own account as a result
of market-making activities or other trading activities and it will deliver the
Prospectus (as amended or supplemented from time to time) meeting the
requirements of the Securities Act in connection with any resale of such
Exchange Capital Securities (provided that, by so acknowledging and by
delivering a Prospectus, such broker-dealer will not be deemed to admit that it
is an "underwriter" within the meaning of the Securities Act).
The Company and the Trust have agreed that, subject to the provisions
of the Registration Rights Agreement, the Prospectus, as it may be amended or
supplemented from, time to time, may be used by a Participating Broker-Dealer
(as defined below) in connection with resales of Exchange Capital Securities
received in exchange for Original Capital Securities, where such Original
Capital Securities were acquired by such Participating Broker-Dealer for its own
account as a result of market-making activities or other trading activities, for
a period ending 90 days after the Expiration Date (subject to extension under
certain limited circumstances described in the Prospectus) or, if earlier, when
all such Exchange Capital Securities have been, disposed of by such
Participating Broker-Dealer. In that regard, each broker-dealer who acquired
Original Capital Securities for its own account and as a result of market-making
or other trading activities (a "Participating Broker-Dealer"), by tendering such
Original Capital Securities and executing this Letter of Transmittal, agrees
that, upon receipt of Notice from the Company or the Trust of the occurrence of
any event or the discovery of any fact which makes any statement contained or
incorporated by reference therein, in light of the circumstances under which
they were made, not misleading or of the occurrence of certain other events
specified in the Registration Rights Agreement, such Participating Broker-Dealer
will suspend the sale of Exchange Capital Securities pursuant to the Prospectus
until the Company and the Trust have amended or supplemented the Prospectus to
correct such misstatement or omission and has furnished copies of the amended or
supplemented Prospectus to the Participating Broker-Dealer or the Company or the
Trust has given Notice that the sale of Exchange Capital Securities may be
resumed, as the case may be. If the Company or the Trust
5
<PAGE> 6
gives such Notice to suspend the sale of the Exchange Capital Securities, it
shall extend the 90-day period referred to above during which Participating
Broker-Dealers are entitled to use the Prospectus in connection with the resale
of Exchange Capital Securities by the number of days during the period from and
including the date of the giving of such Notice to and including the date when
Participating Broker-Dealers shall have received copies of the supplemented or
amended Prospectus necessary to permit resales of the Exchange Capital
Securities or to and including the date on which the Company or the Trust has
given Notice that the sale of Exchange Capital Securities may be resumed, as the
case may be.
As a result, a Participating Broker-Dealer who intends to use the
Prospectus in connection with re-sales of Exchange Capital Securities received
in exchange for Original Capital Securities pursuant to the Exchange Offer must
notify the Company and the Trust, or cause the Company and the Trust to be
notified, on or prior to the Expiration Date, that it is a Participating
Broker-Dealer. Such Notice may be given in the space provided above and by
checking the box next thereto, or may be delivered to the Exchange Agent at the
address set forth in the Prospectus under "The Exchange Offer--Exchange Agent."
Holders whose Original Capital Securities are accepted for exchange
will not receive Distributions on such Original Capital Securities and the
undersigned waives the right to receive any Distribution on such Original
Capital Securities following such acceptance. Holders of Original Capital
Securities as of the October 1, 1998 record date for the initial Distribution on
October 15, 1998, including such holders who tender their Original Capital
Securities pursuant to the Exchange Offer, will be entitled to receive such
Distribution.
All authority herein conferred or agreed to be conferred in this Letter
of Transmittal shall survive the death or incapacity of the undersigned and any
obligation of the undersigned hereunder shall be binding upon the heirs,
executors, administrators, personal representatives, trustees in bankruptcy,
legal representatives, successors and assigns of the undersigned. Except as
stated in the Prospectus, this tender is irrevocable.
6
<PAGE> 7
HOLDER(S) SIGN HERE
(See Instructions 2, 5 and 6)
(Please Complete Substitute Form W-9 Below)
(Note: Signature(s) must be guaranteed if required by Instruction 2)
Must be signed by registered holder(s) exactly as name(s) appear(s) on
Certificate(s) for the Original Capital Securities hereby tendered or on a
security position listing, or by any person(s) authorized to become the
registered holder(s) by endorsements and documents transmitted herewith
(including such opinions of counsel, certificates and other information as may
be required by the Company, the Trust or the Exchange Agent to comply with the
restrictions on transfer applicable to the Original Capital Securities). If
signature is by an attorney-in-fact, executor, administrator, trustee, guardian,
officer of a corporation or another acting in a fiduciary capacity or
representative capacity, please set forth the signer's full title. See
Instruction 5.
________________________________________________________________________________
________________________________________________________________________________
(Signature(s) of Holder(s))
Date__________________________, 1998
Name(s)_________________________________________________________________________
________________________________________________________________________________
(Please Print)
Area Code(s) and Telephone Number_______________________________________________
________________________________________________________________________________
(Tax Identification or Social Security Number(s))
GUARANTEE OF SIGNATURE(S)
(See Instructions 2 and 5)
Authorized Signature____________________________________________________________
Name____________________________________________________________________________
(Please Print)
Date__________________________, 1998
Capacity or Title_______________________________________________________________
Name of Firm____________________________________________________________________
Address_________________________________________________________________________
(Include Zip Code)
Area Code and Telephone Number__________________________________________________
7
<PAGE> 8
SPECIAL ISSUANCE INSTRUCTIONS
(See Instructions 1, 5 and 6)
To be completed ONLY if Exchange Capital Securities and/or any Original
Capital Securities that are not tendered are to be issued in the name of someone
other than the registered holder of the Original Capital Securities whose
name(s) appear(s) above.
Issue:
[ ] Exchange Capital Securities to:
[ ] Original Capital Securities not tendered to:
Name____________________________________________________________________________
(Please Print)
Address_________________________________________________________________________
________________________________________________________________________________
(Include Zip Code)
________________________________________________________________________________
(Taxpayer Identification or Social Security No.)
SPECIAL DELIVERY INSTRUCTIONS
(See Instructions 1, 5 and 6)
To be completed ONLY if Exchange Capital Securities and/or any Original
Capital Securities that are not tendered are to be sent to someone other than
the registered holder of the Original Capital Securities whose name(s) appear(s)
above, or to the registered holder(s) at an address other than that shown above.
Mail:
[ ] Exchange Capital Securities to:
[ ] Original Capital Securities not tendered to:
Name____________________________________________________________________________
(Please Print)
Address_________________________________________________________________________
________________________________________________________________________________
(Include Zip Code)
________________________________________________________________________________
(Taxpayer Identification or Social Security No.)
8
<PAGE> 9
INSTRUCTIONS
Forming Part of the Terms and Conditions of the Exchange Offer
1. Delivery of Letter of Transmittal and Certificates; Guaranteed
Delivery Procedures. This Letter of Transmittal is to be completed either if (a)
tenders are to be made pursuant to the procedures for tender by book-entry
transfer set forth under "The Exchange Offer--Procedures for Tendering Original
Capital Securities" in the Prospectus and an Agent's Message is not delivered or
(b) Certificates are to be forwarded herewith. Timely confirmation of a
book-entry transfer of such Original Capital Securities into the Exchange
Agent's account at DTC, or Certificates as well as this Letter of Transmittal
(or facsimile thereof), properly completed and duly executed, with any required
signature guarantees, and any other documents required by this Letter of
Transmittal, must be received by the Exchange Agent at its addresses set forth
herein on or prior to the Expiration Date. Tenders by book-entry transfer also
may be made by delivering an Agent's Message in lieu of this Letter of
Transmittal. The term "book-entry confirmation" means a confirmation of
book-entry transfer of Original Capital Securities into the Exchange Agent's
account at DTC. The term "Agent's Message" means a message transmitted by DTC to
and received by the Exchange Agent and forming a part of a book-entry
confirmation, which states that DTC has received an express acknowledgment from
the tendering participant, which acknowledgment states that such participant has
received and agrees to be bound by the Letter of Transmittal (including the
representations contained herein) and that the Trust and the Company may enforce
the Letter of Transmittal against such participant. Original Capital Securities
may be tendered in whole or in part in the Liquidation Amount of $100,000 (100
Capital Securities) and integral multiples of $1,000 in excess thereof, provided
that, if any Original Capital Securities are tended for exchange in part, the
untendered Liquidation Amount thereof must be $100,000 (100 Capital Securities)
or any integral multiple of $1,000 in excess thereof.
Holders who wish to tender their Original Capital Securities and (i)
who cannot complete the procedures for delivery by book-entry transfer on or
prior to the Expiration Date, (ii) who cannot deliver their Original Capital
Securities, this Letter of Transmittal and all other required documents to the
Exchange Agent on or prior to the Expiration Date or (iii) whose Original
Capital Securities are not immediately available, may tender their Original
Capital Securities by properly completing and duly executing a Notice of
Guaranteed Delivery pursuant to the guaranteed delivery procedures set forth
under "The Exchange Offer--Procedures for Tendering Original Capital Securities"
in the Prospectus. Pursuant to such procedures: (a) such tender must be made by
or through an Eligible Institution (as defined below); (b) a properly completed
and duly executed Notice of Guaranteed Delivery, substantially in the form made
available by the Company, must be received by the Exchange Agent on or prior to
the Expiration Date; and (c) the Certificates (or a book-entry confirmation (as
defined above and in the Prospectus)) representing all tendered Original Capital
Securities, in proper form for transfer, together with a Letter of Transmittal
(or facsimile thereof), properly completed and duly executed, with any required
signature guarantees and any other documents required by this Letter of
Transmittal, must be received by the Exchange Agent within three New York Stock
Exchange, Inc. trading days after the date of execution of such Notice of
Guaranteed Delivery, all as provided in "The Exchange Offer--Procedures for
Tendering Original Capital Securities" in the Prospectus.
The Notice of Guaranteed Delivery may be delivered by hand or
transmitted by facsimile or mail to the Exchange Agent, and must include a
guarantee by an Eligible Institution in the form, set forth in such Notice. For
Original Capital Securities to be properly tendered pursuant to the guaranteed
delivery procedure, the Exchange Agent must receive a Notice of Guaranteed
Delivery or. or prior to the Expiration Date. As used herein and in the
Prospectus, "Eligible Institution" means a firm or other entity identified in
Rule 17Ad-15 under the Exchange Act as "an eligible guarantor institution,"
including (as such terms are defined therein) (i) a bank; (ii) a broker, dealer,
municipal securities broker or dealer or government securities broker or dealer;
(iii) a credit union; (iv) a national securities exchange, registered securities
association or clearing agency; or (v) a savings association that is a
participant in a Securities Transfer Association.
9
<PAGE> 10
THE METHOD OF DELIVERY OF CERTIFICATES, THIS LETTER OF TRANSMITTAL AND ALL OTHER
REQUIRED DOCUMENTS IS AT THE OPTION AND SOLE RISK OF THE TENDERING HOLDER AND
THE DELIVERY WILL BE DEEMED MADE ONLY WHEN ACTUALLY RECEIVED BY THE EXCHANGE
AGENT. IF DELIVERY IS BY MAIL, REGISTERED MAIL WITH RETURN RECEIPT REQUESTED,
PROPERLY INSURED, OR OVERNIGHT DELIVERY SERVICE IS RECOMMENDED. IN ALL CASES,
SUFFICIENT TIME SHOULD BE ALLOWED TO ENSURE TIMELY DELIVERY.
Neither the Company nor the Trust will accept any alternative,
conditional or contingent tenders. Each tendering holder, by execution of a
Letter of Transmittal (or facsimile thereof), waives any right to receive any
Notice of the acceptance of such tender.
2. Guarantee of Signatures. No signature guarantee or, this
Letter of Transmittal is required if:
(i) this Letter of Transmittal is signed by the
registered holder (which term, for purposes of this document, shall include any
participant in DTC whose name appears on a security position listing as the
owner of the Original Capital Securities) of Original Capital Securities
tendered herewith, unless such holder(s) has completed either the box entitled
"Special Issuance instructions" or the box entitled "Special Delivery
Instructions" above, or
(ii) such Original Capital Securities are tendered for the
account of a firm, that is an Eligible Institution.
In all other cases, an Eligible Institution must guarantee the
signature(s) on this Letter of Transmittal. See Instruction 5.
3. Inadequate Space. If the space provided in the box captioned
"Description of Original Capital Securities" is inadequate, the Certificate
number(s) and/or the Liquidation Amount of Original Capital Securities and any
other required information should be listed on a separate signed schedule which
is attached to this Letter of Transmittal.
4. Partial Tenders and Withdrawal Rights. Tenders of Original
Capital Securities will be accepted only in the principal amount of $100,000
(100 Capital Securities) and integral multiples of $1,000 in excess thereof,
provided that if any Original Capital Securities are tendered for exchange in
part, the untendered principal amount thereof must be $100,000 (100 Capital
securities) or any integral multiple of $1,000 in excess thereof. If less than
all the Original Capital Securities evidenced by any Certificate submitted are
to be tendered, fill in the Liquidation Amount of Original Capital Securities
which are to be tendered in the box entitled "Liquidation Amount of Original
Capital Securities Tendered (if less than all are tendered)." In such case, a
new Certificate(s) for the remainder of the Original Capital Securities that
were evidenced by your old Certificate(s) will be sent to the holder of the
Original Capital Securities, promptly after the Expiration Date, unless the
appropriate boxes or this Letter of Transmittal are completed. All Original
Capital Securities represented by Certificates delivered to the Exchange Agent
will be deemed to have been tendered unless otherwise indicated.
Except as otherwise provided herein, tenders of Original Capital
Securities may be withdrawn at any time on or prior to the Expiration Date. In
order for a withdrawal to be effective on or prior to that time, a written or
facsimile transmission of such Notice of Withdrawal must be received by the
Exchange Agent at one of its addresses set forth above or in the Prospectus on
or prior to the Expiration Date. Any such Notice of Withdrawal must specify the
name of the person who tendered the Original Capital Securities to be withdrawn,
the aggregate Liquidation Amount of Original Capital Securities to be withdrawn,
and (if Certificates for Original Capital Securities have been tendered) the
name of the registered holder of the Original Capital Securities as set forth on
the Certificate for the Original Capital
10
<PAGE> 11
Securities, if different from that of the person who tendered such Original
Capital Securities. If Certificates for the Original Capital Securities have
been delivered or otherwise identified to the Exchange Agent, then prior to the
physical release of such Certificates for the Original Capital Securities, the
tendering holder must submit the serial numbers shown on the particular
Certificates for the Original Capital Securities to be withdrawn and the
signature on the Notice of Withdrawal must be guaranteed by an Eligible
Institution, except in the case of Original Capital Securities tendered for the
account of an Eligible Institution. If Original Capital Securities have been
tendered pursuant to the procedures for book-entry transfer set forth under "The
Exchange Offer--Procedures for Tendering Original Capital Securities" in the
Prospectus, the Notice of Withdrawal must specify the name and number of the
account at DTC to be credited with the withdrawal of Original Capital
Securities, in which case a Notice of Withdrawal will be effective if delivered
to the Exchange Agent by written or facsimile transmission on or prior to the
Expiration Date. Withdrawals of tenders of Original Capital Securities may not
be rescinded. Original Capital Securities properly withdrawn will not be deemed
validly tendered for purposes of the Exchange Offer, but may be untendered at
any subsequent time on or prior to the Expiration Date by following any of the
procedures described in the Prospectus under "The Exchange Offer--Procedures for
Tendering Original Capital Securities."
All questions as to the validity, form and eligibility (including time
of receipt) of such withdrawal notices will be determined by the Company and the
Trust, in their sole discretion, whose determination shall be final and binding
on all parties. None of the Company, the Trust, any affiliates or assigns of the
Company and the Trust, the Exchange Agent nor any other person shall be under
any duty to give any notification of any irregularities in any Notice of
Withdrawal or incur any liability for failure to give any such notification. Any
Original Capital Securities which have been tendered but which are withdrawn
will be returned to the holder thereof without cost to such holder promptly
after withdrawal.
5. Signatures on Letter of Transmittal, Assignments and
Endorsements. If this Letter of Transmittal is signed by the registered
holder(s) of the Original Capital Securities tendered hereby, the signature(s)
must correspond exactly with the name(s) as written or, the face of the
Certificate(s) without alteration, enlargement or any change whatsoever.
If any of the Original Capital Securities tendered hereby are owned of
record by two or more joint owners, all such owners must sign this Letter of
Transmittal.
If any tendered Original Capital Securities are registered in different
name(s) on several Certificates, it will be necessary to complete, sign and
submit as many separate Letters of Transmittal (or facsimiles thereof) as there
are different registrations of Certificates.
If this Letter of Transmittal or any Certificates or bond powers are
signed by trustees, executors, administrators, guardians, attorneys-in-fact,
officers of corporations or others acting in a fiduciary or representative
capacity, such persons should so indicate when signing and must submit proper
evidence satisfactory to the Company and the Trust, in their sole discretion of
such persons' authority to so act.
When this Letter of Transmittal is signed by the registered holder(s)
of the Original Capital Securities listed and transmitted hereby, no
endorsement(s) of Certificate(s) or separate bond power(s) are required unless
Exchange Capital Securities are to be issued in the name of a person other than
the registered holder(s). Signature(s) on such Certificate(s) or bond power(s)
must be guaranteed by an Eligible Institution.
If this Letter of Transmittal is signed by a person other than the
registered holder(s) of the Original Capital Securities listed, the Certificates
must be endorsed or accompanied by appropriate bond powers, signed exactly as
the name or names of the registered owner(s) appear(s) on the Certificates, and
also must be accompanied by such opinions of counsel, certifications and other
information as the Company, the Trust or the Exchange Agent may require in
accordance with the restrictions on transfer
11
<PAGE> 12
applicable to the Original Capital Securities. Signatures on such Certificates
or bond powers must be guaranteed by an Eligible Institution.
6. Special Issuance and Delivery Instructions. If Exchange
Capital Securities are to be issued in the name of a person other than the
signer of this Letter of Transmittal, or if Exchange Capital Securities are to
be sent: to someone other than the signer of this Letter of Transmittal or to an
address other than that shown above, the appropriate boxes an this Letter of
Transmittal should be completed. Certificates for Original Capital Securities
not exchanged will be returned by mail or, if tendered by book-entry transfer,
by crediting the account indicated above maintained at DTC. See Instruction 4.
The Company and the Trust will determine, in their sole discretion, all
questions as to the form of documents, validity, eligibility (including time of
receipt) and acceptance for exchange of any tender of Original Capital
Securities, which determination shall be final and binding on all parties. The
Company and the Trust reserve the absolute right, in their sole and absolute
discretion, to reject any and all tenders determined by either of them not to be
in proper form or the acceptance of which, or exchange for, may, in the view of
counsel to the Company and the Trust, be unlawful. The Company and the Trust
also reserve the absolute right, subject to applicable law, to waive any of the
conditions of the Exchange Offer set forth in the Prospectus under "The Exchange
Offer--Certain Conditions to the Exchange Offer" or any conditions or
irregularity in any tender of Original Capital Securities of any particular
holder whether or not similar conditions or irregularities are waived in the
case of other holders. The Company's and the Trust's interpretation of the terms
and conditions of the Exchange Offer (including this Letter of Transmittal and
the instructions hereto) will be final and binding. No tender of Original
Capital Securities will be deemed to have been validly made until all
irregularities with respect to such tender have been cured or waived. None of
the Company, the Trust, any affiliates or assigns of the Company, the Trust, the
Exchange Agent, or any other person shall be under any duty to give notification
of any irregularities in tenders or incur any liability for failure to give such
notification.
8. Questions, Requests for Assistance and Additional Copies.
Questions and requests for assistance may be directed to the Exchange Agent at
its address and telephone number set forth on the front of this Letter of
Transmittal. Additional copies of the Prospectus, this Letter of Transmittal and
the Notice of Guaranteed Delivery may be obtained from the Exchange Agent or
from your broker, dealer, commercial bank, trust company or other nominee.
9. 31% Backup Withholding; Substitute Form W-9. Under U.S.
Federal income tax law, a holder whose tendered Original Capital Securities are
accepted for exchange is required to provide the Exchange Agent with such
holder's correct taxpayer identification number ("TIN") on Substitute Form W-9
below. If the Exchange Agent is not provided with the correct TIN, the Internal
Revenue Service (the "IRS") may subject the holder or other payee to a $50
penalty. In addition, payments to such holders or other payees with respect to
Original Capital Securities exchanged pursuant to the Exchange Offer may be
subject to 31% backup withholding.
The box in Part 2 of the Substitute Form W-9 may be checked if the
tendering holder has not been issued a TIN and has applied for a TIN or intends
to apply for a TIN in the near future. If the box in Part 2 is checked, the
holder or other payee must also complete the Certificate of Awaiting Taxpayer
Identification Number below in order to avoid backup withholding.
Notwithstanding that the box in Part 2 is checked and the Certificate of
Awaiting Taxpayer Identification Number is completed, the Exchange Agent will
withhold 31% of all payments made prior to the time a properly certified TIN is
provided to the Exchange Agent. The Exchange Agent will retain such amounts
withheld during the 60 day period following the date of the Substitute Form W-9.
If the holder furnishes the Exchange Agent with its TIN within 60 days after the
date of the Substitute Form W-9, the amounts retained during the 60 day period
will be remitted to the holder and no further amounts shall be retained or
withheld from payments made to the holder thereafter. If, however, the holder
has not provided the Exchange Agent with its TIN within such
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<PAGE> 13
60 day period, amounts withheld will be remitted to the IRS as backup
withholding. In addition, 31% of all payments made thereafter will be withheld
and remitted to the IRS until a correct TIN is provided.
The holder is required to give the Exchange Agent the TIN (e.g., social
security number or employer identification number) of the registered owner of
the Original Capital Securities or of the last transferee appearing on the
transfers attached to, or endorsed on, the Original Capital Securities. If the
Original Capital Securities are registered in more than one name or are not in
the name of the actual owner, consult the enclosed "Guidelines for Certification
of Taxpayer Identification Number on Substitute Form W-9" for additional
guidance on which number to report.
Certain holders (including, among others, corporations, financial
institutions and certain foreign persons) may not be subject to these backup
withholding and reporting requirements. Such holders should nevertheless
complete the attached Substitute Form W-9 below, and write "exempt" an the face
thereof, to avoid possible erroneous backup withholding. A foreign person may
qualify as an exempt recipient by submitting a properly completed IRS Form W-8,
signed under penalties of perjury, attesting to that holder's exempt status.
Please consult the enclosed "Guidelines for Certification of Taxpayer
Identification Number on Substitute Form W-9" for additional guidance on which
holders are exempt from backup withholding.
Backup withholding is not an additional U.S. Federal income tax.
Rather, the U.S. Federal income tax liability of a person subject to backup
withholding will be reduced by the amount of tax withheld. If withholding
results in an overpayment of taxes, a refund may be obtained.
10. Lost, Destroyed or Stolen Certificates. If any Certificate(s)
representing Original Capital Securities have been lost, destroyed or stolen,
the holder should promptly notify the Exchange Agent. The holder will then be
instructed as to the steps that must be taken in order to replace the
Certificate(s). This Letter of Transmittal and related documents cannot be
processed until the procedures for replacing lost, destroyed or stolen
Certificate(s) have been followed.
11. Security Transfer Taxes. Holders who tender their Original
Capital Securities for exchange will not be obligated to pay any transfer taxes
in connection therewith. If, however, Exchange Capital Securities are to be
delivered to, or are to be issued in the name of, any person other than the
registered holder of the Original Capital Securities tendered, or if a transfer
tax is imposed for any reason other than the exchange of Original Capital
Securities in connection with the Exchange Offer, then the amount of any such
transfer tax (whether imposed on the registered holder or any other persons)
will be payable by the tendering holder. If satisfactory evidence of payment of
such taxes or exemption therefrom is not submitted with the Letter of
Transmittal, the amount of such transfer taxes will be billed directly to such
tendering holder.
Important: This Letter of Transmittal (or facsimile thereof) and all
other required documents must be received by the Exchange Agent on or prior to
the Expiration Date.
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<PAGE> 14
TO BE COMPLETED BY ALL\
TENDERING SECURITYHOLDERS
(See Instruction 9)
PAYER'S NAME: BANKERS TRUST COMPANY
SUBSTITUTE Part 1 - PLEASE PROVIDE YOUR TIN______________________
Form W-9 TIN IN THE BOX AT RIGHT AND Social Security Number or
CERTIFY BY SIGNING AND Employer Identification
DATING BELOW Number
Part 2
Department of the Treasury Awaiting TIN / /
Internal Revenue Service
CERTIFICATION - UNDER THE PENALTIES OF PERJURY, I CERTIFY THAT
(1) the number shown on this form is my correct taxpayer
identification number (or I am waiting for a number to be
issued to me), (2) I am not subject to backup withholding
either because (i) I am exempt from backup withholding, (ii) I
have not been notified by the Internal Revenue Service ("IRS")
that I am subject to backup withholding as a result of a
failure to report all interest or dividends, or (iii) the IRS
has notified me that I am no longer subject to backup
withholding, and (3) any other information provided on this
form is true and correct.
Payer's Request for Taxpayer
Identification Number (TIN) Signature__________________
______
and Certification
Date_______________________
______
You must cross out item (iii) in Part (2) above if
you have been notified by the IRS that you are
subject to backup withholding because of
underreporting interest or dividends on your tax
return and you have not been notified by the IRS that
you are no longer subject to backup withholding.
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY IN CERTAIN
CIRCUMSTANCES RESULT IN BACKUP WITHHOLDING OF 31% OF ANY
AMOUNTS PAID TO YOU PURSUANT TO THE EXCHANGE OFFER. PLEASE
REVIEW THE ENCLOSED GUIDELINES FOR CERTIFICATION OF TAXPAYER
IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 FOR ADDITIONAL
DETAILS.
CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER
I certify under penalties of perjury that a taxpayer identification
number has not been issued to me, and either (1) I have mailed or delivered an
application to receive a taxpayer identification number to the appropriate
Internal Revenue Service Center or Social Security Administration Office, or (2)
I intend to mail or deliver an application in the near future. I understand that
if I do not provide a taxpayer identification number by the time of payment, 31%
of all payments made to me on account of the Exchange Capital Securities shall
be retained until I provide a taxpayer identification number to the
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<PAGE> 15
Exchange Agent and that, if I do not provide my taxpayer identification number
within 60 days, such retained amounts shall be remitted to the Internal Revenue
Service as backup withholding and 31% of all reportable payments made to me
thereafter will be withheld and remitted to the Internal Revenue Service until I
provide a taxpayer identification number.
Signature_____________________________________ Date
15
<PAGE> 1
EXHIBIT 99.2
FORM OF
NOTICE OF GUARANTEED DELIVERY
FOR TENDER OF
8.29% Capital Securities
(Liquidation Amount $1,000 per Capital Security)
OF
PROVIDENT TRUST I
This Notice of Guaranteed Delivery, or one substantially equivalent to
this form, must be used to accept the Exchange Offer (as defined below) if (i)
the procedures for delivery by book-entry transfer cannot be completed on or
prior to the Expiration Date (as defined in the Prospectus referred to below),
(ii) certificates for the Trust's (as defined below) 8.29% Capital Securities
(the "Original Capital Securities") are not immediately available or (iii)
Original Capital Securities, the Letter of Transmittal and all other required
documents cannot be delivered to Bankers Trust Company (the "Exchange Agent") on
or prior to the Expiration Date. This Notice of Guaranteed Delivery may be
delivered by hand, overnight courier or mail, or transmitted by facsimile
transmission, to the Exchange Agent. See "The Exchange Offer--Procedures for
Tendering Original Capital Securities" in the Prospectus.
The Exchange Agent for the Exchange Offer is:
Bankers Trust Company
<TABLE>
<CAPTION>
By Mail By Hand By Overnight Mail or Courier
- ---------------------------------- ----------------------------------- ---------------------------------
<S> <C> <C>
BT Services Tennessee, Inc. Bankers Trust Company BT Services Tennessee, Inc.
Reorganization Unit Corporate Trust & Agency Group Corporate Trust & Agency Group
Post Office Box 292737 Receipt & Delivery Window Reorganization Unit
Nashville, Tennessee 37229-2737 123 Washington Street, 1st Floor 648 Grassmere Park Road
New York, New York 10006 Nashville, Tennessee 37211
</TABLE>
For Information Call:
(800) 735-7777
Confirm by Telephone:
(615) 835-3572
Facsimile Transmissions:
(Eligible Institutions Only)
(615) 835-3701
Delivery of this Notice of Guaranteed Delivery to an address other than
as set forth above or transmission of this Notice of Guaranteed Delivery via a
facsimile to a number other than as set forth above will not constitute a valid
delivery.
This Notice of Guaranteed Delivery is not to be used to guarantee
signatures. If a signature on a Letter of Transmittal is required to be
guaranteed by an "Eligible Institution" under the instructions therefor, such
signature guarantee must appear in the applicable space provided in the
signature box on the Letter of Transmittal.
Ladies and Gentleman:
The undersigned hereby tenders to Provident Trust I, a trust created
under the laws of Delaware (the "Trust"), upon the terms and subject to the
conditions set forth in the Prospectus dated July __, 1998 (as the same may be
amended or supplemented from time to time, the "Prospectus"), and the related
Letter of Transmittal (which together constitute the "Exchange Offer"), receipt
of which is hereby
<PAGE> 2
acknowledged, the aggregate liquidation amount of Original Capital Securities
set forth below pursuant to the guaranteed delivery procedures set forth in the
Prospectus under the caption "The Exchange Offer--Procedures for Tendering
Original Capital Securities."
<TABLE>
<S> <C>
Aggregate Liquidation Amount Name(s) of Registered Holder(s):
Tendered:____________________________________________ _____________________________________________________
Certificate No(s). (if available): Address(es):
_____________________________________________________ _____________________________________________________
_____________________________________________________
If Original Capital Securities will be tendered by
book-entry transfer, provide the following Area Code and Telephone Number(s):
information:
_____________________________________________________
DTC Account Number:__________________________________
Signature(s):________________________________________
Date:________________________________________________ _____________________________________________________
_____________________________________________________
</TABLE>
THE GUARANTEE ON THE REVERSE SIDE MUST BE COMPLETED
2
<PAGE> 3
GUARANTEE
(Not to be used for signature guarantee)
The undersigned, a firm or other entity identified in Rule 17Ad-15
under the Securities Exchange Act of 1934, as amended, as an "eligible guarantor
institution," including (as such terms are defined therein): (i) bank; (ii) a
broker, dealer, municipal securities broker, municipal securities dealer,
government securities broker, government securities dealer; (iii) a credit
union; (iv) a national securities exchange, registered securities association or
clearing agency; or (v) a savings association that is a participant in a
Securities Transfer Association recognized program (each of the foregoing being
referred to as an "Eligible Institution"), hereby guarantees to deliver to the
Exchange Agent, at one of its addresses set forth above, either the Original
Capital Securities tendered hereby in proper form for transfer, or confirmation
of the book-entry transfer of such Original Capital Securities to the Exchange
Agent's account at The Depository Trust Company ("DTC"), pursuant to the
procedures for book-entry transfer set forth in the Prospectus, in either case
together with one or more properly completed and duly executed Letter(s) of
Transmittal (or facsimile thereof) and any other required documents within three
business days after the date of execution of this Notice of Guaranteed Delivery.
The undersigned acknowledges that it must deliver the Letter(s) of
Transmittal and the Original Capital Securities tendered hereby to the Exchange
Agent within the time period set forth above and that failure to do so could
result in a financial loss to the undersigned.
Name of Firm:______________________ _______________________________
(Authorized Signature)
Address:___________________________ Title:_________________________
___________________________________ Name:__________________________
Zip Code (Please type or print)
Area Code and
Telephone Number:__________________ Date:__________________________
NOTE: DO NOT SEND ORIGINAL CAPITAL SECURITIES WITH THIS NOTICE OF GUARANTEED
DELIVERY. ACTUAL SURRENDER OF ORIGINAL CAPITAL SECURITIES MUST BE MADE PURSUANT
TO, AND BE ACCOMPANIED BY, A PROPERLY COMPLETED AND DULY EXECUTED LETTER OF
TRANSMITTAL AND ANY OTHER REQUIRED DOCUMENTS.
3
