<PAGE>
As filed with the Securities and Exchange Commission on February 18, 2000
Registration No. 333-
Registration No. 333- -1
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-3
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933
__________________________________
PROVIDENT BANKSHARES CORPORATION
PROVIDENT TRUST II
(Exact name of registrants as specified in their Charters)
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Maryland 6022 52-1518642
Delaware 6022 Applied For
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(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Numbers) Identification Numbers)
</TABLE>
114 East Lexington Street, Baltimore, Maryland 21202 (410) 277-7000
(Address, including zip code, and telephone number, including area code,
of registrants' principal executive offices)
Peter M. Martin
114 East Lexington Street, Baltimore, Maryland 21202 (410) 277-7000
(Name, address, including zip
code, and telephone number, including area code, of agent for service)
With copies to:
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Marc P. Levy, Esq. Abba David Poliakoff, Esq.
Victor L. Cangelosi, Esq. Carla Stone Witzel, Esq.
Muldoon, Murphy & Faucette LLP Gordon, Feinblatt, Rothman, Hoffberger
5101 Wisconsin Avenue, N.W. & Hollander, LLC
Washington, D.C. 20016 233 E. Redwood Street, Baltimore, Maryland 21202
(202) 362-0840 (410) 576-4000
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Approximate date of commencement of the proposed sale to public: As soon as
practicable after the effective date of this Registration Statement.
If the only securities being registered on this Form are being offered pursuant
to dividend or interest reinvestment plans, please check the following box. [_]
If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. [_]
If this Form is filed to register additional securities for an offering pursuant
to Rule 462(b) under the Securities Act, please check the following box and list
the Securities Act registration statement number of the earlier effective
registration statement for the same offering. [_]
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [_]
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CALCULATION OF REGISTRATION FEE
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Proposed Proposed
Maximum Maximum
Title of Securities Amount to be Offering Price Aggregate Amount of
to be Registered Registered Per Unit Offering Price (1) Registration Fee
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___% Trust Preferred Securities 1,200,000 $25 $30,000,000 $7,920
of Provident Trust II
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___% Junior Subordinated _________ $__ $__________ N/A
Deferrable Interests Debenture of
Provident Bankshares Corporation (2)
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Guarantee of Provident _________ $__ $__________ N/A
Bankshares Corporation of
certain obligations under the
Trust Preferred Securities (3)
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Total Registration Fee _________ $__ $__________ $7,920
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(1) Estimated solely for the purpose of calculating the registration fee,
exclusive of accrued interest and dividends, if any.
(2) The Junior Subordinated Deferrable Interest Debentures will be purchased
by Provident Trust II. Such securities may later be distributed for no
additional consideration to the holders of the trust preferred securities
upon the dissolution of the Issuer Trust and the distribution of its
assets.
(3) This Registration Statement is deemed to cover the guarantee. Pursuant to
Rule 457(n) under the Securities Act, no separate registration fee is
payable for the 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 or until the Registration Statement shall become effective on
such date as the Securities and Exchange Commission, acting pursuant to said
Section 8(a), may determine.
EXPLANATORY NOTE
The prospectus contained in this Registration Statement will be used in
connection with the offering of the following securities: (1) _________% Trust
Preferred Securities of Provident Trust II; (2) _________% Junior Subordinated
Deferrable Interest Debentures of Provident Bankshares Corporation; (3) a
Guarantee of Provident Bankshares Corporation of certain obligations under the
trust preferred securities.
The information in this prospectus is not complete and may be changed. We may
not sell these securities until the registration statement filed with the
Securities and Exchange Commission is effective. This prospectus is not an offer
to sell these securities and it is not soliciting an offer to buy these
securities in any state where the offer or sale is not permitted.
<PAGE>
*******************************************************************************
The information in this Prospectus is not complete and may be changed. We may
not sell these securities until the registration statement relating to these
securities has been declared effective by the Securities and Exchange
Commission. This Prospectus is neither an offer to sell nor a solicitation of
an offer to buy these securities in any state where the offer or sale is
unlawful.
*******************************************************************************
Subject to completion, dated February 18, 2000
PROSPECTUS
1,200,000 Trust Preferred Securities
PROVIDENT TRUST II
% Trust Preferred Securities
guaranteed by
[Provident Bankshares Corporation Logo Appears Here]
Provident Bankshares Corporation
. We are a bank holding company for our bank subsidiary, which offers a full
range of consumer and commercial banking services to customers in
Maryland, Northern Virginia and southern York County, Pennsylvania.
The Trust
. Provident Trust II is our subsidiary and a statutory business trust
created under the laws of Delaware.
. We created the Trust for the limited purposes of issuing the common and
trust preferred securities, investing in the junior subordinated
debentures, and engaging in incidental activities.
The Trust Preferred Securities
. The trust preferred securities represent undivided beneficial interests in
the assets of the Trust, which will include the junior subordinated
debentures and payments on the debentures.
. Holders of the trust preferred securities are entitled to cumulative cash
distributions at the annual rate of % on March 31, June 30, September
30 and December 31 of each year, beginning , 2000.
. We have applied to have the trust preferred securities approved for
quotation under the proposed Nasdaq National Market symbol "PBKSP."
. The Trust may redeem the trust preferred securities at a redemption price
of $25 per trust preferred security, plus accrued and unpaid
distributions, on or after , 2005.
. If we defer interest payments on the junior subordinated debentures, the
Trust will defer distributions on the trust preferred securities.
The Junior Subordinated Debentures
. We will sell of our % junior subordinated debentures to the
Trust, an amount equal to the proceeds to the Trust from the sale of the
common and trust preferred securities.
. The junior subordinated debentures are scheduled to mature on ,
2030, but we may shorten this date.
. We may defer interest payments on the junior subordinated debentures from
time to time.
Before you make an investment decision, we urge you to consider carefully the
"Risk Factors" beginning on page 7 of this Prospectus.
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Price Underwriting Proceeds
to Public Commission to Trust
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Per Trust Preferred Security................ $25.00 (1) $
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Total....................................... $30,000,000 (1) $
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(1) Because all of the proceeds from the sale of the trust preferred securities
will be used to purchase the junior subordinated debentures, we have agreed
to pay the underwriters, as compensation, $ per trust preferred security
or $ in the aggregate
Neither the Securities and Exchange Commission nor any State Securities
Commission has approved or disapproved of these securities or passed upon the
adequacy or accuracy of this Prospectus. Any representation to the contrary is
a criminal offense.
Neither the trust preferred securities nor the junior subordinated debentures
are deposit accounts of any bank, and neither are insured to any extent by the
Federal Deposit Insurance Corporation or any other governmental agency.
Legg Mason Wood Walker Ferris, Baker Watts
Incorporated Incorporated
The date of this prospectus is , 2000.
<PAGE>
TABLE OF CONTENTS
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Page No.
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Summary........................................................................... 1
Risk Factors...................................................................... 7
Selected Consolidated Financial Data.............................................. 12
Use of Proceeds................................................................... 14
Capitalization.................................................................... 15
Provident Trust II................................................................ 16
Accounting Treatment.............................................................. 17
Description of Preferred Securities............................................... 17
Description of Junior Subordinated Debentures..................................... 30
Description of Guarantee.......................................................... 41
Relationship among the Preferred Securities, the Junior Subordinated Debentures,
and the Guarantee................................................................ 43
Certain Federal Income Tax Consequences........................................... 45
Certain ERISA Considerations...................................................... 50
Underwriting...................................................................... 50
Validity of Securities............................................................ 51
Experts........................................................................... 52
Where You Can Find More Information............................................... 52
Incorporation of Certain Documents by Reference................................... 52
Cautionary Statement Concerning
Forward-Looking Information..................................................... 53
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<PAGE>
[MAP]
We have not, and the underwriters have not, authorized any other person to
provide you with information other than that provided in this prospectus. This
prospectus is not an offer to sell, nor is it seeking an offer to buy, these
trust preferred securities in any state where the offer or sale is not
permitted. The information in this prospectus is complete and accurate as of
the date on the front cover, but the information may have changed since that
date.
<PAGE>
SUMMARY
The items in the following summary are described in more detail later in this
prospectus. This summary provides an overview of selected information and does
not contain all the information you should consider. You also should read the
more detailed information set out in this prospectus or incorporated in the
prospectus by reference. See "Where You Can Find More Information" (page 52). In
this prospectus, "we," "our," and "us," refer to Provident Bankshares
Corporation.
Provident Bankshares Corporation
Overview
Provident Bankshares Corporation is a registered bank holding company whose
principal business is conducted by its wholly owned subsidiary, Provident Bank,
which is headquartered in Baltimore, Maryland. At December 31, 1999, the Bank
was the third largest commercial bank chartered in Maryland in terms of assets.
Our common stock trades on the Nasdaq Stock Market's National Market under the
symbol "PBKS."
We provide a full range of commercial banking services from 83 branches (of
which 50 are traditional branch offices and 33 are in-store facilities) in seven
Maryland counties in the Baltimore/Washington, D.C. corridor, Baltimore City in
Maryland, northern Virginia and southern York County, Pennsylvania. The Bank
offers related financial services through its wholly owned subsidiaries,
including mortgages through Provident Mortgage Corp., mutual funds, annuities
and insurance products through Provident Investment Center, Inc. and leases
through Court Square Leasing Corporation and Provident Lease Corporation.
At December 31, 1999, we had total assets of approximately $5.1 billion, total
deposits of $3.8 billion, and total consolidated shareholders' equity of
approximately $275 million.
Our principal executive offices are located at 114 East Lexington Street,
Baltimore, Maryland 21202, and our telephone number at such address is (410)
277-7000.
Our Strategy
Our strategy is to continue to develop our 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 we operate. At the same time, we are continuing to develop
our portfolio and indirect consumer loan operations. Management believes that
the increasing consolidation in the financial services industry, particularly in
our principal market area, provides us with significant opportunities as the
larger regional institutions focus increasingly on higher dollar credits and
less personalized forms of service delivery.
We have experienced significant growth since the management team, led by Carl W.
Stearn and Peter M. Martin, was retained in 1990 to reorient our 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 Provident Bankshares Corporation and Mr. Martin assumed
those positions. Mr. Stearn remains a director of Provident Bankshares
Corporation. During their tenure, we have grown from approximately $1.5 billion
in assets and 38 banking offices to approximately $5.1 billion in assets and 83
banking offices. In developing our commercial bank franchise, management has
implemented extensive modifications to our lending, funding, balance sheet
management, and operational functions to position us for future profitable
growth.
In August 1997, we completed our acquisition of First Citizens Financial
Corporation, a $674 million financial institution with 15 branches in the
Montgomery and Frederick Counties of Maryland. We will continue to evaluate
business combination opportunities.
Recent Developments
We recorded net income for the year ended December 31, 1999 of $44.2 million or
$1.73 per share basic and $1.67 diluted. This represented a
1
<PAGE>
13.1% increase in net income over the same period a year ago. Net income for the
year ended December 31, 1998 was $39.0 million or $1.52 per share basic or $1.47
diluted. The higher earnings in 1999 were primarily due to a $17.5 million
increase in net interest income, offset in part by lower non-interest income of
$1.7 million and higher operating costs of $9.3 million. There was a $457,000
decrease in the provision for loan losses during 1999 and net charge-offs of
$13.0 million. We decreased our loan loss provision despite an increase in
charge-offs because the increase in 1999 charge-offs was primarily related to an
adverse decision in a lawsuit associated with a letter of credit issued in 1989.
Our returns on average assets and average equity were 0.90% and 15.46% in 1999,
respectively. Additionally, our efficiency ratio was 63.4% in 1999.
We have transitioned our asset base into higher yielding products since 1995,
with investment securities, residential mortgages and loans held for sale
declining from 51.4% at year-end 1995 to 39.4% of earning assets at December 31,
1999. Loan growth has ranged between 13-21% in recent years, supported by
consumer and commercial loan emphasis as well as disciplined wholesale purchases
of seasoned consumer portfolios. At December 31, 1999, Provident's loan balance
totaled $3.2 billion and was composed of 69% consumer loans, 23% commercial and
commercial real estate loans, and 8% residential mortgage loans.
At December 31, 1999, we had non-performing loans of $28.9 million, or 0.91% of
total loans. The increase in non-performing loans in 1999 is primarily the
result of one health care relationship, the largest portion of which is part of
a shared national credit of $15 million. The total relationship is $21 million.
The allowance for loan losses at December 31, 1999, was 1.25% of total loans and
137.6% of non-performing loans. Net charge-offs at December 31, 1999 were 0.40%
of average loans. Additionally, our net charge-offs to average loans ratio has
averaged 0.23% over the five years ended December 31, 1999.
In addition to emphasizing credit quality, management has focused on liquidity
by maintaining an investment portfolio of $1.7 billion at December 31, 1999. Of
the investment portfolio, 87.9% is invested in mortgage-backed securities with a
weighted average life of 5.6 years and 3.4% is invested in U.S. government
obligations.
On April 15, 1998, Provident Trust I, a statutory business trust created under
the laws of the State of Delaware, issued $40,000,000 of its 8.29% Exchange
Capital Securities to certain investors. These securities remain outstanding. A
copy of the prospectus dated July 31, 1998, relating to the Exchange Capital
Securities will be made available to you at no cost through our Corporate
Secretary. The 8.29% Exchange Capital Securities will be of equal rank to the
securities offered through this prospectus.
A stockholder has submitted a proposal that would require us to immediately take
steps to achieve a sale, merger or other acquisition of the Company on terms
that will maximize stockholder value. Our Board of Directors intends to oppose
the proposal if it is presented properly at our Annual Meeting of Stockholders.
Provident Trust II
Provident Trust II is a statutory business trust that we formed under the
Delaware Business Trust Act. The Trust is selling 1,200,000 Trust Preferred
Securities in this Offering. The Trust also will issue common trust securities
to us. The Trust Preferred Securities and the common securities are referred to
in this prospectus as the Trust Securities.
The Trust exists only to issue Trust Securities for cash, to invest the proceeds
in an equivalent amount of ___% Junior Subordinated Deferrable Interest
Debentures due 2030 issued by us, and to engage in other activities that are
necessary or incidental to the issuance of the Trust Securities and the
investment in Junior Subordinated Debentures. The Trust does not have separate
financial statements. We do not believe that the statements would be significant
to you because the Trust is our direct, wholly owned subsidiary, has no
independent operations, and exists solely for the reasons summarized above. We
will pay all of the expenses of operating the Trust.
The Trust's principal office is located at 114 East Lexington Street, Baltimore,
Maryland, and its telephone number is (410) 277-7000.
2
<PAGE>
The Offering
The Issuer............................ Provident Trust II, a Delaware statutory
business trust.
Securities Being Offered.............. 1,200,000 trust preferred securities
having a liquidation amount of $25 per
trust preferred security. The trust
preferred securities represent preferred
undivided beneficial interests in the
assets of the Trust, which will consist
solely of junior subordinated
debentures. We will guarantee payments
on the trust preferred securities to the
extent of funds in the Trust.
The Offering Price.................... $25 per trust preferred security.
The Payment of Distributions.......... The Trust will pay distributions to you
on each trust preferred security at an
annual rate of ____%. The distributions
will be cumulative, will accumulate from
the date of issue, and will be payable
in arrears with additional
distributions, compounded quarterly,
beginning ____________, 2000.
Our Option to Extend the Interest
Payment Period..................... At any time that we are not in default
under the junior subordinated
debentures, we may defer payments of
interest on the junior subordinated
debentures for up to 20 consecutive
quarters, but not beyond their stated
maturity date. The Trust would defer
quarterly distributions on the trust
preferred securities while we are
deferring payment on the junior
subordinated debentures. Deferred
quarterly distributions will accumulate
additional distributions at an annual
rate of ____% compounded quarterly.
During any period that we are deferring
interest payments, we may not declare or
pay any cash distributions on our
capital stock or debt securities that
are of equal or lower rank than the
junior subordinated debentures. After
the end of any period in which we are
deferring interest payments, if we have
paid all deferred and current interest
under the junior subordinated
debentures, we may defer interest
payments again. If we defer interest
payments, you will be required to
include deferred interest income in your
gross income for United States federal
income tax purposes even if you have not
received distributions.
Junior Subordinated Debentures........ The Trust will invest the proceeds from
the issuance of the trust preferred
securities and common securities in an
equivalent amount of our _____% junior
subordinated debentures.
Maturity of Debentures................ The junior subordinated debentures are
scheduled to mature on ____________,
2030. The Trust must redeem the trust
preferred securities when the junior
subordinated debentures are paid on the
maturity date, or following any earlier
redemption of the junior subordinated
debentures.
3
<PAGE>
Redemption of the Preferred
Securities is Possible............. The Trust may redeem the trust preferred
securities in whole or in part, if we
repay the junior subordinated
debentures. Subject to any regulatory
approval that may then be required, we
may redeem the junior subordinated
debentures before their scheduled
maturity either (1) on or after
____________, ____, in whole at any time
or in part, from time to time, or (2) at
any time, in whole, but not in part,
within 90 days after:
. certain tax events occur or become
likely to occur;
. the Trust is or becomes likely to
be deemed to be an investment
company; or
. there is a change in the regulatory
capital treatment of the trust
preferred securities.
We will use the cash proceeds of any
redemption to pay you the liquidation
amount for the trust preferred
securities. The liquidation amount you
will receive will be $25 per trust
preferred security plus any accrued and
unpaid distributions to the date of
redemption.
How the Securities will Rank in
Right of Payment................... The trust preferred securities will rank
equally with the common securities
issued by the Trust. The Trust will pay
distributions on the trust preferred
securities and the common securities pro
rata. If we default by failing to pay
interest payments on the junior
subordinated debentures, no
distributions on the common securities
will be paid until all accumulated and
unpaid distributions on the trust
preferred securities have been paid.
Our obligation under the junior
subordinated debentures is unsecured and
generally will rank junior in priority
to any of our senior and other
subordinated indebtedness. If we create
any other trusts similar to this Trust,
then the subordinated debentures will
rank equally with any other junior
subordinated debentures we issue to the
trusts.
Our obligation under the guarantee is
unsecured and will rank junior to our
senior and other subordinated
indebtedness. If we issue any other
guarantees in the future relating to
trust preferred securities issued by the
other trusts, then the guarantee issued
in this transaction will rank equally
with our guarantee related to the trust
preferred securities issued by Provident
Trust I and any other guarantees.
Because we are a holding company, the
junior subordinated debentures and the
guarantee will effectively be
subordinated to all existing and future
liabilities of our subsidiaries.
The trust preferred securities, junior
subordinated debentures and our
guarantee will rank equally with the
Exchange Capital
4
<PAGE>
Securities that were issued in 1998 in
connection with Provident Trust I.
The Junior Subordinated Debentures
may be Distributed to You.......... Under certain circumstances and after we
obtain any necessary regulatory
approvals, we may dissolve the Trust. If
we dissolve the Trust, after
satisfaction of any of the Trust's
liabilities to creditors, the Trust will
distribute your pro rata share of the
junior subordinated debentures to you in
liquidation of the Trust.
Our Obligations to Guarantee
Payments.......................... We provide an irrevocable and
unconditional guarantee of payments of
distributions and other amounts due on
the trust preferred securities. Our
obligations to guarantee the payments
and other amounts are found under the
junior subordinated debentures, the
indenture, the trust agreement and the
guarantee, taken together.
If we do not make payments on the junior
subordinated debentures, the Trust will
not have sufficient funds to make
distributions on the trust preferred
securities. The guarantee does not cover
distributions when the Trust does not
have sufficient funds.
Limited Voting Rights................ You will have no voting rights except in
limited circumstances.
The Use of Proceeds.................. The Trust will invest all of the
proceeds from the sale of the trust
preferred and the common securities in
our junior subordinated debentures. We
intend to utilize a substantial portion
of the net proceeds for our stock
repurchase program. We intend to
contribute the remainder of net proceeds
from our sale of the junior subordinated
debentures to our subsidiary bank to
fund the bank's operations, support
internal growth opportunities, and to
use the remainder to finance growth,
including future acquisitions if and
when suitable opportunities arise, and
for general corporate purposes.
The trust preferred securities may
qualify in whole or in part, as our
"Tier 1" capital or core capital, with
certain limitations, in accordance with
capital guidelines provided by The
Federal Reserve. The remaining amount of
trust preferred securities that does not
qualify as our "Tier 1" capital will
qualify as "Tier 2," or supplementary
capital.
Nasdaq National Market Symbol......... We have applied for a listing of the
securities on the Nasdaq National Market
under the symbol "PBKSP."
5
<PAGE>
Book-Entry............................ The trust preferred securities will be
represented by a global security that
will be deposited with and registered in
the name of The Depository Trust
Company, New York, New York, or its
nominee. You will not receive a
certificate for your trust preferred
securities.
No Rating............................. We do not expect that the trust
preferred securities will be rated by
any rating service.
ERISA Considerations.................. You must consider carefully the
information described under "Certain
ERISA Considerations."
For additional information regarding the trust preferred securities, see:
"Description of Preferred Securities" on page 17, "Description of Junior
Subordinated Debentures" on page 30, "Description of Guarantee" on page 41,
"Relationship Among the Preferred Securities, the Junior Subordinated Debentures
and the Guarantee" on page 43 and "Certain Federal Income Tax Consequences" on
page 45.
6
<PAGE>
RISK FACTORS
You should carefully consider the following risk factors before purchasing
the trust preferred securities. This prospectus contains forward-looking
statements that involve risk and uncertainties. You can identify these forward-
looking statements because they may include terms such as "believes,"
"anticipates," "intends," "expects," or similar expressions, and may include
discussions of future strategy. We caution you not to rely unduly on any
forward-looking statements in this prospectus. Our actual results could differ
materially from the forward-looking statements. The risk factors described below
could cause or contribute to these differences and apply to all forward-looking
statements wherever they appear in this prospectus.
Risk Factors Relating to the Preferred Securities
Payments on the Trust Preferred Securities depend on our making payment on the
Junior Subordinated Debentures.
The ability of Provident Trust II to make the required payments on the
capital securities depends on our ability to make the required payments on the
junior subordinated debentures. If we default on our obligations to pay our
other creditors, then we may be prohibited from paying you. Our obligations to
you under the guarantee and the junior subordinated debentures rank lower than
our obligations to most of our other creditors. If we do not pay our other
creditors amounts we owe them, we may be prohibited from paying you. If we go
into bankruptcy or insolvency, our other creditors must be paid in full before
you may be paid. There is no limitation on the amount of secured or unsecured
debt that may be incurred by us.
If we defer interest payments, there may be adverse tax consequences to you and
this may affect the trading price for the securities.
If we extend the interest payment period, you will not receive
distributions, but you will recognize ordinary income and incur a related
federal income tax liability, and you will recognize a capital loss that may be
used only to offset a capital gain. So long as we are not in default, we may
defer the payment of interest on the junior subordinated debentures from time to
time for up to 20 consecutive quarters. If we defer interest payments, the Trust
will defer quarterly distributions to you on the trust preferred securities.
During a deferral period you will continue to accrue income (in the form of
original issue discount) for federal income tax purposes on the trust preferred
securities, but you will not receive your cash distributions. In addition, your
tax basis in the trust preferred securities will increase by the amount of
accrued but unpaid distributions. If you sell the trust preferred securities
during a deferral period, your increased tax basis will decrease the amount of
any capital gain or increase the amount of any capital loss that you may have
otherwise realized on the sale. A capital loss, except in certain limited
circumstances, cannot be applied to offset ordinary income.
We may redeem the securities early, which may adversely affect you.
The Trust may return your principal to you early, which would require you
to reinvest your principal at a time when you may not be able to earn a return
that is as high as you were earning on the trust preferred securities. Under the
following circumstances we may return your principal before the stated maturity
of the junior subordinated debentures:
. We may redeem all of the junior subordinated debentures in whole, but
not in part, prior to maturity within 90 days after certain
occurrences at any time during the life of the Trust. If we redeem the
junior subordinated debentures due to the occurrence of one of these
events, the Trust will redeem the trust preferred securities. You
would receive the redemption price.
. We may also at any time shorten the maturity of the junior
subordinated debentures to a date not earlier than ____________, 2005.
We may be required to obtain regulatory approval before shortening the
maturity of the junior subordinated debentures.
7
<PAGE>
. You should be aware that Congress may enact legislation that would
adversely affect our ability to deduct the interest we pay on the
junior subordinated debentures or that otherwise results in
unfavorable tax consequences for us or the Trust. This legislation may
cause us to redeem the junior subordinated debentures and cause the
Trust to redeem the trust preferred securities.
If we redeem the junior subordinated debentures we would redeem the trust
preferred securities, and you may be required to reinvest your principal.
We can distribute the junior subordinated debentures to you, which may have
adverse tax consequences for you and which may adversely affect the market price
of your investment. The Trust may be dissolved at any time before maturity of
the junior subordinated debentures on _____________, 2030. Then, the trustees
would distribute the junior subordinated debentures to the holders of the trust
preferred securities. The junior subordinated debentures that you receive upon a
distribution, or the trust preferred securities you hold pending this type of
distribution, may trade at a price that is less than you paid to purchase the
trust preferred securities.
Under current United States federal income tax laws, a distribution of the
junior subordinated debentures to you upon the dissolution of the Trust would
not be a taxable event to you. However, if the Trust were classified for United
States federal income tax purposes as an association taxable as a corporation at
the time it is dissolved, the distribution of the junior subordinated debentures
would be a taxable event to you. In addition, if there is a change in law, a
distribution of junior subordinated debentures upon the dissolution of the Trust
could be a taxable event to you.
We will make payments under the guarantee only if the Trust has cash available.
Our guarantee covers payments to you only if the Trust has cash available
to make payments. If we do not make payments on the junior subordinated
debentures, the Trust will not have sufficient funds to pay distributions or the
liquidation amount. Because our guarantee does not cover payments when the Trust
does not have sufficient funds, you will not be able to rely on our guarantee
for payment of these amounts. Instead, you or the property trustee may enforce
the rights of the Trust under the junior subordinated debentures against us
directly.
You will have limited voting rights.
You will have only limited voting rights as a holder of the trust preferred
securities, and we can amend the trust agreement without your consent. Your
voting rights will relate only to the modification of the trust preferred
securities and the exercise of the Trust's rights as holder of the junior
subordinated debentures. You will not usually be able to appoint, remove or
replace the property trustee or the Delaware trustee because these rights
generally reside with us as the holder of the common securities. Even if it
would adversely affect your rights, we, together with the property trustee and
the trust administrators, may amend the trust agreement without your consent to
ensure that the Trust will not be taxable as a corporation for United States
federal income tax purposes.
The market price of the securities may decline if we defer interest on the
debentures.
The market price for the trust preferred securities may decline during any
period that we are deferring interest payments on the junior subordinated
debentures. If this were the case, the trust preferred securities would not
trade at a price that accurately reflects the value of accrued but unpaid
interest on the underlying junior subordinated debentures.
There may be no active or liquid market for the securities.
There is no current public market for the trust preferred securities and
one may not develop. We plan to list the trust preferred securities on the
Nasdaq National Market. There is no guarantee that an active or liquid public
8
<PAGE>
trading market will develop for the trust preferred securities or whether there
will be continued listing of the trust preferred securities on the Nasdaq
National Market. Although the underwriters have informed the Trust and us that
they intend to make a market in the trust preferred securities, they are not
obligated to do so and any market making activity may be terminated at any time
without notice. Even if an active public market does develop, there is no
guarantee that the market price for the trust preferred securities will equal or
exceed the price you pay for the trust preferred securities.
Holders of the securities and debentures are not protected by covenants in the
Indenture or the Trust Agreement.
The indenture and the trust agreement do not restrict our business
operations for your benefit. Neither the indenture, which sets forth the terms
of the junior subordinated debentures, nor the trust agreement, which sets forth
the terms of the trust preferred securities and the common securities, protects
holders of junior subordinated debentures or the trust preferred securities if
we experience adverse changes in our financial condition or results of
operations. In addition, neither the indenture nor the trust agreement limit our
ability or the ability of any subsidiary to incur additional indebtedness.
The securities are not insured.
The trust preferred securities are not insured. Neither the Federal Deposit
Insurance Corporation nor any other governmental agency or private company has
insured the trust preferred securities.
Potential tax law changes could require us to redeem the securities.
From time to time, certain tax law changes have been proposed that would
deny interest deductions to corporate issuers of debt instruments with terms
that include certain of the terms of the debentures. In addition, the Internal
Revenue Service ("IRS") has in the past challenged taxpayers' treatment as
indebtedness or securities issued with characteristics similar to the
debentures. To date, these tax law change proposals have not been enacted and
the only known challenge that has advanced as far as litigation was settled
short of trial, with resolution favorable to the taxpayer's position. However,
if any similar tax law change were enacted or a challenge by the IRS were
upheld, that event could give rise to a Tax Event (as defined under "Description
of Preferred Securities--Repayment or Redemption") which could result in an
early redemption of the Trust Preferred Securities.
Risk Factors Relating to Us
Our ability to make payments on the debentures may be limited.
The Trust will depend solely on our payments on the junior subordinated
debentures to pay amounts due to you on the trust preferred securities. Our
ability to make payments on the junior subordinated debentures is subject to the
following risks:
We depend primarily on dividends from our subsidiaries to pay you and those
dividends are restricted by regulation. We are a separate legal entity from our
subsidiaries and have limited operations of our own. We will depend primarily on
dividends we receive from our subsidiaries to make payments on the junior
subordinated debentures. Federal and state law and regulations restrict the
dividends our subsidiaries may pay us. If our subsidiaries are prohibited from
issuing dividends to us, we may not be able to make payments on the junior
subordinated debentures and the Trust will not be able to make payments to you
on the trust preferred securities.
9
<PAGE>
The securities will be of equal rank to our Exchange Capital Securities
The trust preferred securities will rank equally with the Exchange Capital
Securities that we issued in 1998.
Creditors of our subsidiaries have priority over you in the event of a
distribution of our subsidiaries' assets.
The creditors of our subsidiaries have priority over us and you in any
distribution of our subsidiaries' assets in a liquidation or reorganization. We
are a holding company and our assets are primarily composed of our investment in
the stock of our subsidiaries. The creditors of our subsidiaries will have
priority over us and you in any distribution of the subsidiaries' assets in a
liquidation, reorganization or otherwise, except to the extent that we are
recognized as a creditor of our subsidiaries. We will depend on dividends and
other amounts we receive from our subsidiaries to make payments on the junior
subordinated debentures. If our subsidiaries make no distributions to us, we may
not be able to make payments on the junior subordinated debentures and the Trust
will not be able to make payments to you on the trust preferred securities.
Our allowance for loan losses may be inadequate, which could affect our ability
to make payments on the debentures.
Provident Bank's reserve for possible credit losses may not be adequate to
cover actual loan losses and if we are required to increase our reserve, current
earnings may be reduced. When borrowers default and do not repay the loans that
we make to them, we may lose money. Our experience shows that some borrowers
either will not pay on time or will not pay at all, which will require us to
cancel or "charge off" the defaulted loan or loans. We provide for losses by
reserving what we believe to be an adequate amount to absorb any probable
inherent losses. A "charge-off" reduces our reserve for possible credit losses.
If our reserve is not sufficient, we would have to record a larger reserve which
would reduce current period earnings.
Changes in economic conditions could reduce our income and growth and could lead
to higher charge-offs and problem loans.
Changes in the real estate market could result in "charge-offs." Provident
Bank's loan portfolio includes many real estate secured loans. Real estate loans
are in demand when interest rates are low and economic conditions are favorable.
Even when economic conditions are favorable and interest rates are low, these
conditions may not continue. If the borrower does not pay a real estate loan, we
may have to "charge off" the loan. If real estate values decrease, then we may
not recover the full amount of the loan when we foreclose on the real estate.
Net charge-offs were $13.0 million in 1999 compared to $6.1 million in
1998. This increase in charge-offs is related to an adverse decision in a
lawsuit associated with a letter of credit issued in 1989. Net charge-offs as a
percentage of average loans was 0.40% in 1999 compared to 0.21% in 1998. Non-
accrual loans at December 31, 1999 were $28.9 million, an increase of $17.4
million from December 31, 1998. This increase is due to one health care
relationship, the largest portion of which is a shared national credit.
Changes in interest rates could reduce our profitability.
Provident Bank may be unable to manage interest rate risks that could
reduce our net interest income. Our earnings depend greatly on our net interest
income, the difference between the interest earned on loans and investments and
the interest paid on deposits. If the interest rate paid on deposits is high and
the interest rate earned on loans and investments is low, we earn less or may
lose money. Because interest rates are established by competition, we have
limited control over our net interest income.
10
<PAGE>
Risk Factors Relating to Our Industry
The Board of Governors of the Federal Reserve System regulates Provident
Bankshares Corporation as a bank holding company. We are a legal entity separate
and distinct from Provident Bank. We rely on cash dividends from Provident Bank
to meet our obligations for payment of principal and interest on our outstanding
debt obligations and corporate expenses. Provident Bank's ability to pay us
dividends depends on several factors including the following:
. regulatory limitations imposed by the various regulatory agencies with
authority over Provident Bank, generally based on current and retained
earnings;
. regulatory restrictions if such dividends would impair the capital of
Provident Bank; and
. Provident Bank's profitability and financial condition and its capital
expenditures and other cash flow requirements.
We cannot assure you that Provident Bank will be able to pay dividends at past
levels, or at all, in the future. Please refer to the section entitled
"Business" in our Annual Report on Form 10-K for the year ended December 31,
1999, which is incorporated by reference into this prospectus.
In addition to the restrictions on the payment of dividends, Provident Bank
is subject to additional restrictions required by federal law on extensions of
credit to, and certain other transactions with, us (and any affiliated companies
that are existing or may be formed in the future) and on investments in our and
our other affiliates' stock or other securities. These restrictions prevent us
and our other affiliates from borrowing from the Bank, unless the loans are
secured by various types of collateral. In addition, the amount of such secured
loans, other transactions and investments by the Bank are generally limited as
follows:
. as to us and as to each of our other affiliates, 10% of the Bank's
capital and surplus; and
. as to us and all of our other affiliates, an aggregate of 20% of the
Bank's capital and surplus.
Under the Federal Deposit Insurance Act, the Bank would be prohibited from
making capital distributions, including the payment of cash dividends if, after
making any such distribution, the institution would become "undercapitalized"
(as that term is used in the statute). Based on the Bank's current financial
conditions, we do not expect that this prohibition will have any impact on our
ability to obtain cash dividends from the Bank.
11
<PAGE>
SELECTED CONSOLIDATED FINANCIAL AND OTHER DATA
The following selected financial data for the five years ended December 31,
1999 are derived from our audited consolidated financial statements. You should
read the selected consolidated financial data along with our consolidated
financial statements, related notes, and other financial information
incorporated into this prospectus by reference. See "Where You Can Find More
Information."
<TABLE>
<CAPTION>
As of and for the Year Ended December 31,
---------------------------------------------------------------
1999 1998 1997(1) 1996 1995
---------- ---------- ---------- ---------- ----------
(Dollars in thousands, except per share data)
<S> <C> <C> <C> <C> <C>
Results of Operations:
Interest income (tax-equivalent)/(2)/.... $ 353,341 $ 319,240 $ 280,167 $ 248,311 $ 224,236
Interest expense......................... 204,261 187,509 156,718 137,354 122,819
---------- ---------- ---------- ---------- ----------
Net interest income (tax-equivalent)..... 149,080 131,731 123,449 110,957 101,417
Provision for loan losses................ 11,570 12,027 9,953 10,011 1,517
---------- ---------- ---------- ---------- ----------
Net interest income after provision
for loan losses....................... 137,510 119,704 113,496 100,946 99,900
Non-interest income...................... 60,734 55,995 41,672 44,509 34,573
Securities gains (losses)................ 312 6,749 2,337 5,556 (2,683)
Merger expenses.......................... -- -- 10,047 -- --
Non-interest expense..................... 132,243 122,914 107,816 110,323 97,416
---------- ---------- ---------- ---------- ----------
Income before taxes...................... 66,313 59,534 39,642 40,688 34,374
Income tax expense (tax equivalent)...... 22,163 20,504 14,683 14,500 12,242
---------- ---------- ---------- ---------- ----------
Net income............................... $ 44,150 $ 39,030 $ 24,959 $ 26,188 $ 22,132
========== ========== ========== ========== ==========
Per Share Data:
Net income -- Basic...................... $ 1.73 $ 1.52 $ 1.00 $ 1.07 $ 0.92
Net income -- Diluted.................... 1.67 1.47 0.96 1.02 0.88
Cash dividends paid...................... 0.60 0.49 0.40 0.31 0.23
Book value per share..................... 10.76 12.19 11.72 11.13 11.25
Financial Condition:
Assets................................... $5,094,477 $4,675,897 $3,926,739 $3,485,618 $3,170,390
Investments.............................. 1,671,507 1,198,511 983,241 1,054,391 1,168,772
Loans.................................... 3,184,119 3,100,211 2,701,068 2,247,873 1,752,851
Deposits................................. 3,808,528 3,419,557 2,754,515 2,286,144 2,056,436
Borrowings, excludes capital securities.. 928,441 880,602 816,368 930,952 860,646
Stockholders' equity..................... 274,599 296,077 270,182 238,798 223,048
</TABLE>
__________________________________
(1) Merger Related Expenses--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 13.33%, respectively. Basic earnings per share and diluted
earnings per share would have been $1.34 and $1.29, respectively.
(2) Tax-advantaged income has been adjusted to a tax-equivalent basis using
the combined statutory federal and state income tax rate in effect of 35%
in 1999 and 39.55% for 1998 through 1995.
12
<PAGE>
<TABLE>
<CAPTION>
As of and for the Year Ended December 31,
----------------------------------------------
1999 1998 1997(1) 1996 1995
----------------------------------------------
(Dollars in thousands, except per share data)
<S> <C> <C> <C> <C> <C>
Selected Ratios:
Return on average assets..................... 0.90% 0.90% 0.68% 0.79% 0.75%
Return on average equity..................... 15.46 13.75 9.90 11.53 11.14
Net interest margin.......................... 3.13 3.12 3.49 3.47 3.56
Efficiency ratio............................. 63.41 65.50 65.30 71.00 71.60
Dividend payout ratio........................ 35.93 32.15 40.14 29.49 24.84
Asset Quality Ratios:
Allowance of loan losses to total loans...... 1.25% 1.38% 1.36% 1.35% 1.57%
Allowance of loan losses to non-
performing loans.......................... 137.61 371.09 374.07 161.29 174.41
Non-performing loans to total loans.......... 0.91 0.37 0.36 0.84 0.90
Non-performing assets to total assets........ 0.63 0.35 0.32 0.84 0.97
Net charge-offs to average loans............. 0.40 0.21 0.14 0.35 0.06
Capital Ratios:/(3)/
Average equity of average assets............. 5.83% 6.52% 6.89% 6.85% 6.70%
Leverage ratio............................... 7.10 7.05 7.06 6.96 7.08
Tier 1 capital to risk-weighted assets....... 9.18 9.21 8.99 9.29 9.43
Total capital ratio to risk-weighted assets.. 10.20 10.26 10.24 10.46 10.57
Ratio of Earnings to Fixed Charges:/(4)/
Including interest on deposits............... 1.32 1.31 1.25 1.29 1.27
Excluding interest on deposits............... 2.16 1.98 1.76 1.80 1.75
</TABLE>
_______________________________
(3) The capital ratios for 1995 do not include pro forma information relating
to the acquisition of First Citizens Financial Corporation and its
subsidiaries.
(4) The ratio of earnings to fixed charges is computed by dividing income
before income taxes and fixed charges less interest capitalized during
the period, net of amortization of previously capitalized interest, by
fixed charges. Fixed charges consist of interest, expended or
capitalized, on borrowings (including or excluding deposits, as
applicable), and the portion of rental expense which is deemed
representative of interest.
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<PAGE>
USE OF PROCEEDS
All the proceeds to the Trust from the sale of the trust preferred
securities will be invested by the Trust in the junior subordinated debentures.
The net proceeds we receive from the sale of the junior subordinated debentures,
which we estimate to be approximately $____________, will be used:
. to continue our stock repurchase program;
. to make an equity contribution to our subsidiary, Provident Bank, to
support internal growth opportunities at the Bank and its
subsidiaries;
. to finance growth, which may include one or more branch acquisitions,
acquisitions of other financial institutions, or acquisitions of other
financial services companies;
. to increase our capital; and
. for general corporate purposes.
The precise amounts and timing of the application of proceeds, and the type
of investment, will depend upon our and our subsidiaries' funding requirements
and the availability of other funds. We do not have any specific plans at this
time to make any particular acquisition.
14
<PAGE>
CAPITALIZATION
The following table sets forth: (1) our consolidated capitalization at
December 31, 1999; (2) our consolidated capitalization giving effect to the
issuance of the trust preferred securities; and (3) actual and pro forma capital
ratios. The "As Adjusted" column assumes application of the net proceeds from
the corresponding sale of the junior subordinated debentures to the Trust as if
the sale of the trust preferred securities had been consummated on December 31,
1999. The table assumes that the offering occurs on the last day of the period
and that any resulting change to average assets is considered immaterial.
<TABLE>
<CAPTION>
At December 31, 1999
------------------------
Actual As Adjusted
------------------------
(Unaudited)
(Dollars in thousands)
<S> <C> <C>
Corporation-obligated mandatorily redeemable capital
securities/(1)/........................................ $ 40,000 $ ______
Stockholders' equity:
Common stock, $1.00 par value, 100,000,000
shares authorized, 26,225,752 shares issued......... 26,226 26,226
Capital surplus........................................ 203,364 203,364
Retained earnings...................................... 102,587 102,587
Net accumulated other comprehensive income (loss)...... (44,323) (44,323)
Treasury stock at cost - 693,866
shares at December 31, 1999......................... (13,255) (13,255)
-------- --------
Total stockholders' equity....................... $274,599 $274,599
======== ========
Total capitalization............................. $314,599 $
======== ========
Capital ratios /(2)/:
Tier 1 risk-based capital ratio/(3)/................... 9.18% _____%
Total risk-based capital ratio/(3)/.................... 10.20 _____
Leverage ratio......................................... 7.10 _____
</TABLE>
_____________________________
(1) Reflects the Trust's trust preferred securities representing beneficial
interests in an aggregate principal amount of $30,000,000 of our ___%
junior subordinated debentures that will mature on _____________, 2030.
(2) The capital ratios, as adjusted, are computed including the total
estimated proceeds from the sale of the trust preferred securities in a
manner consistent with the Federal Reserve guidelines.
(3) Assumes net proceeds of the offering of the trust preferred securities
are invested in assets with various risk weightings under the risk-based
capital rules of the Federal Reserve.
Under the risk-based capital adequacy guidelines established by the Board
of Governors of The Federal Reserve System, the trust preferred securities
cannot constitute more than 25% of our total Tier 1 capital. Amounts in excess
of this 25% capital limitation will be Tier 2, or supplemental, capital, and
therefore will be included in total risk-based capital. We believe the trust
preferred securities will initially be included in our Tier 1 capital, subject
to such 25% limitation, and the full amount will be included in our total risk-
based capital.
We exceed all regulatory capital requirements as of December 31, 1999. The
standards used by federal bank regulators to evaluate capital adequacy are the
risk-based capital and leverage ratio guidelines. Equity for regulatory purposes
does not include market value adjustments as required by Statement of Financial
Accounting Standard No. 115. Risk-based capital ratios measure core and total
stockholders' equity against risk-weighted assets. Our core capital is equal to
our common stock, capital surplus, other qualified Tier 1 components or capital
securities and retained earnings less treasury stock. The calculation of our
total stockholders' equity, for these
15
<PAGE>
purposes, is equal to the above in addition to the allowance for loan losses
subject to certain limitations. Risk-weighted assets are determined by applying
a weighting to asset categories and certain off-balance sheet commitments based
on the level of credit risk inherent in the assets. At December 31, 1999, our
total capital ratio was 10.20% compared to the minimum regulatory guideline of
8%. In addition, Tier 1 capital must be at least 4% of risk-weighted assets. At
year end, our Tier 1 capital ratio was 9.18%.
The leverage ratio represents Tier 1 capital, as defined above, divided by
average total assets. Guidelines for the leverage ratio require the ratio of
core stockholders' equity to average assets to be 100 to 200 basis points above
a 3% minimum, depending on risk profiles and other factors. Our leverage ratio
of 7.10% at December 31, 1999 was in excess of this requirement.
PROVIDENT TRUST II
The Trust is a statutory business trust created under Delaware law. It has
filed a Certificate of Trust with the Delaware Secretary of State on February
11, 2000. The Trust will be governed by the trust agreement, as amended and
restated among us as depositor, Bankers Trust (Delaware) as Delaware trustee,
Bankers Trust Company as property trustee and the holders, from time to time, of
undivided beneficial interests in the Trust. We will select two individuals who
are our employees or officers to act as administrators of the Trust. See
"Description of Preferred Securities--Miscellaneous." The Trust exists
exclusively to:
. issue and sell the trust preferred securities and the common
securities;
. use the proceeds from the sale of the trust preferred securities and
the common securities to acquire the junior subordinated debentures;
and
. engage in those activities necessary or incidental to the maintenance
of the Trust (such as registering the transfer of the trust preferred
securities and the common securities).
The junior subordinated debentures will be the sole assets of the Trust.
Payments under the junior subordinated debentures will be the sole source of
revenue of the Trust.
We will own all of the common securities. The common securities will rank
equally, and payments on them will be made pro rata, with the trust preferred
securities, except that upon the occurrence and during the continuation of an
event of default under the junior subordinated debentures. In such a case, our
rights as the holder of the common securities to all payments will be
subordinated to the rights of the holders of the trust preferred securities. See
"Description of Preferred Securities--Subordination of Common Securities." We
will acquire common securities in an aggregate liquidation amount equal to at
least 3% of the total capital of the Trust. The Trust has a term of 30 years,
but may dissolve earlier as provided in the trust agreement.
The address of the Delaware trustee is Bankers Trust (Delaware), 1011
Centre Road, Suite 200, Trust Department, Wilmington, Delaware 19805, and the
telephone number is (302) 636-3300.
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, and the telephone number is (212) 250-2500.
The holder of the common securities of the Trust can appoint, remove or
replace the property trustee and/or the Delaware trustee. The holders of a
majority in liquidation amount of the trust preferred securities can appoint,
remove or replace the property trustee or the Delaware trustee for cause, or if
an event of default has occurred or is continuing under the trust agreement.
The holders of the trust preferred securities may not appoint, remove or replace
the administrators. This right rests exclusively with us.
16
<PAGE>
ACCOUNTING TREATMENT
For financial reporting purposes, the Trust will be treated as our
subsidiary and the accounts of the Trust will be included in our consolidated
financial statements. The trust preferred securities will be reflected as
capital securities in the consolidated balance sheet and appropriate disclosures
about the trust preferred securities, the guarantee and the junior subordinated
debentures will be included in the notes to our consolidated financial
statements. For financial reporting purposes, we will record distributions on
the trust preferred securities as other non-interest expense in our consolidated
statement of income.
DESCRIPTION OF PREFERRED SECURITIES
The Trust will issue the trust preferred securities and the common
securities in accordance with the terms of the trust agreement. The trust
preferred securities will represent trust preferred undivided beneficial
interests in the assets of the Trust. You will be entitled to a preference with
respect to distributions and amounts payable on redemption or liquidation over
the common securities in certain circumstances, as well as other benefits as
described in the trust agreement.
This summary of certain provisions of the trust preferred securities and
the trust agreement is not complete. You should read the form of the trust
agreement, which is filed as an exhibit to the registration statement of which
this prospectus is a part. Wherever particular defined terms of the trust
agreement are referred to in this prospectus, the defined terms are incorporated
in this prospectus by reference. A copy of the form of the trust agreement is
also available upon request from the trustees.
General
The trust preferred securities will be limited to $____________ aggregate
liquidation amount (as defined in the trust agreement) outstanding. See
"Underwriting." The trust preferred securities will rank equally, and payments
will be made pro rata, with the common securities except as described under
"Subordination of Common Securities." The junior subordinated debentures will be
registered in the name of the Trust and held by the property trustee in trust
for your benefit, as a holder of trust preferred securities, and for our
benefit, as the holders of the common securities. The guarantee we will execute
for the benefit of the holders of the trust preferred securities will be a
guarantee on a subordinated basis with respect to the trust preferred securities
but will not guarantee payments when the Trust does not have funds on hand
available to make these payments. See "Description of Guarantee."
Distributions
You will receive distributions on each trust preferred security at the
annual rate of ___% of the stated liquidation amount of $_____, payable
quarterly in arrears on March 31, June 30, September 30 and December 31 of each
year, to record holders at the close of business on the 15th day of March, June,
September and December (whether or not a business day) next preceding the
relevant distribution date. Distributions on the trust preferred securities will
be cumulative. Distributions will accumulate from the date of original issuance.
The first distribution date for the trust preferred securities will be
____________, 2000. 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 the
period. Distributions payable for each full distribution period will be computed
by dividing the annual rate by four. If any date on which distributions are
payable is not a business day, then payment will be made on the next succeeding
day that is a business day (without any additional distributions or other
payment because of the delay), except that, if the business day falls in the
next calendar year, the payment will be made on the immediately preceding
business day.
So long as no debenture event of default has occurred and is continuing, we
have the right to defer the payment of interest on the junior subordinated
debentures at any time or from time to time for an "extension period" not
exceeding 20 consecutive quarterly periods, but not beyond the maturity date of
the junior subordinated
17
<PAGE>
debentures. Quarterly distributions on the trust preferred securities will be
deferred during the extension period. Distributions to which you are entitled
will accumulate additional distributions at the annual rate of ______%,
compounded quarterly from the relevant payment date, computed on the basis of a
360-day year of twelve 30-day months and the actual days elapsed in a partial
month in the period. Additional distributions payable for each full distribution
period will be computed by dividing the annual rate by four.
During any extension period, we may not: (1) declare or pay any dividends
or distributions on, or redeem, purchase, acquire or make a liquidation payment
with respect to, any of our capital stock; or (2) make any payment of principal
(or any premium on the principal) or interest, or repay, repurchase or redeem
any of our debt securities that rank equally in all respects with or junior in
interest to the junior subordinated debentures, including our obligations
associated with the outstanding trust preferred securities of Provident Trust I.
These prohibitions, however, do not apply to:
. repurchases, redemptions or other acquisitions of our capital stock,
in connection with any employment contract, benefit plan or other
similar arrangement, a dividend reinvestment or shareholder stock
purchase plan or the issuance of our capital stock (or securities
convertible into or exercisable for the capital stock) as
consideration in an acquisition or merger transaction entered into
prior to the applicable extension period;
. a reclassification, exchange or conversion of any class or series of
our capital stock (or any capital stock of our subsidiaries) for any
class or series of our capital stock or of any class or series of any
indebtedness for any class or series of our capital stock;
. the purchase of fractional interests in shares of our capital stock
pursuant to the conversion or exchange provisions of the capital stock
or the security being converted or exchanged;
. any declaration of a dividend in connection with any shareholders'
rights plan, or the issuance of rights, stock or other property under
any shareholders' rights plan, or the redemption or repurchase of
rights pursuant to any shareholders' rights plan; or
. any dividend in the form of stock, warrants, options or other rights,
where the dividend stock or the stock issuable upon exercise of the
warrants, options or other rights is the same stock as that on which
the dividend is being paid or ranks equally with or junior to the
stock.
Upon the termination of an extension period and the payment of all amounts
then due, we may begin a new extension period. We must give the property trustee
notice of our election to defer the payment of interest at least one business
day before the earlier of: (1) the date the distributions on the trust preferred
securities would have been payable but for the election to begin the extension
period; or (2) the date the property trustee is required to give you notice of
the record date or the date the distributions are payable, but in any event not
less than one business day prior to the record date. The property trustee will
give you notice of our election to begin a new extension period. Subject to the
foregoing, there is no limitation on the number of times that we 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."
We currently do not intend to exercise our right to defer payments of
interest.
The revenue of the Trust available for distribution to you will be limited
to payments under the junior subordinated debentures. See "Description of Junior
Subordinated Debentures." If we do not make payments on the junior subordinated
debentures, the Trust may not have funds available to pay distributions or other
amounts payable on the trust preferred securities. The payment of distributions
and other amounts payable on the trust preferred securities (if and to the
extent the Trust has funds legally available for and cash sufficient to make
these payments) is guaranteed by us on a limited basis as described below under
"Description of Guarantee."
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Repayment or Redemption
If we repay or redeem the junior subordinated debentures, we must give the
property trustee not less than 30 nor more than 60 days notice so that it can
redeem a proportionate amount of the trust preferred and common securities.
The redemption price for each trust preferred security shall equal $25.00
plus accumulated but unpaid distributions on the redemption date and the related
amount of the premium, if any, paid by us upon the concurrent redemption of the
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 the
repayment or redemption shall be allocated to the redemption pro rata of the
trust preferred securities and the common securities.
We may redeem the junior subordinated debentures: (1) in whole or in part
on or after ______________, 2005 in whole at any time or in part from time to
time; or (2) 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 proportionate amount of the trust preferred securities and
common securities at the redemption price.
"Tax Event" means the receipt by the Trust of an opinion of a counsel
experienced in such matters to the effect that, as a result of any amendment to,
or change (including an announced prospective change) in, the laws (or any
regulations thereunder) of the United States or any of its political
subdivisions or taxing authorities, or as a result of any official or
administrative pronouncement or action or judicial decision interpreting or
applying these 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 trust preferred securities, there is more than an insubstantial risk that:
. the Trust is, or will be within 90 days of the delivery of the
opinion, subject to United States federal income tax with respect to
income received or accrued on the junior subordinated debentures;
. interest payable by us on the junior subordinated debentures is not,
or within 90 days of the delivery of the opinion will not be,
deductible by us, in whole or in part, for United States federal
income tax purposes; and
. the 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.
See "Certain Federal Income Tax Consequences--Pending Tax Litigation
Affecting the Preferred Securities" for a discussion of pending United States
Tax Court litigation that, if decided adversely to the taxpayer, could give rise
to a Tax Event, that may permit us to redeem the junior subordinated debentures
before ____________, 2005.
If a Tax Event described in the first or third circumstances above has
occurred and is continuing and the Trust holds all of the junior subordinated
debentures, we will pay on the junior subordinated debentures any additional
amounts necessary so that the amount of distributions then due and payable by
the Trust on the outstanding trust preferred securities and common securities of
the Trust will not be reduced as a result of any additional taxes, duties and
other governmental charges to which the Trust has become subject as a result of
a Tax Event.
"Investment Company Event" means the receipt by the Trust of an opinion of
a 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
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(including any announced prospective change) in interpretation or application of
law or regulation by any legislative body, court, governmental agency or
regulatory authority, there is more than an insubstantial risk that the Trust is
or will be considered an "investment company" that is required to be registered
under the Investment Company Act. This change or prospective change would become
effective on or after the date of the issuance of the trust preferred
securities.
"Capital Treatment Event" means the reasonable determination by us 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 its political subdivisions, or as a result
of any official or administrative pronouncement or action or judicial decision
interpreting or applying their laws or regulations, which amendment or change is
effective or pronouncement, action or decision is announced on or after the date
of issuance of the trust preferred securities, there is more than an
insubstantial risk that we will not be entitled to treat an amount equal to the
liquidation amount of the trust preferred securities, as Tier 1 Capital (or any
equivalent amount), except as otherwise restricted by the Federal Reserve, for
purposes of the capital adequacy guidelines of the Federal Reserve, as then in
effect and applicable to us. The Federal Reserve has determined that the
proceeds of certain qualifying securities like the trust preferred securities
will qualify as Tier 1 capital for us only up to an amount not to exceed, when
taken together with all of our cumulative trust preferred stock, if any, 25% of
our Tier 1 capital.
Redemption Procedures
Preferred securities redeemed on each redemption date shall be redeemed at
a price equal to $25.00 plus accumulated but unpaid distributions, with the
applicable proceeds from the contemporaneous redemption of the junior
subordinated debentures. Redemptions of the trust preferred securities will be
made and the redemption price will be payable on each redemption date only to
the extent that the Trust has funds on hand available for the payment of the
redemption price. See also "Subordination of Common Securities."
If the Trust gives you notice of redemption of the trust preferred
securities, then by 12:00 noon, Eastern Standard Time on the redemption date, to
the extent funds are available, in the case of trust preferred securities held
in book entry form, the property trustee will deposit irrevocably with The
Depository Trust Company ("DTC") funds sufficient to pay the redemption price.
It will also give DTC irrevocable instructions and authority to pay the
redemption price to you. With respect to trust preferred 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 trust preferred securities
funds sufficient to pay the redemption price. The property trustee also will
give the paying agent irrevocable instructions and authority to pay the
redemption price to you once you surrender your certificates evidencing the
trust preferred securities. However, distributions payable on or before the
redemption date for any trust preferred securities called for redemption will be
payable to you on the relevant record dates for the related distribution dates.
If notice of redemption is given and funds are deposited as required, then
upon the date of the deposit all of your rights with respect to your trust
preferred securities so called for redemption will cease, except your right to
receive the redemption price and any distributions payable with respect to the
trust preferred securities on or prior to the redemption date, but without
interest, and trust preferred securities that are redeemed will no longer be
outstanding. If any date fixed for redemption of trust preferred securities is
not a business day, then payment of the redemption price payable on that date
will be made on the next succeeding day which is a business day (without any
interest or other payment with respect to any delay), except that, if the
business day falls in the next calendar year, the payment will be made on the
immediately preceding business day. In the event that payment of the redemption
price for the trust preferred securities called for redemption is improperly
withheld or refused and not paid either by the Trust or by us pursuant to the
guarantee as described under "Description of Guarantee," distributions on the
trust preferred securities will continue to accumulate at the then applicable
rate, from the redemption date originally established by the Trust for the trust
preferred securities to the date the 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.
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Subject to applicable law (including United States federal securities
laws), we or our affiliates may at any time and from time to time purchase
outstanding trust preferred securities by tender, in the open market or by
private agreement, and may resell the securities.
If less than all of the trust preferred securities and common securities
are to be redeemed on a redemption date, then the aggregate liquidation amount
of the trust preferred securities and common securities to be redeemed will be
allocated pro rata to the trust preferred securities and the common securities
based upon the relative liquidation amounts of the classes. The particular trust
preferred securities to be redeemed will be selected on a pro rata basis not
more than 60 days before the redemption date by the property trustee from the
outstanding trust preferred securities not previously called for redemption, or
in accordance with DTC's customary procedures if the trust preferred securities
are then held in the form of a global trust preferred security. The property
trustee must promptly notify in writing the securities registrar for the trust
preferred securities of the trust preferred securities selected for redemption
and, in the case of any trust preferred securities selected for partial
redemption, the liquidation amount of the trust preferred securities to be
redeemed. For all purposes of the trust agreement, unless the context otherwise
requires, all provisions relating to the redemption of trust preferred
securities will relate, in the case of any trust preferred securities redeemed
or to be redeemed only in part, to the portion of the aggregate liquidation
amount of trust preferred securities which has been or is to be redeemed.
Notice of any redemption will be mailed to you at your address as it
appears on the securities register for the Trust at least 30 days but not more
than 60 days before the redemption date if your trust preferred securities will
be redeemed. Unless we default in payment of the redemption price on the junior
subordinated debentures, on and after the redemption date, interest will no
longer accrue on the junior subordinated debentures or any portions called for
redemption.
Unless payment of the redemption price with respect to the trust preferred
securities is withheld or refused and not paid either by the Trust or us
pursuant to the guarantee, distributions will no longer accumulate on the trust
preferred securities or any portions called for redemption.
Subordination of Common Securities
Payment of distributions on, the redemption price of and the liquidation
distribution with respect to, the trust preferred securities and common
securities, as applicable, will be made pro rata based on the liquidation amount
of the trust preferred 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 our failure by us to pay any amounts with
respect to the junior subordinated debentures when due, no payment of any
distribution on, or redemption price of, or liquidation distribution with
respect to, any of the common securities, and no other payment on account of the
redemption, liquidation or other acquisition of the common securities, may be
made unless payment in full in cash of all accumulated and unpaid distributions
on all the outstanding trust preferred securities for all distribution periods
terminating on or prior to our failure to pay, or in the case of payment of the
redemption price, the full amount of the redemption price on all the outstanding
trust preferred securities then called for redemption, shall have been made or
provided for, and all funds immediately available to the property trustee must
first be applied to the payment in full in cash of all distributions on, or
redemption price of, the trust preferred securities then due and payable.
In the case of any event of default with respect to the trust preferred
securities (as described below under "Events of Default; Notice") resulting from
an event of default with respect to junior subordinated debentures (as described
below under "Description of Junior Subordinated Debentures--Debenture Events of
Default"), the holders of the common securities will have no right to act with
respect to any event of default under the trust agreement until the effects of
these events of default with respect to the trust preferred 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 events of default under the trust agreement with respect to the trust
preferred securities have been so cured, waived or otherwise eliminated, the
property trustee will act solely on
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your behalf and not on our behalf, as the holders of the common securities, and
only you will have the right to direct the property trustee to act on your
behalf.
Liquidation Distribution Upon Dissolution
The amount payable on the trust preferred securities in the event of any
dissolution and liquidation of the Trust is $25.00 per trust preferred security
plus accumulated and unpaid distributions, subject to certain exceptions which
may be in the form of a distribution of this amount in junior subordinated
debentures.
The holders of all the outstanding common securities have the right at any
time to dissolve the Trust and, after satisfaction of liabilities to creditors
of the Trust as provided by applicable law, distribute the junior subordinated
debentures to you and the holders of the common securities in liquidation of the
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 a redemption should
consult with the Federal Reserve before redeeming any equity or capital
instrument prior to maturity if the redemption could have a material effect on
the level or composition of the organization's capital base. (This consultation
may not be necessary if the equity or capital instrument is 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 we, while a holder of common securities, dissolve the Trust
before the maturity date of the trust preferred securities and the dissolution
of the Trust is deemed to constitute the redemption of capital instruments by
the Federal Reserve under its risk-based capital guidelines or policies, our
dissolution of the Trust 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 us to obtain the prior approval of the Federal Reserve to dissolve the Trust.
Pursuant to the trust agreement, the Trust will automatically dissolve upon
expiration of its term or, if earlier, will dissolve on the first to occur of:
. certain events of bankruptcy, dissolution or liquidation of us or
another holder of the common securities;
. if the holders of common securities have given written direction to
the property trustee to dissolve the Trust (which direction, subject
to the foregoing restrictions, is optional and wholly within the
discretion of the holders of common securities);
. the redemption of all the trust preferred securities in connection
with the redemption of junior subordinated debentures as described
under "Repayment or Redemption"; and
. the entry of an order for the dissolution of the Trust by a court of
competent jurisdiction.
If dissolution of the Trust occurs as described in any of the first three
circumstances described above, the 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 Trust as
provided by applicable law, to you and the holders of the common securities a
proportionate amount of the junior subordinated debentures, unless the
distribution is not practical.
If distribution of the junior subordinated debentures is not practical, you
and the holders of trust preferred securities and common securities, after
satisfaction of liabilities to creditors of the Trust as provided by applicable
law, will be entitled to receive out of the assets of the Trust available for
distribution to holders, an amount equal to,
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in the case of your distribution, the aggregate of the liquidation amount plus
accumulated and unpaid distributions thereon to the date of payment. If the
liquidation distribution can be paid only in part because the Trust has
insufficient assets available to pay in full the aggregate liquidation
distribution, then the amounts payable directly by the Trust on its trust
preferred securities shall be paid on a pro rata basis.
The holders of the common securities will be entitled to receive
distributions upon any liquidation pro rata with you, except that if an event of
default under the junior subordinated debentures has occurred and is continuing
as a result of our failure to pay any amounts with respect to the junior
subordinated debentures when due, the trust preferred 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:
. the trust preferred securities will no longer be deemed to be
outstanding;
. DTC or its nominee, as the registered holder of trust preferred
securities, will receive a registered global certificate or
certificates (which are not the registered global certificates)
representing the junior subordinated debentures to be delivered upon
the distribution with respect to trust preferred securities held by
DTC or its nominee; and
. any certificates representing the trust preferred 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 trust preferred securities and bearing
accrued and unpaid interest in an amount equal to the accumulated and
unpaid distributions on the trust preferred securities until the
certificates are presented to the security registrar for the trust
preferred securities and common securities for transfer or reissuance.
If we do not redeem the junior subordinated debentures before maturity, the
Trust is not dissolved, and the junior subordinated debentures are not
distributed to you, then the trust preferred securities will remain outstanding
until the repayment of the junior subordinated debentures and the distribution
of the liquidation distribution to you.
There can be no assurance as to the market prices for the trust preferred
securities or the junior subordinated debentures that may be distributed in
exchange for trust preferred securities if a dissolution and liquidation of the
Trust were to occur. Accordingly, the trust preferred securities that you may
purchase, or the junior subordinated debentures that you may receive on
dissolution and liquidation of the Trust, may trade at a discount to the price
that you paid to purchase the trust preferred securities offered by this
prospectus.
Events of Default; Notice
Under all circumstances, any one of the following events is an event of
default under the trust agreement with respect to the trust preferred
securities:
. the occurrence of an event of default with respect to the junior
subordinated debentures (see "Description of Junior Subordinated
Debentures--Debenture Events of Default");
. default by the Trust in the payment of any distribution when it
becomes due and payable, and continuation of the default for a period
of 30 days;
. default by the Trust in the payment of any redemption price of any
trust preferred security and common security when it becomes due and
payable;
. default in the performance, or breach, in any material respect, of any
covenant or warranty of the trustees in the trust agreement (other
than a covenant or warranty a default in the performance of which or
the breach of which is addressed in either of the second or third
circumstances above),
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and continuation of the default or breach for a period of 60 days
after the holders of at least 25% in aggregate liquidation amount of
the outstanding trust preferred securities give, by registered or
certified mail, to the trustees and us, a written notice specifying
the default or breach and requiring it to be remedied and stating that
the notice is a "Notice of Default" under the trust agreement; or
. 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 of the event.
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 the event of default to you and the holders of the common securities
and the trust preferred securities and the administrators, unless the event of
default has been cured or waived. We, as depositor, and the administrators are
required to file annually with the property trustee a certificate as to whether
or not we are in compliance with all the conditions and covenants applicable to
us under the trust agreement.
If an event of default with respect to the junior subordinated debentures
has occurred and is continuing as a result of any failure by us to pay any
amounts with respect to the junior subordinated debentures when due, the trust
preferred securities will have a preference over the common securities with
respect to payments of any amounts as described above. See "Subordination of
Common Securities," "Liquidation Distribution Upon Dissolution" and "Description
of Junior Subordinated Debentures--Debenture Events of Default."
Removal of Trustees; Appointment of Successors
The holders of at least a majority in aggregate liquidation amount of the
outstanding trust preferred securities may remove any trustee for cause, or if
an event of default with respect to the junior subordinated debentures has
occurred and is continuing, with or without cause. If a trustee is removed by
the holders of the outstanding trust preferred securities, the successor may be
appointed by the holders of at least 25% in aggregate liquidation amount of
trust preferred securities. If a trustee resigns, the trustee will appoint its
successor. If a trustee fails to appoint a successor, the holders of at least
25% in aggregate liquidation amount of the outstanding trust preferred
securities may appoint a successor. If a successor has not been appointed by you
or the holders, any holder of trust preferred securities or common securities or
the other trustee may petition a court in the State of Delaware 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 at the time of appointment have securities rated in one of the three highest
rating categories by a nationally recognized statistical rating organization and
have capital and surplus of at least $50,000,000. No resignation or removal of a
trustee and no appointment of a successor trustee shall be effective until the
acceptance of appointment by the successor trustee in accordance with the
provisions of the trust agreement.
Merger or Consolidation of 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 the trustee is a
party, or any entity succeeding to all or substantially all the corporate trust
business of the trustee, will be the successor of the trustee under the trust
agreement, provided the entity is otherwise qualified and eligible.
Mergers, Consolidations, Amalgamations or Replacements of the Trust
The Trust may not merge with or into, consolidate, amalgamate, or be
replaced by, convey, transfer or lease its properties and assets substantially
as an entirety to any entity, except as described below or as otherwise provided
in the trust agreement. The Trust may, at the request of the holders of the
common 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 under the laws of any state, so long as:
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. the successor entity: (1) expressly assumes all the obligations of the
Trust with respect to the trust preferred securities; or (2)
substitutes for the trust preferred securities other securities having
substantially the same terms as the trust preferred securities so long
as the substitute trust preferred securities have the same priority as
the trust preferred securities with respect to distributions and
payments upon liquidation, redemption and otherwise;
. a trustee of the successor entity, possessing the same powers and
duties as the property trustee, is appointed to hold the junior
subordinated debentures;
. the merger, consolidation, amalgamation, replacement, conveyance,
transfer or lease does not cause the trust preferred securities
(including any substitute trust preferred securities) to be downgraded
by any nationally recognized statistical rating organization, if then
rated;
. the merger, consolidation, amalgamation, replacement, conveyance,
transfer or lease does not adversely affect the rights, preferences
and privileges of the holders of the trust preferred securities
(including any substitute trust preferred securities) in any material
respect;
. the successor entity has a purpose substantially identical to that of
the Trust;
. before the merger, consolidation, amalgamation, replacement,
conveyance, transfer or lease, the Trust has received an opinion from
independent and experienced counsel to the effect that:
(1) the merger, consolidation, amalgamation, replacement, conveyance,
transfer or lease does not adversely affect your rights,
preference and privileges as a holder of trust preferred
securities (including any substitute trust preferred securities)
in any material respect; and
(2) following the merger, consolidation, amalgamation, replacement,
conveyance, transfer or lease, neither the Trust nor the
successor entity will be required to register as an investment
company under the Investment Company Act; and
. we or any permitted successor or assignee own all the common
securities of the successor entity and guarantee the obligations of
the successor entity under the successor securities at least to the
extent provided by the guarantee.
Notwithstanding the above, the Trust may not, except with the consent of
all the holders of the trust preferred 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 action would cause the Trust or the successor entity to be taxable as a
corporation for United States federal income tax purposes.
Voting Rights; Amendment of Trust Agreement
Except as provided above and under "Removal of Trustees; Appointment of
Successors" and "Description of Guarantee--Amendments and Assignment" and as
otherwise required by law and the trust agreement, you will have no voting
rights.
The trust agreement may be amended from time to time by the holders of a
majority of the common securities and the property trustee, without your consent
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
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questions arising under the trust agreement, provided that the
amendment does not adversely affect in any material respect your
interests; and
. modify, eliminate or add to any provisions of the trust agreement to
the extent as may be necessary to ensure that the Trust will not be
taxable as a corporation for United States federal income tax purposes
at any time that any trust preferred or common securities are
outstanding or to ensure that the Trust will not be required to
register as an "investment company" under the Investment Company Act.
Any amendments to the trust agreement will become effective when notice of
the amendment is given to the holders of trust preferred securities and common
securities.
The trust agreement may be amended by the holders of a majority of the
common securities and the property trustee with:
. the consent of holders representing not less than a majority in
aggregate liquidation amount of the outstanding trust preferred
securities; and
. receipt by the trustees of an opinion of counsel to the effect that
the amendment or the exercise of any power granted to the trustees in
accordance with the amendment will not affect the Trust's not being
taxable as a corporation for United States federal income tax purposes
or the Trust's exemption from status as an "investment company" under
the Investment Company Act.
However, without the consent of every holder of trust preferred securities
or common securities affected, the trust agreement may not be amended to:
. change the amount or timing of any distribution on the trust preferred
securities and common securities or otherwise adversely affect the
amount of any distribution required to be made with respect to the
trust preferred securities and common securities as of a specified
date; or
. restrict your right and the right of a holder of common securities to
institute suit for the enforcement of the payment on or after the
specified date.
So long as any junior subordinated debentures are held by the Trust, the
property trustee will not:
. 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;
. waive any past default that is waivable under Section 5.13 of the
indenture
. exercise any right to rescind or annul a declaration that the
principal of all the junior subordinated debentures shall be due and
payable; or
. consent to any amendment, modification or termination of the indenture
or the junior subordinated debentures, where the 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
outstanding trust preferred securities, or, if a consent under the
indenture would require the consent of every holder of junior
subordinated debentures affected, no consent will be given by the
property trustee without the prior consent of each holder of the trust
preferred securities.
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The property trustee may not revoke any action previously authorized or
approved by a vote of the holders of the trust preferred securities except by
subsequent vote of the holders of the trust preferred securities. The property
trustee will notify you of any notice of default with respect to the junior
subordinated debentures. In addition to obtaining your approval as described
above, before taking any of the actions listed above, the property trustee will
obtain an opinion of counsel experienced in such matters to the effect that the
Trust will not be taxable as a corporation for United States federal income tax
purposes on account of the action.
Any required approval of holders of trust preferred securities may be given
at a meeting of holders of trust preferred securities convened for the purpose
or pursuant to written consent without prior notice. The property trustee will
cause a notice of any meeting at which you are entitled to vote to be given to
you in the manner provided in the trust agreement.
Your vote or consent will not be required to redeem and cancel trust
preferred securities in accordance with the trust agreement.
Notwithstanding that you are entitled to vote or consent under any of the
circumstances described above, any of the trust preferred securities that are
owned by us, the trustees or any of our affiliates or any trustees, will, for
purposes of the vote or consent, be treated as if they were not outstanding.
Expenses and Taxes
In the indenture, we have agreed to pay all debts and other obligations
(other than distributions on the trust preferred securities) and all costs and
expenses of the Trust (including costs and expenses relating to the organization
of the Trust, the fees and expenses of the trustees and the costs and expenses
relating to the operation of the Trust) and to pay any and all taxes and all
costs and expenses with respect to any taxes (other than United States
withholding taxes) to which the Trust might become subject. Our obligations
under the indenture are for the benefit of, and shall be enforceable by, any
creditor of the Trust to whom any of these debts, obligations, costs, expenses
and taxes are owed whether or not the creditor has received notice. The creditor
may enforce these obligations directly against us, and we have irrevocably
waived any right or remedy to require that any creditor take any action against
the Trust or any other person before proceeding against us. We have also agreed
in the indenture to execute the additional agreements as may be necessary or
desirable to give full effect to these payment obligations.
Book Entry, Delivery and Form
The trust preferred securities will be issued in the form of one or more
fully registered global securities, which will be deposited with, or on behalf
of, DTC and registered in the name of a DTC nominee. Unless and until it is
exchangeable in whole or in part for the trust preferred securities in
definitive form, a global security may not be transferred except as a whole by
DTC to a nominee of DTC or by a nominee of DTC to DTC or to another nominee of
DTC or by DTC or the nominee to a successor of DTC or to a nominee of the
successor.
Ownership of beneficial interests in a global security will be limited to
participants that have accounts with DTC or its nominee or persons that may hold
interests through the participants. We expect that, upon the issuance of a
global security, DTC will credit, on its book entry registration and transfer
system, the participants' accounts with their respective principal amounts of
trust preferred securities represented by the global security. Ownership of
beneficial interests in the global security will be shown on, and the transfer
of the ownership interests will be effected only through, records maintained by
DTC (with respect to your interests of participants) and on the records of
participants (with respect to your interests). You will not receive written
confirmation from DTC of your purchase, but are expected to receive written
confirmations from participants through which you entered into the transaction.
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Transfers of ownership interests will be accomplished by entries on the
books of participants acting on your behalf. So long as DTC, or its nominee, is
the registered owner of a global security, DTC or the nominee, as the case may
be, will be considered the sole owner or holder of the trust preferred
securities represented by the global security for all purposes under the trust
agreement. Except as provided below, you are the owner of beneficial interests
in a global security and will not be entitled to receive physical delivery of
the trust preferred securities in definitive form.
You will not be considered an owner or holder under the trust agreement.
Accordingly, you must rely on the procedures of DTC and, if you are not a
participant, on the procedures of the participant through which you own your
interest, to exercise any rights as a holder of trust preferred securities under
the trust agreement. We understand that, under DTC's existing practices, in the
event that we request any action you, or if you desire to take any action which
a holder is entitled to take under the trust agreement, DTC would authorize the
participants holding your interests to take the action, and the participants
would authorize you to take the action or would otherwise act upon your
instructions. Redemption notices will also be sent to DTC. If less than all of
the trust preferred securities are being redeemed, we understand that it is
DTC's existing practice to determine by lot the amount of the interest of each
participant to be redeemed.
Distributions on the trust preferred securities registered in the name of
DTC or its nominee will be made to DTC or its nominee, as the case may be, as
the registered owner of the global security representing the trust preferred
securities. Neither the trustees, nor the administrators, any paying agent or
any other agent of ours or the trustees will have any responsibility or
liability for any aspect of the records relating to or payments made on account
of beneficial ownership interests in the global security for the trust preferred
securities or for maintaining, supervising or reviewing any records relating to
the beneficial ownership interests. Disbursements of distributions to
participants will be DTC's responsibility. DTC's practice is to credit
participants' accounts on a payable date in accordance with their respective
holdings shown on DTC's records unless DTC has reason to believe that it will
not receive payment on the payable date. Payments by participants to you will be
governed by standing instructions and customary practices, as is the case with
securities held for the accounts of customers in bearer form or registered in
"street name," and will be the responsibility of the participant and not of DTC,
us, the trustees, the paying agent or any other agent of ours, subject to any
statutory or regulatory requirements as may be in effect from time to time.
DTC may discontinue providing its services as securities depository with
respect to the trust preferred securities at any time by giving reasonable
notice to us or the trustees. If DTC notifies us that it is unwilling to
continue as depository, or if it is unable to continue or ceases to be a
clearing agency registered under the Securities Exchange Act of 1934, as
amended, and a successor depository is not appointed by us within 90 days after
receiving the notice or becoming aware that DTC is no longer a registered
clearing agency, we will issue the trust preferred securities in definitive form
upon registration of transfer of, or in exchange for, the global security. In
addition, we may at any time and in our sole discretion determine not to have
the trust preferred securities represented by one or more global securities and,
in this event, will issue trust preferred securities in definitive form in
exchange for all of the global securities representing the trust preferred
securities.
DTC has advised the Trust and us as follows:
. DTC is a limited purpose trust company organized under the laws of the
State of New York, a member of the Federal Reserve, a "clearing
corporation" within the meaning of the Uniform Commercial Code and a
"clearing agency" registered pursuant to the provisions of Section 17A
of the Securities Exchange Act of 1934, as amended,;
. DTC was created to hold securities for its participants and to
facilitate the clearance and settlement of securities transactions
between participants through electronic book entry changes to accounts
of its participants, thereby eliminating the need for physical
movement of certificates;
. participants include securities brokers and dealers (such as the
underwriters), banks, trust companies and clearing corporations and
may include certain other organizations;
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. certain of the participants (or their representatives), together with
other entities, own DTC; and
. indirect access to the DTC system is available to others such as
banks, brokers, dealers and trust companies that clear through, or
maintain a custodial relationship with, a participant, either directly
or indirectly.
Same-Day Settlement and Payment
Settlement for the trust preferred securities will be made by the
underwriters in immediately available funds.
Secondary trading in trust preferred securities of corporate issuers is
generally settled in clearinghouse or next-day funds. In contrast, the trust
preferred securities will trade in DTC's Same-Day Funds Settlement System, and
secondary market trading activity in the trust preferred securities will
therefore be required by DTC to settle in immediately available funds. No
assurance can be given as to the effect, if any, of settlement in immediately
available funds on trading activity in the trust preferred securities.
Payment and Paying Agency
Payments with respect to the trust preferred securities will be made to
DTC, which will credit the relevant accounts at DTC on the applicable
distribution dates or, if the trust preferred securities are not held by DTC,
the payments will be made by check mailed to the address of the holder entitled
to it at the address that appears on the securities register for the trust
preferred securities and common securities. The paying agent will initially 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 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 will act as registrar and transfer agent for the trust
preferred securities.
Registration or transfers of trust preferred securities will be effected
without charge by or on behalf of the Trust, but only upon payment of any tax or
other governmental charges that may be imposed in connection with any transfer
or exchange. The Trust will not be required to register or cause to be
registered the transfer of the trust preferred securities after the trust
preferred securities have been called for redemption.
Obligations and Duties of the Property Trustee
The property trustee, other than during the occurrence and continuance of
an event of default, undertakes to perform only the duties that are specifically
provided in the trust agreement. After any event of default, the property
trustee 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 your request unless it is offered
reasonable indemnity against the costs, expenses and liabilities that might be
incurred.
For information concerning the relationships between Bankers Trust Company,
the property trustee, and us, see "Description of Junior Subordinated
Debentures--Information Concerning the Debenture Trustee."
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Miscellaneous
The two administrators and the property trustee are authorized and directed
to conduct the affairs of the Trust and to operate it in such a way that: (1)
the Trust will not be deemed to be an "investment company" required to be
registered under the Investment Company Act or taxable as a corporation for
United States federal income tax purposes; and (2) the junior subordinated
debentures will be treated as our indebtedness 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, or the trust agreement that the property trustee and the holders of common
securities determine in their discretion to be necessary or desirable for these
purposes, as long as the action does not materially adversely affect your
interests.
You will not have preemptive or similar rights.
The Trust may not borrow money, 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 junior subordinated debentures are to be issued under the indenture
between Bankers Trust Company, as the debenture trustee, and us. This summary of
certain terms and provisions of the junior subordinated debentures and the
indenture is not complete. You should read the form of the indenture that is
filed as an exhibit to the registration statement of which this prospectus is a
part. Whenever particular defined terms of the indenture (in effect from time to
time) are referred to in this prospectus, the defined terms are incorporated in
this prospectus by reference. A copy of the form of indenture is available from
the debenture trustee upon request.
General
Concurrently with the issuance of the trust preferred securities, the Trust
will invest the proceeds, together with the consideration paid by us for the
common securities, in the junior subordinated debentures issued by us. The
junior subordinated debentures will bear interest, accruing from the date of
issue, at the annual rate of ___% of the principal amount, payable quarterly in
arrears on March 31/st/, June 30/th/, September 30/th/ and December 31/st/ of
each year, beginning ___________, 2000, to the person in whose name each junior
subordinated debenture is registered at the close of business on the 15/th/ day
of March, June, September or December (whether or not a business day) next
preceding the interest payment date. It is anticipated that, until the
dissolution of the Trust, if any, each junior subordinated debenture will be
registered in the name of the Trust and held by the property trustee in trust
for you and the holders of the common 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 the period. The amount of
interest payable for any full interest period will be computed by dividing the
annual rate by four. If any date on which interest is payable to the junior
subordinated debentures is not a business day, then payment of the interest
payable on the date will be made on the next business day (without any interest
or other payment with respect to the delay), or, if the business day falls in
the next calendar year, the payment will be made on the immediately preceding
business day in each case with the same force and effect as if made on the date
the payment was originally payable.
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Accrued interest that is not paid on the applicable interest payment date
will bear additional interest on the amount (to the extent permitted by law) at
the annual rate of ___%, compounded quarterly 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 the period. The amount of additional interest payable for any full
interest period will be computed by dividing the annual rate by four.
The term "interest" as used in this prospectus includes quarterly interest
payments, interest on quarterly interest payments not paid on the applicable
interest payment date and, if applicable, any additional sums we pay on the
junior subordinated debentures following a Tax Event (as defined under
"Description of Preferred Securities--Repayment or Redemption") that may be
required so that distributions payable by the Trust will not be reduced by any
additional taxes, duties or other governmental changes resulting from the Tax
Event.
The junior subordinated debentures will mature on _____________, 2030,
subject to our right to shorten the maturity date at any time to any date not
earlier than _____________, 2005, if we have received prior approval of the
Federal Reserve and if the approval is then required under applicable capital
guidelines or policies of the Federal Reserve. If we elect to shorten the
maturity of the junior subordinated debentures, we will give notice to the
registered holders of the junior subordinated debentures, the debenture trustee
and the Trust no less than 90 days before the effectiveness of the maturity
date. The property trustee must give you and the holders of the common
securities notice of the shortened stated maturity at least 30 but not more than
60 days before the applicable date.
The junior subordinated debentures will be unsecured and will rank junior
and be subordinate in right of payment to any senior indebtedness and equally
with our obligations associated with the outstanding trust preferred securities
of Provident Trust I. The junior subordinated debentures will not be subject to
a sinking fund. The indenture does not limit our ability to incur or issue other
secured or unsecured debt, including senior indebtedness, whether under the
junior subordinated debentures or any existing or other indenture that we may
enter into in the future or otherwise. See "Subordination."
Option to Extend Interest Payment Period
So long as no event of default under the junior subordinated debentures has
occurred and is continuing, we have 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 20 consecutive quarterly periods
with respect to each extension period, provided that no extension period may
extend beyond the stated maturity of the junior subordinated debentures. During
any extension period we have the right to make partial payments of interest on
any interest payment date. At the end of an extension period, we must pay all
interest then accrued and unpaid (together with interest thereon at the annual
rate of ___%, compounded quarterly 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 the
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
annual rate by four. During an extension period, interest will continue to
accrue and holders of junior subordinated debentures (or holders of trust
preferred securities while outstanding) will be required to accrue interest
income for United States federal income tax purposes. See "Certain Federal
Income Tax Consequences--Interest Income and Original Issue Discount."
During any extension period, we may not:
. make any payment of principal (or any premium on the principal) or
interest, or repay, repurchase or redeem any of our debt securities
that rank equally in all respects with or junior in interest to the
junior subordinated debentures, including our obligations associated
with the outstanding trust preferred securities of Provident Trust I;
or
. declare or pay any dividends or distributions on, or redeem, purchase,
acquire or make a liquidation payment with respect to, any of our
capital stock, except that we may:
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(1) repurchase, redeem or make other acquisitions of shares of our
capital stock 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 our capital
stock (or securities convertible into or exercisable for the
capital stock) as consideration in an acquisition transaction
entered into prior to the applicable extension period;
(2) take any necessary action in connection with any
reclassification, exchange or conversion of any class or series
of our capital stock (or any capital stock of any of our
subsidiaries) for any class or series of our capital stock or of
any class or series of our indebtedness for any class or series
of our capital stock;
(3) purchase fractional interests in shares of our capital stock
pursuant to the conversion or exchange provisions of the capital
stock or the security being converted or exchanged;
(4) declare a dividend in connection with any shareholders' rights
plan, or issue rights, stock or other property under any
shareholders' rights plan, or redeem or repurchase rights
pursuant to any shareholders' rights plan; or
(5) declare a dividend in the form of stock warrants, options or
other rights where the dividend stock or the stock issuable upon
exercise of the warrants, options or other rights is the same
stock as that on which the dividend is being paid or ranks
equally with or junior to the stock.
Before the termination of any extension period, we may further defer the
payment of interest, provided that no extension period may exceed 20 consecutive
quarterly periods or extend beyond the stated maturity of the junior
subordinated debentures. Upon the termination of any extension period and the
payment of all amounts then due, we 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 its end. We must give the trustees notice of our
election of the extension period at least one business day prior to the earlier
of: (1) the date the distribution on the trust preferred securities would have
been payable but for the election to begin an extension period; and (2) the date
the property trustee is required to give you notice of the record date or the
date the distribution is payable, but in any event not less than one business
day prior to the record date. The property trustee will give you notice of our
election to begin a new extension period. There is no limitation on the number
of times that we may elect to begin an extension period.
Redemption
We may redeem the junior subordinated debentures prior to maturity at our
option: (1) on or after __________________, 2005, in whole at any time or in
part from time to time; or (2) 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 Preferred Securities--Repayment or Redemption"), in each case at
a redemption price equal to the outstanding principal amount of the junior
subordinated debentures plus accrued interest (including any additional interest
on any additional sums we pay following a Tax Event as described below under
"Additional Sums"). The proceeds of the redemption will be used by the Trust to
redeem the trust preferred 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 a redemption should consult with the Federal Reserve before
redeeming any equity or capital instrument prior to maturity if the redemption
could have a material effect on the level or composition of the organization's
capital base.
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Consultation may not be necessary if the equity or capital instrument was
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.
If we redeem the junior subordinated debentures prior to their stated
maturity, that would constitute the redemption of capital instruments under the
Federal Reserve's current risk-based capital guidelines and may be subject to
the prior approval of the Federal Reserve. The redemption of the junior
subordinated debentures also could be subject to the additional prior approval
of the Federal Reserve under its current risk-based capital guidelines.
Additional Sums
We have covenanted in the indenture that, if and for so long as the Trust
is the holder of all junior subordinated debentures and the Trust is required to
pay any additional taxes, duties or other governmental charges as a result of a
Tax Event, we will pay as additional sums on the junior subordinated debentures
the amounts as may be required so that the distributions payable by the Trust
will not be reduced as a result of any additional taxes, duties or other
governmental charges. See "Description of Preferred Securities--Repayment or
Redemption."
Registration, Denomination and Transfer
The junior subordinated debentures will initially be registered in the name
of the Trust. If the junior subordinated debentures are distributed to you, it
is anticipated that the depositary arrangements for the junior subordinated
debentures will be substantially identical to those in effect for the trust
preferred securities. See "Description of Preferred 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 the procedures, and the procedures
may be discontinued at any time. If DTC is at any time unwilling or unable to
continue as depositary and we do not appoint a successor depositary within 90
days of receipt of notice from DTC to the effect, we 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 & Co., the nominee for DTC, as the registered holder of the
junior subordinated debentures, described under "Description of Preferred
Securities--Book Entry, Delivery and Form." If junior subordinated debentures
are issued in certificated form, principal and interest will be payable, the
transfer of the junior subordinated debentures will be registerable, 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 we appoint, provided that payment
of interest may be made at our option by check mailed to the address of the
persons entitled to the payment. 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.
Junior subordinated debentures are issuable only in registered form without
coupons in integral multiples of $25.00. 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
indenture or at the office of any transfer agent we designate for that purpose
without service charge and upon payment of any taxes and other governmental
charges as described in the indenture. We will appoint the debenture trustee as
securities registrar
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under the indenture. We may at any time designate additional transfer agents
with respect to the junior subordinated debentures.
In the event of any redemption, we will not, nor will the debenture trustee
be required to:
. 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
. transfer or exchange any junior subordinated debentures selected for
redemption, except, in the case of any junior subordinated debentures
being redeemed in part, any portion of the debenture not to be
redeemed.
Any monies deposited with the debenture trustee or any paying agent, or
then held by us 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 this principal (and premium, if any) or interest has become
due and payable shall, at our request, be repaid to us, and the holder of the
junior subordinated debenture shall thereafter look, as a general unsecured
creditor, only to us for payment.
Restrictions on Certain Payments and Certain Covenants of the Company
We have covenanted that at any time: (1) there has occurred any event (a)
of which we have actual knowledge that with the giving of notice or the lapse of
time, or both, would constitute an event of default under the junior
subordinated debentures and that we have not taken reasonable steps to cure; (2)
if the junior subordinated debentures are held by the Trust, we are in default
with respect to our payment of any obligations under the guarantee; or (3) we
have given notice of our election of an extension period as provided in the
indenture and have not rescinded the notice, or any extension period, is
continuing, then we will not:
. make any payment of principal (or any premium on the principal) or
interest, or repay, repurchase or redeem any of our debt securities
that rank equally in all respects with, or junior in interest to, the
junior subordinated debentures, including our obligations associated
with the outstanding trust preferred securities of Provident Trust I;
or
. declare or pay any dividends or distributions on, or redeem, purchase,
acquire, or make a liquidation payment with respect to, any of our
capital stock, except that we may:
(1) repurchase, redeem or make other acquisitions of shares of our
capital stock 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 our capital
stock (or securities convertible into or exercisable for the
capital stock) as consideration in an acquisition transaction
entered into prior to the applicable extension period or other
event referred to below;
(2) take any necessary action in connection with any
reclassification, exchange or conversion of any class or series
of our capital stock (or any capital stock of any of our
subsidiaries) for any class or series of our capital stock or of
any class or series of our indebtedness for any class or series
of our capital stock;
(3) purchase fractional interests in shares of our capital stock
pursuant to the conversion or exchange provisions of the capital
stock or the security being converted or exchanged;
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(4) declare a dividend in connection with any shareholders' rights
plan, or issue rights, stock or other property under any
shareholders' rights plan, or redeem or repurchase rights
pursuant to any shareholders' rights plan; or
(5) declare a dividend in the form of stock, warrants, options or
other rights where the dividend stock or the stock issuable upon
exercise of the warrants, options or other rights is the same
stock as that on which the dividend is being paid or ranks
equally with or junior to the stock.
We have covenanted in the indenture:
. to continue to hold, directly or indirectly, all of the common
securities, provided that certain successors that are permitted
pursuant to the indenture may succeed to our ownership of the common
securities;
. as holder of the common securities, not to voluntarily terminate,
dissolve and liquidate the Trust, other than:
(1) in connection with a distribution of junior subordinated
debentures to the holders of the trust preferred securities in
liquidation of the Trust; or
(2) in connection with certain mergers, consolidations or
amalgamations permitted by the trust agreement; and
. to use reasonable efforts, consistent with the terms and provisions of
the trust agreement, to cause the Trust to continue not to be taxable
as a corporation for United States federal income tax purposes.
Modification of Indenture
From time to time, we as well as 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 indenture to:
. evidence our succession to another corporation or association and the
assumption by the person of our obligations under the junior
subordinated debentures;
. add further covenants, restrictions or conditions for the protection
of holders of the junior subordinated debentures;
. cure ambiguities or correct the junior subordinated debentures in the
case of defects or inconsistencies in the provisions of the
debentures, so long as any cure or correction does not adversely
affect the interest of the holders of the junior subordinated
debentures in any material respect;
. change the terms of the junior subordinated debentures to facilitate
the issuance of the junior subordinated debentures in certificated or
other definitive form;
. evidence or provide for the appointment of a successor debenture
trustee; or
. qualify, or maintain the qualification of, the indenture under the
Trust Indenture Act.
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The indenture contains provisions permitting the debenture trustee and us,
with the consent of the holders of not less than a majority in principal amount
of the junior subordinated debentures, to modify the indenture in a manner
affecting the rights of the holders of the junior subordinated debentures.
However, none of these modifications may be made, without the consent of the
holder of each outstanding junior subordinated debenture so affected that would:
. change the stated maturity of, or any installment of interest on, the
junior subordinated debentures, or reduce the principal amount, their
rate of interest or any premium payable upon any redemption, or change
the place of payment where, or the currency in which, the amount is
payable, or impair the right to institute suit for the enforcement of
any payment on junior subordinated debentures; or
. reduce the percentage of principal amount of junior subordinated
debentures, the holders of which are required to consent to any
modification of, or waiver of rights under, the indenture.
Furthermore, so long as any of the trust preferred securities remain
outstanding, no modification may be made that adversely affects you in any
material respect, and no termination of the indenture may occur, and no waiver
of any event of default or compliance with any covenant under the indenture may
be effective, without the prior consent of the holders of at least a majority of
the aggregate liquidation amount of the outstanding trust preferred securities
unless and until the principal of (and premium, if any, on) the junior
subordinated debentures and all accrued and unpaid interest have been paid in
full and certain other conditions are satisfied.
Debenture Events of Default
The 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 constitute an "event of default" with respect to the junior
subordinated debentures:
. failure to pay any interest on the junior subordinated debentures when
due and continuance of this default for a period of 30 days (subject
to the deferral of any due date in the case of an extension period);
. failure to pay any principal (or any premium on the principal) on the
junior subordinated debentures when due whether at the stated
maturity;
. failure to observe or perform certain other covenants contained in the
indenture for 90 days after written notice of the failure to us from
the debenture trustee or the holders of at least 25% in aggregate
outstanding principal amount of the outstanding junior subordinated
debentures; or
. the occurrence of the appointment of a receiver or other similar
official in any liquidation, insolvency or similar proceeding with
respect to us or all or substantially all of our property; or a court
or other governmental agency shall enter a decree or order appointing
a receiver or similar official and the decree or order shall remain
unstayed and undischarged for a period of 60 days.
As described in "Description of Preferred Securities--Events of Default;
Notice," the occurrence of an event of default with respect to the junior
subordinated debentures will also be an event of default with respect to the
trust preferred securities and common 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 immediately upon an event of default, and,
should the debenture trustee or the holders of junior subordinated debentures
fail to make
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the declaration, the holders of at least 25% in aggregate liquidation amount of
the outstanding trust preferred securities shall have the right. The holders of
a majority in aggregate principal amount of outstanding junior subordinated
debentures may annul the 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 the acceleration) have been cured and a sum
sufficient to pay all matured installments of interest and principal due
otherwise than by acceleration has been deposited with the debenture trustee.
Should the holders of junior subordinated debentures fail to annul the
declaration and waive the default, the holders of a majority in aggregate
liquidation amount of the outstanding trust preferred securities shall have the
right.
The holders of at least a majority in aggregate principal amount of the
outstanding junior subordinated debentures affected 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 any premium) or interest
(unless this default has been cured and a sum sufficient to pay all matured
installments of interest and principal (and premium on, if any) due otherwise
than by acceleration has been deposited with the debenture trustee) or a default
with respect to a covenant or provision which under the indenture cannot be
modified or amended without the consent of the holder of each outstanding junior
subordinated debenture affected by the default. See "Modification of Junior
Subordinated Indenture." We are required to certify annually to the debenture
trustee as to whether or not we are in compliance with all the conditions and
covenants applicable to us under the 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
indenture, to be 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 Preferred Securities
If a debenture event of default has occurred and is continuing and the
event is attributable to our failure to pay any amounts payable with respect to
the junior subordinated debentures on the date the amounts are otherwise
payable, you may institute a legal action against us to enforce the payment to
you of an amount equal to the amount payable with respect to junior subordinated
debentures having a principal amount equal to the aggregate liquidation amount
of the trust preferred securities you hold. We may not amend the indenture to
remove the foregoing right to bring legal action without your prior written
consent. We will have the right under the indenture to set off any payment we
make to you in connection with a legal action.
You are not 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 Preferred Securities--Events of
Default; Notice."
Consolidation, Merger, Sale of Assets and Other Transactions
The indenture provides that we may not consolidate with or merge into any
other entity or sell, convey, transfer or lease our properties and assets
substantially as an entirety, or sell, convey, transfer or distribute the
capital stock or all or substantially all of the assets of any principal
subsidiary bank to any entity, and no entity may consolidate with or merge into
us or convey, transfer or lease its properties and assets substantially as an
entirety to us, unless:
. in the event we consolidate with or merge into another entity or
convey or transfer our properties and assets substantially as an
entirety to any entity, the successor entity is organized under the
laws of the United States or any state or the District of Columbia,
and the successor entity expressly assumes our obligations with
respect to the junior subordinated debentures; provided, however, that
nothing in the indenture shall be deemed to restrict or prohibit, and
no supplemental indenture shall be required in the case of the merger
of a bank (as defined below) with and into a bank or us, the
consolidation of banks into a bank or us, or the sale or other
disposition of all or
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substantially all of the assets of any bank to another bank or us, if,
in any case in which we are not the surviving, resulting or acquiring
entity, we would own, directly or indirectly, at least 80% of the
voting securities of the bank (and of any other bank any voting
securities of which are owned, directly or indirectly, by the bank)
surviving the merger, resulting from the consolidation or acquiring
the assets;
. immediately after giving effect to the transaction, no event of
default with respect to the junior subordinated debentures, and no
event which, after notice or lapse of time or both, would constitute
an event of default with respect to the junior subordinated
debentures, has occurred and is continuing; and
. certain other conditions as prescribed in the indenture are satisfied.
For purposes of the first bullet point above, the term "bank" means each
of:
. any banking subsidiary of ours the consolidated assets of which
constitute 20% or more of our consolidated assets and our consolidated
subsidiaries;
. any other banking subsidiary designated as a bank pursuant to a board
resolution and provided in an officers' certificate delivered to the
trustee; and
. any of our subsidiaries that owns, directly or indirectly, any voting
securities, or options, warrants or rights to subscribe for or
purchase voting securities, of any bank under the first and second
bullet points above and in the case of all three bullet points above
their respective successors (whether by consolidation, merger,
conversion, transfer of substantially all their assets and business or
otherwise) so long as the successor is a banking subsidiary (in the
case of the first and second bullet point) or a subsidiary (in the
case of the third bullet point) of ours.
The provisions of the indenture do not afford holders of the junior
subordinated debentures protection in the event we are involved in a highly
leveraged or other transaction that may adversely affect holders of the junior
subordinated debentures.
Satisfaction and Discharge
The indenture will no longer be in effect and we will deemed to have
satisfied and discharged the indenture when:
. all junior subordinated debentures not previously delivered to the
debenture trustee for cancellation: (1) have become due and payable;
or (2) will become due and payable at the stated maturity within one
year;
. we deposit or cause to be deposited with the debenture trustee funds,
in trust, for the purpose and in an amount sufficient to pay and
discharge the entire indebtedness on the junior subordinated
debentures not previously delivered to the debenture trustee for
cancellation, for the principal (and premium, if any) and interest to
the date of the deposit or to the stated maturity or redemption date;
and
. we have paid all other sums payable by us under the indenture and we
have delivered applicable certificates and opinions that indicate we
have complied with all of our obligations.
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Subordination
The junior subordinated debentures will be subordinate and junior in right
of payment, to the extent provided in the indenture, to all our senior
indebtedness (as defined below) of and equally with our obligations associated
with the outstanding trust preferred securities of Provident Trust I and any
future issuances of trust preferred securities. If we default in the payment of
any principal, premium, if any, or interest, if any, or any other amount payable
on any senior indebtedness when the payment 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 the 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 set-off or otherwise) may be made or
agreed to be made on the junior subordinated debentures, or with respect to any
redemption repayment, retirement, purchase or other acquisition of any of the
junior subordinated debentures.
As used in this prospectus, "senior indebtedness" means, whether recourse
is to all or a portion of our assets and whether or not contingent:
. every obligation of ours for money borrowed;
. every obligation of ours evidenced by bonds, debentures, notes or
other similar instruments, including obligations incurred in
connection with the acquisition of property, assets or businesses;
. every reimbursement obligation of ours with respect to letters of
credit, bankers' acceptance or similar facilities issued for our
account;
. every obligation of ours 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);
. every capital lease obligation of ours;
. every obligation of ours for claims (as defined in Section 101(4) of
the United States Bankruptcy Code of 1978 and in any amendments to the
Bankruptcy Code) with respect to derivative products such as interest
foreign exchange rate contracts, commodity contracts and similar
arrangements; and
. every obligation of the type referred to above of another person and
all dividends of another person the payment of which, in either case,
we have guaranteed or are responsible or liable, directly or
indirectly, as obligor or otherwise.
However, senior indebtedness does not include any of the following:
. any obligations which, by their terms, are expressly stated to rank
equally in right of payment with or, to not be superior in right of
payment to, the junior subordinated debentures;
. any of our senior indebtedness which when incurred and without respect
to any election under Section 1111(b) of the United States Bankruptcy
Code of 1978, and in any amendments to the Bankruptcy Code, was
without recourse to us;
. any indebtedness of ours to any of our subsidiaries;
. any indebtedness to our executive officers or directors; or
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. any indebtedness with respect to debt securities issued to any trust,
or a trustee of the trust, partnership or other entity affiliated with
us that is our financing entity in connection with the issuance by the
financing entity of securities that are similar to the trust preferred
securities, including the outstanding trust preferred securities of
Provident Trust I.
As of January 31, 2000, we had senior indebtedness of $620.8 million. In
addition, we have $40 million of 8.29% Exchange Capital Securities that remain
outstanding and that will rank equally to the trust preferred securities offered
through this prospectus. Any future senior indebtedness (including any interest
on the indebtedness accruing after the commencement of any proceedings) shall
first be paid in full before any payment or distribution whether in cash,
securities or other property is made on account of the junior subordinated
debentures in the event of:
. certain events of bankruptcy, dissolution or liquidation of us or
another holder of the common securities;
. any proceeding for our liquidation, dissolution or other winding up,
voluntary or involuntary, whether or not involving insolvency or
bankrupt proceedings;
. any assignment by us for the benefit of creditors; or
. any other marshaling of our assets.
In this 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
with respect to the junior subordinated debentures will be paid as described
above, directly to the holders of senior indebtedness in accordance with the
priorities then existing among the holders until all senior indebtedness
(including any interest on the indebtedness accruing after the commencement of
the proceedings) has been paid in full.
In the event of any proceeding described above, after payment in full of
all sums owing with respect to our senior indebtedness, if any, the holders of
junior subordinated debentures, together with the holders of our obligations
ranking on a parity with the junior subordinated debentures, will be entitled to
be paid from our remaining assets the amounts at the time due and owing on the
junior subordinated debentures and other obligations. This payment will be made
before any payment or other distribution, whether in cash, property or
otherwise, will be made on account of any capital stock or obligations ranking
junior to the junior subordinated debentures and other obligations. If payment
or distribution on account of the junior subordinated debentures of any
character or security, whether in cash, securities or other property, is
received by any holder of any junior subordinated debentures in contravention of
any of these terms and before all our senior indebtedness, if any, has been paid
in full, the 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 our senior indebtedness at the time outstanding in accordance with
the priorities then existing among the holders for application to the payment of
all senior indebtedness remaining unpaid to the extent necessary to pay all
senior indebtedness in full.
By reason of the subordination, in the event of our insolvency, holders of
senior indebtedness may receive more, ratably, and holders of the junior
subordinated debentures may receive less, ratably, than our other creditors. The
subordination will not prevent the occurrence of any event of default with
respect to the junior subordinated debentures.
The indenture places no limitation on the amount of additional senior
indebtedness that we may incur. We expect from time to time to incur additional
senior indebtedness.
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Information Concerning the Debenture Trustee
The debenture trustee, other than during the occurrence and continuance of
a default in the performance of our obligations under the junior subordinated
debentures, is under no obligation to exercise any of the powers vested in it by
the indenture at the request of any holder of junior subordinated debentures,
unless offered reasonable indemnity by the holder against the costs, expenses
and liabilities that might be incurred by the exercise of these powers. 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 us or our
subsidiaries relating to other issues of our securities. In addition, we as well
as certain of our affiliates may have other banking relationships with Bankers
Trust Company and its affiliates.
Governing Law
The 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
We will execute and deliver the guarantee at the same time the Trust issues
the trust preferred securities by the Trust for your benefit. Bankers Trust
Company will act as guarantee trustee under the guarantee. The guarantee trustee
will hold the guarantee for your benefit. This summary of certain provisions of
the guarantee is not complete. You should read the form of the guarantee, which
is filed as an exhibit to the registration statement of which this prospectus is
a part. A copy of the form of guarantee is available upon request from the
guarantee trustee.
General
We will irrevocably agree to pay in full on a subordinated basis, to the
extent provided in the guarantee and described in this prospectus, the guarantee
payments described below to you, as and when due, regardless of any defense,
right of set-off or counterclaim that the Trust may have or assert other than
the defense of payment. The following payments with respect to the trust
preferred securities, to the extent not paid by or on behalf of the Trust, will
be subject to the guarantee:
. any accrued and unpaid distributions required to be paid on the trust
preferred securities, to the extent that the Trust has funds on hand
available therefor at that time;
. the redemption price with respect to any trust preferred securities
called for redemption, to the extent that the Trust has funds on hand
available for its payment at that time; and
. upon a voluntary or involuntary dissolution, termination, winding up
or liquidation of the Trust (unless the junior subordinated debentures
are distributed to you), the lessor of:
(1) the aggregate of the liquidation amount and all accumulated and
unpaid distributions to the date of payment, to the extent that
the Trust has funds on hand available for their payment; and
(2) the amount of assets of the Trust remaining available for
distribution to you on liquidation of the Trust.
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Our obligation to make a guarantee payment may be satisfied by our direct
payment to you or by causing the Trust to pay these amounts to you.
The guarantee will be an irrevocable guarantee of payment on a subordinated
basis of the Trust's obligations under the trust preferred securities, but will
apply only to the extent that the Trust has funds sufficient to make the
payments, and is not a guarantee of collection.
If we do not make payments on the junior subordinated debentures held by
the Trust, the Trust will not be able to pay any amounts payable with respect to
the trust preferred securities and will not have funds legally available for
these payments. The guarantee will rank subordinate and junior in right of
payment to all of our senior indebtedness. See "Status of the Guarantee." The
guarantee does not limit our ability to incur or issue other secured or
unsecured debt, including senior indebtedness, whether under the indenture or
any other indenture that we may enter into in the future or otherwise.
We have through the guarantee, the trust agreement, the junior subordinated
debentures and the indenture, taken together, fully, irrevocably and
unconditionally guaranteed all the Trust's obligations under the trust preferred
securities on a subordinated basis. No single document standing alone or
operating in conjunction with fewer than all the other documents constitutes the
guarantee. Only the combined operation of these documents that has the effect of
providing a full, irrevocable and unconditional guarantee of the Trust's
obligations with respect to the trust preferred securities. See "Relationship
Among the Preferred Securities, the Junior Subordinated Debentures and the
Guarantee."
Status of the Guarantee
The guarantee will constitute our unsecured obligation and will rank
subordinate and junior in right of payment to our senior indebtedness, if any,
and equally with the outstanding trust preferred securities of Provident Trust I
and with any additional obligations associated with any future issuances of
trust preferred securities.
The guarantee will constitute a guarantee of payment and not of collection.
This means that the guarantee trustee may institute a legal proceeding directly
against us as 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 your benefit. The guarantee
will not be discharged except by payment of the guarantee payments in full to
the extent not paid by the Trust or distribution to the holders of the trust
preferred securities or the junior subordinated debentures.
Amendments and Assignment
Except with respect to any changes which do not materially adversely affect
your rights (in which case no consent 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 outstanding trust preferred
securities. The manner of obtaining the approval is described under "Description
of Preferred Securities--Voting Rights; Amendment of Trust Agreement." All
guarantees and agreements contained in the guarantee shall bind our successors,
assigns, receivers, trustees and representatives and shall inure to your benefit
and the benefit of all of the holders of the trust preferred securities then
outstanding.
Events of Default
An event of default under the guarantee will occur if we fail to perform
any of our payment or other obligations under the guarantee, or to perform any
non-payment obligation if the non-payment default remains unremedied for 30
days. The holders of not less than a majority in aggregate liquidation amount of
the outstanding trust preferred securities have the right to direct the time,
method and place of conducting any proceeding for any remedy available to the
guarantee trustee with respect to the guarantee or to direct the exercise of any
trust or power conferred upon the guarantee trustee under the guarantee.
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You may institute a legal proceeding directly against us to enforce your
rights under the guarantee without first instituting a legal proceeding against
the Trust, the guarantee trustee or any other person or entity.
We are required, as guarantor, to certify annually to the guarantee trustee
whether or not we are in compliance with all the conditions and covenants
applicable to us under the guarantee.
Information Concerning the Guarantee Trustee
The guarantee trustee, other than during the occurrence and continuance of
a default by us in performance of the guarantee, undertakes to perform only the
duties as are specifically provided 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 your request unless it is offered reasonable indemnity against the
costs, expenses and liabilities that it might incur in the exercise of these
powers.
For information concerning our relationship with Bankers Trust Company, as
guarantee trustee, see "Description of Junior Subordinated Debentures--
Information Concerning the Debenture Trustee."
Termination of the Guarantee
The guarantee will terminate and be of no further force and effect upon
full payment of the redemption price of the trust preferred securities, upon
full payment of the amounts payable with respect to the trust preferred
securities upon liquidation of the Trust, or upon distribution of junior
subordinated debentures to you and the other holders of the trust preferred
securities in exchange for all of the trust preferred securities. The guarantee
will continue to be effective or will be reinstated, as the case may be, if at
any time you must restore payment of any sums paid to you under the trust
preferred securities or the guarantee.
Governing Law
The guarantee will be governed by and construed in accordance with the laws
of the State of New York.
RELATIONSHIP AMONG THE PREFERRED SECURITIES,
THE JUNIOR SUBORDINATED DEBENTURES AND THE GUARANTEE
Full and Unconditional Guarantee
We have irrevocably guaranteed, on a subordinate basis, payments of
distributions and other amounts due on the trust preferred securities (to the
extent that Trust has funds available for the payment) and to the extent
described under "Description of Guarantee." Taken together, our obligations
under the junior subordinated debentures, the 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 trust
preferred securities. No single document standing alone or operating in
conjunction with fewer than all the other documents constitutes the guarantee.
It is only the combined operation of these documents that has the effect of
providing a full, irrevocable and unconditional guarantee of the Trust's
obligations with respect to the trust preferred securities.
If and to the extent that we do not make payments on the junior
subordinated debentures, the Trust will not have sufficient funds to pay
distributions or other amounts due on the trust preferred securities. The
guarantee does not cover payment of amounts payable with respect to the trust
preferred securities when the Trust does not have sufficient funds to pay the
amounts. In this event, your remedy is to institute a legal proceeding directly
against us for enforcement of our payment obligations under the junior
subordinated debentures having a principal amount equal to the liquidation
amount of the trust preferred securities you hold.
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Our obligations under the junior subordinated debentures and the guarantee
are subordinate and junior in right of payment to all senior indebtedness, if
any, and rank equally with our obligations associated with the outstanding trust
preferred securities of Provident Trust I and any additional obligations
associated with any future issuances of trust preferred securities.
Sufficiency of Payments
As long as we make the payments on the junior subordinated debentures when
they are due, the payments will be sufficient to cover distributions and other
payments distributable on the trust preferred securities, primarily because:
. the aggregate principal amount of the junior subordinated debentures
will be equal to the sum of the aggregate stated liquidation amount of
the trust preferred securities and common securities;
. 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 trust preferred securities;
. we will pay for any and all costs, expenses and liabilities of the
Trust except the Trust's obligations to you and the holders of the
common securities; and
. the trust agreement further provides that the Trust will not engage in
any activity that is not consistent with the limited purposes of the
Trust.
Notwithstanding anything to the contrary in the indenture, we have the
right to set off any payment we are otherwise required to make thereunder
against and to the extent we have previously made, or are concurrently on the
date of the payment making, a payment under the guarantee.
Enforcement Rights of Holders of Preferred Securities
You may institute a legal proceeding directly against us to enforce your
rights under the guarantee without first instituting a legal proceeding against
the guarantee trustee, the Trust or any other person or entity. See "Description
of Guarantee."
A default or event of default under any of our senior indebtedness would
not constitute a default or event of default with respect to the trust preferred
securities. However, in the event of payment defaults under, or acceleration of
our senior indebtedness, the subordination provisions of the indenture provide
that no payments may be made with respect to the junior subordinated debentures
until the senior indebtedness has been paid in full or any payment default on
senior indebtedness has been cured or waived. See "Description of Junior
Subordinated Debentures--Subordination."
Limited Purpose of Trust
The trust preferred securities represent trust preferred undivided
beneficial interests in the assets of the Trust, and the Trust exists for the
sole purpose of issuing the trust preferred securities and common securities and
investing the proceeds from their issuance in the junior subordinated
debentures. A principal difference between your rights as a holder of trust
preferred securities and a holder of a junior subordinated debenture is that a
holder of a junior subordinated debenture is entitled to receive from us
payments on junior subordinated debentures held, while you are entitled to
receive distributions or other amounts distributable with respect to the trust
preferred securities from the Trust (or from us under the Guarantee) only if and
to the extent the Trust has funds available for the payment of the
distributions.
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Rights Upon Dissolution
Upon any voluntary or involuntary dissolution of the Trust, other than the
dissolution involving the distribution of the junior subordinated debentures and
after satisfaction of liabilities to creditors of the Trust as required by
applicable law, you will be entitled to receive, out of assets held by the
Trust, the liquidation distribution in cash. See "Description of Preferred
Securities--Liquidation Distribution Upon Dissolution." If we are voluntarily or
involuntarily liquidated or declare bankruptcy, the Trust, as registered holder
of the junior subordinated debentures, will be our subordinated creditor,
subordinated and junior in right of payment to all our senior indebtedness, if
any, as provided in the indenture, but entitled to receive payment in full of
all amounts payable with respect to the junior subordinated debentures before
any of our shareholders receive payments or distributions. Since we are the
guarantor under the guarantee and have agreed under the indenture to pay for all
costs, expenses and liabilities of the Trust (other than the Trust's obligations
to you and the holders of the common securities), your position as a holder of
the trust preferred securities and the position of a holder of the junior
subordinated debentures relative to other creditors and to our shareholders in
the event of our liquidation or bankruptcy are expected to be substantially the
same.
CERTAIN FEDERAL INCOME TAX CONSEQUENCES
General
The trust preferred securities and payments on the trust preferred
securities generally are subject to taxation. Therefore, you should consider the
tax consequences of owning and receiving payments on the trust preferred
securities before acquiring them.
We have engaged Muldoon, Murphy & Faucette LLP, Washington, D.C., as
special counsel to review the following discussion. They have given us their
written legal opinion that the discussion correctly describes the principal
aspects of the United States federal tax treatment of beneficial owners of trust
preferred securities.
The following discussion is general and may not apply to your particular
circumstances for any of the following (or other) reasons:
. This summary is based on federal tax laws in effect as of the date of
this prospectus. Changes to any of these laws after this date may
affect the tax consequences described below.
. This summary discusses only trust preferred securities you acquire at
original issuance at the original offering price and hold as capital
assets (within the meaning of federal tax law). It does not discuss
all of the tax consequences that may be relevant to the owners of
trust preferred securities who are subject to special rules, such as
banks, thrift institutions, real estate investment trusts, regulated
investment companies, insurance companies, brokers and dealers in
securities or currencies, certain securities traders, tax-exempt
organizations and certain other financial institutions.
This discussion also does not discuss tax consequences that may be relevant to
an owner of trust preferred securities in light of the owner's particular
circumstances, such as an owner holding a trust preferred security as a position
in a straddle, hedging, conversion or other integrated investment.
. This summary does not address:
(1) the income tax consequences to shareholders in, or partners or
beneficiaries of, a holder of trust preferred securities;
(2) the United States alternative minimum tax consequences of
purchasing, owning and disposing of trust preferred securities;
or
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(3) any state, local or foreign tax consequences of purchasing,
owning and disposing of trust preferred securities.
The authorities on which this summary is based are subject to various
interpretations, and the opinions of Muldoon, Murphy & Faucette LLP, as counsel,
represents counsel's best legal judgment based on current authorities and are
not binding on the Internal Revenue Service or the courts, either of which could
take a contrary position. Moreover, no rulings have been or will be sought from
the IRS with respect to the transaction described in this prospectus.
Accordingly, we cannot assure you that the IRS will not challenge the opinion
expressed in this prospectus or that a court would not sustain a challenge.
We advise you to consult your own tax advisors regarding the tax
consequences of purchasing, owning and disposing of the trust preferred
securities because the following discussion may not apply to you.
U.S. Holders
In General. For purposes of the following discussion, a "U.S. Holder"
means:
. a citizen or individual resident of the United States;
. a corporation or partnership created or organized in or under the laws
of the United States or any of its political subdivisions;
. an estate the income of which is includable in its gross income for
United States federal income tax purposes without regard to its
source; or
. a trust if a court within the United States is able to exercise
primary supervision over its administration and at least one United
States person has the authority to control all substantial decisions
of the trust.
Characterization of the Trust. Prior to the time that the trust preferred
securities are issued, Muldoon, Murphy & Faucette LLP will give its opinion
that: (1) under then current law and based on the representations, facts and
assumptions provided in this prospectus; (2) assuming full compliance with the
terms of the trust agreement (and other relevant documents); and (3) based on
certain assumptions and qualifications referred to in the opinion, the Trust
will be characterized for United States federal income tax purposes as a grantor
trust. Accordingly, for United States federal income tax purposes, if you, as a
U.S. Holder, purchase a trust preferred security you will be considered the
owner of an undivided interest in the junior subordinated debentures owned by
the Trust, and you will be required to include all income or gain recognized for
United States federal income tax purposes with respect to your share of the
junior subordinated debentures on your income tax return.
Characterization of the Junior Subordinated Debentures. We intend to take
the position that, under current law, the junior subordinated debentures are our
debt for United States federal income tax purposes. We, along with the Trust and
you (by acceptance of a beneficial interest in a trust preferred security),
agree to treat the junior subordinated debentures as our debt and the trust
preferred securities as evidence of a beneficial ownership interest in the
Trust. We cannot assure you, however, that the position will not be challenged
by the IRS or, if challenged, that a challenge will not be successful. The
remainder of this discussion assumes that the junior subordinated debentures
will be classified as our debt for United States federal income tax purposes.
Interest Income and Original Issue Discount. Under the terms of the junior
subordinated debentures, we have the ability to defer payments of interest from
time to time by extending the interest payment period for a period not exceeding
20 consecutive quarterly periods, but not beyond the maturity of the junior
subordinated debentures. Treasury regulations provide that debt instruments like
the junior subordinated debentures will not be considered issued with original
issue discount ("OID") even if their issuer can defer payments of interest if
the likelihood of any deferral is "remote."
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We have concluded, and this discussion assumes, that, as of the date of
this prospectus, the likelihood of our deferring payments of interest is
"remote" within the meaning of the applicable treasury regulations. This
conclusion is based in part on the fact that exercising that option would
prevent us from declaring dividends on our common stock and would prevent us
from making any payments with respect to debt securities that rank equally with
or junior to the junior subordinated debentures. Therefore, the junior
subordinated debentures should not be treated as issued with OID by reason of
our deferral option. Rather, you will be taxed on stated interest on the junior
subordinated debentures when it is paid or accrued in accordance with your
method of accounting for income tax purposes. You should note, however, that no
published rulings or any other published authorities of the IRS have addressed
this issue. Accordingly, it is possible that the IRS could take a position
contrary to the interpretation described in this prospectus.
If we exercise our option to defer payments of interest, the junior
subordinated debentures would be treated as redeemed and reissued for OID
purposes. The sum of the remaining interest payments (and any de minimis OID) on
the junior subordinated debentures would thereafter be treated as OID. The OID
would accrue, and be includable in your taxable income, on an economic accrual
basis (regardless of your method of accounting for income tax purposes) over the
remaining term of the junior subordinated debentures (including any period of
interest deferral), without regard to the timing of payments under the junior
subordinated debentures. Subsequent distributions of interest on the junior
subordinated debentures generally would not be taxable. The amount of OID that
would accrue in any period would generally equal the amount of interest that
accrued on the junior subordinated debentures in that period at the stated
interest rate. Consequently, during any period of interest deferral, you will
include OID in gross income in advance of the receipt of cash, and if you
dispose of a trust preferred security prior to the record date for payment of
distributions on the junior subordinated debentures following that period, you
will be subject to income tax on OID accrued through the date of disposition
(and not previously included in income), but you will not receive cash from the
Trust with respect to the OID.
If the possibility of our exercising our option to defer payments of
interest is not remote, the junior subordinated debentures would be treated as
initially issued with OID in an amount equal to the aggregate stated interest
(plus any de minimis OID) over the term of the junior subordinated debentures.
You would include that OID in your taxable income, over the term of the junior
subordinated debentures, on an economic accrual basis.
Characterization of Income. Because the income underlying the trust
preferred securities will not be characterized as dividends for income tax
purposes, if you are a corporate holder of the trust preferred securities, you
will not be entitled to a dividends-received deduction for any income you
recognize with respect to the trust preferred securities.
Market Discount and Bond Premium. Under certain circumstances, you may be
considered to have acquired your undivided interests in the junior subordinated
debentures with market discount or bond premium (as each phrase is defined for
United States federal income tax purposes).
Receipt of Junior Subordinated Debentures or Cash Upon Liquidation of the
Trust. Under certain circumstances described above (See "Description of the
Preferred Securities--Liquidation Distribution Upon Dissolution"), the Trust may
distribute the junior subordinated debentures to you in exchange for your trust
preferred securities and in liquidation of the Trust. Except as discussed below,
a distribution would not be a taxable event for United States federal income tax
purposes, and you would have an aggregate adjusted basis in the junior
subordinated debentures you receive for United States federal income tax
purposes equal to your aggregate adjusted basis in your trust preferred
securities. For United States federal income tax purposes, your holding period
in the junior subordinated debentures you receive in a liquidation of the Trust
would include the period during which you held the trust preferred securities.
If, however, the relevant event is a Tax Event that results in the Trust being
treated as an association taxable as a corporation, the distribution would
likely constitute a taxable event to the Trust and to you for United States
federal income tax purposes, and in that event, your holding period for the
junior subordinated debentures would begin on the date that you received the
debentures.
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<PAGE>
Under certain circumstances described in this prospectus (see "Description
of the Preferred Securities"), we may redeem junior subordinated debentures for
cash and distribute the proceeds of the redemption to you in redemption of your
trust preferred securities. A redemption would be taxable for United States
federal income tax purposes, and you would recognize gain or loss as if you had
sold the trust preferred securities for cash. See "Sales of Preferred
Securities" below.
Sales of Preferred Securities. If you sell trust preferred securities, you
will recognize gain or loss equal to the difference between your adjusted basis
in the trust preferred securities and the amount realized on the sale of the
trust preferred securities. Your adjusted basis in the trust preferred
securities generally will be the initial purchase price, increased by OID
previously included (or currently includable) in your gross income to the date
of disposition, and decreased by payments received on the trust preferred
securities (other than any interest received with respect to the period prior to
the effective date we first exercise our option to defer payments of interest).
A gain or loss generally will be capital gain or loss, and generally will be a
long-term capital gain or loss if you have held the trust preferred securities
for more than one year prior to the date of disposition.
If you dispose of your trust preferred securities between record dates for
payments of distributions thereon, you will be required to include accrued but
unpaid interest (or OID) on the junior subordinated debentures through the date
of disposition in your taxable income for United States federal income tax
purposes (notwithstanding that you may receive a separate payment from the
purchaser with respect to accrued interest). You may deduct that amount from the
sales proceeds received (including the separate payment, if any, with respect to
accrued interest) for the trust preferred securities (or as to OID only, to add
the amount to your adjusted tax basis in the trust preferred securities). To the
extent the selling price is less than your adjusted tax basis (which will
include accrued but unpaid OID if any), you will recognize a capital loss.
Subject to certain limited exceptions, capital losses cannot be applied to
offset ordinary income for United States federal income tax purposes.
Pending Tax Litigation Affecting the Preferred Securities
In 1998, a taxpayer filed a petition in the United States Tax Court
contesting the IRS's disallowance of interest deductions that taxpayer claimed
with respect to securities issued in 1993 and 1994 that are, in some respects,
similar to the trust preferred securities. (Enron Corp. v. Commissioner, Docket
No. 6149-98, filed April 1, 1998). Recently the IRS issued a private letter
ruling (PLR 199910046) concluding that instruments similar in some respects to
the trust preferred securities were debt securities rather than equity
securities. While a private letter ruling may not be used as a legal precedent,
it does provide insight as to the views of the IRS on the issues in the ruling.
An adverse decision by the Tax Court in Enron Corp. concerning the deductibility
of the interest may cause a Tax Event. A Tax Event would give us the right to
redeem the junior subordinated debentures. See "Description of Junior
Subordinated Debentures--Redemption" and "Description of Preferred Securities--
Liquidation Distribution Upon Dissolution."
Non-U.S. Holders
The following discussion applies to you if you are not a U.S. Holder as
described above.
Payments to you, as a non-U.S. Holder, on a trust preferred security will
generally not be subject to withholding of income tax, provided that:
. you did not (directly or indirectly, actually or constructively) own
10% or more of the total combined voting power of all classes of our
stock entitled to vote;
. you are not a controlled foreign corporation that is related to us
through stock ownership; and
. either (a) you certify to the Trust or its agent under penalties of
perjury, that you are not a U.S. Holder and provide your 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,
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<PAGE>
and holds the trust preferred security in that capacity, certifies to
the Trust or its agent, under penalties of perjury, that it requires
and has received a statement from you or another financial institution
between it and you in the chain of ownership, and furnishes a copy of
the statement to the Trust or its agent.
As discussed above, it is possible that changes in the law affecting the
income tax consequences of the junior subordinated debentures could adversely
affect our ability to deduct interest payable on the junior subordinated
debentures. These changes could also cause the junior subordinated debentures to
be classified as our equity (rather than our debt) for United States federal
income tax purposes. This might cause the income derived from the junior
subordinated debentures to be characterized as dividends, generally subject to a
30% income tax (on a withholding basis) when paid to you if you are not a U.S.
Holder, rather than as interest which, as discussed above, generally is exempt
from income tax in the hands of a person who is not a U.S. Holder.
You, as a non-U.S. Holder, will generally not be subject to withholding of
income tax on any gain realized upon the sale or other disposition of a trust
preferred security.
If you hold the trust preferred securities in connection with the active
conduct of a United States trade or business, you will be subject to income tax
on all income and gains recognized with respect to your proportionate share of
the junior subordinated debentures.
Information Reporting
In general, information reporting requirements will apply to payments made
on, and proceeds from the sale of, the trust preferred securities held by a non-
corporate U.S. Holder within the United States. In addition, payments made on,
and payments of the proceeds from the sale of, the trust preferred securities to
or through the United States office of a broker are subject to information
reporting unless you certify as to your non-U.S. Holder status or otherwise
establish an exemption from information reporting and backup withholding. See
"Backup Withholding." Taxable income on the trust preferred securities for a
calendar year should be reported to U.S. Holders on the appropriate forms by the
following January 31st.
Backup Withholding
Payments made on, and proceeds from the sale of, the trust preferred
securities may be subject to a "backup" withholding tax of 31% unless you comply
with certain identification or exemption requirements. Any amounts so withheld
will be allowed as a credit against your income tax liability, or refunded,
provided the required information is provided to the IRS.
The preceding discussion is only a summary and does not address the
consequences to a particular person of the purchase, ownership and disposition
of the trust preferred securities. You are urged to contact your own tax advisor
to determine your particular tax consequences.
Possible Tax Law Changes
In 1996 and 1997, the Clinton Administration proposed to amend the Internal
Revenue Code of 1986, as amended, (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. Congress did not
pass that proposal. The Clinton Administration did not include this proposal in
its fiscal year 1999 budget proposal. However, we make no assurance that future
legislative proposals, regulations, official administrative pronouncements or
judicial decisions will not affect our ability to deduct interest on the junior
subordinated debentures. Such a change could give rise to a tax event, which
may permit us, upon approval of the Federal Reserve if then required under its
applicable capital guidelines or policies, to cause a redemption of the trust
preferred securities, as described more fully under "Description of Preferred
Securities--Redemption."
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<PAGE>
CERTAIN ERISA CONSIDERATIONS
We and certain of our affiliates may each be considered a "party in
interest" within the meaning of the Employee Retirement Income Security Act of
1974 ("ERISA"), and any amendments to ERISA, or a "disqualified person" within
the meaning of Section 4975 of the Code with respect to many employee benefit
plans that are subject to ERISA and individual retirement accounts ("IRAs"). The
purchase of the trust preferred securities by an employee benefit plan or IRA
that is subject to the fiduciary responsibility provisions of ERISA or the
prohibited transaction provisions of Section 4975(e)(1) of the Code and with
respect to which we, or any of our affiliates are service providers (or
otherwise a party in interest or a disqualified person), may constitute or
result in a prohibited transaction under ERISA or Section 4975 of the Code,
unless the trust preferred securities are acquired pursuant to and in accordance
with an applicable exemption. Any pension or other employee benefit plan,
fiduciary or IRA holder, proposing to acquire any trust preferred securities for
this type of plan or IRA should consult with legal counsel.
UNDERWRITING
Subject to the terms and conditions of the underwriting agreement, dated
_________, 2000, among us, the Trust, Legg Mason Wood Walker, Incorporated and
Ferris, Baker Watts, Incorporated, as the representatives of the underwriters,
the Trust has agreed to sell to the underwriters, and the underwriters have
severally agreed to purchase from the Trust, the following respective aggregate
liquidation amounts of trust preferred securities at the public offering price
less the underwriting discounts and commissions provided on the cover page of
this prospectus:
NUMBER OF TRUST
UNDERWRITER PREFERRED SECURITIES
----------- ---------------------
Legg Mason Wood Walker, Incorporated $_________
Ferris, Baker Watts, Incorporated $_________
Total $
==========
The underwriting agreement provides that the obligations of the
underwriters are subject to certain conditions precedent and that the
underwriters will purchase all of the trust preferred securities offered if any
of the trust preferred securities are purchased.
In the event of a default by an underwriter, the underwriting agreement
provides that, in certain circumstances, purchase commitments of the
nondefaulting underwriters may be increased, or the underwriting agreement may
be determined. The underwriters may reject orders in whole or in part and
withdraw, cancel, or modify the offer without notice.
The underwriters also may impose a penalty bid on certain selling group
members. This means that if the underwriters purchase trust preferred
securities in the open market to reduce the underwriter's short position or to
stabilize the price of the trust preferred securities, it may reclaim the amount
of the selling concession from the selling group members who sold those trust
preferred securities as part of the offering.
The underwriters have advised us and the Trust that they propose to offer
the trust preferred securities to the public at the public offering price
provided on the cover page of this prospectus and to certain dealers at the
price less a concession not in excess of $_______ per trust preferred security.
The underwriters may allow, and the dealers may reallow, a concession not in
excess of $_______ per trust preferred security to certain other dealers. After
the public offering, the offering price and other selling terms may be changed
by the underwriters.
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In connection with this offering, the underwriters and any selling group
members and their respective affiliates may engage in transactions effected in
accordance with Rule 104 of SEC Regulation M that are intended to stabilize,
maintain or otherwise affect the market price of the trust preferred securities.
The transactions may include over-allotment transactions in which the
underwriters create a short position for their own account by selling more trust
preferred securities than they are committed to purchase from the Trust. In this
case, to cover all or part of the short position, the underwriters may purchase
trust preferred securities in the open market following the initial offering of
the trust preferred securities. In connection with this offering, certain
underwriters (and selling group members) may engage in passive market making
transactions in the trust preferred securities on the Nasdaq National Market in
accordance with Rule 103 of SEC Regulation M. The underwriters also may engage
in stabilizing transactions in which they bid for, and purchase, trust preferred
securities at a level above that which might otherwise prevail in the open
market for the purpose of preventing or retarding a decline in the market price
of the trust preferred securities. The underwriters also may reclaim any selling
concessions allowed to an underwriter or dealer if the underwriters repurchase
trust preferred securities distributed by that underwriter or dealer. Any of
these transactions may result in the maintenance of a price for the trust
preferred securities at a level above that which might otherwise prevail in the
open market. We do not, nor do any of the underwriters, make any representation
or prediction as to the direction or magnitude of any effect that the
transactions described above may have on the price of the trust preferred
securities. The underwriters are not required to engage in any of these
transactions and, once begun, the transactions may be discontinued at any time
without notice.
In view of the fact that the proceeds from the sale of the trust preferred
securities will be used to purchase our junior subordinated debentures, the
underwriting agreement provides that we will pay as compensation for the
underwriters' arranging the investment of the proceeds, an amount of $_______
per trust preferred security.
Because the National Association of Securities Dealers, Inc. ("NASD") is
expected to view the trust preferred securities as interests in a direct
participation program, this offering is being made in compliance with the
applicable provisions of the NASD's Conduct Rules.
The trust preferred securities are a new issue of securities with no
established trading market. The representatives have advised the Trust and us
that they intend to make a market in the trust preferred securities. However,
the underwriters are not obligated to do so and the market making may be
interrupted or discontinued at any time without notice at the sole discretion of
each of the underwriters. We have applied to have the trust preferred securities
approved for quotation on the Nasdaq National Market but a requirement for
initial listing, and for continued listing, is the presence of three, and two,
market makers, respectively, for the trust preferred securities, and the
presence of a third market maker cannot be assured. Accordingly, no assurance
can be given as to the development or liquidity of any market for the trust
preferred securities.
We have agreed to indemnify the underwriters against certain liabilities,
including liabilities under the Securities Act.
The representatives and certain of the other underwriters have in the past,
and may in the future perform various services for us, including investment
banking services, for which they have and may receive customary fees.
VALIDITY OF SECURITIES
The validity of the guarantee and the junior subordinated debentures and
certain tax matters will be passed upon for us by our counsel, Muldoon, Murphy &
Faucette LLP, Washington, D.C., and certain other legal matters will be passed
upon for the underwriters by Gordon, Feinblatt, Rothman, Hoffberger & Hollander,
LLC, Baltimore, Maryland. Certain matters of Delaware law relating to the
validity of the trust preferred securities, the enforceability of the trust
agreement and the creation of the Trust will be passed upon by Richards, Layton
& Finger, P.A., as special Delaware counsel to us and the Trust. Muldoon, Murphy
& Faucette LLP and Gordon, Feinblatt, Rothman, Hoffberger & Hollander, LLC will
rely as to certain matters of Delaware law on the opinion of Richards, Layton &
Finger, P.A.
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<PAGE>
EXPERTS
The financial statements incorporated in this Prospectus by Reference to
the Annual Report on Form 10-K for the year ended December 31, 1999, have been
so incorporated in reliance on the report of PricewaterhouseCoopers LLP
independent accountants, given on the authority of said firm as experts in
auditing and accounting.
WHERE YOU CAN FIND MORE INFORMATION
We are subject to the informational requirements of the Securities Exchange
Act of 1934, as amended, and any amendments to the Securities Exchange Act of
1934, as amended, and in accordance with the Securities Exchange Act of 1934, as
amended, we file reports, proxy statements, information statements and other
information with the SEC. These reports, proxy statements and other information
can be inspected and copied at the public reference facilities of the SEC at
Room 1024, 450 Fifth Street, N.W., Washington, D.C. 20549 and at the regional
offices of the SEC located at 7 World Trade Center, 13th Floor, Suite 1300, New
York, New York 10048 and Suite 1400, Citicorp Center, 14th Floor, 50 West
Madison Street, Chicago, Illinois 60661. You may obtain information on the
operation of the public reference room by calling the SEC at 1-800-SEC-0330.
Copies of this material can also be obtained at prescribed rates by writing to
the Public Reference Section of the SEC at 450 Fifth Street, N.W., Washington,
D.C. 20549. This material also may be accessed electronically by means of the
SEC's home page on the Internet at www.sec.gov.
Our common stock trades on the Nasdaq National Market under the symbol
"PBKS." Documents filed by us with the SEC also can be inspected at the offices
of NASD, 1735 K Street, N.W., Washington, D.C. 20006.
We and the Trust have filed a registration statement on Form S-3 with the
SEC under the Securities Act in connection with the offering. This prospectus
does not contain all of the information provided in the registration statement,
certain parts of which are omitted in accordance with the rules and regulations
of the SEC. The registration statement, including any amendments, schedules and
exhibits, is available for inspection and copying as provided above.
Statements contained in this prospectus as to the contents of any contract
or other document referred to in this document include all material terms of the
contract or other documents but are not necessarily complete, and in each
instance reference is made to the copy of the contract or other document which
may have been filed as an exhibit to the registration statement, each statement
being qualified in all respects by the reference.
No separate financial statements of the Trust have been included or
incorporated by reference in this document. We do not, nor does the Trust,
consider that the financial statements would be material to holders of the trust
preferred securities because the Trust is a newly formed special purpose entity,
has no operating history or independent operations and is not engaged in and
does not propose to engage in any activity other than holding as trust assets
the junior subordinated debentures and issuing the trust preferred securities
and common securities. See "Provident Trust II," "Description of Preferred
Securities," "Description of Junior Subordinated Debentures" and "Description of
Guarantee." In addition, we do not expect that the Trust will be filing reports
under the Securities Exchange Act of 1934, as amended, with the SEC.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
Our Annual Report on Form 10-K for the fiscal year ended December 31, 1999,
as amended, is incorporated into this prospectus by reference.
In addition, all subsequent documents filed with the SEC by us pursuant
Sections 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934, as
amended, after the date of this prospectus shall be deemed to be incorporated by
reference into this prospectus and to be a part of this prospectus from the date
of filing the
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<PAGE>
documents. Any statement contained in this prospectus or in a document
incorporated or deemed to be incorporated by reference in this prospectus or any
other document shall be deemed to be modified or superseded for purposes of this
prospectus to the extent that a statement contained in this prospectus or any
other document or in any subsequently filed document which also is or is deemed
to be incorporated by reference in this prospectus modified or supersedes the
statement. Any statement so modified or superseded shall not be deemed to
constitute a part of this prospectus, except as so modified or superseded.
This prospectus incorporates documents by reference which are not presented
here or delivered with this document. These documents (excluding exhibits unless
specifically incorporated in these documents) are available without charge upon
written or oral request to Provident Bankshares Corporation, 114 East Lexington
Street, Baltimore, Maryland 21202, Attention: Corporate Secretary, telephone:
(410) 277-7000.
You should rely only on the information contained or incorporated by
reference in this prospectus. We have not authorized anyone to provide you with
information that is different from what is contained in this prospectus. This
prospectus is dated ____________, 2000. You should not assume the information
contained in this prospectus is accurate as of any date other than that date.
CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING INFORMATION
This prospectus (including information included or incorporated by
reference in this prospectus) contains forward-looking statements with respect
to our financial condition, results of operations, plans, objectives, future
performance and business, including statements preceded by, followed by or that
include the words, "believes," "expects," "anticipates" or similar expressions.
These forward-looking statements involve certain risks and uncertainties
and may relate to our future operating results.
Factors that may cause actual results to differ materially from those
contemplated by these forward-looking statements include, among others, the
following possibilities:
. earnings following acquisitions being lower than expected;
. a significant increase in competitive pressure among depository and
other financial institutions;
. costs or difficulties related to the integration of the acquired
businesses being greater than expected;
. changes in the interest rate environment resulting in reduced margins;
. general economic or business conditions, either nationally or in
Maryland, Virginia or Pennsylvania, being less favorable than
expected, resulting in, among other things, a deterioration in credit
quality or a reduced demand for credit;
. legislative or regulatory changes adversely affecting the businesses
in which we will be engaged;
. changes in the securities markets; and
. changes in the banking industry, including, the effects of
consolidation resulting from possible mergers of financial
institutions.
For other matters that may affect operating results you should carefully
consider the "Risk Factors" beginning on page _.
53
<PAGE>
================================================================================
1,200,000 Trust Preferred Securities
Provident Trust II
% Preferred Securities
guaranteed by
[Logo of Provident Bankshares Corporation Appears Here]
_____________________________________
PROSPECTUS
_____________________________________
Legg Mason Wood Walker Ferris, Baker Watts
Incorporated Incorporated
_____________________________________
February __, 2000
================================================================================
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
The following expenses will be incurred in connection with the issuance and
distribution of the Securities being registered, other than underwriting
discounts and commissions.
<TABLE>
<S> <C>
SEC registration fee.......... $ 7,920
Printing and engraving........ 40,000
Accounting fees and expenses.. 40,000
Legal fees and expenses....... 75,000
Transfer agent fee............ 1,000
Trustee fees and expenses*.... 25,000
NASD fee...................... 4,000
Nasdaq listing fee*........... 48,750
Blue sky fees and expenses*... 3,500
Miscellaneous................. 10,000
--------
Total................. $255,170
========
</TABLE>
________________
*Estimated
Item 15. Indemnification of Directors and Officers.
Section 2-418 of the Maryland Annotated Code, Corporations and Associations
Article (1993) ("Maryland Code") provides that a corporation may indemnify
directors and officers against liabilities they may incur in such capacities
unless it is established that: (a) the directors act or omission was material
and (i) was committed in bad faith or (ii) was the result of active and
deliberate dishonesty; or (b) the director actually received an improper
personal benefit; or (c) the director had reasonable cause to believe that the
act or omission was unlawful. A corporation is required to indemnify directors
and officers against expenses they may incur in defending actions against them
in such capacities if they are successful on the merits or otherwise in the
defense of such actions.
The Maryland Code provides that the foregoing provisions shall not be
deemed exclusive of any other rights to which a director or officer seeking
indemnification may be entitled under, among other things, any by-law provision.
Our Bylaws provide that we shall indemnify and advance expenses to an
officer or director in connection with a proceeding to the fullest extent
permitted by and in accordance with the Maryland Code and federal law.
II-1
<PAGE>
Item 16. Exhibits.
EXHIBIT
NUMBER DESCRIPTION
- ------ -----------
1.1 Form of Underwriting Agreement
4.1 Form of Indenture of Provident Bankshares Corporation relating to the
Junior Subordinated Debentures
4.2 Form of Amended and Restated Trust Agreement of Provident Trust II
4.3 Form of Guarantee by Provident Bankshares Corporation
5.1 Opinion and Consent of Muldoon, Murphy & Faucette LLP as to the
legality of the Junior Subordinated Debentures and Guarantee to be
issued by Provident Bankshares Corporation
5.2 Opinion and Consent of Richards, Layton & Finger, P.A. as to the
legality of the Trust Preferred Securities to be issued by Provident
Trust II
8.1 Tax Opinion of Muldoon, Murphy & Faucette LLP as to certain federal
income tax matters
23.1 Consent of PricewaterhouseCoopers LLP
23.2 Consent of Muldoon, Murphy & Faucette LLP
(included in Exhibits 5.1 and 8.1)
23.3 Consent of Richards, Layton & Finger, P.A. (included in Exhibit 5.2)
24.1 Powers of Attorney of certain directors of Provident Bankshares
Corporation
25.1 Form T-1 Statement of Eligibility under the Trust Indenture Act of
1939, and any amendments, of Bankers Trust Company, as trustee under
the Junior Subordinated Indenture, the Amended and Restated Trust
Agreement and the Guarantee
Item 17. Undertakings.
Each of the undersigned Registrants hereby undertakes:
1. That, for purposes of determining any liability under the Securities
Act of 1933, as amended, and any amendments (the "Securities Act"),
each filing of the Registrant's annual report pursuant to Section
13(a) or Section 15(d) of the Securities Exchange Act of 1934, as
amended, (and, where applicable, each filing of an employee benefit
plan's annual report pursuant to Section 15(d) of the Securities Act)
that is incorporated by reference in the 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.
2. That, for purposes of determining any liability under the Securities
Act, as amended, the information omitted from the form of prospectus
filed as part of this registration statement in reliance upon Rule
430A and contained in a form of prospectus filed by the registrant
pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act,
as amended, shall be deemed to be part of this registration statement
as of the time it was declared effective.
3. That, for the purpose of determining any liability under the
Securities Act, as amended, each post-effective amendment that
contains a form of prospectus 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.
Insofar as indemnification for liabilities arising under the
Securities Act, as amended, may be permitted to directors, officers
and controlling persons of the Registrants pursuant to the provisions
provided in Item 15 hereof, or otherwise, the Registrants have been
advised that in the opinion of the Securities and Exchange Commission
("Commission") such indemnification is
II-2
<PAGE>
against public policy as expressed in the Securities Act, as amended,
and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by
the Registrants of expenses incurred or paid by a director, officer or
controlling person of the Registrants 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
and the Commission remains of the same opinion, the Registrants will,
unless in the opinion of its counsel the matter has been settled by
controlling precedent, submit to a court of appropriate jurisdiction
the question whether such indemnification by it is against public
policy as expressed in the Securities Act, as amended, and will be
governed by the final adjudication of such issue.
II-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 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 February 18, 2000.
PROVIDENT BANKSHARES CORPORATION
By /s/ Peter M. Martin
------------------------------------
Chairman of the Board, 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.
<TABLE>
<CAPTION>
Signature Title Date
- --------- ----- ----
<S> <C> <C>
/s/ Peter M. Martin Chairman of the Board, President February 18, 2000
- ------------------------------
Peter M. Martin and Chief Executive Officer
(Principal Executive Officer)
/s/ Dennis A. Starliper Chief Financial Officer February 18, 2000
- ------------------------------
Dennis A. Starliper (Principal Financial and
Accounting Officer)
/s/ Robert B. Barnhill* Director February 18, 2000
- ------------------------------
Robert B. Barnhill
/s/ Melvin A. Bilal* Director February 18, 2000
- ------------------------------
Melvin A. Bilal
/s/ Thomas S. Bozzuto* Director February 18, 2000
- ------------------------------
Thomas S. Bozzuto
/s/ Dr. Calvin W. Burnett* Director February 18, 2000
- ------------------------------
Dr. Calvin W. Burnett
/s/ Ward B. Coe, III* Director February 18, 2000
- ------------------------------
Ward B. Coe, III
/s/ Charles W. Cole, Jr.* Director February 18, 2000
- ------------------------------
Charles W. Cole, Jr.
/s/ Pierce B. Dunn* Director February 18, 2000
- ------------------------------
Pierce B. Dunn
</TABLE>
II-4
<PAGE>
<TABLE>
<S> <C> <C>
/s/ Enos K. Fry* Director February 18, 2000
- ------------------------------
Enos K. Fry
/s/ Herbert W. Jorgensen* Director February 18, 2000
- ------------------------------
Herbert W. Jorgensen
/s/ Mark K. Joseph* Director February 18, 2000
- ------------------------------
Mark K. Joseph
/s/ Barbara B. Lucas* Director February 18, 2000
- ------------------------------
Barbara B. Lucas
/s/ Frederick W. Meier, Jr.* Director February 18, 2000
- ------------------------------
Fredrick W. Meier, Jr.
/s/ Sister Rosemarie Nassif* Director February 18, 2000
- ------------------------------
Sister Rosemarie Nassif
/s/ Francis G. Riggs* Director February 18, 2000
- ------------------------------
Francis G. Riggs
/s/ Sheila K. Riggs* Director February 18, 2000
- ------------------------------
Sheila K. Riggs
/s/ Carl W. Stearn* Director February 18, 2000
- ------------------------------
Carl W. Stearn
*By: /s/ Peter M. Martin February 18, 2000
--------------------------------------
Peter M. Martin, Attorney-in-Fact
</TABLE>
II-5
<PAGE>
Pursuant to the requirements of the Securities Act of 1933, as amended, the
Issuer Trust 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 February 18, 2000.
PROVIDENT TRUST II
By: Provident Bankshares Corporation,
as Depositor
By: /s/ Peter M. Martin
----------------------------------
Peter M. Martin
Chairman of the Board, President and
Chief Executive Officer
II-6
<PAGE>
EXHIBIT
NUMBER DESCRIPTION
- ------ -----------
1.1 Form of Underwriting Agreement
4.1 Form of Indenture of Provident Bankshares Corporation relating to the
Junior Subordinated Debentures
4.2 Form of Amended and Restated Trust Agreement of Provident Trust II
4.3 Form of Guarantee by Provident Bankshares Corporation
5.1 Opinion and Consent of Muldoon, Murphy & Faucette LLP as to the
legality of the Junior Subordinated Debentures and Guarantee to be
issued by Provident Bankshares Corporation
5.2 Opinion and Consent of Richards, Layton & Finger, P.A. as to the
legality of the Trust Preferred Securities to be issued by Provident
Trust II
8.1 Tax Opinion of Muldoon, Murphy & Faucette LLP as to certain federal
income tax matters
23.1 Consent of PricewaterhouseCoopers LLP
23.2 Consent of Muldoon, Murphy & Faucette LLP
(included in Exhibits 5.1 and 8.1)
23.3 Consent of Richards, Layton & Finger, P.A. (included in Exhibit 5.2)
24.1 Powers of Attorney of certain directors of Provident Bankshares
Corporation
25.1 Form T-1 Statement of Eligibility under the Trust Indenture Act of
1939, and any amendments, of Bankers Trust Company, as trustee under
the Junior Subordinated Indenture, the Amended and Restated Trust
Agreement and the Guarantee
II-7
<PAGE>
EXHIBIT 1.1
1,200,000 PREFERRED SECURITIES
PROVIDENT TRUST II
[________%] Trust Preferred Securities
(Liquidation Amount $25 per Preferred Security)
UNDERWRITING AGREEMENT
----------------------
____________, 2000
12:00 p.m.
LEGG MASON WOOD WALKER, INCORPORATED
FERRIS, BAKER WATTS, INCORPORATED
As Representatives of the
Several Underwriters Identified in Schedule I Hereto
c/o Legg Mason Wood Walker, Incorporated
1747 Pennsylvania Avenue, N.W.
Washington, D.C. 20006
and c/o Ferris, Baker, Watts, Incorporated
1720 Eye Street, N.W.
Washington, D.C. 20006
Ladies and Gentlemen:
Section 1. Introduction. Provident Bankshares Corporation, a Maryland
------------
corporation (the "Company"), and Provident Trust II, a statutory business trust
created under the Delaware Business Trust Act (the "Delaware Act") (the "Trust"
and, together with the Company, sometimes the "Offerors"), propose, upon the
terms and subject to the conditions set forth in this underwriting agreement
(this "Agreement"), that the Trust issue and sell to the several underwriters
named in Schedule I hereto (each an "Underwriter" and, collectively, subject to
substitution as provided in Section 12 hereof, the "Underwriters"), for which
Legg Mason Wood Walker, Incorporated and Ferris, Baker Watts, Incorporated are
acting as Representatives (the "Representatives"), with respect to the proposed
issuance and sale by the Trust of its ____% Preferred Securities, with a
liquidation amount of $_____ per Preferred Security (the "Securities"), the
terms of which are more fully described in the Prospectus (as hereinafter
defined). Such Securities will be issued pursuant to an Amended and Restated
Trust Agreement, dated _________, 2000 (the "Trust Agreement") among the Company
as Depositor, Bankers Trust Company, as Property Trustee and Bankers Trust
(Delaware) as Delaware Trustee. The Preferred Securities will be guaranteed by
the Company with respect to distributions and
-1-
<PAGE>
payments upon liquidation, redemption and otherwise (the "Guarantee")
pursuant to and to the extent provided by a Guarantee Agreement (the "Guarantee
Agreement"), dated ______, 2000, between the Company and Bankers Trust Company,
as Guarantee Trustee (the "Guarantee Trustee").
The entire proceeds of the sale of the Securities to be issued
pursuant hereto will be used to purchase an equivalent dollar amount of junior
subordinated debentures (the "Subordinated Debentures") to be issued by the
Company pursuant to a Junior Subordinated Indenture (the "Indenture"), dated
_______, 2000, between the Company and Bankers Trust Company, as Debenture
Trustee (the "Debenture Trustee").
The Securities proposed to be sold by the Trust are referred to herein
as the "Preferred Securities."
The registration statement on Form S-3 under the Securities Act of
1933, as amended (the "Securities Act"), with respect to the Preferred
Securities, the Subordinated Debentures and the Guarantee, as amended at the
time it is or was declared effective by the Securities and Exchange Commission
(the "Commission") and, in the event of any amendment thereto after the
effective date, such registration statement as so amended (but only from and
after the effectiveness of such amendment), including a registration statement
(if any) filed pursuant to Rule 462(b) of the rules and regulations of the
Commission under the Securities Act (the "Securities Act Rules and Regulations")
increasing the size of the offering registered under the Securities Act and
information (if any) deemed to be part of the registration statement at the time
of effectiveness pursuant to Rules 430A(b) and 434(d) of the Securities Act
Rules and Regulations, is hereinafter called the "Registration Statement." The
prospectus included in the Registration Statement at the time it is or was
declared effective by the Commission and any related prospectus supplement or
supplements relating to the Preferred Securities, the Guarantee or the
Subordinated Debentures as previously filed with or promptly hereafter filed
with the Commission pursuant to Rule 424(b) of the Securities Act Rules and
Regulations, is hereinafter called the "Prospectus," except that if any
prospectus (including any term sheet meeting the requirements of Rule 434 of the
Securities Act Rules and Regulations provided by the Offerors for use with a
prospectus subject to completion within the meaning of such Rule 434 in order to
meet the requirements of Section 10(a) of the Securities Act) filed by the
Offerors with the Commission pursuant to Rule 424(b) (and Rule 434, if
applicable) of the Securities Act Rules and Regulations or any other such
prospectus provided to the Underwriters by the Offerors for use in connection
with the offering of the Preferred Securities (whether or not required to be
filed by the Offerors with the Commission pursuant to Rule 424(b) of the
Securities Act Rules and Regulations) differs from the prospectus on file at the
time the Registration Statement is or was declared effective by the Commission,
the term "Prospectus" shall refer to such differing prospectus (including any
term sheet within the meaning of Rule 434 of the Securities Act Rules and
Regulations) from and after the time such prospectus is filed with the
Commission or transmitted to the Commission for filing pursuant to such Rule
424(b) (and Rule 434, if applicable) or from and after the time it is first
provided to the Underwriters by the Offerors for such use. The term "Preliminary
Prospectus" as used herein means the preliminary prospectus included in any
Registration Statement prior to the time it becomes or became effective under
the Securities Act and any prospectus subject to completion as described in Rule
430A or 434 of the
-2-
<PAGE>
Securities Act Rules and Regulations. The term "disclosed in" when referring to
the Registration Statement, the Preliminary Prospectus, or the Prospectus
includes documents that are incorporated in or made an exhibit to any of the
foregoing. The term "Material Adverse Effect" means (i) when used in connection
with the Company, any development, change or effect that is materially adverse
to the business, properties, assets, net worth, condition (financial or
otherwise), or results of operations of the Company and the Subsidiaries, taken
as a whole and (ii) when used in connection with the Trust, any development,
change or effect that is materially adverse to the business, properties, assets,
net worth, condition (financial or otherwise) or results of operations of the
Trust.
Section 2. Representations and Warranties and Agreements of the Offerors.
--------------------------------------------------------------
(a) The Offerors, jointly and severally, represent and warrant to,
and agree with, each of the Underwriters, as of the date hereof, as of the
Closing Date (as such term is defined in Section 5 hereof) (except in respect of
such representations as are specified as being made as of a particular date) as
follows:
(i) A registration statement on Form S-3 (File Nos.
333-_____ and 333-_____-01) under the Securities Act with respect to the
Preferred Securities, the Subordinated Debentures and the Guarantee, including a
form of prospectus subject to completion, has been prepared by the Offerors in
conformity with the requirements of the Securities Act, the Securities Act Rules
and Regulations, the Trust Indenture Act of 1939, as amended (the "Trust
Indenture Act"), and the rules and regulations thereunder and has been filed
with the Commission. The Offerors have prepared and filed such amendments
thereto, if any, and such amended preliminary prospectuses, if any, as may have
been required to the date hereof, and will file such additional amendments
thereto and such amended prospectuses as may hereafter be required. If the
Offerors have elected to rely upon Rule 462(b) of the Securities Act Rules and
Regulations to increase the size of the offering registered under the Securities
Act, the Offerors will prepare and file with the Commission a registration
statement with respect to such increase pursuant to such Rule.
If the Offerors have elected not to rely upon Rule 430A of the
Securities Act Rules and Regulations, the Offerors have prepared and will
promptly file an amendment to the registration statement and an amended
prospectus (including a term sheet meeting the requirements of Rule 434 of the
Securities Act Rules and Regulations) if necessary to complete the Prospectus.
If the Offerors have elected to rely upon Rule 430A of the Securities Act Rules
and Regulations, they will prepare and file a prospectus (or a term sheet
meeting the requirements of Rule 434) pursuant to Rule 424(b) that discloses the
information previously omitted from the prospectus in reliance upon Rule 430A.
Copies of the Registration Statement, any amendment thereto and any
Preliminary Prospectus filed with the Commission, including the exhibits,
financial statements and schedules thereto, have been delivered by the Offerors
to the Representatives on behalf of the Underwriters.
-3-
<PAGE>
(ii) If the Registration Statement or any post-effective
amendment thereto has been declared effective, the Commission has not issued any
stop order suspending the effectiveness thereof or any order preventing or
suspending the use of any Preliminary Prospectus, the Prospectus, the
Registration Statement or any amendment or supplement thereto, and the
Commission has not instituted or, to the best knowledge of the offerors,
threatened to institute any proceedings with respect to such an order.
(iii) The Registration Statement, on the date it was or is
declared effective by the Commission, each Preliminary Prospectus, on the date
of the filing thereof with the Commission, and the Prospectus and any amendment
or supplement thereto, on the date of filing thereof with the Commission (or if
not filed, on the date provided by the Offerors to the Underwriters in
connection with offering and sale of the Preferred Securities) at the Closing
Date conformed or will conform in all material respects with the requirements of
the Securities Act, the Securities Act Rules and Regulations, the Trust
Indenture Act and the rules and regulations thereunder and all applicable
federal, state, or local statutes, and any other applicable administrative
regulation or other applicable law enacted, adopted or issued by any
governmental agency; and every request of the Commission, or any securities
authority or agency of any jurisdiction, for additional information (to be
included in the Registration Statement or the Prospectus or otherwise) has been
complied with in all material respects. The Registration Statement, on the date
it was or is declared effective by the Commission, upon the filing or first
delivery to the Underwriters of the Prospectus (or any supplement to the
Prospectus (including any term sheet meeting the requirements of Rule 434 of the
Securities Act Rules and Regulations) at the Closing Date did not and will not
contain an untrue statement of material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading; each Preliminary Prospectus on the date of the filing thereof with
the Commission, and the Prospectus and any amendment or supplement thereto on
the date of filing-thereof with the Commission (or if not filed, on the date
provided by the Offerors to the Underwriters in connection with the offering and
sale of the Preferred Securities) at the Closing Date did not and will not
include an untrue statement of material fact or omit to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided, however,
that the foregoing representation and warranty shall not apply to (i) any
statements or omissions made in reliance upon and in conformity with information
furnished in writing to the Offerors by an Underwriter through the
Representatives or by the Delaware Trustee, the Property Trustee, the Guarantee
Trustee or the Debenture Trustee expressly for use therein (as identified in
Section 9(b) hereof) and (ii) that part of the Registration Statement which
constitutes the Statement of Eligibility and Qualification under the Trust
Indenture Act. As of the date that the Registration Statement was or is declared
effective by the Commission, as of the date that each Preliminary Prospectus was
filed with the Commission, as of the date that the Prospectus and any amendment
or supplement thereto was of is with the Commission (or if not filed, on the
date provided by the Offerors to the Underwriters in connection with offering
and sale of the Preferred Securities), at the Closing Date, no event has or will
have occurred which should have been set forth in an amendment or supplement to
the Registration Statement or the Prospectus which has not then been set forth
in such an amendment or supplement.
-4-
<PAGE>
(iv) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State of
Maryland, its jurisdiction of incorporation, has been duly qualified as a
foreign corporation for the transaction of business and is in good standing
under the laws of each other jurisdiction in which it owns or leases properties
or conducts any business so as to require such qualification, except where the
failure to be so qualified would not have a Material Adverse Effect, and has all
power and authority necessary to own or hold its properties and assets and to
conduct the business in which it engages as described in or contemplated by the
Registration Statement and the Prospectus. The Company is duly registered as a
bank holding company under the Bank Holding Company Act of 1956, as amended.
(v) Provident Bank of Maryland (the "Bank Subsidiary") is a
state-chartered commercial bank organized, validly existing and in good standing
under the laws of the State of Maryland, its state of organization. All eligible
deposit accounts issued by the Bank Subsidiary are insured by the Federal
Deposit Insurance Corporation (the "FDIC",) up to the maximum applicable amount
in accordance with applicable law and the rules and regulations of the FDIC and
no proceedings for the termination or revocation of such insurance are pending
or, to the best knowledge of the Offerors, threatened. Provident Mortgage Corp.,
Provident Financial Services, Inc., Provident Investment Center, Inc., Banksure
Insurance Corporation, PB Investment Corporation, Provident Lease Corp., Inc.,
PB REIT, Inc., Lexington Properties Management, Inc., LPM Sub 1, Inc., LPM Sub
2, Inc., LPM Sub 3, Inc., LPM Sub 4, Inc., LPM Sub 5, Inc., LPM Sub 6, Inc., LPM
Sub 7, Inc., LPM Sub 8, Inc., LPM Sub 9, Inc., LPM Sub 10, Inc., Court Square
Leasing Corporation (collectively, with the Bank Subsidiary, the "Subsidiaries"
and, each individually, a "Subsidiary"), have been duly incorporated and are
validly existing as corporations in good standing in their jurisdiction of
incorporation. Each Subsidiary has been duly qualified as a foreign corporation
for the transaction of business and is in good standing under the laws of each
other jurisdiction in which it owns or leases properties or conducts any
business so as to require such qualification (except to the extent the lack of
such qualification will not result in a Material Adverse Effect to the
Offerors), and has all power and authority necessary to own or hold its
properties and assets and to conduct the business in which it engages as
described in or contemplated by the Registration Statement and the Prospectus.
The Subsidiaries are all of the direct and indirect subsidiaries of the Company,
and the Subsidiaries, together with the Trust, include all of the "significant
subsidiaries" of the Company as defined in Rule 1-02 of Regulation S-X of the
Commission.
(vi) The Trust has been duly created and is validly existing in
good standing as a business trust under the Delaware Act, has been duly
authorized to do business in each jurisdiction where such qualification is
required and has all power and authority necessary to own or hold its properties
and assets and to conduct the business in which it is engaged as described in or
contemplated by the Registration Statement and the Prospectus. The Trust has
conducted and will conduct no business other than as contemplated by the Trust
Agreement and as described in or contemplated by the Registration Statement and
the Prospectus. The Trust is not a party to or otherwise bound by any agreement
other than those described in the Prospectus. At and after such time as the
Company has purchased Common Securities equal to at least 3% of the total equity
of the Trust, the Trust will be classified for United States federal income tax
purposes as a grantor trust and not as an association taxable as a corporation
and the Trust is and
-5-
<PAGE>
will be treated as a consolidated subsidiary of the Company pursuant to
generally accepted accounting principles.
(vii) The Company has all power and authority necessary to enter
into, execute, deliver and perform its obligations under and with respect to the
Indenture, the Trust Agreement, the Guarantee Agreement and the Subordinated
Debentures. All necessary corporate proceedings of the Company have been duly
taken to authorize the execution, delivery and performance by the Company of its
obligations under the Indenture, the Trust Agreement, the Guarantee Agreement
and the Subordinated Debentures. The Indenture, the Trust Agreement, the
Guarantee Agreement and the Subordinated Debentures have been duly authorized,
and when executed and delivered by the Company, will be the valid and binding
obligations of the Company, enforceable against the Company, in accordance with
their respective terms (except as such enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or other laws of
general application relating to or affecting the enforcement of creditors'
rights and by the application of equitable principles relating to the
availability of remedies, and except as rights to indemnity or contribution may
be limited by federal or state securities laws and the public policy underlying
such laws). The Indenture has been or will be duly qualified under the Trust
Indenture Act. The Indenture, the Trust Agreement, the Guarantee Agreement and
the Subordinated Debentures conform or will conform in all material respects to
the descriptions thereof contained in the Registration Statement and the
Prospectus and are in substantially the forms filed as exhibits to the
Registration Statement.
(viii) The Trust has all power and authority necessary to enter
into, execute, deliver and perform its obligations under and with respect to the
Common Securities and the Preferred Securities. All necessary trust action on
the part of the Trust has been duly taken to authorize the execution, issuance,
sale, delivery and performance by the Trust of its obligations under the Common
Securities and the Preferred Securities. The Common Securities and the Preferred
Securities have been duly authorized by the Trust Agreement, and when issued by
the Trust against payment therefor as contemplated by the Prospectus, will be
validly issued and (subject to the terms of the Trust Agreement) fully paid and
nonassessable (except with respect to the Common Securities) undivided
beneficial interests in the assets of the Trust, entitled to the benefits
provided by the Trust Agreement. Good and marketable title to the Preferred
Securities will pass to the Underwriters on the Closing Date free and clear of
all liens, security interests, pledges, charges, mortgages or other defects or
encumbrances of any kind or nature. The issuance of the Common Securities and
the Preferred Securities is not subject to preemptive or other similar rights
and holders of Preferred Securities will be entitled to the same limitation of
personal liability under Delaware law as is extended to stockholders of private
corporations for profit organized under the General Corporation Law of the State
of Delaware. The Common Securities and the Preferred Securities conform or will
conform in all material respects to the descriptions thereof contained in the
Registration Statement and the Prospectus.
(ix) The Company has the duly authorized capital stock set
forth in the Prospectus. All of the shares of capital stock of the Company
issued and outstanding have been duly and validly authorized and issued, are
fully paid and nonassessable, without personal liability attaching to the
ownership thereof, and none of such shares have been issued or are owned or held
in violation of any preemptive or other similar rights. There are no holders of
the
-6-
<PAGE>
securities of the Company having rights to registration thereof or preemptive or
other similar rights to purchase capital stock or equity interests of the
Company and neither the filing of the Registration Statement nor the offering or
sale of the Preferred Securities or the Subordinated Debentures as contemplated
by the Registration Statement, the Prospectus and this Agreement gives rise to
any rights (other than have been waived or satisfied) for or relating to the
registration of any securities of the Company. The capital stock of the Company
conforms in all material respects to the descriptions thereof contained in the
Registration Statement and the Prospectus. There are no options, warrants, or
other rights to purchase or acquire from the Company or from any of the
Subsidiaries shares of the capital stock of the Company or any such Subsidiary.
All of the issued and outstanding shares of capital stock of each of the
Subsidiaries have been duly authorized, validly issued and are fully paid and
nonassessable, and all such shares are held, in the case of the Bank Subsidiary,
by the Company, and in the case of each other Subsidiary, by the Bank
Subsidiary, free and clear of any liens, security interests, pledges, charges,
mortgages or other defects or encumbrances of any kind or nature, except as
related to ownership of preferred stock of PB REIT, Inc. by employees of the
Company and of the Bank Subsidiary.
(x) The consolidated financial statements of the Company and the
related notes thereto incorporated by reference in the Registration Statement
and the Prospectus comply in all material respects with the requirements of the
Securities Act and the Securities Act Rules and Regulations at the dates and for
the periods indicated, are accurate in all material respects and fairly present
the financial condition, results of operations, stockholders' equity and cash
flows, and the other information of the Company and its consolidated
subsidiaries at the respective dates and for the respective periods specified
therein. Such financial statements and the related notes thereto have been
prepared in accordance with generally accepted accounting principles
consistently applied throughout the periods presented (except as otherwise noted
therein) and have been properly derived from the books and records of the
Company, and such financial statements have been audited by
PricewaterhouseCoopers, LLP, who are independent public accountants within the
meaning of the Securities Act and the Securities Act Rules and Regulations, as
indicated in their reports filed therewith. The selected financial information
and statistical data set forth under the captions "Prospectus Summary,"
"Selected Consolidated Financial Data," "Use of Proceeds", "Capitalization" in
the Prospectus fairly present the information set forth therein, have been
derived from the financial statements or operating records of the Company and
have been compiled on a basis consistent with that of the audited financial
statements incorporated by reference in the Registration Statement and the
Prospectus. No other financial statements or financial information, except that
which is contained in the Registration Statement or the Prospectus, is required
by Form S-3, the Securities Act Rules and Regulations or otherwise, to be
included in the Registration Statement or the Prospectus.
(xi) Since the respective dates as of which information is given
in the Prospectus, and except as otherwise may be stated therein or contemplated
thereby (A) none of the Subsidiaries, the Company or the Trust has entered into
any transaction or incurred any liability or obligation, direct, contingent or
otherwise, which is material to the Company and the Subsidiaries, taken as a
whole or to the Trust, (B) there has not been any material change in the
outstanding capital stock of the Company, or any issuance of options, warrants
or rights to purchase the capital stock of the Company (through any existing
stock repurchase plan, dividend
-7-
<PAGE>
reinvestment plan, employee benefit plan or otherwise), or any material increase
in the short-term or long-term debt the Company or the Subsidiaries, except
indebtedness and deposit liabilities incurred by the Bank Subsidiary in the
ordinary course of its banking business, or any event or circumstance giving
rise to a Material Adverse Effect relating to the Company or the Trust; (C) none
of the Subsidiaries, the Company or the Trust has sustained any loss or damage
(whether or not insured) which has resulted in or reasonably could be expected,
in the aggregate, to result in a Material Adverse Effect to the Company or the
Trust; (D) there has not been any material interference with the business of any
of the Subsidiaries taken as a whole, the Company or the Trust from any labor
dispute or court or governmental action, order or decree; (E) there has not been
any change greater than ten percent (10%), contingent or otherwise, in the
direct or indirect control of the Company nor has there been any change in
control, direct or indirect, in the Trust and, to the best knowledge of the
Company and the Trust, there do not exist any events or conditions which would
reasonably be expected to result in such changes in the Company or the Trust,
respectively; (F) other than as set forth in the Prospectus, there are no
actions, suits, proceedings, or investigations or litigation pending, or, to the
best knowledge of the Company or the Trust, threatened or contemplated actions,
suits or proceedings against the Subsidiaries, the Company or the Trust before
any court, regulatory body, administrative agency or other governmental body
which might, in the aggregate, have a Material Adverse Effect on the Company or
the Trust, or which is required by the Securities Act and the Securities Act
Rules and Regulations to be set forth in the Registration Statement or the
Prospectus which has not been so set forth, and (G) there has not occurred any
other event and there has arisen no set of circumstances required by the
Securities Act and the Securities Act Rules and Regulations to be set forth in
the Registration Statement or the Prospectus which has not been so set forth in
the Registration Statement or Prospectus as fairly and accurately summarized
therein. None of the Subsidiaries, the Company or the Trust has any material
contingent liabilities, taken as a whole, that are not disclosed in the
Prospectus.
(xii) Each of the Subsidiaries, the Company and the Trust has
filed all foreign, federal, state and local income, franchise and other material
tax returns required to be filed (or has obtained extensions with respect
thereto) and has paid all taxes shown as due thereunder and all assessments
received by it to the extent that payment has become due, and has made all
required payroll tax payments. All tax liabilities have been adequately provided
for in the consolidated financial statements of the Company and, to the best
knowledge of the Company and the Trust, there are no tax deficiencies which have
been or might be asserted against any of the Company, the Subsidiaries or the
Trust which, if so assessed, would have a Material Adverse Effect on the Company
or the Trust, as the case may be.
(xiii) The Company and each of the Subsidiaries maintains
insurance of the types and in amounts which the Company reasonably believes to
be adequate for the conduct of their respective businesses and the value of
their prospective properties and in such amounts and with such deductibles as
are customary for companies in the same or similar businesses, all of which
insurance is in full force and effect.
(xiv) Each of the Company and the Trust has all power and
authority to enter into, execute, deliver and perform its obligations under and
with respect to this Agreement. All necessary corporate or trust proceedings, as
the case may be, of the Company and the Trust
-8-
<PAGE>
have been duly taken to authorize the execution, delivery and performance by the
Company and the Trust of this Agreement. This Agreement has been duly
authorized, executed and delivered by the Company and the Trust and constitutes
a valid and binding obligation of the Company and of the Trust, enforceable
against each in accordance with its terms (except as such enforceability may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium or
other laws of general application relating to or affecting the enforcement of
creditors' rights and by the application of equitable principles relating to the
availability of remedies, and except as rights to indemnity or contribution may
be limited by federal or state securities laws and the public policy underlying
such laws).
(xv) None of the Subsidiaries, the Company or the Trust is in
default in the performance or observance of any obligation, agreement, covenant
or condition contained in any contract, indenture, mortgage, loan agreement,
note, lease, franchise, license, bond or other evidence of indebtedness or other
agreement or instrument to which it is a party, by which it may be bound or to
which any of its assets, properties or businesses are or may be subject, except
for such defaults that would not, in the aggregate, have a Material Adverse
Effect on the Company or the Trust, as the case may be, or which could in any
way, in the aggregate, materially impair or delay the consummation of the
transactions contemplated by this Agreement, the Indenture, the Trust Agreement
or the Guarantee Agreement, or the issuance and sale of the Common Securities,
the Preferred Securities or of the Subordinated Debentures, or the consummation
by the Company and the Trust of the other transactions contemplated by this
Agreement, the Indenture, the Trust Agreement or the Guarantee Agreement. The
Company's and the Trust's execution and delivery of this Agreement, and the
Company's execution of the Indenture, the Trust Agreement and the Guarantee
Agreement, and the consummation by the Company and/or the Trust of the
transactions contemplated hereby and thereby, including, without limitation, the
issuance, sale and delivery of the Preferred Securities and the Common
Securities by the Trust and of the Subordinated Debentures by the Company, and
the conduct of their respective businesses as described in or contemplated by
the Registration Statement and the Prospectus, will not violate of any provision
of the charter, bylaws or other governing documents of any of the Subsidiaries,
the Company or the Trust Agreement or the Trust's certificate of trust filed
with the State of Delaware on February 11, 2000 (the "Certificate of Trust"),
and will not result in the breach of, or be in contravention of, constitute a
default under, cause (or permit) the maturation or acceleration of any liability
or the termination of any rights under, or result in the creation or imposition
of any lien, security interest, pledge, charge, mortgage or other defect in or
encumbrance upon, any assets, property or business of the Subsidiaries, the
Company, or the Trust pursuant to the terms of any contract, indenture,
mortgage, loan agreement, note, lease, franchise, license, bond, other evidence
of indebtedness, or other agreement or instrument to which any of the
Subsidiaries, the Company or the Trust is a party, by which it may be bound or
to which any of its assets, properties or businesses are or may be subject, or,
assuming compliance with the Securities Act and applicable state securities or
Blue Sky laws, any statute, judgment, decree, order, rule or regulation
applicable to any of the Subsidiaries, the Company or the Trust of any
arbitrator, court, regulatory body, administrative agency or other governmental
body, except those, if any, that are described in the Prospectus or those which
would not, individually or in the aggregate, have a Material Adverse Effect on
the Company or the Trust, as the case may be.
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(xvi) All executed agreements or copies of executed agreements
filed as exhibits to the Registration Statement to which any of the
Subsidiaries, the Company or the Trust is a party, by which any of them is or
may be bound or to which any of their respective assets, properties or
businesses are or may be subject have been duly and validly authorized, executed
and delivered by such Subsidiary, the Company or the Trust, as the case may be,
and constitute the legal, valid and binding agreements of such Subsidiary, the
Company or the Trust, enforceable against it in accordance with its terms
(except as such enforceability may be limited by applicable bankruptcy,
insolvency, reorganization or other laws of general application relating to or
affecting enforcement of creditors' rights, and application of equitable
principles relating to the availability of remedies, and except as rights to
indemnity or contribution may be limited by federal or state securities laws and
the public policy underlying such laws). The descriptions and summaries
contained in the Registration Statement of contracts and other documents and the
statements set forth in the Prospectus under the captions "Description of
Preferred Securities Debentures," "Description of Junior Subordinated
Debentures," "Description of Guarantee" and "Relationship Among the Preferred
Securities, the Subordinated Debentures and the Guarantee," insofar as they
purport to constitute a summary of the terms of the Company's and the Trust's
securities, and under the captions (except, with respect to the statements under
the caption "Underwriting," for information furnished in writing to the Company
by the Underwriters through the Representatives expressly for use therein (as
identified in Section 9(b) hereof)) insofar as they purport to describe the
provisions of the laws and the provisions of documents referred to therein, are
accurate and fairly present in all material respects the information required to
be disclosed with respect thereto by the Securities Act and the Securities Act
Rules and Regulations, and there are no contracts, other documents, transactions
or circumstances which are required by the Securities Act and the Securities Act
Rules and Regulations to be described in the Prospectus, the Registration
Statement or filed as exhibits thereto which are not so described or filed. The
exhibits which have been filed are complete and correct copies of the documents
of which they purport to be copies.
(xvii) The Company and the Bank Subsidiary have good and
marketable title in fee simple to all real property and good and marketable
title to all other property and assets owned thereby as set forth in the
Prospectus, in each case free and clear of all liens, security interests,
pledges, charges, mortgages and other defects or encumbrances of any kind or
nature, except in the ordinary course of business, and except such as are
described in the Prospectus or such as do not materially affect the value of any
such property, and do not materially interfere with the use made or proposed to
be made of such property by the Company or the Bank Subsidiary. Any real
properties held or used by the Company or the Bank Subsidiary under lease are
held or used under valid, subsisting and enforceable leases, such leases are in
full force and effect, the Company or the Bank Subsidiary, as the case may be,
is not in default in respect of any material terms of any such lease and enjoys
peaceful and undisturbed possession thereunder and, to the best knowledge of the
Company, there are no claims that have been asserted by any party adverse to the
Company's or the Bank Subsidiary's right as lessee under any such lease or
affecting or challenging the Company's or the Bank Subsidiary's right to
continue possession of the premises subject to any such lease which,
individually or in the aggregate, would have a Material Adverse Affect on the
Company. No real property owned, held or used by the Company or the Bank
Subsidiary is situated in an area which is or, to the best knowledge of the
Company and the Bank Subsidiary, will be, subject to zoning, use, or building
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code restrictions that would prohibit (and no state of facts relating to the
actions or inaction of another person or entity or his or its ownership,
leasing, or use of any real or personal property exists or will exist which
would prevent) the continued effective ownership, holding or use of such real
property in the business of the Company or the Bank Subsidiary as described in
or contemplated by the Registration Statement and the Prospectus.
(xviii) All legally required proceedings in connection with the
issuance and sale of the Common Securities, the Preferred Securities, the
Subordinated Debentures and the Guarantee in accordance with this Agreement and
as contemplated by the Registration Statement and the Prospectus have been taken
and no consent, authorization, approval, order, registration, license,
certificate, declaration or permit of or from, or filing with, any court,
regulatory body, administrative agency or other governmental body, is required
in connection with the execution and delivery of this Agreement, the Indenture,
the Trust Agreement or the Guarantee Agreement, or the issuance and sale of the
Common Securities, the Preferred Securities or the Subordinated Debentures, or
the consummation by each of the Company and the Trust of the transactions
contemplated by this Agreement, the Indenture, the Trust Agreement or the
Guarantee Agreement, except such as have been described in the Prospectus or may
be required, under the Securities Act, the Securities Act Rules and Regulations,
the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and such
as may be required under state securities or Blue Sky laws in connection with
the purchase and distribution of the Preferred Securities by the Underwriters,
or by The Nasdaq National Market (the "NNM") to have the Preferred Securities
listed thereon, and by the National Association of Securities Dealers, Inc. (the
"NASD") in connection with the terms and conditions set forth in this Agreement.
No consent of any party to any material contract, agreement, mortgage, loan
agreement, note, franchise, lease, bond, other evidence of indebtedness or other
agreement or instrument, or any arrangement or understanding to which the
Company or the Trust is a party, by which either of them may be bound or to
which any of their respective assets, properties or businesses are or may be
subject, is required for the execution, delivery or performance of this
Agreement, the Indenture, the Trust Agreement or the Guarantee Agreement, or the
issuance and sale of the Common Securities, the Preferred Securities or the
Subordinated Debentures, or the consummation by each of the Company and the
Trust of the transactions contemplated by this Agreement, the Indenture, the
Trust Agreement or the Guarantee Agreement.
(xix) None of the Subsidiaries, the Company or the Trust, or
the conduct of their respective businesses as described in or contemplated by
the Prospectus is in violation of any federal, state or local statute,
administrative regulation or other law, the consequence of which violation(s),
individually or in the aggregate, would have a Material Adverse Effect on the
Company or the Trust, as the case may be, or which could in any way,
individually or in the aggregate, materially impair or delay the consummation of
the transactions contemplated by this Agreement, the Indenture, the Trust
Agreement, or the Guarantee Agreement, or the issuance and sale of the Common
Securities, the Preferred Securities, or of the Subordinated Debentures, or the
consummation by each of the Company and by the Trust of the other transactions
contemplated by this Agreement, the Indenture, the Trust Agreement or the
Guarantee Agreement.
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<PAGE>
(xx) The Company has received, subject to notice of issuance,
approval to have the Preferred Securities listed on the NNM and the Company
knows of no reason which is likely to adversely affect such approval.
(xxi) None of the Subsidiaries, the Company or the Trust is
and, after giving effect to the offering and sale of the Preferred Securities,
the Common Securities and the Junior Subordinated Debentures, will not be, an
"investment company" or an "affiliated person" of or a "promoter" or "principal
underwriter" of or an entity "controlled" by an "investment company", as such
terms are defined in the Investment Company Act of 1940 (the "Investment Company
Act").
(xxii) Each of the Company, the Subsidiaries, the Company and
the Trust owns or is licensed or otherwise has sufficient right to use the
proprietary knowledge, trademarks, service marks, trade names, trademark
registrations, service mark registrations, logo marks, copyrights and rights
(collectively, "Intellectual Property") necessary for the conduct of its
business as described in or contemplated by the Registration Statement and the
Prospectus. To the best knowledge of the Company and the Trust, none of the
activities engaged in by the Company, the Subsidiaries or the Trust materially
infringes upon or otherwise materially conflicts with Intellectual Property
rights of others. No claims have been asserted or, to the best knowledge of the
Offerors, threatened against the Company, the Subsidiaries or the Trust by any
person with respect to the use of any such Intellectual Property or challenging
or questioning the validity or effectiveness of any such Intellectual Property.
(xxiii) No labor disturbance(s) by, or labor dispute(s) with the
employees of the Company or the Subsidiaries exists or, to the best knowledge of
the Offerors, is threatened or imminent which, in the aggregate, would have a
Material Adverse Effect on the Company.
(xxiv) Each of the administrators under the Trust Agreement
(each of the "Administrators") has been duly authorized to execute and deliver
the Trust Agreement.
(xxv) To the best knowledge of the Offerors, no hazardous
substances, hazardous wastes, pollutants or contaminants have been deposited or
disposed of in, on or under the properties of the Company, or any of the
Subsidiaries (including properties owned, managed or controlled by a Subsidiary
in connection with its lending activities) during the period in which the
Company or the Subsidiary has owned, occupied, managed, controlled or operated
such properties, in violation of any environmental, safety, health or similar
laws or regulations, orders, decrees or permits relating to the protection of
human health and safety, the environment or hazardous or toxic substances or
wastes, pollutants or contaminants ("Environmental Regulations"), or any order,
judgment, decree or permit which would require remedial action under any
Environmental Regulations, except for any violations or remedial actions which
would not have, in the aggregate, a Material Adverse Effect on the Company. The
Company and each of the Subsidiaries (i) is in material compliance with all
applicable Environmental Regulations and (ii) has received all permits,
licenses, consents or other approvals required under applicable Environmental
Regulations to conduct its business, in each case except where the failure(s) to
do so would not, in the aggregate, have a Material Adverse Effect on the
Company.
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<PAGE>
(xxvi) The employee benefit plans, including employee welfare
benefit plans, of the Company and each of the Subsidiaries (the "Employee
Plans",) have been operated in material compliance with the applicable
provisions of the Employee Retirement Income Security Act of 1974, as amended
("ERISA"), the Internal Revenue Code of 1986, as amended (the "Code"), all
regulations, rulings and announcements promulgated or issued thereunder and all
other applicable governmental laws and regulations (except to the extent such
noncompliance would not, in the aggregate, have a Material Adverse Effect on the
Company). No reportable event under Section 4043(c) of ERISA has occurred with
respect to any Employee Plan of the Company or any of the Subsidiaries for which
the reporting requirements have not been waived by the Pension Benefit Guaranty
Corporation. No prohibited transaction under Section 406 of ERISA, for which an
exemption does not apply, has occurred with respect to any Employee Plan of the
Company or any of the Subsidiaries. There are no pending or, to the Company's
best knowledge, threatened claims by or on behalf of any Employee Plan, by any
employee or beneficiary covered under any such Plan or by any governmental
authority or otherwise involving such Plans or any of their respective
fiduciaries (other than for routine claims for benefits). All Employee Plans
that are group health plans have been operated in material compliance with the
group health plan continuation coverage requirements of Section 4980B of the
Code.
(xxvii) None of the Company, the Subsidiaries or the Trust is
party to or otherwise subject to any consent decree, memorandum of
understanding, written commitment or other supervisory agreement (restricting
the activities of the Company, the Subsidiaries or the Trust in a material way)
with the Board of Governors of the Federal Reserve System or any Federal Reserve
Bank (the "Federal Reserve"), the FDIC, the Maryland Commissioner of Financial
Regulation (the "Maryland Commissioner") or any other federal or state authority
or agency responsible for the supervision, regulation or insurance of depository
institutions, mortgage companies and their subsidiaries and holding companies
(any "Bank Regulator").
(xxviii) None of the Company, the Subsidiaries, the Trust or, to
the best knowledge of the Offerors, any other person associated with or acting
on behalf of the Company, any of the Subsidiaries or the Trust, including,
without limitation, any director, officer, agent, or employee of any of the
Subsidiaries or the Company has, directly or indirectly, while acting on behalf
of such Subsidiary, the Company or the Trust (i) used any corporate funds for
unlawful contributions, gifts, entertainment, or other unlawful expenses
relating to political activity; (ii) made any unlawful contribution to any
candidate for foreign or domestic office, or to any foreign or domestic
government officials or employees or other person charged with similar public or
quasi-public duties, other than payments required or permitted by the laws of
the United States or any jurisdiction thereof or to foreign or domestic
political parties or campaigns from corporate funds, or failed to disclose fully
any contribution in violation of law; (iii) violated any provision of the
Foreign Corrupt Practices Act of 1977, as amended; or (iv) made any other
payment of funds of the Company or a Subsidiary or retained any funds which
constitute a violation of any law, rule or regulation or which was or is
required to be disclosed in the Registration Statement or the Prospectus
pursuant to the requirements of the Securities Act or the Securities Act Rules
and Regulations.
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<PAGE>
(xxix) The Bank Subsidiary is in good standing with the
Maryland Division of Financial Regulation of the Department of Licensing and
Regulations and the activities of the Company and the Bank Subsidiary are
permitted under applicable federal and state banking laws, rules and
regulations. The Company and each of the Subsidiaries have all necessary
approvals, including approvals of each Bank Regulator having jurisdiction over
it, to conduct their respective business as described in the Registration
Statement and the Prospectus, except where the failure to have such approvals
would not in the aggregate have a Material Adverse Effect on the Company. The
Company and each Subsidiary has filed with the appropriate governmental
authorities each and every statement, report, information or form required to be
filed by it pursuant to any applicable law, regulation, license, permit or
order, except where the failure(s) to so file would not, in the aggregate, have
a Material Adverse Effect on the Company, all such filings or submissions were
in compliance in all material respects with applicable laws and regulations when
filed, and no deficiencies have been asserted by any regulatory commission,
agency or authority with respect to such filings or submissions, except where
the failure(s) to so file or cure would not, in the aggregate, have such a
Material Adverse Effect in the Company. No report or application filed by the
Company or any of the Subsidiaries with any Bank Regulator (each such report or
application, together with all exhibits thereto, a "Regulatory Report"), as of
the date it was filed, contained any material misstatement or omission or failed
to comply with the applicable requirements of the applicable Bank Regulators, as
the case may be. The Company and each of the Subsidiaries has filed each
Regulatory Report that it was required to file with any Bank Regulator except
where the failure(s) to so file would not, in the aggregate, have a Material
Adverse Effect on the Company.
(xxx) The books, records and accounts and systems of internal
accounting controls of the Company and of each of the Subsidiaries comply in all
material respects with the requirements of Section 13(b)(2) of the Exchange Act.
(xxxi) The minute books of the Company and each of the
Subsidiaries are current and contain a correct record, in all material respects,
of all corporate action reflected therein as taken by the Boards of Directors
and shareholders of the Company and the Subsidiaries and a correct and complete
record of the ratification by the Boards of Directors of the Company and the
Subsidiaries of all corporate action taken by such Boards for which such minute
books do not contain a record, and all signatures contained therein are true
signatures of the persons whose signatures they purport to be.
(xxxii) Except pursuant to this Agreement, the Company has not
incurred, directly or indirectly, any liability for a fee, commission or other
compensation or reimbursement on account of the employment of a broker, finder
agent, investment adviser or otherwise in connection with the transactions
contemplated by this Agreement, the Indenture, the Trust Agreement, or the
Guarantee Agreement.
(xxxiii) There are no business relationships or related party
transactions of the nature described in Item 404 of Regulation S-K of the
Commission involving the Company, the Subsidiaries or the Trust and any person
referred to in Items 401 or 404 of Regulation S-K, except as required to be
described, and as so described, in the Prospectus.
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<PAGE>
(xxxiv) To the best knowledge of the Company, since its
inception, the Company has not incurred any liability arising under or as a
result of the application of the provisions of the Securities Act. Without
limiting the generality of the foregoing, all offers and sales of the Company's
capital stock prior to the date hereof were at all relevant times exempt from
the registration requirements of the Securities Act and from applicable state
securities or Blue Sky laws or were made pursuant to effective registration
statements in conformity with the Securities Act and the Securities Act Rules
and Regulations and were properly qualified under all applicable state
securities or Blue Sky laws in all material respects. Any offering materials
prepared in connection therewith did not include any untrue statement of a
material fact or omit to state any material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading.
(xxxv) The conditions for use of Form S-3, as set forth
in the General Instructions thereto, have been satisfied in all material
respects.
(b) Any certificate signed by any officer of the Company or
Administrator of the Trust and delivered to the Representatives or to counsel to
the Underwriters shall be deemed a representation and warranty by the Company
and each of the Subsidiaries or of the Trust, as the case may be, to the
Underwriters as to the matters covered thereby.
Section 3. Purchase of Securities by the Underwriters. On the basis of
------------------------------------------
the representations, warranties, covenants and agreements herein contained, and
subject to the terms and conditions herein set forth, the Trust agrees to issue
and sell to the Underwriters, and each of the Underwriters agrees, severally and
not jointly, to purchase from the Trust, the respective number of Preferred
Securities set forth opposite the name of each such Underwriter in Schedule I
hereto at a purchase price of $______ per Preferred Security (the "Purchase
Price"). As compensation to the Underwriters for their commitments hereunder and
in view of the fact that the proceeds of the sale of the Preferred Securities
(together with the entire proceeds from the sale by the Trust to the Company of
the Common Securities) will be used to purchase the Subordinated Debentures, on
the Closing Date, the Company hereby agrees to pay to the Representatives, on
behalf of the several Underwriters, a commission of $____ per Preferred Security
($_______ in the aggregate).
Section 4. Offering of the Preferred Securities by the Underwriters.
--------------------------------------------------------
The Company and the Trust are advised that the Underwriters propose to make a
public offering of the Preferred Securities, on the terms and conditions set
forth in the Registration Statement from time to time as and when the
Representatives deem advisable after the Registration Statement becomes
effective. Because the NASD is expected to view the Preferred Securities as
interests in a direct participation program, the offering of the Preferred
Securities is being made in compliance with the applicable provisions of Rule
2810 of the NASD's Conduct Rules.
Section 5. Delivery of and Payment for the Preferred Securities.
-----------------------------------------------------
(a) Delivery to the Underwriters of, and payment to the Trust
for, the Preferred Securities shall be made at 10:00 a.m., Washington, DC time,
on the third (or if the Preferred Securities are priced, as contemplated by Rule
l5c6-l(c) under the Exchange Act, after
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4:30 p.m., on the fourth) full business day (such time and date being referred
to as the "Closing Date") following the date of the initial public offering of
the Preferred Securities as advised to the Representatives by the Company, at
such place as the Representatives shall designate.
(b) The Preferred Securities will be delivered by the Trust to
the Underwriters on the Closing Date against payment of the Purchase Price
therefor by wire transfer of same-day funds, payable to the order of the Trust
to an account designated thereby. Delivery of the Preferred Securities may be
made by credit through full fast transfer to the accounts at The Depository
Trust Company designated by the Representatives. The Preferred Securities shall
be represented in the form of one or more fully registered global notes (the
"Global Notes") in book-entry form registered in the name of the nominee of The
Depository Trust Company. The Global Notes representing the Preferred Securities
shall be made available for examination by the Representatives not later than
10:00 a.m., Washington, DC time, on the last business day prior to the Closing
Date with any transfer taxes payable upon initial issuance or the transfer
thereof duly paid by the Company for the respective accounts of the Underwriters
against payment of the Purchase Price therefor.
(c) The documents to be delivered on the Closing Date by or on
behalf of the parties hereto pursuant to Section 8 hereof, including the cross-
receipt for the Preferred Securities to be purchased and any additional
documents requested by the Underwriters, will be delivered at the offices of
Gordon Feinblatt, Rothman, Hoffberger & Hollander, LLC, 233 East Redwood Street,
Baltimore, Maryland 21202, or such other location as the Representatives may
designate (the "Closing Location").
(d) A meeting will be held at the Closing Location at 2:00 p.m.,
Washington, D.C. time, on the business day next preceding Closing Date or at
such other time(s) and location as is mutually agreed upon by the parties
hereto, at which meeting(s) the final drafts of the documents to be delivered
pursuant to the preceding paragraph will be available for review by the parties
hereto.
Section 6. Covenants of the Company and the Trust. The Offerors,
--------------------------------------
jointly and severally, covenant and agree with each of the Underwriters as
follows:
(a) The Offerors will use their respective best efforts to cause
the Registration Statement, if not effective at the time of execution of this
Agreement, to become effective as promptly as practicable thereafter. If
required, the Offerors will file the Prospectus and any amendments or
supplements thereto with the Commission in the manner and within the time period
required by Rule 424(b) under the Securities Act. During any time when a
prospectus relating to the Preferred Securities is required to be delivered
under the Securities Act, each of the Offerors will comply in all material
respects with all requirements imposed by the Securities Act and the Securities
Act Rules and Regulations to the extent necessary to permit the continuance of
sales of or dealings in the Preferred Securities in accordance with the
provisions hereof and as contemplated by the Registration Statement and the
Prospectus. With respect to any registration statement, prospectus, amendment
(including any post-effective amendment), or supplement to be filed with the
Commission in connection with the Preferred Securities, the Offerors will
provide a copy of each such document to the Representatives a reasonable time
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<PAGE>
prior to the date such document is proposed to be filed with the Commission and
will not file any such document without the consent of the Representatives. Any
such registration statement, prospectus, amendment or supplement, when filed,
will comply in all material respects with the Securities Act and the Securities
Act Rules and Regulations. In the event that the Registration Statement is
effective at the time of execution of this Agreement, but the total number of
Preferred Securities subject to this Agreement exceeds the number of Preferred
Securities covered by the Registration Statement, the Offerors promptly will
file with the Commission the date hereof a registration statement pursuant to
Rule 462(b) of the Rules and Regulations in accordance with the requirements of
such Rule and will make payment of the filing fee therefor in accordance with
the requirements of Rule 111(b) of the Rules and Regulations.
(b) The Offerors will advise the Representatives promptly and, if
requested by the Representatives, will confirm such advice in writing (i) when
the Registration Statement, as amended, has become effective; (ii) if the
provisions of Rule 430A of the Securities Act Rules and Regulations will be
relied upon, when the Prospectus has been filed in accordance with said Rule
430A; (iii) when any post-effective amendment to the Registration Statement
becomes effective; (iv) of any request made by the Commission for amendments or
supplements to the Registration Statement, any Preliminary Prospectus or
Prospectus or for additional information; (v) of the issuance by the Commission
of any stop order suspending the effectiveness of the Registration Statement or
any post-effective amendment thereto or any order preventing or suspending the
use of any Preliminary Prospectus or Prospectus or any amendment or supplement
thereto or the qualification of the securities for offering or sale in any
jurisdiction, or the institution or threat of any investigation or proceedings
for any such purpose by the Commission, any state securities commission or any
other regulatory authority; and (vi) of the receipt of any comments from the
Commission regarding the Registration Statement, any post-effective amendment
thereto, the Preliminary Prospectus, the Prospectus, or any amendment or
supplement thereto. The Offerors will use their best efforts to prevent the
issuance of any stop order by the Commission, and if at any time the Commission
shall issue any stop order, the Offerors will use their best efforts to obtain
the withdrawal of such stop order at the earliest possible moment.
(c) The Offerors will cooperate with the Representatives, the
Underwriters and counsel to the Underwriters in qualifying or registering the
Preferred Securities for sale, or obtaining an exemption therefrom, under the
securities or Blue Sky laws of such jurisdictions as the Representatives shall
designate, and will continue such qualifications or registrations or exemptions
in effect so long as necessary to complete the distribution of the Preferred
Securities. Notwithstanding the foregoing, neither of the Offerors shall be
required to qualify as a foreign corporation or to file a general consent to
service of process in any such jurisdiction where it is not presently qualified.
(d) The Offerors' consent to the use of the Prospectus (and any
amendment or supplement thereto) by the Underwriters and all dealers to whom the
Preferred Securities may be sold, in connection with the offering or sale of the
Preferred Securities and for such period of time thereafter as the Prospectus is
required by law to be delivered in connection therewith. If, at any time when a
prospectus relating to the Preferred Securities is required under the Securities
Act to be delivered in connection with sales of the securities by an underwriter
or dealer, any
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<PAGE>
event occurs as a result of which the Prospectus, as then amended or
supplemented, would include 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, or if it becomes
necessary at any time to amend or supplement the Prospectus to comply in all
material respects with the Securities Act or the Securities Act Rules and
Regulations, the Offerors promptly will so notify the Representatives and will
prepare and file with the Commission an amendment to the Registration Statement
or an amendment or supplement to the Prospectus which will correct such
statement or omission or effect such compliance. The Offerors will provide a
copy of each such amendment or supplement to the Representatives a reasonable
time prior to the date on which it is proposed to be filed with the Commission
and will not file any such amendment or supplement without the consent of the
Representatives, which shall not be unreasonably withheld.
(e) As soon as practicable, but in any event not later than forty-
five (45) calendar days after the end of the twelve (12) month period beginning
on the day after the end of the fiscal quarter of the Offerors during which the
effective date of the Registration Statement occurs (ninety (90) calendar days
in the event that such quarter is the last fiscal quarter), the Offerors, to the
extent not exempt pursuant to the Securities Act, the Securities Act Rules and
Regulations or the exemptive authority of the Commission, will make generally
available to their security holders, in the manner specified in Rule 158(b) of
the Securities Act Rules and Regulations, and will deliver to the
Representatives, an earnings statement which will be in the detail required by,
and will otherwise comply with, the provisions of Section 11(a) of the
Securities Act and Rule 158(a) of the Securities Act Rules and Regulations,
which statement need not be audited unless required by the Securities Act or the
Securities Act Rules and Regulations, covering a period of at least twelve (12)
consecutive months after the effective date of the Registration Statement.
(f) For a period of three (3) years commencing with the date hereof,
as promptly as practical after filing or release, as the case may be, each of
the Offerors will furnish to the Representatives copies of (i) all annual
reports, quarterly reports and current reports filed thereby with the Commission
on Forms 10-K, 10-Q and 8-K, or such other similar forms as may be designated by
the Commission; (ii) such other documents, proxy statements, reports and
information as are furnished thereby to its security holders generally; (iii)
each report filed thereby with the NNM; (iv) each press release in respect
thereof; (v) and such other public information relating to the Offerors as the
Representatives may reasonably request.
(g) The Offerors will furnish, without charge, to the Representatives
or on the Representatives' request, at such place as the Representatives may
designate, copies of each Preliminary Prospectus, the Registration Statement and
any amendments thereto, any registration statement filed pursuant to Rule 462(b)
(of which copies two (2) will be signed and will include all financial
statements and exhibits) and the Prospectus, and all amendments and supplements
thereto, in each case as soon as available and in such quantities as the
Representatives may reasonably request.
(h) Each of the Offerors will use its best efforts to cause the
Preferred Securities to be duly approved for listing on the NNM, subject to
notice of issuance, prior to the
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Closing Date and to cause the Preferred Securities to remain listed for at least
thirty-six (36) months thereafter.
(i) None of the Offerors, the Subsidiaries or any of their officers
or directors, trustees or affiliates, (within the meaning of the Securities Act
Rules and Regulations) will take, directly or indirectly, any action designed
to, or which might reasonably be expected to, cause or result in stabilization
or manipulation of the price of any securities of the Offerors.
(j) The Offerors will apply the net proceeds from the sale of the
Preferred Securities and the Subordinated Debentures in the manner and for the
purposes set forth in the Prospectus and will make such disclosures of the
application of such proceeds as may be required by Rule 463 of the Securities
Act Rules and Regulations. Pending application of the net proceeds of the sale
of the Common Securities, the Preferred Securities and the Subordinated
Debentures in such manner, the Offerors and each of the Subsidiaries will
operate their businesses in such manner and for such purposes and each will
invest such net proceeds in such securities, so as not to become an "investment
company" as such term is defined under the Investment Company Act.
(k) To the extent not exempt pursuant to the Securities Act, the
Securities Act Rules and Regulations or the exemptive authority of the
Commission, each of the Offerors will timely file all such reports, forms or
other documents as may be required from time to time, under the Securities Act,
the Securities Act Rules and Regulations, the Exchange Act and the rules and
regulations thereunder, and all such reports, forms and documents so filed will
materially comply as to form and substance with the applicable requirements
under the Securities Act, the Securities Act Rules and Regulations, the Exchange
Act and the rules and regulations thereunder which may from time to time be
applicable thereto. Each of the Offerors shall comply with the provisions of all
undertakings contained in the Registration Statement.
(l) Neither of the Offerors shall offer, sell, contract to sell or
otherwise dispose of any securities issued or guaranteed by the Trust or the
Company that, in the reasonable judgment of the Representatives, is
substantially similar to the Preferred Securities, without the prior written
consent of the Representatives, which shall not be unreasonably withheld.
(m) The Offerors will not, without the prior written consent of the
Representatives, which shall not be unreasonably withheld, incur any material
liability or obligation, direct or contingent, or enter into any material
transaction, other than in the ordinary course of business, except as described
in or contemplated by the Registration Statement and the Prospectus.
(n) Neither of the Offerors shall enter into any contractual
agreement with respect to the distribution of the Preferred Securities except
for the arrangements with the Underwriters pursuant hereto.
(o) Each of the Offerors will use its best efforts to comply or cause
to be complied with the conditions to the Underwriters' obligations set forth in
Section 8 hereof.
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Section 7. Expenses.
---------
(a) If the Underwriters purchase the Preferred Securities in
accordance with the terms of this Agreement, the Company shall pay all costs,
expenses and fees incident to the performance of its obligations and those of
the Trust under this Agreement including the costs and expenses associated with
(i) the printing and filing of the Registration Statement as originally filed
and any amendments and exhibits thereto; (ii) the filing fee of the NASD and
expenses relating to any review of the offering and listing of the Preferred
Securities on the NNM; (iii) all costs and expenses incurred in connection with
the preparation, issuance and delivery of the Preferred Securities to the
Underwriters; (iv) the fees and disbursements of the Trust's and the Company's
counsel and accountants; (v) all costs and expenses in connection with the
qualification of the Preferred Securities under state securities laws in
accordance with the provisions of Section 6(c), including filing fees and the
reasonable fees and disbursements of counsel to the Underwriters in connection
therewith and in connection with the preparation of the preliminary and final
Blue Sky memoranda; (vi) the printing and delivery of copies of the preliminary
and final Blue Sky memoranda; and (vii) the fees and expenses of the Property
Trustee, the Delaware Trustee, the Indenture Trustee, and the Guarantee Trustee,
and any agent of the Property Trustee, the Delaware Trustee, the Indenture
Trustee, and the Guarantee Trustee, and the fees and disbursements of Trustees'
counsel, in connection with the Trust Agreement and the issuance and delivery of
the Preferred Securities.
(b) If the purchase of the Preferred Securities as herein
contemplated is not consummated for any reason other than the Underwriters'
default under this Agreement is not consummated or by reason of Section 11(a)
hereof, the Company shall pay all reasonable costs, expenses and fees incident
to the performance of its obligations and those of the Trust under this
Agreement and shall reimburse the several Underwriters for their reasonable out-
of-pocket expenses (including but not limited to reasonable counsel fees and
disbursements) in connection with any investigation made by them, and any
preparation made by them in respect of marketing of the Preferred Securities or
in contemplation of the performance by them of their obligations hereunder,
provided, however, that in no event shall the amount of such reimbursement
exceed $35,000 in the aggregate.
Section 8. Conditions of the Underwriters' Obligations. The
--------------------------------------------
obligations. of each Underwriter to purchase and pay for the number of Preferred
Securities set forth opposite the name of such Underwriter in Schedule I on the
Closing Date are subject to the continuing accuracy of the representations and
warranties of the Offerors contained herein as of the date hereof, as of the
Closing Date as if they had been made on and as of the Closing Date; the
accuracy on and as of the Closing Date of the statements of officers or trustees
of the Offerors, as the case may be, made pursuant to the provisions hereof; the
performance by the Offerors, on and as of the Closing Date of their respective
covenants and agreements hereunder and the following additional conditions
(which may, in the absolute and sole discretion of the Representatives, be
waived, in whole or in part):
(a) The Registration Statement shall have been declared
effective, and the Prospectus (containing the information omitted pursuant to
Rule 430(A)) shall have been filed
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with the Commission not later than the Commission's close of business on the
second business day following the date hereof or such later time and date to
which the Representatives shall have consented. No stop order suspending the
effectiveness of the Registration Statement or any post-effective amendment
thereto or any order preventing or suspending the use of any Prospectus or any
amendment or supplement thereto shall have been issued, and no proceedings for
that purpose shall have been instituted or pending or, to the best knowledge of
the Offerors or the Representatives, shall be contemplated or threatened by the
Commission. The Offerors shall have complied in all material respects with any
request of the Commission for additional information (to be included in the
Registration Statement or the Prospectus or otherwise). No stop orders
suspending the sale of the Preferred Securities in any jurisdiction referred to
in Section 6(c) shall have been issued, and no proceedings for that purpose
shall have been instituted or shall be pending or, to the best knowledge of the
Offerors or the Representatives, shall be contemplated or threatened by the
officials of any such jurisdiction.
(b) The Representatives shall not have advised the Offerors in
writing that the Registration Statement contains an untrue statement of fact
which the Representatives reasonably believe is material, or omits to state a
fact which the Representatives reasonably believe is material and is required to
be stated therein or is necessary to make the statements therein not misleading,
or that the Prospectus, or any supplement thereto, contains an untrue statement
of fact which the Representatives reasonably believe is material, or omits to
state a fact which the Representatives reasonably believe is material and is
required to be stated therein or is necessary to make the statements therein not
misleading.
(c) On or prior to the Closing Date, the Representatives shall
have received from counsel to the Underwriter, such opinion or opinions with
respect to the issuance and sale of the Common Securities, the Preferred
Securities and the Subordinated Debentures, the Registration Statement and the
Prospectus and such other related matters as the Representatives reasonably may
request, and such counsel shall have received such documents and other
information as it requests to enable it to pass upon such matters.
(d) On the Closing Date, the Representatives shall receive:
(i) The favorable opinion, dated as of the Closing Date,
of Muldoon, Murphy & Faucette LLP, counsel to the Company, substantially in the
form and substance of Exhibit A attached hereto. In rendering such opinion,
---------
counsel may state that it is passing only on matters of Maryland and United
States federal laws. In rendering such opinion, counsel may rely upon an opinion
or opinions, each dated the Closing Date, of other counsel retained by it, the
Company or the Trust as to laws of any jurisdiction other than the United States
or the State of Maryland, provided that (A) such reliance is expressly
authorized by each opinion so relied upon and a copy of each such opinion is
delivered to the Underwriters and (B) counsel to the Company shall state in its
opinion that it is justified in relying thereon. Insofar as such opinions
involve factual matters, such counsel may rely, to the extent such counsel deems
proper, upon certificates of officers and trustees of the Company, the
Subsidiaries and the Trust, as the case may be, and certificates of public
officials, provided that copies of all such certificates shall be attached to or
referenced in the opinion.
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(ii) The favorable opinion, dated the Closing Date, of White &
Case, counsel to Bankers Trust (Delaware), as the Property Trustee, the
Debenture Trustee and the Guarantor Trustee, substantially in the form and
substance of Exhibit B attached hereto.
---------
(iii) The favorable opinion, dated the Closing Date, of Richards,
Layton & Finger, P.A., special Delaware counsel to the Company and the Trust,
substantially in the form and substance of Exhibit C attached hereto.
---------
In rendering the opinions contemplated by clauses (ii) and (iii) above,
counsel may rely upon an opinion or opinions, each dated the Closing Date, of
other counsel retained by it or the Company as to laws of any jurisdiction other
than the United States or the State of Delaware, provided that (A) such reliance
is expressly authorized by each opinion so relied upon and a copy of each such
opinion is delivered to the Representatives and (B) counsel shall state in its
opinion that it believes that it is justified in relying thereon. Insofar as
such opinions involve factual matters, such counsel may rely, to the extent such
counsel deems proper, upon certificates of officers and trustees of the Company,
the Subsidiaries and the Trust, as the case may be, and certificates of public
officials, provided that copies of all such opinions shall be attached to or
referenced in the opinion.
(e) On or prior to the Closing Date, counsel to the Underwriters
shall have been furnished such documents, certificates and opinions as they may
reasonably request in order to evidence the accuracy, completeness or
satisfaction of any of the representations or warranties of the Company or the
Trust or conditions herein contained.
(f) On the date hereof, the Representatives shall have received
a "comfort" letter from PricewaterhouseCoopers, LLP dated as of the date of this
Agreement, in form and substance satisfactory to the Representatives, to the
effect that (i) they are independent public accountants as required by the
Securities Act of 1933, as amended ("Securities Act") and the applicable rules
and regulations thereunder; (ii) it is their opinion that the financial
statements included or incorporated by reference in the Registration Statement
comply as to form in all material respects with the applicable accounting
requirements of the Securities Act and the Exchange Act and the applicable rules
and regulations thereunder; (iii) based upon consultations with officers and
other employees of the Company responsible for financial and accounting matters
and other specified procedures and inquires, nothing has come to their attention
that caused them to believe that unaudited financial statements included in the
Registration Statement do not comply as to form in all material respects with
the applicable accounting requirements of Rule 11-02 of Regulation S-X; (iv)
based upon limited procedures set forth in detail in such letter, nothing has
come to their attention which causes them to believe that during the period from
December 31, 1999 to a specified date not more than five days prior to the date
of this Agreement, there has been any decrease in the capital stock or increase
in long-term debt of the Company or its subsidiaries or any decrease in
consolidated total assets of the Company and its subsidiaries as compared with
the amounts shown in the December 31, 1999 consolidated balance sheet
incorporated by reference in the Registration Statement, or any decrease, as
compared with the corresponding period in the preceding year, in net income or
net interest income of the Company and its subsidiaries on a consolidated basis,
except in each case as set forth or contemplated in the Registration Statement;
(v) they have read the Registration
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Statement and certain dollar amounts, percentages and other financial
information specified by the Underwriters which is included or incorporated by
reference in the Registration Statement and have performed the procedures set
forth in detail in such letter and have found such amounts, percentages or other
financial information to be in agreement with the relevant accounting and
financial records of the Company and the Subsidiaries; and (vi) statements as to
such other matters incidental to the transactions contemplated hereby as the
Underwriters may reasonably request.
(g) On the Closing Date, the Representatives shall have received from
PricewaterhouseCoopers, LLP a letter, dated as of the such date, to the effect
that they reaffirm the statements made in the letter furnished pursuant to
Section 8(f).
(h) On the Closing Date, the Underwriters shall have received a
certificate, dated such date, of the Chief Executive Officer and Chief Financial
Officer of the Company to the effect that each such person has carefully
examined the Registration Statement, to the best knowledge of each such person,
and the Prospectus and any amendments or supplements thereto and this Agreement,
and that:
(i) The representations and warranties of the Company in this
Agreement are true and correct in all material respects, as if made on and as of
the Closing Date, and the Company has complied with all agreements and covenants
and satisfied, in all material respects, all conditions contained in this
Agreement on its part to be performed or satisfied at or prior to the Closing
Date;
(ii) No stop order suspending the effectiveness of the
Registration Statement or post-effective amendment thereto or suspending the use
of any Prospectus or amendment or supplement thereto or the qualification of the
Preferred Securities for offering or sale has been issued, and no proceedings
for that purpose have been instituted or are pending or, to the best knowledge
of each such person, are contemplated or threatened under the Securities Act,
and any and all filings required by Rule 424, Rule 430A and Rule 462(b) have
been timely made; and
(iii) The Registration Statement and Prospectus and, if any, each
amendment and each supplement thereto, contain all statements and information
required to materially comply with the Securities Act or the Securities Act
Rules and Regulations to be included therein, and neither the Registration
Statement or the Prospectus nor any amendment or supplement thereto includes any
untrue statement of a material fact or omits to state any material fact required
to be stated therein or necessary to make the statements therein not materially
misleading in the light of the circumstances under which they were made.
References to the Registration Statement and the Prospectus in
this Section 8(h) are to such documents as amended and supplemented at the date
of the certificate required hereby.
(j) On the Closing Date, the Underwriters shall have received a
certificate, dated the Closing Date, of the Administrators to the effect that
each such Administrator has
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carefully examined the Registration Statement and the Prospectus and any
amendments or supplements thereto and this Agreement, and that, to the best
knowledge of each person:
(i) the representations and warranties of the Trust in
this Agreement are true and correct in all material respects, as if made on and
as of the Closing Date, and the Trust has complied with all agreements and
covenants and satisfied, in all material respects, all conditions contained in
this Agreement on its part to be performed or satisfied at or prior to the
Closing Date;
(ii) no stop order suspending the effectiveness of the
Registration Statement or any post-effective amendment thereto or suspending the
use of any Prospectus in any amendment or supplement thereto, or the
qualification of the Preferred Securities for offering or sale has been issued
has been issued, and no proceedings for that purpose have been instituted or are
pending or, to the best knowledge of each such person, are contemplated or
threatened under the Securities Act, and any and all filings required by Rule
424, Rule 430A and Rule 462(b) have been timely made; and
(iii) the Registration Statement and Prospectus and, if
any, each amendment and supplement thereto, contain all statements and
information required to materially comply with the Securities Act and the Rules
and the Securities Act Regulations to be included therein, and neither the
Registration Statement or the Prospectus nor any amendment or supplement thereto
includes any untrue statement of a material fact or omits to state any material
fact required to be stated therein or necessary to make the statements therein
not materially misleading in the light of the circumstances under which they
were made.
References to the Registration Statement and the Prospectus in
this Section 8(j) are to such documents as amended and supplemented at the date
of the certificate required hereby.
(k) Subsequent to the respective dates as of which information
is given in the Registration Statement and the Prospectus up to and including
the Closing Date, there has not been any material change in the business or
properties of the Company, any of the Subsidiaries or the Trust which change,
taken as a whole, makes it reasonably impractical or inadvisable in the
Representatives' reasonable judgment to proceed with the public offering or the
delivery of the Preferred Securities as contemplated by the Prospectus.
(l) Prior to the Closing Date, the Preferred Securities shall
have been duly authorized for listing on the NNM.
(m) Prior to the Closing Date, the Preferred Securities shall
have been qualified under the securities or Blue Sky laws of such jurisdictions
as the Representatives shall have designated or an exemption therefrom shall be
available;
(n) Prior to the Closing Date, the NASD, upon review of the
terms of the public offering of the Preferred Securities contemplated hereby,
shall have indicated that it has
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no objection to the underwriting arrangements pertaining to the sale of the
Preferred Securities and the Underwriters' participation in the sale of the
Preferred Securities as so contemplated.
All opinions, certificates, letters and documents to be furnished
by the Offerors will comply with the provisions hereof only if they are
reasonably satisfactory in all material respects to the Representatives. The
Offerors shall furnish the Underwriters with manually signed or conformed copies
of such opinions, certificates, letters and documents in such quantities as the
Representatives reasonably request. The certificates delivered under this
Section 8 shall constitute representations, warranties and agreements of the
Offerors as to all matters set forth therein as fully and effectively as if such
matters had been set forth in Section 2 of this Agreement.
If any condition to the Underwriters' obligations hereunder to be
satisfied prior to or at the Closing Date is not so satisfied, in all material
respects, or waived by the Representatives, in their discretion, this Agreement,
at the Representatives' election, will terminate upon notification to the
Offerors without liability on the part of any Underwriter (including the
Representatives), or the Offerors, except for the expenses to be paid by the
Company pursuant to Section 7 hereof and except to the extent provided in
Section 9 hereof.
Section 9. Indemnification and Contribution.
---------------------------------
(a) The Offerors agree, jointly and severally, to indemnify and
hold harmless each Underwriter, and its officers, directors, partners, employees
and agents and each person, if any, who controls such Underwriter within the
meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act,
against any and all losses, claims, damages, liabilities or expenses whatsoever
(which shall include, for all purposes of this Section 9, but not be limited to,
attorneys' fees and any and all fees and expenses whatsoever reasonably incurred
in investigating, preparing or defending against any litigation, commenced or
threatened, or any claim whatsoever and any and all amounts paid in settlement),
joint or several (and actions in respect thereof), to which such Underwriter,
officer, partner, employee, agent, counsel or controlling person may become
subject, under the Securities Act or other federal or state statutory law or
regulation, at common law or otherwise, insofar as such losses, claims, damages,
liabilities, expenses or actions arise out of or are based upon any untrue
statement or alleged untrue statement of any material fact contained in the
Registration Statement or the Prospectus or any Preliminary Prospectus, or any
Blue Sky application or other document executed by the Offerors specifically for
the purposes of qualifying, or based upon written information furnished by the
Offerors in any state or other jurisdiction in order to qualify, any or all of
the Preferred Securities under the securities or Blue Sky laws thereof (any such
application, document or information being hereinafter called a "Blue Sky
Application"), or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, and will reimburse, as
incurred, expenses of such Underwriter, partner, employee, agent or controlling
person in connection with investigating, defending or appearing as a third party
witness in connection with any such loss, claim, damage, liability, expense or
action; provided, however, that neither of the Offerors will be liable in any
such case to the extent that any such loss, claim, damage, liability, expense or
action arises out of or is based upon any untrue statement or alleged untrue
statement or omission
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<PAGE>
or alleged omission made in any of such documents in reliance upon and in
conformity with information furnished in writing to the Offerors on behalf of
such Underwriter through the Representatives expressly for use therein (as
identified in Section 9(b) hereof), or provided, that such indemnity with
respect to any Preliminary Prospectus shall not inure to the benefit of any
Underwriter (or to the benefit of any person controlling such Underwriter) from
whom the person asserting any such loss, claim, damage, liability or action
purchased Preferred Securities which are the subject thereof to the extent that
any such loss, claim, damage, liability or action (i) results from the fact that
such Underwriter failed to send or give a copy of the Prospectus to such person
at or prior to the confirmation of the sale of such Preferred Securities to such
person in any case where such delivery is required by the Securities Act or (ii)
arises out of or is based upon an untrue statement or omission of a material
fact contained in such Preliminary Prospectus that was corrected in the
Prospectus, unless such failure resulted from non-compliance by the Offerors
with Section 6(d) hereof. The indemnity agreement in this Section 9(a) shall be
in addition to any liability which the Offerors may otherwise have.
Notwithstanding the foregoing, the Offerors shall not be liable for any losses,
claims, damages, liabilities or expenses that a court having jurisdiction shall
have determined such loss, claim, damage, liability or expenses resulted from
any of the Underwriters' negligence or willful misconduct.
(b) Each of the Underwriters agrees severally, but not jointly,
to indemnify and hold harmless the Offerors, each of their respective directors
or trustees, as the case may be, each of their respective officers or
Administrators, as the case may be, who has signed the Registration Statement,
their respective employees and agents and each person, if any, who controls
either of the Offerors within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act against any and all losses, claims, damages,
liabilities or expenses whatsoever (which shall include, for all purposes of
this Section 9, but not be limited to, attorneys' fees and any and all fees and
expenses whatsoever incurred in investigating, preparing or defending against
any litigation, commenced or threatened, or any claim whatsoever and any and all
amounts paid in settlement), and actions in respect thereof to which the
Offerors or any such director, trustee, Administrator, officer, employee, agent
or controlling person may become subject, under the Securities Act or other
federal or state statutory law or regulation, at common law or otherwise,
insofar as such losses, claims, damages, liabilities, expenses or actions arise
out of or are based upon any untrue statement or alleged untrue statement of any
material fact contained in the Registration Statement or the Prospectus or any
Preliminary Prospectus, or in any Blue Sky Application, or arise out of or are
based upon the omission or the alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements not
misleading, in each case to the extent, but only to the extent, that such untrue
statement or alleged untrue statement or omission or alleged omission was made
in reliance upon and in conformity with information furnished by the
Underwriters through the Representatives to the Offerors expressly for use
therein. The Company and the Trust acknowledge that the statements with respect
to the public offering of the Preferred Securities set forth under the caption
"Underwriting" and the stabilization legend in the Prospectus have been
furnished by the Underwriters to the Offerors expressly for use therein and
constitute the only information furnished in writing by or on behalf of the
Underwriters for inclusion in the Prospectus. The indemnity agreement contained
in this Section 9(b) shall be in addition to any liability which the
Underwriters may otherwise have. Each Underwriter will severally reimburse any
legal fees or other expenses reasonably incurred by the Offerors, or any such
director, officer, or controlling
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person in connection with investigating or defending any such claims or
threatened claim, and from any and all claims or threatened claims resulting
from failure of such Underwriter to deliver a copy of the Prospectus, if the
person asserting such claim or threatened claim purchased Preferred Securities
from such Underwriter and a copy of the Prospectus (as then amended if the
Offerors shall have amended the Prospectus) was not sent or given by or on
behalf of such Underwriter to such person, if required by law so to have been
delivered, at or prior to the written confirmation of the sale of the Preferred
Securities to such person, and if the Prospectus (as so amended) would have
cured the defect giving rise to such Claim (unless such failure was due to a
failure by the Company and the Trust to provide sufficient copies of the
Prospectuses (as so amended) to each Underwriter).
(c) Promptly after receipt by an indemnified party under this
Section 9 of notice of the commencement of any action, such indemnified party
will, if a claim in respect thereof is to be made against one or more
indemnifying parties under this Section 9, notify such indemnifying party or
parties of the commencement thereof; but the failure to so notify the
indemnifying party shall not relieve it from any liability which it may have to
any indemnified party otherwise than under Section 9(a) or Section 9(b) to the
extent that the indemnifying party was not actually prejudiced by such omission.
In case any such action is brought against an indemnified party and it notifies
an indemnifying party or parties of the commencement thereof, the indemnifying
party or parties against which a claim is to be made will be entitled to
participate therein and, to the extent that it or they may wish, to assume the
defense thereof, with counsel reasonably satisfactory to such indemnified party;
provided, however, that if the defendants in any such action include both the
indemnified party and the indemnifying party and the indemnified party has
reasonably concluded that there may be legal defenses available to it and/or
other indemnified parties which are different from or additional to those
available to the indemnifying party, the indemnified party or parties shall have
the right to select separate counsel to assume such legal defenses and otherwise
to participate in the defense of such action on behalf of such indemnified party
or parties. Upon receipt of notice from the indemnifying party to such
indemnified party of its election so to assume the defense of such action and
approval by the indemnified party of counsel which approval shall not be
unreasonably denied or delayed, the indemnifying party will not be liable to
such indemnified party under this Section 9 for any legal or other expenses
(other than the reasonable costs of investigation) subsequently incurred by such
indemnified party in connection with the defense thereof unless (i) the
indemnified party has employed such counsel in connection with the assumption of
such different or additional legal defenses in accordance with the proviso to
the immediately preceding sentence, (ii) the indemnifying party has not employed
counsel reasonably satisfactory to the indemnified party to represent the
indemnified party within a reasonable time after notice of commencement of the
action, or (iii) the indemnifying party has authorized in writing the employment
of counsel for the indemnified party at the expense of the indemnifying party.
It is understood that the indemnifying party shall not, in connection with any
proceeding or related proceedings in the same jurisdiction, be liable for the
reasonable fees and expenses for more than one separate firm (and appropriate
local counsel) for all such indemnified parties, except to the extent such
counsel advises the indemnifying party of a conflict of interest whereby the
indemnifying party shall be liable for the reasonable fees and expenses for
additional counsel for all such indemnified parties to remedy the conflict of
interest. The indemnifying party shall not be liable for any settlement or any
proceeding effected without its written consent but if settled with such consent
or if there be
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a final judgment for the plaintiff, the indemnifying party agrees to indemnify
the indemnified party from and against any loss or liability by reason of such
settlement or judgment.
(d) If the indemnification provided for in this Section 9 is
unavailable or insufficient to hold harmless an indemnified party under Section
9(a) or Section 9(b) above in respect of any losses, claims, damages,
liabilities or expenses (or actions in respect thereof) referred to therein,
then each indemnifying party shall contribute to the amount paid or payable by
such indemnified party as a result of such losses, claims, damages, liabilities
or expenses (or actions in respect thereof) (i) in such proportion as is
appropriate to reflect the relative benefits received by each of the
contributing parties, on the one hand, and the party to be indemnified, on the
other hand, from the offering of the Preferred Securities or (ii) if the
allocation provided by clause (i) above is not permitted by applicable law, in
such proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) above but also the relative fault of each of the
contributing parties, on the one hand, and the party to be indemnified, on the
other hand in connection with the statements or omissions that resulted in such
losses, claims, damages or liabilities, as well as any other relevant equitable
considerations. In any case where the Company and/or the Trust is a contributing
party and the Underwriters are the indemnified party, the relative benefits
received by the Company and/or the Trust on the one hand, and the Underwriters,
on the other hand, shall be deemed to be in the same proportion as the total net
proceeds (before deducting expenses) from the initial offering and issuance of
the Preferred Securities bear to the total underwriting compensation received by
the Underwriters hereunder, in each case as set forth in the table on the cover
page of the Prospectus. Relative fault 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 and/or the Trust or the Underwriters and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such untrue statement or omission. The amount paid or payable
by an indemnified party as a result of the losses, claims, damages, liabilities
or expenses (or actions in respect thereof) referred to above in this Section
9(d) shall be deemed to include any legal or other expenses reasonably incurred
by such indemnified party in connection with investigating or defending any such
action or claim. Notwithstanding the provisions of this Section 9(d), the
Underwriters shall not be required to contribute any amount in excess of the
underwriting discounts applicable to the Preferred Securities purchased by the
Underwriters hereunder. The Underwriters' obligations to contribute pursuant to
this Section 9(d) are several in proportion to their respective underwriting
obligations, and not joint. No person guilty of fraudulent misrepresentations
(within the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. For purposes of this Section 9(d), (i) each person, if any,
who controls an Underwriter within the meaning of Section 15 of the Act or
Section 20 of the Exchange Act shall have the same rights to contribution as
such Underwriter and (ii) each director of the Company, each trustee of the
Trust, each officer of the Company or trustee of the Trust who has signed the
Registration Statement, and each person, if any, who controls the Company or the
Trust within the meaning of Section 15 of the Act or Section 20 of the Exchange
Act shall have the same rights to contribution as the Company or the Trust, as
the case may be. Any party entitled to contribution will, promptly after receipt
of notice of commencement of any action, suit or proceeding against such party
in respect to which claim for contribution may be made against another party or
parties under this Section 9(d), notify such
-28-
<PAGE>
party or parties from whom contribution may be sought, but the omission so to
notify such party or parties shall not relieve the party or parties from whom
contribution may be sought from any other obligation (x) it or they may have
hereunder or otherwise than under this Section 9(d) or (y) to the extent that
such party or parties were not actually prejudiced by such omission. The
contribution agreement set forth above shall be in addition to any liabilities
which any indemnifying party may otherwise have.
Section 10. Representations, Etc. to Survive Delivery. The
------------------------------------------
representations, warranties, agreements, covenants, indemnities and statements
contained shall remain in full force and effect, regardless of (a) any
termination of this Agreement; (b) any investigation made by or on behalf of the
Underwriters or by or on behalf of any person controlling the Underwriters, or
by or on behalf of the Offerors; and (c) delivery of and payment for the
Preferred Securities.
Section 11. Effective Date and Termination.
-------------------------------
(a) This Agreement shall become effective at 9:00 a.m.,
Washington, DC time, on the first business day following the date hereof, or at
such earlier time after the Registration Statement becomes effective as the
Representatives, in their sole discretion, shall release the Preferred
Securities for the sale to the public, unless prior to such time the
Representatives shall have received written notice from the Company on behalf of
itself and the Trust that they elect that this Agreement shall not become
effective, or the Representatives shall have given written notice to the
Offerors that the Representatives on behalf of the Underwriters elects that this
Agreement shall not become effective; provided, however, that the provisions of
this Section 11 and of Section 7 and Section 9 hereof shall at all times be
effective. For purposes of this Section 1l(a), the Preferred Securities to be
purchased hereunder shall be deemed to have been so released upon the earlier of
notification by the Representatives to securities dealers releasing such
Preferred Securities for offering or the release by the Representatives for
publication of the first newspaper advertisement which is subsequently published
relating to the Preferred Securities.
(b) This Agreement (except for the provisions of Sections 7 and
9 hereof) may be terminated by the Representatives by written notice to the
Company and the Trust in the event that either of the Offerors has failed to
comply in any material respect with any of the provisions of this Agreement
required on its part to be complied with at or prior to the Closing Date, or if
any of the representations or warranties of the Offerors are not materially
accurate in any respect or if the covenants, agreements or conditions of, or
applicable to, the Offerors herein contained have not been complied with in any
material respect or satisfied within the time specified or the Closing Date,
unless waived by the Representatives, as the case may be, or if prior to the
Closing Date:
(i) the Company or the Subsidiaries, taken as a whole, or
the Trust shall have sustained a loss by strike, fire, flood, accident or other
calamity of such a character, in the reasonable judgment of the Representatives,
as to interfere materially with the conduct of the business and operations of
the Company, the Subsidiaries or the Trust, as the case may be, regardless of
whether or not such loss was insured;
-29-
<PAGE>
(ii) trading in the securities of the Company or in
securities generally on the New York Stock Exchange or the NNM shall have been
suspended or a material limitation on such trading shall have been imposed or
minimum or maximum prices shall have been established on either such exchange or
market;
(iii) a banking moratorium shall have been declared by
Maryland, Delaware or United States authorities;
(iv) there shall have been an outbreak or escalation of
hostilities between the United States and any foreign power or an outbreak or
escalation of any other insurrection or armed conflict involving the United
States which, in each Representatives' reasonable judgment, will materially
affect the general securities market or make it inadvisable, in their sole,
reasonable judgment, to proceed with the sale of and payment for the Preferred
Securities;
(v) there shall have been commenced any action, suit or
proceeding at law or in equity against the Company, the Bank Subsidiary or the
Trust, or by any federal, state or other commission, board or agency, wherein,
in the reasonable judgment of the Representatives, any unfavorable decision
would have a Material Adverse Effect on the Company or the Trust;
(vi) there shall have occurred the enactment, publication,
decree or other promulgation of any federal or state statute, regulation, rule
or order of any court or other governmental authority that in the reasonable
judgment of the Representatives has or will have a Material Adverse Effect on
the Company or the Trust;
(vii) there shall have been taken any action by any
federal, state or local government or agency in respect of its monetary or
fiscal affairs that in the reasonable judgment of the Representatives has a
Material Adverse Effect or will materially adverse affect the financial markets
in the United States; or
(viii) the Company's independent public accountants shall
have imposed qualifications in certifying to, or its attorneys in opining upon,
material items including, without limitation, information in the footnotes to
the financial statements or matters incident to the issuance and sale of the
Common Securities, the Preferred Securities or the Subordinated Debentures,
corporate proceedings or other subjects; or
(ix) there shall have been a material adverse change in
(A) general economic, political or financial conditions or (B) the present or
prospective business or condition (financial or other) of the Company, the
Subsidiaries or the Trust, as the case may be that, in each case, in the
reasonable judgment of the Representatives, makes it impracticable or
inadvisable to make or consummate the public offering, sale or delivery of the
Preferred Securities on the terms and in the manner contemplated in the
Prospectus and the Registration Statement.
-30-
<PAGE>
(c) Termination of this Agreement shall be without liability of any
party to any other party other than as provided in Sections 7 and 9 hereof.
Section 12. Substitution of Underwriters. If one or more of the
-----------------------------
Underwriters shall fail or refuse (otherwise than for a reason sufficient to
justify the termination of this Agreement under the provisions of Section 8 or
11 hereof) to purchase and pay for the number of Preferred Securities agreed to
be purchased by such Underwriter or Underwriters (pursuant to Section 3 hereof)
upon tender of such number of Preferred Securities in accordance with the terms
hereof, and the number of such Preferred Securities shall not exceed ten percent
(10%) of the Preferred Securities required to be purchased on the Closing Date,
then, each of the non-defaulting Underwriters shall purchase and pay for (in
addition to the number of such Preferred Securities which it has severally
agreed to purchase hereunder) its proportionate share (based on the monetary
obligations of the several Underwriters hereunder on account of the purchase of
Preferred Securities, excluding the Preferred Securities allocable to the
defaulting Underwriter or Underwriters) which the defaulting Underwriter or
Underwriters shall have so failed or refused to purchase on such Closing Date.
In such case, the Representative, on behalf the Underwriters, shall have the
right to postpone the Closing Date to a date not exceeding seven (7) full
business days after the date originally fixed as such Closing Date pursuant to
the terms hereof in order that any necessary changes in the Registration
Statement, the Prospectus or any other documents or arrangements may be made.
If one or more of the Underwriters shall fail or refuse (otherwise
than for a reason sufficient to justify the termination of this Agreement under
the provisions of Section 8 or 11 hereof) to purchase and pay for the number of
Preferred Securities agreed to be purchased by such Underwriter or Underwriters
upon tender to the Representatives on behalf thereof of such Preferred
Securities in accordance with the terms hereof and the number of such Preferred
Securities shall equal or exceed ten percent (10%) of the Preferred Securities
required to be purchased by all the Underwriters on the Closing Date (unless
within forty-eight (48) hours after such default arrangements to the
satisfaction of the Representatives shall have been made for the purchase of the
defaulted Preferred Securities by an Underwriter or Underwriters) and subject to
the provisions of Section 1l(b) hereof, this Agreement will terminate without
liability on the part of any non-defaulting Underwriter or on the part of the
Company or the Trust except as otherwise provided in Sections 7 and 9 hereof. As
used in this Agreement, the term "Underwriter" includes any person substituted
for an Underwriter under this Section 12. Nothing in this Section 12, and no
action taken hereunder, shall relieve any defaulting Underwriter from liability
in respect of any default of such Underwriter under this Agreement.
Section 13. Default by the Company or the Trust. If the Trust shall fail
------------------------------------
at the Closing Date to sell and deliver the number of Preferred Securities which
it is obligated to sell hereunder or the Company fails to deliver the number of
Subordinated Debentures required to be delivered pursuant to the Trust
Agreement, then this Agreement shall terminate without any liability on the part
of any non-defaulting party. Nothing in this Section 13 shall relieve the Trust
or the Company so defaulting from liability, if any, in respect of such default.
Section 14. Notices. All communications hereunder shall be in writing
--------
and if sent to the Representatives shall be mailed or delivered or sent by
facsimile transmission and confirmed
-31-
<PAGE>
by letter to Legg Mason Wood Walker, Incorporated, 1747 Pennsylvania Avenue,
N.W., Washington, D.C. 20006, attention: _______________ (facsimile number:
____________), and to Ferris, Baker Watts, Incorporated at 1720 Eye Street, NW,
Washington, DC 20006, Attention: Michael J. Coiro (facsimile number: (410) 659-
4632), with a copy to Gordon, Feinblatt, Rothman, Hoffberger & Hollander, LLC,
The Garrett Building, 233 East Redwood Street, Baltimore, MD 21202, attention:
Abba David Poliakoff (facsimile number: (410) 576-4246), or, if sent to the
Company or the Trust, shall be mailed or delivered or sent by facsimile
transmission and confirmed by letter to the Company at 114 East Lexington
Street, Baltimore, Maryland 21202, Attention: Robert L. Davis, Esquire
(facsimile number: (301) 334-2318), with a copy to Marc P. Levy, Esquire,
Muldoon, Murphy & Faucette LLP, 5101 Wisconsin Avenue, N.W., Washington, D.C.
20016 (facsimile number: (202) 686-8622).
Section 15. Successors. This Agreement shall inure to the benefit of and
----------
be binding upon the Company, the Trust and each Underwriter and the respective
successors and legal Representatives thereof, and nothing expressed or mentioned
in this Agreement is intended or shall be construed to give any other person any
legal or equitable right, remedy or claim under or in respect of this Agreement,
or any provisions herein contained, this Agreement and all conditions and
provisions hereof being intended to be and being for the sole and exclusive
benefit of such persons and for the benefit of no other person, except that the
representations, warranties, indemnities and contribution agreements of the
Company and the Trust contained in this Agreement shall also be for the benefit
of the officers, directors, partners, employees and agents of each Underwriter
and any person or persons, if any, who control any Underwriter within the
meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act,
and except that the Underwriters' indemnity and contribution agreements shall
also be for the benefit of the directors of the Company, the trustees of the
Trust, the officers of the Company who have signed the Registration Statement on
behalf of the Company or in the Company's role as Depositor under the Trust
Agreement, the Administrators of the Trust, their respective employees and
agents, and any person or persons, if any, who control the Company or the Trust
within the meaning of Section 15 of the Securities Act or Section 20 of the
Exchange Act. No purchaser of Preferred Securities from the Underwriters will be
deemed a successor because of such purchase.
Section 16. Applicable Law; Jurisdiction. This Agreement shall be
-----------------------------
governed by and construed in accordance with the laws of the State of Maryland,
without giving effect to the choice of law or conflict of law principles
thereof. Each party hereto consents to the jurisdiction of each court in which
any action is commenced seeking indemnity or contribution pursuant to Section 9
above and agrees to accept, either directly or through an agent, service of
process of each such court.
Section 17. Counterparts. This Agreement may be executed in any number of
------------
counterparts, each of which shall be deemed to be an original, and all of which
together shall be deemed to be one and the same instrument.
Section 18. Amendment. This Agreement may be amended at any time, but
---------
only by a writing signed by the parties hereto.
-32-
<PAGE>
* * * * * * *
If the foregoing is in accordance with your understanding, please sign and
return to us three (3) counterparts hereof, and upon your acceptance hereof, on
behalf of each of the Underwriters, this letter and such acceptance hereof shall
constitute a binding agreement among each of the Underwriters, the Company and
the Trust in accordance with the terms hereof.
-33-
<PAGE>
Very truly yours,
PROVIDENT TRUST II
By: PROVIDENT BANKSHARES
CORPORATION
Depositor
By ________________________________
Name:
Title:
PROVIDENT BANKSHARES
CORPORATION
By ________________________________
Name:
Title:
Accepted as of the date hereof
LEGG MASON WOOD WALKER, INCORPORATED
1747 Pennsylvania Avenue, N.W.
Washington, D.C. 20006
By: LEGG MASON WOOD WALKER, INCORPORATED
as Representative of the Underwriters
By ________________________________
Name:
Title:
FERRIS, BAKER WATTS, INCORPORATED
1720 Eye Street, N.W.
Washington, D.C. 20006
By: FERRIS, BAKER WATTS, INCORPORATED
as Representative of the Underwriters
By ________________________________
Name:
Title:
-34-
<PAGE>
SCHEDULE I
NUMBER OF PREFERRED SECURITIES TO BE
PURCHASED BY EACH UNDERWRITER
<TABLE>
<CAPTION>
Number of Purchased Securities
to be Purchased from the Trust
Name of Underwriter Percentage (Liquidation Amount $25)
- ------------------------------------------------------------------------------------------------
<S> <C> <C>
Legg Mason Wood Walker, ___% ____________
Incorporated
Ferris, Baker Watts, Incorporated ___% ____________
Total ____________
</TABLE>
<PAGE>
Exhibit A to
Underwriting Agreement
The opinion of counsel to the Company to be delivered pursuant to Section
8(d)(i) of the Underwriting Agreement shall be substantially to the effect that:
(1) The Company is incorporated and is validly existing as a
corporation in good standing under the laws of Maryland and is duly qualified as
a foreign corporation for the transaction of business and is in good standing
under the laws of each other jurisdiction in which it owns or leases properties
or conducts any business so as to require such qualification (except to the
extent the lack of such qualification will not result in a Material Adverse
Effect to the Company). The Company has all power and authority necessary to own
or hold its properties and assets and to conduct the business in which it is
engaged as described in or contemplated by the Prospectus (except to the extent
the lack of such power and authority will not result in a Material Adverse
Effect to the Company). The Company is duly registered as a bank holding company
under the Bank Holding Company Act of 1956, as amended.
(2) The Bank Subsidiary is a state bank organized, validly existing
and in good standing under the laws of Maryland and is duly qualified as a
foreign corporation for the transaction of business and is in good standing
under the laws of each other jurisdiction in which it owns or leases properties
or conducts any business so as to require such qualification (except to the
extent the lack of such qualification will not result in a Material Adverse
Effect to the Company). The Bank Subsidiary has all power and authority
necessary to own or hold its properties and assets and to conduct the business
in which it is engaged as described in or contemplated by the Prospectus (except
to the extent the lack of such power and authority will not result in a Material
Adverse Effect to the Company and the Bank Subsidiary, taken as a whole). All
eligible deposit accounts issued by the Bank Subsidiary are insured by the FDIC
to the full extent permitted under applicable law.
(3) Each of the Subsidiaries is incorporated and is validly existing
as a corporation in good standing under the laws of the respective state of its
incorporation, is duly qualified as a foreign corporation for the transaction of
business and is in good standing under the laws of each other jurisdiction in
which the conduct of its business (to the knowledge of such counsel) requires
such qualification (except to the extent the lack of such qualification will not
result in a Material Adverse Effect to the Company) and has the corporate power
and authority necessary to own or hold its properties and assets and to conduct
the business in which it is engaged as described in the Prospectus (except to
the extent the lack of such power and authority will not result in a Material
Adverse Effect to the Company and the Subsidiaries, taken as a whole).
(4) The Trust Agreement has been duly qualified under the Trust
Indenture Act.
(5) Each of the Company and the Trust has the corporate or trust, as
the case may be, power and authority necessary to enter into, execute, deliver
and perform its obligations under the Underwriting Agreement, the Indenture, the
Trust Agreement, the Guarantee
A-1
<PAGE>
Agreement and the Subordinated Debentures, as applicable, and to effect the
transactions contemplated thereby and by the Prospectus. The performance of the
Company's and/or the Trust's obligations under the Underwriting Agreement, the
Indenture, the Trust Agreement, the Guarantee Agreement and the Subordinated
Debentures, as applicable, have been duly authorized by all necessary corporate
or trust action, as the case may be. The Underwriting Agreement, the Indenture,
the Trust Agreement, the Guarantee Agreement and the Subordinated Debentures
have been duly authorized, executed and delivered by the Company, the Trust,
and/or the Administrators, as applicable, and each constitutes the valid and
binding obligations of the Company and/or the Trust, as the case may be,
enforceable against the Company and/or the Trust in accordance with their
respective terms (except as such enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or other laws of general
application relating to or affecting the enforcement of creditors' rights and by
the application of equitable principles relating to the availability of
remedies, and except as rights to indemnity or contribution may be limited by
federal or state securities laws and the public policy underlying such laws).
(6) The Company has the duly authorized capital stock set forth in
the Prospectus. All of the shares of capital stock of the Company issued and
outstanding have been duly and validly authorized and issued, are fully paid and
non-assessable, without personal liability attaching to the ownership thereof.
To such counsel's knowledge, based solely upon the stock ledger of the Company
and a certificate of the officers of the Company, none of such shares have been
issued or are owned or held in violation of any preemptive or other similar
rights. To such counsel's knowledge, based solely upon the stock ledger of the
Company and a certificate of the officers of the Company, other than as set
forth in the Prospectus, there are no options, warrants, or other rights to
purchase or acquire from the Company or any of the Subsidiaries any shares of
the capital stock of the Company or any such Subsidiary. Such counsel is not
aware of any holders of the securities of the Company having rights to
registration thereof or preemptive rights to purchase capital stock of the
Company and, to the best of such counsel's knowledge, based solely upon the
stock ledger of the Company and a certificate of the officers of the Company,
neither the filing of the Registration Statement nor the offering or sale of the
Preferred Securities or the Subordinated Debentures as contemplated by the
Underwriting Agreement and the Prospectus gives rise to any rights (other than
have been waived or satisfied) for or relating to the registration of any
securities of the Company.
(7) All of the issued and outstanding shares of capital stock of each
of the Subsidiaries have been duly authorized, validly issued and are fully paid
and nonassessable, all such shares are held, in the case of the Bank Subsidiary,
by the Company, and in the case of each other Subsidiary, by the Bank
Subsidiary, free and clear of any liens, security interests, pledges, charges,
mortgages or other defects or encumbrances of any kind or nature.
(8) Other than as set forth in the Prospectus, counsel has no
knowledge of any pending proceedings or investigations or threatened or
contemplated proceedings or investigations, before any court or other
governmental body that (A) are required to be disclosed in the Registration
Statement or Prospectus, which are not so disclosed; (B) reasonably could be
expected, individually or in the aggregate, to have a Material Adverse Effect on
the Company or the Trust; or (C) reasonably could be expected to materially and
adversely affect the
A-2
<PAGE>
consummation of the Underwriting Agreement, the Indenture, the Trust Agreement
or the Guarantee Agreement and the transactions contemplated thereby.
(9) None of (A) the filing of the Registration Statement or any
amendment thereto; (B) the Company's and the Trust's execution and delivery of
the Underwriting Agreement, the Indenture, the Trust Agreement and the Guarantee
Agreement, as applicable; or (C) the consummation by the Company and the Trust
of the transactions contemplated thereby and by the Prospectus will (X) violate
any provision of the charter, bylaws or other governing documents of the Company
of the Subsidiaries, or the Trust Agreement or the Certificate of the Trust, as
applicable; (Y) to such counsel's knowledge, without independent investigation
or verification violate, result in the breach of, or be in contravention of, or
constitute a default under, any agreement or instrument to which the Company,
the Subsidiaries or the Trust is a party or by which it may be bound or to which
any of its assets, properties or businesses are or may be subject; or (Z)
violate any statute, judgment, decree, order, rule or regulation applicable to
the Company, the Subsidiaries or the Trust, except those, if any, that are
described in the Prospectus or those which would not, individually or in the
aggregate, have a Material Adverse Effect on the Company or the Trust, as the
case may be.
(10) No consent, authorization, approval, order, registration,
license, certificate, declaration or permit of or from, or filing with, any
court or other governmental body, is required of the Company and the Trust in
connection with the execution and delivery of the Underwriting Agreement, the
Indenture, the Trust Agreement or the Guarantee Agreement, or the issuance and
sale of the Subordinated Debentures, or the consummation by the Company and the
Trust of the other transactions contemplated by the Underwriting Agreement, the
Indenture, the Trust Agreement or the Guarantee Agreement, except such as may be
required under the Securities Act, which has been obtained, or under state
securities or Blue Sky laws as to which no opinion is expressed.
(11) The statements set forth in the Registration Statement under the
captions "Description of Preferred Securities," "Description of Junior
Subordinated Debentures," "Description of Guarantee," "Relationship Among the
Preferred Securities, the Junior Subordinated Debentures and the Guarantee" and
"Supervision and Regulation," insofar as they purport to describe the provisions
of the laws and the provisions of documents referred to therein, are accurate
and fairly summarize such provisions in all material respects and there are no
other provisions of law or of documents which are required by the Securities Act
or the Securities Act Rules and Regulations to be described therein.
(12) The statements of law or legal conclusions and opinions set forth
in the Registration Statement under the caption "Certain Federal Income Tax
Consequences", constitute an accurate summary of the matters discussed therein,
subject to the assumptions and conditions described therein and accurately and
fairly reflect such counsel's opinion in all material respects .
(13) The Registration Statement was declared effective under the
Securities Act as of the date and time specified in such opinion, the Prospectus
has been filed as required by the Underwriting Agreement, if necessary, and to
the best of counsel's knowledge (A) after telephonic inquiry of the Commission,
no stop order suspending the effectiveness of the
A-3
<PAGE>
Registration Statement has been issued and (B) no proceedings for that purpose
are pending or have been initiated or threatened by the Commission.
(14) The descriptions in the Registration Statement and Prospectus of
contracts, instruments and other documents and any contracts, instruments or
other documents filed as exhibits to the Registration Statement, and the
description of statutes, legal and governmental proceedings and rulings, are
accurate in all material respects and fairly present the information required to
be disclosed, and counsel does not know of any statutes, legal or governmental
proceedings or rulings required to be described in the Prospectus that are not
described, or, to the best of such counsel's knowledge, of any contracts,
instruments or other documents of a character required to be described in the
Registration Statement or the Prospectus or to be filed as exhibits to the
Registration Statement that were not described and filed as required. The
Registration Statement (including the information deemed to be part of the
Registration Statement at the time of effectiveness pursuant to Rule 430A, if
applicable), the Prospectus and each amendment or supplement thereto (except for
the financial statements and other statistical or financial data included
therein, as to which such counsel need express no opinion) made prior to the
Closing Date when it or they became effective or were filed with the Commission,
as the case may be, and, in each case, at the Closing Date, complied as to form
in all material respects with the requirements of the Securities Act, the
Securities Act Rules and Regulations, the Trust Indenture Act and the rules and
regulations thereunder.
(15) None of the Company, the Subsidiaries or the Trust is and, after
giving effect to the offering and sale of the Preferred Securities and the
Subordinated Debentures, will be, an "investment company" or an "affiliated
person" of or a "promoter" or "principal underwriter" of or an entity
"controlled" by an "investment company," as such terms are defined in the
Investment Company Act of 1940.
(16) The Bank Subsidiary is in good standing with the Office of the
Maryland Commissioner of Financial Regulation and the activities of the Company
are permitted under applicable federal and state banking laws, rules and
regulations. The Company and the Bank Subsidiary have all necessary approvals,
including approvals of the Federal Reserve, the FDIC, the Office of the Maryland
Commissioner of Financial Regulation and other bank regulating authorities
having jurisdiction over it to conduct their respective business.
(17) Each of the Subsidiaries has, in effect, all consents,
authorizations, approvals, orders, registrations, licenses and permits of all
regulatory bodies, administrative agencies, or other governmental bodies and
other regulating authorities having jurisdiction over it that are reasonably
required to conduct its business in the manner that, to such counsel's
knowledge, such business is currently being conducted, except to the extent the
failure will not result in a Material Adverse Effect to the Company.
(18) To the best knowledge of counsel, the Trust is not required to be
authorized to do business in any other jurisdiction, and the Trust is not a
party to or otherwise bound by any agreement, other than those described in the
Prospectus.
A-4
<PAGE>
(19) No Tax Event, Capital Treatment Event or Investment Company Event
(as each such term is defined in the Indenture) has occurred.
In addition, counsel shall state in a separate letter that in the
course of the preparation of the Registration Statement and the Prospectus, such
counsel has participated in conferences with officers and Representatives of the
Company and the Trust, with the Company's independent public accountants, and
with the Representative, at which conferences the content of the Registration
Statement and the Prospectus were discussed and at which conferences counsel
made inquiries of such officers, Representatives and accountants and, on the
basis of the foregoing, nothing has come to counsel's attention that would lead
such counsel to believe that either the Registration Statement or any amendment
thereto, as of the date the Registration Statement or such amendment is or was
declared effective, and as of the Closing Date, or the Prospectus as of the date
thereof and as of the Closing Date, contained or contains any untrue statement
of a material fact or omitted or omits to state a material fact required to be
stated therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading (it being understood
that such counsel need not express any belief with respect to the financial
statements, and the notes and schedules related thereto and other financial
information or statistical data included in the Registration Statement, any
amendment thereto, or the Prospectus).
A-5
<PAGE>
Exhibit B to
Underwriting Agreement
The opinion of counsel to the Property Trustee and the Delaware Trustee
under the Trust Agreement, the Indenture Trustee under the Indenture and the
Guarantee Trustee under the Guarantee to be delivered pursuant to Section
8(d)(ii) of the Underwriting Agreement shall be substantially to the effect
that:
(A) Bankers Trust Company is duly incorporated and is validly
existing in good standing as a banking corporation with trust powers under the
laws of the State of New York.
(B) Bankers Trust Company, as the Indenture Trustee, has the
requisite power and authority to execute, deliver and perform its obligations
under the Indenture, and has taken all necessary corporate action to authorize
the execution, delivery and performance by it of the Indenture.
(C) Bankers Trust Company, as the Guarantee Trustee, has the
requisite power and authority to execute, deliver and perform its obligations
under the Guarantee Agreement, and has taken all necessary corporate action to
authorize the execution, delivery and performance by it of the Guarantee
Agreement.
(D) Bankers Trust Company, as the Property Trustee, has the requisite
power and authority to execute and deliver the Trust Agreement, and has taken
all necessary corporate action to authorize the execution and deliver of the
Trust Agreement .
(E) Each of the Indenture and the Guarantee Agreement has been duly
executed and delivered by the Indenture Trustee and the Guarantee Trustee,
respectively, and constitutes a valid and binding obligation of the Indenture
Trustee and the Guarantee Trustee, respectively, enforceable against the
Indenture Trustee and the Guarantee Trustee, respectively, in accordance with
its respective terms, except that certain payment obligations may be enforceable
solely against the assets of the Trust and except that such enforcement may be
limited by bankruptcy, insolvency, reorganization, moratorium, liquidation,
fraudulent conveyance and transfer or other similar laws affecting the
enforcement of creditors' rights generally, and by principles of equity,
including, without limitation, concepts of materiality, reasonableness, good
faith and fair dealing (regardless of whether such enforceability is considered
in a proceeding in equity or at law), and by the effect of applicable public
policy on the enforceability of provisions relating to indemnification or
contribution.
(F) The Junior Subordinated Debentures delivered on the Closing Date
have been duly authenticated by the Indenture Trustee in accordance with the
terms of the Indenture.
B-1
<PAGE>
Exhibit C to
Underwriting Agreement
The opinion of special Delaware counsel to the Company and the Trust to be
delivered pursuant to Section 8(d)(iii) of the Underwriting Agreement shall be
substantially to the effect that:
(A) The Trust has been duly created and is validly existing in good
standing as a business trust under the Delaware Act, and all filings required as
of the date hereof under the Delaware Act with respect to the creation and valid
existence of the Trust as a business trust have been made.
(B) Under the Trust Agreement and the Delaware Act, the Trust has all
trust power and authority necessary to own property and to conduct its business,
all as described in the Prospectus.
(C) The Trust Agreement constitutes a valid and binding obligation of
the Company and each of the Property Trustee, the Delaware Trustee and each of
the Administrators, and is enforceable against the Company and each of the
Property Trustee, the Delaware Trustee, and each of the Administrators, in
accordance with its terms.
(D) Under the Trust Agreement and the Delaware Act, the Trust has the
trust power and authority (i) to execute and deliver, and to perform its
obligations under, the Underwriting Agreement and (ii) to issue, and to perform
its obligations under, the Preferred Securities and the Common Securities.
(E) Under the Trust Agreement and the Delaware Act, the execution and
delivery by the Trust of the Underwriting Agreement, and the performance by it
of its obligations thereunder, have been duly authorized by all necessary trust
action on the part of the Trust.
(F) Under the Delaware Act, the certificate attached to the Trust
Agreement as Exhibit D is an appropriate form of certificate to evidence
ownership of the Preferred Securities. The Preferred Securities have been duly
authorized for issuance by the Trust Agreement and, when issued, delivered and
paid for in accordance with the terms of the Trust Agreement and the
Underwriting Agreement, and as described in the Prospectus, will be validly
issued, fully paid undivided beneficial interests in the assets of the Trust.
The holders of the Preferred Securities will be entitled to the same limitation
of personal liability extended to stockholders of private corporations for
profit organized under the General Corporation Law of the State of Delaware.
This opinion need not address the liability of any holder of a Preferred
Security that is, was or becomes a named trustee of the Trust. In addition, this
opinion may note that the holders of the Preferred Securities may be required to
make payment or provide indemnity or security as set forth in the Trust
Agreement.
(G) The Common Securities have been duly authorized for issuance by
the Trust Agreement and, when issued, delivered and paid for in accordance with
the terms of the
C-1
<PAGE>
Trust Agreement and as described in the Prospectus, will be validly issued fully
paid undivided beneficial interests in the assets of the Trust.
(H) Under the Trust Agreement and the Delaware Act, the issuance of
the Preferred Securities and the Common Securities is not subject to preemptive
or similar rights.
(I) The issuance and sale by the Trust of the Preferred Securities
and the Common Securities, the purchase by the Trust of the Subordinated
Debentures, the execution, delivery and performance by the Trust of the
Underwriting Agreement, the consummation by the Trust of the transactions
contemplated by the Underwriting Agreement and the Prospectus and compliance by
the Trust with its obligations under the Underwriting Agreement do not violate
(i) any of the provisions of the Certificate of Trust or the Trust Agreement or
(ii) any applicable Delaware law or Delaware administrative regulation.
C-2
<PAGE>
EXHIBIT 4.1
- --------------------------------------------------------------------------------
JUNIOR SUBORDINATED INDENTURE
Between
PROVIDENT BANKSHARES CORPORATION
and
BANKERS TRUST COMPANY
(as Trustee)
dated as of
__________, 2000
- --------------------------------------------------------------------------------
<PAGE>
PROVIDENT TRUST II
Certain Sections of this Junior Subordinated Indenture relating
to Sections 310 through 318 of the
Trust Indenture Act of 1939:
<TABLE>
<CAPTION>
Trust Indenture Junior Subordinated
Act Section Indenture Section
--------------- -------------------
<S> <C> <C>
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
</TABLE>
Note: This reconciliation and tie shall not, for any purpose, be deemed to be a
part of the Indenture.
<PAGE>
TABLE OF CONTENTS
-----------------
<TABLE>
<CAPTION>
Page
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<S> <C> <C>
ARTICLE I DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION............... 1
Section 1.1. Definitions.................................................... 11
Section 1.2. Compliance Certificate and Opinions............................ 12
Section 1.3. Forms of Documents Delivered to Trustee........................ 12
Section 1.4. Acts of Holders................................................ 14
Section 1.5. Notices, Etc. to Trustee and Company........................... 14
Section 1.6. Notice to Holders; Waiver...................................... 15
Section 1.7. Conflict with Trust Indenture Act.............................. 15
Section 1.8. Effect of Headings and Table of Contents....................... 15
Section 1.9. Successors and Assigns......................................... 15
Section 1.10. Separability Clause............................................ 15
Section 1.11. Benefits of Indenture.......................................... 15
Section 1.12. Governing Law.................................................. 16
Section 1.13. Non-Business Days.............................................. 16
ARTICLE II SECURITY FORMS........................................................ 16
Section 2.1. Generally...................................................... 16
Section 2.2. Form of Face of Security....................................... 17
Section 2.3. Form of Reverse of Security.................................... 21
Section 2.4. Additional Provisions Required in Global Security.............. 23
Section 2.5. Form of Trustee's Certificate of Authentication................ 24
ARTICLE III THE SECURITIES........................................................ 24
Section 3.1. Title and Terms................................................ 24
Section 3.2. Denominations.................................................. 25
Section 3.3. Execution, Authentication, Delivery and Dating................. 25
Section 3.4. Temporary Securities........................................... 27
Section 3.5. Global Securities.............................................. 27
Section 3.6. Registration, Transfer and Exchange Generally;
Certain Transfers and Exchanges; Securities Act
Legends........................................................ 28
Section 3.7. Mutilated, Lost and Stolen Securities.......................... 31
Section 3.8. Payment of Interest and Additional Interest;
Interest Rights Preserved...................................... 32
Section 3.9. Persons Deemed Owners.......................................... 33
Section 3.10. Cancellation................................................... 33
Section 3.11. Computation of Interest........................................ 34
Section 3.12. Deferrals of Interest Payment Dates............................ 34
Section 3.13. Right of Set-Off............................................... 35
Section 3.14. Agreed Tax Treatment........................................... 35
Section 3.15. CUSIP Numbers.................................................. 35
Section 3.16. Shortening of Stated Maturity.................................. 36
ARTICLE IV SATISFACTION AND DISCHARGE........................................... 36
Section 4.1. Satisfaction and Discharge of Indenture........................ 36
Section 4.2. Application of Trust Money..................................... 37
ARTICLE V REMEDIES............................................................. 37
Section 5.1. Events of Default.............................................. 38
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
Section 5.2. Acceleration of Maturity; Rescission and Annulment............. 39
Section 5.3 Collection of Indebtedness and Suits for Enforcement
by Trustee..................................................... 40
Section 5.4. Trustee May File Proofs of Claim............................... 41
Section 5.5. Trustee May Enforce Claim Without Possession of
Securities..................................................... 41
Section 5.6. Application of Money Collected................................. 41
Section 5.7. Limitation on Suits............................................ 41
Section 5.8. Unconditional Right of Holders to Receive Principal,
Premium and Interest; Direct Action by Holders of
Preferred Securities........................................... 42
Section 5.9. Restoration of Rights and Remedies............................. 42
Section 5.10. Rights and Remedies Cumulative................................. 43
Section 5.11. Delay or Omission Not Waiver................................... 43
Section 5.12. Control by Holders............................................. 43
Section 5.13. Waiver of Past Defaults........................................ 43
Section 5.14. Undertaking for Costs.......................................... 44
Section 5.15. Waiver of Usury, Stay or Extension Laws........................ 44
ARTICLE VI THE TRUSTEE......................................................... 45
Section 6.1. Certain Duties and Responsibilities............................ 45
Section 6.2. Notice of Defaults............................................. 46
Section 6.3. Certain Rights of Trustee...................................... 46
Section 6.4. Not Responsible for Recitals or Issuance of
Securities..................................................... 47
Section 6.5. May Hold Securities............................................ 47
Section 6.6. Money Held in Trust............................................ 47
Section 6.7. Compensation and Reimbursement................................. 48
Section 6.8. Disqualification; Conflicting Interests........................ 49
Section 6.9. Corporate Trustee Required; Eligibility........................ 49
Section 6.10. Resignation and Removal; Appointment of Successor.............. 49
Section 6.11. Acceptance of Appointment by Successor......................... 51
Section 6.12. Merger, Conversion, Consolidation or Succession to
Business....................................................... 51
Section 6.13. Preferential Collection of Claims Against Company.............. 51
Section 6.14. Appointment of Authenticating Agent............................ 52
ARTICLE VII HOLDERS LISTS AND REPORTS BY TRUSTEE, PAYING AGENT AND COMPANY...... 53
Section 7.1. Company to Furnish Trustee Names and Addresses of
Holders........................................................ 53
Section 7.2. Preservation of Information, Communications to
Holders........................................................ 53
Section 7.3. Reports by Trustee and Paying Agent............................ 54
Section 7.4. Reports by Company............................................. 54
ARTICLE VIII CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE................ 54
Section 8.1. Company May Consolidate, Etc., Only on Certain Terms........... 55
Section 8.2. Successor Company Substituted.................................. 56
ARTICLE IX SUPPLEMENTAL INDENTURES............................................. 56
Section 9.1. Supplemental Indentures Without Consent of Holders............. 56
Section 9.2. Supplemental Indentures with Consent of Holders................ 57
Section 9.3. Execution of Supplemental Indentures........................... 58
Section 9.4. Effect of Supplemental Indentures.............................. 58
Section 9.5. Conformity with Trust Indenture Act............................ 59
Section 9.6. Reference in Securities to Supplemental Indentures............. 59
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
ARTICLE X COVENANTS........................................................... 59
Section 10.1. Payment of Principal, Premium and Interest..................... 59
Section 10.2. Maintenance of Office or Agency................................ 59
Section 10.3. Money for Security Payments to be Held in Trust................ 60
Section 10.4. Statement as to Compliance..................................... 61
Section 10.5. Waiver of Certain Covenants.................................... 61
Section 10.6. Additional Sums................................................ 61
Section 10.7. Additional Covenants........................................... 62
Section 10.8. Federal Tax Reports............................................ 63
ARTICLE XI REDEMPTION OF SECURITIES............................................ 63
Section 11.1. Applicability of this Article.................................. 63
Section 11.2. Election to Redeem; Notice to Trustee.......................... 63
Section 11.3. Selection of Securities to be Redeemed......................... 64
Section 11.4. Notice of Redemption........................................... 64
Section 11.5. Deposit of Redemption Price.................................... 65
Section 11.6. Payment of Securities Called for Redemption.................... 65
Section 11.7. Right of Redemption of Securities Initially Issued
to the Issuer Trust............................................ 66
ARTICLE XII SINKING FUNDS....................................................... 66
ARTICLE XIII SUBORDINATION OF SECURITIES......................................... 66
Section 13.1. Securities Subordinate to Senior Indebtedness.................. 66
Section 13.2. No Payment When Senior Indebtedness in Default;
Payment Over of Proceeds Upon Dissolution, Etc................. 67
Section 13.3. Payment Permitted if No Default................................ 68
Section 13.4. Subrogation to Rights of Holders of Senior
Indebtedness................................................... 68
Section 13.5. Provisions Solely to Define Relative Rights.................... 69
Section 13.6. Trustee to Effectuate Subordination............................ 69
Section 13.7 No Waiver of Subordination Provisions.......................... 69
Section 13.8. Notice to Trustee.............................................. 70
Section 13.9. Reliance on Judicial Order or Certificate of
Liquidating Agent.............................................. 71
Section 13.10. Trustee Not Fiduciary for Holders of Senior
Indebtedness................................................... 71
Section 13.11. Rights of Trustee as Holder of Senior Indebtedness;
Preservation of Trustee's Rights.............................. 71
Section 13.12. Article Applicable to Paying Agents............................ 71
Section 13.13. Certain Conversions or Exchanges Deemed Payment................ 71
ANNEX A FORM OF RESTRICTED SECURITIES CERTIFICATE............................ A-1
</TABLE>
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<PAGE>
JUNIOR SUBORDINATED INDENTURE
-----------------------------
THIS JUNIOR SUBORDINATED INDENTURE, dated as of __________, 2000 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 of its unsecured junior subordinated
deferrable interest debentures due _____________, 2030 (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 Provident Trust II, a Delaware business trust (the "Issuer Trust") of
undivided preferred beneficial interests in the assets of such Issuer Trust (the
"Preferred Securities") and common undivided interests in the assets of such
Issuer Trust (the "Common Securities" and, collectively with the Preferred
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:
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:
(a) the terms defined in this Article I 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;
<PAGE>
(c) the words "include," "includes" and "including" shall be deemed to be
followed by the phrase "without limitation";
(d) 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;
(e) whenever the context may require, any gender shall be deemed to include
the other;
(f) 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
(g) 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.
"25% Capital Limitation" means the limitation imposed by the Federal Reserve
that the proceeds of certain qualifying securities similar to the Trust
Securities will qualify as Tier 1 capital of the issuer up to an amount not to
exceed, when taken together with all cumulative preferred securities of the
issuer, if any, 25% of the issuer's Tier 1 capital, or any subsequent limitation
adopted by the Federal Reserve.
"Act" when used with respect to any Holder has the meaning specified in
Section 1.4.
"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.
"Additional Taxes" means any additional taxes, duties and other governmental
charges to which the Issuer Trust has become subject from time to time as a
result of a Tax Event.
"Administrator" means, in respect of the Issuer Trust, each Person appointed
in accordance with the Trust Agreement, solely in such Person's capacity as
Administrator of the 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.
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<PAGE>
"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.
"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 State of Maryland or the City of New York
are authorized or required by law or executive order to remain closed, or (iii)
a day on which the Corporate Trust Office of the Trustee, or, with respect to
the Securities initially issued to the Issuer Trust, the "Corporate Trust
Office" (as defined in the Trust Agreement) of the Property Trustee or the
Delaware Trustee under the Trust Agreement, is closed for business.
"Capital Treatment Event" means, in respect of the 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 Preferred Securities of the 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 (as defined in the Trust Agreement) of such
Preferred Securities as "Tier 1 Capital" (or the then equivalent thereof),
except as otherwise restricted under the 25% Capital Limitation, 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.
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<PAGE>
"Common Securities" has the meaning specified in the first recital of this
Indenture.
"Common Stock" means the common stock, $___ par value per share, of the
Company.
"Company" means the Person named as the "Company" in the first paragraph of
this instrument until a successor entity shall have become such pursuant to the
applicable provisions of this Indenture, and thereafter "Company" shall mean
such successor entity.
"Company Request" and "Company Order" mean, respectively, the written request
or order signed in the name of the Company by any Chairman of the Board of
Directors, any Vice Chairman of the Board of Directors, its Chief Executive
Officer, President or a Vice President, and by its Chief Financial Officer, its
Treasurer, its Secretary or an Assistant Secretary, and delivered to the
Trustee.
"Corporate Trust Office" means the principal office of the Trustee at which at
any particular time its corporate trust business shall be administered, which
office at the date hereof is located at Four Albany Street, 4th Floor, New York,
New York 10006.
"Creditor" has the meaning specified in Section 6.7.
"Defaulted Interest" has the meaning specified in Section 3.8.
"Delaware Trustee" means, with respect to the Issuer Trust, the Person
identified as the "Delaware Trustee" in the Trust Agreement, solely in its
capacity as Delaware Trustee of the Issuer Trust under the Trust Agreement and
not in its individual capacity, or its successor in interest in such capacity,
or any successor Delaware trustee appointed as therein provided.
"Depositary" means, with respect to the Securities issuable or issued in whole
or in part in the form of one or more Global Securities, the Person designated
as Depositary by the Company pursuant to Section 3.1 (or any successor thereto).
"Discount Security" means any security that provides for an amount less than
the principal amount thereof to be due and payable upon a declaration of
acceleration of the Maturity thereof pursuant to Section 5.2.
"Dollar" or "$" 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," has the meaning specified in Article V.
"Exchange Act" means the Securities Exchange Act of 1934 and any successor
statute thereto, in each case as amended from time to time.
"Expiration Date" has the meaning specified in Section 1.4.
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<PAGE>
"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 the Securities, issued to the Depositary or its
nominee, and registered in the name of such Depositary or its nominee.
"Guarantee" means, with respect to the Issuer Trust, the Guarantee Agreement,
dated __________, 2000, executed by the Company for the benefit of the Holders
of the Preferred Securities issued by the 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.
"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.
"Interest Payment Date" means the Stated Maturity of an installment of interest
on such Securities.
"Investment Company Act" means the Investment Company Act of 1940 and any
successor statute thereto, in each case as amended from time to time.
"Investment Company Event" means the receipt by the Issuer Trust of an Opinion
of Counsel, rendered by 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 Preferred Securities of the
Issuer Trust.
"Issuer Trust" has the meaning specified in the first recital of this
Indenture.
"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(c).
"Officers' Certificate" means, with respect to any Person, a certificate
signed by the Chairman of the Board, Chief Executive Officer, President or a
Vice President, and by the Chief Financial Officer, Treasurer, an Associate
Treasurer, an Assistant Treasurer, the Secretary or an
-5-
<PAGE>
Assistant Secretary of such Person, and delivered to the Trustee. 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
(d) a statement as to whether, in the opinion of such officer, such
condition or covenant has been complied with;
provided, however, that the Officers' Certificate delivered pursuant to the
provisions of Section 10.4 hereof shall comply with the provisions of Section
314 of the Trust Indenture Act.
"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:
(a) Securities theretofore canceled by the Trustee or delivered to the
Trustee for cancellation;
(b) 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
(c) Securities in substitution for or in lieu of other Securities which 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
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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, the 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, the 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.
"Outstanding Preferred Securities" means the ___________ aggregate liquidation
amount of $________ preferred securities issued by Provident Trust I.
"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, partnership, trust, unincorporated organization
or entity (as defined herein) or government or any agency or political
subdivision thereof.
"Place of Payment" means, with respect to the Securities, the place or places
where the principal of (or premium, if any) and interest on the Securities 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.
"Preferred Securities" has the meaning specified in the first recital of this
Indenture.
"Principal Subsidiary Bank" means each of (i) Provident Bank of Maryland, (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) or (iii), 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.
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"Property Trustee" means, with respect to the Issuer Trust, the Person
identified as the "Property Trustee" in the Trust Agreement, solely in its
capacity as Property Trustee of the Issuer Trust under the 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.
"Regular Record Date" for the interest payable on any Interest Payment Date
with respect to the Securities means, unless otherwise provided pursuant to
Section 3.1 with respect to the Securities, the close of business on March 15,
June 15, September 15 or December 15 next preceding such Interest Payment Date
(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, principal, vice president, assistant vice president, assistant
treasurer, assistant secretary or any other officer of the Trustee customarily
performing functions similar to those performed by any of the above designated
officers and having direct responsibility for the administration of this
Indenture, and also, with respect to a particular matter, any other officer to
whom such matter is 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, $____ par value per share, 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 and any successor statute
thereto, in each case as amended from time to time.
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"Securities Register" and "Securities Registrar" have the respective meanings
specified in Section 3.6.
"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 and all dividends of another person the payment of which, in either case,
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 Junior
Subordinated Debentures, (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 Preferred Securities,
including the obligations associated with the Outstanding Preferred 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
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exchange for or in lieu of a mutilated, destroyed, lost or stolen Security shall
be deemed to evidence the same debt as the mutilated, destroyed, lost or stolen
Security.
"Tax Event" means the receipt by the Issuer Trust of an Opinion of Counsel,
rendered by 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 or decision is announced on or after the date
of issuance of the Preferred Securities of the Issuer Trust, there is more than
an insubstantial risk that (a) 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 corresponding series of
Securities issued by the Company to the Issuer Trust, (b) interest payable by
the Company on the 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 (c) the Issuer Trust is, or
will be within 90 days of the delivery of such Opinion of Counsel, subject to
more than a de minimus amount of other taxes, duties or other governmental
charges.
"Trust Agreement" means the Amended and Restated Trust Agreement, dated as of
__________, 2000, as amended, modified or supplemented from time to time, among
the trustees of the Issuer Trust named therein, the Company, as depositor, and
the holders from time to time of undivided beneficial ownership interests in the
assets of the 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
shall mean the Trustee with respect to Securities.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as amended by the
Trust Indenture Reform Act of 1990, or any successor statute, in each case as
amended 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
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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.
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:
(a) 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;
(b) 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;
(c) 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
(d) 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.
(a) 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.
(b) 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.
(c) 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, 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 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 1.4.
(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 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 to, made or taken by
Holders of Securities, provided that the Company may not set a record date for,
and the provisions of this Section 1.4(f) shall not apply with respect to, the
giving or making of any notice, declaration, request or direction referred to in
Section 1.4(g). If any record date is set pursuant to this Section 1.4(f), the
Holders of Outstanding Securities 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, however that no such action
shall be effective hereunder unless taken on or prior to the applicable
Expiration Date (as defined below) by Holders of the requisite principal amount
of Outstanding Securities on such record date. Nothing in this Section 1.4(f)
shall be construed to prevent the Company from setting a new record date for any
action for
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which a record date has previously been set pursuant to this Section
1.4(f) (whereupon the record date previously set shall automatically and with no
action by any Person be canceled and of no effect), and nothing in this Section
1.4(f) shall be construed to render ineffective any action taken by Holders of
the requisite principal amount of Outstanding Securities on the date such action
is taken. Promptly after any record date is set pursuant to this Section 1.4(f),
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 in the manner set forth in
Section 1.6.
(g) The Trustee may set any day as a record date for the purpose of
determining the Holders of Outstanding Securities 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(b), or (iv) any direction referred to in Section 5.12, in each
case with respect to Securities. If any record date is set pursuant to this
Section 1.4(g), the Holders of Outstanding Securities 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, however 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 on such record date. Nothing in this
Section 1.4(g) 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 Section 1.4(g) (whereupon the record date previously set shall
automatically and with no action by any Person be canceled 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 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 in
the manner set forth in Section 1.6.
(h) With respect to any record date set pursuant to this Section 1.4, 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 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 Section 1.4(h).
Notwithstanding the foregoing, no Expiration Date shall be later than the 180th
day after the applicable record date.
(i) 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.
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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:
(a) the Trustee by any Holder, any holder of Preferred 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
(b) the Company by the Trustee, any Holder or any holder of Preferred
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 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.
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 thereunder 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.
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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 Preferred 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) 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 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. Generally.
(a) The Securities and the Trustee's certificate of authentication shall be
in substantially the forms set forth in this Article II, 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
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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 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.
(b) 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.
(c) Securities distributed to holders of Global Preferred Securities (as
defined in the Trust Agreement) upon the dissolution of the 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 Preferred Securities other than Global
Preferred Securities upon the dissolution of the 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.
Section 2.2. Form of Face of Security.
PROVIDENT BANKSHARES CORPORATION
_______% Junior Subordinated Deferrable Interest Debentures due _____________,
2030
[If the Security is a Restricted Security, insert - 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 WHO 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 INSTITUTIONAL ACCREDITED INVESTOR IN A TRANSACTION
EXEMPT FROM THE REGISTRATION REQUIREMENTS
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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 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
Provident Trust II, or registered assigns, the principal sum of __________
Dollars on _____________, 2030, 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 provided that the
Company may shorten the Stated Maturity of the principal of this Security to a
date not earlier than _____________, 2005. The Company further promises to pay
interest on said principal from __________, 2000, or from the most recent
Interest Payment Date to which interest has been paid or duly provided for,
quarterly (subject to deferral as set forth herein) in arrears on March 31, June
30, September 30 and December 31 of each year, commencing _____________, 2000 at
the rate of _______% 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 _______% per annum (to the extent
that the payment of such interest shall be legally enforceable), compounded
quarterly 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 four. 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 the 15th day of March, June,
September and December (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
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requirements of any securities exchange on which the Securities may be listed,
and upon such notice as may be required by such exchange, all as more fully
provided in said Indenture.
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 20 consecutive
quarterly 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, including the
Company's obligations associated with the Outstanding Preferred Securities
(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 stockholder 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 a reclassification, 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, (iii) 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, (iv) 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 (v) 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 20 consecutive quarterly 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 quarterly 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
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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 II, or at least one Business Day
prior to the earlier of (i) the next succeeding date on which Distributions on
the Preferred Securities of the Issuer Trust would be payable but for such
deferral, and (ii) the date on which the Property Trustee of the Issuer Trust is
required to give notice to holders of such Preferred 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 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, (i) agrees to and shall be bound by such provisions, (ii)
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
(iii) 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 or facsimile 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.
PROVIDENT BANKSHARES CORPORATION
By:___________________________
Name:
Title:
Attest:
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______________________________________
Secretary or Assistant Secretary
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: __________________
Name:
Title:
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 under the Junior
Subordinated Indenture, dated as of __________, 2000 (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 series designated on the face hereof, limited in
aggregate principal amount to $______________.
All terms used in this Security that are defined in the Indenture or, if not
defined in the Indenture, in the Amended and Restated Trust Agreement dated as
of __________, 2000 (as modified, amended or supplemented from time to time the
"Trust Agreement"), relating to Provident Trust II (the "Issuer Trust") among
the Company, as Depositor, the Trustees named therein and the Holders from time
to time of the Trust Securities issued pursuant thereto shall have the meanings
assigned to them in the Indenture or the Trust Agreement, as the case may be.
The Company has the right to redeem this Security (i) on or after
_____________, 2005, 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. The Redemption Price shall equal 100%
of the principal amount hereof being redeemed, together with accrued interest to
but excluding the date fixed for redemption.
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<PAGE>
In the event of redemption of this Security in part only, a new Security or
Securities for the unredeemed portion hereof will be issued in the name of the
Holder hereof upon the cancellation hereof.
[If applicable, insert - The Indenture contains provisions for defeasance at
any time [of the entire indebtedness of this Security] [or] [certain restrictive
covenants and Events of Default with respect to this Security] [, in each case]
upon compliance by the Company with certain conditions set forth in the
Indenture.]
The Indenture permits, with certain exceptions as therein provided, the
Company and the Trustee at any time to enter into a supplemental indenture or
indentures for the purpose of modifying in any manner the rights and obligations
of the Company and of the Holders of the Securities, with the consent of the
Holders of not less than a majority in principal amount of the Outstanding
Securities to be affected by such supplemental indenture. The Indenture also
contains provisions permitting Holders of specified percentages in principal
amount of the Securities at the time Outstanding, on behalf of the Holders of
all Securities, to waive compliance by the Company with certain provisions of
the Indenture and certain past defaults under the Indenture and their
consequences. Any such consent or waiver by the Holder of this Security shall be
conclusive and binding upon such Holder and upon all future Holders of this
Security and of any Security issued upon the registration of transfer hereof or
in exchange herefor or in lieu hereof, whether or not notation of such consent
or waiver is made upon this Security.
[If the Security is not a Discount Security, insert - As provided in and
subject to the provisions of the Indenture, if an Event of Default with respect
to the Securities 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 may declare the principal amount
of all the Securities 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 to be immediately due and payable, the holders
of at least 25% in aggregate Liquidation Amount (as defined in the Trust
Agreement) of the Preferred 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 shall become
immediately due and payable, provided that the payment of principal and interest
(including any Additional Interest) on such Securities shall remain subordinated
to the extent provided in Article XIII of the Indenture.]
[If the Security is a Discount Security, insert - As provided in and subject
to the provisions of the Indenture, if an Event of Default with respect to the
Securities 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 may declare an amount of principal of the
Securities 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 such principal
amount of the Outstanding Securities to be immediately due and payable, the
Holders of at least 25% in aggregate Liquidation Amount (as defined in the Trust
Agreement) of the Preferred Securities then outstanding shall have the right to
make such declaration by a notice in writing to the Company and the Trustee.
The principal amount payable
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upon such acceleration shall be equal to [insert formula for determining the
amount]. Upon any such declaration, such amount of the principal of and the
accrued interest (including any Additional Interest) on all the Securities shall
become immediately due and payable, provided that the payment of such principal
and interest (including any Additional Interest) on all the Securities shall
remain subordinated to the extent provided in Article XIII of the Indenture.
Upon payment (i) of the amount of principal so declared due and payable and (ii)
of interest on any overdue principal, premium and interest (in each case to the
extent that the payment of such interest shall be legally enforceable), all of
the Company's obligations in respect of the payment of the principal of and
premium and interest, if any, on this Security shall terminate.]
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 like tenor, of authorized denominations
and for the same aggregate principal amount, will be issued to the designated
transferee or transferees.
As provided in the Indenture and subject to certain limitations therein set
forth, Securities are exchangeable for a like aggregate principal amount of
Securities 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.
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
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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 referred to in the within-mentioned Indenture.
Dated: BANKERS TRUST COMPANY,
as Trustee
By:___________________________
Authorized Signatory
ARTICLE III
THE SECURITIES
Section 3.1. Title and Terms.
(a) The aggregate principal amount of Securities that may be authenticated
and delivered under this Indenture is $______________.
(b) Subject to Section 3.16, the Securities' Stated Maturity shall be
_____________, 2030.
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(c) The Securities, established pursuant to a Board Resolution, shall bear
interest at a per annum rate equal to _______% from __________, 2000 or from the
most recent Interest Payment Date to which interest has been paid or duly
provided for, as the case may be, payable quarterly (subject to deferral as set
forth in Section 3.12), in arrears, on March 31, June 30, September 30 and
December 31 of each year, commencing _____________, 2000, until the principal
thereof is paid or made available for payment. Interest will compound quarterly
and will accrue at a per annum rate equal to _______% to the extent permitted by
applicable law, on any interest installment in arrears for more than one
quarterly period or during an extension of an interest payment period as set
forth below in Section 3.12.
(d) The principal of (and premium, if any) and interest on the Securities
shall be payable at the office or agency of the Paying Agent in the United
States maintained for such purpose and at any other office or agency maintained
by the Company for such purpose in such coin or currency of the United States of
America as at the time of payment is legal tender for payment of public and
private debts; provided, however, that at the 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 Security Register or (ii) by wire
transfer in immediately available funds at such place and to such account as may
be designated by the Person entitled thereto as specified in the Security
Register.
(e) Securities may be issuable in whole or in part in the form of one or more
Global Securities and, in such case, the Depositary for such Global Securities
shall be The Depository Trust Company.
(f) The securities shall be subordinated in right of payment to Senior
Indebtedness as provided in Article XIII.
Section 3.2. Denominations.
The Securities shall be in registered form without coupons and shall be
issuable in denominations of $10.00 and any integral multiple thereof.
Section 3.3. Execution, Authentication, Delivery and Dating.
(a) The Securities shall be executed on behalf of the Company by its Chairman
of the Board, its Vice Chairman of the Board, its Chief Executive Officer,
President or one of its Vice Presidents, 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.
(b) Securities bearing the manual or facsimile signatures of individuals who
were at any time the proper officers of the Company shall bind the Company,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Securities or did not
hold such offices at the date of such Securities. At any time and from time to
time after the execution and delivery of this Indenture, the Company may deliver
Securities executed by the Company to the Trustee for authentication, together
with a Company Order for the authentication and delivery of such Securities, and
the Trustee in accordance with the Company
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<PAGE>
Order shall authenticate and deliver such Securities. If the form or terms of
the Securities 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:
(i) 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;
(ii) 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
(iii) 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.
(c) 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.
(d) Notwithstanding the provisions of Section 3.1 and Section 3.3(b), if all
Securities 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 Section 3.3(b) at or prior to the authentication of each Security if
such documents are delivered at or prior to the authentication upon original
issuance of the first Security to be issued.
(e) Each Security shall be dated the date of its authentication.
(f) 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 or facsimile signature of one of its
authorized officers, and such certificate upon any Security shall be conclusive
evidence, and the only evidence, that such security has been duly authenticated
and delivered hereunder. 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.
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(a) Pending the preparation of definitive Securities, 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 denomination, substantially of the
tenor of the definitive Securities in lieu of which they are issued and with
such appropriate insertions, omissions, substitutions and other variations as
the officers executing such Securities may determine, as evidenced by their
execution of such Securities.
(b) If temporary Securities are issued, the Company will cause definitive
Securities to be prepared without unreasonable delay. After the preparation of
definitive Securities, the temporary Securities shall be exchangeable for
definitive Securities upon surrender of the temporary Securities at 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 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 shall in all respects be entitled to the same benefits under this
Indenture as definitive Securities.
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 within 90 days of receipt of such notice from the
Depositary, (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 canceled in part, or if another Security is to be exchanged in
whole or in part for a beneficial interest in any Global Security, then either
(i) such Global Security shall be so surrendered for exchange or cancellation as
provided in this Article III or (ii) the principal amount thereof shall be
reduced, or increased by an amount equal to the portion thereof to be so
exchanged or canceled, or equal to the principal amount of such other Security
to be so exchanged for a beneficial interest therein, as the case may be, by
means of an appropriate adjustment made on the records of the Securities
Registrar, whereupon the Trustee, in accordance
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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.
(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 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 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
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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.
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 during a period beginning at the opening of business 15 days before
the day of selection for redemption of Securities pursuant to Article XI and
ending at the close of business on the day of mailing of 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 3.6(a) 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
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Securities Registrar shall have received a Restricted Securities Certificate
duly executed by the transferor Holder or such Holder's attorney duly
authorized in writing.
(iii) Exchanges Between Global Security and Non-Global Security. A
beneficial interest in a Global Security may be exchanged for a Security that
is not a Global Security as provided in Section 3.5.
(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 Institutional Accredited Investor or Investors as
if such transfer or exchange were not an initial transfer or exchange;
provided, however 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.
(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 Security 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;
(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 Preferred Securities upon
dissolution of an Issuer Trust shall bear a Restricted Securities Legend if
the Preferred Securities so held bear a similar legend.
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Section 3.7. Mutilated, Lost and Stolen Securities.
(a) 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 like tenor and
aggregate principal amount, bearing the same legends, and bearing a number not
contemporaneously outstanding.
(b) 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 or a
protected 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 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.
(c) 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.
(d) 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.
(e) Every new Security issued pursuant to this Section in lieu of any
destroyed, lost or stolen Security shall constitute an original additional
contractual obligation of the Company, whether or not the destroyed, lost or
stolen Security shall be at any time enforceable by anyone, and shall be
entitled to all the benefits of this Indenture equally and proportionately with
any and all other Securities duly issued hereunder.
(f) 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.
(a) Interest and Additional Interest on any Security 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, except that, unless otherwise
provided in the Securities, 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 that is issued between a Regular
Record Date and the related Interest Payment Date shall
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be payable as provided in such Security or in the Board Resolution pursuant to
Section 3.1 with respect to the Securities.
(b) 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 (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 (i) or (ii) below:
(i) The Company may elect to make payment of any Defaulted Interest to
the Persons in whose names the Securities 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 which shall
be fixed 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 at the address of such
Holder as it appears in the Securities Register not less than 10 days prior to
such Special Record Date. The Trustee may, in its discretion, in the name and
at the expense of the Company, cause a similar notice to be published at least
once in a newspaper, customarily published in the English language on each
Business Day and of general circulation in the Borough of Manhattan, The City
of New York, but such publication shall not be a condition precedent to the
establishment of such Special Record Date. Notice of the proposed payment of
such Defaulted Interest and the Special Record Date therefor having been
mailed as aforesaid, such Defaulted Interest shall be paid to the Persons in
whose names the Securities (or their respective Predecessor Securities) are
registered on such Special Record Date and shall no longer be payable pursuant
to the following clause (ii).
(ii) 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 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 (ii),
such payment shall be deemed practicable by the Trustee.
(c) 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
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rights to interest accrued and unpaid, and to accrue interest, that were carried
by such other Security.
Section 3.9. Persons Deemed Owners.
(a) 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 none of the Company,
the Trustee or any agent of the Company or the Trustee shall be affected by
notice to the contrary.
(b) 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.
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 3.10, 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.
Interest on the Securities 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 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.
(a) 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 the Securities,
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
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the number of consecutive interest periods that equal five years with respect to
each Extension Period, during which Extension Periods the Company shall have the
right to make partial payments of interest on any Interest Payment Date. No
Extension Period shall end on a date other than an.Interest Payment Date. At the
end of any such Extension Period, the Company shall pay all interest then
accrued and unpaid on the Securities (together with Additional Interest thereon,
if any, at the rate specified for the Securities 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; 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, (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 stockholder 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 a reclassification, 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 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. The Company shall give the Holders of the
Securities 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 would be payable but for such deferral or,
with respect to any Securities issued to the Issuer Trust, so long as any such
Securities are held by the Issuer Trust, at least one Business Day prior to the
earlier of (x) the next succeeding date on which Distributions (as defined in
the Trust Agreement) on the Preferred Securities of the Issuer Trust would be
payable but for such deferral, and (y) the date on which the Property Trustee of
the Issuer Trust is required to give notice to holders of such Preferred
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.
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(b) The Trustee shall promptly give notice of the Company's election to begin
any such Extension Period to the Holders of the Outstanding Securities.
Section 3.13. Right of Set-Off.
With respect to the Securities initially issued to the 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 Preferred Securities pursuant to an action
undertaken under Section 5.8 of this Indenture.
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. 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.
Section 3.16. Shortening of Stated Maturity.
The Company shall have the right to shorten the Stated Maturity of the
principal of the Securities at any time to any date not earlier than
_____________, 2005, provided that the Company shall give notice to the Holders,
the Trustee and, in the case of Securities issued to an Issuer Trust, the Issuer
Trust of such shortening no less than 90 days prior to the effectiveness
thereof.
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
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the Company, shall execute proper instruments acknowledging satisfaction and
discharge of this Indenture, when:
(a) either
(i) all Securities theretofore authenticated and delivered (other than
(A) Securities that have been destroyed, lost or stolen and that have been
replaced or paid as provided in Section 3.7 and (B) Securities for whose
payment money has theretofore been deposited in trust or segregated and held
in trust by the Company and thereafter repaid to the Company or discharged
from such trust, as provided in Section 10.3) have been delivered to the
Trustee for cancellation; or
(ii) all such Securities not theretofore delivered to the Trustee for
cancellation
(A) have become due and payable,
(B) will become due and payable at their Stated Maturity within
one year of the date of deposit, or
(C) 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 (ii)(A), (B) or (C) 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 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;
(b) the Company has paid or caused to be paid all other sums payable hereunder
by the Company; and
(c) the Company has delivered to the Trustee an Officers' Certificate and an
Opinion of Counsel each stating that all conditions precedent herein provided
for relating to the satisfaction and discharge of this Indenture have been
complied with.
(d) Notwithstanding the satisfaction and discharge of this Indenture, the
obligations of the Company to the Trustee under Section 6.7, the obligations of
the Company to any Authenticating Agent under Section 6.14 and, if money shall
have been deposited with the Trustee pursuant to subclause (ii) of clause (a) of
this Section, the obligations of the Trustee under Section 4.2 and the last
paragraph of Section 10.3 shall survive.
Section 4.2. Application of Trust Money.
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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, 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) default in the payment of any interest upon any Security, including any
Additional Interest in respect thereof, when it becomes due and payable and
continuance of such default for a period of 30 days (subject to the deferral of
any due date in the case of an Extension Period);
(b) default in the payment of (and premium, if any, on) the principal of any
Security at its Stated Maturity;
(c) 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 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; or
(d) the occurrence of the appointment of a receiver or other similar official
in any liquidation, insolvency or similar proceeding with respect to the Company
or all or substantially all of its property; or a court or other governmental
agency shall enter a decree or order appointing a receiver or similar official
and such decree or order shall remain unstayed and undischarged for a period of
60 days.
Section 5.2. Acceleration of Maturity; Rescission and Annulment.
(a) If an Event of Default (other than an Event of Default specified in
Section 5.1(d)) with respect to Securities 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 may declare
the principal amount (or, if the Securities are Discount Securities, such
portion of the principal amount as may be specified in the terms) of all the
Securities to be due and payable immediately, by a notice in writing to the
Company (and to the
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Trustee if given by Holders), provided, however that, if, upon an Event of
Default, the Trustee or the Holders of not less than 25% in principal amount of
the Outstanding Securities fail to declare the principal of all the Outstanding
Securities to be immediately due and payable, the holders of at least 25% in
aggregate Liquidation Amount (as defined in the Trust Agreement) of the
Preferred Securities issued by the 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 shall become immediately due and payable. If an Event of
Default specified in Section 5.1(d) with respect to Securities at the time
Outstanding occurs, the principal amount of all the Securities (or, if the
Securities are Discount Securities, such portion of the principal amount of such
Securities as may be specified by the terms) 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.
(b) At any time after such a declaration of acceleration with respect to the
Securities 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 V,
provided the Holders of a majority in aggregate principal amount of the
Outstanding Securities, by written notice to the Company and the Trustee, may
rescind and annul such declaration and its consequences if:
(i) the Company has paid or deposited with the Trustee a sum sufficient
to pay:
(A) all overdue installments of interest on all Securities;
(B) any accrued Additional Interest on all Securities;
(C) the principal of (and premium, if any on) any Securities 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
(ii) all Events of Default with respect to Securities, other than the
non-payment of the principal of Securities that has become due solely by such
acceleration, have been cured or waived as provided in Section 5.13.
(c) If the Holders of Securities fail to annul such declaration and waive
such default, the holders of a majority in aggregate Liquidation Amount (as
defined in the Trust Agreement) of Preferred Securities issued by the 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 (a)
and (b) above of this Section 5.2.
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(d) No such rescission shall affect any subsequent default or impair any
right consequent thereon.
Section 5.3 Collection of Indebtedness and Suits for Enforcement by Trustee.
(a) The Company covenants that if:
(i) default is made in the payment of any installment of interest
(including any Additional Interest) on any Security when such interest becomes
due and payable and such default continues for a period of 30 days or (ii)
default is made in the payment of the principal of (and premium, if any, on)
any Security at the Stated Maturity thereof,
then the Company will, upon demand of the Trustee, pay to the Trustee, for the
benefit of the Holders of the Securities, the whole amount then due and payable
on the 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.
(b) 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.
(c) If an Event of Default with respect to Securities 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 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
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:
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(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
(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 the Securities pursuant to this Article V 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 (and 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;
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SECOND: Subject to Article XIII, to the payment of the amounts
then due and unpaid upon Securities for principal (and premium, if any) and
interest (including any Additional Interest) in respect of which or for the
benefit of which such money has been collected, ratably, without preference or
priority of any kind, according to the amounts due and payable on such
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 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:
(a) such Holder has previously given written notice to the Trustee of a
continuing Event of Default with respect to the Securities;
(b) the Holders of not less than 25% in aggregate principal amount of the
Outstanding Securities shall have made written request to the Trustee to
institute proceedings in respect of such Event of Default in its own name as
Trustee hereunder;
(c) 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;
(d) the Trustee for 60 days after its receipt of such notice, request and
offer of indemnity has failed to institute any such proceeding; and
(e) 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; 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 Preferred Securities.
Notwithstanding any other provision in this Indenture, the Holder of any
Security shall have the right, which is absolute and unconditional, to receive
payment of the principal of (and premium, if any) and (subject to Sections 3.8
and 3.12) interest (including any Additional Interest) on such Security on the
Stated Maturity (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. Any registered holder of the
Preferred Securities issued by the Issuer
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Trust shall have the right, upon the occurrence of an Event of Default described
in Section 5.1(a) or 5.1(b), to institute a suit directly against the Company
for enforcement of payment to such holder of principal of (and premium, if any)
and (subject to Sections 3.8 and 3.12) interest (including any Additional
Interest) on the Securities having a principal amount equal to the aggregate
Liquidation Amount (as defined in the Trust Agreement) of such Preferred
Securities held by such holder.
Section 5.9. Restoration of Rights and Remedies.
If the Trustee, any Holder or any holder of Preferred Securities issued by the
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 Preferred Securities, then, and in every such case, the Company, the
Trustee, such Holders and such holder of Preferred 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 Preferred 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.
(a) No delay or omission of the Trustee, any Holder of any Security with
respect to the Securities or any holder of any Preferred Security to exercise
any right or remedy accruing upon any Event of Default with respect to the
Securities shall impair any such right or remedy or constitute a waiver of any
such Event of Default or an acquiescence therein.
(b) Every right and remedy given by this Article V or by law to the Trustee
or to the Holders and the right and remedy given to the holders of Preferred
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 Preferred
Securities, as the case may be.
Section 5.12. Control by Holders.
The Holders of not less than a majority in aggregate principal amount of the
Outstanding Securities shall have the right to direct the time, method and place
of conducting any proceeding for any remedy available to the Trustee or
exercising any trust or power conferred on the Trustee, with respect to the
Securities, provided that:
(a) such direction shall not be in conflict with any rule of law or with this
Indenture,
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(b) the Trustee may take any other action deemed proper by the Trustee that
is not inconsistent with such direction, and
(c) 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.
(a) The Holders of not less than a majority in aggregate principal amount of
the Outstanding Securities affected thereby and, the holders of a majority in
aggregate Liquidation Amount (as defined in the Trust Agreement) of the
Preferred Securities issued by the Issuer Trust may waive any past default
hereunder and its consequences except a default:
(i) in the payment of the principal of (and premium, if any) or
interest (including any Additional Interest) on any Security (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) all
Securities due otherwise than by acceleration), or
(ii) 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 affected thereby.
(b) Any such waiver shall be deemed to be on behalf of the Holders of all the
Securities, or in the case of waiver by holders of Preferred Securities issued
by the Issuer Trust, by all holders of Preferred Securities issued by the Issuer
Trust.
(c) Upon any such waiver, such default shall cease to exist, and any Event of
Default arising therefrom shall be deemed to have been cured, for every purpose
of this Indenture, but no such waiver shall extend to any subsequent or other
default or impair any right consequent thereon.
Section 5.14. Undertaking for Costs.
All parties to this Indenture agree, and each Holder of any Security by his
acceptance thereof shall be deemed to have agreed, that any court may, in its
discretion, require, in any suit for the enforcement of any right or remedy
under this Indenture, or in any suit against the Trustee for any action taken or
omitted by it as Trustee, the filing by any party litigant in such suit of an
undertaking to pay the costs of such suit, and that such court may, in its
discretion, assess reasonable costs, including reasonable attorneys' fees,
against any party litigant in such suit, having due regard to the merits and
good faith of the claims or defenses made by such party litigant, but the
provisions of this Section shall not apply to any suit instituted by the
Trustee, to any suit instituted by any Holder, or group of Holders, holding in
the aggregate more than 10% in aggregate principal amount of the Outstanding
Securities, or to any suit instituted by any Holder for the
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enforcement of the payment of the principal of (and premium, if any) or interest
(including any Additional Interest) on any Security on or after the Stated
Maturity.
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,
(i) 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
(ii) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness of
the opinions expressed therein, upon certificates or opinions furnished to the
Trustee and conforming to the requirements of this Indenture, but in the case
of any such certificates or opinions that by any provisions hereof are
specifically required to be furnished to the Trustee, the Trustee shall be
under a duty to examine the same to determine whether or not they conform to
the requirements of this Indenture.
(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:
(i) this subsection shall not be construed to limit the effect of
subsection (a) of this Section 6.1;
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(ii) the Trustee shall not be liable for any error of judgment made in
good faith by a Responsible Officer, unless it shall be proved that the
Trustee was negligent in ascertaining the pertinent facts; and
(iii) the Trustee shall not be liable with respect to any action taken
or omitted to be taken by it in good faith in accordance with the direction of
Holders pursuant to Section 5.12 relating to the time, method and place of
conducting any proceeding for any remedy available to the Trustee, or
exercising any trust or power conferred upon the Trustee, under this Indenture
with respect to the Securities.
(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, the
Trustee shall transmit by mail to all Holders of Securities, 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 (and premium, if any) or
interest (including any Additional Interest) on any Security, the Trustee shall
be protected in withholding such notice if and so long as the board of
directors, the executive committee or a trust committee of directors and/or
Responsible Officers of the Trustee in good faith determines that the
withholding of such notice is in the interests of the Holders of Securities; and
provided further, that, in the case of any default of the character specified in
Section 5.1(c), no such notice to Holders of Securities shall be given until at
least 30 days after the occurrence thereof. For the purpose of this Section
6.2, 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 the Securities.
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;
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(b) any request or direction of the Company mentioned herein shall be
sufficiently evidenced by a Company Request or Company Order and any resolution
of the Board of Directors may be sufficiently evidenced by a Board Resolution;
(c) whenever in the administration of this Indenture the Trustee shall deem
it desirable that a matter be proved or established prior to taking, suffering
or omitting any action hereunder, the Trustee (unless other evidence be herein
specifically prescribed) may, in the absence of bad faith on its part, rely upon
an Officers' Certificate;
(d) the Trustee may consult with counsel of its choice and 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; provided, however, that nothing herein shall relieve the Trustee of
its obligations upon the occurrence of an Event of Default that has not been
cured or waived to exercise with respect to the Securities such of the rights
and powers vested in the Trustee by this Indenture, and to use the same degree
of care and skill in exercising such rights and powers as a reasonably prudent
person would use under the circumstances in the conduct of his own affairs.
(f) the Trustee shall not be bound to make any investigation into the facts
or matters stated in any resolution, certificate, statement, instrument,
opinion, report, notice, request, 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
(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.
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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, bad faith or willful misconduct.
(c) Since the Issuer Trust is being formed solely to facilitate an investment
in the Preferred Securities, the Company, as Holder of the Common Securities,
hereby covenants to pay all debts and obligations (other than with respect to
the Preferred Securities and the Common Securities) and all reasonable costs and
expenses of the Issuer Trust (including without limitation all costs and
expenses relating to the organization of the Issuer Trust, the fees and expenses
of the trustees and all reasonable 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, its directors, officers,
employees and agents for, and hold them harmless against, any loss, liability or
expense (including the reasonable compensation and the expenses and
disbursements of its agents and counsel) incurred without
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negligence, bad faith or willful misconduct, 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
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.
(e) When the Trustee incurs expenses or renders services after an Event of
Default specified in Section 5.1(d) 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 issued hereunder shall be subject to, and shall
comply fully with, 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 with respect to the Securities issued
hereunder which shall be:
(a) a Person 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 exercise corporate trust powers and subject to
supervision or examination by federal, state, territorial or District of
Columbia authority, or
(b) an entity 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,
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 6.9, 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 VI. 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 issued hereunder.
Section 6.10. Resignation and Removal; Appointment of Successor.
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(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 by
giving written notice thereof to the Company. If an instrument of acceptance by
a successor Trustee shall not have been delivered to the Trustee within 30 days
after the giving of such notice of resignation, the resigning Trustee may
petition any court of competent jurisdiction for the appointment of a successor
Trustee.
(c) The Trustee may be removed at any time with respect to the Securities by
Act of the Holders of a majority in aggregate principal amount of the
Outstanding Securities, delivered to the Trustee and to the Company.
(d) If at any time:
(i) 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
(ii) 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
(iii) the Trustee shall become incapable of acting or shall be adjudged
bankrupt or insolvent or a receiver of the Trustee or of its property shall be
appointed or any public officer shall take charge or control of the Trustee or
of its property or affairs for the purpose of rehabilitation, conservation or
liquidation;
then, in any such case, (x) the Company, acting pursuant to the authority of a
Board Resolution, may remove the Trustee with respect to the Securities issued
hereunder, or (y) subject to Section 5.14, any Holder who has been a bona fide
Holder of a Security for at least six months may, on behalf of such Holder and
all others similarly situated, petition any court of competent jurisdiction for
the removal of the Trustee with respect to the Securities 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, the Company, by a Board Resolution, shall promptly appoint a
successor Trustee with respect to the Securities. If, within one year after such
resignation, removal or incapability, or the occurrence of such vacancy, a
successor Trustee with respect to the Securities shall be appointed by Act of
the Holders of a majority in aggregate principal amount of the Outstanding
Securities delivered to the Company and the retiring Trustee, the successor
Trustee so appointed shall, forthwith upon its acceptance of such appointment,
become the successor Trustee with respect to the Securities and supersede the
successor Trustee appointed by the Company. If no successor Trustee with respect
to the Securities shall have been so appointed by the Company or the Holders and
accepted appointment in the manner hereinafter provided, any Holder who has been
a bona fide Holder of a Security for at least six months may, subject to Section
5.14, on behalf of such Holder and all
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others similarly situated, petition any court of competent jurisdiction for the
appointment of a successor Trustee with respect to the Securities.
(f) The Company shall give notice of each resignation and each removal of the
Trustee with respect to the Securities and each appointment of a successor
Trustee with respect to the Securities by mailing written notice of such event
by first-class mail, postage prepaid, to the Holders of Securities 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 and the address
of its Corporate Trust Office.
Section 6.11. Acceptance of Appointment by Successor.
(a) In case of the appointment hereunder of a successor Trustee with respect
to all Securities, every such successor Trustee so appointed shall execute,
acknowledge and deliver to the Company and to the retiring Trustee an instrument
accepting such appointment, and thereupon the resignation or removal of the
retiring Trustee shall become effective and such successor Trustee, without any
further act, deed or conveyance, shall become vested with all the rights,
powers, trusts and duties of the retiring Trustee; but, on the request of the
Company or the successor Trustee, such retiring Trustee shall, upon payment of
its charges, execute and deliver an instrument transferring to such successor
Trustee all the rights, powers and trusts of the retiring Trustee and shall duly
assign, transfer and deliver to such successor Trustee all property and money
held by such retiring Trustee hereunder.
(b) 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 Section
6.11(a).
(c) 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 VI.
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 VI, 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.
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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.
(a) The Trustee may appoint an Authenticating Agent or Agents with respect to
the Securities, which shall be authorized to act on behalf of the Trustee to
authenticate Securities 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 6.14, such Authenticating Agent shall resign immediately in the manner
and with the effect specified in this Section 6.14.
(b) 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.
(c) 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.
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.
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(d) 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.
(e) If an appointment is made pursuant to this Section 6.14, the Securities
may have endorsed thereon, in addition to the Trustee's certificate of
authentication, an alternative certificate of authentication in the following
form:
This is one of the Securities referred to in the within mentioned Indenture.
Dated: BANKERS TRUST COMPANY,
as Trustee
By:__________________________
As Authenticating Agent
By:__________________________
As Authenticating Agent
ARTICLE VII
HOLDERS 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) quarterly, not more than 15 days after March 15, June 15, September 15,
and December 15 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 dates, excluding
from any such list names and addresses received by the Trustee in its capacity
as Securities Registrar, 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.
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(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 within 60 days of January 31 in each
calendar year, commencing with January 31, 2001.
(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 is 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.
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The Company shall not consolidate with or merge into any other Person or sell,
convey, transfer or lease its properties and assets substantially as an entirety
or sell, convey, transfer or distribute the capital stock or all or
substantially all of the assets of any Principal Subsidiary Bank 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:
(a) 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 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;
(b) 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
(c) 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 (a)
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.
(a) 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
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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.
(b) 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 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.
(c) 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 enter into one or more indentures
supplemental hereto, in form satisfactory to the Trustee, for any of the
following purposes:
(a) 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;
(b) 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;
(c) to facilitate the issuance of Securities in certificated or other
definitive form;
(d) to add to the covenants of the Company for the benefit of the Holders of
the Securities or to surrender any right or power herein conferred upon the
Company;
(e) to add any additional Events of Default for the benefit of the Holders of
the Securities;
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(f) to change or eliminate any of the provisions of this Indenture, provided
that any such change or elimination shall not apply to any Outstanding
Securities;
(g) 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 (g) shall not
adversely affect the interest of the Holders of Securities in any material
respect or, in the case of the Securities issued to the Issuer Trust and for so
long as any of the Preferred Securities issued by the Issuer Trust shall remain
outstanding, the holders of such Preferred Securities;
(h) to evidence and provide for the acceptance of appointment hereunder by a
successor Trustee with respect to the Securities 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
(i) 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 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 under this Indenture; provided, however, that no such supplemental
indenture shall, without the consent of the Holder of each Outstanding Security
affected thereby:
(a) 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
Stated 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),
(b) reduce the percentage in aggregate principal amount of the Outstanding
Securities, the consent of whose Holders is required for any such supplemental
indenture, or the consent of whose Holders is required for any waiver (of
compliance with certain provisions of this Indenture or certain defaults
hereunder and their consequences) provided for in this Indenture, or
(c) 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;
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provided, further, that, in the case of the Securities issued to the Issuer
Trust, so long as any of the Preferred Securities issued by the Issuer Trust
remains outstanding, (i) no such amendment shall be made that adversely affects
the holders of such Preferred 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 (as defined in the Trust Agreement) of such Preferred
Securities then outstanding unless and until the principal of (and premium, if
any, on) the Securities 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 Preferred Securities issued by the Issuer
Trust provided therein without the prior consent of the holders of each such
Preferred 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.
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 IX 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
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 IX, 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 IX 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 IX may, and shall if required by the Company,
bear a notation in form
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approved by the Company as to any matter provided for in such supplemental
indenture. If the Company shall so determine, new Securities so modified as to
conform, in the opinion of the 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.
ARTICLE X
COVENANTS
Section 10.1. Payment of Principal, Premium and Interest.
The Company covenants and agrees for the benefit of the Securities that it
will duly and punctually pay the principal of (and premium, if any) and interest
(including any Additional Interest) on the Securities in accordance with the
terms of such Securities and this Indenture.
Section 10.2. Maintenance of Office or Agency.
(a) The Company will maintain in each Place of Payment an office or agency
where Securities may be presented or surrendered for payment, where Securities
may be surrendered for registration of transfer or exchange and where notices
and demands to or upon the Company in respect of the Securities and this
Indenture may be served. The Company initially appoints the Trustee, acting
through its Corporate Trust Office, as its agent for said purposes. The Company
will give prompt written notice to the Trustee of any change in the location of
any such office or agency. If at any time the Company shall fail to maintain
such office or agency or shall fail to furnish the Trustee with the address
thereof, such presentations, surrenders, notices and demands may be made or
served at the Corporate Trust Office of the Trustee, and the Company hereby
appoints the Trustee as its agent to receive all such presentations, surrenders,
notices and demands.
(b) 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 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.
(a) If the Company shall at any time act as its own Paying Agent with respect
to the 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, segregate and hold in trust for the benefit of the Persons entitled
thereto a sum sufficient to pay the principal 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.
(b) 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 (and
premium, if any) (or
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premium, if any) or interest, including Additional Interest on any Securities,
deposit with a Paying Agent a sum sufficient to pay the principal 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 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.
(c) The Company will cause each Paying Agent other than the Trustee to
execute and deliver to the Trustee an instrument in which such Paying Agent
shall agree with the Trustee, subject to the provisions of this Section, that
such Paying Agent will:
(i) 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
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;
(ii) 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 (including Additional Interest) in respect
of any Security;
(iii) at any time during the continuance of any default with respect to
the Securities, upon the written request of the Trustee, forthwith pay to the
Trustee all sums so held in trust by such Paying Agent; and
(iv) comply with the provisions of the Trust Indenture Act applicable
to it as a Paying Agent.
(d) 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.
(e) 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
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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 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 Preferred 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, 9.1(c) or 9.1(d) with
respect to the Securities, if before or after the time for such compliance the
Holders of at least a majority in aggregate principal amount of the Outstanding
Securities shall, by Act of such Holders, either waive such compliance in such
instance or generally waive compliance with such 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.
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: (a) the
Issuer Trust is the Holder of all of the Outstanding Securities, and (b) a Tax
Event described in clause (a) or (c) of the definition of "Tax Event" in Section
1.1 hereof has occurred and is continuing in respect of the Issuer Trust, the
Company shall pay the Issuer Trust (and its permitted successors or assigns
under the Trust Agreement) for so long as the Issuer Trust (or its permitted
successor or assignee) is the registered holder of the Outstanding Securities,
such additional sums as may be necessary in order that the amount of
Distributions (including any Additional Amount (as defined in the Trust
Agreement)) then due and payable by the Issuer Trust on the Preferred 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,
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however, that the deferral of the payment of interest pursuant to Section 3.12
or 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 that it shall
not: (a) declare or pay any dividends or distributions on, or redeem, purchase,
acquire or make a liquidation payment with respect to, any shares of the
Company's capital stock, or (b) 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 (other than (i) 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 stockholder 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, (ii) as a result of a reclassification, 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, (iii) 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, (iv) 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 (v) 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 (A) there shall have occurred any
event (x) 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, and (y) which the Company shall not have taken
reasonable steps to cure, (B) if the Securities are held by the Issuer Trust,
the Company shall be in default with respect to its payment of any obligations
under the Guarantee relating to the Preferred Securities issued by the Issuer
Trust, or (C) the Company shall have given notice of its election to begin an
Extension Period with respect to the Securities 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 issued to the Issuer
Trust (a) to hold, directly or indirectly, 100% of the Common Securities of the
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, (b) as holder of such Common Securities, not to voluntarily
terminate, windup or liquidate the Issuer Trust, other than (i) in connection
with a distribution of the Securities to the holders of the Preferred Securities
in liquidation of the Issuer Trust, or (ii) in connection with certain mergers,
consolidations or amalgamations permitted by the Trust Agreement, and (c) to use
its reasonable efforts, consistent with the terms and provisions of the Trust
Agreement, to cause the Issuer Trust to continue not to be taxable as a
corporation for United States federal income tax purposes.
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Section 10.8. Federal Tax Reports.
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 includible 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 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 XI, the
provision of such form of Security shall govern.
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 held by the Issuer
Trust, the Property Trustee under the Trust Agreement of such date and of the
principal amount of Securities to be redeemed and provide the additional
information required to be included in the notice or notices contemplated by
Section 11.4; provided, that, for so long as such Securities are held by the
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 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.
Section 11.3. Selection of Securities to be Redeemed.
(a) If less than all the Securities 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 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, 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.
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(b) 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 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 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;
(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 the
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.
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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.
(a) 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, 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.
(b) 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
authorized denominations, in aggregate principal amount equal to the unredeemed
portion of the Security so presented and having the same Original Issue Date,
Stated Maturity and terms.
(c) 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 the Issuer
Trust.
(a) The Company, at its option, may redeem such Securities (i) on or after
_____________, 2005, 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.
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(b) If less than all the Securities 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.
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.
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 are hereby expressly made subordinate and subject
in right of payment to the prior payment in full of all Senior Indebtedness.
Section 13.2. No Payment When Senior Indebtedness in Default; Payment Over of
Proceeds Upon Dissolution, Etc.
(a) If the Company shall default in the payment of any principal of (and
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, 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 (and 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.
(b) 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 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
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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
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.
(c) 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 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.
(d) 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.
(e) 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.
(f) 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.
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Section 13.3. Payment Permitted if No Default.
Nothing contained in this Article XIII 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.
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
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 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 XIII 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 XIII 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; (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 Preferred Security) from exercising all remedies otherwise
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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 XIII 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 effectuate the subordination provided in this
Article XIII and appoints the Trustee his or her attorney-in-fact for any and
all such purposes.
Section 13.7 No Waiver of Subordination Provisions.
(a) 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.
(b) Without in any way limiting the generality of Section 13.7(a), the
holders of Senior Indebtedness may, at any time and from time to time, without
the consent of or notice to the Trustee or the Holders of the Securities,
without incurring responsibility to such Holders of the Securities and without
impairing or releasing the subordination provided in this Article XIII 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.
(a) 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 XIII 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
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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.
(b) 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 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 XIII.
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.
Section 13.12. Article Applicable to Paying Agents.
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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 XIII 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 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 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.
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be duly
executed, all as of the day and year first above written.
PROVIDENT BANKSHARES CORPORATION
By:______________________
BANKERS TRUST COMPANY,
as Trustee
By:______________________
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EXHIBIT 4.2
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
_____________, 2000
PROVIDENT TRUST II
<PAGE>
PROVIDENT TRUST II
Certain Sections of this Trust Agreement relating to
Sections 310 through 318 of the
Trust Indenture Act of 1939:
<TABLE>
<CAPTION>
Trust Indenture Trust Agreement
Act Section Section
- --------------- ---------------------
<S> <C>
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)
(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)
</TABLE>
Note: This reconciliation and tie shall not, for any purpose, be deemed to be a
part of the Trust Agreement.
<PAGE>
TABLE OF CONTENTS
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<TABLE>
<CAPTION>
Page
----
<S> <C>
ARTICLE I DEFINITIONS................................................................................................. 1
Section 1.1 Definitions..................................................................................... 1
ARTICLE II CONTINUATION OF THE ISSUER TRUST........................................................................... 11
Section 2.1 Name............................................................................................ 11
Section 2.2 Office of the Delaware Trustee; Principal Place of Business..................................... 12
Section 2.3 Initial Contribution of Trust Property; Organizational Expenses................................. 12
Section 2.4 Issuance of the Preferred Securities............................................................ 12
Section 2.5 Subordinated Debentures......................................................................... 12
Section 2.6 Declaration of Trust............................................................................ 13
Section 2.7 Authorization to Enter into Certain Transactions................................................ 13
Section 2.8 Assets of Trust................................................................................. 16
Section 2.9 Title to Trust Property......................................................................... 16
ARTICLE III PAYMENT ACCOUNT........................................................................................... 17
Section 3.1 Payment Account................................................................................. 17
ARTICLE IV DISTRIBUTIONS; REDEMPTION.................................................................................. 17
Section 4.1 Distributions................................................................................... 17
Section 4.2 Redemption...................................................................................... 18
Section 4.3 Subordination of Common Securities.............................................................. 20
Section 4.4 Payment Procedures.............................................................................. 21
Section 4.5 Tax Returns and Reports......................................................................... 21
Section 4.6 Payment of Taxes; Duties, Etc. of the Issuer Trust.............................................. 22
Section 4.7 Payments under Indenture or Pursuant to Direct Actions.......................................... 22
Section 4.8 Liability of the Holder of Common Securities.................................................... 22
ARTICLE V TRUST SECURITIES CERTIFICATES............................................................................... 22
Section 5.1 Initial Ownership............................................................................... 22
Section 5.2 The Trust Securities Certificates............................................................... 22
Section 5.3 Execution and Delivery of Trust Securities Certificates......................................... 23
Section 5.4 Global Preferred Security....................................................................... 23
Section 5.5 Exchanges; Preferred Securities Certificates.................................................... 24
Section 5.6 Mutilated, Destroyed, Lost or Stolen Trust Securities Certificates.............................. 25
Section 5.7 Persons Deemed Holders.......................................................................... 26
Section 5.8 Access to List of Holders' Names and Addresses.................................................. 26
Section 5.9 Maintenance of Office or Agency................................................................. 26
Section 5.10 Appointment of Paying Agent..................................................................... 26
Section 5.11 Ownership of Common Securities by Depositor..................................................... 29
Section 5.12 Notices to Clearing Agency...................................................................... 29
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Section 5.13 Rights of Holders....................................... 27
ARTICLE VI ACTS OF HOLDERS; MEETINGS; VOTING 29
Section 6.1 Limitations on Holder's Voting Rights................... 29
Section 6.2 Notice of Meetings...................................... 30
Section 6.3 Meetings of Holders..................................... 30
Section 6.4 Voting Rights........................................... 31
Section 6.5 Proxies, etc............................................ 31
Section 6.6 Holder Action by Written Consent........................ 31
Section 6.7 Record Date for Voting and Other Purposes............... 31
Section 6.8 Acts of Holders......................................... 31
Section 6.9 Inspection of Records................................... 32
ARTICLE VII REPRESENTATIONS AND WARRANTIES.................................. 32
Section 7.1 Trustee 33
Section 7.2 Representations and Warranties of the Depositor......... 34
ARTICLE VIII THE ISSUER TRUSTEES; THE ADMINISTRATORS........................ 34
Section 8.1 Certain Duties and Responsibilities..................... 34
Section 8.2 Certain Notices......................................... 38
Section 8.3 Certain Rights of Property Trustee...................... 37
Section 8.4 Not Responsible for Recitals or Issuance of Securities.. 41
Section 8.5 May Hold Securities..................................... 38
Section 8.6 Compensation; Indemnity; Fees........................... 39
Section 8.7 Corporate Property Trustee Required; Eligibility of
Trustees and Administrators............................ 40
Section 8.8 Conflicting Interests................................... 40
Section 8.9 Co-Trustees and Separate Trustee........................ 41
Section 8.10 Resignation and Removal; Appointment of Successor....... 42
Section 8.11 Acceptance of Appointment by Successor.................. 43
Section 8.12 Merger, Conversion, Consolidation or Succession to
Business............................................... 43
Section 8.13 Preferential Collection of Claims Against Depositor or
Issuer Trust........................................... 44
Section 8.14 Trustee May File Proofs of Claim........................ 44
Section 8.15 Reports by Property Trustee............................. 44
Section 8.16 Reports to the Property Trustee......................... 45
Section 8.17 Evidence of Compliance with Conditions Precedent........ 45
Section 8.18 Number of Issuer Trustees............................... 45
Section 8.19 Delegation of Power..................................... 45
Section 8.20 Appointment of Administrators........................... 48
ARTICLE IX DISSOLUTION, LIQUIDATION AND MERGER.............................. 49
Section 9.1 Dissolution Upon Expiration Date........................ 49
Section 9.2 Early Dissolution....................................... 49
Section 9.3 Termination............................................. 50
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Section 9.4 Liquidation............................................. 47
Section 9.5 Mergers, Consolidations, Amalgamations or
Replacements of the Issuer Trust....................... 49
ARTICLE X MISCELLANEOUS PROVISIONS.......................................... 49
Section 10.1 Limitation of Rights of Holders......................... 50
Section 10.2 Amendment............................................... 50
Section 10.3 Separability............................................ 51
Section 10.4 Governing Law........................................... 51
Section 10.5 Payments Due on Non-Business Day........................ 51
Section 10.6 Successors.............................................. 51
Section 10.7 Headings................................................ 52
Section 10.8 Reports, Notices and Demands............................ 52
Section 10.9 Agreement Not to Petition............................... 52
Section 10.10 Trust Indenture Act; Conflict with Trust Indenture Act.. 53
Section 10.11 Acceptance of Terms of Trust Agreement, Guarantee
and Indenture.......................................... 54
Section 10.12 Counterparts............................................ 54
</TABLE>
EXHIBITS
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EXHIBIT A Certificate of Trust........................................... 1
EXHIBIT B Form of Certificate Depositary Agreement....................... 1
EXHIBIT C Form of Common Securities Certificate.......................... 1
EXHIBIT D Form of Preferred Securities Certificate....................... 1
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AMENDED AND RESTATED TRUST AGREEMENT
------------------------------------
THIS AMENDED AND RESTATED TRUST AGREEMENT, dated as of ________, 2000 (this
"Trust Agreement"), is among (a) PROVIDENT BANKSHARES CORPORATION, a Maryland
corporation (including any permitted successors or assigns, the "Depositor"),
(b) 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"), and (c)
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"); (d) the several
Holders, as hereinafter defined, and (e) the Administrators, as hereinafter
defined.
RECITALS
WHEREAS, the Depositor and the Delaware Trustees have heretofore duly
declared and established a business trust pursuant to the Delaware Business
Trust Act by the entering into a certain Trust Agreement, dated as of
___________, 2000 (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 __________, 2000 (the
"Certificate of Trust"), a copy of which is attached hereto as Exhibit A; and
---------
WHEREAS, the parties hereto desire to amend and restate the Original Trust
Agreement in its entirety as set forth herein to provide for, among other
things, (a) the issuance of the Common Securities by the Issuer Trust to the
Depositor, (b) the issuance and sale of the Preferred Securities by the Issuer
Trust pursuant to the Underwriting Agreement, (c) the acquisition by the Issuer
Trust from the Depositor of all of the right, title and interest in the Junior
Subordinated Debentures and (d) the appointment of the Administrators, and (e)
the addition of the Property Trustee as a party to the Original 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:
ARTICLE I
DEFINITIONS
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 I have the meanings assigned to them
in this Article and include the plural as well as the singular;
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(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; and
(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;
"25% Capital Limitation" means the limitation imposed by the Federal
Reserve that the proceeds of certain qualifying securities similar to the Trust
Securities will qualify as Tier 1 capital of the issuer up to an amount not to
exceed, when taken together with all cumulative preferred securities of the
Depositor, if any, 25% of the issuer's Tier 1 capital, or any subsequent
limitation adopted by the Federal Reserve.
"Act" has the meaning specified in Section 6.8.
"Additional Amount" means, with respect to Trust Securities of a given
Liquidation Amount and/or for 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.
"Administrators" means each Person appointed in accordance with Section
8.20 solely in such Person's capacity as Administrator of the Issuer Trust and
not in such Person's individual capacity, or any successor Administrator
appointed as herein provided; with the initial Administrators being ____________
and _____________.
"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 Preferred Security or beneficial interest therein, the rules
and procedures of the Depositary for such Preferred 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.
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"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, for purposes of this Trust Agreement, 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 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 State of Maryland or in the City of New
York, are authorized or required by law or executive order to remain closed or
(c) a day on which the Property Trustee's Corporate Trust Office or the Delaware
Trustee's Corporate Trust Office or the Corporate Trust Office of the Debenture
Trustee is closed for business.
"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)
3
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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 Preferred 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 Preferred Securities
as "Tier 1 Capital" (or the then equivalent thereof), except as otherwise
restricted under the 25% Capital Limitation, 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 hereto 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 Time of Delivery for the Preferred Securities,
which date is also the date of execution and delivery of this Trust Agreement.
"Code" means the Internal Revenue Code of 1986, as amended or any successor
statute, in each case as amended from time to time.
"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 at such time.
"Common Securities Certificate" means a certificate evidencing ownership of
Common Securities, substantially in the form attached hereto as Exhibit C.
---------
"Common Security" means an undivided beneficial interest in the assets of
the Issuer Trust, having a Liquidation Amount of $_____. and having the rights
provided therefor in this Trust Agreement, including the right to receive
Distributions and a Liquidation Distribution as provided herein.
"Corporate Trust Office" means (a) with respect to the Property Trustee or
the Debenture Trustee, the principal office of the Property Trustee located in
the City of New York, New York,
4
<PAGE>
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, and (b) with respect to the Delaware
Trustee, the principal office of the Delaware Trustee located at 1011 Centre
Road, Suite 200, Wilmington, Delaware, 19805-1266.
"Debenture Event of Default" means an "Event of Default" as defined in the
Indenture.
"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, as trustee under the Indenture.
"Delaware Business Trust Act" means Chapter 38 of Title 12 of the Delaware
Code, 12 Del. C. 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 and not in its individual capacity, or its
successor in interest in such capacity, or any successor Delaware 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.
"Direct Action" has the meaning specified in Section 5.13(c).
"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;
(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;
(c) default by the Issuer Trust in the payment of any Redemption Price of
any Trust Security when it becomes due and payable; or
5
<PAGE>
(d) default in the performance, or breach, in any material respect, of any
covenant or warranty of the Issuer Trust 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 Preferred
Securities, a written notice specifying such default or breach and requiring it
to be remedied and stating that such notice is a "Notice of Default" hereunder;
or
(e) the occurrence of 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, in each case as amended from time to time.
"Expiration Date" has the meaning specified in Section 9.1.
"Extension Period" has the meaning specified in Section 4.1.
"Global Preferred Securities Certificate" means a Preferred Securities
Certificate evidencing ownership of Global Preferred Securities.
"Global Preferred Security" means a Preferred Security, the ownership and
transfers of which shall be made through book entries by a Clearing Agency as
described in Section 5.4.
"Guarantee Agreement" means the Guarantee Agreement executed and delivered
by the Depositor and Bankers Trust Company, as guarantee trustee,
contemporaneously with the execution and delivery of this Trust Agreement, for
the benefit of the Holders of the Preferred 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.
"Indemnified Person" has the meaning specified in Section 8.6(c).
"Indenture" means the Junior Subordinated Indenture, dated as of ________,
2000, between the Depositor and the Debenture Trustee (as amended or
supplemented from time to time) relating to the issuance of the Junior
Subordinated Debentures.
"Investment Company Act" means the Investment Company Act of 1940, as
amended or any successor statute, in each case as amended from time to time.
"Investment Company Event" means the receipt by the Issuer Trust of an
Opinion of Counsel, rendered by counsel experienced in such matters, to the
effect that, as a result of the
6
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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 Preferred Securities.
"Issuer Trust" means Provident Trust II.
"Issuer Trustees" means, collectively, the Property Trustee and the
Delaware Trustee.
"Junior Subordinated Debentures" means the aggregate principal amount of
the Depositor's _______% junior subordinated deferrable interest debentures, due
__________, 2030 which date may be shortened once at any time by the Depositor
to any date not earlier than ______________, 2005 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 Preferred Securities based upon the relative Liquidation Amounts of
such securities and (b) with respect to a distribution of Junior Subordinated
Debentures to Holders of Trust Securities in connection with a dissolution and
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 $_____ per Trust Security.
"Liquidation Date" means the date on which Junior Subordinated Debentures
on the Liquidation Distributions 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 Preferred Securities" or "Majority
in Liquidation Amount of the Common Securities" means, except as provided by the
Trust Indenture Act, Preferred Securities or Common Securities, as the case may
be, representing more than 50% of the aggregate Liquidation Amount of all then
Outstanding Preferred Securities or Common Securities, as the case may be.
"Officers' Certificate" means, a certificate signed by the Chairman of the
Board, Chief Executive Officer, President or a Vice President and by the Chief
Financial Officer, the Treasurer, an Associate Treasurer, an Assistant
Treasurer, the Secretary, or an Assistant Secretary, of the
7
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Depositor, and delivered to the appropriate Issuer Trustee. 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;
(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.
"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 Preferred 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, 5.6 and 5.13;
provided, however, that in determining whether the Holders of the requisite
Liquidation Amount of the Outstanding Preferred Securities have given any
request, demand, authorization, direction, notice, consent, or waiver hereunder,
Preferred 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 (i) in determining whether any Issuer Trustee
shall be protected in relying upon any such request, demand, authorization,
direction, notice, consent or waiver, only Preferred Securities that such Issuer
Trustee or such Administrator, as the case may be, knows to be so owned shall be
so disregarded and (ii) the foregoing shall not apply at any time when all of
the outstanding Preferred Securities are owned by the Depositor, one or more of
the Issuer Trustees, one or more of the Administrators and/or any such
Affiliate. Preferred Securities so owned which
8
<PAGE>
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 Preferred Securities and that the pledgee is not the
Depositor or any Affiliate of the Depositor.
"Owner" means each Person who is the beneficial owner of Global Preferred
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 by 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.
"Preferred Securities Certificate" means a certificate evidencing ownership
of Preferred Securities, substantially in the form attached hereto as Exhibit D.
---------
"Preferred Security" means a security constituting a preferred undivided
beneficial interest in the assets of the Issuer Trust, having a Liquidation
Amount of $_____. and having the rights provided therefore in this Trust
Agreement, including the right to receive Distributions and a Liquidation
Distribution as provided herein.
"Property Trustee" means the Person identified as the "Property Trustee" in
the first paragraph 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.
"Prospectus" means the final prospectus covering the Preferred Securities,
Junior Subordinated Debentures and the Guarantee Agreement.
"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 Junior Subordinated 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 with respect to a redemption of any Trust
Security, the Liquidation Amount of such Trust Security, together with
accumulated but unpaid Distributions to
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but excluding the date fixed for redemption, plus the related amount of the
premium, if any, paid by the Depositor upon the concurrent redemption of a Like
Amount of Junior Subordinated Debentures.
"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, principal, vice president, assistant vice president, assistant
treasurer, assistant secretary or any other officer of the Property Trustee
customarily performing functions similar to those performed by any of the above
designated officers and having direct responsibility for the administration of
this 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.
"Securities Act" means the Securities Act of 1933, as amended, and any
successor statute thereto, in each case as amended from time to time.
"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 Securities Certificate" of any particular Preferred Securities
Certificate means every Preferred 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 Preferred Securities Certificate; and, for
the purposes of this definition, any Preferred Securities Certificate executed
and delivered under Section 5.6 in exchange for or in lieu of a mutilated,
destroyed, lost or stolen Preferred Securities Certificate shall be deemed to
evidence the same beneficial interest in the Issuer Trust as the mutilated,
destroyed, lost or stolen Preferred Securities Certificate.
"Successor 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 hereunder) 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 Preferred Securities, there is more than an insubstantial risk
that (a) 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, (b) 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 (c) the Issuer Trust is, or will be within 90 days of the delivery
of such Opinion of Counsel, subject to more than a de minimus amount of other
taxes, duties or other governmental charges.
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"Time of Delivery" means 9:00 a.m. Eastern Standard Time, with respect to
the Preferred Securities or the Common Securities, on the fourth Business Day
(unless postponed in accordance with the provisions of Section 4 of the
Underwriting Agreement) following the date of execution of the Underwriting
Agreement, or such other time not later than ten Business Days after such date
as shall be agreed upon by the Underwriters, the Issuer Trust and the Company.
"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 (a) all Exhibits hereto, and (b) 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, as amended by
the Trust Indenture Reform Act of 1990, 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, and (c) all proceeds and rights
in respect of the foregoing and 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.
"Trust Securities Certificate" means any one of the Common Securities
Certificates or the Preferred Securities Certificates.
"Trust Security" means any one of the Common Securities or the Preferred
Securities.
"Underwriters" has the meaning specified in the Underwriting Agreement.
"Underwriting Agreement" means the Underwriting Agreement, dated as of
________, 2000, among the Issuer Trust, the Depositor and the Underwriters, as
the same may be amended from time to time.
ARTICLE II
CONTINUATION OF THE ISSUER TRUST
Section 2.1 Name
The Issuer Trust continued hereby shall be known as "Provident Trust II,"
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.
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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), 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 Issuer Trustees,
Administrators and Depositor. The principal executive office of the Issuer
Trust is in care of Provident Bankshares Corporation, 114 East Lexington Street,
Baltimore, Maryland 21202, Attention: Office of the Secretary.
Section 2.3 Initial Contribution of Trust Property; Organizational Expenses.
The Issuer Trustees acknowledge receipt in trust from the Depositor in
connection with this Trust Agreement of the sum of $______, 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
or Administrators, promptly reimburse such Issuer Trustee or Administrators for
any such reasonable expenses paid by such Issuer Trustee or Administrators. The
Depositor shall make no claim upon the Trust Property for the payment of such
expenses.
Section 2.4 Issuance of the Preferred Securities.
The Depositor, both on its own behalf and on behalf of the Issuer Trust
pursuant to the Original Trust Agreement, executed and delivered the
Underwriting 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 Underwriters,
Preferred Securities Certificates, registered in the names requested by the
Underwriters, in an aggregate amount of ___________ Preferred Securities having
an aggregate Liquidation Amount of $__________, against receipt of the aggregate
purchase price of such Preferred Securities of $__________, by the Property
Trustee.
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 manually execute in
accordance with Section 5.3 and the Property Trustee shall deliver to the
Depositor, Common Securities Certificates, registered in the name of the
Depositor, in an aggregate amount of _____ Common Securities having an aggregate
Liquidation Amount of $______ against receipt by the Property Trustee of the
aggregate purchase price of such Common Securities of $______ by the Property
Trustee. Contemporaneously with the executions, and deliveries of any Common
Securities Certificates and any Preferred Securities Certificates, an
Administrator, on behalf of the Issuer Trust, shall subscribe for and purchase
from the Depositor, corresponding amounts of Junior Subordinated Debentures,
registered in the name of the Issuer Trust and having an aggregate principal
amount equal to $___________; 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 $__________.
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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 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 (as agents of the Issuer Trust), 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 fiduciaries with
respect to the Issuer Trust and, to the fullest extent permitted by applicable
law, this Trust Agreement shall be construed in a manner consistent with such
intent. The Property Trustee shall have the right, power and authority 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 paragraph (b) of this Section 2.7 and in
accordance with the following provisions (i) and (ii), the Issuer Trustees and
the Administrators shall act as follows:
(i) Each Administrator shall have the power and authority and is
hereby authorized and directed to act on behalf of the Issuer Trust with
respect to the following:
(A) the compliance with the Underwriting Agreement regarding the
issuance and sale of the Trust Securities;
(B) the compliance with the Securities Act, applicable state
securities or blue sky laws, and the Trust Indenture Act;
(C) the execution of the Trust Securities on behalf of the
Issuer Trust in accordance with this Trust Agreement;
(D) the listing of the Preferred Securities upon such securities
exchange or exchanges or upon the Nasdaq National Market as shall be
determined by the Depositor, with the registration of the Preferred
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;
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(E) the application for a taxpayer identification number for the
Issuer Trust;
(F) the preparation of a registration statement and a prospectus
in relation to the Preferred Securities, including any amendments
thereto and the taking of any action necessary or desirable to sell
the Preferred Securities in a transaction or series of transactions
subject to the registration requirements of the Securities Act;
(G) causing the Issuer Trust to enter into, and execute, deliver
and perform on behalf of the Issuer Trust all agreements, instruments,
certificates or other documents as such Administrator deems necessary
or incidental to the purposes and functions of the Issuer Trust; and
(H) any action incidental to the foregoing as the Administrators
may from time to time determine is necessary or advisable to give
effect to the terms of this Trust Agreement.
(ii) The Property Trustee shall have the power and authority, and is
hereby authorized and directed, to act on behalf of the Issuer Trust with
respect to the following matters:
(A) establishing and maintaining the Payment Account;
(B) receiving and exercising all of the rights, powers and
privileges of the holder of the Junior Subordinated Debentures;
(C) receiving and collecting interest, principal and any other
payments made in respect of the Junior Subordinated Debentures in the
Payment Account;
(D) distributing amounts owed to the Holders in respect of the
Trust Securities in accordance with the terms of this Trust Agreement;
(E) acting as Paying Agent and/or Securities Registrar to the
extent appointed as such hereunder;
(F) sending 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) distributing the Trust Property in accordance with the terms
of this Trust Agreement;
(H) to the extent provided in this Trust Agreement, winding up
the affairs of and liquidating the Issuer Trust and preparing,
executing and filing the certificate of cancellation with the
Secretary of State of the State of Delaware;
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(I) after an Event of Default (other than under paragraph (b),
(c) or (d) of the definition of such term if such Event of Default is
by or with respect to the Property Trustee), complying with the
provisions of this Trust Agreement and taking any action to give
effect to the terms of this Trust Agreement and protecting and
conserving the Trust Property for the benefit of the Holders (without
consideration of the effect of any such action on any particular
Holder); and
(J) taking any action incidental or convenient to the foregoing
as the Property Trustee may from time to time determine is necessary
or advisable to give effect to the terms of this Trust Agreement;
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.
(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 (in each case acting on behalf of the Issuer
Trust) shall (i) acquire any investments or engage in any activities not
authorized by this Trust Agreement, (ii) sell, assign, transfer, exchange,
mortgage, pledge, setoff, 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 reasonably be expected to cause the Issuer
Trust to become taxable as a corporation for 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 Preferred Securities, the
Depositor shall have the power and authority 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 and filing by the Issuer Trust with the
Commission, and the execution and delivery on behalf of the Issuer Trust,
of a registration statement and a prospectus in relation to the Preferred
Securities, including any amendments thereto, and the taking of any action
necessary or desirable to sell the Preferred Securities in a transaction or
a series of transactions subject to 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 Preferred
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
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order to comply with the applicable laws of any such states in connection
with the offer and sale of the Preferred Securities;
(iii) the negotiation of the terms of, and the execution and delivery
of, the Underwriting Agreement providing for the sale of the Preferred
Securities;
(iv) the preparation and filing by the Issuer Trust with the
Commission and the execution on behalf of the Issuer Trust of a
registration statement on Form 8-A relating to the registration of the
Preferred Securities under Section 12(b) or 12(g) of the Exchange Act, as
amended, including any amendments thereto;
(v) compliance with the listing requirements of the Preferred
Securities upon such securities exchange or exchanges, or upon the Nasdaq
National Market, as shall be determined by the Depositor, the registration
of the Preferred 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; and
(vi) 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 as a corporation 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, the
Administrators, 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, the Administrators, 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 Preferred 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.
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
Issuer Trust and shall be held and administered by the Property Trustee (in its
capacity as such) for the benefit of the Issuer Trust and the Holders in
accordance with this Trust Agreement.
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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 Distributions of Additional
Amounts) will be made on the Trust Securities at the rate and on the dates that
payments of interest (including payments 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 ________, 2000, 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
quarterly in arrears on March 31, June 30, September 30, and December 31 of
each year, commencing on ______________, 2000. 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 interest or other
payment in respect of any such delay), except that, if such Business Day is
in the next succeeding calendar year, payment of such Distributions shall
be made on the immediately preceding Business Day, in either case 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").
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(ii) The Trust Securities shall be entitled to Distributions payable
at a rate of _______% 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 four. 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 20 consecutive quarterly
periods (an "Extension Period"), provided that no Extension Period may
extend beyond ____________, 2030. As a consequence of any such deferral,
quarterly 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 the rate per annum of _______% per annum, compounded quarterly)
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 four (4). 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 the 15th day of March,
June, September or December (whether or not a Business Day).
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;
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(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 Preferred 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 shall use "CUSIP" numbers,
and the Property Trustee shall indicate the "CUSIP" 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.
(d) If the Property Trustee gives a notice of redemption in respect of any
Preferred 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
Preferred Securities held in global form, irrevocably deposit with the Clearing
Agency for such Preferred 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 Preferred Securities. With respect to Preferred 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 Holders of the Preferred Securities upon surrender of their
Preferred Securities Certificates. Notwithstanding the foregoing, Distributions
payable on or prior to the
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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 Distributions
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 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 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 Agreement, Distributions on such Trust
Securities will continue to accumulate, as set forth in Section 4.1, 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 particular
Preferred Securities to be redeemed shall be selected not more than 60 days
prior to the Redemption Date by the Property Trustee from the Outstanding
Preferred Securities not previously called for redemption in such a manner as
the Property Trustee shall deem fair and appropriate.
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 Preferred 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(a) or 5.1(b) of the Indenture shall
have occurred and be continuing, no payment of any Distribution (including any
Additional Amounts, if applicable) on, or 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 Additional Amounts, if applicable) on all Outstanding
Preferred 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 Preferred 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 Preferred 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
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Amounts, if applicable) on, or the Redemption Price of, or Liquidation
Distribution in respect of Preferred Securities then due and payable. Except as
provided in Section 5.13(b), the existence of an Event of Default does not
entitle the Holders of Preferred 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 Holder of the Common Securities shall have
no 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
Preferred Securities have been cured, waived, or otherwise eliminated. Until all
such Events of Default under this Trust Agreement with respect to the Preferred
Securities have been so cured, waived, or otherwise eliminated, the Property
Trustee shall act solely on behalf of the Holders of the Preferred Securities
and not on behalf of the Holder of the Common Securities, and only the Holders
of the Preferred 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, if applicable)
in respect of the Preferred 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 Preferred 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 Preferred Securities may be made by wire
transfer of immediately available funds upon written request of such Holder of
Preferred Securities 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 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.
(a) The Administrators shall prepare and file (or cause to be prepared and
filed), at the Depositor's expense, 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 (i) 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 (ii) 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 and the Administrators 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.
(b) On or before December 15 of each year during which any Preferred
Securities are outstanding, the Administrators shall furnish to the Paying Agent
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
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and 1099 pursuant to Section 6049 of the Code. Such information shall include
the amount of original issue discount includible in income for each outstanding
Preferred Security during such year.
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 Preferred Securities shall be
reduced by the amount of any corresponding payment such Holder (or any owner
related thereto) 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(c) of the Indenture
regarding allocation of expenses.
ARTICLE V
TRUST SECURITIES CERTIFICATES
Section 5.1 Initial Ownership.
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 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
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, Preferred Securities Certificates shall
be issued in the form of one or more fully registered Global Preferred
Securities Certificates which will be deposited with or on behalf of Cede as the
Depositary's nominee and registered in the name of Cede as the Depositary's
nominee. Unless and until it is exchangeable in whole or in part for the
Preferred Securities in definitive form, a global security may not be
transferred except as a whole
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by the Depositary to a nominee of the Depositary or by a nominee of the
Depositary to the Depositary or another nominee of the Depositary or by the
Depositary or any such nominee to a successor of such Depositary or a nominee of
such successor.
(c) A single Common Securities Certificate representing the Common
Securities shall be issued to the Depositor in the form of a definitive Common
Securities Certificate.
Section 5.3 Execution and Delivery of Trust Securities Certificates.
On the Closing Date, an Administrator shall cause Trust Securities
Certificates, in an aggregate Liquidation Amount as provided in Sections 2.4 and
2.5, as the case may be, to be executed on behalf of the Issuer Trust and
delivered to the Property Trustee and upon such delivery the Property Trustee
shall authenticate the Preferred Securities Certificates and deliver all such
Trust Securities Certificates upon the written order of the Issuer Trust,
executed by an Administrator thereof, without further corporate action by the
Issuer Trust, in authorized denominations, and whereupon the Trust Securities
evidenced by such Trust Securities Certificates shall be duly and validly issued
undivided beneficial interests in the assets of the Issuer Trust and entitled to
the benefits of this Trust Agreement.
Section 5.4 Global Preferred Security.
(a) Any Global Preferred Security issued under this Trust Agreement shall
be registered in the name of the Clearing Agency or its nominee and delivered to
it or its custodian therefor, and such Global Preferred Security shall
constitute a single Preferred Security for all purposes of this Trust Agreement.
(b) Notwithstanding any other provision in this Trust Agreement, a Global
Preferred Security may not be exchanged in whole or in part for Preferred
Securities registered, and no transfer of the Global Preferred Security in whole
or in part may be registered, in the name of any Person other than the Clearing
Agency or its nominee for such Global Preferred Security, Cede, or other nominee
thereof unless (i) such Clearing Agency advises the Depositor and the Issuer
Trustees 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 Preferred Security, and the Depositor is unable to locate a qualified
successor within 90 days of receipt of such notice from the Depositary, (ii) the
Depositor 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) Every Preferred Security authenticated and delivered upon registration
of transfer of, or in exchange for or in lieu of, a Global Preferred Security or
any portion thereof, whether pursuant to this Article V or Article IV or
otherwise, shall be authenticated and delivered in the form of, and shall be, a
Global Preferred Security, unless such Global Preferred Security is registered
in the name of a Person other than the Clearing Agency for such Global Preferred
Security or a nominee thereof.
(d) The Clearing Agency or its nominee, as the registered owner of a
Global Preferred Security, shall be considered the Holder of the Preferred
Securities represented by such Global Preferred Security for all purposes under
this Trust Agreement and the Preferred Securities, and
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owners of beneficial interests in such Global Preferred Security shall hold such
interests pursuant to the Applicable Procedures and, except as otherwise
provided herein, shall not be entitled to receive physical delivery of any such
Preferred 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 Preferred 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, the Securities
Registrar nor the Depositor shall have any liability in respect of any transfers
effected by the Clearing Agency.
(e) The rights of owners of beneficial interests in a Global Preferred
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; Preferred Securities Certificates.
(a) The Property Trustee shall keep or cause to be kept at its Corporate
Trust Office a register or registers for the purpose of registering Preferred
Trust Securities Certificates and transfers and exchanges of Preferred
Securities Certificates in which the registrar and transfer agent with respect
to the Preferred Securities (the "Securities Registrar"), subject to such
reasonable regulations as it may prescribe, shall provide for the registration
of Preferred 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 Preferred 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 Preferred Securities and transfers of Preferred
Securities as herein provided.
Upon surrender for registration of transfer of any Preferred Security at
the offices or agencies of the Property Trustee designated for that purpose, an
Administrator shall execute and the Property Trustee shall authenticate and
deliver, in the name of the designated transferee or transferees, one or more
new Preferred Securities of the same series of any authorized denominations of
like tenor and aggregate Liquidation Amount and bearing such legends as may be
required by this Trust Agreement.
At the option of the Holder, Preferred Securities may be exchanged for
other Preferred Securities of any authorized denominations, of like tenor and
aggregate Liquidation Amount and bearing such legends as may be required by this
Trust Agreement, upon surrender of the Preferred Securities to be exchanged at
such office or agency. Whenever any Preferred Securities are so surrendered for
exchange, an Administrator shall execute and the Property Trustee shall
authenticate and deliver the Preferred Securities that the Holder making the
exchange is entitled to receive.
All Preferred Securities issued upon any transfer or exchange of Preferred
Securities shall be the valid obligations of the Issuer Trust, evidencing the
same interest, and entitled to the same benefits under this Trust Agreement, as
the Preferred Securities surrendered upon such transfer or exchange.
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Every Preferred 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
Preferred 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 Preferred Securities.
Neither the Issuer Trust nor the Property Trustee shall be required,
pursuant to the provisions of this Section, (i) to issue, register the transfer
of, or exchange any Preferred Security during a period beginning at the opening
of business 15 days before the day of selection for redemption of Preferred
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 Preferred Security so selected for redemption in whole or in part,
except, in the case of any such Preferred Security to be redeemed in part, any
portion thereof not to be redeemed.
(b) Certain Transfers and Exchanges. Trust Securities may only be
transferred, in whole or in part, in accordance with the terms and conditions
set forth in this Trust Agreement. To the fullest extent permitted by applicable
law, any transfer or purported transfer of any Trust Security not made in
accordance with this Trust Agreement shall be null and void.
(i) Non-Global Security to Non-Global Security. A Trust Security
that is not a Global Preferred 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 Preferred Security as provided in Section 5.5(a).
(ii) Free Transferability. Subject to this Section 5.5, Preferred
Securities shall be freely transferable.
(iii) Exchanges Between Global Preferred Security and Non-Global
Preferred Security. A beneficial interest in a Global Preferred Security
may be exchanged for a Preferred Security that is not a Global Preferred
Security as provided in Section 5.4.
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 or a protected
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 (in the case of a Preferred Securities Certificate), 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
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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, the Administrators, the Securities Registrar, or the
Depositor 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, the Securities Registrar
nor the Depositor 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 Preferred 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 for such purposes. The Property Trustee shall give prompt
written notice to the Depositor, the Administrators and 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 appointed by the Property
Trustee, or any additional Paying Agent appointed by the Administrators, shall
execute and deliver to the Property Trustee an instrument in which such
successor Paying Agent or additional Paying Agent shall agree with the Property
Trustee 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
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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.
On the Closing Date, 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 of the
Common Securities, and the Depositor or any successor Holder may transfer the
Common Securities only (a) 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 (b) a transfer 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 other attempted transfer of the Common
Securities 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 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 Preferred Securities are
represented by a Global Preferred 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.
Section 5.13 Rights of Holders.
(a) The legal title to all Trust Property shall be vested at all times in
the Issuer Trust and shall be held and administered by 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 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 will be validly issued, fully paid and, subject to
Section 4.8 hereof, nonassessable undivided beneficial interests in the Trust
Property. Subject to Section 4.8 hereof, 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.
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(b) For so long as any Preferred 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 Preferred 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
Preferred 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.
The Holders of at least a Majority in Liquidation Amount of the Preferred
Securities may, on behalf of the Holders of all the Preferred 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 affected thereby. No such rescission shall affect any
subsequent default or impair any right consequent thereon.
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Upon receipt by the Property Trustee of written notice declaring such an
acceleration, or rescission and annulment thereof, by Holders of the Preferred
Securities all or part of which is represented by Global Preferred Securities, a
record date shall be established for determining Holders of Outstanding
Preferred 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 Preferred 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(a)
or 5.1(b) of the Indenture, any Holder of Preferred 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
Preferred Securities of such Holder (a "Direct Action"). Except as set forth in
Sections 5.13(b) and 5.13(c) of this Trust Agreement, the Holders of Preferred
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 Preferred 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 be construed so as to constitute the Holders
from time to time as members of an association.
(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 Property Trustee, or executing any trust or power conferred on
the Debenture 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
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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 Preferred 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 Preferred
Securities. The Property Trustee shall not revoke any action previously
authorized or approved by a vote of the Holders of Preferred Securities, except
by a subsequent vote of the Holders of Preferred Securities. The Property
Trustee shall notify all Holders of the Preferred 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 Preferred 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 as a corporation 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 Preferred Securities, whether by way of amendment to the Trust
Agreement or otherwise, or (ii) the dissolution 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
Preferred 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 as a corporation
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.
(a) 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 25% of the aggregate Liquidation
Amount of the Preferred Securities and the Administrators or the Property
Trustee may, at any time in their discretion, call a meeting of Holders of
Preferred Securities to vote on any matters as to which Holders are entitled to
vote.
(b) Holders of at least a Majority in Liquidation Amount of the Preferred
Securities, present in person or represented by proxy, shall constitute a quorum
at any meeting of Holders of Preferred Securities.
(c) If a quorum is present at a meeting, an affirmative vote by the
Holders of record present, in person or by proxy, holding Preferred Securities
representing at least a Majority in
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Liquidation Amount of the Preferred Securities held by the Holders present,
either in person or by proxy, at such meeting shall constitute the action of the
Holders of Preferred 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 $_____ 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 and without prior notice 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 to act 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 the 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.
Section 6.8 Acts of Holders.
(a) 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
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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 6.8.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness of such
execution or by a certificate of a notary public or other officer authorized by
law to take acknowledgments of deeds, certifying that the individual signing
such instrument or writing acknowledged to him the execution thereof. Where such
execution is by a signer acting in a capacity other than his individual
capacity, such certificate or affidavit shall also constitute sufficient proof
of his authority. The fact and date of the execution of any such instrument or
writing, or the authority of the Person executing the same, may also be proved
in any other manner which any Issuer Trustee or Administrator receiving the same
deems sufficient.
(c) The ownership of Trust Securities shall be proved by the Securities
Register.
(d) 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.
(e) 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.
(f) 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.
ARTICLE VII
REPRESENTATIONS AND WARRANTIES
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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 have 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 do not conflict with or constitute a breach of the certificate
of incorporation or by-laws of the Property Trustee.
(d) At the Time of Delivery, the Property Trustee has not knowingly
created any Liens or encumbrances 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, the Trust Agreement.
(g) The execution, delivery and performance by the Delaware Trustee of
this Trust Agreement have 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).
(h) The execution, delivery and performance of this Trust Agreement by the
Delaware Trustee do not conflict with or constitute a breach of the certificate
of incorporation or by-laws of the Delaware Trustee.
(i) No consent, approval or authorization of, or registration with or
notice to any state or Federal banking authority is required for the execution,
delivery, or performance by the Delaware Trustee, of this Trust Agreement.
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(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 the Depositor.
The Depositor hereby represents and warrants for the benefit of the Holders
that:
(a) the Trust Securities Certificates issued at the Time of Delivery 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 or them. 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 the Delaware Trustee from liability for his or its own grossly
negligent action, his or its own grossly negligent failure to act, or his 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 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
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Holder, by his or its acceptance of a Trust Security, agrees that he or it will
look solely to the revenue and proceeds from the Trust Property to the extent
legally available for distribution to it or him as herein provided and that
neither the Issuer Trustees nor the Administrators are personally liable to it
or him 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;
(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 Preferred Securities relating to the time, method and place of
conducting any proceeding for any remedy available to the Property
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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.
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.
(c) In the event the Property Trustee receives notice of the Depositor's
exercise of its right to shorten the stated maturity of the Junior Subordinated
Debentures as provided in Section 3.16 of the Indenture, the Property Trustee
shall give notice of such shortening of the
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stated maturity to the Holders at least 30 but not more than 60 days before the
effective date thereof.
Section 8.3 Certain Rights of Property Trustee.
Subject to the provisions of Section 8.1:
(a) the Property Trustee may 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;
(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
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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.
(a) 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, and except as provided in the definition of the term "Outstanding" in
Article I, 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.
(b) If at any time the Depositor or any of its Affiliates (in either case
a "Depositor Affiliated Owner/Holder") is the Owner or Holder of any of the
Trust Securities, such Depositor Affiliated Owner/Holder shall have the right to
deliver to the Property Trustee all or such portion of its Trust Securities as
it elects and receive, in exchange therefor, a Like Amount of debentures. Such
election (i) shall be exercisable effective on any Distribution Date by such
Depositor Affiliated Owner/Holder delivering to the Property Trustee a written
notice of such election specifying the Liquidation Amount of the Trust
Securities with respect to which such election is being made and the
Distribution Date on which such exchange shall occur, which Distribution Date
shall be not less than ten Business Days after the date of receipt by the
Property Trustee of such election notice and (ii) shall be conditioned upon such
Depositor Affiliated Owner/Holder having delivered or caused to be delivered to
the Property Trustee or its designee the Trust Securities which are the subject
of such election by 10:00 a.m. New York time, on the Distribution Date on which
such exchange is to occur. After the exchange, such Trust Securities will be
cancelled and will no longer be deemed to be Outstanding and all rights of the
Depositor or its Affiliates(s) with respect to such Trust Securities will cease.
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(c) In the case of any exchange described in Section 8.5(b), the Issuer
Trust will, on the date of such exchange, exchange debentures having a principal
amount equal to a proportional amount of the aggregate Liquidation Amount of the
Outstanding Common Securities, based on the ratio of the aggregate Liquidation
Amount of the Trust Securities exchanged pursuant to Section 8.5(b) divided by
the aggregate Liquidation Amount of the Trust Securities Outstanding immediately
prior to such exchange, for such proportional amount of Common Securities held
by the Depositor (which contemporaneously shall be cancelled and no longer be
deemed to be Outstanding); provided, that the Depositor delivers or causes to be
delivered to the Property Trustee or its designee the required amount of Common
Securities to be exchanged by 10:00 a.m. New York time on the Distribution Date
on which such exchange is to occur.
Section 8.6 Compensation; Indemnity; Fees.
The Depositor 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 and the Administrators 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 the Issuer Trustees' bad faith, 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 (excluding income taxes, other than
taxes referred to in Sections 4.5 and 4.6 hereunder), 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 bad faith, 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 or charge 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 (subject to Section
8.8) 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
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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.
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 Agreement and the Indenture shall be deemed to be
specifically 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.
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Section 8.9 Co-Trustees and Separate Trustee.
(a) 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
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 8.9. Any co-trustee
or separate trustee appointed pursuant to this Section 8.9 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.
(b) 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.
(c) 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:
(i) The Trust Securities shall be executed by one or more
Administrators, and the Trust Securities shall be executed and delivered and all
rights, powers, duties, and obligations hereunder in respect of the custody of
securities, cash and other personal property held by, or required to be
deposited or pledged with, the Property Trustees specified hereunder, shall be
exercised, solely by the Property Trustee and not by such co-trustee or separate
trustee.
(ii) 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.
(iii) 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
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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.
(iv) 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.
(v) The Property Trustee shall not be liable by reason of any act
of a co-trustee or separate trustee.
(vi) Any Act of Holders delivered to the Property Trustee shall be
deemed to have been delivered to each such co-trustee and separate trustee.
Section 8.10 Resignation and Removal; Appointment of Successor.
(a) No resignation or removal of any Issuer Trustee (the "Relevant
Trustee") and no appointment of a successor Issuer Trustee pursuant to this
Article VIII shall become effective until the acceptance of appointment by the
successor Issuer Trustee in accordance with the applicable requirements of
Section 8.11.
(b) Subject to Section 8.10(a), a Relevant Trustee may resign at any time
by giving written notice thereof to the Depositor and the Holders of the Common
Securities. The Depositor shall appoint a successor by requesting from at least
three Persons meeting the eligibility requirements its expenses and charges to
serve as the successor Issuer Trustee on a form provided by the Administrators,
and selecting the Person who agrees to the lowest expenses and charges. If the
instrument of acceptance by the successor Issuer 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 Depositor, any court of competent jurisdiction for the
appointment of a successor Issuer Trustee.
(c) 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
Preferred Securities, delivered to the Relevant Trustee (in its individual
capacity and on behalf of the Issuer Trust) with or without cause.
(d) 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 Common Securities, by Act of the Holders of record
of not less than 25% aggregate Liquidation Amount of the Preferred Securities
then Outstanding delivered to such Relevant Trustee, shall promptly appoint a
successor Issuer Trustee or Trustees, and such successor Issuer Trustee shall
comply with the applicable requirements of Section 8.11. If no successor Issuer
Trustee shall have been so appointed by the Holders of the Preferred 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 in the State of Delaware for the appointment of
a successor Issuer Trustee.
(e) The Property Trustee shall give notice of each appointment of a
successor Issuer Trustee to all Holders in the manner provided in Section 10.8
and shall give notice of each resignation, removal and appointment of a Relevant
Trustee to the Depositor and to the
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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.
(f) 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 Holders of the Common Securities or 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 Delaware Trustee set forth in Section 8.7).
Section 8.11 Acceptance of Appointment by Successor.
(a) In case of the appointment hereunder of a successor Issuer Trustee,
each such successor Issuer Trustee with respect to the Trust Securities shall
execute, acknowledge and deliver an instrument wherein each successor Issuer
Trustee shall accept such appointment and which shall contain such provisions as
shall be necessary or desirable to transfer and confirm to, and to vest in, each
successor Issuer Trustee all the rights, powers, trusts and duties of the
retiring or removed Relevant Trustee with respect to the Trust Securities and
the Issuer Trust, and upon the execution and delivery of such instrument the
resignation or removal of the retiring or removed Relevant Trustee shall become
effective to the extent provided therein and each such successor Issuer Trustee,
without any further act, deed or conveyance, shall become vested with all the
rights, powers, trusts and duties of the retiring or removed Relevant Trustee;
but, on request of the Issuer Trust or any successor Issuer Trustee such
Relevant Trustee shall duly assign, transfer and deliver to such successor
Issuer Trustee all Trust Property, all proceeds thereof and money held by such
Relevant Trustee hereunder with respect to the Trust Securities and the Issuer
Trust.
(b) Upon request of any such successor Issuer Trustee, the Issuer Trust
and/or the retiring or removed Relevant Trustee (upon payment of its reasonable
expenses) shall execute any and all instruments for more fully and certainly
vesting in and confirming to such successor Issuer Trustee all such rights,
powers and trusts referred to in the first or second preceding paragraph, as the
case may be.
(c) No successor Issuer Trustee shall accept its appointment unless at the
time of such acceptance such successor Issuer 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.
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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 Junior Subordinated Debentures or 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
the Issuer Trust (or any such other obligor) as is required by 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 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) Within 60 days of January 31 of each year commencing with January 31,
2001, 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 January 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
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(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 as set forth in Section 10.10 of
this Trust Agreement.
(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.
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 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, as set forth in Section 10.10 of this Trust Agreement. 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 as
set forth in Section 10.10 of this Trust Agreement. 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 event the number of Issuer
Trustees shall 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.
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(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 (other than the initial Administrators) shall be
appointed by the Holders of a Majority in Liquidation Amount of the Common
Securities and all Administrators (including the initial Administrators) may be
removed by the Holders of a Majority in Liquidation Amount of the Common
Securities or may resign at any time. Each Administrator shall sign an agreement
agreeing to comply with the terms 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 Trust 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 or a Delaware Trustee 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 or Delaware
Trustee, as the case may be, set forth in Section 8.7).
(d) 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
_______, 2030 (the "Expiration Date"), and 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:
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(a) the occurrence of any Bankruptcy Event with respect to the Depositor,
unless the Depositor shall transfer the Common Securities as provided by Section
5.11, in which case this provision shall refer instead to any Bankruptcy Event
with respect to the successor Holder of the Common Securities;
(b) delivery of the written direction to the Property Trustee from the
Holder of the Common Securities 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 distribute the Junior Subordinated Debentures to Holders
in exchange for the Preferred 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 Preferred 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.
The respective obligations and responsibilities of the Issuer Trustees, the
Administrators and the Issuer Trust created and continued hereby shall terminate
upon the latest to occur of the following: (a) the distribution by the Property
Trustee to Holders of all amounts required to be distributed hereunder pursuant
to the liquidation of the Issuer Trust in accordance with Section 9.4, or upon
the redemption of all of the Trust Securities pursuant to Section 4.2, (b) the
payment of any expenses owed by the Issuer Trust, (c) the discharge of all
administrative duties of the Administrators, including the performance of any
tax reporting obligations with respect to the Issuer Trust or the Holders, and
(d) the filing of a certificate of cancellation with the Secretary of State of
the State of Delaware pursuant to Section 3810 of the Delaware Business Trust
Act.
Section 9.4 Liquidation.
(a) If an Early Termination Event specified in clause (a), (b) or (d) of
Section 9.2 occurs or upon the Expiration Date, the Issuer Trust shall 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 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
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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 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 Preferred Securities or its nominee, as the
registered Holder of the Global Preferred Securities Certificate, shall receive
a registered global certificate or certificates representing the Junior
Subordinated Debentures to be delivered upon such distribution with respect to
Preferred Securities held by the Clearing Agency or its nominee, and (iii) any
Trust Securities Certificates not held by the Clearing Agency for the Preferred
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 Trust Property shall be liquidated, and the Issuer Trust 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 satisfaction of liabilities to
creditors of the Issuer Trust as provided by applicable law, an amount equal to
the aggregate of the 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 liquidation pro rata (determined
as aforesaid) with Holders of Preferred Securities, except that, if a Debenture
Event of Default has occurred and is continuing, the Preferred Securities shall
have a priority over the Common Securities as provided in Section 4.3.
(e) Following the dissolution of the Issuer Trust and after the completion
of the winding up of the affairs of the Issuer Trust, one of the Issuer Trustees
shall file a certificate of cancellation with the Secretary of State of the
State of Delaware.
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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
and Section 9.4. At the request of the Holders of the Common Securities, but
without the consent of the Holders of at least a Majority in Liquidation Amount
of the Preferred Securities, the Delaware Trustee, or the Property Trustee, 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 (a) such successor entity either (i) expressly assumes all of the
obligations of the Issuer Trust with respect to the Securities or (ii)
substitutes for the Preferred Securities other securities having substantially
the same terms as the Preferred Securities (the "Successor Securities") so long
as the Successor Securities have the same priority as the Preferred Securities
with respect to distributions and payments upon liquidation, redemption and
otherwise, (b) a trustee of such successor entity possessing the same powers and
duties as the Property Trustee is appointed to hold the Junior Subordinated
Debentures, (c) such merger, consolidation, amalgamation, replacement,
conveyance, transfer or lease does not cause the Preferred Securities (including
any Successor Securities) to be downgraded by any nationally recognized
statistical rating organization if the Preferred Securities were rated by any
nationally recognized statistical rating organization immediately prior to such
merger, consolidation, amalgamation, replacement, conveyance, transfer or lease,
(d) such merger, consolidation, amalgamation, replacement, conveyance, transfer
or lease does not adversely affect the rights, preferences and privileges of the
Holders of the Preferred Securities (including any Successor Securities) in any
material respect, (e) such successor entity has a purpose substantially
identical to that of the Issuer Trust, (f) 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 (i) such merger, consolidation, amalgamation,
replacement, conveyance, transfer or lease does not adversely affect the rights
preferences and privileges of the holders of the Preferred Securities (including
any Successor Securities) in any material respect, and (ii) 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 (g) 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
Securities at least to the extent provided by the Guarantee Agreement.
Notwithstanding the foregoing, the Issuer Trust shall not, except with the
consent of Holders of 100% in Liquidation Amount of the Preferred 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 as a corporation for United States federal income tax
purposes. Any merger or similar agreement shall be executed by the
Administrators on behalf of the Issuer Trust.
ARTICLE X
MISCELLANEOUS PROVISIONS
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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.
Section 10.2 Amendment.
(a) This Trust Agreement may be amended from time to time by the Property
Trustee, the Administrators or the Holders of a Majority in Liquidation Amount
of the Common Securities, without the consent of any Holder of the Preferred
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 matters or questions arising under this Trust
Agreement; provided, however, that such amendment shall not adversely affect in
any material respect the interests of the Holders of the Preferred Securities
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 as a corporation 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 6.1(c) or Section 10.2(c), any provision
of this Trust Agreement may be amended by the Property Trustee, the
Administrators, 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 Preferred Securities and (ii) receipt by the Property
Trustee 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 cause the Issuer Trust to be taxable as a corporation for
United States federal income tax purposes or affect 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. Notwithstanding any other provision herein,
without the unanimous consent of the Holders (such consent being obtained in
accordance with Section 6.3 or 6.6), this Section 10.2(c) may not be amended.
(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 as a corporation for United States federal income tax
purposes.
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(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) Notwithstanding anything in this Trust Agreement to the contrary,
without the consent of the Property Trustee, this Trust Agreement may not be
amended to affect the rights, duties, obligations or powers of the Property
Trustee. 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) Notwithstanding anything in this Trust Agreement to the contrary,
without the consent of the Delaware Trustee, this Trust Agreement may not be
amended to affect the rights, duties, obligations or powers of the Delaware
Trustee.
(i) 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.
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
WITH RESPECT TO THIS TRUST AGREEMENT AND THE TRUST SECURITIES SHALL BE CONSTRUED
IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF DELAWARE, WITHOUT
REGARD TO THE CONFLICT OF LAWS PROVISIONS THEREOF.
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(d)), except that, if such Business Day is in the next
succeeding calendar year, payment on any Trust Security shall be made on the
immediately preceding Business Day, in each case, 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.
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
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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.
(a) 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, (i) in the case of
a Holder of Preferred Securities, to such Holder as such Holder's name and
address may appear on the Securities Register; and (ii) in the case of the
Holder of Common Securities or the Depositor, to Provident Bankshares
Corporation, 114 East Lexington Street, Baltimore, Maryland 21202, Attention:
Office of the Secretary, facsimile no.: (410) ____________ 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.
(b) 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 Issuer Trust, 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: (i) 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; (ii) with respect to the Delaware Trustee to Bankers Trust (Delaware),
1011 Centre Road, Suite 200, Trust Department, Wilmington, Delaware 19805-1266,
Attention: Lisa Wilkins, and (iii) with respect to the Administrators, to them
at the address above for notices to the Depositor, marked "Attention: Office of
the Secretary." Such notice, demand or other communication to or upon the Issuer
Trust or the Property Trustee 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 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
52
<PAGE>
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
Depositor 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 Preferred 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 Issuer 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 January 31 of
each year, commencing January 31, 2001, 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 314(a)(1)B(3) (if
any) of the Trust Indenture Act and the compliance certificates required by
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
53
<PAGE>
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 of 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 AGREEMENT
AND THE INDENTURE, AND THE AGREEMENT TO THE SUBORDINATION PROVISIONS AND OTHER
TERMS OF THE GUARANTEE AGREEMENT 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.
Section 10.12 Counterparts.
This Trust Agreement may contain more than one counterpart of the signature
page and this Trust Agreement may be executed by the affixing of the signature
of each of the Issuer Trustees to one of such counterpart signature pages. All
of such counterpart signature pages shall be read as though one, and they shall
have the same force and effect as though all of the signers had signed a single
signature paper.
[SIGNATURES APPEAR ON THE FOLLOWING PAGE]
54
<PAGE>
IN WITNESS WHEREOF, the parties have caused this Amended and Restated Trust
Agreement to be duly executed as of the day and year first above written.
PROVIDENT BANKSHARES CORPORATION
as Depositor
By:________________________________
BANKERS TRUST COMPANY,
as Property Trustee
By:
BANKERS TRUST (DELAWARE),
as Delaware Trustee
By:________________________________
___________________________________
Initial Administrator
___________________________________
Initial Administrator
55
<PAGE>
EXHIBIT A
---------
[INSERT CERTIFICATE OF TRUST FILED WITH DELAWARE SECRETARY OF STATE]
1
<PAGE>
EXHIBIT B
---------
[INSERT FORM OF CERTIFICATE DEPOSITARY AGREEMENT]
1
<PAGE>
EXHIBIT C
---------
THIS CERTIFICATE IS NOT TRANSFERABLE EXCEPT IN COMPLIANCE WITH APPLICABLE LAW
AND SECTION 5.11 OF THE TRUST AGREEMENT
Certificate Number Number of Common Securities ______
C-__
Certificate Evidencing Common Securities
of
Provident Trust II
_______% Common Securities
(liquidation amount $______ per Common Security)
Provident Trust II, a statutory business trust created under the laws of
the State of Delaware (the "Issuer Trust"), hereby certifies that Provident
Bankshares Corporation (the "Holder"), is the registered owner of _________
(___) common securities of the Issuer Trust representing undivided beneficial
interests in the assets of the Issuer Trust and has designated the Provident
Trust II _______% Common Securities (liquidation amount $_____ per Common
Security) (the "Common Securities"). Except in accordance with Section 5.11 of
the Trust Agreement (as defined below), the Common Securities are not
transferable and any attempted transfer hereof other than in accordance
therewith shall be void. The designations, rights, privileges, restrictions,
preferences and other terms and provisions of the Common Securities are set
forth in, and this certificate and the Common Securities represented hereby are
issued and shall in all respects be subject to the terms and provisions of, the
Amended and Restated Trust Agreement of the Issuer Trust, dated as of ______,
2000, 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,_________ and
___________, as Administrators, and the Holders of Trust Securities, including
the designation of the terms of the Common Securities as set forth therein. The
Issuer Trust will furnish a copy of the Trust Agreement to the Holder without
charge upon written request to the Issuer Trust at its principal place of
business or registered office.
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.
1
<PAGE>
IN WITNESS WHEREOF, one of the Administrators of the Issuer Trust has
executed this certificate this ___ day of ______________, 2000.
PROVIDENT TRUST II
By:__________________________________
Name:
Administrator
2
<PAGE>
EXHIBIT D
---------
[IF THE PREFERRED SECURITIES CERTIFICATE IS TO BE A GLOBAL PREFERRED
SECURITIES CERTIFICATE, INSERT B This Preferred Securities Certificate is a
Global Preferred 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 Preferred Securities Certificate is
exchangeable for Preferred 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 Preferred Securities Certificate is presented by an authorized
representative of The Depository Trust Company, a New York Corporation ("DTC"),
to Provident Trust II or its agent for registration of transfer, exchange or
payment, and any Preferred Securities Certificate issued is registered in the
name of such nominee as is requested by an authorized representative of DTC (and
any payment is made to such 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,
has an interest herein.]
CERTIFICATE NUMBER NUMBER OF PREFERRED SECURITIES
P-__
CUSIP NO. ________________________
CERTIFICATE EVIDENCING PREFERRED SECURITIES
OF
PROVIDENT TRUST II
_______% PREFERRED SECURITIES
(LIQUIDATION AMOUNT $_____. PER PREFERRED SECURITY)
Provident Trust II, a statutory business trust created under the laws of
the State of Delaware (the "Issuer Trust"), hereby certifies that
_______________ (the "Holder") is the registered owner of $___________ (
) aggregate liquidation amount of preferred securities of the Issuer Trust
representing an undivided beneficial interest in the assets of the Issuer Trust
and has designated the Provident Trust II _______% Preferred Securities
(liquidation amount $_____. per Preferred Security) (the "Preferred
Securities"). The Preferred Securities are transferable on the books and the
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 Preferred Securities are set forth in, and this certificate
and the Preferred Securities represented hereby are issued and shall in all
respects be subject to the terms
1
<PAGE>
and provisions of, the Amended and Restated Trust Agreement of the Issuer Trust,
dated as of ________, 2000 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, _____________ and _____________, as Administrators, and the Holders of
Trust Securities, including the designation of the terms of the Preferred
Securities as set forth therein. The Holder is entitled to the benefits of the
Guarantee Agreement entered into by Provident Bankshares Corporation, a Maryland
corporation, and Bankers Trust Company, as Guarantee Trustee, dated as of
________, 2000 as the same may be amended from time to time (the "Guarantee
Agreement"), to the extent provided therein. The Issuer Trust will furnish a
copy of the Trust Agreement and the Guarantee Agreement to the Holder without
charge upon written request to the Issuer Trust at its principal place of
business or registered office.
Upon receipt of this certificate, the Holder is bound by the Trust
Agreement and is entitled to the benefits thereunder.
2
<PAGE>
IN WITNESS WHEREOF, one of the Administrators of the Issuer Trust has
executed this certificate this _______ day of ____________, 2000.
PROVIDENT TRUST II
By:_____________________________
Name:
Administrator
AUTHENTICATED AND REGISTERED:
BANKERS TRUST COMPANY,
as Property Trustee and Securities Registrar
By:______________________________
Name:
Authorized Signatory
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this Preferred
Securities Certificate to:
_______________________________________________________________________________
(Insert assignee's name and social security or tax
identification number)
_______________________________________________________________________________
(Insert address and zip code of assignee)
and irrevocably appoints:
_______________________________________________________________________________
_______________________________________________________________________________
3
<PAGE>
_______________________________________________________________________________
agent to transfer this Preferred 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 Preferred 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
SEC Rule 17Ad-15.
4
<PAGE>
EXHIBIT 4.3
GUARANTEE AGREEMENT
Between
PROVIDENT BANKSHARES CORPORATION
(as Guarantor)
and
BANKERS TRUST COMPANY
(as Guarantee Trustee)
dated as of
______________, 2000
<PAGE>
PROVIDENT TRUST II
Certain Sections of this Guarantee Agreement relating to
Sections 310 through 318 of the
Trust Indenture Act of 1939:
<TABLE>
<CAPTION>
Trust Indenture Guarantee Agreement
Act Section Section
- ------------- -------------------
<S> <C> <C>
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
</TABLE>
Note: This reconciliation and tie shall not, for any purpose, be deemed to be a
part of the Guarantee Agreement.
<PAGE>
TABLE OF CONTENTS
-----------------
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
ARTICLE I. DEFINITIONS
Section 1.1. Definitions......................... 2
ARTICLE II. TRUST INDENTURE ACT
Section 2.1. Trust Indenture Act; Application.... 5
Section 2.2. List of Holders..................... 5
Section 2.3. Reports by the Guarantee Trustee.... 6
Section 2.4. Periodic Reports to Guarantee
Trustee............................. 6
Section 2.5. Evidence of Compliance with
Conditions Precedent................ 6
Section 2.6. Events of Default; Waiver........... 6
Section 2.7. Event of Default; Notice............ 6
Section 2.8. Conflicting Interests............... 7
ARTICLE III. POWERS, DUTIES AND RIGHTS OF THE GUARANTEE
TRUSTEE
Section 3.1. Powers and Duties of the Guarantee
Trustee............................. 7
Section 3.2. Certain Rights of Guarantee Trustee. 9
Section 3.3. Indemnity........................... 10
Section 3.4. Expenses............................ 11
ARTICLE IV. GUARANTEE TRUSTEE
Section 4.1. Guarantee Trustee; Eligibility...... 11
Section 4.2. Appointment, Removal and Resignation
of the Guarantee Trustee............ 11
ARTICLE V. GUARANTEE
Section 5.1. Guarantee........................... 12
Section 5.2. Waiver of Notice and Demand......... 12
Section 5.3. Obligations Not Affected............ 13
Section 5.4. Rights of Holders................... 13
Section 5.5. Guarantee of Payment................ 14
Section 5.6. Subrogation......................... 14
Section 5.7. Independent Obligations............. 14
ARTICLE VI. COVENANTS AND SUBORDINATION
Section 6.1. Subordination....................... 14
Section 6.2. Pari Passu Guarantees............... 15
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
ARTICLE VII. TERMINATION
Section 7.1 Termination......................... 15
ARTICLE VIII. MISCELLANEOUS
Section 8.1. Successors and Assigns.............. 15
Section 8.2. Amendments.......................... 16
Section 8.3. Notices............................. 16
Section 8.4. Benefit............................. 17
Section 8.5. Interpretation...................... 17
Section 8.6. Governing Law....................... 18
Section 8.7. Counterparts........................ 18
</TABLE>
<PAGE>
GUARANTEE AGREEMENT
-------------------
THIS GUARANTEE AGREEMENT, dated as of ______________, 2000 (this "Guarantee
Agreement"), 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, having its principal office at Four Albany Street,
Fourth Floor, New York, New York 10006, as trustee, for the benefit of the
Holders (as defined herein) from time to time of the Preferred Securities (as
defined herein) of Provident Trust II, a Delaware statutory business trust (the
"Issuer Trust").
RECITALS
WHEREAS, pursuant to an Amended and Restated Trust Agreement (the "Trust
Agreement"), dated as of ______________, 2000, 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") and the Holders from
time to time of preferred undivided beneficial ownership interests in the assets
of the Issuer Trust, the Issuer Trust is issuing up to $___________ aggregate
Liquidation Amount (as defined herein) of its _______% Preferred Securities,
Liquidation Amount $_______ per preferred security (the "Preferred Securities"),
representing preferred undivided beneficial ownership interests in the assets of
the Issuer Trust and having the terms set forth in the Trust Agreement;
WHEREAS, the Preferred Securities will be issued by the Issuer Trust and the
proceeds thereof, together with the proceeds from the issuance of the Issuer
Trust's Common Securities (as defined herein), will be used to purchase the
Junior Subordinated Debentures due ___________, 2030 (as defined in the Trust
Agreement) (the "Junior Subordinated Debentures") of the Guarantor which will be
deposited with Bankers Trust Company, as Property Trustee under the Trust
Agreement, as trust assets; and
WHEREAS, as incentive for the Holders to purchase Preferred Securities, the
Guarantor desires irrevocably and unconditionally to agree, to the extent set
forth herein, to pay to the Holders of the Preferred Securities the Guarantee
Payments (as defined herein) and to make certain other payments on the terms and
conditions set forth herein.
NOW, THEREFORE, in consideration of the purchase of the Preferred Securities
by each Holder, which purchase the Guarantor hereby acknowledges shall benefit
the Guarantor, and intending to be legally bound hereby, the Guarantor executes
and delivers this Guarantee Agreement for the benefit of the Holders from time
to time of the Preferred Securities.
1
<PAGE>
ARTICLE I
DEFINITIONS
Section 1.1. Definitions.
As used in this 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.
"Additional Amount" has the meaning specified in the Trust Agreement.
"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.
"Common Securities" means the securities representing common undivided
beneficial interests in the assets of the Issuer Trust.
"Delaware Trustee" shall have the meaning specified in the first recital of
this Guarantee Agreement.
"Distributions" means preferential cumulative cash distributions accumulating
from ______________, 2000 and payable quarterly in arrears on March 31, June 30,
September 30, and December 31 of each year, commencing ___________, 2000 at the
annual rate of _______% of the Liquidation Amount.
"Event of Default" means (a) a default by the Guarantor in any of its payment
obligations under this Guarantee Agreement, or (b) a default by the Guarantor in
any other obligation hereunder that remains unremedied for 30 days.
"Guarantee Agreement" means this Guarantee Agreement, as modified, amended or
supplemented from time to time.
"Guarantee Payments" means the following payments or distributions, without
duplication, with respect to the Preferred Securities, to the extent not paid or
made by or on behalf of the Issuer Trust: (a) any accrued and unpaid
Distributions (as defined in the Trust Agreement) required to be paid on the
Preferred Securities, to the extent the Issuer Trust shall have funds on hand
available therefor at such time, (b) the Redemption Price, with respect to the
Preferred 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 (c) upon a voluntary or involuntary termination, winding-up or liquidation
of the Issuer Trust, unless the Junior Subordinated Debentures are distributed
to the Holders, the lesser of (i) the aggregate of the Liquidation Amount and
all accumulated and unpaid Distributions to the date of payment to the extent
the Issuer Trust shall
2
<PAGE>
have funds on hand available to make such payment at such time and (ii) the
amount of assets of the Issuer Trust remaining available for distribution to
Holders in 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
Guarantee Agreement.
"Holder" means any holder, as registered on the books and records of the
Issuer Trust, of any Preferred Securities; provided, however, that, in
determining whether the holders of the requisite percentage of Preferred
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
______________, 2000, 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.
"Issuer Trustees" shall have the meaning specified in the first recital of
this Guarantee Agreement.
"Junior Subordinated Debentures" shall have the meaning specified in the first
recital of this Guarantee Agreement.
"Like Amount" means (a) with respect to a redemption of Preferred Securities,
Preferred Securities having a Liquidation Amount equal to the principal amount
of Junior Subordinated Debentures to be contemporaneously redeemed in accordance
with the Indenture, the proceeds of which will be used to pay the Redemption
Price of such Preferred Securities, (b) with respect to a distribution of Junior
Subordinated Debentures to Holders of Preferred 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 Preferred
Securities of the Holder to whom such Junior Subordinated Debentures are
distributed, and (c) with respect to any distribution of an Additional Amount to
Holders of Preferred Securities, Junior Subordinated Debentures having a
principal amount equal to the Liquidation Amount of the Preferred Securities in
respect of which such distribution is made.
"Liquidation Amount" means the stated amount of $_______ per Preferred
Security.
3
<PAGE>
"Majority in Liquidation Amount of the Preferred Securities" means, except as
provided by the Trust Indenture Act, Preferred Securities representing more than
50% of the aggregate Liquidation Amount of all then outstanding Preferred
Securities issued by the Issuer Trust.
"Officers' Certificate" means, with respect to any Person, a certificate
signed by the Chairman of the Board, Chief Executive Officer, President or a
Vice President, and by the Chief Financial Officer, Treasurer, an Associate
Treasurer, an Assistant Treasurer, the Secretary or an Assistant Secretary of
such Person, and delivered to the Guarantee Trustee. Any Officers' Certificate
delivered with respect to compliance with a condition or covenant provided for
in this Guarantee Agreement shall include:
(a) a statement 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.
"Preferred Securities" shall have the meaning specified in the first recital
of this Guarantee Agreement.
"Property Trustee" shall have the meaning specified in the first recital of
this Guarantee Agreement.
"Redemption Date" means, with respect to any Preferred 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 (as
such term is defined in the Indenture) and the stated maturity of the Junior
Subordinated Debentures shall be a Redemption Date for a Like Amount of
Preferred 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, principal, vice president, assistant vice president, assistant
treasurer, assistant secretary or any other officer of the Guarantee
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Trustee customarily performing functions similar to those performed by any of
the above designated officers and having direct responsibility for the
administration of this Guarantee Agreement, and also, with respect to a
particular matter, any other officer to whom such matter is referred because of
such officer's knowledge of and familiarity with the particular subject.
"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
______________, 2000, executed by Provident Bankshares Corporation, as
depositor, Bankers Trust (Delaware), as Delaware Trustee, and Bankers Trust
Company, as Property Trustee.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as amended by the
Trust Indenture Reform Act of 1990, or any successor statute, in each case as
amended from time to time.
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 Guarantee Agreement, the provision of the Trust Indenture Act shall
control. If any provision of this 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 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:
(i) quarterly, not more than 15 days after March 15, June 15, September
15 and December 15 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 such date; 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.
(b) The Guarantee Trustee shall comply with the requirements of Section
312(b) of the Trust Indenture Act.
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Section 2.3. Reports by the Guarantee Trustee.
Within 60 days of January 31 of each year commencing January 31, 2001, the
Guarantee Trustee shall provide to the Holders such reports, if any, as are
required by Section 313 of the Trust Indenture Act in the form and in the manner
provided by Section 313 of the Trust Indenture Act. The Guarantee Trustee shall
also comply with the requirements of Section 313(d) of the Trust Indenture Act.
Section 2.4. Periodic Reports to the Guarantee Trustee.
The Guarantor shall provide to the Guarantee Trustee and the Holders such
documents, reports and information, if any, as required by Section 314 of the
Trust Indenture Act and the compliance certificate required by Section 314 of
the Trust Indenture Act, in the form, in the manner and at the times required by
Section 314 of the Trust Indenture Act.
Section 2.5. Evidence of Compliance with Conditions 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 Preferred 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,
notices of all Events of Default known to the Guarantee Trustee, unless such
Events of Default have been cured before the giving of such notice; provided
that, except in the case of a default in the payment of a Guarantee Payment, the
Guarantee Trustee shall be protected in withholding such notice if and so long
as the Board of Directors, the executive committee or a trust committee of
directors and/or 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 (i) a Responsible Officer charged with the
administration of this Guarantee Agreement shall have received written notice of
such Event of Default, or (ii) a Responsible Officer
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of the Guarantee Trustee charged with administration of the Trust Agreement
shall have obtained actual knowledge thereof.
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 to a Holder exercising his or her
rights pursuant to Section 5.4(d) 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 bad faith or 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:
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(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
those set forth in 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 Preferred 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; provided, however, that nothing herein shall relieve the Guarantee
Trustee of its obligations upon the occurrence of an Event of Default that
has not been cured or waived to exercise the rights and powers vested in
the Guarantee Trustee by this Guarantee, and to use the same degree of care
and skill in exercising such rights and powers as a reasonably prudent
person would use under the circumstances in the conduct of his own affairs;
(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 willful misconduct on the part of any such agent or
attorney appointed with due care by it hereunder. Nothing herein shall be
construed as limiting or restricting the right of the Guarantor to bring
any action directly against any agent or attorney appointed by the
Guarantee Trustee for any negligence or willful misconduct on the part of
such agent or attorney; and
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(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.
(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 (which for purposes of
this Section 3.3 shall include its directors, officers, and employees) for, and
to hold the Guarantee Trustee harmless against, any loss, liability or expense
incurred without negligence, willful 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 reasonable costs and
expenses of defending 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
reasonable 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
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meeting the requirements of Section 310(a) 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(b).
(c) If the Guarantee Trustee has or shall acquire any "conflicting
interest" within the meaning of Section 310(b) of the Trust Indenture Act, the
Guarantee Trustee and Guarantor shall in all respects comply with the provisions
of Section 310(b) of the Trust Indenture Act.
Section 4.2. Appointment, Removal and Resignation of the Guarantee Trustee.
(a) No resignation or removal of the Guarantee Trustee and no appointment
of a Successor Guarantee Trustee pursuant to this Article IV 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 Section 4.2(a), 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 Preferred 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 Preferred Securities, by Act of the
Holders of record of not less than 25% in aggregate Liquidation Amount of the
Preferred 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 Preferred 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.
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ARTICLE V
GUARANTEE
Section 5.1. Guarantee.
The Guarantor irrevocably and unconditionally agrees to pay in full on a
subordinated basis as set forth in Section 6.1 hereof 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 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 Preferred 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
Preferred Securities or the extension of time for the performance of any other
obligation under, arising out of, or in connection with, the Preferred
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 Preferred Securities, or
any action on the part of the Issuer Trust granting indulgence or extension of
any kind;
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(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 Preferred
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 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: (a) this Guarantee Agreement will
be deposited with the Guarantee Trustee to be held for the benefit of the
Holders; (b) the Guarantee Trustee has the right to enforce this Guarantee
Agreement on behalf of the Holders; (c) the Holders of a Majority in Liquidation
Amount of the Preferred 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 (d) 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 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
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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 Preferred 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.
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, including without limiting the foregoing, the
guarantee agreement between Guarantor and _________, dated as of ___________,
relating to $________ aggregate liquidation amount of $________ preferred
securities issued by Provident Trust I.
ARTICLE VII
TERMINATION
Section 7.1. Termination.
This Guarantee Agreement shall terminate and be of no further force and effect
upon (a) full payment of the Redemption Price of all Preferred Securities, (b)
the distribution of Junior Subordinated Debentures to the Holders in exchange
for all of the Preferred Securities or (c) 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
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continue to be effective or will be reinstated, as the case may be, if at any
time any Holder is required to repay any sums paid with respect to the Preferred
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 Preferred
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 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
Preferred 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) ___________
Attention: Office of the President
(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:
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Provident Trust II
Provident Bankshares Corporation
114 East Lexington Street
Baltimore, Maryland 21202
Facsimile No.: (410) _________
Attention: Office of the President
with a copy to:
Bankers Trust Company
Four Albany Street - 4th Floor
New York, New York 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, New York 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 Preferred 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;
16
<PAGE>
(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;
(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 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.
[SIGNATURES APPEAR ON THE FOLLOWING PAGE]
17
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Guarantee Agreement to
be duly executed, all as of the day and year first above written.
PROVIDENT BANKSHARES CORPORATION
as Guarantor
By: _______________________________
BANKERS TRUST COMPANY,
as Guarantee Trustee
and not in its individual capacity
By: _______________________________
18
<PAGE>
EXHIBIT 5.1
[MULDOON, MURPHY & FAUCETTE LLP LETTERHEAD]
February 18, 2000
Provident Bankshares Corporation
114 East Lexington Street
Baltimore, Maryland 21202
Re: Provident Trust II
Registration Statement on Form S-3
----------------------------------
Ladies and Gentlemen:
We have acted as counsel to Provident Bankshares Corporation, a Maryland
corporation (the "Company"), and Provident Trust II, a Delaware statutory
business trust (the "Trust"), in connection with the preparation of a
Registration Statement on Form S-3 (the "Registration Statement") to be filed by
the Company and the Trust with the Securities and Exchange Commission (the
"SEC") for the purpose of registering trust preferred securities (the "Preferred
Securities") of the Trust, subordinated debentures (the "Subordinated
Debentures") of the Company and the guarantee of the Company with respect to the
Preferred Securities (the "Guarantee") under the Securities Act of 1933, as
amended.
In connection with this opinion, we have examined originals or copies,
certified or otherwise identified to our satisfaction, of (i) the certificate of
trust (the "Certificate of Trust") filed by the Trust with the Secretary of
State of the State of Delaware on February 11, 2000; (ii) the Company's
resolutions dated February 16, 2000, authorizing the establishment of the Trust
and authorizing the issuance of the Preferred Securities by the Trust and the
Guarantee by the Company; (iii) the Declaration of Trust, dated as of February
11, 2000 with respect to the Trust; (iv) the form of the Amended and Restated
Trust Agreement with respect to the Trust; (v) the form of the Preferred
Securities of the Trust; (vi) the form of Guarantee between the Company and
Bankers Trust Company as trustee; (vii) the form of Subordinated Debentures; and
(viii) the form of the indenture (the "Indenture") between the Company and
Bankers Trust Company, as trustee, in each case in the form filed as an exhibit
to the Registration Statement. We have also examined originals or copies,
certified, or otherwise identified to our satisfaction, of such other documents,
certificates, and records as we have deemed necessary or appropriate as a basis
for the opinions set forth herein.
In our examination, we have assumed the legal capacity of all natural
persons, the genuineness of all signatures, the authenticity of all documents
submitted to us as originals, the conformity to original documents of all
documents submitted to us as copies and the authenticity of the originals of
such copies. In examining documents executed by parties other than the Company
<PAGE>
Provident Bankshares Corporation
February 18, 2000
Page 2
or the Trust, we have assumed that such parties had the power, corporate or
otherwise, to enter into and perform all obligations thereunder and have also
assumed the due authorization by all requisite action, corporate or otherwise,
and execution and delivery by such parties of such documents and that, except as
set forth in paragraphs (1) and (2) below, such documents constitute valid and
binding obligations of such parties. In addition, we have assumed that the
Amended and Restated Trust Agreement, the Preferred Securities, the Guarantee,
the Subordinated Debentures and the Indenture, when executed, will be executed
in substantially the form reviewed by us. As to any facts material to the
opinions expressed herein which were not independently established or verified,
we have relied upon oral or written statements and representations of officers,
trustees, and other representatives of the Company, the Trust, and others.
Based upon and subject to the foregoing, we are of the opinion that:
1. After the Indenture has been duly executed and delivered, the
Subordinated Debentures, when duly executed, delivered, authenticated and issued
in accordance with the Indenture and delivered and paid for as contemplated by
the Registration Statement, will be valid and binding obligations of the Company
entitled to the benefits of the Indenture and enforcement against the Company in
accordance with their terms, except to the extent that enforcement thereof may
be limited by (i) bankruptcy, insolvency, reorganization, moratorium or other
similar laws now or hereafter in effect relating to creditors' rights generally,
and (ii) general principles of equity, regardless of whether enforceability is
considered in a proceeding at law or in equity.
2. The Guarantee, when duly executed and delivered by the parties hereto,
will be a valid and binding agreement of the Company, enforceable against the
Company in accordance with its terms, except to the extent that enforcement
thereof may be limited by (i) bankruptcy, insolvency, reorganization,
moratorium, or other similar laws now or hereafter in effect relating to
creditors' rights generally, and (ii) general principles of equity, regardless
of whether enforceability is considered in a proceeding at law or in equity.
We hereby consent to the use of our name under the caption "Validity of
Securities" in the Prospectus forming a part of the Registration Statement and
to the inclusion of this opinion as an exhibit to the Registration Statement.
Very truly yours,
/s/ Muldoon, Murphy & Faucette LLP
MULDOON, MURPHY & FAUCETTE LLP
<PAGE>
EXHIBIT 5.2
[LETTERHEAD OF RICHARDS, LAYTON & FINGER, P.A.]
February 18, 2000
Provident Bankshares Corporation
114 East Lexington Street
Baltimore, Maryland 21202
Re: Provident Trust II
------------------
Ladies and Gentlemen:
We have acted as special Delaware counsel for Provident Bankshares
Corporation, a Maryland corporation (the "Company"), and Provident Trust II, 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 February 11,
2000 (the "Certificate"), as filed in the office of the Secretary of State of
the State of Delaware (the "Secretary of State") on February 11, 2000;
(b) The Trust Agreement of the Trust, dated as of February 11, 2000,
between the Company and the trustee of the Trust named therein;
(c) A form of Amended and Restated Trust Agreement of the Trust
(including Exhibits A, C and D thereto) (the "Trust Agreement"), to be entered
into among the Company, as depositor, the trustees of the Trust named therein,
and the holders, from time to time, of undivided beneficial interests in the
assets of the Trust, attached as an exhibit to the Registration Statement (as
defined below);
<PAGE>
Provident Trust II
February 18, 2000
Page 2
(d) The Registration Statement on Form S-3 (the "Registration
Statement"), including a prospectus (the "Prospectus"), relating to the
preferred securities of the Trust representing undivided beneficial interests in
the assets of the Trust (each, a "Perferred Security" and collectively, the
"Preferred Securities"), as proposed to be filed by the Company and the Trust
with the Securities and Exchange Commission on or about February 18, 2000; and
(e) A Certificate of Good Standing for the Trust, dated February 18,
2000, 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 and the Certificate are in full force and effect and have not been
amended, (ii) except to the extent provided in paragraph 1 below, that each
party to the documents examined by us has been duly created, organized or
formed, as the case may be, and is validly existing in good standing 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) that each party to the documents examined
by us has duly authorized, executed and delivered such documents, (vi) the
receipt by each Person to whom a Preferred Security is to be issued by the Trust
(collectively, the "Preferred Security Holders") of a Preferred Securities
Certificate for such Preferred Security and the payment for the Preferred
Security acquired by it, in accordance with the Trust Agreement and the
Registration Statement, and (vii) that the Preferred Securities are issued and
sold to the Preferred Security Holders in accordance with the Trust Agreement
<PAGE>
Provident Trust II
February 18, 2000
Page 3
and the Registration Statement. We have not participated in the preparation of
the Registration Statement and assume no responsibility for its contents.
This opinion is limited to the laws of the State of Delaware
(excluding the securities laws of the State of Delaware), and we have not
considered and express no opinion on the laws of any other jurisdiction,
including federal laws and rules and regulations relating thereto. Our opinions
are rendered only with respect to Delaware laws and rules, regulations and
orders thereunder that are currently in effect.
Based upon the foregoing, and upon our examination of such questions
of law and statutes of the State of Delaware as we have considered necessary or
appropriate, and subject to the assumptions, qualifications, limitations and
exceptions set forth herein, we are of the opinion that:
1. The Trust has been duly created and is validly existing in good
standing as a business trust under the Delaware Business Trust Act.
2. The Preferred 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 Preferred Security Holders, as beneficial owners of the
Trust, will be entitled to the same limitation of personal liability extended to
stockholders of private corporations for profit organized under the General
Corporation Law of the State of Delaware. We note that the Preferred 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
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, P.A.
<PAGE>
EXHIBIT 8.1
[MULDOON, MURPHY & FAUCETTE LLP LETTERHEAD]
February 18, 2000
Provident Bankshares Corporation
114 East Lexington Street
Baltimore, Maryland 21202
Re: Provident Bankshares Corporation
Provident Trust II
Registration Statement on Form S-3
----------------------------------
Gentlemen:
We have acted as special counsel for Provident Bankshares Corporation, a
Maryland corporation (the "Company"), and Provident Trust II (the "Trust"), a
statutory business trust created under the laws of Delaware, in connection with
the above-captioned registration statement on Form S-3, initially filed with the
Securities and Exchange Commission (the "Commission") pursuant to the Securities
Act of 1933, as amended (the "Act"), on February 18, 2000 (such registration
statement, as amended, being hereinafter referred to as the "Registration
Statement"), for the purpose of registering the Preferred Securities issued by
the Trust and the Subordinated Debentures issued by the Company to the Trust in
connection with such issuance of the Preferred Securities. All capitalized
terms not otherwise defined herein shall have the meanings set forth in the
Registration Statement.
In rendering this opinion, we have examined originals or copies, certified
or otherwise identified to our satisfaction, of (i) the certificate of trust
(the "Certificate of Trust") filed by the Trust with the Secretary of State of
the State of Delaware on February 11, 2000; (ii) the Declaration of Trust, dated
as of February 11, 2000, with respect to the Trust; (iii) the form of the
Amended and Restated Declaration of Trust with respect to the Trust; (iv) the
form of the Preferred Securities of the Trust; (v) the form of Guarantee between
the Company and Bankers Trust Company, as trustee; (vi) the form of Subordinated
Debentures; and (vii) the form of the indenture (the "Indenture") between the
Company and Bankers Trust Company, as trustee, in each case in the form filed as
an exhibit to the Registration Statement. We have also examined originals or
copies, certified or otherwise identified to our satisfaction, of such other
documents, certificates, and records as we have deemed necessary or appropriate
for purposes of rendering the opinions set forth herein.
<PAGE>
Provident Bankshares Corporation
February 18, 2000
Page 2
In our examination, we have assumed the legal capacity of all natural
persons, the genuineness of all signatures, the authenticity of all documents
submitted to us as originals, the conformity to original documents of all
documents submitted to us as certified or photostatic copies and the
authenticity of the originals of such copies. In making our examination of
documents executed by parties other than the Company or the Trust, we have
assumed that such parties had the power, corporate or other, to enter into and
perform all obligations thereunder and have also assumed the due authorization
by all requisite action, corporate or other, and execution and delivery by such
parties of such documents and that such documents constitute valid and binding
obligations of such parties. In addition, we have assumed that the Amended and
Restated Trust Agreement, the Preferred Securities, the Guarantee, the
Subordinated Debentures and the Indenture when executed, will be executed in
substantially the form reviewed by us and that the terms of the Subordinated
Debentures when established in conformity with the Indenture will not violate
any applicable law. As to any facts material to the opinions expressed herein
which were not independently established or verified, we have relied upon oral
or written statements and representations of officers, trustees, and other
representatives of the Company, the Trust and others.
We hereby confirm that, although the discussion set forth under the heading
"Certain Federal Income Tax Consequences" in the form of Prospectus for the
offering of Preferred Securities constituting a part of the Registration
Statement ("Prospectus") does not purport to discuss all possible United States
federal income tax consequences of the purchase, ownership and disposition of
Preferred Securities, in our opinion, such discussion constitutes, in all
material respects, a fair and accurate summary, in general terms, of the United
States federal income tax consequences of the purchase, ownership and
disposition of the Preferred Securities, based upon current laws as they relate
to holders described therein. It is possible that contrary positions with
regard to the purchase, ownership and disposition of the Preferred Securities
may be taken by the Internal Revenue Service and that a court may agree with
such contrary positions.
Additionally, based upon the facts, assumptions and representations set
forth or referred to herein, and the accuracy of such facts, assumptions and
representations as of the date hereof, it is our opinion that the Trust will be
classified for United States federal income tax purposes as a grantor trust and
not as an association taxable as a corporation. Accordingly, each holder of
Preferred Securities will be treated as owning an undivided beneficial interest
in the Subordinated Debentures.
The opinions expressed in this letter are based on the Internal Revenue
Code of 1986, as amended, the Income Tax Regulations promulgated by the Treasury
Department thereunder and judicial authority reported as of the date hereof. We
have also considered the position of the Internal Revenue Service (the
"Service") reflected in published and private rulings. There can be no
assurances that future legislation or administrative changes, court decisions or
Service Interpretations would not significantly modify the statements or
opinions expressed herein.
<PAGE>
Provident Bankshares Corporation
February 18, 2000
Page 3
Our opinion is limited to those federal income tax issues specifically
considered herein and is addressed to and is only for the benefit of the Company
and the Trust in connection with the filing of the Registration Statement and,
except as set forth below, is not to be used, circulated, quoted or otherwise
referred to for any other purpose or relied upon by any other person for any
purpose without our written consent. We do not express any opinion as to any
other United States federal income issues, or any state, local or foreign tax
issues. Although the opinions herein are based upon our best interpretation of
existing sources of law and express what we believe a court would properly
conclude if presented with these issues, no assurance can be given that such
interpretations would be followed if they were to become the subject of judicial
or administrative proceedings.
We hereby consent to the use of our name under the captions "Certain
Federal Income Tax Consequences" and "Validity of Securities" in the Prospectus
and the filing of this opinion as an exhibit to the Registration Statement. In
giving this consent, we do not thereby concede that we are within the category
of persons whose consent is required under Section 7 of the Act or the rules and
regulations of the Commission promulgated thereunder. This opinion is expressed
as of the date hereof and applies only to the disclosures set forth in the
Prospectus and Registration Statement. We disclaim any undertaking to advise
you of any subsequent changes of the facts stated or assumed herein or any
subsequent changes of the facts stated or assumed herein or any subsequent
changes in applicable law.
Very truly yours,
/s/ Muldoon, Murphy & Faucette LLP
MULDOON, MURPHY & FAUCETTE LLP
<PAGE>
EXHIBIT 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
The Board of Directors
Provident Bankshares Corporation
We hereby consent to the incorporation by reference in this Registration
Statement on Form S-3 of our report dated January 19, 2000 relating to the
financial statements which appear in Provident Bankshares Corporation's Annual
Report on Form 10-K for the year ended December 31, 1999.
We also consent to the reference to us under the heading "Experts" in such
Registration Statement.
/s/ PricewaterhouseCoopers LLP
Baltimore, Maryland
February 15, 2000
<PAGE>
EXHIBIT 24.1
CONFORMED
POWER OF ATTORNEY
Each of the undersigned directors of Provident Bankshares Corporation (the
"Company") whose signature appears below constitutes and appoints Peter M.
Martin as his or her true and lawful attorney-in-fact and agent, with full power
of substitution and re-substitution, for him or her and in his or her name,
place and stead, in any and all capacities, to sign any and all Registration
Statements of the Company, and all amendments thereto, relating to or in
connection with the registration by the Company of securities of Provident Trust
II and the guarantee by the Company thereof, and to file the same, with all
exhibits thereto and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto each of said attorneys-in-fact
and agents full power and authority to do and perform each and every act and
thing necessary or advisable to be done in connection therewith, as fully to all
intents and purposes as he or she might or could do in person, hereby ratifying
and confirming all that said attorneys-in-fact and agents, or their substitutes,
may lawfully do or cause to be done by virtue thereof. This power of attorney
may be executed in counterparts.
<TABLE>
<S> <C> <C>
/s/ Peter M. Martin Chairman of the Board, President February 16, 2000
- ------------------------ and Chief Executive Officer
Peter M. Martin (Principal Executive Officer)
/s/ Dennis A. Starliper Chief Financial Officer February 16, 2000
- ------------------------ (Principal Financial and
Dennis A. Starliper Accounting Officer)
/s/ Robert B. Barnhill Director February 16, 2000
- ------------------------
Robert B. Barnhill
/s/ Melvin A. Bilal Director February 16, 2000
- ------------------------
Melvin A. Bilal
/s/ Thomas S. Bozzuto Director February 16, 2000
- ------------------------
Thomas S. Bozzuto
/s/ Dr. Calvin W. Burnett Director February 16, 2000
- ------------------------
Dr. Calvin W. Burnett
/s/ Ward B. Coe, III Director February 16, 2000
- ------------------------
Ward B. Coe, III
/s/ Charles W. Cole, Jr. Director February 16, 2000
- ------------------------
Charles W. Cole, Jr.
/s/ Pierce B. Dunn Director February 16, 2000
- ------------------------
Pierce B. Dunn
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C>
/s/ Enos K. Fry Director February 16, 2000
- ---------------------------
Enos K. Fry
/s/ Herbert W. Jorgensen Director February 16, 2000
- ---------------------------
Herbert W. Jorgensen
/s/ Mark K. Joseph Director February 16, 2000
- ---------------------------
Mark K. Joseph
/s/ Barbara B. Lucas Director February 16, 2000
- ---------------------------
Barbara B. Lucas
/s/ Fredrick W. Meier, Jr. Director February 16, 2000
- ---------------------------
Fredrick W. Meier, Jr.
/s/ Sister Rosemarie Nassif Director February 16, 2000
- ---------------------------
Sister Rosemarie Nassif
/s/ Francis G. Riggs Director February 16, 2000
- ---------------------------
Francis G. Riggs
/s/ Sheila K. Riggs Director February 16, 2000
- ---------------------------
Sheila K. Riggs
/s/ Carl W. Stearn Director February 16, 2000
- ---------------------------
Carl W. Stearn
</TABLE>
<PAGE>
EXHIBIT 25.1
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)
______________________________________________________
PROVIDENT BANKSHARES CORPORATION
PROVIDENT TRUST II
(Exact name of Registrant as specified in its charter)
MARYLAND 52-1518642
DELAWARE APPLIED FOR
(State or other jurisdiction or organization) (IRS Employer Identification no.)
114 East Lexington Street
Baltimore, Maryland 21202
(410) 277-7000
(Address, including zip code and telephone
of principal executive offices)
__% Junior Subordinated Debentures
scheduled to mature on _____, 2030.
(Title of the indenture securities)
<PAGE>
Item 1. General Information.
Furnish the following information as to the trustee.
(a) Name and address of each examining or supervising authority
to which it is subject.
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 6, 1998, Certificate of Amendment
of the Organization Certificate of Bankers Trust
Company dated September 25, 1998, and Certificate of
Amendment of the Organization Certificate of Bankers
Trust Company dated December 16, 1998, and Certificate
of Amendment of the Organization Certificate of Bankers
Trust Company dated July 30th, 1999, copies 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 June 22, 1999. Copy attached.
-2-
<PAGE>
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 June 30, 1999. Copy attached.
Exhibit 8 - Not Applicable.
Exhibit 9 - Not Applicable.
-3-
<PAGE>
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 this 10th day
of February, 2000.
BANKERS TRUST COMPANY
/s/ Christopher Lew
-------------------
By: Christopher Lew
Associate
-4-
<PAGE>
RESTATED
ORGANIZATION
CERTIFICATE
OF
BANKERS TRUST COMPANY
____________________________
Under Section 8007
Of the Banking Law
____________________________
Bankers Trust Company
130 Liberty Street
New York, N.Y. 10006
Counterpart Filed in the Office of the Superintendent of Banks, State of
New York, August 31, 1998
<PAGE>
RESTATED ORGANIZATION CERTIFICATE
OF
BANKERS TRUST
Under Section 8007 of the Banking Law
_____________________________
We, James T. Byrne, Jr. and Lea Lahtinen, being respectively a Managing
Director and an Assistant Secretary and a Vice President 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 the corporation was filed by the
Superintendent of Banks of the State of New York on the March 5, 1903.
3. The text of the organization certificate, as amended heretofore,
is hereby restated without further amendment or change to read as herein set
forth in full, to wit:
Certificate of Organization
of
Bankers Trust Company
Know All Men By These Presents That we, the undersigned, James A. Blair,
James G. Cannon, E. C. Converse, Henry P. Davison, Granville W. Garth, A. Barton
Hepburn, Will Logan, Gates W. McGarrah, George W. Perkins, William H. Porter,
John F. Thompson, Albert H. Wiggin, Samuel Woolverton and Edward F. C. Young,
all being persons of full age and citizens of the United States, and a majority
of us being residents of the State of New York, desiring to form a corporation
to be known as a Trust Company, do hereby associate ourselves together for that
purpose under and pursuant to the laws of the State of New York, and for such
purpose we do hereby, under our respective hands and seals, execute and duly
acknowledge this Organization Certificate in duplicate, and hereby specifically
state as follows, to wit:
I. The name by which the said corporation shall be known is Bankers
Trust Company.
II. The place where its business is to be transacted is the City of New
York, in the State of New York.
III. Capital Stock: The amount of capital stock which the corporation is
hereafter to have is Three Billion One Million, Six Hundred Sixty-Six Thousand,
Six Hundred Seventy Dollars ($3,001,666,670), divided into Two Hundred Million,
One Hundred Sixty-Six Thousand, Six Hundred Sixty-Seven (200,166,667) shares
with a par value of $10 each designated as Common Stock and 1,000 shares with a
par value of One Million Dollars ($1,000,000) each designated as Series
Preferred Stock.
(a) Common Stock
1. Dividends: Subject to all of the rights of the Series Preferred
Stock, dividends may be declared and paid or set apart for payment upon the
Common Stock out of any assets or funds of the corporation legally available for
the payment of dividends.
<PAGE>
2. Voting Rights: Except as otherwise expressly provided with respect to
the Series Preferred Stock or with respect to any series of the Series Preferred
Stock, the Common Stock shall have the exclusive right to vote for the election
of directors and for all other purposes, each holder of the Common Stock being
entitled to one vote for each share thereof held.
3. Liquidation: Upon any liquidation, dissolution or winding up of the
corporation, whether voluntary or involuntary, and after the holders of the
Series Preferred Stock of each series shall have been paid in full the amounts
to which they respectively shall be entitled, or a sum sufficient for the
payment in full set aside, the remaining net assets of the corporation shall be
distributed pro rata to the holders of the Common Stock in accordance with their
respective rights and interests, to the exclusion of the holders of the Series
Preferred Stock.
4. Preemptive Rights: No holder of Common Stock of the corporation shall
be entitled, as such, as a matter of right, to subscribe for or purchase any
part of any new or additional issue of stock of any class or series whatsoever,
any rights or options to purchase stock of any class or series whatsoever, or
any securities convertible into, exchangeable for or carrying rights or options
to purchase stock of any class or series whatsoever, whether now or hereafter
authorized, and whether issued for cash or other consideration, or by way of
dividend or other distribution.
(b) Series Preferred Stock
1. Board Authority: The Series Preferred Stock may be issued from time
to time by the Board of Directors as herein provided in one or more series. The
designations, relative rights, preferences and limitations of the Series
Preferred Stock, and particularly of the shares of each series thereof, may, to
the extent permitted by law, be similar to or may differ from those of any other
series. The Board of Directors of the corporation is hereby expressly granted
authority, subject to the provisions of this Article III, to issue from time to
time Series Preferred Stock in one or more series and to fix from time to time
before issuance thereof, by filing a certificate pursuant to the Banking Law,
the number of shares in each such series of such class and all designations,
relative rights (including the right, to the extent permitted by law, to convert
into shares of any class or into shares of any series of any class), preferences
and limitations of the shares in each such series, including, buy without
limiting the generality of the foregoing, the following:
(i) The number of shares to constitute such series (which number
may at any time, or from time to time, be increased or decreased by the
Board of Directors, notwithstanding that shares of the series may be
outstanding at the time of such increase or decrease, unless the Board of
Directors shall have otherwise provided in creating such series) and the
distinctive designation thereof;
(ii) The dividend rate on the shares of such series, whether or not
dividends on the shares of such series shall be cumulative, and the date or
dates, if any, from which dividends thereon shall be cumulative;
(iii) Whether or not the share of such series shall be redeemable,
and, if redeemable, the date or dates upon or after which they shall be
redeemable, the amount or amounts per share (which shall be, in the case of
each share, not less than its preference upon involuntary liquidation, plus
an amount equal to all dividends thereon accrued and unpaid, whether or not
earned or declared) payable thereon in the case of the redemption thereof,
which amount may vary at different redemption dates or otherwise as
permitted by law;
(iv) The right, if any, of holders of shares of such series to
convert the same into, or exchange the same for, Common Stock or other
stock as permitted by law, and the terms and conditions of such conversion
or exchange, as well as provisions for adjustment of the conversion rate in
such events as the Board of Directors shall determine;
<PAGE>
(v) The amount per share payable on the shares of such series upon
the voluntary and involuntary liquidation, dissolution or winding up of the
corporation;
(vi) Whether the holders of shares of such series shall have voting
power, full or limited, in addition to the voting powers provided by law
and, in case additional voting powers are accorded, to fix the extent
thereof; and
(vii) Generally to fix the other rights and privileges and any
qualifications, limitations or restrictions of such rights and privileges
of such series, provided, however, that no such rights, privileges,
qualifications, limitations or restrictions shall be in conflict with the
organization certificate of the corporation or with the resolution or
resolutions adopted by the Board of Directors providing for the issue of
any series of which there are shares outstanding.
All shares of Series Preferred Stock of the same series shall be identical
in all respects, except that shares of any one series issued at different times
may differ as to dates, if any, from which dividends thereon may accumulate. All
shares of Series Preferred Stock of all series shall be of equal rank and shall
be identical in all respects except that to the extent not otherwise limited in
this Article III any series may differ from any other series with respect to any
one or more of the designations, relative rights, preferences and limitations
described or referred to in subparagraphs (I) to (vii) inclusive above.
2. Dividends: Dividends on the outstanding Series Preferred Stock of
each series shall be declared and paid or set apart for payment before any
dividends shall be declared and paid or set apart for payment on the Common
Stock with respect to the same quarterly dividend period. Dividends on any
shares of Series Preferred Stock shall be cumulative only if and to the extent
set forth in a certificate filed pursuant to law. After dividends on all shares
of Series Preferred Stock (including cumulative dividends if and to the extend
any such shares shall be entitled thereto) shall have been declared and paid or
set apart for payment with respect to any quarterly dividend period, then and
not otherwise so long as any shares of Series Preferred Stock shall remain
outstanding, dividends may be declared and paid or set apart for payment with
respect to the same quarterly dividend period on the Common Stock out the assets
or funds of the corporation legally available therefor.
All Shares of Series Preferred Stock of all series shall be of equal rank,
preference and priority as to dividends irrespective of whether or not the rates
of dividends to which the same shall be entitled shall be the same and when the
stated dividends are not paid in full, the shares of all series of the Series
Preferred Stock shall share ratably in the payment thereof in accordance with
the sums which would by payable on such shares if all dividends were paid in
full, provided, however, that nay two or more series of the Series Preferred
Stock may differ from each other as to the existence and extent of the right to
cumulative dividends, as aforesaid.
3. Voting Rights: Except as otherwise specifically provided in the
certificate filed pursuant to law with respect to any series of the Series
Preferred Stock, or as otherwise provided by law, the Series Preferred Stock
shall not have any right to vote for the election of directors or for any other
purpose and the Common Stock shall have the exclusive right to vote for the
election of directors and for all other purposes.
4. Liquidation: In the event of any liquidation, dissolution or winding
up of the corporation, whether voluntary or involuntary, each series of Series
Preferred Stock shall have preference and priority over the Common Stock for
payment of the amount to which each outstanding series of Series Preferred Stock
shall be entitled in accordance with the provisions thereof and each holder of
Series Preferred Stock shall be entitled to be paid in full such amount, or have
a sum sufficient for the payment in full set aside, before any payments shall be
made to the holders of the Common Stock. If, upon liquidation, dissolution or
winding up of the corporation, the assets of the corporation or proceeds
thereof, distributable among the holders of the shares of all series of the
Series Preferred Stock shall be insufficient to pay in full the preferential
amount aforesaid, then such assets, or the proceeds thereof, shall be
distributed among such holders ratably in accordance with the respective amounts
which would be payable if all amounts payable thereon were paid in full. After
the payment to the holders of Series Preferred Stock of all such amounts to
which they are entitled, as above provided, the remaining assets and funds of
the corporation shall be divided and paid to the holders of the Common Stock.
<PAGE>
5. Redemption: In the event that the Series Preferred Stock of any series
shall be made redeemable as provided in clause (iii) of paragraph 1 of section
(b) of this Article III, the corporation, at the option of the Board of
Directors, may redeem at any time or times, and from time to time, all or any
part of any one or more series of Series Preferred Stock outstanding by paying
for each share the then applicable redemption price fixed by the Board of
Directors as provided herein, plus an amount equal to accrued and unpaid
dividends to the date fixed for redemption, upon such notice and terms as may be
specifically provided in the certificate filed pursuant to law with respect to
the series.
6. Preemptive Rights: No holder of Series Preferred Stock of the
corporation shall be entitled, as such, as a matter or right, to subscribe for
or purchase any part of any new or additional issue of stock of any class or
series whatsoever, any rights or options to purchase stock of any class or
series whatsoever, or any securities convertible into, exchangeable for or
carrying rights or options to purchase stock of any class or series whatsoever,
whether now or hereafter authorized, and whether issued for cash or other
consideration, or by way of dividend.
(c) Provisions relating to Floating Rate Non-Cumulative Preferred Stock,
Series A. (Liquidation value $1,000,000 per share.)
1. Designation: The distinctive designation of the series established
hereby shall be "Floating Rate Non-Cumulative Preferred Stock, Series A"
(hereinafter called "Series A Preferred Stock").
2. Number: The number of shares of Series A Preferred Stock shall
initially be 250 shares. Shares of Series A Preferred Stock redeemed, purchased
or otherwise acquired by the corporation shall be cancelled and shall revert to
authorized but unissued Series Preferred Stock undesignated as to series.
3. Dividends:
(a) Dividend Payments Dates. Holders of the Series A Preferred Stock
shall be entitled to receive non-cumulative cash dividends when, as and if
declared by the Board of Directors of the corporation, out of funds legally
available therefor, from the date of original issuance of such shares (the
"Issue Date") and such dividends will be payable on March 28, June 28, September
28 and December 28 of each year ("Dividend Payment Date") commencing September
28, 1990, at a rate per annum as determined in paragraph 3(b) below. The period
beginning on the Issue Date and ending on the day preceding the first Dividend
Payment Date and each successive period beginning on a Dividend Payment Date and
ending on the date preceding the next succeeding Dividend Payment Date is herein
called a "Dividend Period". If any Dividend payment Date shall be, in The City
of New York, a Sunday or a legal holiday or a day on which banking institutions
are authorized by law to close, then payment will be postponed to the next
succeeding business day with the same force and effect as if made on the
Dividend Payment Date, and no interest shall accrue for such Dividend Period
after such Dividend Payment Date.
(b) Dividend Rate. The dividend rare from time to time payable in respect
of Series A Preferred Stock (the "Dividend Rate") shall be determined on the
basis of the following provisions:
(i) On the Dividend Determination Date, LIBOR will be determined on the
basis of the offered rates for deposits in U.S. dollars having a maturity of
three months commencing on the second London Business Day immediately following
such Dividend Determination Date, as such rates appear on the Reuters Screen
LIBO Page as of 11:00 A.M. London time, on such Dividend Determination Date. If
at least two such offered rates appear on the Reuters Screen LIBO Page, LIBOR in
respect of such Dividend Determination Dates will be the arithmetic mean
(rounded to the nearest one-hundredth of a percent, with five one-thousandths of
a percent rounded upwards) of such offered rates. If fewer than those offered
rates appear, LIBOR in respect of such Dividend Determination Date will be
determined as described in paragraph (ii) below.
(ii) On any Dividend Determination Date on which fewer than those offered
rates for the applicable maturity appear on the Reuters Screen LIBO Page as
specified in paragraph (I) above, LIBOR will be determined on the basis of the
rates at which deposits in U.S. dollars having a maturity of three months
commending on the second
<PAGE>
London Business Day immediately following such Dividend Determination Date and
in a principal amount of not less than $1,000,000 that is representative of a
single transaction in such market at such time are offered by three major banks
in the London interbank market selected by the corporation at approximately
11:00 A.M., London time, on such Dividend Determination Date to prime banks in
the London market. The corporation will request the principal London office of
each of such banks to provide a quotation of its rate. If at least two such
quotations are provided, LIBOR in respect of such Dividend Determination Date
will be the arithmetic mean (rounded to the nearest one-hundredth of a percent,
with five one-thousandths of a percent rounded upwards) of such quotations. If
fewer than two quotations are provided, LIBOR in respect of such Dividend
Determination Date will be the arithmetic mean (rounded to the nearest one-
hundredth of a percent, with five one-thousandths of a percent rounded upwards)
of the rates quoted by three major banks in New York City selected by the
corporation at approximately 11:00 A.M., New York City time, on such Dividend
Determination Date for loans in U.S. dollars to leading European banks having a
maturity of three months commencing on the second London Business Day
immediately following such Dividend Determination Date and in a principal amount
of not less than $1,000,000 that is representative of a single transaction in
such market at such time; provided, however, that if the banks selected as
aforesaid by the corporation are not quoting as aforementioned in this sentence,
then, with respect to such Dividend Period, LIBOR for the preceding Dividend
Period will be continued as LIBOR for such Dividend Period.
(ii) The Dividend Rate for any Dividend Period shall be equal to the lower
of 18% of 50 basis points above LIBOR for such Dividend Period as LIBOR is
determined by sections (I) or (ii) above.
As used above, the term "Dividend Determination Date" shall mean, with resect to
any Dividend Period, the second London Business Day prior to the commencement of
such Dividend Period; and the term "London Business Day" shall mean any day that
is not a Saturday or Sunday and that, in New York City, is not a day on which
banking institutions generally are authorized or required by law or executive
order to close and that is a day on which dealings in deposits in U.S. dollars
are transacted in the London interbank market.
4. Voting Rights: The holders of the Series A Preferred Stock shall have
the voting power and rights set forth in this paragraph 4 and shall have no
other voting power or rights except as otherwise may from time to time be
required by law.
So long as any shares of Series A Preferred Stock remain outstanding, the
corporation shall not, without the affirmative vote or consent of the holders of
at least a majority of the votes of the Series Preferred Stock entitled to vote
outstanding at the time, given in person or by proxy, either in writing or by
resolution adopted at a meeting at which the holders of Series A Preferred Stock
(alone or together with the holders of one or more other series of Series
Preferred Stock at the time outstanding and entitled to vote) vote separately as
a class, alter the provisions of the Series Preferred Stock so as to materially
adversely affect its rights; provided, however, that in the event any such
materially adverse alteration affects the rights of only the Series A Preferred
Stock, then the alteration may be effected with the vote or consent of at least
a majority of the votes of the Series A Preferred Stock; provided, further, that
an increase in the amount of the authorized Series Preferred Stock and/or the
creation and/or issuance of other series of Series Preferred Stock in accordance
with the organization certificate shall not be, nor be deemed to be, materially
adverse alterations. In connection with the exercise of the voting rights
contained in the preceding sentence, holders of all series of Series Preferred
Stock which are granted such voting rights (of which the Series A Preferred
Stock is the initial series) shall vote as a class (except as specifically
provided otherwise) and each holder of Series A Preferred Stock shall have one
vote for each share of stock held and each other series shall have such number
of votes, if any, for each share of stock held as may be granted to them.
The foregoing voting provisions will not apply if, in connection with the
matters specified, provision is made for the redemption or retirement of all
outstanding Series A Preferred Stock.
5. Liquidation: Subject to the provisions of section (b) of this Article
III, upon any liquidation, dissolution or winding up of the corporation, whether
voluntary or involuntary, the holders of the Series A Preferred Stock shall have
preference and priority over the Common Stock for payment out of the assets of
the corporation or proceeds thereof, whether from capital or surplus, of
$1,000,000 per share (the "liquidation value") together with the amount
<PAGE>
of all dividends accrued and unpaid thereon, and after such payment the holders
of Series A Preferred Stock shall be entitled to no other payments.
6. Redemption: Subject to the provisions of section (b) of this Article
III, Series A Preferred Stock may be redeemed, at the option of the corporation
in whole or part, at any time or from time to time at a redemption price of
$1,000,000 per share, in each case plus accrued and unpaid dividends to the date
of redemption.
At the option of the corporation, shares of Series A Preferred Stock
redeemed or otherwise acquired may be restored to the status of authorized but
unissued shares of Series Preferred Stock.
In the case of any redemption, the corporation shall give notice of such
redemption to the holders of the Series A Preferred Stock to be redeemed in the
following manner: a notice specifying the shares to be redeemed and the time and
place or redemption (and, if less than the total outstanding shares are to be
redeemed, specifying the certificate numbers and number of shares to be
redeemed) shall be mailed by first class mail, addressed to the holders of
record of the Series A Preferred Stock to be redeemed at their respective
addressees as the same shall appear upon the books of the corporation, not more
than sixty (60) days and not less than thirty (30) days previous to the date
fixed for redemption. In the event such notice is not given to any shareholder
such failure to give notice shall not affect the notice given to other
shareholders. If less than the whole amount of outstanding Series A Preferred
Stock is to be redeemed, the shares to be redeemed shall be selected by lot or
pro rata in any manner determined by resolution of the Board of Directors to be
fair and proper. From and after the date fixed in any such notice as the date of
redemption (unless default shall be made by the corporation in providing moneys
at the time and place of redemption for the payment of the redemption price) all
dividends upon the Series A Preferred Stock so called for redemption shall cease
to accrue, and all rights of the holders of said Series A Preferred Stock as
stockholders in the corporation, except the right to receive the redemption
price (without interest) upon surrender of the certificate representing the
Series A Preferred Stock so called for redemption, duly endorsed for transfer,
if required, shall cease and terminate. The corporation's obligation to provide
moneys in accordance with the preceding sentence shall be deemed fulfilled if,
on or before the redemption date, the corporation shall deposit with a bank or
trust company (which may be an affiliate of the corporation) having an office in
the Borough of Manhattan, City of New York, having a capital and surplus of at
least $5,000,000 funds necessary for such redemption, in trust with irrevocable
instructions that such funds be applied to the redemption of the shares of
Series A Preferred Stock so called for redemption. Any interest accrued on such
funds shall be paid to the corporation from time to time. Any funds so deposited
and unclaimed at the end of two (2) years from such redemption date shall be
released or repaid to the corporation, after which the holders of such shares of
Series A Preferred Stock so called for redemption shall look only to the
corporation for payment of the redemption price.
IV. The name, residence and post office address of each member of
the corporation are as follows:
<TABLE>
<CAPTION>
Name Residence Post Office Address
---- --------- -------------------
<S> <C> <C>
James A. Blair 9 West 50/th/ Street, 33 Wall Street,
Manhattan, New York City Manhattan, New York City
James G. Cannon 72 East 54/th/ Street, 14 Nassau Street,
Manhattan New York City Manhattan, New York City
E. C. Converse 3 East 78/th/ Street, 139 Broadway,
Manhattan, New York City Manhattan, New York City
Henry P. Davison Englewood, 2 Wall Street,
New Jersey Manhattan, New York City
Granville W. Garth 160 West 57/th/ Street, 33 Wall Street
Manhattan, New York City Manhattan, New York City
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C>
A. Barton Hepburn 205 West 57/th/ Street 83 Cedar Street
Manhattan, New York City Manhattan, New York City
William Logan Montclair, 13 Nassau Street
New Jersey Manhattan, New York City
George W. Perkins Riverdale, 23 Wall Street,
New York Manhattan, New York City
William H. Porter 56 East 67/th/ Street 270 Broadway,
Manhattan, New York City Manhattan, New York City
John F. Thompson Newark, 143 Liberty Street,
New Jersey Manhattan, New York City
Albert H. Wiggin 42 West 49/th/ Street, 214 Broadway,
Manhattan, New York City Manhattan, New York City
Samuel Woolverton Mount Vernon, 34 Wall Street,
New York Manhattan, New York City
Edward F.C. Young 85 Glenwood Avenue, 1 Exchange Place,
Jersey City, New Jersey Jersey City, New Jersey
</TABLE>
V. The existence of the corporation shall be perpetual.
VI. The subscribers, the members of the said corporation, do, and each
for himself does, hereby declare that he will accept the responsibilities and
faithfully discharge the duties of a director therein, if elected to act as
such, when authorized accordance with the provisions of the Banking Law of the
State of New York.
VII. The number of directors of the corporation shall not be less that 10
nor more than 25."
4. The foregoing restatement of the organization certificate was
authorized by the Board of Directors of the corporation at a meeting held on
July 21, 1998.
IN WITNESS WHEREOF, we have made and subscribed this certificate this 6th
day of August, 1998.
/s/ James T. Byrne, Jr.
--------------------------------------
James T. Byrne, Jr.
Managing Director and Secretary
/s/ Lea Lahtinen
--------------------------------------
Lea Lahtinen
Vice President and Assistant Secretary
/s/ Lea Lahtinen
--------------------------------------
Lea Lahtinen
<PAGE>
State of New York )
) ss:
County of New York )
Lea Lahtinen, being duly sworn, deposes and says that she is a Vice
President and 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
6th day of August, 1998.
/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
<PAGE>
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 "RESTATED ORGANIZATION
CERTIFICATE OF BANKERS TRUST COMPANY Under Section 8007 of the Banking Law,"
dated August 6, 1998, providing for the restatement of the Organization
Certificate and all amendments into a single certificate.
Witness, my hand and official seal of the Banking Department at the City of New
York,
this 31st day of August in the Year of our Lord
---- ------
one thousand nine hundred and ninety-eight.
/s/ Manuel Kursky
------------------------------
Deputy Superintendent of Banks
<PAGE>
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 Secretary and a Vice President 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 Three Billion, One Million, Six Hundred Sixty-Six Thousand, Six
Hundred Seventy Dollars ($3,001,666,670), divided into Two Hundred Million,
One Hundred Sixty-Six Thousand, Six Hundred Sixty-Seven (200,166,667)
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."
is hereby amended to read as follows:
"III. The amount of capital stock which the corporation is hereafter to
have is Three Billion, Five Hundred One Million, Six Hundred Sixty-Six
Thousand, Six Hundred Seventy Dollars ($3,501,666,670), divided into Two
Hundred Million, One Hundred Sixty-Six Thousand, Six Hundred Sixty-Seven
(200,166,667) shares with a par value of $10 each designated as Common
Stock and 1500 shares with a par value of One Million Dollars ($1,000,000)
each designated as Series Preferred Stock."
<PAGE>
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 25th
day of September, 1998
/s/ James T. Byrne, Jr.
--------------------------------------
James T. Byrne, Jr.
Managing Director and Secretary
/s/ Lea Lahtinen
--------------------------------------
Lea Lahtinen
Vice President and Assistant Secretary
State of New York )
) ss:
County of New York )
Lea Lahtinen, being fully sworn, deposes and says that she is a Vice
President and 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 25/th/
day of September, 1998
/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, 2000
<PAGE>
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 September 16, 1998, providing for an increase in authorized
capital stock from $3,001,666,670 consisting of 200,166,667 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 to $3,501,666,670
consisting of 200,166,667 shares with a par value of $10 each designated as
Common Stock and 1,500 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 25th day of September in the Year of our Lord one thousand nine
---- ---------
hundred and ninety-eight.
/s/ Manuel Kursky
------------------------------
Deputy Superintendent of Banks
<PAGE>
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 Secretary and a Vice President 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 Three Billion, Five Hundred One Million, Six Hundred Sixty-Six
Thousand, Six Hundred Seventy Dollars ($3,501,666,670), divided into Two
Hundred Million, One Hundred Sixty-Six Thousand, Six Hundred Sixty-Seven
(200,166,667) shares with a par value of $10 each designated as Common
Stock and 1500 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 Three Billion, Six Hundred Twenty-Seven Million, Three Hundred
Eight Thousand, Six Hundred Seventy Dollars ($3,627,308,670), divided into
Two Hundred Twelve Million, Seven Hundred Thirty Thousand, Eight Hundred
Sixty- Seven (212,730,867) shares with a par value of $10 each designated
as Common Stock and 1500 shares with a par value of One Million Dollars
($1,000,000) each designated as Series Preferred Stock."
<PAGE>
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 16th
day of December, 1998
/s/ James T. Byrne, Jr.
--------------------------------------
James T. Byrne, Jr.
Managing Director and Secretary
/s/ Lea Lahtinen
--------------------------------------
Lea Lahtinen
Vice President and Assistant Secretary
State of New York )
) ss:
County of New York )
Lea Lahtinen, being fully sworn, deposes and says that she is a Vice
President and 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 16/th/ day
of December, 1998
/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, 2000
<PAGE>
State of New York,
Banking Department
I, P. VINCENT CONLON, 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 December 16, 1998, providing for an increase in
authorized capital stock from $3,501,666,670 consisting of 200,166,667 shares
with a par value of $10 each designated as Common Stock and 1,500 shares with a
par value of $1,000,000 each designated as Series Preferred Stock to
$3,627,308,670 consisting of 212,730,867 shares with a par value of $10 each
designated as Common Stock and 1,500 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 18th day of December in the Year of our Lord one
---- --------
thousand nine hundred and ninety-eight.
/s/ P. Vincent Conlon
------------------------------
Deputy Superintendent of Banks
<PAGE>
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 Secretary and a Vice President 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 reduce the minimum number of directors required from 10 to 7, and to reduce
in the maximum number of directors from 25 to 15.
4. Article VII of the organization certificate with reference to number
of directors, which reads as follows:
"VII. The number of directors of the corporation shall be not less than 10
nor more than 25"
is hereby amended to read as follows:
"VII. The number of directors of the corporation shall be not less than 7
nor more than 15"
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
30/th/ day of July 1999
/s/ James T. Byrne, Jr.
--------------------------------------
James T. Byrne, Jr.
Managing Director and Secretary
/s/ Lea Lahtinen
--------------------------------------
Lea Lahtinen
Vice President and Assistant Secretary
State of New York )
) ss:
County of New York )
<PAGE>
Lea Lahtinen, being fully sworn, deposes and says that she is a Vice
and 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 30/th/ day
of July, 1999
/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, 2000
<PAGE>
State of New York
Banking Department
I, P. VINCENT CONLON, 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 September 3, 1999, providing for a reduction in
the minimum number of directors required from ten to seven, and a reduction in
the maximum number of directors from twenty-five to fifteen.
Witness, my hand and official seal of the Banking Department at the City of New
York,
this 3/rd/ day of September in the Year of our Lord
----- ---------
one thousand nine hundred and ninety-nine.
/s/ P. Vincent Conlon
------------------------------
Deputy Superintendent of Banks
<PAGE>
BY-LAWS
JUNE 22, 1999
Bankers Trust Company
New York
<PAGE>
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 seven nor more than fifteen, 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 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.
<PAGE>
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 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 provided, however, that there shall be at least ten regular monthly
meetings during a calendar year. 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 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.
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.
<PAGE>
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.
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.
<PAGE>
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 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
<PAGE>
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.
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
<PAGE>
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 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
<PAGE>
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 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.
ARTICLE VIII
CONSTRUCTION
<PAGE>
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.
I, Marc J. Parilla, Assistant Vice President 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 J. Parilla
________________________
Marc J. Parilla
Assistant Vice President
DATED: February 9, 2000
<PAGE>
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
Legal Title of Bank: Bankers Trust Company Call Date: 09/30/99 State#: 36-4840 FFIEC 031
Address: 130 Liberty Street Vendor ID: D Cert#: 00623 Page RC-1
City, State ZIP: New York, NY 10006 Transit#: 21001003
11
</TABLE>
Consolidated Report of Condition for Insured Commercial
and State-Chartered Savings Banks for September 30, 1999
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 |
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C>
ASSETS | / / / / / / / / / / |
1. Cash and balances due from depository institutions (from Schedule RC-A): | / / / / / / / / / / |
a. Noninterest-bearing balances and currency and coin (1) ............. | 0081 1,652,000 | 1.a.
b. Interest-bearing balances (2) ...................................... | 0071 3,292,000 | 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 3,240,000 | 2.b.
3. Federal funds sold and securities purchased under agreements to resell... | 135 10,104,000 | 3.
4. Loans and lease financing receivables: | / / / / / / / / / / |
a. Loans and leases, net of unearned income (from Schedule RC-C) RCFD 2122 15,897,000 | / / / / / / / / / / | 4.a.
b. LESS: Allowance for loan and lease losses........................RCFD 3123 444,000 | / / / / / / / / / / | 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 15,453,000 | 4.d.
5. Trading Assets (from schedule RC-D) ................................... | 3545 8,582,000 | 5.
6. Premises and fixed assets (including capitalized leases) ............... | 2145 757,000 | 6.
7. Other real estate owned (from Schedule RC-M) ........................... | 2150 82,000 | 7.
8. Investments in unconsolidated subsidiaries and associated companies
(from Schedule RC-M).................................................... | 2130 773,000 | 8.
9. Customers' liability to this bank on acceptances outstanding ........... | 2155 73,000 | 9.
10. Intangible assets (from Schedule RC-M) ................................. | 2143 74,000 | 10.
11. Other assets (from Schedule RC-F) ...................................... | 2160 3,722,000 | 11.
12. Total assets (sum of items 1 through 11) ............................... | 2170 47,804,000 | 12.
----------------------------
</TABLE>
____________________________
(1) Includes cash items in process of collection and unposted debits.
(2) Includes time certificates of deposit not held for trading.
<PAGE>
<TABLE>
<CAPTION>
Legal Title of Bank: Bankers Trust Company Call Date: 06/30/99 State#: 364840 FFIEC 031
Address: 130 Liberty Street Vendor ID: D Cert#: 00623 Page RC-2
City, State ZIP: New York, NY 10006 Transit#: 21001003
12
Schedule RC--Continued
Dollar Amounts in Thousands
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C>
LIABILITIES
13. Deposits: | / / / / / / / / / / / / / / / / / / /
a. In domestic offices (sum of totals of columns A and C from Schedule RC-E, part I) | RCON 2200 14,113,000 |13.a.
(1) Noninterest-bearing(1) ..................................................... | RCON 6631 2,748,000 |13.a.(1)
(2) Interest-bearing ........................................................... | RCON 6636 11,365,000 |13.a.(2)
b. In foreign offices, Edge and Agreement subsidiaries, and IBFs (from Schedule RC-E | / / / / / / / / / / / / / / / / / / /
part II) | RCFN 2200 11,869,000 |13.b.
(1) Noninterest-bearing ........................................................ | RCFN 6631 2,329,000 |13.b.(1)
(2) Interest-bearing ........................................................... | RCFN 6636 9,540,000 |13.b.(2)
14. Federal funds purchased and securities sold under agreements to repurchase | RCFD 2800 3,195,000 |14.
15. a. Demand notes issued to the U.S. Treasury ........................................ | RCON 2840 363,000 |15.a.
b. Trading liabilities (from Schedule RC-D) ........................................ | RCFD 3548 4,118,000 |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 1,797,000 |16.a.
b. With a remaining maturity of more than one year through three years ............. | A547 1,864,000 |16.b
c. With a remaining maturity of more than three years .............................. | A548 143,000 |16.c
17. Not Applicable. | / / / / / / / / / / / / / / / / / / /
18. Bank's liability on acceptances executed and outstanding ............................. | RCFD 2920 73,000 |18.
19. Subordinated notes and debentures (2)................................................. | RCFD 3200 330,000 |19.
20. Other liabilities (from Schedule RC-G) ............................................... | RCFD 2930 3,738,000 |20.
21. Total liabilities (sum of items 13 through 20) ....................................... | RCFD 2948 41,603,000 |21.
22. Not Applicable | / / / / / / / / / / / / / / |
| / / / / / / / / / / / / / / |22.
EQUITY CAPITAL | / / / / / / / / / / / / / / |
23. Perpetual preferred stock and related surplus ........................................ | RCFD 3838 1,500,000 |23.
24. Common stock ......................................................................... | RCFD 3230 2,127,000 |24.
25. Surplus (exclude all surplus related to preferred stock) ............................. | RCFD 3839 541,000 |25.
26. a. Undivided profits and capital reserves .......................................... | RCFD 3632 2,124,000 |26.a.
b. Net unrealized holding gains (losses) on available-for-sale securities .......... | RCFD 8434 (6,000) |26.b.
c. Accumulated net gains (losses) on cash flow hedges______________________ | RCFD 4336 0 |26c.
27. Cumulative foreign currency translation adjustments .................................. | RCFD 3284 (85,000) |27.
28. Total equity capital (sum of items 23 through 27) .................................... | RCFD 3210 6,201,000 |28.
29. Total liabilities and equity capital (sum of items 21 and 28)......................... | RCFD 3300 47,804,000 |29
|______________________________|
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 N/A |M.1
-------------------------------
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
submits a report on the consolidated holding company external 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.
