<PAGE> 1
As filed with the Securities and Exchange Commission on September 25, 1998
Registration Nos. 333-______;
333-______-01
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-------------------------
FORM S-4
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
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<TABLE>
<S> <C>
BSB BANCORP, INC. BSB CAPITAL TRUST I
(Exact name of registrant as specified in its charter) (Exact name of registrant as specified in its charter)
Delaware Delaware
(State of incorporation) (State of incorporation)
6712 6719
(Primary Standard Industrial Classification Code No.) (Primary Standard Industrial Classification Code No.)
16-1327860 16-6479360
(I.R.S. Employer Identification No.) (I.R.S. Employer Identification No.)
</TABLE>
58-68 Exchange Street
Binghamton, NY 13902
(607) 779-2492
(Address, including zip code, and telephone number, including area code, of
registrants' principal executive offices)
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<TABLE>
<S> <C>
Larry G. Denniston Larry G. Denniston
BSB Bancorp, Inc. BSB Capital Trust I
58-68 Exchange Street 58-68 Exchange Street
Binghamton, NY 13902 Binghamton, NY 13902
(607) 779-2492 (607) 779-2492
</TABLE>
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
-----------------------
Copies to:
Stuart G. Stein, Esq.
Roger A. Seiken, Esq.
Hogan & Hartson L.L.P.
555 Thirteenth Street, N.W.
Washington, D.C. 20004
(202) 637-5600
Approximate date of commencement of proposed sale of the securities to
the public: As soon as practicable after this Registration Statement becomes
effective.
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CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
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<S> <C> <C> <C> <C>
Proposed Proposed
maximum maximum
Amount to be offering price aggregate Amount of
Title of each class of securities to be registered registered per unit (1) offering price (1) registration fee
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Exchange Capital Securities of BSB Capital Trust I $30,000,000 100% $30,000,000 $8,850
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Exchange Junior Subordinated Debentures of BSB Bancorp,
Inc. (2)
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BSB Bancorp, Inc. Exchange Guarantee with respect to
Exchange Capital Securities (2)
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Total (3) $30,000,000 (4) 100% $30,000,000 (4) $8,850
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</TABLE>
(1) Estimated solely for the purpose of computing the registration fee.
(2) No separate consideration will be received for the Exchange Junior
Subordinated Debentures of BSB Bancorp, Inc. distributed upon any
liquidation of BSB Capital Trust I, and no separate consideration will
be received for the BSB Bancorp, Inc. Exchange Guarantee.
(3) This Registration Statement is deemed to cover rights of holders of
Exchange Junior Subordinated Debentures under the Indenture, the rights
of holders of Exchange Capital Securities under an Amended and Restated
Declaration of Trust, and the rights of holders of such Exchange Capital
Securities under the Exchange Guarantee and certain backup undertakings
as described herein.
(4) Such amount represents the liquidation amount of the Capital
Securities to be exchanged hereunder and the principal amount of
Exchange Junior Subordinated Debentures that may be distributed to
holders of such Capital Securities upon any liquidation of BSB Capital
Trust I.
The registrants hereby amend this registration statement on such date
or dates as may be necessary to delay its effective date until the registrant
shall file a further amendment which specifically states that this registration
statement shall thereafter become effective in accordance with section 8(a) of
the Securities Act of 1933 or until the registration statement shall become
effective on such date as the Commission acting pursuant to said section 8(a),
may determine.
<PAGE> 2
The information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor may
offers to buy be accepted prior to the time the registration statement becomes
effective. This Prospectus shall not constitute an offer to sell or the
solicitation of an offer to buy nor shall there be any sale of these securities
in any State in which such offer, solicitation or sale would be unlawful prior
to registration or qualification under the securities laws of any such State.
<PAGE> 3
SUBJECT TO COMPLETION, DATED SEPTEMBER 25, 1998
PROSPECTUS
BSB CAPITAL TRUST I
OFFER TO EXCHANGE ITS
8.125% EXCHANGE CAPITAL SECURITIES
(LIQUIDATION AMOUNT $1,000 PER EXCHANGE CAPITAL SECURITY)
WHICH HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933
FOR ANY AND ALL OF ITS OUTSTANDING
8.125% ORIGINAL CAPITAL SECURITIES
(LIQUIDATION AMOUNT $1,000 PER ORIGINAL CAPITAL SECURITY)
FULLY AND UNCONDITIONALLY GUARANTEED, AS DESCRIBED HEREIN, BY
BSB BANCORP, INC.
THE EXCHANGE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M.,
NEW YORK CITY TIME ON ________, 1998, UNLESS EXTENDED.
BSB Capital Trust I, a trust formed under the laws of the state of
Delaware (the "Trust"), hereby offers, upon the terms and subject to the
conditions set forth in this prospectus (as the same may be amended or
supplemented from time to time, the "Prospectus") and in the accompanying
Letter of Transmittal (which together constitute the "Exchange Offer"), to
exchange up to $30,000,000 aggregate Liquidation Amount of its 8.125% Exchange
Capital Securities (the "Exchange Capital Securities"), which have been
registered under the Securities Act of 1933, as amended (the "Securities Act"),
pursuant to a Registration Statement of which this Prospectus constitutes a
part, for a like Liquidation Amount of its outstanding 8.125% Capital
Securities (the "Original Capital Securities"), of which $30,000,000 aggregate
Liquidation Amount are issued and outstanding. Pursuant to the Exchange Offer,
BSB Bancorp, Inc., a Delaware-chartered bank holding company (the "Company" or
"BSB Bancorp"), is also offering to exchange (i) its guarantee of payments of
cash distributions and payments on liquidation of the Trust or redemption of
the Original Capital Securities (the "Original Guarantee") for a like guarantee
in respect of the Exchange Capital Securities (the "Exchange Guarantee") and
(ii) $30,000,000 aggregate principal amount of its 8.125% Junior Subordinated
Deferrable Interest Debentures due July 31, 2028 (the "Original Junior
Subordinated Debentures") for
(Continued on next page)
This Prospectus and the Letter of Transmittal are first being mailed
to all holders of Original Capital Securities on or about ______, 1998.
SEE "RISK FACTORS" BEGINNING ON PAGE 10 FOR CERTAIN INFORMATION THAT
SHOULD BE CONSIDERED BY HOLDERS IN DECIDING WHETHER TO TENDER ORIGINAL CAPITAL
SECURITIES FOR EXCHANGE CAPITAL SECURITIES IN THE EXCHANGE OFFER.
THE SECURITIES OFFERED HEREBY ARE NOT DEPOSITS OR OTHER OBLIGATIONS OF A BANK
AND ARE NOT INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION
OR ANY OTHER GOVERNMENTAL AGENCY.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF
THIS PROSPECTUS. ANY REPRESENTATION TO
THE CONTRARY IS A CRIMINAL OFFENSE.
The date of this Prospectus is , 1998.
<PAGE> 4
(Continued from the previous page)
like aggregate principal amount of its 8.125% Exchange Junior Subordinated
Deferrable Interest Debentures due July 31, 2028 (the "Exchange Junior
Subordinated Debentures"), which Exchange Guarantee and Exchange Junior
Subordinated Debentures also have been registered under the Securities Act.
The Original Capital Securities, the Original Guarantee and the Original Junior
Subordinated Debentures are collectively referred to herein as the "Original
Securities" and the Exchange Capital Securities, the Exchange Guarantee and the
Exchange Junior Subordinated Debentures are collectively referred to herein as
the "Exchange Securities."
The terms of the Exchange Securities are identical in all material
respects to the respective terms of the Original Securities, except that (i)
the Exchange Securities have been registered under the Securities Act and
therefore will not be subject to certain restrictions on transfer applicable to
the Original Securities, (ii) the Exchange Capital Securities will not provide
for any increase in the Distribution rate thereon, and (iii) the Exchange
Junior Subordinated Debentures will not provide for any liquidated damages
thereon. See "Description of Exchange Securities" and "Description of Original
Securities." The Exchange Capital Securities are being offered for exchange in
order to satisfy certain obligations of the Company and the Trust under the
Registration Rights Agreement, dated July 24, 1998 (the "Registration Rights
Agreement") among the Company, the Trust and Keefe, Bruyette & Woods, Inc. (the
"Initial Purchaser"). In the event that the Exchange Offer is consummated, any
Original Capital Securities that remain outstanding after consummation of the
Exchange Offer and the Exchange Capital Securities issued in the Exchange Offer
will vote together as a single class for purposes of determining whether
holders of the requisite percentage in outstanding Liquidation Amount thereof
have taken certain actions or exercised certain rights under the Trust
Agreement.
The Exchange Capital Securities and the Original Capital Securities
(together, the "Capital Securities") represent preferred undivided beneficial
interests in the assets of the Trust. The Company is the holder of all of the
common undivided beneficial interests in the assets of the Trust represented by
common securities of the Trust (the "Common Securities," and together with the
Capital Securities, the "Trust Securities"). Bankers Trust Company is the
Property Trustee (the "Property Trustee") of the Trust. The Trust exists for
the sole purpose of issuing the Trust Securities and investing the proceeds
thereof in the Junior Subordinated Debentures. The Exchange Junior
Subordinated Debentures will mature on July 31, 2028 (the "Stated Maturity
Date"). The Exchange Capital Securities will have a preference over the Common
Securities under certain circumstances with respect to cash distributions and
amounts payable on liquidation, redemption or otherwise. See "Description of
Exchange Securities -- Description of Exchange Capital Securities --
Subordination of Common Securities."
As used herein, (i) the "Indenture" means the Junior Subordinated
Indenture, dated as of July 24, 1998, as amended and supplemented from time to
time, between the Company and Bankers Trust Company, as trustee (the "Debenture
Trustee"), relating to the Junior Subordinated Debentures, (ii) the "Trust
Agreement" means the Amended and Restated Trust Agreement, among the Company,
as Depositor, Bankers Trust Company, as Property Trustee, Bankers Trust Company
(Delaware), as Delaware Trustee (the "Delaware Trustee," and collectively, with
the Property Trustee, the "Trustees"), and the Administrators named therein,
and (iii) the "Guarantee" means the Guarantee Agreement, between the Company
and Bankers Trust Company, as Guarantee Trustee (the "Guarantee Trustee"). In
addition, as the context may require, (i) "Junior Subordinated Debentures"
includes the Original Junior Subordinated Debentures and the Exchange Junior
Subordinated Debentures and (ii) "Guarantee" includes the Original Guarantee
and the Exchange Guarantee.
Holders of the Trust Securities will be entitled to receive
preferential cumulative cash distributions arising from the payment of interest
on the Exchange Junior Subordinated Debentures, accumulating from July 24,
1998, and payable semi-annually in arrears on January 31 and July 31 of each
year, commencing January 31, 1999, at the annual rate of 8.125% of the
Liquidation Amount of $1,000 per Trust Security ("Distributions"). The Company
has the right to defer payment of interest on the Exchange Junior Subordinated
Debentures at any time or from time to time for a period not exceeding 10
(ii)
<PAGE> 5
consecutive semi-annual periods with respect to each deferral period (each, an
"Extension Period"), provided that no Extension Period may extend beyond the
Stated Maturity Date of the Exchange Junior Subordinated Debentures. No
interest shall be due and payable during any Extension Period, except at the
end thereof. Upon the termination of any such Extension Period and the payment
of all amounts then due, the Company may elect to begin a new Extension Period
subject to the requirements set forth herein. If interest payments on the
Exchange Junior Subordinated Debentures are so deferred, Distributions on the
Exchange Capital Securities will also be deferred and the Company will not be
permitted, subject to certain exceptions described herein, to declare or pay
any cash distributions with respect to the Company's capital stock or with
respect to debt securities of the Company that rank pari passu in all respects
with or junior to the Exchange Junior Subordinated Debentures. During an
Extension Period, interest on the Exchange Junior Subordinated Debentures will
continue to accrue (and the amount of Distributions to which holders of the
Exchange Capital Securities are entitled will accumulate) at a rate equal to
8.125%, compounded semi-annually, and holders of Exchange Capital Securities
will be required to accrue interest income for United States federal income tax
purposes. See "Description of Exchange Securities -- Description of Exchange
Junior Subordinated Debentures -- Option to Extend Interest Payment Period" and
"Certain Federal Income Tax Consequences -- Interest Income and Original Issue
Discount."
The Company has, through the Exchange Guarantee, the Trust Agreement,
the Exchange Junior Subordinated Debentures and the Indenture, taken together,
fully, irrevocably and unconditionally guaranteed all of the Trust's
obligations under the Exchange Capital Securities as described below. See
"Relationship Among the Exchange Capital Securities, the Exchange Junior
Subordinated Debentures and the Exchange Guarantee -- Full and Unconditional
Guarantee." The Exchange Guarantee guarantees payments of Distributions and
payments upon liquidation of the Trust or redemption of the Exchange Capital
Securities, but in each case only to the extent of funds held by the Trust, as
described herein. See "Description of Exchange Securities -- Description of
Exchange Guarantee." If the Company does not make payments on the Exchange
Junior Subordinated Debentures, the Trust may not have sufficient funds to pay
Distributions on the Exchange Capital Securities. The Exchange Guarantee does
not cover payment of Distributions when the Trust does not have sufficient
funds to pay such Distributions. In such event, a holder of Exchange Capital
Securities may institute a legal proceeding directly against the Company to
enforce payment of such Distributions to such holder. See "Description of
Exchange Securities -- Description of Exchange Junior Subordinated Debentures
- -- Enforcement of Certain Rights by Holders of Exchange Capital Securities."
The obligations of the Company under the Exchange Guarantee and the Exchange
Capital Securities are subordinate and junior in right of payment to all Senior
Indebtedness (as defined in "Description of Exchange Securities -- Description
of Exchange Junior Subordinated Debentures -- Subordination") of the Company.
See "Risk Factors -- Ranking of Subordinated Obligations under the Exchange
Guarantee and the Exchange Junior Subordinated Debentures."
The Exchange Capital Securities are subject to mandatory redemption
(i) in whole, but not in part, upon repayment of the Exchange Junior
Subordinated Debentures on the Stated Maturity Date or their earlier redemption
in whole upon the occurrence of a Tax Event, an Investment Company Event or a
Capital Treatment Event (each as defined herein) and (ii) in whole or in part
at any time on or after July 31, 2008 contemporaneously with the optional
redemption by the Company of the Exchange Junior Subordinated Debentures in
whole or in part. The Exchange Junior Subordinated Debentures are redeemable
prior to maturity at the option of the Company (i) on or after July 31, 2008,
in whole at any time or in part from time to time, or (ii) in whole, but not in
part, at any time within 90 days following the occurrence and continuation of a
Tax Event, Investment Company Event or Capital Treatment Event, in each case at
a redemption price set forth herein, plus the accrued and unpaid interest on
the Exchange Junior Subordinated Debentures so redeemed to the date fixed for
redemption. The ability of the Company to exercise its rights to redeem the
Exchange Junior Subordinated Debentures or to cause the redemption of the
Exchange Capital Securities prior to the Stated Maturity Date may be subject to
prior regulatory approval by the Federal Reserve, if then required under
applicable Federal Reserve capital guidelines or policies. See "Description of
Exchange Securities -- Description of Capital Securities --
(iii)
<PAGE> 6
Liquidation Distribution Upon Dissolution" and "Description of Exchange
Securities -- Description of Exchange Junior Subordinated Debentures --
Redemption."
The holders of the outstanding Common Securities have the right at any
time to dissolve the Trust and, after satisfaction of liabilities of creditors
of the Trust as required by applicable law, to cause the Exchange Junior
Subordinated Debentures to be distributed to the holders of the Trust
Securities in dissolution of the Trust.
In the event of dissolution of the Trust, after satisfaction of
liabilities to creditors of the Trust as required by applicable law, the
holders of the Exchange Capital Securities will be entitled to receive a
Liquidation Amount of $1,000 per Exchange Capital Security plus accumulated and
unpaid Distributions thereon to the date of payment, subject to certain
exceptions, which may be in the form of a distribution of such amount in
Exchange Junior Subordinated Debentures. See "Description of Exchange
Securities -- Description of Exchange Capital Securities -- Liquidation
Distribution Upon Dissolution."
THE EXCHANGE CAPITAL SECURITIES MAY BE TRANSFERRED ONLY IN A BLOCK
HAVING A LIQUIDATION AMOUNT OF NOT LESS THAN $100,000 (100 EXCHANGE CAPITAL
SECURITIES). ANY TRANSFER OF EXCHANGE CAPITAL SECURITIES IN A BLOCK HAVING A
LIQUIDATION AMOUNT OF LESS THAN $100,000 SHALL BE DEEMED TO BE VOID AND OF NO
LEGAL EFFECT WHATSOEVER. ANY SUCH TRANSFEREE SHALL BE DEEMED NOT TO BE THE
HOLDER OF SUCH EXCHANGE CAPITAL SECURITIES FOR ANY PURPOSE, INCLUDING BUT NOT
LIMITED TO THE RECEIPT OF DISTRIBUTIONS ON SUCH EXCHANGE CAPITAL SECURITIES,
AND SUCH TRANSFEREE SHALL BE DEEMED TO HAVE NO INTEREST WHATSOEVER IN SUCH
EXCHANGE CAPITAL SECURITIES.
----------------------------
The Trust is making the Exchange Offer of the Exchange Capital
Securities in reliance on the position of the staff of the Division of Company
Finance (the "Staff") of the Securities and Exchange Commission (the
"Commission") as set forth in certain interpretive letters addressed to third
parties in other transactions. However, neither the Company nor the Trust has
sought its own interpretive letter and there can be no assurance that the Staff
of the Commission would make a similar determination with respect to the
Exchange Offer as it has in such interpretive letters to third parties. Based
on these interpretations by the Staff of the Commission, and subject to the two
immediately following sentences, the Company and the Trust believe that
Exchange Capital Securities issued pursuant to this Exchange Offer in exchange
for Original Capital Securities may be offered for resale, resold and otherwise
transferred by a holder thereof (other than a holder who is a broker-dealer)
without further compliance with the registration and prospectus delivery
requirements of the Securities Act, provided that such Exchange Capital
Securities are acquired in the ordinary course of such holder's business and
that such holder is not participating, and has no arrangement or understanding
with any person to participate, in a distribution (within the meaning of the
Securities Act) of such Exchange Capital Securities. However, any holder of
Original Capital Securities who is an "affiliate" of the Company or the Trust
or who intends to participate in the Exchange Offer for the purpose of
distributing Exchange Capital Securities, or any broker-dealer who purchased
Original Capital Securities from the Trust to resell pursuant to Rule 144A
under the Securities Act ("Rule 144A") or any other available exemption under
the Securities Act, (i) will not be able to rely on the interpretations of the
Staff of the Commission set forth in the above-mentioned interpretive letters,
(ii) will not be permitted or entitled to tender such Original Capital
Securities in the Exchange Offer and (iii) must comply with the registration
and prospectus delivery requirements of the Securities Act in connection with
any sale or other transfer of such Original Capital Securities unless such sale
is made pursuant to an exemption from such requirements. In addition, as
described herein, if any broker-dealer holds Original Capital Securities
acquired for its own account as a result of market-making or other trading
activities and exchanges such Original Capital Securities for Exchange Capital
Securities, then such broker-dealer must deliver a prospectus meeting the
requirements of the Securities Act in connection with any resales of such
Exchange Capital Securities.
(iv)
<PAGE> 7
Each holder of Original Capital Securities who wishes to exchange
Original Capital Securities for Exchange Capital Securities in the Exchange
Offer will be required to represent that (i) it is not an "affiliate" of the
Company or the Trust, (ii) any Exchange Capital Securities to be received by it
are being acquired in the ordinary course of its business, (iii) it has no
arrangement or understanding with any person to participate in a distribution
(within the meaning of the Securities Act) of such Exchange Capital Securities,
and (iv) if such holder is not a broker-dealer, such holder is not engaged in,
and does not intend to engage in, a distribution (within the meaning of the
Securities Act) of such Exchange Capital Securities. In addition, the Company
and the Trust may require such holder, as a condition to such holder's
eligibility to participate in the Exchange Offer, to furnish to the Company and
the Trust (or an agent thereof) in writing information as to the number of
"beneficial owners" (within the meaning of Rule 13d-3 under the Securities
Exchange Act of 1934, as amended (the "Exchange Act")), on behalf of whom such
holder holds the Original Capital Securities to be exchanged in the Exchange
Offer. Each broker-dealer that receives Exchange Capital Securities for its
own account pursuant to the Exchange Offer must acknowledge that it acquired
the Original Capital Securities for its own account as the result of
market-making activities or other trading activities and must agree that it
will deliver a prospectus meeting the requirements of the Securities Act in
connection with any resale of such Exchange Capital Securities. The Letter of
Transmittal states that by so acknowledging and by delivering a prospectus, a
broker-dealer will not be deemed to admit that it is an "underwriter" within
the meaning of the Securities Act. Based on the position taken by the Staff of
the Commission in the interpretive letters referred to above, the Company and
the Trust believe that broker-dealers who acquired Original Capital Securities
for their own accounts, as a result of market-making activities or other
trading activities ("Participating Broker-Dealers"), may fulfill their
prospectus delivery requirements with respect to the Exchange Capital
Securities received upon exchange of such Original Capital Securities (other
than Original Capital Securities which represent an unsold allotment from the
initial sale of the Original Capital Securities) with a prospectus meeting the
requirements of the Securities Act, which may be the prospectus prepared for an
exchange offer so long as it contains a description of the plan of distribution
with respect to the resale of such Exchange Capital Securities. Each
broker-dealer that receives Exchange Capital Securities for its own account
pursuant to the Exchange Offer must acknowledge that it will deliver a
prospectus in connection with any resale of such Exchange Capital Securities.
The Letter of Transmittal states that by so acknowledging and by delivering a
prospectus, a broker-dealer will not be deemed to admit that it is an
"underwriter" within the meaning of the Securities Act. This Prospectus, as it
may be amended or supplemented from time to time, may be used by a
broker-dealer in connection with resales of Exchange Capital Securities
received in exchange for Original Capital Securities acquired by such
broker-dealer as a result of market-making activities or other trading
activities. The Trust and the Company have agreed that, ending on the close of
business on the 180th day following the Expiration Date, it will make this
Prospectus available to any broker-dealer for use in connection with any such
resale. See "Plan of Distribution." However, a Participating Broker-Dealer who
intends to use this Prospectus in connection with the resale of Exchange
Capital Securities received in exchange for Original Capital Securities
pursuant to the Exchange Offer must notify the Company or the Trust, or cause
the Company or the Trust to be notified, on or prior to the Expiration Date,
that it is a Participating Broker-Dealer. Such notice may be given in the
space provided for that purpose in the Letter of Transmittal or may be
delivered to Bankers Trust Company (the "Exchange Agent") at the address set
forth herein under "The Exchange Offer -- Exchange Agent." Any Participating
Broker-Dealer who is an "affiliate" of the Company or the Trust may not rely on
such interpretive letters and must comply with the registration and prospectus
delivery requirements of the Securities Act in connection with any resale
transaction. See "The Exchange Offer -- Resales of Exchange Capital
Securities."
In that regard, each Participating Broker-Dealer who surrenders
Original Capital Securities pursuant to the Exchange Offer will be deemed to
have agreed, by execution of the Letter of Transmittal, that upon receipt of
notice from the Company or the Trust of the occurrence of any event or the
discovery of any fact that makes any statement contained or incorporated by
reference in this Prospectus untrue in any material respect or that causes this
Prospectus to omit to state a material fact necessary in order to make the
statements contained or incorporated by reference herein, in light of the
circumstances under which they were made, not misleading or of the occurrence
of certain other events specified in the Registration Rights Agreement, such
Participating Broker-Dealer will suspend the sale of Exchange
(v)
<PAGE> 8
Capital Securities (or the Exchange Guarantee or the Exchange Junior
Subordinated Debentures, as applicable) pursuant to this Prospectus until the
Company or the Trust has amended or supplemented this Prospectus to correct
such misstatement or omission and has furnished copies of the amended or
supplemented Prospectus to such Participating Broker-Dealer, or the Company or
the Trust has given notice that the sale of the Exchange Capital Securities (or
the Exchange Guarantee or the Exchange Junior Subordinated Debentures, as
applicable) may be resumed, as the case may be. If the Company or the Trust
gives such notice to suspend the sale of the Exchange Capital Securities (or
the Exchange Guarantee or the Exchange Junior Subordinated Debentures, as
applicable), it shall extend the 180-day period referred to above during which
Participating Broker-Dealers are entitled to use this Prospectus in connection
with the resale of Exchange Capital Securities by the number of days during the
period from and including the date of the giving of such notice to and
including the date when Participating Broker-Dealers shall have received copies
of the amended or supplemented Prospectus necessary to permit resales of the
Exchange Capital Securities or to and including the date on which the Company
or the Trust has given notice that the sale of Exchange Capital Securities (or
the Exchange Guarantee or the Exchange Junior Subordinated Debentures, as
applicable) may be resumed, as the case may be.
Prior to the Exchange Offer, there has been only a limited secondary
market and no public market for the Original Capital Securities. The Exchange
Capital Securities will be a new issue of securities for which there currently
is no market. Although the Initial Purchaser has informed the Company and the
Trust that it currently intends to make a market in the Exchange Capital
Securities, it is not obligated to do so, and any such market making may be
discontinued at any time without notice. Accordingly, there can be no
assurance as to the development or liquidity of any market for the Exchange
Capital Securities. The Company and the Trust currently do not intend to apply
for listing of the Exchange Capital Securities on any securities exchange or
for quotation through the Nasdaq Stock Market, Inc.
Any Original Capital Securities not tendered and accepted in the
Exchange Offer will remain outstanding and will be entitled to all the same
rights and will be subject to the same limitations applicable thereto under the
Trust Agreement (except for those rights which terminate upon consummation of
the Exchange Offer). Following consummation of the Exchange Offer, the holders
of Original Capital Securities will continue to be subject to all of the
existing restrictions upon transfer thereof and neither the Company nor the
Trust will have any further obligation to such holders (other than under
certain limited circumstances) to provide for registration under the Securities
Act of the Original Capital Securities held by them. To the extent that
Original Capital Securities are tendered and accepted in the Exchange Offer, a
holder's ability to sell untendered Original Capital Securities could be
adversely affected. See "Risk Factors -- Consequences of a Failure to Exchange
Original Capital Securities."
THIS PROSPECTUS AND THE RELATED LETTER OF TRANSMITTAL CONTAIN
IMPORTANT INFORMATION. HOLDERS OF ORIGINAL CAPITAL SECURITIES ARE URGED TO
READ THIS PROSPECTUS AND THE RELATED LETTER OF TRANSMITTAL CAREFULLY BEFORE
DECIDING WHETHER TO TENDER THEIR ORIGINAL CAPITAL SECURITIES PURSUANT TO THE
EXCHANGE OFFER.
Original Capital Securities may be tendered for exchange on or prior
to 5:00 p.m., New York City time, on ________________, 1998 (such time on such
date being hereinafter called the "Expiration Date"), unless the Exchange Offer
is extended by the Company or the Trust (in which case the term "Expiration
Date" shall mean the latest date and time to which the Exchange Offer is
extended). Tenders of Original Capital Securities may be withdrawn at any time
on or prior to the Expiration Date. The Exchange Offer is not conditioned upon
any minimum Liquidation Amount of Original Capital Securities being tendered
for exchange. However, the Exchange Offer is subject to certain events and
conditions which may be waived by the Company or the Trust and to the terms and
provisions of the Registration Rights Agreement. Original Capital Securities
may be tendered in whole or in part having an aggregate Liquidation Amount of
not less than $100,000 (100 Original Capital Securities) or any integral
multiple of $1,000 Liquidation Amount (one Original Capital Security) in excess
thereof. The Company has agreed to pay all expenses of the Exchange Offer.
See "The Exchange Offer -- Fees and Expenses." Holders of the
(vi)
<PAGE> 9
Original Capital Securities whose Original Capital Securities are accepted for
exchange will not receive Distributions on such Original Capital Securities and
will be deemed to have waived the right to receive any Distributions on such
Original Capital Securities accumulated from and after July 24, 1998. See "The
Exchange Offer -- Distributions on the Exchange Capital Securities."
Neither the Company nor the Trust will receive any cash proceeds from
the issuance of the Exchange Capital Securities offered hereby. No
dealer-manager is being used in connection with this Exchange Offer. See "Use
of Proceeds" and "Plan of Distribution."
NO DEALER, SALESPERSON OR OTHER INDIVIDUAL HAS BEEN AUTHORIZED TO GIVE
ANY INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED OR
INCORPORATED BY REFERENCE IN THIS PROSPECTUS IN CONNECTION WITH THIS EXCHANGE
OFFER AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE
RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY OR THE TRUST. NEITHER THE
DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL UNDER ANY
CIRCUMSTANCE CREATE AN IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS
OF THE COMPANY OR THE TRUST SINCE THE DATE HEREOF. THIS PROSPECTUS DOES NOT
CONSTITUTE AN OFFER OR A SOLICITATION BY ANYONE IN ANY JURISDICTION IN WHICH
SUCH OFFER OR SOLICITATION IS NOT AUTHORIZED OR IN WHICH THE PERSON MAKING SUCH
OFFER OR SOLICITATION IS NOT QUALIFIED TO DO SO OR ANYONE TO WHOM IT IS
UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION.
----------------------------
(vii)
<PAGE> 10
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the
Exchange Act, and in accordance therewith, files reports, proxy statements and
other information with the Commission. Such reports (including the
Incorporated Documents, as defined below), proxy statements and other
information can be inspected and copied at the public reference facilities of
the Commission at Room 1024, 450 Fifth Street, N.W., Washington, D.C. 20549 and
at the regional offices of the Commission located at 7 World Trade Center, 13th
Floor, Suite 1300, New York, New York 10048 and Suite 1400, Citicorp Center,
14th Floor, 500 West Madison Street, Chicago, Illinois 60661. Copies of such
material (including the Incorporated Documents) can also be obtained at
prescribed rates by writing to the Public Reference Section of the Commission
at 450 Fifth Street, N.W., Washington, D.C. 20549. Such material (including
the Incorporated Documents) may also be accessed electronically by means of the
Commission's home page on the Internet at http://www.sec.gov.
The Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1997, the Company's Quarterly Reports on Form 10-Q for the three
months ended March 31, 1998 and the three and six months ended June 30, 1998,
and the Company's Current Reports on Form 8-K, dated July 23, 1998 and July 29,
1998, all previously filed by the Company with the Commission, are incorporated
herein by reference and shall be deemed to be a part hereof. Each document
filed by the Company with the Commission pursuant to Sections 13(a), 13(c), 14
or 15(d) of the Exchange Act subsequent to the date of this Prospectus and
prior to the termination of any offering of securities made by this Prospectus
shall be deemed to be incorporated herein by reference and to be a part hereof
from the date of filing of such document. All such reports and documents filed
by the Company with the Commission are referred to herein as the "Incorporated
Documents." Any statement contained herein, or in any document all or a portion
of which is incorporated or deemed to be incorporated herein by reference shall
be deemed to be modified or superseded for purposes of this Prospectus to the
extent that a statement contained herein or in any other subsequently filed
document which also is or is deemed to be incorporated by reference herein
modifies or supersedes such statement. Any such statement so modified or
superseded shall not be deemed, except as so modified or superseded, to
constitute a part of this Prospectus.
No separate financial statements of the Trust have been included or
incorporated by reference herein. The Company and the Trust do not consider
that such financial statements would be material to holders of the Capital
Securities because the Trust is a newly formed special purpose entity, has no
operating history or independent operations and is not engaged in and does not
propose to engage in any activity other than holding as trust assets the Junior
Subordinated Debentures, issuing the Trust Securities and engaging in
incidental activities. See "BSB Capital Trust I," "Description of Exchange
Securities -- Description of Exchange Capital Securities," "Description of
Exchange Securities -- Description of Exchange Junior Subordinated Debentures"
and "Description of Exchange Securities -- Description of Exchange Guarantee."
In addition, the Company does not expect that the Trust will file reports,
proxy statements and other reports under the Exchange Act with the Commission.
This Prospectus constitutes a part of a registration statement on Form
S-4 (the "Registration Statement") filed by the Company and the Trust with the
Commission under the Securities Act. This Prospectus does not contain all the
information set forth in the Registration Statement, certain parts of which are
omitted in accordance with the rules and regulations of the Commission, and
reference is hereby made to the Registration Statement and to the exhibits
relating thereto for further information with respect to the Company and the
Capital Securities. Any statements contained herein concerning the provisions
of any document are not necessarily complete, and, in each instance, reference
is made to the copy of such document filed as an exhibit to the Registration
Statement or otherwise filed with the Commission. Each such statement is
qualified in its entirety by such reference.
1
<PAGE> 11
SUMMARY
Reference is made to, and the following summary is qualified in its
entirety by, the more detailed information and financial statements, including
the notes thereto, contained elsewhere in this Prospectus and in documents
incorporated by reference hereto.
BSB BANCORP, INC.
BSB Bancorp, Inc. is the Delaware-chartered bank holding company of
BSB Bank and Trust Company (the "Bank"), a New York-chartered commercial bank
and trust company headquartered in Binghamton, New York. Through the Bank, the
Company offers full service business and retail banking, and trust and
investment services throughout the New York State Counties of Broome
(Binghamton), Onondaga (Syracuse), Tioga, Chenango, and Chemung. Through its
wholly owned subsidiary, BSB Financial Services, Inc., the Bank also offers a
complete range of personalized investment services including securities
brokerage, annuity and mutual fund sales, and other traditional
investment/broker activities. At June 30, 1998, the Company had total assets of
$1.8 billion, including $1.3 billion of total loans, total deposits of $1.4
billion and shareholders' equity of $128.3 million.
The Bank's business strategy is to serve as a community-based
commercial bank alternative to large, out-of-market financial institutions.
Through its business and retail banking products, and trust and investment
services, the Company is seeking to be a major source, if not the single
source, of financial products and services for its customers. The Company
believes that its relationship to the communities it serves distinguishes the
Bank from its competitors, most of which are out-of-market financial
institutions. The Bank has served the Binghamton community for over 130 years,
and many of the Bank's officers and employees have spent their entire careers
in the Binghamton area, including working for competitors which were acquired
by or merged with out-of-market financial institutions.
As a full service commercial banking company, the Bank places
particular emphasis on commercial, consumer and real estate loan products, as
well as business and retail consumer banking and trust services. The Bank's
commercial loans are focused on a diverse group of small and medium-sized
businesses in its market area, with an average total lending relationship per
commercial borrower of approximately $411,000, at June 30, 1998. The Bank's
consumer loans reflect a full range of products, including personal, credit
card, home equity, mobile home and indirect auto dealer loans. The Bank also
originates real estate loans, including residential and commercial mortgage
loans, and also services many of the residential mortgage loans that it sells
in the secondary market.
The Bank serves its retail customers through a variety of delivery
platforms, including 13 traditional, full service branches in five counties in
southern and central New York State. In addition, the Bank offers telephone
banking, personal computer banking, cash management services and 35 automatic
teller machines throughout its market area. The Bank also has proprietary
in-store banking service centers at 12 area Giant Food Markets. The Company
intends to continue to pursue electronic and other customer service delivery
channels in an effort to attract more customer deposits and better service its
existing customers.
The Company and the Bank are subject to regulation, examination and
supervision by the Board of Governors of the Federal Reserve System, the
Federal Deposit Insurance Corporation ("FDIC") and the New York State Banking
Department. The Bank is a member of the Federal Home Loan Bank System, and
deposits in the Bank are insured by the FDIC to the maximum extent provided by
law. The Company's executive offices and the Bank's home office are located at
58-68 Exchange Street, Binghamton, New York 13902, telephone (607)779-2492.
For additional information regarding the Company and its financial
condition and results of operations, see "BSB Bancorp, Inc.," "Selected
Consolidated Financial Data and Other Information" and "Capitalization."
2
<PAGE> 12
BSB CAPITAL TRUST I
The Trust is a statutory business trust formed under Delaware law
pursuant to the Trust Agreement and the filing of a certificate of trust with
the Delaware Secretary of State. The Trust's business and affairs are
conducted pursuant to the Trust Agreement by the Trustees and the two
Administrators who are officers of the Company. The Trust exists for the
exclusive purposes of (i) issuing and selling the Trust Securities, (ii) using
the proceeds from the sale of the Trust Securities to acquire the Junior
Subordinated Debentures and (iii) engaging in only those other activities
necessary, advisable or incidental thereto, including the Exchange Offer.
Accordingly, the Junior Subordinated Debentures are the sole assets of the
Trust and payments under the Junior Subordinated Debentures are the sole source
of revenue of the Trust. All of the Common Securities are held by the Company.
THE EXCHANGE OFFER
<TABLE>
<S> <C>
The Exchange Offer . . . . . . . . . . Up to $30,000,000 aggregate Liquidation Amount of Exchange Capital Securities are being
offered in exchange for a like aggregate Liquidation Amount of Original Capital
Securities. Original Capital Securities may be tendered for exchange in whole or in part
in a Liquidation Amount of $100,000 (100 Original Capital Securities) or any integral
multiple of $1,000 (one Original Capital Security) in excess thereof. The Company and the
Trust are making the Exchange Offer in order to satisfy their obligations under the
Registration Rights Agreement relating to the Original Capital Securities. For a
description of the procedures for tendering Original Capital Securities, see "The Exchange
Offer -- Procedures for Tendering Original Capital Securities."
Expiration Date . . . . . . . . . . . . 5:00 p.m., New York City time, on _________, 1998 unless the Exchange Offer is extended by
the Company and the Trust (in which case the Expiration Date will be the latest date and
time to which the Exchange Offer is extended). See "The Exchange Offer -- Terms of the
Exchange Offer."
Conditions to the Exchange Offer . . . The Exchange Offer is subject to certain conditions, which may be waived by the Company
and the Trust in their sole discretion. The Exchange Offer is not conditioned upon any
minimum Liquidation Amount of Original Capital Securities being tendered. See "The
Exchange Offer -- Conditions to the Exchange Offer."
Terms of the Exchange Offer . . . . . . The Company and the Trust reserve the right in their sole and absolute discretion, subject
to applicable law, at any time and from time to time, (i) to delay the acceptance of the
Original Capital Securities, (ii) to terminate the Exchange Offer if certain specified
conditions have not been satisfied, (iii) to extend the Expiration Date of the Exchange
Offer and retain all Original Capital Securities tendered pursuant to the Exchange Offer,
subject, however, to the right of holders of Original Capital Securities to withdraw their
tendered Original Capital Securities, or (iv) to waive any condition or otherwise amend
the terms of the Exchange Offer in any respect. See "The Exchange Offer -- Terms of the
Exchange Offer."
Withdrawal Rights . . . . . . . . . . . Tenders of Original Capital Securities may be withdrawn at any time on or prior to the
Expiration Date by delivering a written notice of such withdrawal to the Exchange Agent in
conformity
</TABLE>
3
<PAGE> 13
<TABLE>
<S> <C>
with certain procedures as set forth herein under "The Exchange Offer -- Withdrawal
Rights."
Procedures for Tendering
Original Capital Securities . . . . . . Certain brokers, dealers, commercial banks, trust companies and other nominees who hold
Original Capital Securities through The Depository Trust Company ("DTC") must effect
tenders by book-entry transfer through DTC's Automated Tender Offer Program ("ATOP").
Beneficial owners of Original Capital Securities registered in the name of a broker,
dealer, commercial bank, trust company or other nominee are urged to contact such person
promptly if they wish to tender Original Capital Securities pursuant to the Exchange
Offer. Tendering holders of Original Capital Securities that do not use ATOP must
complete and sign a Letter of Transmittal in accordance with the instructions contained
therein and forward the same by mail, facsimile transmission or hand delivery, together
with any other required documents, to the Exchange Agent, either with the certificates of
the Original Capital Securities to be tendered or in compliance with the specified
procedures for guaranteed delivery of Original Capital Securities. Tendering holders of
Original Capital Securities that use ATOP will, by so doing, acknowledge that they are
bound by the terms of the Letter of Transmittal. See "The Exchange Offer -- Procedures
for Tendering Original Capital Securities."
Letters of Transmittal and certificates representing Original Capital Securities should
not be sent to the Company or Trust. Such documents should only be sent to the Exchange
Agent.
Resales of Exchange
Capital Securities . . . . . . . . . . The Company and the Trust are making the Exchange Offer in reliance on the position of the
Staff of the Commission as set forth in certain interpretive letters addressed to third
parties in other transactions. However, neither the Company nor the Trust has sought its
own interpretive letter and there can be no assurance that the Staff of the Commission
would make a similar determination with respect to the Exchange Offer as it has in such
interpretive letters to third parties. Based on these interpretations by the Staff of the
Commission, and subject to the two immediately following sentences, the Company and the
Trust believe that Exchange Capital Securities issued pursuant to this Exchange Offer in
exchange for Original Capital Securities may be offered for resale, resold and otherwise
transferred by a holder thereof (other than a holder who is a broker-dealer) without
further compliance with the registration and prospectus delivery requirements of the
Securities Act, provided that such Exchange Capital Securities are acquired in the
ordinary course of such holder's business and that such holder is not participating, and
has no arrangement or understanding with any person to participate, in a distribution
(within the meaning of the Securities Act) of such Exchange Capital Securities. However,
any holder of Original Capital Securities who is an "affiliate" of the Company or the
Trust or who intends to participate in the Exchange Offer for the purpose of distributing
the Exchange Capital Securities, or any broker-dealer who purchased the Original Capital
Securities from the Trust to
</TABLE>
4
<PAGE> 14
<TABLE>
<S> <C>
resell pursuant to Rule 144A or any other available exemption under the Securities Act,
(i) will not be able to rely on the interpretations of the Staff of the Commission set
forth in the above-mentioned interpretive letters, (ii) will not be permitted or entitled
to tender such Original Capital Securities in the Exchange Offer and (iii) must comply
with the registration and prospectus delivery requirements of the Securities Act in
connection with any sale or other transfer of such Original Capital Securities unless such
sale is made pursuant to an exemption from such requirements. In addition, as described
herein, if any broker-dealer holds Original Capital Securities acquired for its own
account as a result of market-making or other trading activities and exchanges such
Original Capital Securities for Exchange Capital Securities, then such broker-dealer must
deliver a prospectus meeting the requirements of the Securities Act in connection with any
resales of such Exchange Capital Securities.
Each holder of Original Capital Securities who wishes to exchange Original Capital
Securities for Exchange Capital Securities in the Exchange Offer will be required to
represent that (i) it is not an "affiliate" of the Company or theTrust, (ii) any Exchange
Capital Securities to be received by it are being acquired in the ordinary course of its
business, (iii) it has no arrangement or understanding with any person to participate in a
distribution (within the meaning of the Securities Act) of such Exchange Capital
Securities, and (iv) if such holder is not a broker-dealer, such holder is not engaged in,
and does not intend to engage in, a distribution (within the meaning of the Securities Act)
of such Exchange Capital Securities. Each broker-dealer that receives Exchange Capital
Securities for its own account in exchange for Original Capital Securities, where such
Original Capital Securities were acquired by such broker-dealer as a result of
market-making activities or other trading activities, must acknowledge that it will
deliver a prospectus meeting the requirements of the Exchange Act in connection with any
resale of such Exchange Capital Securities. See "Plan of Distribution." The Letter of
Transmittal states that, by so acknowledging and by delivering a prospectus, a
broker-dealer will not be deemed to admit that it is an "underwriter" within the meaning
of the Securities Act. Based on the position taken by the Staff of the Commission in the
interpretive letters referred to above, the Company and the Trust believe that
Participating Broker-Dealers who acquired Original Capital Securities for their own
accounts as a result of market-making activities or other trading activities may fulfill
their prospectus delivery requirements with respect to the Exchange Capital Securities
received upon exchange of such Original Capital Securities (other than Original Capital
Securities that represent an unsold allotment from the initial sale of the Original
Capital Securities) with a prospectus meeting the requirements of the Securities Act,
which may be the prospectus prepared for an exchange offer so long as it contains a
description of the plan of distribution with respect to the resale of such Exchange Capital
Securities. Accordingly, this Prospectus, as it may be amended or supplemented from time
to time, may be used by a Participating Broker-Dealer in connection with resales of
Exchange Capital
</TABLE>
5
<PAGE> 15
<TABLE>
<S> <C>
Securities received in exchange for Original Capital Securities where such Original
Capital Securities were acquired by such Participating Broker-Dealer for its own account
as a result of market-making or other trading activities. Subject to certain provisions
set forth in the Registration Rights Agreement and to the limitations described herein
under "The Exchange Offer -- Resales of Exchange Capital Securities," the Company and the
Trust have agreed that this Prospectus, as it may be amended or supplemented from time to
time, may be used by a Participating Broker-Dealer in connection with resales of such
Exchange Capital Securities for a period ending 180 days after the Expiration Date
(subject to extension under certain limited circumstances) or, if earlier, when all such
Exchange Capital Securities have been disposed of by such Participating Broker-Dealer. See
"Plan of Distribution." Any Participating Broker-Dealer who is an "affiliate" of the
Company or the Trust may not rely on such interpretive letters and must comply with the
registration and prospectus delivery requirements of the Securities Act in connection with
any resale transaction. See "The Exchange Offer -- Resales of Exchange Capital
Securities."
Exchange Agent . . . . . . . . . . . . The Exchange Agent with respect to the Exchange Offer is Bankers Trust Company. The
address, and telephone and facsimile number of the Exchange Agent are set forth in "The
Exchange Offer -- Exchange Agent" and in the Letter of Transmittal.
Use of Proceeds . . . . . . . . . . . . Neither the Company nor the Trust will receive any cash proceeds from the issuance of the
Exchange Capital Securities offered hereby. See "Use of Proceeds."
Federal Income Tax Considerations . . . The exchange of Original Capital Securities for Exchange Capital Securities will not be a
taxable exchange for federal income tax purposes, and holders should not recognize any
taxable gain or loss or any interest income as a result of such exchange. See "Certain
Federal Income Tax Consequences -- Exchange of Original Capital Securities."
ERISA Considerations . . . . . . . . . Holders of Original Capital Securities should review the information set forth under
"ERISA Considerations" prior to tendering Original Capital Securities in the Exchange
Offer.
THE EXCHANGE CAPITAL SECURITIES
Securities Offered . . . . . . . . . . Up to $30,000,000 aggregate Liquidation Amount of Exchange Capital Securities (Liquidation
Amount $1,000 per Exchange Capital Security) will have been registered under the
Securities Act. The Exchange Capital Securities will be issued and the Original Capital
Securities were issued under the Trust Agreement. The Exchange Capital Securities and any
Original Capital Securities that remain outstanding after consummation of the Exchange
Offer will vote together as a single class for purposes of determining whether holders of
the requisite percentage in outstanding Liquidation Amount thereof have taken certain
actions or exercised certain rights under the Trust Agreement. See "Description of
Exchange Securities -- Description of Exchange
</TABLE>
6
<PAGE> 16
<TABLE>
<S> <C>
Capital Securities -- Voting Rights; Amendment of Trust Agreement." The terms of the
Exchange Capital Securities are identical in all material respects to the terms of the
Original Capital Securities, except that the Exchange Capital Securities have been
registered under the Securities Act, will not be subject to certain restrictions on
transfer applicable to the Original Capital Securities and will not provide for any
increase in the Distribution rate thereon. See "The Exchange Offer -- Purpose and Effect
of the Exchange Offer," "Description of Exchange Securities" and "Description of Original
Securities."
Distribution Dates . . . . . . . . . . January 31 and July 31 of each year, commencing January 31, 1999.
Extension Periods . . . . . . . . . . . So long as no Debenture Event of Default has occurred and is continuing, Distributions on
Exchange Capital Securities may be deferred for the duration of any Extension Period
selected by the Company with respect to the payment of interest on the Exchange Junior
Subordinated Debentures. No Extension Period may exceed 10 consecutive semi-annual
periods or extend beyond the Stated Maturity Date. See "Description of Exchange
Securities -- Description of Exchange Junior Subordinated Debentures -- Option to Extend
Interest Payment Period" and "Certain Federal Income Tax Consequences -- Interest Income
and Original Issue Discount."
Ranking. . . . . . . . . . . . . . . . The Exchange Capital Securities will rank pari passu, and payments thereon will be made
pro rata, with the Original Capital Securities and the Common Securities, except as
described under "Description of Exchange Securities -- Description of Exchange Capital
Securities." The Exchange Junior Subordinated Debentures will rank pari passu with the
Original Junior Subordinated Debentures, and will constitute unsecured and subordinate
obligations, junior in right of payment to all Senior Indebtedness to the extent and in
the manner set forth in the Indenture. See "Description of Exchange Securities
--Description of Exchange Junior Subordinated Debentures." The Exchange Guarantee will
rank pari passu with the Original Guarantee and will constitute an unsecured obligation of
the Company and will rank subordinate and junior in right of payment to all Senior
Indebtedness to the extent and in the manner set forth in the Guarantee Agreement. See
"Description of Exchange Securities -- Description of Exchange Guarantee." In addition,
because the Company is a holding company, the Exchange Junior Subordinated Debentures and
the Exchange Guarantee will be effectively subordinated to all existing and future
liabilities of the Company's subsidiaries, including the deposit liabilities of the Bank.
See "Risk Factors -- Risk Factors Relating to the Company -- Source of Funds for Payment
of Interest" and "Description of Exchange Securities -- Description of Exchange Junior
Subordinated Debenture -- Subordination."
Redemption . . . . . . . . . . . . . . The Trust Securities are subject to mandatory redemption (i) in whole, but not in part, on
the Stated Maturity Date upon repayment of the Exchange Junior Subordinated Debentures,
(ii)
</TABLE>
7
<PAGE> 17
<TABLE>
<S> <C>
in whole, but not in part, contemporaneously with the optional redemption at any time by
the Company of the Exchange Junior Subordinated Debentures at any time within 90 days
following the occurrence and during the continuation of a Tax Event, Investment Company
Event or Capital Treatment Event in each case, subject to possible regulatory approval and
(iii) in whole or in part, at any time on or after July 31, 2008, contemporaneously with
the optional redemption by the Company of the Exchange Junior Subordinated Debentures in
whole or in part, in each case at the applicable Redemption Price (as defined herein).
See "Description of Exchange Securities -- Description of Exchange Capital Securities --
Redemption."
Rating . . . . . . . . . . . . . . . . The Exchange Capital Securities are not expected to be rated by any rating service and no
other security issued by the Company is so rated.
Transfer Restrictions . . . . . . . . . The Exchange Capital Securities will be issued, and may be transferred, only in blocks
having a Liquidation Amount of not less than $100,000 (100 Exchange Capital Securities).
See "Description of Exchange Securities -- Description of Exchange Capital Securities --
Restrictions on Transfer." Any such transfer of Exchange Capital Securities in a block
having a Liquidation Amount of less than $100,000 shall be deemed to be void and of no
legal effect whatsoever.
Absence of Market for the
Exchange Capital Securities . . . . . . The Exchange Capital Securities will be a new issue of securities for which there
currently is no market. Although the Initial Purchaser has informed the Company and the
Trust that it currently intends to make a market in the Exchange Capital Securities, the
Initial Purchaser is not obligated to do so, and any such market making may be
discontinued at any time without notice. Accordingly, there can be no assurance as to the
development or liquidity of any market for the Exchange Capital Securities. The Trust and
the Company do not intend to apply for listing of the Exchange Capital Securities on any
securities exchange or for quotation through the Nasdaq Stock Market, Inc. See "Plan of
Distribution."
</TABLE>
RISK FACTORS
For a discussion of the considerations relevant to the exchange of
Original Capital Securities for Exchange Capital Securities, see "Risk Factors"
beginning on page 10.
8
<PAGE> 18
SELECTED CONSOLIDATED FINANCIAL DATA AND OTHER INFORMATION
The following Selected Balance Sheet Data and Selected Income
Statement Data for the years ended December 31, 1997, 1996, 1995, 1994 and 1993
has been derived from consolidated financial statements audited by
PricewaterhouseCoopers LLP. All other financial information presented is
unaudited. The consolidated financial information is not necessarily
indicative of the results for any future period and is qualified in its
entirety by the detailed information available in the Company's reports as
described under "Available Information."
<TABLE>
<CAPTION>
AT OR FOR THE SIX
MONTHS ENDED
JUNE 30, AT OR FOR THE YEAR ENDED DECEMBER 31,
----------------------- --------------------------------------------------------------------
1998 1997 1997 1996 1995 1994 1993
---------- ----------- --------- ---------- ---------- ---------- -----------
(UNAUDITED) (DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C> <C>
SELECTED BALANCE SHEET DATA:
Total assets $ 1,772,640 $ 1,465,726 $ 1,560,571 $ 1,363,120 $ 1,239,036 $ 1,161,901 $ 1,093,436
Total loans 1,297,498 1,106,891 1,205,797 1,008,540 927,016 865,082 808,101
Investment securities 365,880 281,019 284,988 287,665 247,092 229,863 236,860
Deposits 1,411,797 1,138,868 1,239,508 1,118,052 1,006,465 962,780 894,293
Borrowings 210,187 194,894 178,644 120,502 98,949 79,028 79,563
Shareholders' equity 128,266 114,212 120,866 108,729 116,774 106,870 109,186
Allowance for possible
credit losses 20,746 17,915 19,207 17,054 14,065 13,354 12,756
SELECTED INCOME STATEMENT DATA:
Total interest income $ 69,922 $ 58,693 $ 122,380 $ 106,252 $ 99,034 $ 84,924 $ 80,854
Total interest expense 36,082 29,618 62,016 52,471 50,421 39,201 35,261
----------- ---------- ----------- ---------- ----------- ----------- ----------
Net Interest income 33,840 29,075 60,364 53,781 48,613 45,723 45,593
Provision for credit
losses 5,704 4,813 10,314 9,971 7,333 3,717 5,580
----------- ---------- ----------- ---------- ----------- ----------- ----------
Net interest income after
provision for credit losses 28,136 24,262 50,050 43,810 41,280 42,006 40,013
Gains (losses) on sale
of securities (503) (18) 380 1,208 97 355 1,421
Gains (losses) on sale
of mortgages (380) (90) (377) (34) (41) (952) 129
Non-interest income 3,708 3,003 6,298 8,140 6,672 5,501 4,465
Non-interest expense 15,424 13,838 28,631 28,045 27,239 25,752 23,952
------------ ---------- ------------ ---------- ----------- ----------- ----------
Income before income
taxes 15,537 13,319 27,720 25,079 20,769 21,158 22,076
Income tax expense 6,023 5,191 10,734 9,875 8,175 8,287 8,680
------------ ---------- ------------ ---------- ----------- ----------- ----------
Net income $9,514 $ 8,128 $16,986 $ 15,204 $ 12,594 $ 12,871 $ 13,396
============ ========== ============ ========== =========== =========== ==========
PERFORMANCE RATIOS:
Return on average assets 1.15% 1.15% 1.17% 1.19% 1.06% 1.15% 1.27%
Return on average equity 15.22 14.37 14.65 13.49 10.89 11.59 13.14
Net interest rate margin 4.30 4.34 4.39 4.46 4.30 4.30 4.52
Efficiency ratio(1) 41.08 43.14 42.95 45.29 49.27 50.27 47.85
CREDIT QUALITY RATIOS:
Asset quality ratio(2) 0.64 0.85 1.01 1.00 1.23 0.96 1.05
Allowance for loan losses
to total loans 1.60 1.62 1.59 1.69 1.52 1.54 1.58
Allowance for loan losses
to non-performing loans 232.29 210.22 148.02 139.59 109.78 169.45 119.65
Net charge-offs to average
loans 0.66 0.74 0.74 0.72 0.72 0.37 0.41
CAPITAL RATIOS:
Average equity to average
assets 7.53 8.01 7.98 8.83 9.71 9.94 9.70
Tier 1 risk-based capital
ratio 8.95 9.39 9.18 9.97 11.51 11.80 12.03
Total risk-based capital
ratio 10.20 10.78 10.44 11.22 12.76 13.06 13.23
Leverage ratio(3)
7.25 7.86 7.79 8.06 9.28 9.61 9.83
RATIOS OF EARNINGS TO FIXED
CHARGES:(4)
Excluding interest on deposits 3.84x 3.90x 3.75x 5.87x 4.37x 6.14x 5.47x
Including interest on deposits 1.43x 1.45x 1.45x 1.48x 1.41x 1.54x 1.63x
</TABLE>
- -----------------
(1) Non-interest expense divided by net interest income plus non-interest
income.
(2) Non-performing loans and other real estate owned to total assets.
Non-performing loans consist of non-accrual loans and accruing loans
contractually past due 90 days or more.
(3) Leverage ratio is Tier 1 capital to average total assets.
(4) For purposes of computing the ratios of earnings to combined fixed
charges, earnings represent net income (loss) before extraordinary items
and cumulative effect of changes in accounting principles plus applicable
income taxes and fixed charges. Fixed charges, excluding interest on
deposits, include gross interest expense (other than on deposits) and
the proportion deemed representative of the interest factor of rent
expense, net of income from subleases. Fixed charges, including gross
interest on deposits, include all interest expense and the proportion
deemed representative of the interest factor of rent expense, net of
income from subleases.
9
<PAGE> 19
RISK FACTORS
Prospective investors should consider carefully, in addition to the
other information contained in this Prospectus, the following factors in
connection with the Exchange Offer and the Exchange Capital Securities offered
hereby. This Prospectus contains certain forward-looking statements and
information relating to the Company that are based on the beliefs of management
as well as assumptions made by and information currently available to
management. The words "believes," "expects," "may," "will," "should,"
"projected," "contemplates" or "anticipates" or the negative thereof or other
variations thereon or comparable terminology, as they relate to the Company or
the Company's management, are intended to identify forward-looking statements.
Such statements reflect the current views of the Company with respect to future
events and are subject to certain risks, uncertainties and assumptions,
including the risk factors described in this Prospectus. No assurance can be
given that the future results covered by the forward-looking statements will be
achieved. The following matters constitute cautionary statements identifying
important factors with respect to such forward-looking statements, including
certain risks and uncertainties, that could cause actual results to vary
materially from the future results covered in such forward-looking statements.
Other factors, such as the general state of the economy, could also cause
actual results to vary materially from the future results covered in such
forward-looking statements. Should one or more of these risks or uncertainties
materialize, or should underlying assumptions prove incorrect, actual results
may vary materially from those described herein as anticipated, believed,
estimated or expected, or by other comparable terminology. The Company does not
intend to update these forward-looking statements.
RISK FACTORS RELATING TO THE OFFERING
Ranking of Subordinated Obligations Under the Exchange Guarantee and
the Exchange Junior Subordinated Debentures
The obligations of the Company under the Exchange Guarantee issued by
the Company for the benefit of the holders of Exchange Capital Securities and
under the Exchange Junior Subordinated Debentures are subordinate and junior in
right of payment to all Senior Indebtedness now or hereinafter incurred and are
effectively subordinated to the indebtedness and other liabilities of the
Company's subsidiaries, including the Bank. See "-- Risk Factors Relating to
the Company -- Source of Funds for Payment of Interest." At June 30, 1998, the
Company had no outstanding Senior Indebtedness. None of the Indenture, the
Guarantee or the Trust Agreement places any limitation on the amount of secured
or unsecured debt, including Senior Indebtedness, that may be incurred by the
Company. See "Description of Exchange Securities -- Description of Exchange
Guarantee -- Status of the Exchange Guarantee" and "Description of Exchange
Securities -- Description of Exchange Junior Subordinated Debentures --
Subordination."
The ability of the Trust to pay amounts due on the Exchange Capital
Securities is solely dependent upon the Company's making payments on the
Exchange Junior Subordinated Debentures as and when required.
Option to Extend Interest Payment Period; Tax Consequences
So long as no Event of Default (as defined in the Indenture) has
occurred and is continuing with respect to the Exchange Junior Subordinated
Debentures (a "Debenture Event of Default"), the Company has the right under
the Indenture to defer the payment of interest on the Exchange Junior
Subordinated Debentures at any time or from time to time for a period not
exceeding 10 consecutive semi-annual periods with respect to each Extension
Period, provided that no Extension Period may extend beyond the Stated Maturity
Date of the Exchange Junior Subordinated Debentures. See "Description of
Exchange Securities -- Description of Exchange Junior Subordinated Debentures
- -- Debenture Events of Default." As a consequence of any such deferral,
semi-annual Distributions on the Exchange Capital Securities by the Trust will
be deferred during any such Extension Period. Distributions to which holders
of the Exchange Capital Securities are entitled will accumulate additional
Distributions thereon during any Extension Period at a rate equal to 8.125% per
annum, compounded semi-annually from the relevant
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payment date for such Distributions, computed on the basis of a 360-day year of
twelve 30-day months and the actual days elapsed in a partial month in such
period. Additional Distributions payable for each full Distribution period
will be computed by dividing the rate per annum by two. The term
"Distributions" as used herein shall include any such additional Distributions.
During any such Extension Period, the Company may not (i) declare or pay any
dividends or distributions on, or redeem, purchase, acquire or make a
liquidation payment with respect to, any of the Company's capital stock or (ii)
make any payment of principal of or interest or premium, if any, on or repay,
repurchase or redeem any debt securities of the Company that rank pari passu in
all respects with or junior in interest to the Exchange Junior Subordinated
Debentures (other than (a) repurchases, redemptions or other acquisitions of
shares of capital stock of the Company in connection with any employment
contract, benefit plan or other similar arrangement with or for the benefit of
any one or more employees, officers, directors or consultants, in connection
with a dividend reinvestment or shareholder stock purchase plan or in
connection with the issuance of capital stock of the Company (or securities
convertible into or exercisable for such capital stock) as consideration in an
acquisition transaction entered into prior to the applicable Extension Period,
(b) as a result of an exchange or conversion of any class or series of the
Company's capital stock (or any capital stock of a subsidiary of the Company)
for any class or series of the Company's capital stock or of any class or
series of the Company's indebtedness for any class or series of the Company's
capital stock, (c) the purchase of fractional interests in shares of the
Company's capital stock pursuant to the conversion or exchange provisions of
such capital stock or the security being converted or exchanged, (d) any
declaration of a dividend in connection with any shareholder's rights plan, or
the issuance of rights, stock or other property under any shareholder's rights
plan, or the redemption or repurchase of rights pursuant thereto, or (e) any
dividend in the form of stock, warrants, options or other rights where the
dividend stock or the stock issuable upon exercise of such warrants, options or
other rights is the same stock as that on which the dividend is being paid or
ranks pari passu with or junior to such stock). Prior to the termination of
any such Extension Period, the Company may further defer the payment of
interest, provided that no Extension Period may exceed 10 consecutive
semi-annual periods or extend beyond the Stated Maturity Date of the Exchange
Junior Subordinated Debentures. Upon the termination of any Extension Period
and the payment of all interest then accrued and unpaid (together with interest
thereon at a rate equal to 8.125% per annum, compounded semi-annually), the
Company may elect to begin a new Extension Period subject to the above
conditions. No interest shall be due and payable during an Extension Period,
except at the end thereof. The Company must give the Trustees notice of its
election of such Extension Period at least one Business Day prior to the
earlier of (i) the date the Distributions on the Exchange Capital Securities
would have been payable but for the election to begin such Extension Period and
(ii) the date the Property Trustee is required to give notice to holders of the
Exchange Capital Securities of the record date or the date such Distributions
are payable, but in any event not less than one Business Day prior to such
record date. The Property Trustee will give notice of the Company's election
to begin a new Extension Period to the holders of the Exchange Capital
Securities. Subject to the foregoing, there is no limitation on the number of
times that the Company may elect to begin an Extension Period. See
"Description of Exchange Securities -- Description of Exchange Capital
Securities -- Distributions" and "Description of Exchange Securities --
Description of Exchange Junior Subordinated Debentures -- Option to Extend
Interest Payment Period."
Should an Extension Period occur, a holder of Exchange Capital
Securities will continue to accrue income (in the form of original issue
discount) for United States federal income tax purposes in respect of its pro
rata share of the Exchange Junior Subordinated Debentures held by the Trust
(which will include a holder's pro rata share of both the stated interest and
de minimis original issue discount, if any, on the Exchange Junior Subordinated
Debentures). As a result, a holder of Exchange Capital Securities will include
such interest income in gross income for United States federal income tax
purposes in advance of the receipt of cash attributable to such original issue
discount interest income, and will not receive the cash related to such income
from the Trust if the holder disposes of the Exchange Capital Securities prior
to the record date for the payment of Distributions with respect to such
Extension Period. See "Certain Federal Income Tax Consequences -- Interest
Income and Original Issue Discount" and "-- Sales of Exchange Capital
Securities."
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<PAGE> 21
The Company has no current intention of exercising its right to defer
payments of interest by extending the interest payment period on the Exchange
Junior Subordinated Debentures. However, should the Company elect to exercise
such right in the future, the market price of the Exchange Capital Securities
is likely to be affected. A holder that disposes of its Exchange Capital
Securities during an Extension Period, therefore, might not receive the same
return on its investment as a holder that continues to hold its Exchange
Capital Securities. In addition, as a result of the existence of the Company's
right to defer interest payments, the market price of the Exchange Capital
Securities (which represent preferred undivided beneficial interests in the
assets of the Trust) may be more volatile than the market prices of other
securities on which original issue discount accrues that are not subject to
such deferrals.
Tax Event, Investment Company Event or Capital Treatment Event
Redemption
Upon the occurrence and during the continuation of a Tax Event,
Investment Company Event or Capital Treatment Event, the Company has the right
to redeem the Exchange Junior Subordinated Debentures in whole, but not in
part, at any time within 90 days following the occurrence of such Tax Event,
Investment Company Event or Capital Treatment Event and thereby cause a
mandatory redemption of the Trust Securities. Any such redemption shall be at
a price equal to the liquidation amount of the Trust Securities, together with
accumulated Distributions to but excluding the date fixed for redemption. The
ability of the Company to exercise its rights to redeem the Exchange Junior
Subordinated Debentures prior to the stated maturity may be subject to prior
regulatory approval by the Federal Reserve, if then required under applicable
Federal Reserve capital guidelines or policies. See "Description of Exchange
Securities -- Description of Exchange Junior Subordinated Debentures --
Redemption" and "Description of Exchange Securities -- Description of Capital
Securities -- Liquidation Distribution Upon Dissolution."
A "Tax Event" means the receipt by the Trust of an opinion of counsel
to the Company experienced in such matters to the effect that, as a result of
any amendment to, or change (including any announced prospective change) in,
the laws (or any regulations thereunder) of the United States or any political
subdivision or taxing authority thereof or therein, or as a result of any
official or administrative pronouncement or action or judicial decision
interpreting or applying such laws or regulations, which amendment or change is
effective or which pronouncement or decision is announced on or after July 24,
1998, there is more than an insubstantial risk that (i) the Trust is, or will
be within 90 days of the delivery of such opinion, subject to United States
federal income tax with respect to income received or accrued on the Exchange
Junior Subordinated Debentures, (ii) interest payable by the Company on the
Exchange Junior Subordinated Debentures is not, or within 90 days of the
delivery of such opinion will not be, deductible by the Company, in whole or in
part, for United States federal income tax purposes or (iii) the 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
"-- Possible Tax Law Changes" for a discussion of certain matters that could
give rise to a Tax Event, which may permit the Company to redeem the Exchange
Junior Subordinated Debentures prior to July 31, 2008.
"Investment Company Event" means the receipt by the Trust of an
opinion of counsel to the Company experienced in such matters to the effect
that, as a result of the occurrence of a change in law or regulation or a
written change (including any announced prospective change) in interpretation
or application of law or regulation by any legislative body, court,
governmental agency or regulatory authority, there is more than an
insubstantial risk that the Trust is or will be considered an "investment
company" that is required to be registered under the Investment Company Act of
1940, as amended (the "Investment Company Act"), which change or prospective
change becomes effective or would become effective, as the case may be, on or
after July 24, 1998.
A "Capital Treatment Event" means the reasonable determination by the
Company that, as a result of the occurrence of any amendment to, or change
(including any announced prospective change) in, the laws (or any rules or
regulations thereunder) of the United States or any political subdivision
thereof or therein, or as a result of any official or administrative
pronouncement or action or judicial decision
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<PAGE> 22
interpreting or applying such laws or regulations, which amendment or change is
effective or such pronouncement, action or decision is announced on or after
July 24, 1998, there is more than an insubstantial risk that the Company will
not be entitled to treat an amount equal to the Liquidation Amount of the
Capital Securities as "Tier 1 Capital" (or the then equivalent thereof), except
as otherwise restricted under the 25% Capital Limitation (as defined herein),
for purposes of the risk-based capital adequacy guidelines of the Federal
Reserve, as then in effect and applicable to the Company.
Possible Tax Law Changes
Prospective investors should be aware that a taxpayer recently filed a
petition in the United States Tax Court contesting the proposed disallowance by
the IRS of interest deductions that the taxpayer claimed in respect of
securities issued in 1993 and 1994 that are, in some respects, similar to the
Capital Securities. (Enron Corp. v. Commissioner, Docket No. 6149-98, filed
April 1, 1998). It is possible that an adverse decision by the Tax Court
concerning the deductibility of such interest could give rise to a Tax Event,
which would give the Company the right to redeem the Exchange Junior
Subordinated Debentures.
Exchange of Exchange Capital Securities for Exchange Junior
Subordinated Debentures
The holders of all the outstanding Common Securities have the right at
any time to dissolve the Trust and, after satisfaction of liabilities to
creditors of the Trust as provided by applicable law, cause the Exchange Junior
Subordinated Debentures to be distributed to the holders of the Capital
Securities and Common Securities in liquidation of the Trust. The ability of
the Company to dissolve the Trust may be subject to prior regulatory approval
of the Federal Reserve, if then required under applicable Federal Reserve
capital guidelines or policies. See "Description of Exchange Securities --
Description of Exchange Capital Securities -- Liquidation Distribution Upon
Dissolution."
Under current United States federal income tax law and interpretations
and assuming, as expected, that the Trust will not be taxable as a corporation,
a distribution of the Exchange Junior Subordinated Debentures upon a
dissolution of the Trust will not be a taxable event to holders of the Exchange
Capital Securities. However, if a Tax Event were to occur that would cause the
Trust to be subject to United States federal income tax with respect to income
received or accrued on the Exchange Junior Subordinated Debentures, a
distribution of the Exchange Junior Subordinated Debentures by the Trust would
be a taxable event to the Trust and the holders of the Exchange Capital
Securities. See "Certain Federal Income Tax Consequences -- Receipt of
Exchange Junior Subordinated Debentures or Cash Upon Dissolution of the Trust."
Rights Under the Exchange Guarantee
Bankers Trust Company will act as the trustee under the Exchange
Guarantee (the "Guarantee Trustee") and will hold the Exchange Guarantee for
the benefit of the holders of the Exchange Capital Securities. Bankers Trust
Company will also act as Debenture Trustee for the Exchange Junior Subordinated
Debentures and as Property Trustee under the Trust Agreement. Bankers Trust
(Delaware) acts as Delaware Trustee under the Trust Agreement. The Exchange
Guarantee guarantees to the holders of the Exchange Capital Securities the
following payments, to the extent not paid by or on behalf of the Trust: (i)
any accumulated and unpaid Distributions required to be paid on the Exchange
Capital Securities, to the extent that the Trust has funds on hand available
therefor at such time; (ii) the Redemption Price (as defined in "Description of
Exchange Securities -- Description of Exchange Capital Securities --
Redemption") with respect to any Exchange Capital Securities called for
redemption, to the extent that the Trust has funds on hand available therefor
at such time; and (iii) upon a voluntary or involuntary dissolution of the
Trust (unless the Exchange Junior Subordinated Debentures are distributed to
holders of the Exchange Capital Securities), the lesser of (a) the aggregate of
the Liquidation Amount and all accumulated and unpaid Distributions to the date
of payment, to the extent that the Trust has funds on hand available therefor
at such time, and (b) the amount of assets of the Trust remaining available for
distribution to holders of the Exchange Capital Securities on dissolution of
the
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<PAGE> 23
Trust. The Exchange Guarantee is subordinated as described under "-- Ranking
of Subordinated Obligations Under the Exchange Guarantee and the Exchange
Junior Subordinated Debentures" and "Description of Exchange Securities --
Description of Exchange Guarantee -- Status of the Exchange Guarantee." The
holders of not less than a majority in aggregate Liquidation Amount of the
outstanding Exchange Capital Securities have the right to direct the time,
method and place of conducting any proceeding for any remedy available to the
Guarantee Trustee in respect of the Exchange Guarantee or to direct the
exercise of any trust power conferred upon the Guarantee Trustee under the
Exchange Guarantee. Any holder of the Exchange Capital Securities may
institute a legal proceeding directly against the Company to enforce its rights
under the Exchange Guarantee without first instituting a legal proceeding
against the Trust, the Guarantee Trustee or any other person or entity.
If the Company were to default on its obligation to pay amounts
payable under the Exchange Junior Subordinated Debentures, the Trust may lack
funds for the payment of Distributions or amounts payable on redemption of the
Exchange Capital Securities or otherwise, and, in such event, holders of the
Exchange Capital Securities would not be able to rely upon the Exchange
Guarantee for payment of such amounts. Instead, if a Debenture Event of
Default has occurred and is continuing and such event is attributable to the
failure of the Company to pay any amounts payable in respect of the Exchange
Junior Subordinated Debentures on the payment date on which such payment is due
and payable, then a holder of Exchange Capital Securities may institute a legal
proceeding directly against the Company for enforcement of payment to such
holder of any amounts payable in respect of such Exchange Junior Subordinated
Debentures having a principal amount equal to the aggregate Liquidation Amount
of the Exchange Capital Securities of such holder (a "Direct Action"). In
connection with such Direct Action, the Company will have a right of set-off
under the Indenture to the extent of any payment made by the Company to such
holder of Exchange Capital Securities in the Direct Action. Except as
described herein, holders of Exchange Capital Securities will not be able to
exercise directly any other remedy available to the holders of the Exchange
Junior Subordinated Debentures or assert directly any other rights in respect
of the Exchange Junior Subordinated Debentures. See "Description of Exchange
Securities -- Description of Exchange Junior Subordinated Debentures --
Enforcement of Certain Rights by Holders of Exchange Capital Securities,"
"Description of Exchange Securities -- Description of Exchange Junior
Subordinated Debentures -- Debenture Events of Default" and "Description of
Exchange Securities -- Description of Exchange Guarantee." The Trust Agreement
provides that each holder of Exchange Capital Securities by acceptance thereof
agrees to the provisions of the Exchange Guarantee and the Indenture.
Limited Voting Rights
Holders of Exchange Capital Securities will have limited voting rights
relating generally to the modification of the Exchange Capital Securities and
the Exchange Guarantee and the exercise of the Trust's rights as holder of
Exchange Junior Subordinated Debentures. Holders of Exchange Capital
Securities will not be entitled to appoint, remove or replace the Property
Trustee or the Delaware Trustee except upon the occurrence of certain events
specified in the Trust Agreement and described herein. The Property Trustee
and the holders of all the Common Securities may, subject to certain
conditions, amend the Trust Agreement without the consent of holders of
Exchange Capital Securities to cure any ambiguity or make other provisions not
inconsistent with the Trust Agreement or to ensure that the Trust (i) will not
be taxable as a corporation for United States federal income tax purposes or
(ii) will not be required to register as an "investment company" under the
Investment Company Act. See "Description of Exchange Securities -- Description
of Exchange Capital Securities -- Voting Rights; Amendment of Trust Agreement"
and "Description of Exchange Securities -- Description of Exchange Capital
Securities -- Removal of Trustees; Appointment of Successors."
Market Prices
There can be no assurance as to the market prices for Exchange Capital
Securities, or the market prices for Exchange Junior Subordinated Debentures
that may be distributed in exchange for Exchange Capital Securities if a
dissolution of the Trust occurs. Accordingly, the Exchange Capital Securities
or the Exchange Junior Subordinated Debentures that a holder of Exchange
Capital Securities may receive on
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<PAGE> 24
dissolution of the Trust may trade at a discount to the price that the investor
paid to purchase the Exchange Capital Securities offered hereby. Because
holders of Exchange Capital Securities may receive Exchange Junior Subordinated
Debentures on dissolution of the Trust, prospective purchasers of Exchange
Capital Securities are also making an investment decision with regard to the
Exchange Junior Subordinated Debentures and should carefully review all the
information regarding the Exchange Junior Subordinated Debentures contained
herein. See "Description of Exchange Securities -- Description of Exchange
Capital Securities -- Liquidation Distribution Upon Dissolution" and
"Description of Exchange Securities -- Description of Exchange Junior
Subordinated Debentures."
Absence of Public Market
The Original Capital Securities were issued to, and the Company
believes such securities are currently owned by, a relatively small number of
beneficial owners. The Original Capital Securities have not been registered
under the Securities Act and are subject to restrictions on transferability if
they are not exchanged for the Exchange Capital Securities. Although the
Exchange Capital Securities may be resold or otherwise transferred by the
holders (who are not affiliates of the Company or the Trust) without compliance
with the registration requirements under the Securities Act, they will
constitute a new issue of securities with no established trading market.
Exchange Capital Securities may be transferred by the holders thereof only in
blocks having a Liquidation Amount of not less than $100,000 (100 Exchange
Capital Securities). The Company and the Trust have been advised by the
Initial Purchaser that the Initial Purchaser presently intends to make a market
in the Exchange Capital Securities. However, the Initial Purchaser is not
obligated to do so and any market-making activity with respect to the Exchange
Capital Securities may be discontinued at any time without notice. In
addition, such market-making activity will be subject to the limits imposed by
the Securities Act and the Exchange Act and may be limited during the Exchange
Offer. Accordingly, no assurance can be given that an active public or other
market will develop for the Capital Securities, or as to the liquidity of or
the trading market for the Exchange Capital Securities. If an active public
market does not develop, the market price and liquidity of the Exchange Capital
Securities may be adversely affected.
If a public trading market develops for the Exchange Capital
Securities, future trading prices will depend on many factors, including, among
other things, prevailing interest rates, the financial condition of the Company
and the market for similar securities. Depending on these and other factors,
the Exchange Capital Securities may trade at a discount.
Notwithstanding the registration of the Exchange Capital Securities in
the Exchange Offer, holders who are "affiliates" (as defined under Rule 405 of
the Securities Act) of the Company or the Trust may publicly offer for sale or
resell the Exchange Capital Securities only in compliance with the provisions
of Rule 144 under the Securities Act.
Each broker-dealer that receives Exchange Capital Securities for its
own account in exchange for Original Capital Securities, where such Original
Capital Securities were acquired by such broker-dealer as a result of
market-making activities or other trading activities, must acknowledge that it
will deliver a prospectus in connection with any resale of such Exchange
Capital Securities. See "Plan of Distribution."
Exchange Offer Procedures
Subject to conditions set forth under "The Exchange Offer --
Conditions to the Exchange Offer," issuance of the Exchange Capital Securities
in exchange for Original Capital Securities pursuant to the Exchange Offer will
be made only after a timely receipt by the Trust of (i) a book-entry
confirmation evidencing the tender of such Original Capital Securities through
ATOP or (ii) certificates representing such Original Capital Securities, a
properly completed and duly executed Letter of Transmittal, with any required
signature guarantees, and all other required documents. See "The Exchange
Offer -- Acceptance for Exchange and Issuance of Exchange Capital Securities"
and "The Exchange Offer -- Procedures for Tendering Original Capital
Securities." Therefore, holders of the Original Capital Securities desiring to
tender such Original Capital Securities in exchange for Exchange Capital
Securities should allow
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<PAGE> 25
sufficient time to ensure timely delivery. Neither the Company nor the Trust
is under any duty to give notification of defects or irregularities with
respect to the tenders of Original Capital Securities for exchange.
Trading Characteristics of the Exchange Capital Securities
The Exchange Capital Securities may trade at a price that does not
fully reflect the value of accrued but unpaid interest with respect to the
underlying Exchange Junior Subordinated Debentures. A holder who uses the
accrual method of accounting for tax purposes (and a cash method holder, if the
Exchange Junior Subordinated Debentures are deemed to have been issued with
OID) and who disposes of its Exchange Capital Securities between record dates
for payments of Distributions thereon will be required to include accrued but
unpaid interest on the Exchange Junior Subordinated Debentures through the date
of disposition in income as ordinary income (i.e., interest or, possibly, OID),
and to add such amount to its adjusted tax basis in its share of the underlying
Exchange Junior Subordinated Debentures deemed disposed of. If the selling
price is less than the holder's adjusted tax basis (which will include all
accrued but unpaid interest), a holder will recognize a capital loss. Subject
to certain limited exceptions, capital losses cannot be applied to offset
ordinary income for U.S. federal income tax purposes. See "Certain Federal
Income Tax Considerations -- Interest Income and Original Issue Discount" and
"Certain Federal Income Tax Considerations -- Sales of Exchange Capital
Securities."
Consequences of a Failure to Exchange Original Capital Securities
The Original Capital Securities have not been registered under the
Securities Act or any state securities laws and therefore may not be offered,
sold or otherwise transferred except in compliance with the registration
requirements of the Securities Act and any other applicable securities laws, or
pursuant to an exemption therefrom or in a transaction not subject thereto, and
in each case in compliance with certain other conditions and restrictions.
Original Capital Securities that remain outstanding after consummation of the
Exchange Offer will continue to bear a legend reflecting such restrictions on
transfer. In addition, upon consummation of the Exchange Offer, holders of
Original Capital Securities that remain outstanding will not be entitled to any
rights to have such Original Capital Securities registered under the Securities
Act or to any similar rights under the Registration Rights Agreement (subject
to certain limited exceptions). The Company and the Trust do not intend to
register under the Securities Act any Original Capital Securities that remain
outstanding after consummation of the Exchange Offer (subject to such limited
exceptions, if applicable). To the extent that Original Capital Securities are
tendered and accepted in the Exchange Offer, a holder's ability to sell
untendered Original Capital Securities could be adversely affected.
The Exchange Capital Securities and any Original Capital Securities
that remain outstanding after consummation of the Exchange Offer will vote
together as a single class for purposes of determining whether holders of the
requisite percentage in outstanding Liquidation Amount thereof have taken
certain actions or exercised certain rights under the Trust Agreement. See
"Description of Exchange Securities -- Description of Exchange Capital
Securities -- Voting Rights; Amendment of the Trust Agreement."
The Original Capital Securities provide, among other things, that, if
a registration statement relating to the Exchange Offer has not been declared
effective by January 20, 1999, the Distribution rate borne by the Original
Capital Securities will increase by 0.25% per annum until the Exchange Offer is
consummated. Upon consummation of the Exchange Offer, holders of Original
Capital Securities will not be entitled to any increase in the Distribution
rate thereon or any further registration rights under the Registration Rights
Agreement, except under limited circumstances. See "Description of Original
Securities."
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<PAGE> 26
RISK FACTORS RELATING TO THE COMPANY
Source of Funds for Payment of Interest
The principal source of the Company's cash revenues is dividends from
the Bank. The Company has traditionally invested substantially all of its
liquid assets in the Bank. The Company's liquidity and ability to pay
obligations such as principal, premium (if any) and interest on the Exchange
Junior Subordinated Debentures and dividends to its shareholders is primarily
derived from and dependent on the ability of the Bank to pay dividends to the
Company. Furthermore, as a bank holding company and a legal entity separate
and distinct from the Bank, the right of the Company to participate in the
assets of any subsidiary upon the latter's liquidation, reorganization or
otherwise (and thus the ability of the holders of Exchange Capital Securities
to benefit indirectly from any such distribution) will be subject to the claims
of such subsidiary's creditors, which will take priority except to the extent
that the Company may itself be a creditor with a recognized claim. As of June
30, 1998, the Company's subsidiaries (which includes the Bank and its
subsidiaries) had indebtedness and other liabilities of approximately $1.6
billion.
Payment of dividends by the Bank is restricted by various legal and
regulatory limitations. At June 30, 1998, approximately $26.2 million was
available for payment of dividends to the Company from the Bank without prior
regulatory approval and without giving consideration to the impact on the
Bank's regulatory capital ratios. The requirement to maintain regulatory
capital may further restrict the Bank's ability to pay dividends.
The Bank is also subject to restrictions under federal law which limit
the transfer of funds by the Bank to the Company, whether in the form of loans,
extensions of credit, investments, asset purchases or otherwise. Such
transfers by the Bank to the Company are limited in amount to 10% of the Bank's
capital and surplus and, with respect to the Company and all its non-bank
subsidiaries, to an aggregate of 20% of the Bank's capital and surplus.
Furthermore, such loans and extensions of credit are required to be secured in
specified amounts. Federal law also prohibits banks from purchasing
"low-quality" assets from affiliates.
Effect of Interest Rate Fluctuations
The Company's consolidated results of operations depend to a large
extent on the level of its net interest income, which is the difference between
interest income from interest-earning assets (such as loans and investments)
and interest expense on interest-bearing liabilities (such as deposits and
borrowings). If interest-rate fluctuations cause the Company's cost of funds
to increase faster than the yield on its interest-bearing assets, net interest
income will decrease. In addition, the market values of most of its financial
assets are sensitive to fluctuations in market interest rates. The Company
measures and manages its interest-rate risk by focusing on the Company's "gap,"
which is the measure of the mismatch between the dollar amount of the Company's
interest-earning assets and interest-bearing liabilities which mature or
reprice within certain time frames.
Based on the Company's asset/liability mix at April 30, 1998,
management's simulation analysis of the effects of changing interest rates
projected that a gradual 200 basis point increase in interest rates over the 12
months ending April 30, 1999 would decrease net interest income for that period
by 3.83% or less and that a similar decrease in interest rates would increase
net interest income by 3.87% or less. The test is based on a number of
assumptions and there can be no assurance that if interest rates did move by
one percent that the Company's results of operations would be impacted as
estimated. Although the Company uses various monitors of interest-rate risk,
the Company is unable to predict future fluctuations in interest rates or the
specific impact thereof.
Changes in interest rates can also affect the amount of loans the
Company originates, as well as the value of its loans and other
interest-earning assets and its ability to realize gains on the sale of such
assets and liabilities. Prevailing interest rates also affect the extent to
which borrowers prepay loans
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<PAGE> 27
owned by the Company. When interest rates increase, borrowers are less likely
to prepay their loans, and when interest rates decrease, borrowers are more
likely to prepay loans. Funds generated by prepayment might be invested at less
favorable interest rates. Prepayments may adversely affect the value of
mortgage loans, the levels of such assets that are retained in the Company's
portfolio, net interest income and loan servicing income. Similarly,
prepayments on mortgage-backed securities can adversely affect the value of
such securities and the interest income generated by them.
Increases in interest rates might cause depositors to shift funds from
accounts that have a comparatively lower cost (such as regular savings
accounts) to accounts with a higher cost (such as certificates of deposit). If
the cost of deposits increases at a rate greater than yields on
interest-earning assets increase, the interest-rate spread will be negatively
affected. Changes in the asset and liability mix also affect the Company's
interest-rate risk.
The Company faces substantial competition for deposits and loans
throughout its market area both from local financial institutions and from
out-of-state financial institutions that either solicit deposits or maintain
loan production offices in the Company's market area. The Company competes for
deposits and loans primarily with other financial service providers such as
savings institutions, commercial banks, credit unions, money market funds and
other investment alternatives. The Company believes that its ability to
compete effectively depends largely on its ability to compete with regard to
interest rates, as well as service fees, personalized services, quality and
range of financial products and services offered, convenience of office hours
and locations and automated services.
Allowance for Possible Credit Losses
In originating loans, there is a substantial likelihood that loan
losses will be experienced. The risk of loss will vary with, among other
things, general economic conditions, the type of loan being made, the
creditworthiness of the borrower over the term of the loan and, in the case of
a collateralized loan, the quality of the collateral for the loan. In order to
manage credit quality in its loan portfolio, the Company utilizes a system to
rate substantially all of its loans based on their respective risks. The
Company considers a loan in its portfolio to be "impaired" if it is probable,
based on current information and events, that the Company will be unable to
collect the scheduled principal and interest payments when due. The Company
maintains reserves to cover potential credit losses based on the Company's
estimate of impaired loans and other factors. Although management considers
the current level of reserves adequate to cover potential credit losses, there
can be no assurance that such reserves will in fact be sufficient to cover
actual losses. At June 30, 1998, the Bank's allowance for possible credit
losses was $20.7 million, or 1.60% of total loans and 232.29% of non-performing
loans at that date. At June 30, 1998, non-performing loans totaled $8.9
million, including $6.5 million of commercial loans, $194,000 of consumer
loans, $1.7 million of residential real estate loans and $492,000 of commercial
real estate loans. Net charge offs during 1997 were $8.2 million, of which $5.9
million was attributable to commercial and consumer loans. Net charge offs
during the first six months of 1998 were $4.2 million, substantially all of
which was attributable to commercial and consumer loans.
Asset Growth
The Company has grown significantly in recent years, and intends to
continue to expand its operations and asset size. At June 30, 1998, the
Company had total assets of $1.8 billion, a 62.1% increase from December 31,
1993, when the Company had total assets of $1.1 billion. The Company's total
assets are comprised primarily of loans and investments and mortgage related
securities, and much of the Company's growth in total assets is attributable to
the Company's ability to originate new commercial and consumer loans in its
lending market. In 1997, the Company originated $576.2 million of loans, and
during the first six months of 1998, the Company originated $365.9 million of
loans. The Bank's total loans increased by $197.3 million, or 19.6%, from year
end 1996 to year end 1997, and by $91.7 million, or 7.6%, from year end 1997 to
June 30, 1998.
18
<PAGE> 28
The Company presently intends to continue to emphasize growth through
loan originations. The Company also intends to explore acquisitions of other
financial institutions and/or branches inside or outside of its market area.
The market for both lending and acquisitions in the Company's market area is
highly competitive, and there can be no assurance that the Company will be able
to sustain its level of growth, or even grow at all. The ability to originate
loans is based on a number of factors, including competition and general
economic conditions which impact loan demand. If the Company acquires another
institution or additional branches, there can be no assurance that the Company
will be able to integrate the acquired institution or branches successfully
into its existing operations or otherwise achieve levels of profitability
comparable to those achieved by the Company's existing operations prior to such
acquisition. Both as to internal growth and acquisitions, the failure to
manage growth effectively could have a material adverse effect on the Company's
business, financial condition and results of operations.
Lending Risks
The Company's loan originations include primarily commercial, consumer
and, to a lesser extent, real estate loans. Commercial loans may involve
greater risk than other types of lending because such loans are often made
based on varying forms of collateral and repayment of such loans is often
dependent on the success of the commercial venture. Consumer loans may also
involve greater risk because changes in borrowers' incomes and employment
statuses after funding of the loans may impact their abilities to repay the
loans. Commercial real estate loans may also involve greater risk because
repayment of such loans is dependent, in large part, on sufficient income from
the properties securing the loans to cover operating expenses and debt service.
General economic conditions, monetary policies of the federal
government, legislative tax policies, governmental budget matters and other
events, including environmental factors, beyond the Company's or borrowers'
control may effect interest rates and market conditions which in turn may
effect prepayment and default rates, the demand for new loans and the
underlying values and cash flows of any collateral, especially real estate,
securing the Company's loans. In addition, the Company's net income may be
effected by the Company's increased interest rate sensitivity that is caused by
loans being tied to the Company's prime rate. Furthermore, an economic
recession over a prolonged period of time in the Bank's market area would
likely cause significant increases in non-performing assets, thereby causing
operating losses, impairing liquidity and eroding capital.
Competition
The banking business is highly competitive and the profitability of
the Company depends principally upon its ability to compete in its market area.
The Company competes with other commercial banks, mortgage banking companies,
savings and loan associations, credit unions, automobile manufacturers and
consumer finance companies, mutual funds, insurance companies, brokerage and
investment banking firms, asset-based non-bank lenders, and governmental
organizations that may offer subsidized financing at lower rates than those
offered by the Company. Many of the Company's competitors have significantly
greater resources (financial and other) than the Company and may offer certain
services that the Bank does not provide at this time. Various legislative acts
and regulatory rules and interpretations in recent years have led to increased
competition among financial institutions. There can be no assurance that new
legislation or regulations will not further increase competitive pressures on
the Company. Moreover, certain of the Bank's competitors are not subject to
the regulation and supervision to which the Company and Bank are subject, and
therefore may have a competitive advantage over the Company and Bank.
Year 2000 Issues
The "Year 2000" issue is the result of computer programs and equipment
which are dependent on "embedded chip technology" using two digits rather than
four to define the applicable year. This could result in a system failure or
miscalculations causing disruptions of operations including, among other
things, a temporary inability to process transactions, send invoices, or engage
in similar normal business
19
<PAGE> 29
activities. The Company started to address the issue in 1995 when technology
upgrade plans were approved by an internal Systems Application and Technology
Planning Committee. In addition, an inventory of all systems, hardware, media,
transmissions, and networks was evaluated. During 1995 and 1996, these
technology upgrades were installed throughout the branches and back office
areas to enhance the operating efficiencies within the Bank. An evaluation of
core banking systems was performed in 1997, and, in late 1998, the Company
expects to convert to a new data processing provider which has indicated that
its software, systems and equipment will be Year 2000 compliant. However, the
Company has no control over the effective implementation of such vendor's Year
2000 compliance programs, and there can be no assurance that such vendor will
be in compliance with Year 2000 issues. Further, there can be no guarantee
that the systems of other companies on which the Company's systems rely will be
timely converted, or that a failure to convert by another company, or a
conversion that is incompatible with the Company's systems, would not have a
material adverse effect on the Company.
Supervision and Regulation
The Company and the Bank are subject to federal and state regulatory
oversight as a bank holding company and state bank and trust company bank,
respectively. The Federal Reserve regulates, examines and supervises the
Company, and the FDIC and Banking Department regulate and examine the Bank.
These laws and regulations govern matters ranging from the regulation of
certain debt obligations, changes of control and mergers, and the maintenance
of adequate capital to the general business operations and financial condition
of the Bank, including permissible types, amounts, and terms of loans and
investments, the amount of reserves against deposits, restrictions on
dividends, establishment of branch offices, and subsidiary investments and
activities. These regulations are intended primarily for the protection of
depositors, rather than the benefit of investors, and they restrict the manner
by which the Company and the Bank may conduct their business and obtain
financing. The Company and the Bank are subject to changes in federal and
state law, income tax laws and accounting principles, and the FDIC, the Federal
Reserve or the Banking Department may adopt additional regulations and
undertake further regulatory initiatives, any or all of which could have an
adverse effect on the Bank and the Company.
BSB BANCORP, INC.
BSB Bancorp, Inc. is the Delaware-chartered bank holding company for
BSB Bank and Trust Company, a New York-chartered commercial bank and trust
company headquartered in Binghamton, New York. Through the Bank, the Company
offers full service business and retail banking, and trust and investment
services throughout the New York State Counties of Broome (Binghamton),
Onondaga (Syracuse), Tioga, Chenango, and Chemung. The Bank's business
strategy is to serve as a community-based commercial bank alternative to large,
out-of-market financial institutions. Through its business and retail banking
products, and trust and investment services, the Company is seeking to be a
major source, if not the single source, of financial products and services for
its customers.
As a full service commercial banking company, the Bank places
particular emphasis on commercial and consumer loan products, as well as
business and retail consumer banking and trust services. Through its wholly
owned subsidiary, BSB Financial Services, Inc., the Bank also offers a complete
range of personalized investment services including securities brokerage,
annuity and mutual fund sales, and other traditional investment/brokerage
activities.
The Company believes that its relationship to the communities it
serves distinguishes the Bank from its competitors, most of which are
out-of-market financial institutions. The Bank has served the Binghamton
community for over 130 years. The Bank maintains a highly visible role in its
communities by participating in and sponsoring charities and charitable events,
and many of the Bank's employees serve on civic and community boards. The
Bank's President and two Executive Vice Presidents have been with the Bank for
a combined 50 years, and have spent their entire careers in the Binghamton
area. In addition, many of the Bank's officers joined the Bank after working
for competitors which were acquired by or merged with out-of-market financial
institutions.
20
<PAGE> 30
At June 30, 1998, the Company had total assets of $1.8 billion,
including $1.3 billion of total loans, total deposits of $1.4 billion and
shareholders' equity of $128.3 million. Of the total loan portfolio at that
date, $728.9 million were commercial loans, $338.0 million were consumer loans
and $231.6 million were real estate mortgage loans.
In 1997, the Company originated $576.2 million of loans, 42.4%, 35.7%
and 21.9% of which were commercial loans, consumer loans and real estate
mortgage loans, respectively. For the second quarter of 1998, the Company
originated $365.9 million of loans, 41.5%, 30.7% and 27.8% of which were
commercial loans, consumer loans and real estate mortgage loans, respectively.
The Bank's total loans increased by $197.3 million, or 19.6%, from year end
1996 to year end 1997, and by $91.7 million, or 7.6%, from year end 1997 to
June 30, 1998.
The Bank's commercial loans are focused on a diverse group of small
and medium-sized businesses in its market area. The Bank's average total
lending relationship per commercial borrower at June 30, 1998 was approximately
$411,000. Management of the Bank believes that its ability to make timely
local decisions on commercial loans provides a significant competitive
advantage. As part of its effort to expand its commercial lending market area,
while retaining its competitive advantages, in late 1996 the Bank opened a
branch office in Syracuse, New York. During 1997 and the second quarter of
1998, the Bank originated $42.2 million and $19.3 million, respectively, of
commercial loans in the Syracuse market area.
The Bank's consumer loans reflect a full range of products, including
personal, credit card, home equity, auto and mobile home loans. The focus of
the Bank's consumer lending program in recent years has been on indirect auto
dealer lending, and particularly on used autos. The Bank's portfolio of used
auto loans was $139.9 million, or 10.8% of total loans, at June 30, 1998.
These loans, which are originated through a network of approximately 200
dealers, are underwritten by the Bank with a focus on high credit quality
borrowers purchasing late model cars, and have an average initial outstanding
loan balance of approximately $12,000.
The Bank also offers real estate loans, including residential and
commercial mortgage loans. Although residential mortgage loans reflect a
steadily declining percentage of the Bank's total loan portfolio, the Bank
continues to originate a significant amount of fixed-rate residential mortgage
loans for sale into the secondary market, while retaining servicing rights in
order to generate fee income.
The Bank serves its retail customers through a variety of delivery
platforms, including 13 traditional, full service branches in five counties in
southern and central New York State. In addition, the Bank offers telephone
banking, personal computer banking, cash management services and 35 automatic
teller machines ("ATMs"), in locations that include the area's two largest
hospitals, Broome Community College, the Binghamton Regional Airport, shopping
malls and retail stores, and large private employers. The Bank also has
proprietary in-store banking service centers (StoreTeller) at 12 area Giant
Food Markets. Currently, the Bank is processing, on average, approximately
130,000 transactions per month at its ATMs and in-store banking service
centers, and is handling approximately 52,000 calls monthly through its
telephone teller and call center. The Company intends to continue to pursue
electronic and other customer service delivery channels in an effort to attract
more customer deposits at an efficient cost structure.
The five-county primary market area of the Bank has a combined
population of 880,433 according to the 1990 United States Census. This market
area is located on many major highway networks offering easy access to the east
coast, New England, the midwest and Canada, and is home to major industries,
including defense, high-tech, manufacturing, healthcare and government. The 10
largest employers in Broome County employ over 26,000 workers, and major
companies located in the Binghamton market include IBM, Lockheed Martin,
Raytheon, Universal Instruments and the Raymond Corporation. Major companies
located in the Syracuse market include Carrier Corp., New Process Gear
(Chrysler Corporation), SUNY Health Science Center, Niagara Mohawk Power and
Bristol-Myers Squibb. The Bank's market area is also home to Binghamton
University (SUNY), Syracuse University and Broome
21
<PAGE> 31
Community College. The Bank intends to continue to explore expansion both
within its market and to adjacent geographic areas.
The Company and the Bank are subject to regulation, examination and
supervision by the Board of Governors of the Federal Reserve System, the FDIC
and the New York State Banking Department. The Bank is a member of the Federal
Home Loan Bank System, and deposits in the Bank are insured by the FDIC to the
maximum extent provided by law. The Company's executive offices and the Bank's
home office are located at 58-68 Exchange Street, Binghamton, New York 13902,
telephone (607)779-2492.
BSB CAPITAL TRUST I
The Trust is a statutory business trust created under Delaware law
upon the filing of a certificate of trust with the Delaware Secretary of State.
The Trust's business and affairs are conducted pursuant to the Trust Agreement
by the Trustees and two administrators who are officers of the Company (the
"Administrators"). See "Description of Exchange Securities -- Description of
Exchange Capital Securities -- Miscellaneous." The Trust exists for the
exclusive purposes of (i) issuing and selling the Original Capital Securities
and Common Securities, (ii) using the proceeds from the sale of the Original
Capital Securities and Common Securities to acquire the Original Junior
Subordinated Debentures and (iii) engaging in only those other activities
necessary, advisable or incidental thereto, including the Exchange Offer.
Accordingly, the Exchange Junior Subordinated Debentures are the sole assets of
the Trust, and payments under the Exchange Junior Subordinated Debentures are
the sole source of revenue of the Trust.
All of the Common Securities are held by the Company. The Common
Securities rank pari passu, and payments will be made thereon pro rata, with
the Exchange Capital Securities, except that upon the occurrence and during the
continuation of a Debenture Event of Default arising as a result of any failure
by the Company to pay any amounts in respect of the Exchange Junior
Subordinated Debentures when due, the rights of the holders of the Common
Securities to payment in respect of Distributions and payments upon
liquidation, redemption or otherwise will be subordinated to the rights of the
holders of the Exchange Capital Securities. See "Description of Exchange
Securities -- Description of Exchange Capital Securities -- Subordination of
Common Securities." The Company acquired Common Securities in an aggregate
liquidation amount equal to 3% of the total capital of the Trust. The Trust
has a term of 31 years, but may terminate 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,
telephone number (302) 636-3301. The address of the Property Trustee, the
Guarantee Trustee and the Debenture Trustee is Bankers Trust Company, Four
Albany Street, 4th Floor, New York, New York 10006, telephone number (212)
250-2500.
USE OF PROCEEDS
Neither the Company nor the Trust will receive any cash proceeds from
the Exchange Offering. In consideration for issuing the Exchange Capital
Securities in exchange for Original Capital Securities as described in this
Prospectus, the Company will receive Original Capital Securities in like
Liquidation Amount. The Original Capital Securities surrendered in exchange
for the Exchange Capital Securities will be retired and canceled.
The proceeds to the Trust (without giving effect to expenses of the
offering payable by the Company) from the offering of the Original Capital
Securities were $30.0 million. All of the proceeds from the sale of the
Original Capital Securities were invested by the Trust in the Original Junior
Subordinated Debentures. The Company's net proceeds of approximately $29.3
million from the sale of the Original Junior Subordinated Debentures were added
to the general funds of the Company to be used for general corporate purposes,
including investment in the Bank to increase the Bank's regulatory capital.
The proceeds qualify as Tier 1 or core capital with respect to the
Company under the risk-based capital guidelines established by the Federal
Reserve. Such capital, however, when taken together with
22
<PAGE> 32
all cumulative preferred stock of the Company, if any, cannot constitute more
than 25% of the total Tier 1 capital of the Company (the "25% Capital
Limitation").
RATIO OF EARNINGS TO COMBINED FIXED CHARGES
The following table sets forth the ratios of earnings to combined
fixed charges of the Company on a consolidated basis for the respective periods
indicated.
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
ENDED JUNE 30, YEAR ENDED DECEMBER 31,
--------------- ------------------------------------------------
1998 1997 1997 1996 1995 1994 1993
------ ------ ------ ------ -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
Ratio of Earnings to
Combined Fixed Charges:
Excluding interest on deposits . . . . . . . 3.84x 3.90x 3.75x 5.87x 4.37x 6.14x 5.47x
Including interest on deposits . . . . . . . 1.43x 1.45x 1.45x 1.48x 1.41x 1.54x 1.63x
</TABLE>
For purposes of computing the ratios of earnings to combined fixed
charges, earnings represent net income (loss) before extraordinary items and
cumulative effect of changes in accounting principles plus applicable income
taxes and fixed charges. Fixed charges, excluding interest on deposits,
include gross interest expense (other than on deposits) and the proportion
deemed representative of the interest factor of rent expense, net of income
from subleases. Fixed charges, including gross interest on deposits, include
all interest expense and the proportion deemed representative of the interest
factor of rent expense, net of income from subleases.
ACCOUNTING TREATMENT
For financial reporting purposes, the Trust is treated as a subsidiary
of the Company and, accordingly, the accounts of the Trust are included in the
consolidated financial statements of the Company. The Exchange Capital
Securities will be shown in the consolidated balance sheets of the Company, as
"Company-obligated mandatorily redeemable capital securities of subsidiary
trust holding solely junior subordinated debentures of the Company," and
appropriate disclosures about the Exchange Capital Securities, the Exchange
Guarantee and the Exchange Junior Subordinated Debentures will be included in
the notes to the consolidated financial statements of the Company. For
financial reporting purposes, Distributions payable on the Exchange Capital
Securities will be recorded in the consolidated statements of income of the
Company.
23
<PAGE> 33
CAPITALIZATION
The following table sets forth the unaudited consolidated
capitalization and certain capital ratios of the Company as of June 30, 1998,
and as adjusted to give effect to the offering of the Original Capital
Securities. Consummation of the Exchange Offer will have no effect on such
capitalization. This data should be read in conjunction with the consolidated
financial statements of the Company, including the related notes thereto and
discussion thereof, which are incorporated herein by reference. See "Available
Information."
<TABLE>
<CAPTION>
AS OF JUNE 30, 1998
-------------------
AS
ACTUAL ADJUSTED
------ --------
(DOLLARS IN THOUSANDS)
<S> <C> <C>
LONG-TERM OBLIGATIONS:
Company-obligated mandatorily redeemable capital securities
of subsidiary trust holding solely junior subordinated
debentures of the Company(1) . . . . . . . . . . . . . . . . . . . . . . . . $ 0 $30,000
SHAREHOLDERS' EQUITY:
Preferred stock, par value $0.01 per share; 2,500,000 shares
authorized; none issued . . . . . . . . . . . . . . . . . . . . . . . . . . 0 0
Common stock, par value $0.01 per share; 30,000,000 shares
authorized; 11,197,474 shares issued . . . . . . . . . . . . . . . . . . . . 112 112
Additional paid-in capital . . . . . . . . . . . . . . . . . . . . . . . . . . . 29,705 29,705
Undivided profits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 127,761 127,761
Accumulated other comprehensive income . . . . . . . . . . . . . . . . . . . . . 461 461
Treasury stock, at cost: 2,602,692 shares . . . . . . . . . . . . . . . . . . . (29,773) (29,773)
Total shareholders' equity . . . . . . . . . . . . . . . . . . . . . . . . . . . 128,266 128,266
Total capitalization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 128,266 $ 158,266
COMPANY CAPITAL RATIOS:
Equity to total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.24% 7.24%
Tier 1 risk-based capital ratio(2) . . . . . . . . . . . . . . . . . . . . . . 8.95 11.10
Total risk-based capital . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.20 12.35
Leverage ratio . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.25 8.99
</TABLE>
(1) As described herein, the sole asset of the Trust, which is a subsidiary of
the Company, is $30,928,000 aggregate principal amount of the 8.125% Junior
Subordinated Debentures, which will mature on July 31, 2028. The Company
will own all of the Common Securities issued by the Trust.
(2) The Federal Reserve's risk-based capital guidelines limit the amount of
cumulative preferred stock and Capital Securities that may be included in
Tier 1 capital to 25% of total Tier 1 capital.
24
<PAGE> 34
THE EXCHANGE OFFER
PURPOSE AND EFFECT OF THE EXCHANGE OFFER
In connection with the sale of the Original Capital Securities, the
Company and the Trust entered into the Registration Rights Agreement with the
Initial Purchaser, pursuant to which the Company and the Trust agreed to file
and use commercially reasonable efforts to cause to become effective with the
Commission a registration statement relating to the exchange of the Original
Capital Securities for capital securities with terms identical in all material
respects to the terms of the Original Capital Securities. A copy of the
Registration Rights Agreement has been filed as an exhibit to the Registration
Statement of which this Prospectus is a part.
The Exchange Offer is being made to satisfy the contractual
obligations of the Company and the Trust under the Registration Rights
Agreement. The form and terms of the Exchange Capital Securities are the same
as the form and terms of the Original Capital Securities except that the
Exchange Capital Securities have been registered under the Securities Act and
will not be subject to certain restrictions on transfer applicable to the
Original Capital Securities, and will not provide for any increase in the
Distribution rate thereon. In that regard, the Original Capital Securities
provide, among other things, that, if a registration statement relating to the
Exchange Offer has not been declared effective by January 20, 1999, then the
Distribution rate borne by the Original Capital Securities will increase by
.25% per annum until such registration statement is filed or declared
effective, as the case may be. In addition, the Original Capital Securities
provide that, if the Trust has not exchanged Exchange Capital Securities for
all Original Capital Securities validly tendered by the 30th day after the date
on which the registration statement is declared effective, the Distribution
rate borne by the Original Capital Securities will increase by .25% per annum
for the period from the occurrence of such event until the Exchange Offer has
been consummated. Upon consummation of the Exchange Offer, holders of Original
Capital Securities will not be entitled to any increase in the Distribution
rate thereon or any further registration rights under the Registration Rights
Agreement, except under limited circumstances. See "Risk Factors --
Consequences of a Failure to Exchange Original Capital Securities" and
"Description of Original Securities."
The Exchange Offer is not being made to, and the Trust will not accept
tenders for exchange from, holders of Original Capital Securities in any
jurisdiction in which the Exchange Offer or the acceptance thereof would not be
in compliance with the securities or blue sky laws of such jurisdiction.
Unless the context requires otherwise, the term "holder" with respect
to the Exchange Offer means any person in whose name the Original Capital
Securities are registered on the books of the Trust or any other person who has
obtained a properly completed bond power from the registered holder, or any
person whose Original Capital Securities are held of record by DTC who desires
to deliver such Original Capital Security by book-entry transfer at DTC.
Pursuant to the Exchange Offer, the Company will exchange as soon as
practicable after the date hereof, the Exchange Guarantee for the Original
Guarantee and the Exchange Junior Subordinated Debentures, in an amount
corresponding to the Original Capital Securities accepted for exchange, for a
like aggregate principal amount of the Original Junior Subordinated Debentures.
The Exchange Guarantee and the Exchange Junior Subordinated Debentures have
been registered under the Securities Act.
TERMS OF THE EXCHANGE OFFER
The Trust hereby offers, upon the terms and subject to the conditions
set forth in this Prospectus and in the accompanying Letter of Transmittal, to
exchange up to $30,000,000 aggregate Liquidation Amount of Exchange Capital
Securities for a like aggregate Liquidation Amount of Original Capital
Securities properly tendered on or prior to the Expiration Date and not
properly withdrawn in accordance with the procedures described herein. The
Trust will issue, promptly after the Expiration Date, an aggregate Liquidation
Amount of up to $30,000,000 of Exchange Capital Securities in exchange for a
like
25
<PAGE> 35
principal amount of outstanding Original Capital Securities tendered and
accepted in connection with the Exchange Offer. Holders may tender their
Original Capital Securities in whole or in part in a Liquidation Amount of not
less than $100,000 (100 Original Capital Securities) or any integral multiple
of $1,000 Liquidation Amount (one Original Capital Security) in excess
thereof.
The Exchange Offer is not conditioned upon any minimum Liquidation
Amount of Original Capital Securities being tendered. As of the date of this
Prospectus, $30,000,000 aggregate Liquidation Amount of the Original Capital
Securities is outstanding.
Holders of Original Capital Securities do not have any appraisal or
dissenters' rights in connection with the Exchange Offer. Original Capital
Securities that are not tendered for or are tendered but not accepted in
connection with the Exchange Offer will remain outstanding and be entitled to
the benefits of the Trust Agreement, but will not be entitled to any further
registration rights under the Registration Rights Agreement, except under
limited circumstances. See "Risk Factors -- Consequences of a Failure to
Exchange Original Capital Securities" and "Description of Original Securities."
If any tendered Original Capital Securities are not accepted for
exchange because of an invalid tender, the occurrence of certain other events
set forth herein or otherwise, certificates for any such unaccepted Original
Capital Securities will be returned, without expense, to the tendering holder
thereof promptly after the Expiration Date.
Holders who tender Original Capital Securities in connection with the
Exchange Offer will not be required to pay brokerage commissions or fees or,
subject to the instructions in the Letter of Transmittal, transfer taxes with
respect to the exchange of Original Capital Securities in connection with the
Exchange Offer. The Company will pay all charges and expenses, other than
certain applicable taxes described herein, in connection with the Exchange
Offer. See " -- Fees and Expenses."
NEITHER THE COMPANY, THE BOARD OF DIRECTORS OF THE COMPANY NOR ANY
TRUSTEE OF THE TRUST MAKES ANY RECOMMENDATION TO HOLDERS OF ORIGINAL CAPITAL
SECURITIES AS TO WHETHER TO TENDER OR REFRAIN FROM TENDERING ALL OR ANY PORTION
OF THEIR ORIGINAL CAPITAL SECURITIES PURSUANT TO THE EXCHANGE OFFER. IN
ADDITION, NO ONE HAS BEEN AUTHORIZED TO MAKE ANY SUCH RECOMMENDATION. EACH
HOLDER OF ORIGINAL CAPITAL SECURITIES MUST DECIDE WHETHER TO TENDER PURSUANT TO
THE EXCHANGE OFFER AND, IF SO, THE AGGREGATE AMOUNT OF ORIGINAL CAPITAL
SECURITIES TO TENDER BASED ON SUCH HOLDER'S OWN FINANCIAL POSITION AND
REQUIREMENTS.
EXPIRATION DATE, EXTENSIONS, AMENDMENTS
The term "Expiration Date" means 5:00 p.m., New York City time, on
_______________, 1998 unless the Exchange Offer is extended by the Company or
the Trust (in which case the term "Expiration Date" shall mean the latest date
and time to which the Exchange Offer is extended).
The Company and the Trust expressly reserve the right in their sole
and absolute discretion, subject to applicable law, at any time and from time
to time, (i) to delay the acceptance of the Original Capital Securities for
exchange, (ii) to terminate the Exchange Offer (whether or not any Original
Capital Securities have theretofore been accepted for exchange) if the Trust
determines, in its sole and absolute discretion, that any of the events or
conditions referred to under "-- Conditions to the Exchange Offer" have
occurred or exist or have not been satisfied, (iii) to extend the Expiration
Date of the Exchange Offer and retain all Original Capital Securities tendered
pursuant to the Exchange Offer, subject, however, to the right of holders of
Original Capital Securities to withdraw their tendered Original Capital
Securities as described under "-- Withdrawal Rights," and (iv) to waive any
condition or otherwise amend the terms of the Exchange Offer in any respect.
If the Exchange Offer is amended in a manner determined by the Company and the
Trust to constitute a material change, or if the Company and the Trust waive a
material condition of the Exchange Offer, the Company and the Trust will
promptly disclose such amendment by
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<PAGE> 36
means of a prospectus supplement that will be distributed to the holders of the
Original Capital Securities, and the Company and the Trust will extend the
Exchange Offer to the extent required by Rule 14e-1 under the Exchange Act.
Any such delay in acceptance, extension, termination or amendment will
be followed promptly by oral or written notice thereof to the Exchange Agent
and by making a public announcement thereof, and such announcement in the case
of an extension will be made no later than 9:00 a.m., New York City time, on
the next Business Day after the previously scheduled Expiration Date. Without
limiting the manner in which the Company and the Trust may choose to make any
public announcement and subject to applicable laws, the Company and the Trust
shall have no obligation to publish, advertise or otherwise communicate any
such public announcement other than by issuing a release to an appropriate news
agency.
ACCEPTANCE FOR EXCHANGE AND ISSUANCE OF EXCHANGE CAPITAL SECURITIES
Upon the terms and subject to the conditions of the Exchange Offer,
the Trust will exchange, and will issue to the Exchange Agent, Exchange Capital
Securities for Original Capital Securities validly tendered and not withdrawn
promptly after the Expiration Date.
In all cases, delivery of Exchange Capital Securities in exchange for
Original Capital Securities tendered and accepted for exchange pursuant to the
Exchange Offer will be made only after timely receipt by the Exchange Agent of
(i) the book-entry confirmation described below under "-- Procedures for
Tendering Original Capital Securities -- Book-Entry Transfer" or (ii)
certificates representing such Original Capital Securities, the Letter of
Transmittal (or facsimile thereof), properly completed and duly executed, with
any required signature guarantees, and any other documents required by the
Letter of Transmittal.
Subject to the terms and conditions of the Exchange Offer, the Trust
will be deemed to have accepted for exchange, and thereby exchanged, Original
Capital Securities validly tendered and not withdrawn as, if and when the Trust
gives oral or written notice to the Exchange Agent (any such oral notice to be
promptly confirmed in writing) of the Trust's acceptance of such Original
Capital Securities for exchange pursuant to the Exchange Offer. The Exchange
Agent will act as agent for the Trust for the purpose of receiving tenders of
book-entry confirmations or certificates representing Original Capital
Securities, Letters of Transmittal and related documents, and as agent for
tendering holders for the purpose of receiving book-entry confirmations or
certificates representing Original Capital Securities, Letters of Transmittal
and related documents and transmitting Exchange Capital Securities to validly
tendered holders. Such exchange will be made promptly after the Expiration
Date. If for any reason whatsoever, acceptance for exchange or the exchange of
any Original Capital Securities tendered pursuant to the Exchange Offer is
delayed (whether before or after the Trust's acceptance for exchange of
Original Capital Securities) or the Trust extends the Exchange Offer or is
unable to accept for exchange or exchange Original Capital Securities tendered
pursuant to the Exchange Offer, then, without prejudice to the Trust's rights
set forth herein, the Exchange Agent may, nevertheless, on behalf of the Trust
and subject to Rule 14e-1(c) under the Exchange Act, retain tendered Original
Capital Securities and such Original Capital Securities may not be withdrawn
except to the extent tendering holders are entitled to withdrawal rights as
described under "-- Withdrawal Rights."
Pursuant to the Letter of Transmittal, a holder of Original Capital
Securities will warrant and agree that it has full power and authority to
tender, exchange, sell, assign and transfer Original Capital Securities, that
the Trust will acquire good, marketable and unencumbered title to the tendered
Original Capital Securities, free and clear of all liens, restrictions, charges
and encumbrances, and the Original Capital Securities tendered for exchange are
not subject to any adverse claims or proxies. The holder also will warrant and
agree that it will, upon request, execute and deliver any additional documents
deemed by the Trust or the Exchange Agent to be necessary or desirable to
complete the exchange, sale, assignment, and transfer of the Original Capital
Securities tendered pursuant to the Exchange Offer.
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<PAGE> 37
Tendering holders of Original Capital Securities that use ATOP will, by doing
so, acknowledge that they are bound by the terms of the Letter of Transmittal.
PROCEDURES FOR TENDERING ORIGINAL CAPITAL SECURITIES
Valid Tender
Except as set forth herein, in order for Original Capital Securities
to be validly tendered pursuant to the Exchange Offer, a properly completed and
duly executed Letter of Transmittal (or facsimile thereof), with any required
signature guarantees and any other required documents, must be received by the
Exchange Agent at its address set forth under "-- Exchange Agent," and either
(i) tendered Original Capital Securities must be received by the Exchange
Agent, or (ii) such Original Capital Securities must be tendered pursuant to
the procedures for book-entry transfer set forth herein and a book-entry
confirmation must be received by the Exchange Agent, in each case on or prior
to the Expiration Date, or (iii) the guaranteed delivery procedures set forth
herein must be complied with.
If less than all of the Original Capital Securities are tendered, a
tendering holder should fill in the amount of Original Capital Securities being
tendered in the appropriate box on the Letter of Transmittal or so indicate in
an Agent's Message in lieu of the Letter of Transmittal. The entire amount of
Original Capital Securities delivered to the Exchange Agent will be deemed to
have been tendered unless otherwise indicated.
THE METHOD OF DELIVERY OF THE BOOK-ENTRY CONFIRMATIONS OR
CERTIFICATES, THE LETTER OF TRANSMITTAL AND ALL OTHER REQUIRED DOCUMENTS IS AT
THE OPTION AND SOLE RISK OF THE TENDERING HOLDER, AND DELIVERY WILL BE DEEMED
MADE ONLY WHEN ACTUALLY RECEIVED BY THE EXCHANGE AGENT. IF DELIVERY IS BY
MAIL, REGISTERED MAIL, RETURN RECEIPT REQUESTED, PROPERLY INSURED, OR AN
OVERNIGHT DELIVERY SERVICE IS RECOMMENDED. IN ALL CASES, SUFFICIENT TIME
SHOULD BE ALLOWED TO ENSURE TIMELY DELIVERY.
Book-Entry Transfer
For purposes of the Exchange Offer, the Exchange Agent will establish
an account with respect to the Original Capital Securities at DTC within two
Business Days after the date of this Prospectus. Any tendering financial
institution that is a participant in DTC's book-entry transfer facility system
must make a book-entry delivery of the Original Capital Securities by causing
DTC to transfer such Original Capital Securities into the Exchange Agent's
account at DTC in accordance with DTC's ATOP procedures for transfers. Such
holder of Original Capital Securities using ATOP should transmit its acceptance
to DTC on or prior to the Expiration Date (or comply with the guaranteed
delivery procedures set forth below). DTC will verify such acceptance, execute
a book-entry transfer of the tendered Original Capital Securities into the
Exchange Agent's account at DTC and then send to the Exchange Agent
confirmation of such book-entry transfer, including an agent's message
confirming that DTC has received an express acknowledgment from such holder
that such holder has received and agrees to be bound by the Letter of
Transmittal and that the Trust and the Company may enforce the Letter of
Transmittal against such holder (a "book-entry confirmation").
A beneficial owner of Original Capital Securities that are held by or
registered in the name of a broker, dealer, commercial bank, trust company or
other nominee or custodian is urged to contact such entity promptly if such
beneficial owner wishes to participate in the Exchange Offer.
Certificates
If the tender is not made through ATOP, certificates representing
Original Capital Securities, as well as the Letter of Transmittal (or facsimile
thereof), properly completed and duly executed, with any required signature
guarantees, and any other required documents required by the Letter of
Transmittal,
28
<PAGE> 38
must be received by the Exchange Agent at its address set forth under "--
Exchange Agent" on or prior to the Expiration Date in order for such tender to
be effective (or the guaranteed delivery procedure set forth herein must be
complied with).
If less than all of the Original Capital Securities are tendered, a
tendering holder should fill in the amount of Original Capital Securities being
tendered in the appropriate box on the Letter of Transmittal. The entire
amount of Original Capital Securities delivered to the Exchange Agent will be
deemed to have been tendered unless otherwise indicated.
Signature Guarantees
Certificates for the Original Capital Securities need not be endorsed
and signature guarantees on the Letter of Transmittal are unnecessary unless
(i) a certificate for the Original Capital Securities is registered in a name
other than that of the person surrendering the certificate or (ii) such holder
completes the box entitled "Special Issuance Instructions" or "Special Delivery
Instructions" in the Letter of Transmittal. In the case of (i) or (ii) above,
such certificates for Original Capital Securities must be duly endorsed or
accompanied by a properly executed bond power, with the endorsement or
signature on the bond power and on the Letter of Transmittal guaranteed by a
firm or other entity identified in Rule 17Ad-15 under the Exchange Act as an
"eligible guarantor institution," including (as such terms are defined
therein): (a) a bank; (b) a broker, dealer, municipal securities broker or
dealer or government securities broker or dealer; (c) a credit union; (d) a
national securities exchange, registered securities association or clearing
agency; or (e) a savings association that is a participant in a Securities
Transfer Association (an "Eligible Institution"), unless surrendered on behalf
of such Eligible Institution. See Instruction 1 to the Letter of Transmittal.
Delivery
The method of delivery of the book-entry confirmation or certificates
representing tendered Original Capital Securities, the Letter of Transmittal,
and all other required documents is at the option and sole risk of the
tendering holder, and delivery will be deemed made only when actually received
by the Exchange Agent. If delivery is by mail, registered mail, return receipt
requested, properly insured, or an overnight delivery service is recommended.
In all cases, sufficient time should be allowed to ensure timely delivery.
Notwithstanding any other provision hereof, the delivery of Exchange
Capital Securities in exchange for Original Capital Securities tendered and
accepted for exchange pursuant to the Exchange Offer will in all cases be made
only after timely receipt by the Exchange Agent of (i) a book-entry
confirmation with respect to such Original Capital Securities or (ii)
certificates representing Original Capital Securities and a properly completed
and duly executed Letter of Transmittal (or facsimile thereof), together with
any required signature guarantees and any other documents required by the
Letter of Transmittal. Accordingly, the delivery of Exchange Capital
Securities might not be made to all tendering holders at the same time, and
will depend upon when book-entry confirmations with respect to Original Capital
Securities or certificates representing Original Capital Securities and other
required documents are received by the Exchange Agent.
DELIVERY OF DOCUMENTS TO DTC IN ACCORDANCE WITH DTC'S PROCEDURES DOES
NOT CONSTITUTE DELIVERY TO THE EXCHANGE AGENT.
Guaranteed Delivery
If a holder desires to tender Original Capital Securities pursuant to
the Exchange Offer and the certificates for such Original Capital Securities
are not immediately available or time will not permit all required documents to
reach the Exchange Agent on or prior to the Expiration Date, or the procedure
for book-entry transfer cannot be completed on a timely basis, such Original
Capital Securities may
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<PAGE> 39
nevertheless be tendered, provided that all of the following guaranteed
delivery procedures are complied with:
(i) such tenders are made by or through an Eligible Institution;
(ii) a properly completed and duly executed notice to the Exchange
Agent guaranteeing delivery to the Exchange Agent of either certificates
representing Original Capital Securities or a book-entry confirmation in
compliance with the requirements set forth herein (the "Notice of Guaranteed
Delivery"), substantially in the form accompanying the Letter of Transmittal,
is received by the Exchange Agent, as provided herein, on or prior to
Expiration Date; and
(iii) a book-entry confirmation or the certificates representing all
tendered Original Capital Securities, in proper form for transfer, together
with a properly completed and duly executed Letter of Transmittal (or facsimile
thereof), with any required signature guarantees and any other documents
required by the Letter of Transmittal, are, in any case, received by the
Exchange Agent within three New York Stock Exchange trading days after the date
of execution of such Notice of Guaranteed Delivery.
The Notice of Guaranteed Delivery may be delivered by hand, or
transmitted by facsimile or mail to the Exchange Agent and must include a
guarantee by an Eligible Institution in the form set forth in such notice.
The Trust's acceptance for exchange of Original Capital Securities
tendered pursuant to any of the procedures described above will constitute a
binding agreement between the tendering holder and the Trust upon the terms and
subject to the conditions of the Exchange Offer.
Determination of Validity
All questions as to the form of documents, validity, eligibility
(including time of receipt) and acceptance for exchange of any tendered
Original Capital Securities will be determined by the Company and the Trust, in
their sole discretion, whose determination shall be final and binding on all
parties. The Company and the Trust reserve the absolute right, in their sole
and absolute discretion, to reject any and all tenders determined by them not
to be in proper form or the acceptance of which, or exchange for, may, in the
opinion of counsel to the Company and the Trust, be unlawful. The Company and
the Trust also reserve the absolute right, subject to applicable law, to waive
any of the conditions of the Exchange Offer as set forth under " -- Conditions
to the Exchange Offer" or any condition or irregularity in any tender of
Original Capital Securities of any particular holder whether or not similar
conditions or irregularities are waived in the case of other holders.
The interpretation by the Company and the Trust of the terms and
conditions of the Exchange Offer (including the Letter of Transmittal and the
instructions thereto) will be final and binding. No tender of Original Capital
Securities will be deemed to have been validly made until all irregularities
with respect to such tender have been cured or waived. None of the Company, the
Trust, any affiliates or assigns of the Company or the Trust, the Exchange
Agent or any other person shall be under any duty to give any notification of
any irregularities in tenders or incur any liability for failure to give any
such notification.
If any Letter of Transmittal, endorsement, bond power, power of
attorney, or any other document required by the Letter of Transmittal is signed
by a trustee, executor, administrator, guardian, attorney-in-fact, officer of a
corporation or other person acting in a fiduciary or representative capacity,
such person should so indicate when signing, and unless waived by the Company
and the Trust, proper evidence satisfactory to the Company and the Trust, in
their sole discretion, of such person's authority to so act must be submitted.
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<PAGE> 40
RESALES OF EXCHANGE CAPITAL SECURITIES
The Trust is making the Exchange Offer for the Exchange Capital
Securities in reliance on the position of the Staff of the Commission as set
forth in certain interpretive letters addressed to third parties in other
transactions. However, neither the Company nor the Trust sought its own
interpretive letter and there can be no assurance that the Staff of the
Commission would make a similar determination with respect to the Exchange
Offer as it has in such interpretive letters to third parties. Based on these
interpretations by the Staff of the Commission, and subject to the two
immediately following sentences, the Company and the Trust believe that
Exchange Capital Securities issued pursuant to this Exchange Offer in exchange
for Original Capital Securities may be offered for resale, resold and otherwise
transferred by a holder thereof (other than a holder who is a broker-dealer)
without further compliance with the registration and prospectus delivery
requirements of the Securities Act, provided that such Exchange Capital
Securities are acquired in the ordinary course of such holder's business and
that such holder is not participating, and has no arrangement or understanding
with any person to participate, in a distribution (within the meaning of the
Securities Act) of such Exchange Capital Securities. However, any holder of
Original Capital Securities who is an "affiliate" of the Company or the Trust
or who intends to participate in the Exchange Offer for the purpose of
distributing Exchange Capital Securities, or any broker-dealer who purchased
Original Capital Securities from the Trust to resell pursuant to Rule 144A or
any other available exemption under the Securities Act, (i) will not be able to
rely on the interpretations of the Staff of the Commission set forth in the
above-mentioned interpretive letters, (ii) will not be permitted or entitled to
tender such Original Capital Securities in the Exchange Offer and (iii) must
comply with the registration and prospectus delivery requirements of the
Securities Act in connection with any sale or other transfer of such Original
Capital Securities unless such sale is made pursuant to an exemption from such
requirements. In addition, as described herein, if any broker-dealer holds
Original Capital Securities acquired for its own account as a result of
market-making or other trading activities and exchanges such Original Capital
Securities for Exchange Capital Securities, then such broker-dealer must
deliver a prospectus meeting the requirements of the Securities Act in
connection with any resales of such Exchange Capital Securities.
Each holder of Original Capital Securities who wishes to exchange
Original Capital Securities for Exchange Capital Securities in the Exchange
Offer will be required to represent that (i) it is not an "affiliate" of the
Company or the Trust, (ii) any Exchange Capital Securities to be received by it
are being acquired in the ordinary course of its business, (iii) it has no
arrangement or understanding with any person to participate in a distribution
(within the meaning of the Securities Act) of such Exchange Capital Securities,
and (iv) if such holder is not a broker-dealer, such holder is not engaged in,
and does not intend to engage in, a distribution (within the meaning of the
Securities Act) of such Exchange Capital Securities. In addition, the Company
and the Trust may require such holder, as a condition to such holder's
eligibility to participate in the Exchange Offer, to furnish to the Company and
the Trust (or an agent thereof) in writing information as to the number of
"beneficial owners" (within the meaning of Rule 13d-3 under the Exchange Act)
on behalf of whom such holder holds the Original Capital Securities to be
exchanged in the Exchange Offer. Each broker-dealer that receives Exchange
Capital Securities for its own account pursuant to the Exchange Offer must
acknowledge that it acquired the Original Capital Securities for its own
account as the result of market-making activities or other trading activities
and must agree that it will deliver a prospectus meeting the requirements of
the Securities Act in connection with any resale of such Exchange Capital
Securities. The Letter of Transmittal states that by so acknowledging and by
delivering a prospectus, a broker-dealer will not be deemed to admit that it is
an "underwriter" within the meaning of the Securities Act. Based on the
position taken by the Staff of the Commission in the interpretive letters
referred to above, the Company and the Trust believe that Participating
Broker-Dealers who acquired Original Capital Securities for their own accounts
as a result of market-making activities or other trading activities may fulfill
their prospectus delivery requirements with respect to the Exchange Capital
Securities received upon exchange of such Original Capital Securities (other
than Original Capital Securities which represent an unsold allotment from the
initial sale of the Original Capital Securities) with a prospectus meeting the
requirements of the Securities Act, which may be the prospectus prepared for an
exchange offer so long as it contains a description of the plan of distribution
with respect to the resale of such Exchange Capital Securities. Accordingly,
this
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<PAGE> 41
Prospectus, as it may be amended or supplemented from time to time, may be used
by a Participating Broker-Dealer during the period referred to below in
connection with resales of Exchange Capital Securities received in exchange for
Original Capital Securities where such Original Capital Securities were
acquired by such Participating Broker-Dealer for its own account as a result of
market-making or other trading activities. Subject to certain provisions set
forth in the Registration Rights Agreement, the Company and the Trust have
agreed that this Prospectus, as it may be amended or supplemented from time to
time, may be used by a Participating Broker-Dealer in connection with resales
of such Exchange Capital Securities for a period ending 180 days after the
Expiration Date (subject to extension under certain limited circumstances
described herein) or, if earlier, when all such Exchange Capital Securities
have been disposed of by such Participating Broker-Dealer. See "Plan of
Distribution." However, a Participating Broker-Dealer who intends to use this
Prospectus in connection with the resale of Exchange Capital Securities
received in exchange for Original Capital Securities pursuant to the Exchange
Offer must notify the Company or the Trust, or cause the Company or the Trust
to be notified, on or prior to the Expiration Date, that it is a Participating
Broker-Dealer. Such notice may be given in the space provided for that purpose
in the Letter of Transmittal or may be delivered to the Exchange Agent at its
address set forth herein under "-- Exchange Agent." Any Participating
Broker-Dealer who is an "affiliate" of the Company or the Trust may not rely on
such interpretive letters and must comply with the registration and prospectus
delivery requirements of the Securities Act in connection with any resale
transaction.
In that regard, each Participating Broker-Dealer who surrenders
Original Capital Securities pursuant to the Exchange Offer will be deemed to
have agreed, by execution of the Letter of Transmittal, that upon receipt of
notice from the Company or the Trust of the occurrence of any event or the
discovery of (i) any fact that makes any statement contained or incorporated by
reference in this Prospectus untrue in any material respect or (ii) any fact
that causes this Prospectus to omit to state a material fact necessary in order
to make the statements contained or incorporated by reference herein, in light
of the circumstances under which they were made, not misleading, or (iii) of
the occurrence of certain other events specified in the Registration Rights
Agreement, such Participating Broker-Dealer will suspend the sale of Exchange
Capital Securities (or the Exchange Guarantee or the Exchange Junior
Subordinated Debentures, as applicable) pursuant to this Prospectus until the
Company or the Trust has amended or supplemented this Prospectus to correct
such misstatement or omission and has furnished copies of the amended or
supplemented Prospectus to such Participating Broker-Dealer, or the Company or
the Trust has given notice that the sale of the Exchange Capital Securities (or
the Exchange Guarantee or the Exchange Junior Subordinated Debentures, as
applicable) may be resumed, as the case may be. If the Company or the Trust
gives such notice to suspend the sale of the Exchange Capital Securities (or
the Exchange Guarantee or the Exchange Junior Subordinated Debentures, as
applicable), it shall extend the 180-day period referred to above during which
Participating Broker-Dealers are entitled to use this Prospectus in connection
with the resale of Exchange Capital Securities by the number of days during the
period from and including the date of the giving of such notice to and
including the date when Participating Broker-Dealers shall have received copies
of the amended or supplemented Prospectus necessary to permit resales of the
Exchange Capital Securities or to and including the date on which the Company
or the Trust has given notice that the sale of Exchange Capital Securities (or
the Exchange Guarantee or the Exchange Junior Subordinated Debentures, as
applicable) may be resumed, as the case may be.
WITHDRAWAL RIGHTS
Except as otherwise provided herein, tenders of Original Capital
Securities may be withdrawn at any time on or prior to the Expiration Date.
In order for a withdrawal to be effective a written, telegraphic or
facsimile transmission of such notice of withdrawal must be timely received by
the Exchange Agent at its address set forth under "-- Exchange Agent" on or
prior to the Expiration Date. Any such notice of withdrawal must specify the
name of the person who tendered the Original Capital Securities to be
withdrawn, the aggregate principal amount of Original Capital Securities to be
withdrawn, and (if certificates for such Original Capital Securities have been
tendered) the name of the registered holder of the Original Capital Securities
as set
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<PAGE> 42
forth on the such certificates if different from that of the person who
tendered such Original Capital Securities. If certificates representing
Original Capital Securities have been delivered or otherwise identified to the
Exchange Agent, then prior to the physical release of such certificates, the
tendering holder must submit the serial numbers shown on the particular
certificates to be withdrawn and the signature on the notice of withdrawal must
be guaranteed by an Eligible Institution, except in the case of Original
Capital Securities tendered for the account of an Eligible Institution. If
Original Capital Securities have been tendered pursuant to the procedures for
book-entry transfer set forth in "-- Procedures for Tendering Original Capital
Securities -- Book-Entry Transfer," the notice of withdrawal must specify the
name and number of the account at DTC to be credited with the withdrawal of
Original Capital Securities. Withdrawals of tenders of Original Capital
Securities may not be rescinded. Original Capital Securities properly
withdrawn will not be deemed validly tendered for purposes of the Exchange
Offer, but may be retendered at any subsequent time on or prior to the
Expiration Date by following any of the procedures described above under "--
Procedures for Tendering Original Capital Securities."
All questions as to the validity, form and eligibility (including time
of receipt) of such withdrawal notices will be determined by the Trust, in its
sole discretion, whose determination shall be final and binding on all parties.
None of the Company, the Trust, any affiliates or assigns of the Company or the
Trust, the Exchange Agent or any other person shall be under any duty to give
any notification of any irregularities in any notice of withdrawal or incur any
liability for failure to give any such notification. Any Original Capital
Securities that have been tendered but are withdrawn will be returned to the
holder thereof promptly after withdrawal.
DISTRIBUTIONS ON THE EXCHANGE CAPITAL SECURITIES
Holders of Original Capital Securities whose Original Capital
Securities are accepted for exchange will not receive Distributions on such
Original Capital Securities and will be deemed to have waived the right to
receive any Distributions on such Original Capital Securities accumulated from
and after July 24, 1998. Accordingly, holders of Exchange Capital Securities
(as of the record date) for the payment of Distributions on January 31, 1998
will be entitled to receive Distributions accumulated from and after July 24,
1998.
CONDITIONS TO THE EXCHANGE OFFER
Notwithstanding any other provisions of the Exchange Offer, or any
extension of the Exchange Offer, the Company and the Trust will not be required
to accept for exchange, or to exchange, any Original Capital Securities for any
Exchange Capital Securities, and, as described herein, may terminate the
Exchange Offer (whether or not any Original Capital Securities have theretofore
been accepted for exchange) or may waive any conditions to or amend the
Exchange Offer, if any of the following conditions have occurred or exists or
have not been satisfied:
(i) there shall occur a change in the current interpretation by the
Staff of the Commission that permits the Exchange Capital Securities issued
pursuant to the Exchange Offer in exchange for Original Capital Securities to
be offered for resale, resold and otherwise transferred by holders thereof
(other than broker-dealers and any such holder that is an "affiliate" of the
Company or the Trust within the meaning of Rule 405 under the Securities Act)
without compliance with the registration and prospectus delivery provisions of
the Securities Act, provided that such Exchange Capital Securities are acquired
in the ordinary course of such holders' business and such holders have no
arrangement or understanding with any person to participate in the distribution
of such Exchange Capital Securities; or
(ii) any law, statute, rule or regulation shall have been adopted or
enacted which, in the judgment of Company or the Trust, would reasonably be
expected to impair its ability to proceed with the Exchange Offer; or
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<PAGE> 43
(iii) a stop order shall have been issued by the Commission or any
state securities authority suspending the effectiveness of the Registration
Statement, or proceedings shall have been initiated or, to the knowledge of the
Company or the Trust, threatened for that purpose, or any governmental approval
has not been obtained, which approval the Company or the Trust shall, in its
sole discretion, deem necessary for the consummation of the Exchange Offer as
contemplated hereby; or
(iv) the Company determines in good faith (i) that there is a
reasonable likelihood that, or a material uncertainty exists as to whether,
consummation of the Exchange Offer would result in an adverse tax consequence
to the Trust or the Company and (ii) that such condition exists on the 240th
day following the Closing Date.
If the Company or the Trust determine in its sole and absolute
discretion that any of the foregoing events or conditions has occurred or
exists or has not been satisfied, it may, subject to applicable law, terminate
the Exchange Offer (whether or not any Original Capital Securities have
theretofore been accepted for exchange) or may waive any such condition or
otherwise amend the terms of the Exchange Offer in any respect. If such waiver
or amendment constitutes a material change to the Exchange Offer, the Company
or the Trust will promptly disclose such waiver or amendment by means of a
prospectus supplement that will be distributed to the registered holders of the
Original Capital Securities and will extend the Exchange Offer to the extent
required by Rule 14e-1 under the Exchange Act.
EXCHANGE AGENT
Bankers Trust Company has been appointed as Exchange Agent for the
Exchange Offer. Delivery of the Letters of Transmittal and any other required
documents, questions, requests for assistance, and requests for additional
copies of this Prospectus or of the Letter of Transmittal should be directed to
the Exchange Agent as follows:
<TABLE>
<CAPTION>
By Mail: By Hand: By Overnight Mail:
<S> <C> <C>
BT Services Tennessee, Inc. Bankers Trust Company BT Services Tennessee, Inc.
Corporate Trust and Agency Group Corporate Trust and Agency Group Corporate Trust and Agency Group
Reorganization Unit Receipt and Delivery Window Reorganization Unit
P.O. Box 292737 123 Washington Street, 1st Floor 648 Grassmere Park Road
Nashville, TN 37229-2737 New York, NY 10006 Nashville, TN 37211
</TABLE>
For Information Call:
(800) 735-7777
Confirm: (615) 835-3572
Facsimile: (615) 835-3701
Delivery to other than the above address or facsimile number will not
constitute a valid delivery.
FEES AND EXPENSES
The Company has agreed to pay the Exchange Agent reasonable and
customary fees for its services and will reimburse it for its reasonable
out-of-pocket expenses in connection therewith. The Company will also pay
brokerage houses and other custodians, nominees and fiduciaries the reasonable
out-of-pocket expenses incurred by them in forwarding copies of this Prospectus
and related documents to the beneficial owners of Original Capital Securities,
and in handling or tendering for their customers.
Holders who tender their Original Capital Securities for exchange will
not be obligated to pay any transfer taxes in connection therewith. If,
however, Exchange Capital Securities are to be delivered to, or are to be
issued in the name of, any person other than the registered holder of the
Original Capital Securities tendered, or if a transfer tax is imposed for any
reason other than the exchange of Original Capital Securities in connection
with the Exchange Offer, then the amount of any such transfer taxes
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<PAGE> 44
(whether imposed on the registered holder or any other persons) will be payable
by the tendering holder. If satisfactory evidence of payment of such taxes or
exemption therefrom is not submitted with the Letter of Transmittal, the amount
of such transfer taxes will be billed directly to such tendering holder.
Neither the Company nor the Trust will make any payment to brokers,
dealers or others soliciting acceptances of the Exchange Offer.
The Registration Rights Agreement is governed by, and construed in
accordance with, the laws of the State of New York. The summary herein of
certain provisions of the Registration Rights Agreement does not purport to be
complete and is subject to, and is qualified in its entirety by reference to,
all the provisions of the Registration Rights Agreement. See "Incorporation of
Certain Documents by Reference." In addition, the information set forth above
concerning certain interpretations of and positions taken by the Staff of the
Commission is not intended to constitute legal advice, and prospective
investors should consult their own legal advisors with respect to such matters.
DESCRIPTION OF EXCHANGE SECURITIES
DESCRIPTION OF EXCHANGE CAPITAL SECURITIES
Pursuant to the terms of the Trust Agreement, the Issuer Trustees on
behalf of the Trust will issue the Exchange Capital Securities. The Exchange
Capital Securities will represent preferred undivided beneficial interests in
the assets of the Trust, and the holders thereof will be entitled to a
preference over the Common Securities in certain circumstances with respect to
Distributions and amounts payable on redemption or liquidation, as well as
other benefits as described in the Trust Agreement. This summary of certain
provisions of the Exchange Capital Securities, the Common Securities and the
Trust Agreement does not purport to be complete and is subject to, and
qualified in its entirety by reference to, all the provisions of the Trust
Agreement, including the definitions therein of certain terms.
GENERAL
The Exchange Capital Securities will be limited to $30,000,000
aggregate Liquidation Amount outstanding. The Exchange Capital Securities will
rank pari passu, and payments will be made thereon pro rata, with the Common
Securities except as described under "-- Subordination of Common Securities."
The Exchange Junior Subordinated Debentures will be registered in the name of
the Trust and held by the Property Trustee in trust for the benefit of the
holders of the Exchange Capital Securities and Common Securities. The Exchange
Guarantee will be a guarantee on a subordinated basis with respect to the
Exchange Capital Securities but will not guarantee payment of Distributions or
amounts payable on redemption or liquidation of such Exchange Capital
Securities when the Trust does not have funds on hand available to make such
payments. See "Description of Exchange Securities -- Description of Exchange
Guarantee."
DISTRIBUTIONS
The Exchange Capital Securities represent preferred undivided
beneficial interests in the assets of the Trust, and Distributions on each
Exchange Capital Security will be payable at an annual rate equal to 8.125% on
the stated Liquidation Amount of $1,000, payable semi-annually in arrears on
the 31st day of January and July of each year (each a "Distribution Date"), to
the holders of the Exchange Capital Securities at the close of business on the
January 15th or July 15th (whether or not a Business Day (as defined below))
next preceding the relevant Distribution Date. Distributions on the Exchange
Capital Securities will be cumulative and will accumulate from the date of
original issuance. The first Distribution Date for the Exchange Capital
Securities will be January 31, 1999. The amount of Distributions payable for
any period less than a full Distribution period will be computed on the basis
of a 360-day year of twelve 30-day months and the actual days elapsed in a
partial month in such period. Distributions payable for each full Distribution
period will be computed by dividing the rate per annum by
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<PAGE> 45
two. If any date on which Distributions are payable on the Exchange Capital
Securities is not a Business Day, then payment of the Distributions payable on
such date will be made on the next succeeding day that is a Business Day
(without any additional Distributions or other payment in respect of any such
delay), with the same force and effect as if made on the date such payment was
originally payable.
So long as no Debenture Event of Default has occurred and is
continuing, the Company has the right under the Indenture to defer the payment
of interest on the Exchange Junior Subordinated Debentures at any time or from
time to time for a period not exceeding 10 consecutive semi-annual periods with
respect to each Extension Period, provided that no Extension Period may extend
beyond the Stated Maturity Date of the Exchange Junior Subordinated Debentures.
As a consequence of any such deferral, semi-annual Distributions on the
Exchange Capital Securities by the Trust will be deferred during any such
Extension Period. Distributions to which holders of the Exchange Capital
Securities are entitled will accumulate additional Distributions thereon at a
rate equal to 8.125% per annum, compounded semi-annually from the relevant
payment date for such Distributions, computed on the basis of a 360-day year of
twelve 30-day months and the actual days elapsed in a partial month in such
period. Additional Distributions payable for each full Distribution period
will be computed by dividing the rate per annum by two. The term
"Distributions" as used herein shall include any such additional Distributions.
During any such Extension Period, the Company may not (i) declare or pay any
dividends or distributions on, or redeem, purchase, acquire or make a
liquidation payment with respect to, any of the Company's capital stock or (ii)
make any payment of principal of or interest or premium, if any, on or repay,
repurchase or redeem any debt securities of the Company that rank pari passu in
all respects with or junior in interest to the Exchange Junior Subordinated
Debentures (other than (a) repurchases, redemptions or other acquisitions of
shares of capital stock of the Company in connection with any employment
contract, benefit plan or other similar arrangement with or for the benefit of
any one or more employees, officers, directors or consultants, in connection
with a dividend reinvestment or shareholder stock purchase plan or in
connection with the issuance of capital stock of the Company (or securities
convertible into or exercisable for such capital stock) as consideration in an
acquisition transaction entered into prior to the applicable Extension Period,
(b) as a result of an exchange or conversion of any class or series of the
Company's capital stock (or any capital stock of a subsidiary of the Company)
for any class or series of the Company's capital stock or of any class or
series of the Company's indebtedness for any class or series of the Company's
capital stock, (c) the purchase of fractional interests in shares of the
Company's capital stock pursuant to the conversion or exchange provisions of
such capital stock or the security being converted or exchanged, (d) any
declaration of a dividend in connection with any shareholder's rights plan, or
the issuance of rights, stock or other property under any shareholder's rights
plan, or the redemption or repurchase of rights pursuant thereto, or (e) any
dividend in the form of stock, warrants, options or other rights where the
dividend stock or the stock issuable upon exercise of such warrants, options or
other rights is the same stock as that on which the dividend is being paid or
ranks pari passu with or junior to such stock). Prior to the termination of
any such Extension Period, the Company may further defer the payment of
interest, provided that no Extension Period may exceed 10 consecutive
semi-annual periods or extend beyond the Stated Maturity Date of the Exchange
Junior Subordinated Debentures. Upon the termination of any such Extension
Period and the payment of all amounts then due, the Company may elect to begin
a new Extension Period. No interest shall be due and payable during an
Extension Period, except at the end thereof. The Company must give the Issuer
Trustees notice of its election of such Extension Period at least one Business
Day prior to the earlier of (i) the date the Distributions on the Exchange
Capital Securities would have been payable but for the election to begin such
Extension Period and (ii) the date the Property Trustee is required to give
notice to holders of the Exchange Capital Securities of the record date or the
date such Distributions are payable, but in any event not less than one
Business Day prior to such record date. The Property Trustee will give notice
of the Company's election to begin a new Extension Period to the holders of the
Exchange Capital Securities. Subject to the foregoing, there is no limitation
on the number of times that the Company may elect to begin an Extension Period.
See "-- Description of Exchange Junior Subordinated Debentures -- Option To
Extend Interest Payment Period" and "Certain Federal Income Tax Consequences --
Interest Income and Original Issue Discount."
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<PAGE> 46
The Company has no current intention of exercising its right to defer
payments of interest by extending the interest payment period on the Exchange
Junior Subordinated Debentures.
The revenue of the Trust available for distribution to holders of the
Exchange Capital Securities will be limited to payments under the Exchange
Junior Subordinated Debentures in which the Trust will invest the proceeds from
the issuance and sale of the Exchange Capital Securities. See "-- Description
of Exchange Junior Subordinated Debentures." If the Company does not make
payments on the Exchange Junior Subordinated Debentures, the Trust may not have
funds available to pay Distributions or other amounts payable on the Exchange
Capital Securities. The payment of Distributions and other amounts payable on
the Exchange Capital Securities (if and to the extent the Trust has funds
legally available for and cash sufficient to make such payments) is guaranteed
by the Company on a limited basis as set forth herein under "-- Description of
Exchange Guarantee."
REDEMPTION
Upon the repayment or redemption, in whole or in part, of the Exchange
Junior Subordinated Debentures, whether at maturity or upon earlier redemption
as provided in the Indenture, the proceeds from such repayment or redemption
shall be applied by the Property Trustee to redeem a Like Amount (as defined
below) of the Trust Securities, upon not less than 30 nor more than 60 days'
notice, at a redemption price (the "Redemption Price") equal to the aggregate
Liquidation Amount of such Trust Securities plus accumulated but unpaid
Distributions thereon to the date of redemption (the "Redemption Date") and the
related amount of the premium, if any, paid by the Company upon the concurrent
redemption of such Exchange Junior Subordinated Debentures. See "--
Description of Exchange Junior Subordinated Debentures -- Redemption." If less
than all the Exchange Junior Subordinated Debentures are to be repaid or
redeemed on a Redemption Date, then the proceeds from such repayment or
redemption shall be allocated to the redemption pro rata of the Exchange
Capital Securities and the Common Securities. The amount of premium, if any,
paid by the Company upon the redemption of all or any part of the Exchange
Junior Subordinated Debentures to be repaid or redeemed on a Redemption Date
shall be allocated to the redemption pro rata of the Exchange Capital
Securities and the Common Securities.
The Company has the right to redeem the Exchange Junior Subordinated
Debentures (i) on or after July 31, 2008, in whole at any time or in part from
time to time, or (ii) in whole, but not in part, at any time within 90 days
following the occurrence and during the continuation of a Tax Event, Investment
Company Event or Capital Treatment Event, in each case subject to possible
regulatory approval. See "-- Liquidation Distribution Upon Dissolution." A
redemption of the Exchange Junior Subordinated Debentures would cause a
mandatory redemption of a Like Amount of the Exchange Capital Securities and
Common Securities at the Redemption Price.
The Redemption Price, in the case of a redemption under (i) in the
immediately preceding paragraph, shall equal the following prices, expressed in
percentages of the Liquidation Amount (as defined below), together with
accumulated Distributions to but excluding the date fixed for redemption, if
redeemed during the 12-month period beginning July 31:
<TABLE>
<CAPTION>
YEAR REDEMPTION PRICE
---- ----------------
<S> <C>
2008 104.063%
2009 103.657%
2010 103.250%
2011 102.844%
2012 102.438%
2013 102.032%
2014 101.626%
2015 101.219%
2016 100.813%
2017 100.407%
</TABLE>
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<PAGE> 47
and at 100% on or after July 31, 2018.
The Redemption Price, in the case of a redemption on or after July 31,
2008 following a Tax Event, Investment Company Event or Capital Treatment Event
shall equal the Redemption Price then applicable to a redemption under (i)
above. The Redemption Price, in the case of a redemption prior to July 31,
2008 following a Tax Event, Investment Company Event or Capital Treatment Event
as described under (ii) above, will equal for each Exchange Capital Security
the Make-Whole Amount for a corresponding $1,000 principal amount of Exchange
Junior Subordinated Debentures together with accumulated Distributions to but
excluding the date fixed for redemption. The "Make-Whole Amount" will be equal
to the greater of (i) 100% of the principal amount of such Exchange Junior
Subordinated Debentures and (ii) as determined by a Quotation Agent (as defined
below), the sum of the present values of the principal amount and premium
payable as part of the Redemption Price with respect to an optional redemption
of such Exchange Junior Subordinated Debentures on July 31, 2008, together with
the present values of scheduled payments of interest (not including the portion
of any such payments of interest accrued as of the Redemption Date) from the
Redemption Date to July 31, 2008 (the "Remaining Life"), in each case
discounted to the Redemption Date on a semi-annual basis (assuming a 360-day
year consisting of 30-day months) at the Adjusted Treasury Rate.
"Adjusted Treasury Rate" means, with respect to any Redemption Date,
the Treasury Rate plus (i) 195 basis points if such Redemption Date occurs on
or before July 31, 1999, or (ii) 155 basis points if such Redemption Date
occurs after July 31, 1999.
"Treasury Rate" means (i) the yield, under the heading which
represents the average for the week immediately prior to the calculation date,
appearing in the most recently published statistical release designated "H.15
(519)" or any successor publication which is published weekly by the Federal
Reserve and which establishes yields on actively traded United States Treasury
securities adjusted to constant maturity under the caption "Treasury Constant
Maturities," for the maturity corresponding to the Remaining Life (if no
maturity is within three months before or after the Remaining Life, yields for
the two published maturities most closely corresponding to the Remaining Life
shall be determined and the Treasury Rate shall be interpolated or extrapolated
from such yields on a straight-line basis, rounding to the nearest month) or
(ii) if such release (or any successor release) is not published during the
week preceding the calculation date or does not contain such yields, the rate
per annum equal to the semi-annual equivalent yield to maturity of the
Comparable Treasury Issue, calculated using a price for the Comparable Treasury
Issue (expressed as a percentage of its principal amount) equal to the
Comparable Treasury Price for such Redemption Date. The Treasury Rate shall be
calculated on the third Business Day preceding the Redemption Date.
"Business Day" means a day other than (a) a Saturday or Sunday, (b) a
day on which banking institutions in the City of New York are authorized or
required by law or executive order to remain closed, or (c) a day on which the
Property Trustee's Corporate Trust Office or the Corporate Trust Office of the
Debenture Trustee is closed for business.
"Like Amount" means (i) with respect to a redemption of Trust
Securities, Trust Securities having a Liquidation Amount (as defined below)
equal to that portion of the principal amount of Exchange Junior Subordinated
Debentures to be contemporaneously redeemed in accordance with the Indenture,
allocated to the Common Securities and to the Exchange Capital Securities based
upon the relative Liquidation Amounts of such classes and (ii) with respect to
a distribution of Exchange Junior Subordinated Debentures to holders of Trust
Securities in connection with a dissolution of the Trust, Exchange Junior
Subordinated Debentures having a principal amount equal to the Liquidation
Amount of the Trust Securities of the holder to whom such Exchange Junior
Subordinated Debentures are distributed.
"Liquidation Amount" means the stated amount of $1,000 per Trust
Security.
Payment of Additional Sums. If a Tax Event described in clause (i) or
(iii) of the definition of Tax Event under "Risk Factors -- Risk Factors
Relating to the Offering -- Tax Event, Investment Company
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<PAGE> 48
Event or Capital Treatment Event Redemption" has occurred and is continuing and
the Trust is the holder of all the Exchange Junior Subordinated Debentures, the
Company will pay Additional Sums (as defined below), if any, on the Exchange
Junior Subordinated Debentures.
"Additional Sums" means the additional amounts as may be necessary in
order that the amount of Distributions then due and payable by the Trust on the
outstanding Exchange Capital 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.
REDEMPTION PROCEDURES
Exchange Capital Securities redeemed on each Redemption Date shall be
redeemed at the Redemption Price with the applicable proceeds from the
contemporaneous redemption of the Exchange Junior Subordinated Debentures.
Redemptions of the Exchange Capital Securities shall be made and the Redemption
Price shall be payable on each Redemption Date only to the extent that the
Trust has funds on hand available for the payment of such Redemption Price. See
also "-- Subordination of Common Securities."
If the Property Trustee gives a notice of redemption in respect of the
Exchange Capital Securities, then, by 12:00 noon, New York City time, on the
Redemption Date, to the extent funds are available, in the case of Exchange
Capital Securities held in book-entry form, the Property Trustee will deposit
irrevocably with DTC funds sufficient to pay the applicable Redemption Price
and will give DTC irrevocable instructions and authority to pay the Redemption
Price to the holders of the Exchange Capital Securities. With respect to
Exchange Capital Securities not held in book-entry form, the Property Trustee,
to the extent funds are available, will irrevocably deposit with the paying
agent for the Exchange Capital Securities funds sufficient to pay the
applicable Redemption Price and will give such paying agent irrevocable
instructions and authority to pay the Redemption Price to the holders thereof
upon surrender of their certificates evidencing the Exchange Capital
Securities. Notwithstanding the foregoing, Distributions payable on or prior
to the Redemption Date for any Exchange Capital Securities called for
redemption shall be payable to the holders of the Exchange Capital Securities
on the relevant record dates for the related Distribution Dates. If notice of
redemption shall have been given and funds deposited as required, then upon the
date of such deposit all rights of the holders of such Exchange Capital
Securities so called for redemption will cease, except the right of the holders
of such Exchange Capital Securities to receive the Redemption Price, but
without interest on such Redemption Price, and such Exchange Capital Securities
will cease to be outstanding. If any date fixed for redemption of Exchange
Capital Securities is not a Business Day, then payment of the Redemption Price
payable on such date will be made on the next succeeding day which is a
Business Day (without any interest or other payment in respect of any such
delay), except that, if such Business Day falls in the next calendar year, such
payment will be made on the immediately preceding Business Day. If payment of
the Redemption Price in respect of Exchange Capital Securities called for
redemption is improperly withheld or refused and not paid either by the Trust
or by the Company pursuant to the Exchange Guarantee as described under "--
Description of Exchange Guarantee," Distributions on such Exchange Capital
Securities will continue to accumulate at the then applicable rate, from the
Redemption Date originally established by the Trust for such Exchange Capital
Securities to the date such Redemption Price is actually paid, in which case
the actual payment date will be the date fixed for redemption for purposes of
calculating the Redemption Price.
Subject to applicable law (including, without limitation, United
States federal securities laws), the Company or its affiliates may at any time
and from time to time purchase outstanding Exchange Capital Securities by
tender, in the open market or by private agreement, and may resell such
securities.
If less than all the Exchange Capital Securities and Common Securities
are to be redeemed on a Redemption Date, then the aggregate Liquidation Amount
of such Exchange Capital Securities and Common Securities to be redeemed shall
be allocated pro rata to the Exchange Capital Securities and the Common
Securities based upon the relative Liquidation Amounts of such classes. The
particular Exchange Capital Securities to be redeemed shall be selected on a
pro rata basis, or by such method as the
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<PAGE> 49
Property Trustee shall deem fair and appropriate, not more than 60 days prior
to the Redemption Date by the Property Trustee from the outstanding Exchange
Capital Securities not previously called for redemption, or if the Exchange
Capital Securities are then held in the form of a Global Capital Security (as
defined below), in accordance with DTC's customary procedures. The Property
Trustee shall promptly notify the securities registrar for the Exchange Capital
Securities in writing of the Exchange Capital Securities selected for
redemption and, in the case of any Exchange Capital Securities selected for
partial redemption, the Liquidation Amount thereof to be redeemed. For all
purposes of the Trust Agreement, unless the context otherwise requires, all
provisions relating to the redemption of Exchange Capital Securities shall
relate, in the case of any Exchange Capital Securities redeemed or to be
redeemed only in part, to the portion of the aggregate Liquidation Amount of
Exchange Capital Securities which has been or is to be redeemed.
Notice of any redemption will be mailed at least 30 days but not more
than 60 days before the Redemption Date to each registered holder of Exchange
Capital Securities to be redeemed at its address appearing on the securities
register for the Exchange Capital Securities. Unless the Company defaults in
payment of the Redemption Price on the Exchange Junior Subordinated Debentures,
on and after the Redemption Date interest will cease to accrue on the Exchange
Junior Subordinated Debentures or portions thereof (and, unless payment of the
Redemption Price in respect of the Exchange Capital Securities is withheld or
refused and not paid either by the Trust or the Company pursuant to the
Exchange Guarantee, Distributions will cease to accumulate on the Exchange
Capital Securities or portions thereof) called for redemption.
SUBORDINATION OF COMMON SECURITIES
Payment of Distributions on, and the Redemption Price of, the Exchange
Capital Securities and Common Securities, as applicable, shall be made pro rata
based on the Liquidation Amount of such Exchange Capital Securities and Common
Securities. However, if on any Distribution Date or Redemption Date a
Debenture Event of Default has occurred and is continuing as a result of any
failure by the Company to pay any amounts in respect of the Exchange Junior
Subordinated Debentures when due, no payment of any Distribution on, or
Redemption Price of, or Liquidation Distribution in respect of, any of the
Common Securities, and no other payment on account of the redemption,
liquidation or other acquisition of such Common Securities, shall be made
unless payment in full in cash of all accumulated and unpaid Distributions on
all the outstanding Exchange Capital Securities for all Distribution periods
terminating on or prior thereto, or in the case of payment of the Redemption
Price the full amount of such Redemption Price on all the outstanding Exchange
Capital Securities then called for redemption, shall have been made or provided
for, and all funds available to the Property Trustee shall first be applied to
the payment in full in cash of all Distributions on, or Redemption Price of, or
Liquidation Distribution in respect of, the Exchange Capital Securities then
due and payable.
In the case of any Event of Default (as defined below) resulting from
a Debenture Event of Default, the holders of the Common Securities will be
deemed to have waived any right to act with respect to any such Event of
Default under the Trust Agreement until the effects of all such Events of
Default with respect to such Capital Securities have been cured, waived or
otherwise eliminated. See "-- Events of Default; Notice" and "-- Description
of Exchange Junior Subordinated Debentures -- Debenture Events of Default."
Until all such Events of Default under the Trust Agreement with respect to the
Exchange Capital Securities have been so cured, waived or otherwise eliminated,
the Property Trustee will act solely on behalf of the holders of the Exchange
Capital Securities and not on behalf of the holders of the Common Securities,
and only the holders of the Exchange Capital Securities will have the right to
direct the Property Trustee to act on their behalf.
LIQUIDATION DISTRIBUTION UPON DISSOLUTION
The amount payable on the Exchange Capital Securities in the event of
any dissolution of the Trust is $1,000 per Exchange Capital Security plus
accumulated and unpaid Distributions, subject to
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<PAGE> 50
certain exceptions, which may be in the form of a distribution of such amount
in Exchange 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, cause the Exchange Junior
Subordinated Debentures to be distributed to the holders of the Exchange
Capital Securities and Common Securities in dissolution 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 such a redemption
should consult with the Federal Reserve before redeeming any equity or capital
instrument prior to maturity if such redemption could have a material effect on
the level or composition of the organization's capital base (unless the equity
or capital instrument were redeemed with the proceeds of, or replaced by, a
like amount of a similar or higher quality capital instrument and the Federal
Reserve considers the organization's capital position to be fully adequate
after the redemption).
If the Company, while a holder of Common Securities, dissolves the
Trust prior to the Stated Maturity Date of the Exchange Capital 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, the dissolution of the Trust by the Company may be subject to the
prior approval of the Federal Reserve. Moreover, any changes in applicable law
or changes in the Federal Reserve's risk-based capital guidelines or policies
could impose a requirement on the Company that it obtain the prior approval of
the Federal Reserve to dissolve the 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: (i) certain events of bankruptcy, dissolution or liquidation of the
Company or the holder of the Common Securities, (ii) the distribution of a Like
Amount of the Exchange Junior Subordinated Debentures to the holders of the
Exchange Capital 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), (iii) the repayment of all
the Exchange Capital Securities in connection with the redemption of all the
Exchange Capital Securities as described under "-- Redemption" and (iv) 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 clause (i), (ii) or
(iv) 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 the holders of such Exchange Capital Securities
a Like Amount of the Exchange Junior Subordinated Debentures, unless such
distribution is not practical, in which event such holders will be entitled to
receive out of the assets of the Trust available for distribution to holders,
after satisfaction of liabilities to creditors of the Trust as provided by
applicable law, an amount equal to, in the case of holders of Exchange Capital
Securities, the aggregate of the Liquidation Amount plus accumulated and unpaid
Distributions thereon to the date of payment (such amount being the
"Liquidation Distribution"). If such Liquidation Distribution can be paid only
in part because the Trust has insufficient assets available to pay in full the
aggregate Liquidation Distribution, then the amounts payable directly by the
Trust on its Exchange Capital Securities shall be paid on a pro rata basis.
The holders of the Common Securities will be entitled to receive distributions
upon any such liquidation pro rata with the holders of the Exchange Capital
Securities, except that if a Debenture Event of Default has occurred and is
continuing as a result of any failure by the Company to pay any amounts in
respect of the Exchange Junior Subordinated Debentures when due, the Exchange
Capital Securities shall have a priority over the Common Securities. See "--
Subordination of Common Securities."
After the liquidation date fixed for any distribution of Exchange
Junior Subordinated Debentures (i) the Exchange Capital Securities will no
longer be deemed to be outstanding, (ii) DTC or its nominee, as
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<PAGE> 51
the registered holder of Exchange Capital Securities, will receive a registered
global certificate or certificates representing the Exchange Junior
Subordinated Debentures to be delivered upon such distribution with respect to
Exchange Capital Securities held by DTC or its nominee and (iii) any
certificates representing the Exchange Capital Securities not held by DTC or
its nominee will be deemed to represent the Exchange Junior Subordinated
Debentures having a principal amount equal to the stated Liquidation Amount of
the Exchange Capital Securities and bearing accrued and unpaid interest in an
amount equal to the accumulated and unpaid Distributions on the Exchange
Capital Securities until such certificates are presented to the security
registrar for the Exchange Capital Securities for transfer or reissuance.
If the Company does not redeem the Exchange Junior Subordinated
Debentures prior to the Stated Maturity Date and the Trust is not liquidated
and the Exchange Junior Subordinated Debentures are not distributed to holders
of the Exchange Capital Securities, the Exchange Capital Securities will remain
outstanding until the repayment of the Exchange Junior Subordinated Debentures
and the distribution of the Liquidation Distribution to the holders of the
Exchange Capital Securities.
There can be no assurance as to the market prices for the Exchange
Capital Securities or the Exchange Junior Subordinated Debentures that may be
distributed in exchange for Exchange Capital Securities if a dissolution and
liquidation of the Trust were to occur. Accordingly, the Exchange Capital
Securities that an investor may purchase, or the Exchange Junior Subordinated
Debentures that the investor may receive on dissolution and liquidation of the
Trust, may trade at a discount to the price that the investor paid to purchase
the Exchange Capital Securities offered hereby.
EVENTS OF DEFAULT; NOTICE
Any one of the following events constitutes an "Event of Default"
under the Trust Agreement (an "Event of Default") with respect to the Exchange
Capital Securities (whatever the reason for such Event of Default and whether
it is voluntary or involuntary or be effected by operation of law or pursuant
to any judgment, decree or order of any court or any order, rule or regulation
of any administrative or governmental body):
(i) the occurrence of a Debenture Event of Default (see
"-- Description of Exchange Junior Subordinated Debentures --
Debenture Events of Default"); or
(ii) default by the Trust in the payment of any
Distribution when it becomes due and payable, and continuation of such
default for a period of 30 days; or
(iii) default by the Trust in the payment of any Redemption
Price of any Trust Security when it becomes due and payable; or
(iv) default in the performance, or breach, in any
material respect, of any covenant or warranty of the Issuer Trustees
in the Trust Agreement (other than a covenant or warranty a default in
the performance of which or the breach of which is dealt with in
clause (ii) or (iii) above), and continuation of such default or
breach for a period of 60 days after there has been given, by
registered or certified mail, to the Issuer Trustees and the Company
by the holders of at least 25% in aggregate Liquidation Amount of the
outstanding Exchange Capital Securities, a written notice specifying
such default or breach and requiring it to be remedied and stating
that such notice is a "Notice of Default" under the Trust Agreement;
or
(v) the occurrence of certain events of bankruptcy or
insolvency with respect to the Property Trustee if a successor
Property Trustee has not been appointed within 90 days thereof.
Within five Business Days after the occurrence of any Event of Default
actually known to the Property Trustee, the Property Trustee will transmit
notice of such Event of Default to the holders of Trust Securities and the
Administrators, unless such Event of Default has been cured or waived. The
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Company, as Depositor, and the Administrators are required to file annually
with the Property Trustee a certificate as to whether or not they are in
compliance with all the conditions and covenants applicable to them under the
Trust Agreement.
If a Debenture Event of Default has occurred and is continuing as a
result of any failure by the Company to pay any amounts in respect of the
Exchange Junior Subordinated Debentures when due, the Exchange Capital
Securities will have a preference over the Common Securities with respect to
payments of any amounts in respect of the Exchange Capital Securities as
described above. See "-- Subordination of Common Securities," "-- Liquidation
Distribution Upon Dissolution" and "-- Description of Exchange Junior
Subordinated Debentures -- Debenture Events of Default."
REMOVAL OF ISSUER TRUSTEES; APPOINTMENT OF SUCCESSORS
The holders of at least a majority in aggregate Liquidation Amount of
the outstanding Exchange Capital Securities may remove an Issuer Trustee for
cause or, if a Debenture Event of Default has occurred and is continuing, with
or without cause. If an Issuer Trustee is removed by the holders of the
outstanding Exchange Capital Securities, the successor may be appointed by the
holders of at least 25% in Liquidation Amount of Exchange Capital Securities.
If an Issuer Trustee resigns, such Issuer Trustee will appoint its successor.
If an Issuer Trustee fails to appoint a successor, the holders of at least 25%
in Liquidation Amount of the outstanding Exchange Capital Securities may
appoint a successor. If a successor has not been appointed by the holders, any
holder of Exchange Capital Securities or Common Securities or the other Issuer
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 an
Issuer Trustee and no appointment of a successor trustee shall be effective
until the acceptance of appointment by the successor trustee in accordance with
the provisions of the Trust Agreement.
MERGER OR CONSOLIDATION OF ISSUER TRUSTEES
Any entity into which the Property Trustee or the Delaware Trustee may
be merged or converted or with which it may be consolidated, or any entity
resulting from any merger, conversion or consolidation to which such Issuer
Trustee is a party, or any entity succeeding to all or substantially all of the
corporate trust business of such Issuer Trustee, will be the successor of such
Issuer Trustee under the Trust Agreement, provided such entity is otherwise
qualified and eligible.
MERGERS, CONSOLIDATIONS, AMALGAMATIONS OR REPLACEMENTS OF THE TRUST
The Trust may not merge with or into, consolidate, amalgamate, or be
replaced by, or convey, transfer or lease its properties and assets
substantially as an entirety to, any entity, except as described below or as
otherwise set forth in the Trust Agreement. The Trust may, at the request of
the holders of the Common Securities and with the consent of the holders of at
least a majority in aggregate Liquidation Amount of the outstanding Exchange
Capital Securities, merge with or into, consolidate, amalgamate, or be replaced
by or convey, transfer or lease its properties and assets substantially as an
entirety to a trust organized as such under the laws of any State, so long as
(i) such successor entity either (a) expressly assumes all the obligations of
the Trust with respect to the Exchange Capital Securities or (b) substitutes
for the Exchange Capital Securities other securities having substantially the
same terms as the Exchange Capital Securities (the "Successor Securities") so
long as the Successor Securities have the same priority as the Exchange Capital
Securities with respect to distributions and payments upon liquidation,
redemption and otherwise, (ii) a trustee of such successor entity, possessing
the same powers and duties as the Property Trustee, is appointed to hold the
Exchange Junior Subordinated Debentures, (iii) such merger, consolidation,
amalgamation, replacement, conveyance, transfer or lease does not cause the
Exchange Capital Securities (including any Successor Securities) to be
downgraded, to the extent the Exchange Capital Securities are rated at such
time, by any nationally recognized statistical rating
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organization, (iv) such merger, consolidation, amalgamation, replacement,
conveyance, transfer or lease does not adversely affect the rights, preferences
and privileges of the holders of the Exchange Capital Securities (including any
Successor Securities) in any material respect, (v) such successor entity has a
purpose substantially identical to that of the Trust, (vi) prior to such
merger, consolidation, amalgamation, replacement, conveyance, transfer or
lease, the Trust has received an opinion from independent counsel experienced
in such matters substantially to the effect that (a) such merger,
consolidation, amalgamation, replacement, conveyance, transfer or lease does
not adversely affect the rights, preferences and privileges of the holders of
the Exchange Capital Securities (including any Successor Securities) in any
material respect and (b) following such merger, consolidation, amalgamation,
replacement, conveyance, transfer or lease, neither the Trust nor such
successor entity will be required to register as an investment company under
the Investment Company Act, and (vii) the Company or any permitted successor or
assignee owns all the common securities of such successor entity and guarantees
the obligations of such successor entity under the Successor Securities at
least to the extent provided by the Exchange Guarantee. Notwithstanding the
foregoing, the Trust may not, except with the consent of holders of 100% in
aggregate Liquidation Amount of the Exchange Capital Securities, consolidate,
amalgamate, merge with or into, or be replaced by or convey, transfer or lease
its properties and assets substantially as an entirety to, any other entity or
permit any other entity to consolidate, amalgamate, merge with or into, or
replace it if such consolidation, amalgamation, merger, replacement,
conveyance, transfer or lease would cause the 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 below and under "-- Removal of Issuer Trustees;
Appointment of Successors" and "-- Description of Exchange Guarantee --
Amendments and Assignment" and as otherwise required by law and the Trust
Agreement, the holders of the Exchange Capital Securities will have no voting
rights.
The Trust Agreement may be amended from time to time by the Property
Trustee, the Administrators, or the holders of a majority of the Common
Securities, without the consent of the holders of the Exchange Capital
Securities, (i) to cure any ambiguity, correct or supplement any provisions in
the Trust Agreement that may be inconsistent with any other provision, or to
make any other provisions with respect to matters or questions arising under
the Trust Agreement, provided that any such amendment does not adversely affect
in any material respect the interests of any holder of Trust Securities, or
(ii) to modify, eliminate or add to any provisions of the Trust Agreement to
such extent as may be necessary to ensure that the 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 Trust will not be
required to register as an "investment company" under the Investment Company
Act, and any amendments of the Trust Agreement will become effective when
notice of such amendment is given to the holders of Trust Securities. The
Trust Agreement may be amended by the Property Trustee, the Administrators, and
the holders of a majority of the Common Securities with (i) the consent of
holders of at least a majority in aggregate Liquidation Amount of the
outstanding Exchange Capital Securities and (ii) receipt by the Issuer Trustees
of an opinion of counsel to the effect that such amendment or the exercise of
any power granted to the Issuer Trustees in accordance with such amendment will
not affect the 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, except that, without the
consent of each holder of Trust Securities affected thereby, the Trust
Agreement may not be amended to (x) change the amount or timing of any
Distribution on the Trust Securities or otherwise adversely affect the amount
of any Distribution required to be made in respect of the Trust Securities as
of a specified date or (y) restrict the right of a holder of Trust Securities
to institute suit for the enforcement of any such payment on or after such
date.
So long as any Exchange Junior Subordinated Debentures are held by the
Property Trustee on behalf of the Trust, the Property Trustee will not (i)
direct the time, method and place of conducting any proceeding for any remedy
available to the Property Trustee, or execute any trust or power conferred on
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the Property Trustee with respect to the Exchange Junior Subordinated
Debentures, (ii) waive any past default that is waivable under the Indenture,
(iii) exercise any right to rescind or annul a declaration that the principal
of all the Exchange Junior Subordinated Debentures shall be due and payable or
(iv) consent to any amendment, modification or termination of the Indenture or
the Exchange Junior Subordinated Debentures, where such consent shall be
required, without, in each case, obtaining the prior approval of the holders of
at least a majority in aggregate Liquidation Amount of the outstanding Exchange
Capital Securities, except that, if a consent under the Indenture would require
the consent of each holder of Exchange Junior Subordinated Debentures affected
thereby, no such consent will be given by the Property Trustee without the
prior consent of each holder of the Exchange Capital Securities. The Property
Trustee may not revoke any action previously authorized or approved by a vote
of the holders of the Capital Securities except by subsequent vote of the
holders of the Exchange Capital Securities. The Property Trustee will notify
each holder of Exchange Capital Securities of any notice of default with
respect to the Exchange Junior Subordinated Debentures. In addition to
obtaining the foregoing approvals of the holders of the Exchange Capital
Securities, before taking any of the foregoing actions, 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 such action.
Any required approval of holders of Exchange Capital Securities may be
given at a meeting of holders of Exchange Capital Securities convened for such
purpose or pursuant to written consent. The Property Trustee will cause a
notice of any meeting at which holders of Exchange Capital Securities are
entitled to vote, or of any matter upon which action by written consent of such
holders is to be taken, to be given to each registered holder of Exchange
Capital Securities in the manner set forth in the Trust Agreement.
No vote or consent of the holders of Exchange Capital Securities will
be required to redeem and cancel Exchange Capital Securities in accordance with
the Trust Agreement.
Notwithstanding that holders of Exchange Capital Securities are
entitled to vote or consent under any of the circumstances described above, any
of the Exchange Capital Securities that are owned by the Company, an Issuer
Trustee or any affiliate of the Company or an Issuer Trustee, will, for
purposes of such vote or consent, be treated as if they were not outstanding.
BOOK ENTRY, DELIVERY AND FORM
The Exchange Capital Securities initially will be represented by one
or more Exchange Capital Securities in registered, global form (collectively,
the "Global Capital Securities"). The Global Capital Securities will be
deposited upon issuance with the Property Trustee as custodian for DTC, in New
York, New York, and registered in the name of DTC or its nominee, in each case
for credit to an account of a direct or indirect participant in DTC as
described herein.
In the event that Exchange Capital Securities are issued in
certificated form, the Exchange Capital Securities will be in blocks having a
Liquidation Amount of not less than $100,000 (100 Exchange Capital Securities)
and may be transferred or exchanged on in such blocks in the manner described
herein.
Except as set forth herein, the Global Capital Securities may be
transferred, in whole and not in part, only to another nominee of DTC or to a
successor of DTC or its nominee and only in amounts that would not cause a
holder to own less than 100 Exchange Capital Securities. Beneficial interests
in the Global Capital Securities may not be exchanged for Exchange Capital
Securities in certificated form except in the limited circumstances described
herein. See " -- Exchange of Book-Entry Capital Securities for Certificated
Capital Securities."
DEPOSITORY PROCEDURES
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DTC has advised the Trust and the Company that DTC is a
limited-purpose trust company organized under the laws of the state of New
York, a member of the Federal Reserve System, a "clearing corporation" within
the meaning of the Uniform Commercial Code and a "clearing agency" registered
pursuant to the provisions of Section 17A of the Exchange Act. DTC was created
to hold securities for its participating organizations (collectively, the
"Participants") and to facilitate the clearance and settlement of transactions
in those securities between Participants through electronic book-entry changes
in accounts of its Participants, thereby eliminating the need for physical
movement of certificates. Participants include securities brokers and dealers
(including the Initial Purchaser), banks, trust companies, clearing
corporations and certain other organizations. Indirect access to DTC's system
is also available to other entities such as banks, brokers, dealers and trust
companies that clear through or maintain a custodial relationship with a
Participant, either directly or indirectly (collectively, the "Indirect
Participants"). Persons who are not Participants may beneficially own
securities held by or on behalf of DTC only through the Participants or the
Indirect Participants. The ownership interest and transfer of ownership
interest of each actual purchaser of each security held by or on behalf of DTC
are recorded on the records of the Participants and Indirect Participants.
DTC has also advised the Trust and the Company that, pursuant to
procedures established by it, (i) upon deposit of the Global Capital
Securities, DTC will credit the accounts of Participants designated by the
Initial Purchaser with portions of the principal amount of the Global Capital
Securities and (ii) ownership of such interests in the Global Capital
Securities will be shown on, and the transfer of ownership thereof will be
effected only through, records maintained by DTC (with respect to the
Participants) or by the Participants and the Indirect Participants (with
respect to other owners of beneficial interests in the Global Capital
Securities).
Investors in the Global Capital Securities may hold their interests
therein directly through DTC if they are Participants, or indirectly through
organizations that are Participants. All interests in a Global Capital
Security will be subject to the procedures and requirements of DTC. The laws
of some states require that certain persons take physical delivery in
certificated form of securities that they own. Consequently, the ability to
transfer beneficial interests in a Global Capital Security to such persons will
be limited to that extent. Because DTC can act only on behalf of Participants,
which in turn act on behalf of Indirect Participants and certain banks, the
ability of a person having beneficial interests in a Global Capital Security to
pledge such interests to persons or entities that do not participate in the DTC
system, or otherwise take actions in respect of such interests, may be affected
by the lack of a physical certificate evidencing such interests. For certain
other restrictions on the transferability of the Exchange Capital Securities,
see " -- Exchange of Book-Entry Capital Securities for Certificated Capital
Securities."
EXCEPT AS DESCRIBED HEREIN, OWNERS OF INTERESTS IN THE GLOBAL CAPITAL
SECURITIES WILL NOT HAVE EXCHANGE CAPITAL SECURITIES REGISTERED IN THEIR NAMES,
WILL NOT RECEIVE PHYSICAL DELIVERY OF EXCHANGE CAPITAL SECURITIES IN
CERTIFICATED FORM AND WILL NOT BE CONSIDERED THE REGISTERED OWNERS OR HOLDERS
THEREOF UNDER THE TRUST AGREEMENT FOR ANY PURPOSE.
Payments in respect of the Global Capital Security registered in the
name of DTC or its nominee will be payable by the Property Trustee to DTC in
its capacity as the registered holder under the Trust Agreement. Under the
terms of the Trust Agreement, the Property Trustee will treat the persons in
whose names the Exchange Capital Securities, including the Global Capital
Securities, are registered as the owners thereof for the purpose of receiving
such payments and for any and all other purposes whatsoever. Consequently,
neither the Property Trustee nor any agent thereof has or will have any
responsibility or liability for (i) any aspect of DTC's records or any
Participant's or Indirect Participant's records relating to, or payments made
on account of, beneficial ownership interests in the Global Capital Securities,
or for maintaining, supervising or reviewing any of DTC's records or any
Participant's or Indirect Participant's records relating to the beneficial
ownership interests in the Global Capital Securities or (ii) any other matter
relating to the actions and practices of DTC or any of its Participants or
Indirect Participants. DTC has advised the Trust and the Company that its
current practice, upon receipt of any payment in respect of securities such as
the Exchange Capital Securities, is to credit the accounts of the relevant
Participants with the payment on the payment date, in amounts proportionate to
their
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respective holdings in Liquidation Amount of beneficial interests in the
relevant security as shown on the records of DTC unless DTC has reason to
believe it will not receive payment on such payment date. Payments by the
Participants and the Indirect Participants to the beneficial owners of Exchange
Capital Securities will be governed by standing instructions and customary
practices and will be the responsibility of the Participants or the Indirect
Participants and will not be the responsibility of DTC, the Property Trustee,
the Trust or the Company. None of the Trust, the Company or the Property
Trustee will be liable for any delay by DTC or any of its Participants in
identifying the beneficial owners of the Exchange Capital Securities, and the
Trust, the Company and the Property Trustee may conclusively rely on and will
be protected in relying on instructions from DTC or its nominee for all
purposes.
Interests in the Global Capital Securities will trade in DTC's
Same-Day Funds Settlement System and secondary market trading activity in
interests in the Global Capital Securities will settle in immediately available
funds, subject in all cases to the rules and procedures of DTC and its
Participants. Transfers between Participants in DTC will be effected in
accordance with DTC's procedures, and will settle in same-day funds.
DTC has advised the Trust and the Company that it will take any action
permitted to be taken by a holder of Exchange Capital Securities (including,
without limitation, the presentation of Exchange Capital Securities for
exchange as described herein) only at the direction of one or more Participants
to whose account with DTC interests in the Global Capital Securities are
credited and only in respect of such portion of the aggregate Liquidation
Amount of the Exchange Capital Securities as to which such Participant or
Participants has or have given such direction. However, if there is an Event
of Default under the Trust Agreement, DTC reserves the right to exchange the
Global Capital Securities for legended Exchange Capital Securities in
certificated form and to distribute such Exchange Capital Securities to its
Participants.
So long as DTC or its nominee is the registered owner of the Global
Capital Securities, DTC or such nominee, as the case may be, will be considered
the sole owner or holder of the Exchange Capital Securities represented by the
Global Capital Security for all purposes under the Trust Agreement.
Although DTC has agreed to the foregoing procedures to facilitate
transfers of interest in the Global Capital Securities among Participants in
DTC, it is under no obligation to perform or to continue to perform such
procedures, and such procedures may be discontinued at any time. None of the
Trust, the Company or the Property Trustee will have any responsibility for the
performance by DTC or its Participants or Indirect Participants of their
respective obligations under the rules and procedures governing its operations.
The information in this section concerning DTC and its book-entry
system has been obtained from sources that the Trust and the Company believe to
be reliable, but neither the Trust nor the Company takes responsibility for the
accuracy thereof.
EXCHANGE OF BOOK-ENTRY CAPITAL SECURITIES FOR CERTIFICATED CAPITAL SECURITIES
A Global Capital Security is exchangeable for Exchange Capital
Securities in registered certificated form if (i) DTC (a) notifies the Trust
that it is unwilling or unable to continue as Depository for the Global Capital
Security or (b) has ceased to be a clearing agency registered under the
Exchange Act, and the Trust thereupon fails to appoint a successor Depository
within 90 days, (ii) the Trust in its sole discretion elects to cause the
issuance of the Exchange Capital Securities in certificated form or (iii) there
shall have occurred and be continuing an Event of Default or any event which
after notice or lapse of time or both would be an Event of Default under the
Trust Agreement. In addition, beneficial interests in a Global Capital
Security may be exchanged by or on behalf of DTC for certificated Exchange
Capital Securities upon request by DTC, but only upon at least 20 days' prior
written notice given to the Property Trustee in accordance with DTC's customary
procedures. In all cases, certificated Exchange Capital Securities delivered
in exchange for any Global Capital Security or beneficial interests therein
will be
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registered in the names, and issued in any approved denominations, requested by
or on behalf of the Depository (in accordance with its customary procedures)
EXPENSES AND TAXES
In the Trust Agreement, the Company, as borrower, has agreed to pay
all debts and other obligations (other than with respect to the Exchange
Capital Securities) and all costs and expenses of the Trust (including costs
and expenses relating to the organization of the Trust, the fees and expenses
of the Issuer Trustees and the costs and expenses relating to the operation of
the Trust) and to pay any and all taxes and all costs and expenses with respect
thereto (other than United States withholding taxes) to which the Trust might
become subject. The foregoing obligations of the Company under the Trust
Agreement are for the benefit of, and shall be enforceable by, any person to
whom any such debts, obligations, costs, expenses and taxes are owed (a
"Creditor") whether or not such Creditor has received notice thereof. Any such
Creditor may enforce such obligations of the Company directly against the
Company, and the Company has irrevocably waived any right or remedy to require
that any such Creditor take any action against the Trust or any other person
before proceeding against the Company. The Company has also agreed in the
Trust Agreement to execute such additional agreements as may be necessary or
desirable to give full effect to the foregoing.
RESTRICTIONS ON TRANSFER
The Exchange Capital Securities are issued, and may be transferred
only, in blocks having a Liquidation Amount of not less than $100,000 (100
Exchange Capital Securities). Any such transfer of Exchange Capital Securities
in a block having a Liquidation Amount of less than $100,000 shall be deemed to
be void and of no legal effect whatsoever. Any such transferee shall be deemed
not to be the holder of such Exchange Capital Securities for any purpose,
including but not limited to the receipt of Distributions on such Exchange
Capital Securities, and such transferee shall be deemed to have no interest
whatsoever in such Exchange Capital Securities.
PAYMENT AND PAYING AGENCY
Payments in respect of the Exchange Capital Securities will be made to
DTC, which will credit the relevant accounts at DTC on the applicable
Distribution Dates or, if the Exchange Capital Securities are not held by DTC,
such payments will be made by check mailed to the address of the holder
entitled thereto as such address appears on the securities register for the
Trust Securities. The paying agent (the "Paying Agent") initially will be the
Property Trustee and any co-paying agent chosen by the Property Trustee and
acceptable to the Administrators. The Paying Agent will be permitted to resign
as Paying Agent upon 30 days' written notice to the Property Trustee and the
Administrators. If the Property Trustee is no longer the Paying Agent, the
Property 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
Exchange Capital Securities.
Registration of transfers of Exchange Capital Securities will be
effected without charge by or on behalf of the Trust, but upon payment of any
tax or other governmental charges that may be imposed in connection with any
transfer or exchange. The Trust will not be required to register or cause to
be registered the transfer of the Exchange Capital Securities after the
Exchange Capital Securities have been called for redemption.
INFORMATION CONCERNING THE PROPERTY TRUSTEE
The Property Trustee, other than during the occurrence and continuance
of an Event of Default, undertakes to perform only such duties as are
specifically set forth in the Trust Agreement and, after such
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Event of Default, must exercise the same degree of care and skill as a prudent
person would exercise or use in the conduct of his or her own affairs. Subject
to this provision, the Property Trustee is under no obligation to exercise any
of the powers vested in it by the Trust Agreement at the request of any holder
of Exchange Capital Securities unless it is offered reasonable indemnity
against the costs, expenses and liabilities that might be incurred thereby.
The Property Trustee also serves as the Debenture Trustee and the
Guarantee Trustee. See "-- Description of Exchange Junior Subordinated
Debentures -- Information Concerning the Debenture Trustee" and "-- Description
of Exchange Guarantee -- Information Concerning the Guarantee Trustee."
MISCELLANEOUS
The Administrators and the Property Trustee are authorized and
directed to conduct the affairs of and to operate the Trust in such a way that
the Trust will not be deemed to be an "investment company" required to be
registered under the Investment Company Act or taxable as a corporation for
United States federal income tax purposes and so that the Exchange Junior
Subordinated Debentures will be treated as indebtedness of the Company for
United States federal income tax purposes. In this connection, the Property
Trustee and the holders of Common Securities are authorized to take any action,
not inconsistent with applicable law, the certificate of trust of the Trust or
the Trust Agreement, that the Property Trustee and the holders of Common
Securities determine in their discretion to be necessary or desirable for such
purposes, as long as such action does not materially adversely affect the
interests of the holders of the Exchange Capital Securities.
Holders of the Exchange Capital Securities have no preemptive or
similar rights.
The Trust may not borrow money or issue debt or mortgage or pledge any
of its assets.
GOVERNING LAW
The Trust Agreement will be governed by and construed in accordance
with the laws of the State of Delaware.
DESCRIPTION OF EXCHANGE JUNIOR SUBORDINATED DEBENTURES
The Original Junior Subordinated Debentures were, and the Exchange
Junior Subordinated Debentures will be, issued under the Indenture, under which
Bankers Trust Company is acting as Debenture Trustee. This summary of certain
terms and provisions of the Exchange Junior Subordinated Debentures and the
Indenture does not purport to be complete and is subject to, and is qualified
in its entirety by reference to, all the provisions of the Indenture, including
the definitions therein of certain terms.
GENERAL
Concurrently with the issuance of the Original Capital Securities, the
Trust invested the proceeds thereof, together with the consideration paid by
the Company for the Common Securities, in the Original Junior Subordinated
Debentures issued by the Company. The Original Junior Subordinated Debentures
bear, and the Exchange Junior Subordinated Debentures will bear, interest,
accruing from the date of original issuance, at a rate equal to 8.125% per
annum on the principal amount thereof, payable semi-annually in arrears on the
31st day of January and July of each year (each, an "Interest Payment Date"),
commencing January 31, 1999, to the person in whose name each Original Junior
Subordinated Debenture or Exchange Junior Subordinated Debenture, as the case
may be, is registered at the close of business on the January 15th or July 15th
(whether or not a Business Day) next preceding such Interest Payment Date. It
is anticipated that, until the liquidation, if any, of the Trust, each Exchange
Junior Subordinated Debenture will be registered in the name of the Trust and
held by the Property Trustee in trust for the benefit of the holders of the
Trust Securities. The amount of interest payable for any period
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less than a full interest period will be computed on the basis of a 360-day
year of twelve 30-day months and the actual days elapsed in a partial month in
such period. The amount of interest payable for any full interest period will
be computed by dividing the rate per annum by two. If any date on which
interest is payable on the Exchange Junior Subordinated Debentures is not a
Business Day, then payment of the interest payable on such date will be made on
the next succeeding day that is a Business Day (without any interest or other
payment in respect of any such delay), with the same force and effect as if
made on the date such payment was originally payable. Accrued interest that is
not paid on the applicable Interest Payment Date will bear additional interest
on the amount thereof (to the extent permitted by law) at a rate equal to
8.125% per annum, compounded semi-annually and computed on the basis of a
360-day year of twelve 30-day months and the actual days elapsed in a partial
month in such period. The amount of additional interest payable for any full
interest period will be computed by dividing the rate per annum by two. The
term "interest" as used herein includes semi-annual interest payments, interest
on semi-annual interest payments not paid on the applicable Interest Payment
Date and Additional Sums (as defined below), as applicable.
The Exchange Junior Subordinated Debentures will mature on July 31,
2028.
The Exchange Junior Subordinated Debentures will be unsecured
obligations and will rank junior and be subordinate in right of payment to all
Senior Indebtedness of the Company. The Indenture does not limit the
incurrence or issuance of other secured or unsecured debt by the Company,
including Senior Indebtedness, whether under the Indenture or any existing or
other indenture or agreement that the Company may enter into in the future or
otherwise. See "-- Subordination."
OPTION TO EXTEND INTEREST PAYMENT PERIOD
So long as no Debenture Event of Default has occurred and is
continuing, the Company has the right at any time during the term of the
Exchange Junior Subordinated Debentures to defer the payment of interest at any
time or from time to time for a period not exceeding 10 consecutive semi-annual
periods with respect to each Extension Period, provided that no Extension
Period may extend beyond the Stated Maturity Date of the Exchange Junior
Subordinated Debentures. At the end of such Extension Period, the Company must
pay all interest then accrued and unpaid (together with interest thereon at a
rate equal to 8.125% per annum, compounded semi-annually and computed on the
basis of a 360-day year of twelve 30-day months and the actual days elapsed in
a partial month in such period, to the extent permitted by applicable law).
The amount of additional interest payable for any full interest period will be
computed by dividing the rate per annum by two. During an Extension Period,
interest will continue to accrue and holders of Exchange Junior Subordinated
Debentures (or holders of Exchange Capital 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 such Extension Period, the Company may not (i) declare or
pay any dividends or distributions on, or redeem, purchase, acquire or make a
liquidation payment with respect to, any of the Company's capital stock or (ii)
make any payment of principal of or interest or premium, if any, on or repay,
repurchase or redeem any debt securities of the Company that rank pari passu in
all respects with or junior in interest to the Exchange Junior Subordinated
Debentures (other than (a) repurchases, redemptions or other acquisitions of
shares of capital stock of the Company in connection with any employment
contract, benefit plan or other similar arrangement with or for the benefit of
any one or more employees, officers, directors or consultants, in connection
with a dividend reinvestment or shareholder stock purchase plan or in
connection with the issuance of capital stock of the Company (or securities
convertible into or exercisable for such capital stock) as consideration in an
acquisition transaction entered into prior to the applicable Extension Period,
(b) as a result of an exchange or conversion of any class or series of the
Company's capital stock (or any capital stock of a subsidiary of the Company)
for any class or series of the Company's capital stock or of any class or
series of the Company's indebtedness for any class or series of the Company's
capital stock, (c) the purchase of fractional interests in shares of the
Company's capital stock pursuant to the conversion or exchange provisions of
such capital stock or the
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security being converted or exchanged, (d) any declaration of a dividend in
connection with any shareholder's rights plan, or the issuance of rights, stock
or other property under any shareholders rights plan, or the redemption or
repurchase of rights pursuant thereto, or (e) any dividend in the form of
stock, warrants, options or other rights where the dividend stock or the stock
issuable upon exercise of such warrants, options or other rights is the same
stock as that on which the dividend is being paid or ranks pari passu with or
junior to such stock). Prior to the termination of any such Extension Period,
the Company may further defer the payment of interest, provided that no
Debenture Event of Default has occurred and is continuing, and no Extension
Period exceeds 10 consecutive semi-annual periods or extends beyond the Stated
Maturity Date of the Exchange Junior Subordinated Debentures. Upon the
termination of any such Extension Period and the payment of all amounts then
due, the Company may elect to begin a new Extension Period subject to the above
conditions. No interest shall be due and payable during an Extension Period,
except at the end thereof. The Company must give the holders of the Exchange
Junior Subordinated Debentures and the Issuer Trustees notice of its election
to begin any such Extension Period at least one Business Day prior to the
earlier of (i) the date the Distributions on the Exchange Capital Securities
would have been payable but for the election to begin such Extension Period and
(ii) the date the Property Trustee is required to give notice to holders of the
Exchange Capital Securities of the record date or the date such Distributions
are payable, but in any event not less than one Business Day prior to such
record date. The Property Trustee will give notice of the Company's election
to begin a new Extension Period to the holders of the Exchange Capital
Securities. There is no limitation on the number of times that the Company may
elect to begin an Extension Period.
REDEMPTION
The Exchange Junior Subordinated Debentures are redeemable prior to
maturity at the option of the Company (i) on or after July 31, 2008, in whole
at any time or in part from time to time, or (ii) in whole, but not in part, at
any time within 90 days following the occurrence and during the continuation of
a Tax Event, Investment Company Event or Capital Treatment Event (each as
defined under "Risk Factors -- Risk Factors Relating to the Offering -- Tax
Event, Investment Company Event or Capital Treatment Event Redemption"), in
each case at the redemption prices described below. The proceeds of any such
redemption will be used by the Trust to redeem the Exchange Capital Securities.
The Federal Reserve's risk-based capital guidelines, which are subject
to change, currently provide that redemptions of permanent equity or other
capital instruments before stated maturity could have a significant impact on a
bank holding company's overall capital structure and that any organization
considering such a redemption should consult with the Federal Reserve before
redeeming any equity or capital instrument prior to maturity if such redemption
could have a material effect on the level or composition of the organization's
capital base (unless the equity or capital instrument were redeemed with the
proceeds of, or replaced by, a like amount of a similar or higher quality
capital instrument and the Federal Reserve considers the organization's capital
position to be fully adequate after the redemption).
The redemption of the Exchange Junior Subordinated Debentures by the
Company prior to their Stated Maturity Date 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 Exchange Junior Subordinated Debentures also could be
subject to the additional prior approval of the Federal Reserve under its
current risk-based capital guidelines.
The Redemption Price for Exchange Junior Subordinated Debentures in
the case of a redemption under (i) above shall equal the following prices,
expressed in percentages of the principal amount, together with accrued
interest to but excluding the date fixed for redemption. If redeemed during
the 12-month period beginning July 31:
<TABLE>
<CAPTION>
Year Redemption Price
---- ----------------
<S> <C>
2008 104.063%
2009 103.657%
2010 103.250%
2011 102.844%
</TABLE>
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<PAGE> 61
<TABLE>
<S> <C>
2012 102.438%
2013 102.032%
2014 101.626%
2015 101.219%
2016 100.813%
2017 100.407%
</TABLE>
and at 100% on or after July 31, 2018.
The Redemption Price in the case of a redemption on or after July 31,
2008 following a Tax Event, Investment Company Event or Capital Treatment Event
shall equal the Redemption Price then applicable to a redemption under (i)
above. The Redemption Price for Exchange Junior Subordinated Debentures, in
the case of a redemption prior to July 31, 2008 following a Tax Event,
Investment Company Event or Capital Treatment Event as described under (ii)
above, will equal the Make-Whole Amount (as defined under "Description of
Exchange Securities -- Description of Exchange Capital Securities --
Redemption"), together with accrued interest to but excluding the date fixed
for redemption.
ADDITIONAL SUMS
The Company has covenanted in the Indenture that, if and for so long
as (i) the Trust is the holder of all Exchange Junior Subordinated Debentures
and (ii) a Tax Event has occurred and is continuing in respect of the Trust,
the Company will pay to the Trust for so long as the Trust is the registered
holder of the Exchange Junior Subordinated Debentures, such Additional Sums on
the Exchange Junior Subordinated Debentures as may be required so that the
Distributions payable by the Trust will not be reduced as a result of any such
additional taxes, duties or other governmental charges. See "Description of
Exchange Securities -- Description of Exchange Capital Securities --
Redemption."
REGISTRATION, DENOMINATION AND TRANSFER
The Exchange Junior Subordinated Debentures will initially be
registered in the name of the Trust. If the Exchange Junior Subordinated
Debentures are distributed to holders of Exchange Capital Securities, it is
anticipated that the depositary arrangements for the Junior Subordinated
Debentures will be substantially identical to those in effect for the Exchange
Capital Securities. See "Description of Exchange Securities -- Description of
Exchange Capital Securities -- Book Entry, Delivery and Form."
Although DTC has agreed to the procedures described above, it is under
no obligation to perform or continue to perform such procedures, and such
procedures may be discontinued at any time. If DTC is at any time unwilling or
unable to continue as depositary and a successor depositary is not appointed by
the Company within 90 days of receipt of notice from DTC to such effect, the
Company will cause the Exchange Junior Subordinated Debentures to be issued in
definitive form.
Payments on Exchange Junior Subordinated Debentures represented by a
global security will be made to Cede, the nominee for DTC, as the registered
holder of the Exchange Junior Subordinated Debentures, as described under
"Description of Exchange Securities -- Description of the Exchange Capital
Securities -- Book Entry, Delivery and Form." If Exchange Junior Subordinated
Debentures are issued in certificated form, principal and interest will be
payable, the transfer of the Exchange Junior Subordinated Debentures will be
registrable, and Exchange Junior Subordinated Debentures will be exchangeable
for Exchange Junior Subordinated Debentures of other authorized denominations
of a like aggregate principal amount, at the Corporate Trust Office of the
Debenture Trustee in New York, New York or at the offices of any Paying Agent
or transfer agent appointed by the Company, provided that payment of interest
may be made at the option of the Company by check mailed to the address of the
persons entitled thereto. However, a holder of $1.0 million or more in
aggregate principal amount of Exchange Junior Subordinated Debentures may
receive payments of interest (other than interest payable at the Stated
Maturity Date) 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.
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<PAGE> 62
The Exchange Junior Subordinated Debentures will be issuable only in
registered form without coupons and shall be issuable in minimum denominations
of $100,000 and any integral multiples of $1,000 in excess thereof. Exchange
Junior Subordinated Debentures will be exchangeable for other Exchange Junior
Subordinated Debentures of like tenor, of any authorized denominations, and of
a like aggregate principal amount.
Exchange 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 Exchange Junior Subordinated Debenture or at the office of any
transfer agent designated by the Company for such purpose without service
charge and upon payment of any taxes and other governmental charges as
described in the Indenture. The Company will appoint the Debenture Trustee as
securities registrar under the Indenture. The Company may at any time
designate additional transfer agents with respect to the Exchange Junior
Subordinated Debentures.
In the event of any redemption, neither the Company nor the Debenture
Trustee shall be required to (i) issue, register the transfer of or exchange
Exchange Junior Subordinated Debentures during a period beginning at the
opening of business 15 days before the day of selection for redemption of the
Exchange Junior Subordinated Debentures to be redeemed and ending at the close
of business on the day of mailing of the relevant notice of redemption or (ii)
transfer or exchange any Exchange Junior Subordinated Debentures so selected
for redemption, except, in the case of any Exchange Junior Subordinated
Debentures being redeemed in part, any portion thereof not to be redeemed.
Any monies deposited with the Debenture Trustee or any paying agent,
or then held by the Company in trust, for the payment of the principal of (and
premium, if any) or interest on any Exchange Junior Subordinated Debenture and
remaining unclaimed for two years after such principal (and premium, if any) or
interest has become due and payable shall, at the request of the Company, be
repaid to the Company and the holder of such Exchange Junior Subordinated
Debenture shall thereafter look, as a general unsecured creditor, only to the
Company for payment thereof.
RESTRICTIONS ON CERTAIN PAYMENTS; CERTAIN COVENANTS OF THE COMPANY
The Company has covenanted that it will not (i) declare or pay any
dividends or distributions on, or redeem, purchase, acquire, or make a
liquidation payment with respect to, any of the Company's capital stock or (ii)
make any payment of principal of or interest or premium, if any, on or repay,
repurchase or redeem any debt securities of the Company that rank pari passu in
all respects with or junior in interest to the Exchange Junior Subordinated
Debentures (other than (a) repurchases, redemptions or other acquisitions of
shares of capital stock of the Company in connection with any employment
contract, benefit plan or other similar arrangement with or for the benefit of
any one or more employees, officers, directors or consultants, in connection
with a dividend reinvestment or shareholder stock purchase plan or in
connection with the issuance of capital stock of the Company (or securities
convertible into or exercisable for such capital stock) as consideration in an
acquisition transaction entered into prior to the applicable Extension Period
or other event referred to below, (b) as a result of an exchange or conversion
of any class or series of the Company's capital stock (or any capital stock of
a subsidiary of the Company) for any class or series of the Company's capital
stock or of any class or series of the Company's indebtedness for any class or
series of the Company's capital stock, (c) the purchase of fractional interests
in shares of the Company's capital stock pursuant to the conversion or exchange
provisions of such capital stock or the security being converted or exchanged,
(d) any declaration of a dividend in connection with any shareholder's rights
plan, or the issuance of rights, stock or other property under any
shareholder's rights plan, or the redemption or repurchase of rights pursuant
thereto, or (e) any dividend in the form of stock, warrants, options or other
rights where the dividend stock or the stock issuable upon exercise of such
warrants, options or other rights is the same stock as that on which the
dividend is being paid or ranks pari passu with or junior to such stock), if at
such time (x) there has occurred any event (1) of which the Company has actual
knowledge that with the giving of notice or the lapse of time, or both, would
constitute a Debenture Event of Default and (2) that the Company has not taken
reasonable steps to cure,
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<PAGE> 63
(y) if the Exchange Junior Subordinated Debentures are held by the Trust, the
Company is in default with respect to its payment of any obligations under the
Guarantee or (z) the Company has given notice of its election of an Extension
Period as provided in the Indenture and has not rescinded such notice, or such
Extension Period, or any extension thereof, is continuing.
The Company has covenanted in the Indenture (i) to continue to hold,
directly or indirectly, 100% of the Common Securities, provided that certain
successors which are permitted pursuant to the Indenture may succeed to the
Company's ownership of the Common Securities, (ii) as holder of the Common
Securities, not to voluntarily terminate, windup or dissolve the Trust, other
than (a) in connection with a distribution of Exchange Junior Subordinated
Debentures to the holders of the Capital Securities in dissolution of the Trust
or (b) in connection with certain mergers, consolidations or amalgamations
permitted by the Trust Agreement and (iii) to use its reasonable efforts,
consistent with the terms and provisions of the Trust Agreement, to cause the
Trust to continue not to be taxable as a corporation for United States federal
income tax purposes.
MODIFICATION OF INDENTURE
From time to time, the Company and the Debenture Trustee may, without
the consent of any of the holders of the outstanding Exchange Junior
Subordinated Debentures, amend, waive or supplement the provisions of the
Indenture to: (i) evidence succession of another corporation or association to
the Company and the assumption by such person of the obligations of the Company
under the Exchange Junior Subordinated Debentures; (ii) add further covenants,
restrictions or conditions for the protection of holders of the Exchange Junior
Subordinated Debentures; (iii) cure ambiguities or correct the Exchange Junior
Subordinated Debentures in the case of defects or inconsistencies in the
provisions thereof, so long as any such cure or correction does not adversely
affect the interest of the holders of the Exchange Junior Subordinated
Debentures in any material respect; (iv) change the terms of the Exchange
Junior Subordinated Debentures to facilitate the issuance of the Exchange
Junior Subordinated Debentures in certificated or other definitive form; (v)
evidence or provide for the appointment of a successor Debenture Trustee; or
(vi) qualify, or maintain the qualification of, the Indenture under the Trust
Indenture Act. The Indenture contains provisions permitting the Company and
the Debenture Trustee, with the consent of the holders of not less than a
majority in principal amount of the Exchange Junior Subordinated Debentures, to
modify the Indenture in a manner affecting the rights of the holders of the
Exchange Junior Subordinated Debentures, except that no such modification may,
without the consent of the holder of each outstanding Exchange Junior
Subordinated Debenture so affected, (i) change the Stated Maturity Date of the
Exchange Junior Subordinated Debentures, or reduce the principal amount
thereof, the rate of interest thereon or any premium payable upon the
redemption thereof, or change the place of payment where, or the currency in
which, any such amount is payable or impair the right to institute suit for the
enforcement of any Exchange Junior Subordinated Debenture or (ii) reduce the
percentage of principal amount of Exchange Junior Subordinated Debentures, the
holders of which are required to consent to any such modification of the
Indenture. Furthermore, so long as any of the Exchange Capital Securities
remain outstanding, no such modification may be made that adversely affects the
holders of such Exchange Capital Securities in any material respect, and no
termination of the Indenture may occur, and no waiver of any Debenture 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 Exchange Capital Securities
unless and until the principal of (and premium, if any, on) the Exchange Junior
Subordinated Debentures and all accrued and unpaid interest thereon have been
paid in full and certain other conditions are satisfied.
DEBENTURE EVENTS OF DEFAULT
The Indenture provides that any one or more of the following described
events with respect to the Exchange Junior Subordinated Debentures that has
occurred and is continuing constitutes an "Event of Default" with respect to
the Exchange Junior Subordinated Debentures:
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<PAGE> 64
(i) failure to pay any interest on the Exchange Junior
Subordinated Debentures when due and payable, and continuance of such
default for a period of 30 days (subject to the deferral of any due
date in the case of an Extension Period); or
(ii) failure to pay any principal of or premium, if any,
on the Exchange Junior Subordinated Debentures when due whether at
maturity, upon redemption, by declaration of acceleration or
otherwise; or
(iii) failure to observe or perform in any material respect
certain other covenants contained in the Indenture for 90 days after
written notice to the Company from the Debenture Trustee or the
holders of at least 25% in aggregate outstanding principal amount of
the outstanding Exchange Junior Subordinated Debentures; or
(iv) certain events in bankruptcy, insolvency or
reorganization of the Company.
For purposes of the Trust Agreement and this Prospectus, each such
Event of Default under the Indenture is referred to as a "Debenture Event of
Default." As described in "Description of Exchange Securities -- Description of
Exchange Capital Securities -- Events of Default; Notice," the occurrence of a
Debenture Event of Default will also constitute an Event of Default in respect
of the Trust Securities.
The holders of at least a majority in aggregate principal amount of
outstanding Exchange 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 Exchange Junior
Subordinated Debentures may declare the principal due and payable immediately
upon a Debenture Event of Default, and, should the Debenture Trustee or such
holders of Exchange Junior Subordinated Debentures fail to make such
declaration, the holders of at least 25% in aggregate Liquidation Amount of the
outstanding Capital Securities shall have such right. The holders of a
majority in aggregate principal amount of outstanding Exchange Junior
Subordinated Debentures may annul such declaration and waive the default if all
defaults (other than the non-payment of the principal of Exchange Junior
Subordinated Debentures which has become due solely by such 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 Exchange Junior Subordinated
Debentures fail to annul such declaration and waive such default, the holders
of a majority in aggregate Liquidation Amount of the outstanding Exchange
Capital Securities shall have such right.
The holders of at least a majority in aggregate principal amount of
the outstanding Exchange Junior Subordinated Debentures affected thereby and
the holders of a majority in aggregate Liquidation Amount of the Exchange
Capital Securities issued by the Trust may waive any past default, except a
default in the payment of principal (or premium, if any) or interest (unless
such default has been cured and a sum sufficient to pay all matured
installments of interest and principal due otherwise than by acceleration has
been deposited with the Debenture Trustee) or a default in respect of a
covenant or provision which under the Indenture cannot be modified or amended
without the consent of the holder of each outstanding Exchange Junior
Subordinated Debenture affected thereby. See "-- Modification of Indenture."
The Company is required to file annually with the Debenture Trustee a
certificate as to whether or not the Company is in compliance with all the
conditions and covenants applicable to it under the 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
Exchange Junior Subordinated Debentures, and any other amounts payable under
the Indenture, to be forthwith due and payable and to enforce its other rights
as a creditor with respect to the Exchange Junior Subordinated Debentures.
ENFORCEMENT OF CERTAIN RIGHTS BY HOLDERS OF EXCHANGE CAPITAL SECURITIES
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<PAGE> 65
If a Debenture Event of Default has occurred and is continuing and
such event is attributable to the failure of the Company to pay any amounts
payable in respect of the Exchange Junior Subordinated Debentures on the date
such amounts are otherwise payable, a registered holder of Exchange Capital
Securities may institute a legal proceeding directly against the Company for
enforcement of payment to such holder of an amount equal to the amount payable
in respect of Exchange Junior Subordinated Debentures having a principal amount
equal to the aggregate Liquidation Amount of the Capital Securities held by
such holder (a "Direct Action"). The Company may not amend the Indenture to
remove the foregoing right to bring a Direct Action without the prior written
consent of the holders of all the Exchange Capital Securities. The Company
will have the right under the Indenture to set-off any payment made to such
holder of Exchange Capital Securities by the Company in connection with a
Direct Action.
The holders of the Exchange Capital Securities would not be able to
exercise directly any remedies available to the holders of the Exchange Junior
Subordinated Debentures except under the circumstances described in the
preceding paragraph. See "Description of Exchange Securities -- Description of
Exchange Capital Securities -- Events of Default; Notice."
CONSOLIDATION, MERGER, SALE OF ASSETS AND OTHER TRANSACTIONS
The Indenture provides that the Company may not consolidate with or
merge into any other Person or convey, transfer or lease its properties and
assets substantially as an entirety to any Person, and no Person may
consolidate with or merge into the Company or convey, transfer or lease its
properties and assets substantially as an entirety to the Company, unless (i)
if the Company consolidates with or merges into another Person or conveys or
transfers its properties and assets substantially as an entirety to any Person,
the successor Person is organized under the laws of the United States or any
state or the District of Columbia, and such successor Person expressly assumes
the Company's obligations in respect of the Exchange Junior Subordinated
Debentures; (ii) immediately after giving effect thereto, no Debenture Event of
Default, and no event which, after notice or lapse of time or both, would
constitute a Debenture Event of Default, has occurred and is continuing; and
(iii) certain other conditions as prescribed in the Indenture are satisfied.
The provisions of the Indenture do not afford holders of the Exchange
Junior Subordinated Debentures protection in the event of a highly leveraged or
other transaction involving the Company that may adversely affect holders of
the Exchange Junior Subordinated Debentures.
SATISFACTION AND DISCHARGE
The Indenture provides that when, among other things, all Exchange
Junior Subordinated Debentures not previously delivered to the Debenture
Trustee for cancellation (i) have become due and payable or (ii) will become
due and payable at the Stated Maturity Date within one year or (iii) are to be
called for redemption within one year, and the Company deposits or causes to be
deposited with the Debenture Trustee funds, in trust, for the purpose and in an
amount sufficient to pay and discharge the entire indebtedness on the Exchange
Junior Subordinated Debentures not previously delivered to the Debenture
Trustee for cancellation, for the principal (and premium, if any) and interest
to the date of the deposit or to the Stated Maturity Date, as the case may be,
then the Indenture will cease to be of further effect (except as to the
Company's obligations to pay all other sums due pursuant to the Indenture and
to provide the officers' certificates and opinions of counsel described
therein), and the Company will be deemed to have satisfied and discharged the
Indenture.
SUBORDINATION
The Exchange Junior Subordinated Debentures will be subordinate and
junior in right of payment, to the extent set forth in the Indenture, to all
Senior Indebtedness (as defined below) of the Company. If the Company defaults
in the payment of any principal, premium, if any, or interest, if any, or any
other amount payable on any Senior Indebtedness when the same becomes due and
payable,
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<PAGE> 66
whether at maturity or at a date fixed for redemption or by declaration of
acceleration or otherwise, then, unless and until such default has been cured
or waived or has ceased to exist or all Senior Indebtedness has been paid, no
direct or indirect payment (in cash, property, securities, by setoff or
otherwise) may be made or agreed to be made on the Exchange Junior Subordinated
Debentures, or in respect of any redemption, repayment, retirement, purchase or
other acquisition of any of the Exchange Junior Subordinated Debentures.
As used herein, "Senior Indebtedness" means, whether recourse is to
all or a portion of the assets of the Company and whether or not contingent,
(i) every obligation of the Company for money borrowed; (ii) every obligation
of the Company evidenced by bonds, debentures, notes or other similar
instruments, including obligations incurred in connection with the acquisition
of property, assets or businesses; (iii) every reimbursement obligation of the
Company with respect to letters of credit, bankers' acceptances or similar
facilities issued for the account of the Company; (iv) every obligation of the
Company issued or assumed as the deferred purchase price of property 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. At June 30, 1998, the Company had no outstanding Senior
Indebtedness. 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 Exchange 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 Senior Indebtedness of the Company to any of its
subsidiaries, (iv) Senior Indebtedness to any executive officer or director of
the Company, or (v) any indebtedness in respect of debt securities issued to
any trust, or a trustee of such trust, partnership or other entity affiliated
with the Company that is a financing entity of the Company in connection with
the issuance of such financing entity of securities that are similar to the
Capital Securities.
In the event of (i) certain events of bankruptcy, dissolution or
liquidation 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, all Senior
Indebtedness (including any interest thereon accruing after the commencement of
any such proceedings) shall first be paid in full before any payment or
distribution, whether in cash, securities or other property, shall be made on
account of the Exchange Junior Subordinated Debentures. In such event, any
payment or distribution on account of the Exchange Junior Subordinated
Debentures, whether in cash, securities or other property, that would otherwise
(but for the subordination provisions) be payable or deliverable in respect of
the Exchange Junior Subordinated Debentures will be paid or delivered directly
to the holders of Senior Indebtedness in accordance with the priorities then
existing among such holders until all Senior Indebtedness (including any
interest thereon accruing after the commencement of any such proceedings) has
been paid in full.
In the event of any such proceeding, after payment in full of all sums
owing with respect to Senior Indebtedness, the holders of Exchange Junior
Subordinated Debentures, together with the holders of any obligations of the
Company ranking on a parity with the Exchange Junior Subordinated Debentures,
will be entitled to be paid from the remaining assets of the Company the
amounts at the time due and owing on the Exchange Junior Subordinated
Debentures and such other obligations before any payment or other distribution,
whether in cash, property or otherwise, will be made on account of any capital
stock or obligations of the Company ranking junior to the Exchange Junior
Subordinated Debentures and such other obligations. If any payment or
distribution on account of the Exchange Junior Subordinated Debentures of any
character or any security, whether in cash, securities or other property, is
received by
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<PAGE> 67
the Debenture Trustee or any holder of any Exchange Junior Subordinated
Debentures in contravention of any of the terms hereof and before all the
Senior Indebtedness has been paid in full, such payment or distribution or
security will be received in trust for the benefit of, and must be paid over or
delivered and transferred to, the holders of the Senior Indebtedness at the
time outstanding in accordance with the priorities then existing among such
holders for application to the payment of all Senior Indebtedness remaining
unpaid to the extent necessary to pay all such Senior Indebtedness in full. By
reason of such subordination, in the event of the insolvency of the Company,
holders of Senior Indebtedness may receive more, ratably, and holders of the
Exchange Junior Subordinated Debentures may receive less, ratably, than the
other creditors of the Company. Such subordination will not prevent the
occurrence of any Debenture Event of Default.
The Indenture places no limitation on the amount of additional Senior
Indebtedness that may be incurred by the Company. The Company expects from
time to time to incur additional indebtedness including Senior Indebtedness.
INFORMATION CONCERNING THE DEBENTURE TRUSTEE
The Debenture Trustee, other than during the occurrence and
continuance of a Debenture Event of Default, undertakes to perform only such
duties as are specifically set forth in the Indenture, is under no obligation
to exercise any of the powers vested in it by the Indenture at the request of
any holder of Exchange Junior Subordinated Debentures, unless offered
reasonable indemnity by such holder against the costs, expenses and liabilities
that might be incurred thereby and, after such Debenture Event of Default, must
exercise the same degree of care and skill as a prudent person would in the
conduct of his or her own affairs. The Debenture Trustee is not required to
expend or risk its own funds or otherwise incur personal financial liability in
the performance of its duties if the Debenture Trustee reasonably believes that
repayment or adequate indemnity is not reasonably assured to it.
The Debenture Trustee also serves as the Property Trustee and the
Guarantee Trustee. See "Description of Exchange Securities -- Description of
Exchange Capital Securities -- Information Concerning the Property Trustee" and
"-- Description of Exchange Guarantee -- Information Concerning the Guarantee
Trustee."
Bankers Trust Company, the Debenture Trustee, may serve from time to
time as trustee under other indentures or trust agreements with the Company or
its subsidiaries relating to other issues of their securities. In addition,
the Company and certain of its affiliates may have other banking relationships
with Bankers Trust Company and its affiliates.
RESTRICTIONS ON TRANSFER
The Exchange Junior Subordinated Debentures will be issued, and may be
transferred only, in blocks having an aggregate principal amount of not less
than $100,000 (100 Exchange Junior Subordinated Debentures). Any such transfer
of Exchange Junior Subordinated Debentures in a block having an aggregate
principal amount of less than $100,000 shall be deemed to be void and of no
legal effect whatsoever. Any such transferee shall be deemed not to be the
holder of such Exchange Junior Subordinated Debentures for any purpose,
including but not limited to the receipt of payments on such Exchange Junior
Subordinated Debentures, and such transferee shall be deemed to have no
interest whatsoever in such Exchange Junior Subordinated Debentures.
GOVERNING LAW
The Indenture and the Junior Subordinated Debentures are governed by
and construed in accordance with the laws of the State of New York.
DESCRIPTION OF EXCHANGE GUARANTEE
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<PAGE> 68
The Exchange Guarantee will be executed and delivered by the Company
concurrently with the issuance of the Exchange Capital Securities by the Trust
for the benefit of the holders from time to time of the Exchange Capital
Securities. The terms of the Exchange Guarantee are identical in all material
respects to the terms of the Original Guarantee. Bankers Trust Company will
act as Guarantee Trustee under the Exchange Guarantee. This summary of certain
provisions of the Exchange Guarantee does not purport to be complete and is
subject to, and qualified in its entirety by reference to, all the provisions
of the Exchange Guarantee, including the definitions therein of certain terms.
The Guarantee Trustee will hold the Exchange Guarantee for the benefit of the
holders of the Exchange Capital Securities.
STATUS OF ORIGINAL GUARANTEE
If not all the Original Capital Securities are exchanged for Exchange
Capital Securities in the Exchange Offer, the Original Guarantee will not
terminate, but will continue to guarantee the obligations of the Company for
the benefit of the holders of Original Securities. The Original Guarantee will
terminate upon full payment of the applicable Redemption Price of the Original
Capital Securities, upon full payment of the Liquidation Amount payable upon
liquidation of the Trust or upon distribution of Original Junior Subordinated
Debentures to the holders of the Original Capital Securities. The Original
Guarantee will continue to be effective or will be reinstated, as the case may
be, if at any time any holder of the Original Capital Securities must restore
payment of any sums paid under the Original Capital Securities or the Original
Guarantee.
GENERAL
The Company will irrevocably agree to pay in full on a subordinated
basis, to the extent set forth herein, the Guarantee Payments (as defined
below) to the holders of the Exchange Capital Securities, as and when due,
regardless of any defense, right of set-off or counterclaim that the Trust may
have or assert other than the defense of payment. The following payments with
respect to the Exchange Capital Securities, to the extent not paid by or on
behalf of the Trust (the "Guarantee Payments"), will be subject to the Exchange
Guarantee: (i) any accumulated and unpaid Distributions required to be paid on
such Exchange Capital Securities, to the extent that the Trust has funds on
hand available therefor at such time; (ii) the Redemption Price with respect to
any Exchange Capital Securities called for redemption, to the extent that the
Trust has funds on hand available therefor at such time; and (iii) upon a
voluntary or involuntary dissolution of the Trust (unless the Exchange Junior
Subordinated Debentures are distributed to holders of the Exchange Capital
Securities), the lesser of (a) the aggregate of the Liquidation Amount and all
accumulated and unpaid Distributions to the date of payment, to the extent that
the Trust has funds on hand available therefor at such time, and (b) the amount
of assets of the Trust remaining available for distribution to holders of the
Exchange Capital Securities on liquidation of the Trust. The Company's
obligation to make a Guarantee Payment may be satisfied by direct payment of
the required amounts by the Company to the holders of the Exchange Capital
Securities or by causing the Trust to pay such amounts to such holders.
The Exchange Guarantee will be an irrevocable guarantee on a
subordinated basis of the Trust's obligations under the Exchange Capital
Securities, but will apply only to the extent that the Trust has funds
sufficient to make such payments, and is not a guarantee of collection.
If the Company does not make payments on the Exchange Junior
Subordinated Debentures held by the Trust, the Trust will not be able to pay
any amounts payable in respect of the Exchange Capital Securities and will not
have funds legally available therefor. The Exchange Guarantee will rank
subordinate and junior in right of payment to all Senior Indebtedness of the
Company. See "-- Status of the Exchange Guarantee." The Exchange Guarantee
does not limit the incurrence or issuance of other secured or unsecured debt of
the Company, including Senior Indebtedness, whether under the Indenture, any
other indenture that the Company may enter into in the future or otherwise.
The Company has, through the Exchange Guarantee, the Trust Agreement,
the Exchange Junior Subordinated Debentures and the Indenture, taken together,
fully, irrevocably and unconditionally
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guaranteed all the Trust's obligations under the Exchange Capital Securities.
No single document standing alone or operating in conjunction with fewer than
all the other documents constitutes such guarantee. It is only the combined
operation of these documents that has the effect of providing a full,
irrevocable and unconditional guarantee of the Trust's obligations in respect
of the Exchange Capital Securities. See "Relationship Among the Exchange
Capital Securities, the Exchange Junior Subordinated Debentures and the
Exchange Guarantee."
STATUS OF THE EXCHANGE GUARANTEE
The Exchange Guarantee will rank pari passu with the Original
Guarantee, and will constitute an unsecured obligation of the Company and will
rank subordinate and junior in right of payment to all Senior Indebtedness of
the Company in the same manner as the Exchange Junior Subordinated Debentures.
The Exchange Guarantee will constitute a guarantee of payment and not
of collection (i.e., the guaranteed party may institute a legal proceeding
directly against the Guarantor to enforce its rights under the Guarantee
Agreement without first instituting a legal proceeding against any other person
or entity). The Exchange Guarantee will be held by the Guarantee Trustee for
the benefit of the holders of the Exchange Capital Securities. The Exchange
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
Exchange Capital Securities of the Exchange Junior Subordinated Debentures.
AMENDMENTS AND ASSIGNMENT
Except with respect to any changes which do not materially adversely
affect the rights of holders of the Exchange Capital Securities (in which case
no vote will be required), the Exchange 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 Exchange Capital Securities. The manner
of obtaining any such approval will be as set forth under "Description of
Exchange Securities -- Description of the Exchange Capital Securities -- Voting
Rights; Amendment of Trust Agreement." All guarantees and agreements contained
in the Exchange Guarantee shall bind the successors, assigns, receivers,
trustees and representatives of the Company and shall inure to the benefit of
the holders of the Capital Securities then outstanding.
EVENTS OF DEFAULT
An event of default under the Exchange Guarantee will occur upon the
failure of the Company to perform any of its payment or other obligations
thereunder, or to perform any non-payment obligation if such non-payment
default remains unremedied for 30 days. The holders of not less than a
majority in aggregate Liquidation Amount of the outstanding Exchange Capital
Securities have the right to direct the time, method and place of conducting
any proceeding for any remedy available to the Guarantee Trustee in respect of
the Exchange Guarantee or to direct the exercise of any trust or power
conferred upon the Guarantee Trustee under the Exchange Guarantee.
Any registered holder of Capital Securities may institute a legal
proceeding directly against the Company to enforce its rights under the
Exchange Guarantee without first instituting a legal proceeding against the
Trust, the Guarantee Trustee or any other person or entity.
The Company, as guarantor, is required to file annually with the
Guarantee Trustee a certificate as to whether or not the Company is in
compliance with all the conditions and covenants applicable to it under the
Exchange Guarantee.
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INFORMATION CONCERNING THE GUARANTEE TRUSTEE
The Guarantee Trustee, other than during the occurrence and
continuance of a default by the Company in performance of the Exchange
Guarantee, undertakes to perform only such duties as are specifically set forth
in the Exchange Guarantee and, after the occurrence of an event of default with
respect to the Exchange 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 Exchange Guarantee
at the request of any holder of the Exchange Capital Securities unless it is
offered reasonable indemnity against the costs, expenses and liabilities that
might be incurred thereby.
The Guarantee Trustee also serves as the Property Trustee and the
Debenture Trustee. See "Description of Exchange Securities -- Description of
Exchange Capital Securities -- Information Concerning the Property Trustee" and
"Description of Exchange Securities -- Description of Exchange Junior
Subordinated Debentures -- Information Concerning the Debenture Trustee."
TERMINATION OF THE EXCHANGE GUARANTEE
The Exchange Guarantee will terminate and be of no further force and
effect upon full payment of the Redemption Price of the Exchange Capital
Securities, upon full payment of the amounts payable with respect to the
Exchange Capital Securities upon liquidation of the Trust or upon distribution
of Exchange Junior Subordinated Debentures to the holders of the Exchange
Capital Securities. The Exchange Guarantee will continue to be effective or
will be reinstated, as the case may be, if at any time any holder of the
Exchange Capital Securities must restore payment of any sums paid under the
Exchange Capital Securities or the Exchange Guarantee.
GOVERNING LAW
The Exchange Guarantee will be governed by and construed in accordance
with the laws of the State of New York.
DESCRIPTION OF ORIGINAL SECURITIES
The terms of the Original Securities are identical in all materials
respects to the Exchange Securities, except that (i) the Original Securities
have not been registered under the Securities Act, are subject to certain
restrictions on transfer and are entitled to certain rights under the
applicable Registration Rights Agreement (which rights will terminate upon
consummation of the Exchange Offer, except under limited circumstances), (ii)
the Exchange Capital Securities will not provide for any increase in the
Distribution rate thereon and (iii) the Exchange Junior Subordinated Debentures
will not provide for any liquidated damages thereon. The Original Securities
provide that, if a registration statement relating to the Exchange Offer has
not been declared effective by January 20, 1999, then liquidated damages will
accrue at the rate of 0.25% per annum on the principal amount of the Original
Junior Subordinated Debentures and Distributions will accrue at the rate of
0.25% per annum on the Liquidation Amount of the Original Capital Securities,
for the period from the occurrence of such event until such time as such
registration statement has been filed or declared effective, as the case may
be. In addition, the Original Capital Securities provide that, if the Trust
has not exchanged Exchange Capital Securities for all Original Capital
Securities validly tendered by the 45th day after the date on which the
registration statement is declared effective, the Distribution rate borne by
the Original Capital Securities will increase by 0.25% per annum for the period
from the occurrence of such event until such time as the Exchange Offer has
been consummated. The Exchange Securities are not, and upon consummation of
the Exchange Offer, the Original Securities will not be, entitled to any such
additional interest or Distributions. Accordingly, holders of Original Capital
Securities should review the information set forth under "Risk Factors --
Consequences of a Failure to Exchange Original Capital Securities" and
"Description of Exchange Securities."
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RELATIONSHIP AMONG THE EXCHANGE CAPITAL SECURITIES, THE EXCHANGE
JUNIOR SUBORDINATED DEBENTURES AND THE EXCHANGE GUARANTEE
FULL AND UNCONDITIONAL GUARANTEE
Payments of Distributions and other amounts due on the Exchange
Capital Securities (to the extent the Trust has funds available for such
payment) are irrevocably guaranteed by the Company as and to the extent set
forth under "Description of Exchange Securities -- Description of Exchange
Guarantee." Taken together, the Company's obligations under the Exchange
Junior Subordinated Debentures, the Indenture, the Trust Agreement and the
Exchange Guarantee provide, in the aggregate, a full, irrevocable and
unconditional guarantee of payments of Distributions and other amounts due on
the Exchange Capital Securities. No single document standing alone or
operating in conjunction with fewer than all the other documents constitutes
such guarantee. It is only the combined operation of these documents that has
the effect of providing a full, irrevocable and unconditional guarantee of the
Trust's obligations in respect of the Exchange Capital Securities. If and to
the extent that the Company does not make payments on the Exchange Junior
Subordinated Debentures, the Trust will not have sufficient funds to pay
Distributions or other amounts due on the Exchange Capital Securities. The
Exchange Guarantee does not cover payment of amounts payable with respect to
the Exchange Capital Securities when the Trust does not have sufficient funds
to pay such amounts. In such event, the remedy of a holder of the Exchange
Capital Securities is to institute a legal proceeding directly against the
Company for enforcement of payment of the Company's obligations under Exchange
Junior Subordinated Debentures having a principal amount equal to the
Liquidation Amount of the Exchange Capital Securities held by such holder.
The obligations of the Company under the Exchange Junior Subordinated
Debentures and the Exchange Guarantee are subordinate and junior in right of
payment to all Senior Indebtedness.
SUFFICIENCY OF PAYMENTS
As long as interest and principal payments are made when due on the
Exchange Junior Subordinated Debentures, such payments will be sufficient to
cover Distributions and other payments distributable on the Exchange Capital
Securities, primarily because: (i) the aggregate principal amount of the
Exchange Junior Subordinated Debentures will be equal to the sum of the
aggregate stated Liquidation Amount of the Trust Securities; (ii) the interest
rate and interest and other payment dates on the Exchange Junior Subordinated
Debentures will match the Distribution rate, Distribution Dates and other
payment dates for the Exchange Capital Securities; (iii) the Company will pay
for all and any costs, expenses and liabilities of the Trust except the Trust's
obligations to holders of the Trust Securities; and (iv) 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, the Company
has the right to set-off any payment it is otherwise required to make
thereunder against and to the extent the Company has theretofore made, or is
concurrently on the date of such payment making, a payment under the Exchange
Guarantee.
ENFORCEMENT RIGHTS OF HOLDERS OF EXCHANGE CAPITAL SECURITIES
A holder of any Exchange Capital Security may institute a legal
proceeding directly against the Company to enforce its rights under the
Exchange Guarantee without first instituting a legal proceeding against the
Guarantee Trustee, the Trust or any other person or entity. See "Description
of Exchange Securities -- Description of Exchange Guarantee."
A default or event of default under any Senior Indebtedness of the
Company would not constitute a default or Event of Default in respect of the
Exchange Capital Securities. However, in the event of payment defaults under,
or acceleration of, Senior Indebtedness of the Company, the subordination
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provisions of the Indenture provide that no payments may be made in respect of
the Exchange Junior Subordinated Debentures until such Senior Indebtedness has
been paid in full or any payment default thereunder has been cured or waived.
See "Description of Exchange Securities -- Description of Exchange Junior
Subordinated Debentures -- Subordination." Failure to make required payments
on the Exchange Junior Subordinated Debentures would constitute a Debenture
Event of Default under the Trust Agreement.
LIMITED PURPOSE OF TRUST
The Exchange Capital Securities represent preferred undivided
beneficial interests in the assets of the Trust, and the Trust exists for the
sole purpose of issuing and selling the Trust Securities, using the proceeds
from the sale of the Trust Securities to acquire the Original Junior
Subordinated Debentures, exchanging the Original Capital Securities and the
Original Junior Subordinated Debentures in the Exchange Offer, and engaging in
only those other activities necessary, advisable or incidental thereto. A
principal difference between the rights of a holder of an Exchange Capital
Security and a holder of an Exchange Junior Subordinated Debenture is that a
holder of an Exchange Junior Subordinated Debenture is entitled to receive from
the Company payments on Exchange Junior Subordinated Debentures held, while a
holder of Exchange Capital Securities is entitled to receive Distributions or
other amounts distributable with respect to the Exchange Capital Securities
from the Trust (or from the Company under the Exchange Guarantee) only if and
to the extent the Trust has funds available for the payment of such
Distributions.
RIGHTS UPON DISSOLUTION
Upon any voluntary or involuntary dissolution of the Trust, other than
any such dissolution involving the distribution of the Exchange Junior
Subordinated Debentures, after satisfaction of liabilities to creditors of the
Trust as required by applicable law, the holders of the Exchange Capital
Securities will be entitled to receive, out of assets held by the Trust, the
Liquidation Distribution in cash. See "Description of Exchange Securities --
Description of Exchange Capital Securities -- Liquidation Distribution Upon
Dissolution." Upon any voluntary or involuntary liquidation or bankruptcy of
the Company, the Trust, as registered holder of the Exchange Junior
Subordinated Debentures, would be a subordinated creditor of the Company,
subordinated and junior in right of payment to all Senior Indebtedness as set
forth in the Indenture, but entitled to receive payment in full of all amounts
payable with respect to the Exchange Junior Subordinated Debentures before any
shareholders of the Company receive payments or distributions. Since the
Company is the guarantor under the Exchange Guarantee and has agreed under the
Indenture to pay for all costs, expenses and liabilities of the Trust (other
than the Trust's obligations to the holders of the Trust Securities), the
positions of a holder of the Exchange Capital Securities and a holder of such
Exchange Junior Subordinated Debentures relative to other creditors and to
shareholders of the Company in the event of liquidation or bankruptcy of the
Company are expected to be substantially the same.
CERTAIN FEDERAL INCOME TAX CONSEQUENCES
GENERAL
The following discussion summarizes the principal material United
States federal income tax consequences of an exchange of Original Capital
Securities for Exchange Capital Securities and of the ownership and disposition
of the Capital Securities. This summary is based on the Internal Revenue Code
of 1986, as amended (the "Code"), Treasury regulations thereunder, and
administrative and judicial interpretations thereof, each as of the date
hereof, all of which are subject to change, possibly on a retroactive basis.
Hogan & Hartson L.L.P., Washington D.C., in its capacity as special
tax counsel to the Company ("Tax Counsel"), has reviewed this summary and is of
the opinion that, to the extent that it constitutes matters of law or purports
to describe certain provisions of the U.S. federal income tax laws, it is a
correct
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summary in all material respects of the matters discussed therein. In
connection with the issuance of the Junior Subordinated Debentures and the
Capital Securities, Tax Counsel also rendered the opinion described under "--
Characterization of the Issuer Trust." The opinions of Tax Counsel are not
binding on the Internal Revenue Service (the "IRS") 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 transactions described herein.
Accordingly, there can be no assurance that the IRS will not challenge the
opinions described herein or that a court would not sustain such a challenge.
Except as otherwise stated, this summary deals only with the Capital
Securities held as a capital asset by a beneficial owner who or which (i)
purchased the Original Capital Securities upon original issuance at their
original offering price and (ii) is a US Holder (as defined below). This
summary does not address all the tax consequences that may be relevant to a US
Holder, nor does it address the tax consequences, except as stated below, to
holders that are not US Holders ("Non-US Holders") or to holders that may be
subject to special tax treatment (such as banks, thrift institutions, real
estate investment trusts, regulated investment companies, insurance companies,
brokers and dealers in securities or currencies, certain securities traders,
other financial institutions, tax-exempt organizations, persons holding the
Capital Securities as a position in a "straddle," or as part of a "synthetic
security," "hedging," as part of a "conversion" or other integrated investment,
persons having a functional currency other than the U.S. Dollar and certain
United States expatriates). Further, this summary does not address (a) the
income tax consequences to shareholders in, or partners or beneficiaries of, a
holder of the Capital Securities, (b) the United States federal alternative
minimum tax consequences of the purchase, ownership or disposition of the
Capital Securities, or (c) any state, local or foreign tax consequences of the
purchase, ownership and disposition of Capital Securities.
A "US Holder" generally is a holder of the Capital Securities who or
which is (i) a citizen or individual resident (or is treated as a citizen or
individual resident) of the United States for income tax purposes, (ii) a
corporation or partnership created or organized (or treated as created or
organized for income tax purposes) in or under the laws of the United States or
any political subdivision thereof, (iii) an estate the income of which is
includible in its gross income for United States federal income tax purposes
without regard to its source, or (iv) a trust if (a) a court within the United
States is able to exercise primary supervision over the administration of the
trust and (b) one or more United States persons have the authority to control
all substantial decisions of the trust.
HOLDERS SHOULD CONSULT THEIR OWN TAX ADVISORS WITH RESPECT TO THE TAX
CONSEQUENCES TO THEM OF AN EXCHANGE OF ORIGINAL CAPITAL SECURITIES FOR EXCHANGE
CAPITAL SECURITIES AND OF THE OWNERSHIP AND DISPOSITION OF THE CAPITAL
SECURITIES, INCLUDING THE TAX CONSEQUENCES UNDER STATE, LOCAL, FOREIGN AND
OTHER TAX LAWS AND THE POSSIBLE EFFECTS OF CHANGES IN UNITED STATES FEDERAL OR
OTHER TAX LAWS.
EXCHANGE OF EXCHANGE CAPITAL SECURITIES
The exchange of Original Capital Securities for Exchange Capital
Securities should not be a taxable event to holders for U.S. federal income tax
purposes. The exchange of Original Capital Securities for Exchange Capital
Securities pursuant to the Exchange Offer should not be treated as an
"exchange" for U.S. federal income tax purposes because the Exchange Capital
Securities should not be considered to differ materially in kind or extent from
the Original Capital Securities and because the exchange will occur by
operation of the terms of the Original Capital Securities. Accordingly, the
Exchange Capital Securities should have the same issue price as the Original
Capital Securities, and a holder should have the same adjusted tax basis and
holding period in the Exchange Capital Securities immediately after the
exchange as the holder had in the Original Capital Securities immediately
before the exchange.
US HOLDERS
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Characterization of the Issuer Trust. In connection with the issuance
of the Original Capital Securities, Tax Counsel rendered its opinion generally
to effect that, under then current law and based on the representations, facts
and assumptions set forth in this Prospectus, and assuming full compliance with
the terms of the Trust Agreement (and other relevant documents), and based on
certain assumptions and qualifications referenced in the opinion, the Issuer
Trust will be characterized for United States federal income tax purposes as a
grantor trust and will not be characterized as an association taxable as a
corporation. Accordingly, for United States federal income tax purposes, each
holder of the Capital Securities generally will be considered the owner of an
undivided interest in the Junior Subordinated Debentures owned by the Issuer
Trust, and each US Holder will be required to include all income or gain
recognized for United States federal income tax purposes with respect to its
allocable share of the Junior Subordinated Debentures on its own income tax
return.
Characterization of the Junior Subordinated Debentures. The Company
intends to take the position that, under current law, the Junior Subordinated
Debentures constitute indebtedness for United States federal income tax
purposes. The Company, the Issuer Trust and the holders of the Capital
Securities (by acceptance of a beneficial interest in a Capital Security) agree
to treat the Junior Subordinated Debentures as indebtedness of the Company and
the Capital Securities as evidence of a beneficial ownership interest in the
Junior Subordinated Debentures. No assurance can be given, however, that such
position will not be challenged by the IRS or, if challenged, that such
challenge will not be successful. The remainder of this discussion assumes
that the Junior Subordinated Debentures will be classified as indebtedness of
the Company for United States federal income tax purposes.
Interest Income and Original Issue Discount. Under the terms of the
Junior Subordinated Debentures, the Company has the ability to defer payments
of interest from time to time by extending the interest payment period for a
period not exceeding 10 consecutive semi-annual periods, but not beyond the
Stated Maturity. Treasury regulations under Section 1273 of the Code provide
that debt instruments like the Junior Subordinated Debentures will not be
considered issued with original issue discount ("OID") by reason of certain
contingencies such as (i) the Company's ability to defer payments of interest
or (ii) the possibility that the Company will be required to make Additional
Interest payments, if the likelihood that such contingencies will occur is
"remote."
The Company has concluded, and this discussion assumes, that, as of
the date of this Prospectus, the likelihood of (i) deferring payments of
interest under the terms of the Junior Subordinated Debentures is "remote"
within the meaning of the applicable Treasury regulations, in part because
exercising that option would prevent the Company from declaring dividends on
its stock and would prevent the Company from making any payments with respect
to debt securities that rank pari passu with or junior to the Junior
Subordinated Debentures and (ii) making Additional Interest payments is
"remote" within the meaning of the applicable Treasury regulations. Therefore,
the Company intends to treat the Junior Subordinated Debentures as not issued
with OID by reason of the Company's deferral option or its potential obligation
to make Additional Interest payments. Under such treatment, stated interest on
the Junior Subordinated Debentures will generally be taxable to a US Holder as
ordinary income when paid or accrued in accordance with that holder's method of
accounting for income tax purposes. It should be noted, however, that these
Treasury regulations have not yet been interpreted in any rulings or any other
published authorities of the IRS. Accordingly, it is possible that the IRS
could take a position contrary to the interpretation described herein.
In the event the Company exercises its option to defer payments of
interest, the Junior Subordinated Debentures would be treated as redeemed and
reissued for OID purposes and the sum of the remaining interest payments (and
any de minimis OID) on the Junior Subordinated Debentures would thereafter be
treated as OID, which would accrue, and be includible in a US Holder's taxable
income, on an economic accrual basis (regardless of the US Holder's 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.) Consequently, during any period of interest
deferral, US Holders will include OID in gross
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income in advance of the receipt of cash, and a US Holder that disposes of a
Capital Security prior to the record date for payment of distributions on the
Junior Subordinated Debentures following that period will be subject to income
tax on OID accrued through the date of disposition (and not previously included
in income), but will not receive cash from the Issuer Trust with respect to the
OID.
If the possibility of the Company's exercise of its 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. That OID would generally be includible in a US Holder's taxable
income, over the term of the Junior Subordinated Debentures, on an economic
accrual basis.
In the event the Company is required to make Additional Interest
payments, the Junior Subordinated Debentures would be treated as reissued for
OID purposes and, depending on the facts at that time, the deemed reissued
Junior Subordinated Debentures may be treated as having OID that would be
accrued into a US Holder's income as required by the applicable OID rules in
the Code and Treasury Regulations.
Characterization of Income. Because the income underlying the Capital
Securities will not be characterized as dividends for income tax purposes,
corporate holders of the Capital Securities will not be entitled to a dividends
received deduction for any income recognized with respect to the Capital
Securities.
Market Discount and Bond Premium. Under certain circumstances,
holders of the Capital Securities may be considered to have acquired their
undivided interests in the Junior Subordinated Debentures with market discount
or acquisition premium (as each phrase is defined for United States federal
income tax purposes). Such holders are advised to consult their tax advisors
as to the income tax consequences of the acquisition, ownership and disposition
of the Capital Securities.
Receipt of Junior Subordinated Debentures or Cash Upon Liquidation of
the Issuer Trust. Under certain circumstances described herein (See
"Description of the Capital Securities -- Liquidation Distribution Upon
Dissolution"), the Issuer Trust may distribute the Junior Subordinated
Debentures to holders in exchange for the Capital Securities and in liquidation
of the Issuer Trust. Except as discussed below, such a distribution would not
be a taxable event for United States federal income tax purposes, and each US
Holder would have an aggregate adjusted basis in its Junior Subordinated
Debentures for United States federal income tax purposes equal to such holder's
aggregate adjusted basis in its Capital Securities. For United States federal
income tax purposes, a US Holder's holding period in the Junior Subordinated
Debentures received in such a liquidation of the Issuer Trust would include the
period during which the Capital Securities were held by the holder. A holder
would accrue interest in respect of the Junior Subordinated Debentures received
from the Issuer Trust in the manner described above under "-- Interest Income
and Original Issue Discount." If, however, the relevant event is a Tax Event
which results in the Issuer Trust being treated as an association taxable as a
corporation, the distribution would likely constitute a taxable event to US
Holders of the Capital Securities for United States federal income tax
purposes, and the US Holder's holding period in the Junior Subordinated
Debentures would begin at the date such Junior Subordinated Debentures were
received.
Under certain circumstances described herein (see "Description of the
Capital Securities"), the Junior Subordinated Debentures may be redeemed for
cash and the proceeds of such redemption distributed to holders in redemption
of their Capital Securities. Such a redemption would be taxable for United
States federal income tax purposes, and a US Holder would recognize gain or
loss as if it had sold the Capital Securities for cash. See "-- Sales of
Capital Securities" below.
Sales of Capital Securities. A US Holder that sells Capital
Securities will recognize gain or loss equal to the difference between its
adjusted basis in the Capital Securities and the amount realized on the sale of
such Capital Securities. A US Holder's adjusted basis in the Capital Securities
generally will be its initial purchase price, increased by OID (if any)
previously included (or currently includible) in such
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holder's gross income to the date of disposition, and decreased by payments
received on the Capital Securities (other than any interest received with
respect to the period prior to the effective date of the Company's first
exercise of its option to defer payments of interest). Any such gain or loss
generally will be capital gain or loss, and generally will be a long-term
capital gain or loss if the Capital Securities have been held for more than one
year prior to the date of disposition. Tax rates on capital gains received by
individual US Holders vary depending on each US Holder's income and holding
period for the Capital Securities. US Holders who are individuals should
contact their own tax advisors for more information or for the capital gains
rate applicable to a specific Capital Security.
A holder who disposes of his Capital Securities between record dates
for payments of distributions thereon will be required to include accrued but
unpaid interest (or OID) on the Junior Subordinated Debentures through the date
of disposition in its taxable income for United States federal income tax
purposes (notwithstanding that the holder may receive a separate payment from
the purchaser with respect to accrued interest), and to deduct that amount from
the sales proceeds received (including the separate payment, if any, with
respect to accrued interest) for the Capital Securities (or as to OID only, to
add such amount to such holder's adjusted tax basis in its Capital Securities).
To the extent the selling price is less than the holder's adjusted tax basis
(which will include accrued but unpaid OID, if any), a holder will recognize a
capital loss. Subject to certain limited exceptions, capital losses cannot be
applied to offset ordinary income for United States federal income tax
purposes.
PENDING TAX LITIGATION AFFECTING THE CAPITAL SECURITIES
Recently, a taxpayer filed a petition in the United States Tax Court
contesting the IRS' proposed disallowance of interest deductions that taxpayer
claimed in respect of securities issued in 1993 and 1994 that are, in some
respects, similar to the Capital Securities. (Enron Corp. v. Commissioner,
Docket No. 6149-98, filed April 1, 1998). It is possible that an adverse
decision by the Tax Court concerning the deductibility of such interest could
give rise to a Tax Event. Such a Tax Event would give the Company the right to
redeem the Junior Subordinated Debentures. See "Description of Junior
Subordinated Debentures -- Redemption" and "Description of Capital Securities
- -- Liquidation Distribution Upon Dissolution."
NON-US HOLDERS
The following discussion applies to a Non-US Holder.
Payments to a holder of a Capital Security which is a Non-US Holder
will generally not be subject to withholding of income tax, provided that (a)
the beneficial owner of the Capital Security does not (directly or indirectly,
actually or constructively) own 10% or more of the total combined voting power
of all classes of stock of the Company entitled to vote, (b) the beneficial
owner of the Capital Security is not a controlled foreign corporation that is
related to the Company through stock ownership, and (c) either (i) the
beneficial owner of the Capital Securities certifies to the Issuer Trust or its
agent, under penalties of perjury, that it is a Non-US Holder and provides its
name and address, or (ii) a securities clearing organization, bank or other
financial institution that holds customers' securities in the ordinary course
of its trade or business (a "Financial Institution"), and holds the Capital
Security in such capacity, certifies to the Issuer Trust or its agent, under
penalties of perjury, that such a statement has been received from the
beneficial owner by it or by another Financial Institution between it and the
beneficial owner in the chain of ownership, and furnishes the Issuer Trust or
its agent with a copy thereof.
A Non-US Holder of a Capital Security will generally not be subject to
withholding of income tax on any gain realized upon the sale or other
disposition of a Capital Security.
As discussed above, changes in law affecting the income tax
consequences of the Junior Subordinated Debentures are possible, and could
adversely affect the ability of the Company to deduct interest payable on the
Junior Subordinated Debentures. Such changes could also cause the Junior
Subordinated Debentures to be classified as equity (rather than indebtedness)
of the Company for United
67
<PAGE> 77
States federal income tax purposes and, thus, 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 a
Non-US Holder, rather than as interest which, as discussed above, is generally
exempt from income tax in the hands of a Non-US Holder.
A Non-US Holder that holds the Capital Securities in connection with
the active conduct of a United States trade or business will be subject to
income tax on all income and gains recognized with respect to its proportionate
share of the Junior Subordinated Debentures in the same manner as if it were a
US Holder.
INFORMATION REPORTING
In general, information reporting requirements will apply to payments
made on, and proceeds from the sale of, the Capital Securities held by a
noncorporate US Holder within the United States. In addition, payments made
on, and payments of the proceeds from the sale of, the Capital Securities to or
through the United States office of a broker or through certain U.S.-related
financial intermediaries are subject to information reporting unless the holder
thereof certifies as to its Non-United States status or otherwise establishes
an exemption from information reporting and backup withholding. See "-- Backup
Withholding." Taxable income on the Capital Securities for a calendar year
should be reported to US Holders on the appropriate forms by the following
January 31st.
BACKUP WITHHOLDING
Payments made on, and proceeds from the sale of, the Capital
Securities may be subject to a "backup" withholding tax of 31% unless the
holder complies with certain identification or exemption requirements. Any
amounts so withheld will be allowed as a credit against the holder's 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 all
the consequences to a particular holder of an exchange of Original Capital
Securities for Exchange Capital Securities and of the ownership and disposition
of the Capital Securities. Potential holders of the Capital Securities are
urged to contact their own tax advisors to determine their particular tax
consequences.
ERISA CONSIDERATIONS
Each of the Company (the obligor with respect to the Exchange Junior
Subordinated Debentures held by the Trust), and its affiliates and the Property
Trustee may be considered a "party in interest" (within the meaning of ERISA)
or a "disqualified person" (within the meaning of Section 4975 of the Code)
with respect to many Plans. The purchase and/or holding of Exchange Capital
Securities by a Plan with respect to which the Company, the Property Trustee or
any affiliate is a service provider (or otherwise is a party in interest or a
disqualified person) may constitute or result in a prohibited transaction under
ERISA or Section 4975 of the Code, unless such Exchange Capital Securities are
acquired pursuant to and in accordance with an applicable exemption, such as
Prohibited Transaction Class Exemption ("PTCE") 84-14 (an exemption for certain
transactions determined by an independent qualified professional asset
manager), PTCE 91-38 (an exemption for certain transactions involving bank
collective investment funds), PTCE 90-1 (an exemption for certain transactions
involving insurance company pooled separate accounts), PTCE 95-60 (an exemption
for transactions involving certain insurance company general accounts) or PTCE
96-23 (an exemption for certain transactions determined by an in-house asset
manager). In addition, a Plan fiduciary considering the purchase of Exchange
Capital Securities should be aware that the assets of the Trust may be
considered "plan assets" for ERISA purposes. In such event, the Property
Trustee, as well as any other persons exercising discretion with respect to the
Exchange Junior Subordinated Debentures, may become fiduciaries, parties in
interest or disqualified persons with respect to investing Plans. In order to
avoid certain prohibited transactions under ERISA and the Code that could
thereby result, each investing Plan, by purchasing the Exchange Capital
Securities, will be deemed to have directed the Trust to invest in the Exchange
Junior Subordinated Debentures and to have consented
68
<PAGE> 78
to the appointment of the Property Trustee. In this regard, it should be noted
that, in an Event of Default, the Company may not remove the Property Trustee
without the approval of a majority of the holders of the Exchange Capital
Securities.
A Plan fiduciary should consider whether the purchase of Exchange
Capital Securities could result in a delegation of fiduciary authority to the
Property Trustee, and, if so, whether such a delegation of authority is
permissible under the Plan's governing instrument or any investment management
agreement with the Plan.
THE SALE OF INVESTMENTS TO PLANS IS IN NO RESPECT A REPRESENTATION BY
THE TRUST, THE CORPORATION, THE PROPERTY TRUSTEE, THE INITIAL PURCHASER OR ANY
OTHER PERSON ASSOCIATED WITH THE SALE OF THE EXCHANGE CAPITAL SECURITIES THAT
SUCH SECURITIES MEET RELEVANT LEGAL REQUIREMENTS WITH RESPECT TO INVESTMENTS BY
PLANS GENERALLY OR ANY PARTICULAR PLAN, OR THAT SUCH SECURITIES ARE OTHERWISE
APPROPRIATE FOR PLANS GENERALLY OR ANY PARTICULAR PLAN. ANY PURCHASER
PROPOSING TO ACQUIRE EXCHANGE CAPITAL SECURITIES WITH ASSETS OF ANY PLAN SHOULD
CONSULT WITH ITS COUNSEL.
PLAN OF DISTRIBUTION
Each broker-dealer that receives Exchange Capital Securities for its
own account pursuant to the Exchange Offer must acknowledge that it will
deliver a prospectus in connection with any resale of such Exchange Capital
Securities. This Prospectus, as it may be amended or supplemented from time to
time, may be used by a broker-dealer in connection with resales of Exchange
Capital Securities received in exchange for Original Capital Securities where
such Original Capital Securities were acquired by such broker-dealer as a
result of market-making activities or other trading activities. The Trust and
the Company have agreed that, starting on the Expiration Date and ending on the
close of business on the 180th day following the Expiration Date, it will make
this Prospectus, as amended or supplemented, available to any broker-dealer for
use in connection with any such resale. In addition, for a period of 180 days
after the Expiration Date, all dealers effecting transactions in the Exchange
Securities may be required to deliver a prospectus.
The Trust and the Company will not receive any proceeds from any sale
of Exchange Capital Securities by broker-dealers. Exchange Capital Securities
received by broker-dealers for their own account pursuant to the Exchange Offer
may be sold from time to time in one or more transactions, in the
over-the-counter market, in negotiated transactions, through the writing of
options on the Exchange Capital Securities or a combination of such methods of
resale, at market prices prevailing at the time of resale, at prices related to
such prevailing market prices or at negotiated prices. Any such resale may be
made directly to purchasers or to or through brokers or dealers who may receive
compensation in the form of commissions or concessions from any such
broker-dealer and/or the purchasers of any such Exchange Capital Securities.
Any broker-dealer that resells Exchange Capital Securities that were received
by it for its own account pursuant to the Exchange Offer and any broker or
dealer that participates in a distribution of such Exchange Capital Securities
may be deemed to be an "underwriter" within the meaning of the Securities Act
and any profit of any such resale of Exchange Capital Securities and any
commissions or concessions received by any such persons may be deemed to be
underwriting compensation under the Securities Act. The Letter of Transmittal
states that by acknowledging that it will deliver and by delivering a
prospectus, a broker-dealer will not be deemed to admit that it is an
"underwriter" within the meaning of the Securities Act.
For a period of 180 days after the Expiration Date, the Trust and the
Company will promptly send additional copies of this Prospectus and any
amendment or supplement to this Prospectus to any broker-dealer that requests
such documents in the Letter of Transmittal. The Trust and the Company have
agreed to pay all expenses incident to the Exchange Offer (including the
expenses of one counsel for the holders of the Capital Securities) other than
commissions or concessions of any brokers or dealers and will
69
<PAGE> 79
indemnify the holders of the Exchange Capital Securities (including any
broker-dealers) against certain liabilities, including liabilities under the
Securities Act.
VALIDITY OF EXCHANGE SECURITIES
The validity of the Exchange Capital Securities, the Exchange
Guarantee and the Exchange Junior Subordinated Debentures will be passed upon
for the Company by Hogan & Hartson L.L.P., Washington, D.C. Certain matters of
Delaware law relating to the validity of the Exchange Capital Securities will
be passed upon on behalf of the Trust by Morris, James, Hitchens & Williams,
special Delaware counsel to the Trust. Certain matters relating to U.S.
federal income tax considerations will be passed upon for the Company by Hogan
& Hartson L.L.P., Washington, D.C.
INDEPENDENT AUDITORS
The consolidated financial statements of the Company and its
subsidiaries included in the Company's 1997 Annual Report on Form 10-K have
been audited by PricewaterhouseCoopers LLP, independent auditors, as set forth
in their report thereon included therein in, and have been incorporated herein
by reference.
70
<PAGE> 80
================================================================================
NO DEALER, SALESPERSON OR OTHER INDIVIDUAL HAS BEEN AUTHORIZED TO GIVE
ANY INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED OR
INCORPORATED BY REFERENCE IN THIS PROSPECTUS IN CONNECTION WITH THIS EXCHANGE
OFFER AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE
RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY OR THE TRUST. NEITHER THE
DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL UNDER ANY
CIRCUMSTANCES CREATE AN IMPLICATION THAT THERE HAS NOT BEEN ANY CHANGE IN THE
AFFAIRS OF THE COMPANY OR THE TRUST SINCE THE DATE HEREOF. THIS PROSPECTUS
DOES NOT CONSTITUTE AN OFFER OR SOLICITATION BY ANYONE IN ANY JURISDICTION IN
WHICH SUCH OFFER OR SOLICITATION IS NOT AUTHORIZED OR IN WHICH THE PERSON
MAKING SUCH OFFER OR SOLICITATION IS NOT QUALIFIED TO DO SO OR TO ANYONE TO
WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION.
------------------------------------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
Available Information . . . . . . . . . . . . .
Summary . . . . . . . . . . . . . . . . . . . .
Selected Consolidated Financial Data . . . . .
Risk Factors . . . . . . . . . . . . . . . . .
BSB Bancorp, Inc.. . . . . . . . . . . . . . .
BSB Capital Trust I . . . . . . . . . . . . . .
Use of Proceeds . . . . . . . . . . . . . . . .
Ratios of Earnings to Combined Fixed
Charges . . . . . . . . . . . . . . . . . .
Accounting Treatment . . . . . . . . . . . . .
Capitalization . . . . . . . . . . . . . . . .
The Exchange Offer . . . . . . . . . . . . . .
Description of Exchange Securities . . . . . .
Description of Original Securities . . . . . .
Relationship Among the Exchange Capital
Securities, the Exchange Junior
Subordinated Debentures and the
Exchange Guarantee . . . . . . . . . . . . .
Certain Federal Income Tax Consequences . . . .
ERISA Considerations . . . . . . . . . . . . .
Plan of Distribution . . . . . . . . . . . . .
Independent Auditors . . . . . . . . . . . . .
Validity of Exchange Securities . . . . . . . .
</TABLE>
================================================================================
<PAGE> 81
================================================================================
$30,000,000
BSB CAPITAL TRUST I
OFFER TO EXCHANGE ITS
8.125% EXCHANGE CAPITAL SECURITIES
(LIQUIDATION AMOUNT $1,000 PER EXCHANGE CAPITAL SECURITY)
WHICH HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933
FOR ANY AND ALL OF ITS OUTSTANDING
8.125% ORIGINAL CAPITAL SECURITIES
(LIQUIDATION AMOUNT $1,000 PER ORIGINAL CAPITAL SECURITY)
UNCONDITIONALLY GUARANTEED,
AS DESCRIBED HEREIN, BY
BSB BANCORP, INC.
-------------------------------------------------------------------
PROSPECTUS
-------------------------------------------------------------------
, 1998
================================================================================
<PAGE> 82
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
As authorized by Section 145 of the Delaware General Company Law, the
Company may indemnify its directors and officers against expenses (including
attorneys' fees, judgments, fines and amounts paid in settlement) actually and
reasonably incurred in connection with the defense or settlement of any
threatened, pending or completed legal proceedings in which the director or
officer is involved by reason of the fact that he is or was a director or
officer of the Company if he acted in good faith and in the manner that he
reasonably believed to be in, or not opposed to, the best interests of the
Company and, with respect to any criminal action or proceeding, if he had no
reasonable cause to believe that his conduct was unlawful. If the legal
proceeding, however, is by or in the right of the Company, the director or
officer may not be indemnified in respect of any claim, issue or matter as to
which he shall have been adjudged to be liable to the Company unless a court
determines otherwise.
Article 8 of the Company's Bylaws requires that the Company indemnify
any person who was or is a party or is threatened to be made a party to any
threatened, pending or completed legal proceeding (other than an action by or in
right of the Company) by reason of the fact that such person is or was a
director, officer, trustee, employee, or agent of the Company, or is or was
serving at the request of the Company as a director, officer, trustee, employee,
or agent of another corporation, association, partnership, joint venture, trust,
employee benefit plan or other enterprise, against expenses (including
attorney's fees, judgments, fines and amounts paid in settlement) actually and
reasonably incurred by such person in connection with such legal proceeding, if
such person acted in good faith and in a manner which such person reasonably
believed to be in, or not opposed to, the best interests of the Company, and,
with respect to any criminal legal proceeding, had no reasonable cause to
believe that such conduct was unlawful. The Company is also required to
indemnify any such person in connection with a legal proceeding brought by or in
the right of the Company to procure a judgment in the Company's favor by reason
of such person's connection to the Company, against such expenses incurred by
such person in connection with the defense or settlement of such legal
proceeding if such person acted in good faith and in a manner which such person
reasonably believed to be in, or not opposed to, the best interests of the
Company. No such indemnification shall be made against expenses in respect of
any claim, issue or matter as to which such person shall have been adjudged to
be liable to the Company or against amounts paid in settlement unless and only
to the extent that there is a determination that, despite the adjudication of
liability but in view of all the circumstances of the case, such person is
fairly and reasonably entitled to indemnity for such expenses or amounts paid in
settlement. The Company is permitted to advance expenses incurred by such person
in advance of the final disposition of such legal proceeding upon the receipt of
an undertaking by or on behalf of such person to repay such amount if it shall
ultimately be determined that such person is not entitled to indemnification
from the Company.
The Company also has the power to purchase and maintain insurance on
behalf of its directors, officers, trustees, employees and agents and persons
serving in such capacities with other entities at the Company's request. The
Company has a policy of liability insurance covering its directors and officers,
the effect of which is to reimburse the directors and officers of the Company
against certain damages and expenses resulting from certain claims made against
them caused by their negligent act, error or omission.
The foregoing indemnity and insurance provisions have the effect of
reducing directors' and officers' exposure to personal liability for actions
taken in connection with their respective positions.
<PAGE> 83
<TABLE>
<CAPTION>
ITEM 21. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
-------------------------------------------
<C> <S>
3.1 Certificate of Trust of BSB Capital Trust I, dated as of June 3, 1997.
3.2 Trust Agreement of BSB Capital Trust I, dated as of July 16, 1998.
3.3 Amended and Restated Trust Agreement, among BSB Bancorp, Inc., Bankers
Trust Company and Bankers Trust Company (Delaware), dated as of July
24, 1998.
4.1 Junior Subordinated Indenture, between BSB Bancorp, Inc. and Bankers
Trust Company, dated as of July 24, 1998.
4.2 Form of Certificate of Exchange Junior Subordinated Debentures. *
4.3 Certificate of Trust of BSB Capital Trust I, dated as of June 3, 1997
(filed as Exhibit 3.1 hereto).
4.4 Trust Agreement of BSB Capital Trust I, dated as of July 16, 1998
(filed as Exhibit 3.2 hereto).
4.5 Amended and Restated Trust Agreement, among BSB Bancorp, Inc., Bankers
Trust Company and Bankers Trust Company (Delaware), dated as of July
24, 1998 (filed as Exhibit 3.3 hereto).
4.6 Form of Exchange Capital Security Certificate. *
4.7 Guarantee Agreement, dated as of July 24, 1998, between BSB Bancorp,
Inc. and Bankers Trust Company.
4.8 Registration Rights Agreement, dated July 24, 1998, among BSB Bancorp,
Inc., BSB Capital Trust I and Keefe, Bruyette & Woods, Inc.
4.9 Form of Exchange Guarantee Agreement by BSB Bancorp, Inc. for the
benefit of the holders of Exchange Capital Securities.
5.1 Opinion of Hogan & Hartson L.L.P. as to the validity of the securities
registered hereunder (including the consent of that firm). *
5.2 Form of opinion of Morris, James, Hitchens & Williams as to the validity
of the Exchange Capital Securities (including the consent of that firm). *
8 Form of opinion of Hogan & Hartson L.L.P. as to certain federal income
tax matters (including the consent of that firm). *
10 Purchase Agreeement, dated July 21, 1998, among BSB Bancorp, Inc., the
Trust and Keefe, Bruyette & Woods, Inc.
12 Computation of ratio of earnings to combined fixed charges. *
21 Subsidiaries of BSB Capital Trust I.
23.1 Consent of Hogan & Hartson L.L.P. (included as part of Exhibit 5.1 and
Exhibit 8). *
23.2 Consent of Morris, James, Hitchens & Williams (included as part of
Exhibit 5.2). *
23.3 Consent of PricewaterhouseCoopers LLP.
25 Form T-1 Statement of Eligibility of Bankers Trust Company to act as
trustee.
99.1 Form of Letter of Transmittal.
99.2 Form of Notice of Guaranteed Delivery.
99.3 Form of Exchange Agent Agreement.
99.4 Form of Letter to Brokers, Dealers, Commercial Banks, Trust Companies
and Other Nominees.
99.5 Form of Client Letter.
- ----------------
* To be filed by amendment.
</TABLE>
<PAGE> 84
ITEM 22. UNDERTAKINGS.
Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions, or otherwise, each of the
registrants has been advised that in the opinion of the Commission such
indemnification is against public policy as expressed in the Securities Act and
is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than payment by the registrant of expenses
incurred or paid by a director, officer or controlling person of such registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, each registrant will, unless in the opinion of its counsel the
matter has been settled by 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 and will be governed by
the final adjudication of such issue.
Each of the undersigned registrants hereby undertakes to respond to
requests for information that is incorporated by reference into the prospectus
pursuant to Items 4, 10(b), 11, or 13 of this Form, within one business day of
receipt of such request, and to send the incorporated documents by first class
mail or other equally prompt means. This includes information contained in
documents filed subsequent to the effective date of the registration statement
through the date of responding to the request.
Each of the undersigned registrants hereby undertakes to supply by means
of a post-effective amendment all information concerning a transaction, and the
company being acquired involved therein, that was not the subject of and
included in the registration statement when it became effective.
<PAGE> 85
SIGNATURES
Pursuant to the requirements of the Securities Act, the registrants have
duly caused this registration statement to be signed on their behalf by the
undersigned, thereunto duly authorized, in Binghamton, New York on September
September 19, 1998.
BSB BANCORP, INC. BSB CAPITAL TRUST I
By: /s/ Alex S. DePersis By: /s/ Alex S. DePersis
------------------------------------- ---------------------------
Alex S. DePersis Alex S. DePersis,
President and Chief Executive Officer as Administrator
By: /s/ Larry G. Denniston
---------------------------
Larry G. Denniston,
as Administrator
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below appoints Alex S. DePersis or Larry G. Denniston, jointly and severally,
each in his own capacity, his true and lawful attorneys-in-fact, with full power
of substitution for him and in his name, place and stead, in any and all
capacities to sign any amendments to this registration statement, and to file
the same, with all exhibits thereto, and other documents in connection
therewith, with the Commission, hereby ratifying and confirming all that said
attorney-in-fact, or their substitute or substitutes, may lawfully do or cause
to be done by virtue hereof.
Pursuant to the requirements of the Securities Act, this registration
statement has been signed by the following persons in the capacities indicated
on September 19, 1998.
<TABLE>
<CAPTION>
Signature Title
- --------- -----
<S> <C>
/s/ Alex S. DePersis President, Chief Executive Officer and Director
- ------------------------ (Principal Executive Officer)
Alex S. DePersis
/s/ Edward R. Andrejko Senior Vice President and Chief Financial Officer
- ------------------------ (Principal Financial and Accounting Officer)
Edward R. Andrejko
/s/ Ferris G. Akel Director /s/ William H. Rincker Director
- ------------------------ ------------------------
Ferris G. Akel William H. Rincker
/s/ Robert W. Allen Director /s/ Thomas L. Thorn Director
- ------------------------ ------------------------
Robert W. Allen Thomas L. Thorn
/s/ William C. Craine Director /s/ Mark T. O'Neil, Jr. Director
- ------------------------ ------------------------
William C. Craine Mark T. O'Neil, Jr.
- ------------------------ Director
Thomas F. Kelley
- ------------------------ Director
Herbert R. Levine
/s/ David A. Niermeyer
- ------------------------
David A. Niermeyer Director
</TABLE>
<PAGE> 86
HOGAN & HARTSON L.L.P.
Columbia Square
555 Thirteenth Street, N.W.
Washington, D.C. 20004-1109
(202) 637-5600
September 25, 1998
VIA EDGAR
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Ladies and Gentlemen:
Re: REGISTRATION STATEMENT ON FORM S-4 OF
BSB BANCORP, INC. AND BSB CAPITAL TRUST I
On behalf of BSB Bancorp, Inc. (the "Company") and BSB Capital Trust I
(the "Trust"), I am transmitting herewith for filing pursuant to Rules 101 and
901(a) of Regulation S-T, and the Securities Act of 1933, as amended, the
above-captioned Registration Statement covering the following securities: (i)
the guarantee by the Company of 30,000 of the Trust's 8.125% Exchange Capital
Securities (the "Exchange Capital Securities"), liquidation amount of $1,000 per
Exchange Capital Security with respect to distributions and payments upon
liquidation, redemption and otherwise, (ii) the Exchange Capital Securities and
(iii) $30,000,000 principal amount of 8.125% Exchange Junior Subordinated
Deferrable Interest Debentures due July 31, 2028.
If you have any questions or comments concerning this filing, please
contact the undersigned (202/637-5495). For any comments or questions relating
to accounting matters, please contact Peter J. Marshall at
PricewaterhouseCoopers L.L.P. in Syracuse, New York (315/473-1357) or Edward R.
Andrejko at the Company (607/779-2537).
Sincerely yours,
/s/ Roger A. Seiken
cc: Larry G. Denniston
<PAGE> 87
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT NO. EXHIBITS PAGE NO.
- ----------- -------- --------
<C> <S>
3.1 Certificate of Trust of BSB Capital Trust I, dated as of June 3, 1997.
3.2 Trust Agreement of BSB Capital Trust I, dated as of July 16, 1998.
3.3 Amended and Restated Trust Agreement, among BSB Bancorp, Inc., Bankers
Trust Company and Bankers Trust Company (Delaware), dated as of July 24,
1998.
4.1 Junior Subordinated Indenture, between BSB Bancorp, Inc. and Bankers
Trust Company, dated as of July 24, 1998.
4.2 Form of Certificate of Exchange Junior Subordinated Debentures. *
4.3 Certificate of Trust of BSB Capital Trust I, dated as of June 3, 1997
(filed as Exhibit 3.1 hereto).
4.4 Trust Agreement of BSB Capital Trust I, dated as of July 16, 1998
(filed as Exhibit 3.2 hereto).
4.5 Amended and Restated Trust Agreement, among BSB Bancorp, Inc., Bankers
Trust Company and Bankers Trust Company (Delaware), dated as of July 24,
1998 (filed as Exhibit 3.3 hereto).
4.6 Form of Exchange Capital Security Certificate. *
4.7 Guarantee Agreement, dated as of July 24, 1998, between BSB Bancorp, Inc.
and Bankers Trust Company.
4.8 Registration Rights Agreement, dated July 24, 1998, among BSB Bancorp,
Inc., BSB Capital Trust I and Keefe, Bruyette & Woods, Inc.
4.9 Form of Exchange Guarantee Agreement by BSB Bancorp, Inc. for the benefit
of the holders of Exchange Capital Securities.
5.1 Opinion of Hogan & Hartson L.L.P. as to the validity of the securities
registered hereunder (including the consent of that firm). *
5.2 Form of opinion of Morris, James, Hitchens & Williams as to the validity
of the Exchange Capital Securities (including the consent of that firm). *
8 Form of opinion of Hogan & Hartson L.L.P. as to certain federal income
tax matters (including the consent of that firm). *
10 Purchase Agreeement, dated July 21, 1998, among BSB Bancorp, Inc., the
Trust and Keefe, Bruyette & Woods, Inc.
12 Computation of ratio of earnings to combined fixed charges. *
21 Subsidiaries of BSB Capital Trust I.
23.1 Consent of Hogan & Hartson L.L.P. (included as part of Exhibit 5.1 and
Exhibit 8). *
23.2 Consent of Morris, James, Hitchens & Williams (included as part of
Exhibit 5.2). *
23.3 Consent of PricewaterhouseCoopers LLP.
25 Form T-1 Statement of Eligibility of Bankers Trust Company to act as
trustee.
99.1 Form of Letter of Transmittal.
99.2 Form of Notice of Guaranteed Delivery.
99.3 Form of Exchange Agent Agreement.
99.4 Form of Letter to Brokers, Dealers, Commercial Banks, Trust Companies and
Other Nominees.
99.5 Form of Client Letter.
- ----------------
* To be filed by amendment.
</TABLE>
<PAGE> 1
EXHIBIT 3.1
CERTIFICATE OF TRUST
OF
BSB CAPITAL TRUST I
The undersigned trustees of BSB Capital Trust I, desiring to form a
business trust pursuant to the Delaware Business Trust Act, 12 Del. C. Section
3801, et seq., hereby certify as follows:
(a) The name of the business trust being formed hereby (the
"Trust") is BSB Capital Trust I.
(b) The name and business address of the trustee of the Trust
which has its principal place of business in the State of
Delaware is as follows:
Bankers Trust (Delaware)
E. A. Delle Donne Corporate Center
Montgomery Building
1011 Centre Road, Suite 200
Wilmington, Delaware 19805-1266
IN WITNESS WHEREOF, the undersigned, being the sole initial trustees
of the Trust, have duly executed this Certificate of Trust.
BANKERS TRUST (Delaware), not in its individual
capacity but solely as Trustee
By: /s/ M. Lisa Wilkins
-----------------------------------------------
Name: M. Lisa Wilkins
Title: Assistant Secretary
BANKERS TRUST COMPANY, not in its individual
capacity but solely as Trustee
By: /s/ Marc Parilla
-----------------------------------------------
Name: Marc Parilla
Title: Assistant Treasurer
<PAGE> 1
EXHIBIT 3.2
TRUST AGREEMENT
OF
BSB CAPITAL TRUST I
THIS TRUST AGREEMENT is made as of July 16, 1998 (this "Agreement"),
by and among BSB Bancorp, Inc., a Delaware corporation, as depositor (the
"Depositor"), Bankers Trust (Delaware), a Delaware banking corporation, as
Delaware trustee (the "Delaware Trustee") and Bankers Trust Company, a New York
banking corporation, as property trustee (the "Property Trustee", and together
with the Delaware Trustee, the "Trustees"). The Depositor and the Trustees
hereby agree as follows:
1. The trust created hereby shall be known as "BSB Capital Trust
I" (the "Trust"), in which name the Trustees or the Depositor, to the extent
provided herein, may conduct the business of the Trust, make and execute
contracts, and sue and be sued.
2. The Depositor hereby assigns, transfers, conveys and sets over
to the Trustees the sum of $10. The Trustees hereby acknowledge receipt of such
amount in trust from the Depositor, which amount shall constitute the initial
trust estate. The Trustees hereby declare that they will hold the trust estate
in trust for the Depositor. It is the intention of the parties hereto that the
Trust created hereby constitute a business trust under Chapter 38 of Title 12 of
the Delaware Code, 12 Del. C. Section 3801, et seq. (the "Business Trust Act"),
and that this document constitute the governing instrument of the Trust. The
Trustees are hereby authorized and directed to execute and file a certificate of
trust with the Delaware Secretary of State in such form as the Trustees may
approve.
3. The Depositor and the Trustees will enter into an amended and
restated Trust Agreement satisfactory to each such party to provide for the
contemplated operation of the Trust created hereby and the issuance of the
Capital Securities and Common Securities referred to therein. Prior to the
execution and delivery of such amended and restated Trust Agreement, the
Property Trustee and the Depositor shall take any action as may be necessary to
obtain prior to such execution and delivery any licenses, consents or approvals
required by applicable law or otherwise, and may take all actions deemed proper
as are necessary to effect the transactions contemplated herein.
4. The Depositor hereby agrees to (i) reimburse the Trustees for
all reasonable expenses (including reasonable fees and expenses of counsel), and
(ii) indemnify, defend and hold harmless the Trustees and any of the officers,
directors, employees and agents of the Trustees (collectively, including each
Trustee in its individual capacity, the "Indemnified Persons") from and against
any and all losses, damages, liabilities, claims, actions, suits, costs,
expenses, disbursements (including the reasonable fees and expenses of counsel),
taxes and penalties of any kind and nature whatsoever (collectively,
"Expenses"), to the extent that such Expenses arise out of or are imposed upon
or asserted at any time against such Indemnified Persons with respect to the
performance of this Agreement, the creation, operation,
<PAGE> 2
administration or termination of the Trust, or the transactions contemplated
hereby; provided, however, that the Depositor shall not be required to indemnify
an Indemnified Person for Expenses to the extent such Expenses result from the
willful misconduct, bad faith or negligence of such Indemnified Person.
5. The Depositor, as depositor of the Trust, is hereby
authorized, in its discretion, (i) to prepare and distribute one or more
offering memoranda in preliminary and final form, including any necessary or
desirable amendments, relating to the offering and sale of Capital Securities of
the Trust in a transaction exempt from the registration requirements of the
Securities Act of 1933, as amended (the "1933 Act"), and such forms or filings
as may be required by the 1933 Act, the Securities Exchange Act of 1934, as
amended, or the Trust Indenture Act of 1939, as amended, in each case relating
to the Capital Securities of the Trust; (ii) to prepare, execute and file on
behalf of the Trust, such applications, reports, surety bonds, irrevocable
consents, appointments of attorney for service of process and other papers and
documents that shall be necessary or desirable to register or establish the
exemption from registration of the Capital Securities of the Trust under the
securities or "Blue Sky" laws of such jurisdictions as the Depositor, on behalf
of the Trust, may deem necessary or desirable; (iii) to prepare, execute and
file an application, and all other applications, statements, certificates,
agreements and other instruments that shall be necessary or desirable, to have
the Capital Securities listed on the Private Offerings, Resales and Trading
through Automated Linkages ("PORTAL") Market and, if and at such time as
determined by the Depositor, with the New York Stock Exchange or any other
national stock exchange or the NASDAQ National Market for listing or quotation
of the Capital Securities of the Trust; (iv) to prepare, execute and deliver
letters or documents to, or instruments for filing with, a depository relating
to the Capital Securities of the Trust; (v) to negotiate, execute, deliver and
perform on behalf of the Trust one or more purchase agreements, registration
rights agreements, escrow agreements, subscription agreements and other similar
or related agreements providing for or relating to the sale and issuance of the
Capital Securities of the Trust and/or any other interests in the Trust; and
(vi) to prepare, execute and deliver on behalf of the Trust any and all
documents, papers and instruments as may be desirable in connection with any of
the foregoing. Any power of the Trustees hereunder to execute any document or
take other action on behalf of the Trust may be exercised by one Trustee acting
alone or by both Trustees acting together.
In the event that any filing referred to in this Section 5 is
required by the rules and regulations of Securities and Exchange Commission (the
"Commission"), PORTAL or state securities or Blue Sky laws to be executed on
behalf of the Trust by one or more Trustees, each Trustee, in its capacity as a
trustee of the Trust, so required to execute such filings is hereby authorized
and directed to join in any such filing and to execute on behalf of the Trust
any and all of the foregoing, it being understood that a Trustee, in its
capacity as a trustee of the Trust, shall not be required to join in any such
filing or execute on behalf of the Trust any such document unless required to do
so by the rules and regulations of the Commission, PORTAL or applicable state
securities or Blue Sky laws.
2
<PAGE> 3
6. A Trustee shall take such action or refrain from taking such
action under this Agreement as it may be directed in writing by the Depositor
from time to time; provided, however, that a Trustee shall not be required to
take or refrain from taking any such action if it shall have determined, or
shall have been advised by counsel, that such performance is likely to involve
the Trustee in personal liability or is contrary to the terms of this Agreement
or of any document contemplated hereby to which the Trust or the Trustee is a
party or is otherwise contrary to law. If at any time a Trustee determines that
it requires or desires guidance regarding the provision of this Agreement or any
other document, then the Trustee may deliver a notice to the Depositor
requesting written instructions as to the course of action desired by the
Depositor, and such instructions shall constitute full and complete
authorization and protection for actions taken by the Trustee in reliance
thereon.
7. This Trust Agreement may be executed in one or more
counterparts.
8. The number of trustees of the Trust initially shall be two (2)
and thereafter the number of trustees of the Trust shall be such number as shall
be fixed from time to time by a written instrument signed by the Depositor which
may increase or decrease the number of trustees of the Trust; provided, however,
that to the extent required by the Business Trust Act, one trustee of the Trust
shall either be a natural person who is a resident of the State of Delaware or,
if not a natural person, an entity which has its principal place of business in
the State of Delaware and otherwise meets the requirements of applicable law.
Subject to the foregoing, the Depositor is entitled to appoint or remove without
cause any trustee of the Trust at any time. Any trustee of the Trust may resign
upon thirty days' prior written notice to the Depositor.
9. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of Delaware (without regard to conflict
of laws principles).
[SIGNATURE PAGE FOLLOWS]
3
<PAGE> 4
IN WITNESS WHEREOF, the parties hereto have caused this Trust
Agreement to be duly executed as of the day and year first above written.
BSB BANCORP, INC.,
as Depositor
By:
---------------------------------------
Name:
Title:
BANKERS TRUST (Delaware),
as Delaware Trustee of the Trust
By:
---------------------------------------
Name:
Title:
BANKERS TRUST COMPANY,
as Property Trustee of the Trust
By:
---------------------------------------
Name:
Title:
4
<PAGE> 1
Execution Copy
EXHIBIT 3.3
AMENDED AND RESTATED
TRUST AGREEMENT
among
BSB BANCORP, INC.,
as Depositor,
BANKERS TRUST COMPANY
as Property Trustee,
and
BANKERS TRUST (DELAWARE),
as Delaware Trustee
Dated as of July 24, 1998
--------------------
BSB CAPITAL TRUST I
--------------------
<PAGE> 2
BSB CAPITAL TRUST I
Certain Sections of this Trust Agreement relating to
Sections 310 through 318 of the Trust Indenture Act of 1939:
<TABLE>
<CAPTION>
Trust Indenture Act Section Trust Agreement 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
</TABLE>
<PAGE> 3
<TABLE>
<S> <C>
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> 4
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
<S> <C> <C>
ARTICLE I. DEFINED TERMS
SECTION 1.1. Definitions.................................................................... 1
ARTICLE II. CONTINUATION OF THE ISSUER TRUST
SECTION 2.1. Name ........................................................................ 14
SECTION 2.2. Office of the Delaware Trustee; Principal
Place of Business.............................................................. 15
SECTION 2.3. Initial Contribution of Trust Property;
Organizational Expenses........................................................ 15
SECTION 2.4. Issuance of the Capital Securities............................................. 15
SECTION 2.5. Issuance of the Common Securities;
Subscription and Purchase of Junior
Subordinated Debentures........................................................ 16
SECTION 2.6. Declaration of Trust........................................................... 16
SECTION 2.7. Authorization to Enter into Certain
Transactions................................................................... 17
SECTION 2.8. Assets of Trust................................................................ 20
SECTION 2.9. Title to Trust Property........................................................ 20
ARTICLE III. PAYMENT ACCOUNT
SECTION 3.1. Payment Account................................................................ 20
ARTICLE IV. DISTRIBUTIONS; REDEMPTION
SECTION 4.1. Distributions.................................................................. 21
SECTION 4.2. Redemption..................................................................... 22
SECTION 4.3. Subordination of Common Securities............................................. 24
SECTION 4.4. Payment Procedures............................................................. 25
SECTION 4.5. Tax Returns and Reports........................................................ 25
SECTION 4.6. Payment of Taxes, Duties, Etc.
of the Issuer Trust............................................................ 25
SECTION 4.7. Payments under Indenture or Pursuant to
Direct Actions................................................................. 26
SECTION 4.8. Liability of the Holder of Common Securities................................... 26
ARTICLE V. TRUST SECURITIES CERTIFICATES
SECTION 5.1. Initial Ownership.............................................................. 26
SECTION 5.2. The Trust Securities Certificates.............................................. 26
SECTION 5.3. Execution and Delivery of Trust
</TABLE>
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<PAGE> 5
<TABLE>
<S> <C> <C>
Securities Certificates........................................................ 27
SECTION 5.4. Global Capital Security........................................................ 27
SECTION 5.5. Registration of Transfer and Exchange
Generally; Certain Transfers and
Exchanges; Capital Securities Certificates; Securities Act Legends............. 28
SECTION 5.6. Mutilated, Destroyed, Lost or Stolen
Trust Securities Certificates.................................................. 31
SECTION 5.7. Persons Deemed Holders......................................................... 32
SECTION 5.8. Access to List of Holders'
Names and Addresses............................................................ 32
SECTION 5.9. Maintenance of Office or Agency................................................ 32
SECTION 5.10. Appointment of Paying Agent.................................................... 32
SECTION 5.11. Ownership of Common Securities
by Depositor................................................................... 33
SECTION 5.12. Notices to Clearing Agency..................................................... 33
SECTION 5.13. Rights of Holders.............................................................. 33
ARTICLE VI. ACTS OF HOLDERS; MEETINGS;
VOTING
SECTION 6.1. Limitations on Holder's Voting Rights.......................................... 35
SECTION 6.2. Notice of Meetings............................................................. 36
SECTION 6.3. Meetings of Holders............................................................ 37
SECTION 6.4. Voting Rights.................................................................. 37
SECTION 6.5. Proxies, etc................................................................... 37
SECTION 6.6. Holder Action by Written
Consent...................................................................... 37
SECTION 6.7. Record Date for Voting and Other
Purposes....................................................................... 38
SECTION 6.8. Acts of Holders................................................................ 38
SECTION 6.9. Inspection of Records.......................................................... 39
ARTICLE VII. REPRESENTATIONS AND WARRANTIES
SECTION 7.1. Representations and Warranties
of the Property Trustee and
the Delaware Trustee........................................................... 39
SECTION 7.2. Representations and Warranties of
Depositor...................................................................... 40
ARTICLE VIII. THE ISSUER TRUSTEES; THE ADMINISTRATORS
SECTION 8.1. Certain Duties and Responsibilities............................................ 41
SECTION 8.2. Certain Notices................................................................ 43
SECTION 8.3. Certain Rights of Property Trustee............................................. 43
</TABLE>
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<TABLE>
<S> <C> <C>
SECTION 8.4. Not Responsible for Recitals
or Issuance of Securities...................................................... 45
SECTION 8.5. May Hold Securities............................................................ 45
SECTION 8.6. Compensation; Indemnity; Fees.................................................. 45
SECTION 8.7. Corporate Property Trustee Required;
Eligibility of Trustees and Administrators..................................... 46
SECTION 8.8. Conflicting Interests.......................................................... 47
SECTION 8.9. Co-trustees and Separate Trustee............................................... 47
SECTION 8.10. Resignation and Removal; Appointment of
Successor...................................................................... 49
SECTION 8.11. Acceptance of Appointment by
Successor...................................................................... 50
SECTION 8.12. Merger, Conversion, Consolidation or
Succession to Business......................................................... 50
SECTION 8.13. Preferential Collection of Claims
Against Depositor or Issuer Trust.............................................. 50
SECTION 8.14. Trustee May File Proofs of Claims.............................................. 51
SECTION 8.15. Reports by Property Trustee.................................................... 51
SECTION 8.16. Reports to the Property Trustee................................................ 52
SECTION 8.17. Evidence of Compliance with Conditions
Precedent...................................................................... 52
SECTION 8.18. Number of Issuer Trustees...................................................... 52
SECTION 8.19. Delegation of Power............................................................ 53
SECTION 8.20. Appointment of Administrators.................................................. 53
ARTICLE IX. DISSOLUTION, LIQUIDATION AND MERGER
SECTION 9.1. Termination Upon Expiration Date............................................... 54
SECTION 9.2. Early Termination.............................................................. 54
SECTION 9.3. Termination.................................................................... 54
SECTION 9.4. Liquidation.................................................................... 55
SECTION 9.5. Mergers, Consolidations, Amalgamations
or Replacements of the Issuer Trust............................................ 56
ARTICLE X. MISCELLANEOUS PROVISIONS
SECTION 10.1. Limitation of Rights of Holders................................................ 57
SECTION 10.2. Amendment...................................................................... 57
SECTION 10.3. Separability................................................................... 59
SECTION 10.4. Governing Law.................................................................. 59
SECTION 10.5. Payments Due on Non-Business Day............................................... 59
SECTION 10.6. Successors..................................................................... 59
SECTION 10.7. Headings....................................................................... 59
SECTION 10.8. Reports, Notices and Demands................................................... 59
</TABLE>
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<PAGE> 7
<TABLE>
<S> <C> <C>
SECTION 10.9. Agreement Not to Petition...................................................... 60
SECTION 10.10. Trust Indenture Act; Conflict with
Trust Indenture Act............................................................ 61
SECTION 10.11. Acceptance of Terms of Trust Agreement,
Guarantee and Indenture........................................................ 62
Exhibit A Certificate of Trust
Exhibit B Form of Certificate Depositary Agreement
Exhibit C Form of Common Securities Certificate
Exhibit D Form of Capital Securities Certificate
Exhibit E Form of Restricted Securities Certificate
</TABLE>
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<PAGE> 8
AGREEMENT
THIS AMENDED AND RESTATED TRUST AGREEMENT, dated as of July 24, 1998, is
by and among (i) BSB Bancorp, Inc., a Delaware corporation (including any
successors or assigns, the "Depositor"), (ii) Bankers Trust Company, a New York
banking corporation, as property trustee, (in such capacity, the "Property
Trustee" and, in its separate corporate capacity and not in its capacity as
Property Trustee, the "Bank"), and (iii) Bankers Trust (Delaware), a Delaware
banking corporation, as Delaware trustee (the "Delaware Trustee") (the Property
Trustee and the Delaware Trustee are referred to collectively herein as the
"Issuer Trustees") and (iv) the several Holders, as hereinafter defined.
WITNESSETH
WHEREAS, the Depositor and the Delaware Trustee have heretofore duly
declared and established a business trust pursuant to the Delaware Business
Trust Act by entering into a certain Trust Agreement, dated as of July 16, 1998
(the "Original Trust Agreement"), and by the execution and filing by the
Delaware Trustee with the Secretary of State of the State of Delaware of the
Certificate of Trust, filed on July 16, 1998 (the "Certificate of Trust"),
attached as Exhibit A; and
WHEREAS, the Depositor and the Delaware Trustee desire to amend and
restate the Original Trust Agreement in its entirety as set forth herein to
provide for, among other things, (i) the issuance of the Common Securities by
the Issuer Trust to the Depositor, (ii) the issuance and sale of the Capital
Securities by the Issuer Trust pursuant to the Purchase Agreement dated as of
July 21, 1998 among the Issuer Trust, the Depositor and Keefe, Bruyette & Woods,
Inc. (the "Purchase Agreement"), (iii) the acquisition by the Issuer Trust from
the Depositor of all of the right, title and interest in the Junior Subordinated
Debentures, (iv) the appointment of the Administrators and (v) the addition of
the Property Trustee as a party to this Trust Agreement.
NOW THEREFORE, in consideration of the agreements and obligations set
forth herein and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, each party, for the benefit of the
other parties and for the benefit of the Holders, hereby amends and restates the
Original Trust Agreement in its entirety and agrees, intending to be legally
bound, as follows:
ARTICLE I
DEFINED TERMS
SECTION 1.1. Definitions.
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<PAGE> 9
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;
(b) all other terms used herein that are defined in the Trust Indenture
Act, either directly or by reference therein, have the meanings assigned to them
therein;
(c) the words "include," "includes" and "including" shall be deemed to be
followed by the phrase "without limitation";
(d) all accounting terms used but not defined herein have the meanings
assigned to them in accordance with United States generally accepted accounting
principles as in effect at the time of computation;
(e) unless the context otherwise requires, any reference to an "Article"
or a "Section" refers to an Article or a Section, as the case may be, of this
Trust Agreement;
(f) the words "herein", "hereof" and "hereunder" and other words of
similar import refer to this Trust Agreement as a whole and not to any
particular Article, Section or other subdivision; and
(g) all references to the date the Capital Securities were originally
issued shall refer to the date the 8.125% Capital Securities were originally
issued.
"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 stock of the
Depositor, if any, 25% of the Depositor'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.
"Adjusted Treasury Rate" means, with respect to any Redemption Date, the
Treasury Rate plus (i) 8.125% if such Redemption Date occurs on or before July
31, 1999 or (ii) 8.125% if such Redemption Date occurs after July 31, 1999.
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<PAGE> 10
"Administrators" means each Person appointed in accordance with Section
8.20 solely in such Person's capacity as Administrator of the Issuer Trust
heretofore formed and continued hereunder and not in such Person's individual
capacity, or any successor Administrator appointed as herein provided; with the
initial Administrators being Alex S. DePersis and Larry Denniston.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"Applicable Procedures" means, with respect to any transfer or transaction
involving a Global Capital Security or beneficial interest therein, the rules
and procedures of the Depositary for such Capital Security, in each case to the
extent applicable to such transaction and as in effect from time to time.
"Bank" has the meaning specified in the preamble to this Trust Agreement.
"Bankruptcy Event" means, with respect to any Person:
(a) the entry of a decree or order by a court having jurisdiction in the
premises judging such Person a bankrupt or insolvent, or approving as properly
filed a petition seeking reorganization, arrangement, adjudication or
composition of or in respect of such Person under any applicable federal or
state bankruptcy, insolvency, reorganization or other similar law, or appointing
a receiver, liquidator, assignee, trustee, sequestrator (or other similar
official) of such Person or of any substantial part of its property or ordering
the winding-up or liquidation of its affairs, and the continuance of any such
decree or order unstayed and in effect for a period of 60 consecutive days; or
(b) the institution by such Person of proceedings to be adjudicated a
bankrupt or insolvent, or the consent by it to the institution of bankruptcy or
insolvency proceedings against it, or the filing by it of a petition or answer
or consent seeking reorganization or relief under any applicable federal or
State bankruptcy, insolvency, reorganization or other similar law, or the
consent by it to the filing of any such petition or to the appointment of a
receiver, liquidator, assignee, trustee, sequestrator (or similar official) of
such Person or of any substantial part of its property or the making by it of an
assignment for the benefit of creditors, or the admission by it in writing of
its inability to pay its debts generally as they become due and its willingness
to be adjudicated a bankrupt, or the taking of corporate action by such Person
in furtherance of any such action.
"Bankruptcy Laws" has the meaning specified in Section 10.9.
"Board of Directors" means the board of directors of the Depositor or the
Executive Committee of the board of directors of the Depositor (or any other
committee of the board of directors of the Depositor performing similar
functions) or, for the purposes of this Trust
- 3 -
<PAGE> 11
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 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 Securities Certificate" means a certificate evidencing ownership
of Capital Securities, substantially in the form attached as Exhibit D.
"Capital Security" means a preferred undivided beneficial interest in the
assets of the Issuer Trust, having a Liquidation Amount of $1,000 and having the
rights provided therefor in this Trust Agreement, including the right to receive
Distributions and a Liquidation Distribution as provided herein.
"Capital Treatment Event" means, in respect of the Issuer Trust, the
reasonable determination by the Depositor that, as a result of the occurrence of
any amendment to, or change (including any announced prospective change) in, the
laws (or any rules or regulations thereunder) of the United States or any
political subdivision thereof or therein, or as a result of any official or
administrative pronouncement or action or judicial decision interpreting or
applying such laws or regulations, which amendment or change is effective or
such pronouncement, action or decision is announced on or after the date of the
issuance of the Capital Securities of the Issuer Trust, there is more than an
insubstantial risk that the Depositor will not be entitled to treat an amount
equal to the Liquidation Amount of such Capital Securities as "Tier 1 Capital"
(or the then equivalent thereof), except as otherwise restricted under the 25%
Capital Limitation, for purposes of the risk-based capital adequacy guidelines
of the Federal Reserve, 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.
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<PAGE> 12
"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" has the meaning set forth in the Purchase Agreement, 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
sucessor 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 Securities Purchase Agreement" means the agreement dated as of
July 24, 1998 between the Issuer Trust and the Depositor for the purchase and
sale of Common Securities.
"Common Security" means an undivided beneficial interest in the assets of
the Issuer Trust, having a Liquidation Amount of $1,000 and having the rights
provided therefor in this Trust Agreement, including the right to receive
Distributions and a Liquidation Distribution as provided herein.
"Comparable Treasury Issue" means with respect to any Redemption Date the
United States Treasury security selected by the Quotation Agent as having a
maturity comparable to the Remaining Life that would be utilized, at the time of
selection and in accordance with customary financial practice, in pricing new
issues of corporate debt securities of comparable maturity to the Remaining
Life. If no United States Treasury security has a maturity which is within a
period from three months before to three months after July 31, 2008, the two
most closely corresponding United States Treasury securities shall be used as
the Comparable Treasury Issue, and the Treasury Rate shall be interpolated or
extrapolated on a straight-line basis, rounding to the nearest month using such
securities.
"Comparable Treasury Price" means (A) the average of five Reference
Treasury Dealer Quotations for such Redemption Date, after excluding the highest
and lowest of such
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<PAGE> 13
Reference Treasury Dealer Quotations, or (B) if the Debenture Trustee obtains
fewer than five such Reference Treasury Dealer Quotations, the average of all
such Reference Treasury Dealer Quotations.
"Corporate Trust Office" means (i) with respect to the Property Trustee,
the principal office of the Property Trustee located in the City of New York,
New York, which at the time of the execution of this Trust Agreement is located
at Four Albany Street, New York, New York 10006, Attention: Corporate Trust and
Agency Group -- Corporate Market Services, and (ii) with respect to the Delaware
Trustee, the principal office of the Delaware Trustee located in the State of
Delaware, which at the time of the execution of this Trust Agreement is located
at 1001 Jefferson Street, Suite 550, Wilmington, Delaware 19801, Attention: Lisa
Wilkins.
"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 continued hereunder and not in its
individual capacity, or its successor in interest in such capacity, or any
successor trustee appointed as herein provided.
"Depositary" means The Depository Trust Company or any successor thereto.
"Depositor" has the meaning specified in the preamble to this Trust
Agreement.
"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
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<PAGE> 14
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;
(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 Capital Securities,
a written notice specifying such default or breach and requiring it to be
remedied and stating that such notice is a "Notice of Default" hereunder; or
(e) the occurrence of 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 after the Depositor
receives written notice thereof.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as amended,
and any successor statute thereto.
"Expiration Date" has the meaning specified in Section 9.1.
"Extension Period" has the meaning specified in Section 4.1.
"Federal Reserve" means the Board of Governors of the Federal Reserve
System.
"Global Capital Securities Certificate" means a Capital Securities
Certificate evidencing ownership of Global Capital Securities.
"Global Capital Security" means a Capital Security, the ownership and
transfers of which shall be made through book entries by a Clearing Agency as
described in Section 5.4.
"Guarantee 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 Capital Securities, as amended from time to
time.
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<PAGE> 15
"Holder" means a Person in whose name a Trust Security or Trust Securities
is registered in the Securities Register; any such Person shall 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 July 24,
1998, between the Depositor and the Debenture Trustee (as amended or
supplemented from time to time) relating to the issuance of the Junior
Subordinated Debentures.
"Initial Purchaser" has the meaning specified in the Purchase Agreement.
"Institutional Accredited Investor" means an institutional accredited
investor within the meaning of Rule 501(a)(1), (2), (3) or (7) of Regulation D
under the Securities Act.
"Investment Company Act" means the Investment Company Act of 1940, as
amended, 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 occurrence of a change in law or regulation or a
written change (including any announced prospective change) in interpretation or
application of law or regulation by any legislative body, court, governmental
agency or regulatory authority, there is more than an insubstantial risk that
the Issuer Trust is or will be considered an "investment company" that is
required to be registered under the Investment Company Act, which change or
prospective change becomes effective or would become effective, as the case may
be, on or after the date of the issuance of the Capital Securities.
"Issuer Trust" means BSB Capital Trust I.
"Issuer Trustees" means, collectively, the Property Trustee and the
Delaware Trustee.
"Junior Subordinated Debentures" means the aggregate principal amount of
the Depositor's 8.125% Junior Subordinated Deferrable Interest Debentures, due
July 31, 2028.
"Junior Subordinated Debenture Purchase Agreement" means the Junior
Subordinated Debenture Purchase Agreement dated as of July 24, 1998 between the
Depositor and the Issuer Trust for the purchase and sale of Junior Subordinated
Debentures.
"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
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<PAGE> 16
Subordinated Debentures to be contemporaneously redeemed in accordance with the
Indenture, allocated to the Common Securities and to the Capital Securities
based upon the aggregate Liquidation Amounts of such classes and (b) with
respect to a distribution of Junior Subordinated Debentures to Holders of Trust
Securities in connection with a dissolution or liquidation of the Issuer Trust,
Junior Subordinated Debentures having a principal amount equal to the
Liquidation Amount of the Trust Securities of the Holder to whom such Junior
Subordinated Debentures are distributed.
"Liquidation Amount" means the stated amount of $1,000 per Trust Security.
"Liquidation Date" means the date on which Junior Subordinated Debentures
or 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 Capital Securities" or "Majority in
Liquidation Amount of the Common Securities" means, except as provided by the
Trust Indenture Act, Capital Securities or Common Securities, as the case may
be, representing more than 50% of the aggregate Liquidation Amount of all then
Outstanding Capital Securities or Outstanding Common Securities, as the case may
be.
"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, Assistant Treasurer, the Secretary or an Assistant Secretary, of the
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.
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<PAGE> 17
"Original Trust Agreement" has the meaning specified in the recitals to
this Trust Agreement.
"Other Capital Securities" means the Capital Securities sold by the
Initial Purchaser in the initial offering contemplated by the Purchase Agreement
to Institutional Accredited Investors in reliance on an exemption from the
registration requirement of the Securities Act other than Rule 144A.
"Outstanding," with respect to Trust Securities, means, as of the date of
determination, all Trust Securities theretofore executed and delivered under
this Trust Agreement, except:
(a) Trust Securities theretofore canceled by the Property Trustee or
delivered to the Property Trustee for cancellation;
(b) Trust Securities for whose payment or redemption money in the
necessary amount has been theretofore deposited with the Property Trustee or any
Paying Agent for the Holders of such Capital Securities, provided that if such
Trust Securities are to be redeemed, notice of such redemption has been duly
given pursuant to this Trust Agreement; and
(c) Trust Securities which have been paid, or in exchange for, or in lieu
of which, other Trust Securities have been executed and delivered pursuant to
Sections 5.4, 5.5, 5.6 and 5.13;
provided, however, that in determining whether the Holders of the requisite
Liquidation Amount of the Outstanding Capital Securities have given any request,
demand, authorization, direction, notice, consent or waiver hereunder, Capital
Securities owned by the Depositor, any Issuer Trustee, any Administrator, or any
Affiliate of the Depositor or any Issuer Trustee shall be disregarded and deemed
not to be Outstanding, except that (a) in determining whether any Issuer Trustee
shall be protected in relying upon any such request, demand, authorization,
direction, notice, consent or waiver, only Capital Securities that any Issuer
Trustee or such Administrator, as the case may be, knows to be so owned shall be
so disregarded and (b) the foregoing shall not apply at any time when all of the
Outstanding Capital Securities are owned by the Depositor, one or more of the
Issuer Trustees, one or more of the Administrators and/or any such Affiliate.
Capital Securities so owned which have been pledged in good faith may be
regarded as Outstanding if the pledgee establishes to the satisfaction of the
Administrators the pledgee's right so to act with respect to such Capital
Securities and that the pledgee is not the Depositor or any Affiliate of the
Depositor.
"Owner" means each Person who is the beneficial owner of Global Capital
Securities as reflected in the records of the Clearing Agency or, if a Clearing
Agency Participant is not the Owner, then as reflected in the records of a
Person maintaining an account with such Clearing Agency (directly or
indirectly), in accordance with the rules of such Clearing Agency.
"Paying Agent" means any paying agent or co-paying agent appointed
pursuant to Section 5.10 and shall initially be the Property Trustee.
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<PAGE> 18
"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.
"Property Trustee" means the Person identified as the "Property Trustee"
in the preamble to this Trust Agreement solely in its capacity as Property
Trustee of the Issuer Trust formed and continued hereunder and not in its
individual capacity, or its successor in interest in such capacity, or any
successor property trustee appointed as herein provided.
"Purchase Agreement" has the meaning set forth in the recitals hereto, as
the same may be amended from time to time.
"Quotation Agent" means Keefe, Bruyette & Woods, Inc. and its successors;
provided, however, that if the foregoing shall cease to be a primary U.S.
Government securities dealer in New York City (a "Primary Treasury Dealer"), the
Depositor shall substitute therefor another Primary Treasury Dealer.
"Redemption Date" means, with respect to any Trust Security to be
redeemed, the date fixed for such redemption by or pursuant to this Trust
Agreement; provided that each 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:
(a) in the case of a redemption, other than as provided in paragraph (b)
below, the following prices expressed in percentages of the Liquidation Amount,
together with accumulated Distributions to but excluding the date fixed for
redemption, if redeemed during the 12-month period beginning July 31:
<TABLE>
<CAPTION>
Year Redemption Price
---- ----------------
<S> <C>
2008........................................... 104.063%
2009........................................... 103.657%
2010........................................... 103.250%
2011........................................... 102.844%
2012........................................... 102.438%
</TABLE>
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<PAGE> 19
<TABLE>
<S> <C>
2013........................................... 102.032%
2014........................................... 101.626%
2015........................................... 101.219%
2016........................................... 100.813%
2017........................................... 100.407%
</TABLE>
and 100% on or after July 31, 2018.
(b) in the case of a redemption prior to July 31, 2008 following a Tax
Event, Investment Company Event or Capital Treatment Event, an amount equal to
for each Capital Security the Make-Whole Amount for a corresponding $1,000
principal amount of Junior Subordinated Debentures together with accumulated
Distributions to but excluding the date fixed for redemption. The "Make-Whole
Amount" will be equal to the greater of (i) 100% of the principal amount of such
Junior Subordinated Debentures, and (ii) as determined by a Quotation Agent, the
sum of the present values of the principal amount and premium payable as part of
the Redemption Price with respect to an optional redemption of such Junior
Subordinated Debentures on July 31, 2008, together with the present values of
scheduled payments of interest (not including the portion of any such payments
of interest accrued as of the Redemption Date) from the Redemption Date to July
31, 2008 (the "Remaining Life"), in each case discounted to the Redemption Date
on a semi-annual basis (assuming a 360-day year consisting of 30-day months) at
the Adjusted Treasury Rate. The Redemption Price in the case of a redemption on
or after July 31, 2008 following a Tax Event, Investment Company Event or
Capital Treatment Event shall equal the Redemption Price then applicable to a
redemption under paragraph (a) above.
"Reference Treasury Dealer" means (i) the Quotation Agent and (ii) any
other Primary Treasury Dealer selected by the Debenture Trustee after
consultation with the Depositor.
"Reference Treasury Dealer Quotations" means, with respect to each
Reference Treasury Dealer and any Redemption Date, the average, as determined by
the Debenture Trustee, of the bid and asked prices for the Comparable Treasury
Issue (expressed in each case as a percentage of its principal amount) quoted in
writing to the Debenture Trustee by such Reference Treasury Dealer at 5:00 p.m.,
New York City time, on the third Business Day preceding such Redemption Date.
"Registration Rights Agreement" means the Registration Rights Agreement
dated as of July 24, 1998 between the Issuer Trust, the Depositor and the
Initial Purchaser.
"Regulation D" means Regulation D under the Securities Act (or any
successor provision), as it may be amended from time to time.
"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
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<PAGE> 20
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.
"Restricted Capital Securities" means all Capital Securities, the Capital
Securities Certificate for which is required pursuant to Section 5.5(c) to bear
a Restricted Capital Securities Legend. Such term includes any Global Capital
Securities Certificate.
"Restricted Capital Securities Legend" means a legend substantially in the
form of the legend required in the form of a Capital Securities Certificate set
forth in Exhibit D to be placed upon a Restricted Capital Security.
"Restricted Securities Certificate" means a certificate substantially in
the form set forth in Exhibit E.
"Rule 144A" means Rule 144A under the Securities Act (or any successor
provision), as it may be amended from time to time.
"Rule 144A Capital Securities" means the Capital Securities purchased by
the Initial Purchaser from the Issuer Trust pursuant to the Purchase Agreement,
other than the Other Capital Securities.
"Securities Act" means the Securities Act of 1933, as amended, and any
successor statute thereto, in each case as amended from time to time.
"Senior Indebtedness" has the meaning specified in the Indenture.
"Securities Register" and "Securities Registrar" have the respective
meanings specified in Section 5.5.
"Special Event" means any Tax Event, Capital Treatment Event or Investment
Company Event.
"Successor Capital Securities Certificate" of any particular Capital
Securities Certificate means every Capital Securities Certificate issued after,
and evidencing all or a portion of the same beneficial interest in the Issuer
Trust as that evidenced by, such particular Capital Securities Certificate; and,
for the purposes of this definition, any Capital Securities Certificate executed
and delivered under Section 5.6 in exchange for or in lieu of a mutilated,
destroyed, lost or stolen Capital Securities Certificate shall be deemed to
evidence the same beneficial interest in the Issuer Trust as the mutilated,
destroyed, lost or stolen Capital Securities Certificate.
"Successor Capital Security" has the meaning specified in Section 9.5.
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<PAGE> 21
"Tax Event" means the receipt by the Issuer Trust of an Opinion of Counsel
experienced in such matters to the effect that, as a result of any amendment to,
or change (including any announced prospective change) in, the laws (or any
regulations thereunder) of the United States or any political subdivision or
taxing authority thereof or therein, or as a result of any official or
administrative pronouncement or action or judicial decision interpreting or
applying such laws or regulations, which amendment or change is effective or
which pronouncement, action or decision is announced on or after the date of
issuance of the Capital Securities, there is more than an insubstantial risk
that (i) the Issuer Trust is, or will be within 90 days of the delivery of such
Opinion of Counsel, subject to United States federal income tax with respect to
income received or accrued on the Junior Subordinated Debentures, (ii) interest
payable by the Depositor on the Junior Subordinated Debentures is not, or within
90 days of the delivery of such Opinion of Counsel will not be, deductible by
the Depositor, in whole or in part, for United States federal income tax
purposes, or (iii) the Issuer Trust is, or will be within 90 days of the
delivery of such Opinion of Counsel, subject to more than a de minimis amount of
other taxes, duties or other governmental charges.
"Treasury Rate" means (i) the yield, under the heading which represents
the average for the week immediately prior to the calculation date, appearing in
the most recently published statistical release designated "H.15 (519)" or any
successor publication which is published weekly by the Board of Governors of the
Federal Reserve System and which establishes yields on actively traded United
States Treasury securities adjusted to constant maturity under the caption
"Treasury Constant Maturities," for the maturity corresponding to the Remaining
Life (if no maturity is within three months before or after the Remaining Life,
yields for the two published maturities most closely corresponding to the
Remaining Life shall be determined and the Treasury Rate shall be interpolated
or extrapolated from such yields on a straight-line basis, rounding to the
nearest month) or (ii) if such release (or any successor release) is not
published during the week preceding the calculation date or does not contain
such yields, the rate per annum equal to the semi-annual equivalent yield to
maturity of the Comparable Treasury Issue, calculated using a price for the
Comparable Treasury Issue (expressed as a percentage of its principal amount)
equal to the Comparable Treasury Price for such Redemption Date. The Treasury
Rate shall be calculated on the third Business Day preceding the Redemption
Date.
"Trust Agreement" means this Amended and Restated Trust Agreement, as the
same may be modified, amended or supplemented in accordance with the applicable
provisions hereof, including (i) all exhibits hereto, and (ii) for all purposes
of this Amended and Restated Trust Agreement 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,
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
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<PAGE> 22
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 Capital Securities Certificates.
"Trust Security" means any one of the Common Securities or the Capital
Securities.
ARTICLE II
CONTINUATION OF THE ISSUER TRUST
SECTION 2.1. Name.
The Issuer Trust continued hereby shall be known as "BSB Capital Trust I,"
as such name may be modified from time to time by the Administrators following
written notice to the Holders of Trust Securities and the Issuer Trustees, in
which name the Administrators and the Issuer Trustees may engage in the
transactions contemplated hereby, make and execute contracts and other
instruments on behalf of the Issuer Trust and sue and be sued.
SECTION 2.2. Office of the Delaware Trustee; Principal Place of Business.
The address of the Delaware Trustee in the State of Delaware is Bankers
Trust (Delaware), 1001 Jefferson Street, Suite 550, Wilmington, Delaware 19801,
Attention: Lisa Wilkins, or such other address in the State of Delaware as the
Delaware Trustee may designate by written notice to the Holders and the
Depositor. The principal executive office of the Issuer Trust is in care of BSB
Bancorp, Inc., 58-68 Exchange Street, Binghamton, New York 13902, Attention:
Larry Denniston.
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 $10, which constitutes the
initial Trust Property. The Depositor shall pay all organizational expenses of
the Issuer Trust as they arise or shall, upon request of any Issuer Trustee,
promptly reimburse such Issuer Trustee for any such expenses paid by such Issuer
Trustee. The Depositor shall make no claim upon the Trust Property for the
payment of such expenses.
SECTION 2.4. Issuance of the Capital Securities.
On July 21, 1998, the Depositor, both on its own behalf and on behalf of
the Issuer Trust pursuant to the Original Trust Agreement, executed and
delivered the Purchase Agreement. Contemporaneously with the execution and
delivery of this Trust Agreement, an Administrator, on behalf of the Issuer
Trust, shall execute in accordance with Section 5.3 and the Property Trustee
shall authenticate in accordance with Section 5.3 and deliver to the Initial
Purchaser,
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<PAGE> 23
Capital Securities Certificates, registered in the names requested by the
Initial Purchaser, in an aggregate amount of 30,000 Capital Securities having an
aggregate Liquidation Amount of $30,000,000, against receipt of the aggregate
purchase price of such Capital Securities of $30,000,000, 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 execute in accordance
with Section 5.3 and the Property Trustee shall authenticate in accordance with
Section 5.3 and deliver to the Depositor Common Securities Certificates,
registered in the name of the Depositor, in an aggregate amount of 928 Common
Securities having an aggregate Liquidation Amount of $928,000 against receipt of
the aggregate purchase price of such Common Securities of $928,000 by the
Property Trustee. Contemporaneously therewith, an Administrator, on behalf of
the Issuer Trust, shall subscribe for and purchase from the Depositor the Junior
Subordinated Debentures, registered in the name of the Issuer Trust and having
an aggregate principal amount equal to $30,928,000, and, in satisfaction of the
purchase price for such Junior Subordinated Debentures, the Property Trustee, on
behalf of the Issuer Trust, shall deliver to the Depositor the sum of
$30,928,000 (being the sum of the amounts delivered to the Property Trustee
pursuant to (i) the second sentence of Section 2.4, and (ii) the first and
second sentences of this Section 2.5) and receive the Junior Subordinated
Debentures on behalf of the Issuer Trust.
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, (b) distribute the Trust's income and assets as
provided in this Trust Agreement, and (c) engage in only those other activities
necessary, convenient or incidental thereto, including, without limitation,
those activities specified in Sections 2.7(a), 2.7(c), 8.1 and 8.3 and in
Articles IV and IX. 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, to the fullest extent permitted by law,
fiduciaries with respect to the Issuer Trust and this Trust Agreement shall be
construed in a manner consistent with such intent. The Property Trustee shall
have the right, 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
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<PAGE> 24
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), (ii) and (iii), 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) assist in complying with the Purchase Agreement regarding the
issuance and sale of the Trust Securities;
(B) assist in compliance with the Securities Act, applicable
state securities or blue sky laws, and the Trust Indenture Act;
(C) assist in the listing of the Capital Securities upon such
securities exchange or exchanges as shall be determined by the
Depositor, with the registration of the Capital Securities under the
Exchange Act, if required, and the preparation and filing of all
periodic and other reports and other documents pursuant to the
foregoing;
(D) execute the Trust Securities on behalf of the Issuer Trust in
accordance with this Trust Agreement;
(E) execute and deliver an application for a taxpayer
identification number for the Issuer Trust;
(F) cause the Issuer Trust to enter into, and execute, deliver
and perform on behalf of the Issuer Trust, the Registration Rights
Agreement, the Certificate Depository Agreement, the Junior
Subordinated Debenture Purchase Agreement, the Common Securities
Purchase Agreement, and each other agreement, instrument and
certificate (including, without limitation, such certificates and
cross-receipts as may be required in connection with the issuance and
sale of the Trust Securities and the purchase of the Junior
Subordinated Debentures) as such Administrator deems necessary or
incidental to the purposes and functions of the Issuer Trust, and
(G) take any action incidental or convenient 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.
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(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) establish and maintain the Payment Account;
(B) receive, take title to, and exercise all of the rights,
powers and privileges of the holder of the Junior Subordinated
Debentures;
(C) receive and collect interest, principal and any other
payments made in respect of the Junior Subordinated Debentures in the
Payment Account;
(D) distribute amounts owed to the Holders in respect of the
Trust Securities in accordance with the terms of this Trust Agreement;
(E) act as Paying Agent and/or Securities Registrar to the extent
appointed as such hereunder;
(F) send 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) distribute Trust Property in accordance with the terms of
this Trust Agreement;
(H) to the extent provided in this Trust Agreement, wind-up the
affairs of and liquidate the Issuer Trust and prepare, execute and
file the certificate of cancellation with the Secretary of State of
the State of Delaware;
(I) comply with the provisions of this Trust Agreement and take
any action to give effect to the terms of this Trust Agreement and
protect and conserve the Trust Property for the benefit of the Holders
(without consideration of the effect of any such action on any
particular Holder); and
(J) take 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
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Trust Agreement, (ii) sell, assign, transfer, exchange, mortgage, pledge,
set-off or otherwise dispose of any of the Trust Property or interests therein,
including to Holders, except as expressly provided herein, (iii) take any action
that would 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 Capital Securities, the
Depositor shall have the power and authority, and is hereby authorized, to
assist the Issuer Trust with respect to, or effect on behalf of the Issuer
Trust, the following (and any actions taken by the Depositor in furtherance of
the following prior to the date of this Trust Agreement are hereby ratified and
confirmed in all respects):
(i) the preparation by the Issuer Trust of an offering memorandum in
relation to the Capital Securities, including any amendments thereto and
the taking of any action necessary, incidental or desirable to sell the
Capital Securities in a transaction or a series of transactions exempt from
the registration requirements of the Securities Act;
(ii) the determination of the states in which to take appropriate
action to qualify or register for sale all or part of the Capital
Securities and the determination of any and all such acts, other than
actions that must be taken by or on behalf of the Issuer Trust, and the
advice to the Issuer Trustees of actions they must take on behalf of the
Issuer Trust, and the preparation for execution and filing of any documents
to be executed and filed by the Issuer Trust or on behalf of the Issuer
Trust, as the Depositor deems necessary or advisable in order to comply
with the applicable laws of any such states in connection with the offer
and sale of the Capital Securities;
(iii) the negotiation of the terms of, and the execution and delivery
of, the Purchase Agreement providing for the sale of the Capital
Securities; and
(iv) the taking of any other actions necessary, incidental 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
income tax purposes. In this connection, the Depositor, the Property Trustee,
the Administrators, and the Holders of Common Securities are authorized to take
any action, not inconsistent with
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applicable law, the Certificate of Trust or this Trust Agreement, that the
Depositor, 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 Capital Securities. In
no event shall the Administrators or the Issuer Trustees be liable to the Issuer
Trust or the Holders for any failure to comply with this section that results
from a change in law or regulations or in the interpretation thereof.
(e) Notwithstanding anything herein to the contrary, (i) the issuance and
sale by the Issuer Trust of the Trust Securities, (ii) the purchase by the
Issuer Trust of the Junior Subordinated Debentures, (iii) the execution,
delivery and performance by the Issuer Trust of the Purchase Agreement, the
Registration Rights Agreement, the Certificate Depository Agreement, the Junior
Subordinated Debenture Purchase Agreement and the Common Securities Purchase
Agreement and the consummation by the Issuer Trust of the transactions
contemplated thereby and the compliance by the Issuer Trust with its obligations
thereunder, are hereby authorized and ratified in all respects and do not and
shall be deemed not to violate any of the provisions of this Trust Agreement or
the Certificate of Trust.
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.
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
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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 as provided herein 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 July 24, 1998, and, except in the event (and to the extent) that the
Depositor exercises its right to defer the payment of interest on the
Debentures pursuant to the Indenture, shall be payable semi-annually in
arrears on July 31 and January 31 of each year, commencing on January 31,
1999. If any date on which a Distribution is otherwise payable on the Trust
Securities is not a Business Day, then the payment of such Distribution
shall be made on the next succeeding day that is a Business Day (without
any additional Distributions or other payment in respect of any such
delay), with the same force and effect as if made on the date on which such
payment was originally payable (each date on which distributions are
payable in accordance with this Section 4.1(a), a "Distribution Date").
(ii) The Trust Securities shall be entitled to Distributions payable
at a rate of 8.125% per annum of the Liquidation Amount of the Trust
Securities. The amount of Distributions payable for any period less than a
full Distribution period shall be computed on the basis of a 360-day year
of twelve 30-day months and the actual number of days elapsed in a partial
month in a period. Distributions payable for each full Distribution period
will be computed by dividing the rate per annum by two. The amount of
Distributions payable for any period shall include any Additional Amounts
in respect of such period.
(iii) So long as no Debenture Event of Default has occurred and is
continuing, the Depositor has the right under the Indenture to defer the
payment of interest on the Junior Subordinated Debentures at any time and
from time to time for a period not exceeding 10 consecutive semi-annual
periods (an "Extension Period"), provided that no Extension Period may
extend beyond July 31, 2028. As a consequence of any such deferral,
semi-annual Distributions on the Trust Securities by the Trust will also be
deferred (and the amount of Distributions to which Holders of the Trust
Securities are
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<PAGE> 29
entitled will accumulate additional Distributions thereon at a rate of
8.125% per annum, compounded semi-annually) from the relevant payment date
for such Distributions, computed on the basis of a 360-day year of twelve
30-day months and the actual days elapsed in a partial month in such
period. Additional Distributions payable for each full Distribution period
will be computed by dividing the rate per annum by two. The term
"Distributions" as used in Section 4.1 shall include any such additional
Distributions provided pursuant to this Section 4.1(a)(iii).
(iv) Distributions on the Trust Securities shall be made by the
Property Trustee from the Payment Account and shall be payable on each
Distribution Date only to the extent that the Issuer Trust has funds then
on hand and available in the Payment Account for the payment of such
Distributions.
(b) Distributions on the Trust Securities with respect to a Distribution
Date shall be payable to the Holders thereof as they appear on the Securities
Register for the Trust Securities at the close of business on the relevant
record date, which shall be at the close of business on January 15 or July 15
(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;
(ii) the Redemption Price, or if the Redemption Price cannot be
calculated prior to the time the notice is required to be sent, the
estimate of the Redemption Price provided pursuant to the Indenture
together with a statement that it is an estimate and that the actual
Redemption Price will be calculated on the third Business Day prior to the
Redemption Date (and if an estimate is provided, a further notice shall be
sent of the actual Redemption Price on the date, or as soon as practicable
thereafter, that notice of such actual Redemption Price is received
pursuant to the Indenture);
(iii) the CUSIP number or CUSIP numbers of the Capital Securities
affected;
(iv) if fewer 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;
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(v) that on the Redemption Date the Redemption Price will become due
and payable upon each such Trust Security to be redeemed and that
Distributions thereon will cease to accumulate on and after said date,
except as provided in Section 4.2(d) below; and
(vi) the place or places where Trust Securities are to be surrendered
for the payment of the Redemption Price.
The Issuer Trust in issuing the Trust Securities may use "CUSIP" or
"private placement" numbers (if then generally in use), and, if so, the Property
Trustee shall indicate the "CUSIP" or "private placement" numbers of the Trust
Securities in notices of redemption and related materials as a convenience to
Holders; provided, that any such notice may state that no representation is made
as to the correctness of such numbers either as printed on the Trust Securities
or as contained in any notice of redemption and related material.
(c) The Trust Securities redeemed on each Redemption Date shall be
redeemed at the Redemption Price with the applicable proceeds from the
contemporaneous redemption of Junior Subordinated Debentures. Redemptions of the
Trust Securities shall be made and the Redemption Price shall be payable on each
Redemption Date only to the extent that the Issuer Trust has funds then on hand
and available in the Payment Account for the payment of such Redemption Price.
(d) If the Property Trustee gives a notice of redemption in respect of any
Capital Securities, then, by 12:00 noon, New York City time, on the Redemption
Date, subject to Section 4.2(c), the Property Trustee will, with respect to
Capital Securities held in global form, irrevocably deposit with the Clearing
Agency for such Capital Securities, to the extent available therefor, funds
sufficient to pay the applicable Redemption Price and will give such Clearing
Agency irrevocable instructions and authority to pay the Redemption Price to the
Owners of the Capital Securities. With respect to Capital Securities that are
not held in global form, the Property Trustee, subject to Section 4.2(c), will
irrevocably deposit with the Paying Agent, to the extent available therefor,
funds sufficient to pay the applicable Redemption Price and will give the Paying
Agent irrevocable instructions and authority to pay the Redemption Price to the
Holder of the Capital Securities upon surrender of their Capital Securities
Certificates. Notwithstanding the foregoing, Distributions payable on or prior
to the Redemption Date for any Trust Securities called for redemption shall be
payable to the Holders of such Trust Securities as they appear on the Securities
Register for the Trust Securities on the relevant record dates for the related
Distribution Dates. If notice of redemption shall have been given and funds
deposited as required, then, upon the date of such deposit, all rights of
Holders holding Trust Securities so called for redemption will cease, except the
right of such Holders to receive the Redemption Price and any 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,
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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 fewer than all the Outstanding Trust
Securities are to be redeemed on a Redemption Date, the particular Trust
Securities to be redeemed shall be selected not more than 60 days prior to the
Redemption Date by the Property Trustee from the Outstanding Capital Securities
not previously called for redemption in such a manner as the Property Trustee
shall deem fair and appropriate, subject to the requirement that no Holder shall
hold Capital Securities with an aggregate Liquidation Amount of less than
$100,000 after such redemption.
SECTION 4.3. Subordination of Common Securities.
(a) Payment of Distributions (including Additional Amounts, if applicable)
on, the Redemption Price of, and the Liquidation Distribution in respect of, the
Trust Securities, as applicable, shall be made, subject to Section 4.2(e), pro
rata among the Common Securities and the Capital Securities based on the
Liquidation Amount of such Trust Securities; provided, however, that if on any
Distribution Date or Redemption Date any Event of Default resulting from a
Debenture Event of Default in Section 5.1(1) or 5.1(2) of the Indenture shall
have occurred and be continuing, no payment of any Distribution (including
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
Capital Securities for all Distribution periods terminating on or prior thereto,
or, in the case of payment of the Redemption Price, the full amount of such
Redemption Price on all Outstanding Capital Securities then called for
redemption, or in the case of payment of the Liquidation Distribution the full
amount of such Liquidation Distribution on all Outstanding Capital Securities,
shall have been made or provided for, and all funds immediately available to the
Property Trustee shall first be applied to the payment in full in cash of all
Distributions (including Additional Amounts, if applicable) on, or the
Redemption Price of, or Liquidation Distribution in respect of Capital
Securities then due and payable. The existence of an Event of Default does not
entitle the Holders of Capital Securities to accelerate the maturity thereof.
(b) In the case of the occurrence of any Event of Default resulting from
any Debenture Event of Default, the 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
Capital Securities have been cured, waived or otherwise
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eliminated. Until all such Events of Default under this Trust Agreement with
respect to the Capital Securities have been so cured, waived or otherwise
eliminated, the Property Trustee shall act solely on behalf of the Holders of
the Capital Securities and not on behalf of the Holder of the Common Securities,
and only the Holders of the Capital Securities will have the right to direct the
Property Trustee to act on their behalf.
SECTION 4.4. Payment Procedures.
Payments of Distributions (including Additional Amounts, if applicable) in
respect of the Capital Securities shall be made by check mailed to the address
of the Person entitled thereto as such address shall appear on the Securities
Register or, if the Capital Securities are held by a Clearing Agency, such
Distributions shall be made to the Clearing Agency in immediately available
funds, which will credit the relevant accounts on the applicable Distribution
Dates. Payments of Distributions to Holders of $1,000,000 or more in aggregate
Liquidation Amount of Capital Securities may be made by wire transfer of
immediately available funds upon written request of such Holder of Capital
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.
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 (a) prepare and file
(or cause to be prepared and filed) all Internal Revenue Service forms required
to be filed in respect of the Issuer Trust in each taxable year of the Issuer
Trust and (b) prepare and furnish (or cause to be prepared and furnished) to
each Holder all Internal Revenue Service forms required to be provided by the
Issuer Trust. The Administrators shall provide the Depositor and the Property
Trustee with a copy of all such returns and reports promptly after such filing
or furnishing. The Issuer Trustees 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.
On or before December 15 of each year during which any Capital 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 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 Capital Security during
such year, if any.
SECTION 4.6. Payment of Taxes, Duties, Etc. of the Issuer Trust.
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Upon receipt under the Junior Subordinated Debentures of Additional Sums,
the Property Trustee, at the direction of an Administrator or the Depositor,
shall promptly pay any taxes, duties or governmental charges of whatsoever
nature (other than withholding taxes) imposed on the Issuer Trust by the United
States or any other taxing authority.
SECTION 4.7. Payments under Indenture or Pursuant to Direct Actions.
Any amount payable hereunder to any Holder of Capital Securities shall be
reduced by the amount of any corresponding payment such Holder (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(3) 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 Capital Securities Certificates shall be issued in fully
registered form in minimum blocks of at least 100 (representing a minimum of
$100,000 aggregate Liquidation Amount and multiples of $1,000 in excess
thereof), and shall be at all times held in minimum blocks of 100, and the
Common Securities Certificates shall be issued in minimum blocks of 100
(representing a minimum of $100,000 aggregate Liquidation Amount). The Trust
Securities Certificates shall be executed on behalf of the Issuer Trust by
manual or facsimile signature of at least one Administrator. 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.
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(b) Upon their original issuance, Capital Securities Certificates
representing Rule 144A Capital Securities shall be issued in the form of one or
more fully registered Global Capital 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 Capital Securities in definitive form,
a global security 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 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 all of 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, to be executed on behalf of the Issuer Trust and delivered to the Property
Trustee and upon such delivery the Property Trustee shall authenticate such
Trust Securities Certificates and deliver such Trust Securities Certificates
upon the written order of the Trust, executed by an Administrator thereof,
without further action by the 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. The issuance
of the Trust Securities is not subject to preemptive rights.
SECTION 5.4. Global Capital Security.
(a) Any Global Capital Security issued under this Trust Agreement shall be
registered in the name of the nominee of the Clearing Agency and delivered to
such custodian therefor, and such Global Capital Security shall constitute a
single Capital Security for all purposes of this Trust Agreement.
(b) Notwithstanding any other provision in this Trust Agreement, a Global
Capital Security may not be exchanged in whole or in part for Capital Securities
registered, and no transfer of the Global Capital Security in whole or in part
may be registered, in the name of any Person other than the Clearing Agency for
such Global Capital Security, Cede, or other nominee thereof unless (i) such
Clearing Agency advises the Depositor and the 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 Capital
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.
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(c) If a Global Capital Security is to be exchanged for Other Capital
Securities or cancelled in part, or if another Capital Security is to be
exchanged in whole or in part for a beneficial interest in a Global Capital
Security, then either (i) such Global Capital Security shall be so surrendered
for exchange or cancellation as provided in this Article V or (ii) the
Liquidation Amount thereof shall be reduced or increased by an amount equal to
the portion thereof to be so exchanged or equal to the Liquidation Amount of
such other Capital Security to be so exchanged for a beneficial interest
therein, as the case may be, by means of an appropriate adjustment made on the
records of the Security Registrar, whereupon the Property Trustee, in accordance
with the Applicable Procedures, shall instruct the Clearing Agency or its
authorized representative to make a corresponding adjustment to its records.
Upon any such surrender or adjustment of a Global Capital Security by or on
behalf of the Clearing Agency, accompanied by registration instructions, the
Property Trustee shall, subject to Section 5.4(b) and as otherwise provided in
this Article V, authenticate and deliver, and an Administrator shall execute,
any Capital Securities issuable in exchange for such Global Capital Security (or
any portion thereof) in accordance with the instructions of the Clearing Agency.
The Property Trustee shall not be liable for any delay in delivery of such
instructions and may conclusively rely on, and shall be fully protected in
relying on, such instructions.
(d) Every Capital Security registered, executed, authenticated and
delivered upon registration of transfer of, or in exchange for or in lieu of, a
Global Capital Security or any portion thereof, whether pursuant to this Article
V or Article IV or otherwise, shall be executed, authenticated and delivered in
the form of, and shall be, a Global Capital Security, unless such Global Capital
Security is registered in the name of a Person other than the Clearing Agency
for such Global Capital Security or a nominee thereof.
(e) The Clearing Agency or its nominee, as the registered owner of a
Global Capital Security, shall be considered the Holder of the Capital
Securities represented by a Global Capital Security for all purposes under this
Trust Agreement and the Capital Securities, and owners of beneficial interests
in a Global Capital Security shall hold such interests pursuant to the
Applicable Procedures and, except as otherwise provided herein, shall not be
entitled to have any of the individual Capital Securities represented by such
Global Security registered in their names, shall not receive nor be entitled to
receive physical delivery of any such Capital Securities in definitive form, and
shall not be considered the Holders thereof under this Trust Agreement.
Accordingly, any such Owner's beneficial interest in a Global Capital Security
shall be shown only on, and the transfer of such interest shall be effected only
through, records maintained by the Clearing Agency or its nominee. Neither the
Property Trustee nor the Securities Registrar nor the Depositor shall have any
liability in respect of any transfers effected by the Clearing Agency.
(f) The rights of Owners of beneficial interests in a Global Capital
Security shall be exercised only through the Clearing Agency and shall be
limited to those established by law and agreements between such Owners and the
Clearing Agency.
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SECTION 5.5. Registration of Transfer and Exchange Generally; Certain
Transfers and Exchanges; Capital Securities Certificates; Securities Act
Legends.
(a) The Property Trustee shall keep or cause to be kept at its Corporate
Trust Office a register or registers for the purpose of registering Trust
Securities Certificates and transfers and exchanges of Capital Securities
Certificates in which the registrar and transfer agent with respect to the
Capital Securities (the "Securities Registrar"), subject to such reasonable
regulations as it may prescribe, shall provide for the registration of Capital
Securities Certificates and Common Securities Certificates (subject to Section
5.11 in the case of Common Securities Certificates) and registration of
transfers and exchanges of Capital Securities Certificates as herein provided.
Such register is herein sometimes referred to as the "Securities Register." The
Property Trustee is hereby appointed Securities Registrar for the purpose of
registering Capital Securities and transfers of Capital Securities as herein
provided.
Upon surrender for registration of transfer of any Capital Security at the
offices or agencies of the Property Trustee designated for that purpose, 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 Capital 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, Capital Securities may be exchanged for other
Capital Securities of any authorized denominations, of like tenor and aggregate
Liquidation Amount and bearing such restrictive legends as may be required by
this Trust Agreement, upon surrender of the Capital Securities to be exchanged
at such office or agency. Whenever any securities are so surrendered for
exchange, an Administrator shall execute and the Property Trustee shall
authenticate and deliver the Capital Securities that the Holder making the
exchange is entitled to receive.
All Capital Securities issued upon any transfer or exchange of Capital
Securities shall be the valid obligations of the Issuer Trust, evidencing the
same interest, and entitled to the same benefits under this Trust Agreement, as
the Capital Securities surrendered upon such transfer or exchange.
Every Capital Security presented or surrendered for transfer or exchange
shall (if so required by the Property Trustee) be duly endorsed, or be
accompanied by a written instrument of transfer in form satisfactory to the
Property Trustee and the Securities Registrar, duly executed by the Holder
thereof or such Holder's attorney duly authorized in writing.
No service charge shall be made to a Holder for any transfer or exchange
of Capital Securities, but the Property Trustee may require payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
connection with any transfer or exchange of Capital Securities.
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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 Capital Security during a period beginning at the opening of
business 15 days before the day of selection for redemption of Capital
Securities pursuant to Article IV and ending at the close of business on the day
of mailing of the notice of redemption, or (ii) to register the transfer of or
exchange any Capital Security so selected for redemption in whole or in part,
except, in the case of any such Capital Security to be redeemed in part, any
portion thereof not to be redeemed.
(b) Certain Transfers and Exchanges. Trust Securities may only be
transferred, in whole or in part, in accordance with the terms and conditions
set forth in this Trust Agreement. 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 Capital Security to Non-Global Capital Security. A
Trust Security that is not a Global Capital Security may be transferred,
in whole or in part, to a Person who takes delivery in the form of another
Trust Security that is not a Global Capital Security as provided in
Section 5.5(a); provided that if the Trust Security to be transferred in
whole or in part is a Restricted Capital Security, the Security Registrar
shall have received a Restricted Securities Certificate duly executed by
the transferor Holder or such Holder's attorney duly authorized in
writing.
(ii) Exchanges Between Global Capital Security and Non-Global Trust
Security. A beneficial interest in a Global Capital Security may be
exchanged for a Trust Security that is not a Global Capital Security as
provided in Section 5.4.
(iii) Certain Initial Transfers of Non-Global Trust Securities. In
the case of Trust Securities initially issued other than in global form,
an initial transfer or exchange of such Trust Securities that does not
involve any change in beneficial ownership may be made to an Institutional
Accredited Investor or Investors as if such transfer or exchange were not
an initial transfer or exchange; provided that written certification shall
be provided by the transferee and transferor of such Trust Securities to
the Securities Registrar that such transfer or exchange does not involve a
change in beneficial ownership.
(iv) Limitations Relating to Principal Amount. Notwithstanding any
other provision of this Trust Agreement and unless otherwise specified as
permitted by this Trust Agreement, Trust Securities or portions thereof
may be transferred or exchanged only in principal amounts of not less than
$100,000. Any transfer, exchange or other disposition of Trust Securities
in contravention of this Section 5.5(b)(iv) shall be deemed to be void and
of no legal effect whatsoever, any such transferee shall be deemed not to
be the Holder or owner of any beneficial interest in such Trust Securities
for any purpose, including but not limited to the receipt of interest
payable on such Trust Securities, and such transferee shall be deemed to
have no interest whatsoever in such Trust Securities.
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(c) Restricted Securities Legend. Except as set forth below, all Capital
Securities Certificates shall bear a Restricted Capital Securities Legend:
(i) subject to the following Clauses of this Section 5.5(c), a
Capital Security Certificates or any portion thereof that is exchanged,
upon transfer or otherwise, for a Global Capital Security or any portion
thereof shall bear the Restricted Capital Securities Legend while
represented thereby;
(ii) subject to the following Clauses of this Section 5.5(c), a new
Capital Security which is not a Global Capital Security and is issued in
exchange for another Capital Security (including a Global Capital
Security) or any portion thereof, upon transfer or otherwise, shall, if
such new Capital Security is required to be issued in the form of a
Restricted Capital Security, bear a Restricted Capital Securities Legend;
(iii) a new Capital Security (other than a Global Capital Security)
that does not bear a Restricted Capital Securities Legend may be issued in
exchange for or in lieu of a Restricted Capital Security or any portion
thereof that bears such a legend if, in the Depositor's judgment, placing
such a legend upon such new Capital Security is not necessary to ensure
compliance with the registration requirements of the Securities Act, and
an Administrator shall execute on behalf of the Issuer Trust, and the
Property Trustee, at the written direction of the Issuer Trust in the form
of an Officers' Certificate, shall authenticate and deliver, such new
Capital Security as provided in this Article V;
(iv) notwithstanding the foregoing provisions of this Section
5.5(c), a Successor Capital Security of a Capital Security that does not
bear a Restricted Capital Securities Legend shall not bear such form of
legend unless the Depositor has reasonable cause to believe that such
Successor Capital Security is a "restricted security" within the meaning
of Rule 144 under the Securities Act, in which case an Administrator shall
execute on behalf of the Issuer Trust, and the Property Trustee, at the
written direction of the Issuer Trust in the form of an Officers'
Certificate, shall authenticate and deliver, a new Capital Security
bearing a Restricted Capital Securities Legend in exchange for such
Successor Capital Security as provided in this Article V; and
(v) Junior Subordinated Debentures distributed to a holder of
Capital Securities upon dissolution of the Issuer Trust shall bear a
Restricted Securities Legend (as defined in the Indenture) if the Capital
Securities so held bear a Restricted Capital Securities Legend.
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
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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 exchange for or in lieu of any such mutilated,
destroyed, lost or stolen Trust Securities Certificate, a new Trust Securities
Certificate of like class, tenor and denomination. In connection with the
issuance of any new Trust Securities Certificate under this Section, the
Administrators or the Securities Registrar may require the payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
connection therewith. Any duplicate Trust Securities Certificate issued pursuant
to this Section shall constitute conclusive evidence of an undivided beneficial
interest in the assets of the Issuer Trust corresponding to that evidenced by
the lost, stolen or destroyed Trust 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 Capital Securities Certificates may be
surrendered for registration of transfer or exchange and where notices and
demands to or upon the Issuer Trustees in respect of the Trust Securities
Certificates may be served. The Property Trustee initially designates its
Corporate Trust Office 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
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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 Issuer Trustees an instrument in which such successor Paying
Agent or additional Paying Agent shall agree with the Issuer Trustees that as
Paying Agent, such successor Paying Agent or additional Paying Agent will hold
all sums, if any, held by it for payment to the Holders in trust for the benefit
of the Holders entitled thereto until such sums shall be paid to such Holders.
The Paying Agent shall return all unclaimed funds to the Property Trustee and
upon removal of a Paying Agent such Paying Agent shall also return all funds in
its possession to the Property Trustee. The provisions of Sections 8.1, 8.3 and
8.6 herein shall apply to the Bank also in its role as Paying Agent, for so long
as the Bank shall act as Paying Agent and, to the extent applicable, to any
other paying agent appointed hereunder. Any reference in this Trust Agreement to
the Paying Agent shall include any co-paying agent chosen by the Property
Trustee unless the context requires otherwise.
SECTION 5.11. Ownership of Common Securities by Depositor.
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 the Common
Securities, and the Depositor or any such successor Holder may transfer the
Common Securities only (i) in connection with a consolidation or merger of the
Depositor into another corporation or any conveyance, transfer or lease by the
Depositor of its properties and assets substantially as an entirety to any
Person, pursuant to Section 8.1 of the Indenture, or (ii) to an Affiliate of the
Depositor in compliance with applicable law (including the Securities Act and
applicable state securities and blue sky laws). To the fullest extent permitted
by law, any 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 TO A SUCCESSOR IN INTEREST OF THE DEPOSITOR OR AN AFFILIATE OF THE
DEPOSITOR IN COMPLIANCE WITH APPLICABLE LAW AND SECTION 5.11 OF THE TRUST
AGREEMENT."
SECTION 5.12. Notices to Clearing Agency.
To the extent that a notice or other communication to the Holders is
required under this Trust Agreement, for so long as Capital Securities are
represented by a Global Capital Securities Certificate, the Administrators and
the Property Trustee shall give all such notices and communications specified
herein to be given to the Clearing Agency, and shall have no obligations to the
Owners.
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SECTION 5.13. Rights of Holders.
(a) 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 to subscribe for additional Trust Securities and when issued and
delivered to Holders against payment of the purchase price therefor will be
validly issued, fully paid and 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.
(b) For so long as any Capital Securities remain Outstanding, if, upon a
Debenture Event of Default, the Debenture Trustee fails or the holders of not
less than 25% in principal amount of the outstanding Junior Subordinated
Debentures fail to declare the principal of all of the Junior Subordinated
Debentures to be immediately due and payable, the Holders of at least 25% in
Liquidation Amount of the Capital Securities then Outstanding shall have such
right to make such declaration by a notice in writing to the Property Trustee,
the Depositor and the Debenture Trustee.
At any time after such a declaration of acceleration with respect to the
Junior Subordinated Debentures has been made and before a judgment or decree for
payment of the money due has been obtained by the Debenture Trustee as provided
in the Indenture, the Holders of a Majority in Liquidation Amount of the Capital
Securities, by written notice to the Property Trustee, the Depositor and the
Debenture Trustee, may rescind and annul such declaration and its consequences
if:
(i) the Depositor has paid or deposited with the Debenture Trustee a
sum sufficient to pay:
(A) all overdue installments of interest on all of the Junior
Subordinated debentures,
(B) any accrued Additional Interest on all of the Junior
Subordinated Debentures,
(C) the principal of (and premium, if any, on) any Junior
Subordinated Debentures which have become due otherwise than by such
declaration of acceleration and interest and Additional Interest
thereon at the rate borne by the Junior Subordinated Debentures, and
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(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 Capital
Securities may, on behalf of the Holders of all the Capital Securities, waive
any past default under the Indenture, except a default in the payment of
principal or interest (unless such default has been cured and a sum sufficient
to pay all matured installments of interest and principal due otherwise than by
acceleration has been deposited with the Debenture Trustee) or a default in
respect of a covenant or provision which under the Indenture cannot be modified
or amended without the consent of the holder of each outstanding Junior
Subordinated Debentures affected thereby. No such rescission shall affect any
subsequent default or impair any right consequent thereon.
Upon receipt by the Property Trustee of written notice declaring such an
acceleration, or rescission and annulment thereof, by Holders of the Capital
Securities all or part of which are represented by Global Capital Securities, a
record date shall be established for determining Holders of Outstanding Capital
Securities entitled to join in such notice, which record date shall be at the
close of business on the day the Property Trustee receives such notice. The
Holders on such record date, or their duly designated proxies, and only such
Persons, shall be entitled to join in such notice, whether or not such Holders
remain Holders after such record date; provided, that, unless such declaration
of acceleration, or rescission and annulment, as the case may be, shall have
become effective by virtue of the requisite percentage having joined in such
notice prior to the day which is 90 days after such record date, such notice of
declaration of acceleration, or rescission and annulment, as the case may be,
shall automatically and without further action by any Holder be canceled and of
no further effect. Nothing in this paragraph shall prevent a Holder, or a proxy
of a Holder, from giving, after expiration of such 90-day period, a new written
notice of declaration of acceleration, or rescission and annulment thereof, as
the case may be, that is identical to a written notice which has been canceled
pursuant to the proviso to the preceding sentence, in which event a new record
date shall be established pursuant to the provisions of this Section 5.13(b).
(c) For so long as any Capital Securities remain Outstanding, to the
fullest extent permitted by law and subject to the terms of this Trust Agreement
and the Indenture, upon a Debenture Event of Default specified in Section 5.1(1)
or 5.1(2) of the Indenture, any Holder of Capital Securities shall have the
right to institute a proceeding directly against the Depositor, pursuant to
Section 5.8 of the Indenture, for enforcement of payment to such Holder of the
principal amount of or interest on Junior Subordinated Debentures having an
aggregate principal amount equal to the aggregate Liquidation Amount of the
Capital Securities of such Holder (a
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"Direct Action"). Except as set forth in Sections 5.13(b) and 5.13(c), the
Holders of Capital Securities shall have no right to exercise directly any right
or remedy available to the holders of, or in respect of, the Junior Subordinated
Debentures.
ARTICLE VI
ACTS OF HOLDERS; MEETINGS; VOTING
SECTION 6.1. Limitations on Holder's Voting Rights.
(a) Except as provided in this Trust Agreement and in the Indenture and as
otherwise required by law, no Holder of Capital Securities shall have any right
to vote or in any manner otherwise control the administration, operation and
management of the Issuer Trust or the obligations of the parties hereto, nor
shall anything herein set forth or contained in the terms of the Trust
Securities Certificates be construed so as to constitute the Holders from time
to time as members of an association.
(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 execute any trust or power conferred on the Property
Trustee with respect to such Junior Subordinated Debentures, (ii) waive any past
default that may be waived under Section 5.13 of the Indenture, (iii) exercise
any right to rescind or annul a declaration that the principal of all the Junior
Subordinated Debentures shall be due and payable or (iv) consent to any
amendment, modification or termination of the Indenture or the Junior
Subordinated Debentures, where such consent shall be required, without, in each
case, obtaining the prior approval of the Holders of at least a Majority in
Liquidation Amount of the Capital Securities, provided, however, that where a
consent under the Indenture would require the consent of each holder of Junior
Subordinated Debentures affected thereby, no such consent shall be given by the
Property Trustee without the prior written consent of each Holder of Capital
Securities. The Property Trustee shall not revoke any action previously
authorized or approved by a vote of the Holders of Capital Securities, except by
a subsequent vote of the Holders of Capital Securities. The Property Trustee
shall notify all Holders of the Capital Securities of any notice of default
received with respect to the Junior Subordinated Debentures. In addition to
obtaining the foregoing approvals of the Holders of the Capital Securities,
prior to taking any of the foregoing actions, the Property Trustee shall, at the
expense of the Depositor, obtain an Opinion of Counsel experienced in such
matters to the effect that such action will not cause the Issuer Trust to be
taxable 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 Capital 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
Capital Securities as a class will be entitled to vote on such amendment or
proposal and such
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amendment or proposal shall not be effective except with the approval of the
Holders of at least a Majority in Liquidation Amount of the Capital Securities.
Notwithstanding any other provision of this Trust Agreement, no amendment to
this Trust Agreement may be made if, as a result of such amendment, it would
cause the Issuer Trust to be taxable 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.
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 Capital Securities and the Administrators or the Property Trustee may, at
any time in their discretion, call a meeting of Holders of Capital Securities to
vote on any matters as to which such Holders are entitled to vote.
Holders of at least a Majority in Liquidation Amount of the Capital
Securities, present in person or represented by proxy, shall constitute a quorum
at any meeting of Holders of the Capital Securities.
If a quorum is present at a meeting, an affirmative vote by the Holders of
record present, in person or by proxy, holding Capital Securities representing
at least a Majority in Liquidation Amount of the Capital Securities held by the
Holders present, either in person or by proxy, at such meeting shall constitute
the action of the Holders of Capital Securities, unless this Trust Agreement
requires a greater number of affirmative votes.
SECTION 6.4. Voting Rights.
Holders shall be entitled to one vote for each $1,000 of Liquidation Amount
represented by their Outstanding Trust Securities in respect of any matter as to
which such Holders are entitled to vote.
SECTION 6.5. Proxies, etc.
At any meeting of Holders, any Holder entitled to vote thereat may vote by
proxy, provided that no proxy shall be voted at any meeting unless it shall have
been placed on file with the Property Trustee, or with such other officer or
agent of the Issuer Trust as the Property Trustee may direct, for verification
prior to the time at which such vote shall be taken. Pursuant
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to a resolution of the Property Trustee, proxies may be solicited in the name of
the Property Trustee or one or more officers of the Property Trustee. Only
Holders of record shall be entitled to vote. When Trust Securities are held
jointly by several persons, any one of them may vote at any meeting in person or
by proxy in respect of such Trust Securities, but if more than one of them shall
be present at such meeting in person or by proxy, and such joint owners or their
proxies so present disagree as to any vote to be cast, such vote shall not be
received in respect of such Trust Securities. A proxy purporting to be executed
by or on behalf of a Holder shall be deemed valid unless challenged at or prior
to its exercise, and the burden of proving invalidity shall rest on the
challenger. No proxy shall be valid more than three years after its date of
execution.
SECTION 6.6. Holder Action by Written Consent.
Any action which may be taken by Holders at a meeting may be taken without
a meeting if Holders holding at least a Majority in Liquidation Amount of all
Trust Securities entitled to vote in respect of such action (or such larger
proportion thereof as shall be required by any other provision of this Trust
Agreement) shall consent to the action in writing.
SECTION 6.7. Record Date for Voting and Other Purposes.
For the purposes of determining the Holders who are entitled to notice of
and to vote at any meeting or by written consent, or to participate in any
Distribution on the Trust Securities in respect of which a record date is not
otherwise provided for in this Trust Agreement, or for the purpose of any other
action, the Administrators (or the Property Trustee if the Administrators are
unable or unwilling to act) 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 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
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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 an
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
SECTION 7.1. Representations and Warranties of the Property Trustee and the
Delaware Trustee.
The Property Trustee and the Delaware Trustee (and any successors thereto
at the time of their appointment), each severally on behalf of and as to itself,
hereby represents and warrants for the benefit of the Depositor and the Holders
that:
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(a) The Property Trustee is a banking corporation duly organized, validly
existing and in good standing under the laws of New York, with trust power and
authority to execute and deliver, and to carry out and perform its obligations
under the terms of this Trust Agreement.
(b) The execution, delivery and performance by the Property Trustee of this
Trust Agreement has been duly authorized by all necessary corporate action on
the part of the Property Trustee; and this Trust Agreement has been duly
executed and delivered by the Property Trustee, and constitutes a legal, valid
and binding obligation of the Property Trustee, enforceable against it in
accordance with its terms, subject to applicable bankruptcy, reorganization,
moratorium, insolvency, and other similar laws affecting creditors' rights
generally and to general principles of equity and the discretion of the court
(regardless of whether the enforcement of such remedies is considered in a
proceeding in equity or at law).
(c) The execution, delivery and performance of this Trust Agreement by the
Property Trustee does not conflict with or constitute a breach of the
certificate of incorporation or by-laws of the Property Trustee.
(d) 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, this Trust Agreement.
(g) The execution, delivery and performance by the Delaware Trustee of this
Trust Agreement has been duly authorized by all necessary corporate action on
the part of the Delaware Trustee; and this Trust Agreement has been duly
executed and delivered by the Delaware Trustee, and constitutes a legal, valid
and binding obligation of the Delaware Trustee, enforceable against it in
accordance with its terms, subject to applicable bankruptcy, reorganization,
moratorium, insolvency, and other similar laws affecting creditors' right
generally and to general principles of equity and the discretion of the court
(regardless of whether the enforcement of such remedies is considered in a
proceeding in equity or at law).
(h) The execution, delivery and performance of this Trust Agreement by the
Delaware Trustee does not conflict with or constitute a breach of the
certificate of incorporation or by-laws of the Delaware Trustee.
(i) No consent, approval or authorization of, or registration with or
notice to any state or Federal banking authority is required for the execution,
delivery, or performance by the Delaware Trustee, of this Trust Agreement.
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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 on the Closing Date 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 Issuer Trustees from liability for his, her or its own
negligent action, his, her or its own negligent failure to act, or his, her 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
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Depositor and the Holders to replace such other duties and liabilities of the
Issuer Trustees and Administrators.
(b) All payments made by the Property Trustee or a Paying Agent in respect
of the Trust Securities shall be made only from the revenue and proceeds from
the Trust Property and only to the extent that there shall be sufficient revenue
or proceeds from the Trust Property to enable the Property Trustee or a Paying
Agent to make payments in accordance with the terms hereof. Each Holder, by his,
her or its acceptance of a Trust Security, agrees that he, she or it will look
solely to the revenue and proceeds from the Trust Property to the extent legally
available for distribution to him, her or it as herein provided and that neither
the Issuer Trustees nor the Administrators are personally liable to him, her or
it for any amount distributable in respect of any Trust Security or for any
other liability in respect of any Trust Security. This Section 8.1(b) does not
limit the liability of the Issuer Trustees expressly set forth elsewhere in this
Trust Agreement or, in the case of the Property Trustee, in the Trust Indenture
Act.
(c) The Property Trustee, before the occurrence of any Event of Default and
after the curing of all Events of Default that may have occurred, shall
undertake to perform only such duties as are specifically set forth in this
Trust Agreement (including pursuant to Section 10.10), and no implied covenants
shall be read into this Trust Agreement against the Property Trustee. If an
Event of Default has occurred (that has not been cured or waived pursuant to
Section 5.13 of the Indenture), the Property Trustee shall enforce this Trust
Agreement for the benefit of the Holders and shall exercise such of the rights
and powers vested in it by this Trust Agreement, and use the same degree of care
and skill in its exercise thereof, as a prudent person would exercise or use
under the circumstances in the conduct of his or her own affairs.
(d) No provision of this Trust Agreement shall be construed to relieve the
Property Trustee from liability for its own negligent action, its own negligent
failure to act, or its own willful misconduct, except that:
(i) prior to the occurrence of any Event of Default and after the
curing or waiving of all such Events of Default that may have occurred:
(A) the duties and obligations of the Property Trustee shall be
determined solely by the express provisions of this Trust Agreement
(including pursuant to Section 10.10), and the Property Trustee shall
not be liable except for the performance of such duties and obligations
as are specifically set forth in this Trust Agreement (including
pursuant to Section 10.10); and
(B) in the absence of bad faith on the part of the Property
Trustee, the Property Trustee may conclusively rely, as to the truth of
the statements and the correctness of the opinions expressed therein,
upon any certificates or opinions furnished to the Property Trustee and
conforming to the requirements of this Trust Agreement; but in the case
of any such certificates or opinions that by any provision hereof or of
the Trust Indenture Act are specifically required to be furnished to
the Property Trustee, the Property Trustee shall be
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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 Capital Securities relating to the time, method and place of
conducting any proceeding for any remedy available to the Property Trustee,
or exercising any trust or power conferred upon the Property Trustee under
this Trust Agreement;
(iv) the Property Trustee's sole duty with respect to the custody,
safe keeping and physical preservation of the Junior Subordinated
Debentures and the Payment Account shall be to deal with such property in a
similar manner as the Property Trustee deals with similar property for its
own account, subject to the protections and limitations on liability
afforded to the Property Trustee under this Trust Agreement and the Trust
Indenture Act;
(v) the Property Trustee shall not be liable for any interest on any
money received by it except as it may otherwise agree with the Depositor;
and money held by the Property Trustee need not be segregated from other
funds held by it except in relation to the Payment Account maintained by
the Property Trustee pursuant to Section 3.1 and except to the extent
otherwise required by law;
(vi) the Property Trustee shall not be responsible for monitoring the
compliance by the Administrators or the Depositor with their respective
duties under this Trust Agreement, nor shall the Property Trustee be liable
for the default or misconduct of any other Issuer Trustee, the
Administrators or the Depositor; and
(vii) no provision of this Trust Agreement shall require the Property
Trustee to expend or risk its own funds or otherwise incur personal
financial liability in the performance of any of its duties or in the
exercise of any of its rights or powers, if the Property Trustee shall have
reasonable grounds for believing that the repayment of such funds or
liability is not reasonably assured to it under the terms of this Trust
Agreement or adequate indemnity against such risk or liability is not
reasonably assured to it.
(e) The Administrators shall not be responsible for monitoring the
compliance by the Issuer Trustees or the Depositor with their respective duties
under this Trust Agreement, nor shall either Administrator be liable for the
default or misconduct of any other Administrator, the Issuer Trustees or the
Depositor.
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SECTION 8.2. Certain Notices.
(a) Within five Business Days after the occurrence of any Event of Default
actually known to a Responsible Officer of the Property Trustee, the Property
Trustee shall transmit, in the manner and to the extent provided in Section
10.8, notice of such Event of Default to the Holders and the Administrators,
unless such Event of Default shall have been cured or waived.
(b) Within five Business Days after the receipt of notice of the
Depositor's exercise of its right to defer the payment of interest on the Junior
Subordinated Debentures pursuant to the Indenture, the Property Trustee shall
transmit, in the manner and to the extent provided in Section 10.8, notice of
such exercise to the Holders and the Administrators, unless such exercise shall
have been revoked.
SECTION 8.3. Certain Rights of Property Trustee.
Subject to the provisions of Section 8.1:
(a) the Property Trustee may 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
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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 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.
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SECTION 8.5. May Hold Securities.
Except as provided in the definition of the term "Outstanding" in Article
I, the Administrators, the Issuer Trustees or any other agent of the Issuer
Trustees or the Issuer Trust, in its individual or any other capacity, may
become the owner or pledgee of Trust Securities and, subject to Sections 8.8 and
8.13, may otherwise deal with the Issuer Trust with the same rights it would
have if it were not an Administrator, Issuer Trustee or such other agent.
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 an Issuer Trustee's 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 Section 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 indemnification
provided to an Indemnified Party in this Trust Agreement shall not be exclusive
and nothing in this Trust Agreement shall limit any indemnification for actions
taken in connection with this Trust Agreement or otherwise which may be
available or provided to such Indemnified Party under other sources.
The provisions of this Section 8.6 shall survive the termination of this
Trust Agreement.
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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 may engage in or
possess an interest in other business ventures of any nature or description,
independently or with others, similar or dissimilar to the business of the
Issuer Trust, and the Issuer Trust and the Holders of Trust Securities shall
have no rights by virtue of this Trust Agreement in and to such independent
ventures or the income or profits derived therefrom, and the pursuit of any such
venture, even if competitive with the business of the Issuer Trust, shall not be
deemed wrongful or improper. Neither the Depositor, any Administrator, nor any
Issuer Trustee shall be obligated to present any particular investment or other
opportunity to the Issuer Trust even if such opportunity is of a character that,
if presented to the Issuer Trust, could be taken by the Issuer Trust, and the
Depositor, any Administrator or any Issuer Trustee shall have the right to take
for its own account (individually or as a partner or fiduciary) or to recommend
to others any such particular investment or other opportunity. The Issuer
Trustees 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.
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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.
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. Any co-trustee or
separate trustee appointed pursuant to this Section shall either be (i) a
natural person who is at least 21 years of age and a resident of the United
States or (ii) a legal entity with its principal place of business in the United
States that shall act through one or more persons authorized to bind such
entity.
(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.
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(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 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 Holders. The Relevant Trustee shall
appoint a successor by requesting from at least three Persons meeting the
eligibility requirements its expenses and charges to serve as the successor
Issuer Trustee on a form provided by the Administrators, and selecting the
Person who agrees to the lowest expenses and charges, subject to the prior
consent of the Depositor which consent shall not be unreasonably withheld. If
the instrument of acceptance by the successor 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
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Trustee may petition, at the expense of the Issuer Trust, 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
Capital Securities, delivered to the Relevant Trustee (in its individual
capacity and on behalf of the Issuer Trust) (i) for cause, or (ii) if a
Debenture Event of Default shall have occurred and be continuing at any time.
(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 Capital Securities, by Act of the Holders of
record of not less than 25% aggregate Liquidation Amount of the Capital
Securities then Outstanding delivered to such Issuer 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
Capital Securities and accepted appointment in the manner required by Section
8.11, any Holder, on behalf of himself and all others similarly situated, or any
other Issuer Trustee, may petition any court in the State of Delaware for the
appointment of a successor Issuer Trustee.
(e) The Property Trustee shall give notice of each resignation and each
removal of an Issuer Trustee and each appointment of a successor Issuer Trustee
to all Holders in the manner provided in Section 10.8 and shall give notice to
the Depositor and to the Administrators. Each notice shall include the name of
the Relevant Trustee and the address of its Corporate Trust Office if it is the
Property Trustee.
(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 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, the
retiring Relevant Trustee and 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 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 Issuer Trustee shall
become effective to the extent provided therein and each such successor Relevant
Trustee, without any further act, deed or conveyance, shall become
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vested with all the rights, powers, trusts and duties of the predecessor Issuer
Trustee; but, on request of the Issuer Trust or any successor Issuer Trustee,
the predecessor Issuer Trustee shall duly assign, transfer and deliver to such
successor Issuer Trustee all Trust Property, all proceeds thereof and money held
by such predecessor Issuer Trustee hereunder with respect to the Trust
Securities and the Issuer Trust.
(b) Upon request of any such successor Issuer Trustee, the Issuer Trust
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.
SECTION 8.13. Preferential Collection of Claims Against Depositor or Issuer
Trust.
If and when the Property Trustee shall be or become a creditor of the
Depositor (or any other obligor upon the 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) only if this Trust Agreement is
subject to the Trust Indenture Act.
SECTION 8.14. Trustee May File Proofs of Claim.
In case of any receivership, insolvency, liquidation, bankruptcy,
reorganization, arrangement, adjustment, composition or other similar judicial
proceeding relative to the Issuer Trust or any 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:
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(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,
1999, the Property Trustee shall transmit to all Holders in accordance with
Section 10.8, and to the Depositor, a brief report dated as of the immediately
preceding 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
(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.
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The Depositor and the Administrators on behalf of the Issuer Trust shall
provide to the Property Trustee such documents, reports and information as
required by Section 314 of the Trust Indenture Act (if any) and the compliance
certificate required by Section 314(a) of the Trust Indenture Act in the form,
in the manner and at the times required by Section 314 of the Trust Indenture
Act, 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.
(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.
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(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 all of 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
July 31, 2029 (the "Expiration Date").
SECTION 9.2. Early Dissolution.
The first to occur of any of the following events is an "Early Termination
Event," upon the occurrence of which the Issuer Trust shall dissolve:
(a) the occurrence of 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
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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 Capital Securities (which direction, subject to Section
9.4(a), is optional and wholly within the discretion of the Holder of the Common
Securities);
(c) the redemption of all of the Capital Securities in connection with the
redemption of all the Junior Subordinated Debentures; and
(d) the entry of an order for dissolution of the Issuer Trust by a court of
competent jurisdiction.
SECTION 9.3. Termination.
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 upon the
liquidation of the Issuer Trust pursuant to 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 Delaware Secretary of State 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
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(iii) provide such information with respect to the mechanics by which
Holders may exchange Trust Securities Certificates for Junior Subordinated
Debentures, or if Section 9.4(d) applies receive a Liquidation
Distribution, as the Administrators or the Property Trustee shall deem
appropriate.
(b) Except where Section 9.2(c) or 9.4(d) applies, in order to effect the
liquidation of the Issuer Trust and distribution of the Junior Subordinated
Debentures to Holders, the Property Trustee shall establish a record date for
such distribution (which shall be not more than 30 days prior to the Liquidation
Date) and, either itself acting as exchange agent or through the appointment of
a separate exchange agent, shall establish such procedures as it shall deem
appropriate to effect the distribution of Junior Subordinated Debentures in
exchange for the Outstanding Trust Securities Certificates.
(c) Except where Section 9.2(c) or 9.4(d) applies, after the Liquidation
Date, (i) the Trust Securities will no longer be deemed to be Outstanding, (ii)
the Clearing Agency for the Capital Securities or its nominee, as the registered
Holder of a global Capital Securities Certificate, shall receive a registered
global certificate or certificates representing the Junior Subordinated
Debentures to be delivered upon such distribution with respect to Capital
Securities held by the Clearing Agency or its nominee, and, (iii) any Trust
Securities Certificates not held by the Clearing Agency for the Capital
Securities or its nominee as specified in clause (ii) above will be deemed to
represent Junior Subordinated Debentures having a principal amount equal to the
stated Liquidation Amount of the Trust Securities represented thereby and
bearing accrued and unpaid interest in an amount equal to the accumulated and
unpaid Distributions on such Trust Securities until such certificates are
presented to the Securities Registrar for transfer or reissuance.
(d) If, notwithstanding the other provisions of this Section 9.4, whether
because of an order for dissolution entered by a court of competent jurisdiction
or otherwise, distribution of the Junior Subordinated Debentures is not
practical, or if any Early Termination Event specified in clause (c) of Section
9.2 occurs, the 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 Capital Securities, except that, if a
Debenture Event of Default has occurred and is continuing, the Capital
Securities shall have a priority over the Common Securities as provided in
Section 4.3.
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(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 Delaware Secretary of State.
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, and
with the consent of the Holders of at least a Majority in Liquidation Amount of
the Capital Securities, but without the consent of the 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 (i) such successor entity either (a)
expressly assumes all of the obligations of the Issuer Trust with respect to the
Capital Securities or (b) substitutes for the Capital Securities other
securities having substantially the same terms as the Capital Securities (the
"Successor Capital Securities") so long as the Successor Capital Securities have
the same priority as the Capital Securities with respect to distributions and
payments upon liquidation, redemption and otherwise, (ii) a trustee of such
successor entity possessing the same powers and duties as the Property Trustee
is appointed to hold the Junior Subordinated Debentures, (iii) such merger,
consolidation, amalgamation, replacement, conveyance, transfer or lease does not
cause the Capital Securities (including any Successor Capital Securities) to be
downgraded by any nationally recognized statistical rating organization if the
Capital Securities were rated by any nationally recognized statistical rating
organization immediately prior to such merger, consolidation, amalgamation,
replacement, conveyance, transfer or lease, (iv) such merger, consolidation,
amalgamation, replacement, conveyance, transfer or lease does not adversely
affect the rights, preferences and privileges of the holders of the Capital
Securities (including any Successor Capital Securities) in any material respect,
(v) such successor entity has a purpose substantially identical to that of the
Issuer Trust, (vi) prior to such merger, consolidation, amalgamation,
replacement, conveyance, transfer or lease, any Issuer Trustee has received an
Opinion of Counsel from independent counsel experienced in such matters to the
effect that (a) such merger, consolidation, amalgamation, replacement,
conveyance, transfer or lease does not adversely affect the rights preferences
and privileges of the holders of the Capital Securities (including any Successor
Capital Securities) in any material respect, and (b) following such merger,
consolidation, amalgamation, replacement, conveyance, transfer or lease, neither
the Issuer Trust nor such successor entity will be required to register as an
"investment company" under the Investment Company Act, and (vii) the Depositor
or any permitted transferee to whom it has transferred the Common Securities
hereunder owns all of the common securities of such successor entity and
guarantees the obligations of such successor entity under the Successor Capital
Securities at least to the extent provided by the Guarantee Agreement.
Notwithstanding the foregoing, the Issuer Trust shall not, except with the
consent of Holders of 100% in Liquidation Amount of the Capital Securities,
consolidate, amalgamate, merge with or into, or be replaced by or convey,
transfer or lease its
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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
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 Capital
Securities (i) to cure any ambiguity, correct or supplement any provision herein
which may be inconsistent with any other provision herein, or to make any other
provisions with respect to matters or questions arising under this Trust
Agreement, provided, however, that such amendment shall not adversely affect in
any material respect the interests of any Holder or (ii) to modify, eliminate or
add to any provisions of this Trust Agreement to such extent as shall be
necessary to ensure that the Issuer Trust will not be taxable 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 Capital Securities and (ii) receipt by the Issuer
Trustees of an Opinion of Counsel to the effect that such amendment or the
exercise of any power granted to the Issuer Trustees in accordance with such
amendment will not 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.
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(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 Section 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.
(e) Notwithstanding anything in this Trust Agreement to the contrary,
without the consent of the Depositor and the Administrators, this Trust
Agreement may not be amended in a manner which imposes any additional obligation
on the Depositor or the Administrators.
(f) In the event that any amendment to this Trust Agreement is made, the
Administrators or the Property Trustee shall promptly provide to the Depositor a
copy of such amendment.
(g) Neither the Property Trustee nor the Delaware Trustee shall be required
to enter into any amendment to this Trust Agreement which affects its own
rights, duties or immunities under this Trust Agreement. The Property Trustee
shall be entitled to receive an Opinion of Counsel and an Officers' Certificate
stating that any amendment to this Trust Agreement is in compliance with this
Trust Agreement.
(h) Any amendments to this Trust Agreement pursuant to Section 10.2(a)
shall become effective when notice of such amendment is given to the Holders of
the Trust Securities.
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
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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 the
Issuer Trustees, including any successor by operation of law. Except in
connection with a consolidation, merger or sale involving the Depositor that is
permitted under Article VIII of the Indenture and pursuant to which the assignee
agrees in writing to perform the Depositor's obligations hereunder, the
Depositor shall not assign its obligations hereunder.
SECTION 10.7. Headings.
The Article and Section headings are for convenience only and shall not
affect the construction of this Trust Agreement.
SECTION 10.8. Reports, Notices and Demands.
(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, (a) in the case of a Holder
of Capital Securities, to such Holder as such Holder's name and address may
appear on the Securities Register; and (b) in the case of the Holder of Common
Securities or the Depositor, to BSB Bancorp, Inc., 58-68 Exchange Street,
Binghamton, New York 13902, Attention: Larry Denniston, facsimile no.: (607)
779-2516 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 Property Trustee,
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the Delaware Trustee, the Administrators, or the Issuer Trust shall be given in
writing addressed (until another address is published by the Issuer Trust) as
follows: (a) with respect to the Property Trustee to its Corporate Trust Office;
(b) with respect to the Delaware Trustee to its Corporate Trust Office; and (c)
with respect to the Administrators, to them at the address above for notices to
the Depositor, marked "Attention: Larry Denniston," and (d) with respect to the
Issuer Trust, to the Administrators and the Property Trustee at their respective
addresses listed above. 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
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 any 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 Capital Securities and the
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Common Securities as equity securities representing undivided beneficial
interests in the assets of the Issuer Trust.
(b) Lists of Holders of Capital 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, the Property Trustee shall provide to the Holders of the Trust
Securities such reports as are required by Section 313 of the Trust Indenture
Act, if any, in the form, in the manner and at the times provided by Section 313
of the Trust Indenture Act. The Property Trustee shall also comply with the
requirements of Section 313(d) of the Trust Indenture Act.
(d) Periodic Reports to Property Trustee. Each of the Depositor and the
Administrators on behalf of the Issuer Trust shall provide to the Property
Trustee, the Commission and the Holders of the Trust Securities, as applicable,
such documents, reports and information as required by Section 315(a)(1) - (3)
(if any) of the Trust Indenture Act and the compliance certificates required by
Section 314(a)(4) and (c) of the Trust Indenture Act (provided that any
certificate to be provided pursuant to Section 314(a)(4) of the Trust Indenture
Act shall be provided within 120 days of the end of each fiscal year of the
Issuer Trust).
(e) Evidence of Compliance with Conditions Precedent. Each of the Depositor
and the Administrators on behalf of the Issuer Trust shall provide to the
Property Trustee such evidence of compliance with any conditions precedent, if
any, provided for in this Trust Agreement which relate to any of the matters set
forth in Section 314(c) of the Trust Indenture Act. Any certificate or opinion
required to be given pursuant to Section 314(c) shall comply with Section 314(e)
of the Trust Indenture Act.
(f) Disclosure Information. The disclosure of information as to the names
and addresses of the Holders of Trust Securities in accordance with Section 312
of the Trust Indenture Act, regardless of the source from which such information
was derived, shall not be deemed to be a violation of any existing law or any
law hereafter enacted which does not specifically refer to Section 312 of the
Trust Indenture Act, nor shall the Property Trustee be held accountable by
reason of mailing any material pursuant to a request made under Section 312(b)
of the Trust Indenture Act.
SECTION 10.11. Acceptance of Terms of Trust Agreement, Guarantee and
Indenture.
THE RECEIPT AND ACCEPTANCE OF A TRUST SECURITY OR ANY INTEREST THEREIN BY
OR ON BEHALF OF A HOLDER OR ANY BENEFICIAL OWNER, WITHOUT ANY SIGNATURE OR
FURTHER MANIFESTATION OF ASSENT, SHALL CONSTITUTE THE UNCONDITIONAL ACCEPTANCE
BY THE HOLDER AND ALL OTHERS HAVING A BENEFICIAL INTEREST IN SUCH TRUST SECURITY
OF ALL
- 62 -
<PAGE> 70
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.
* * * *
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.
- 63 -
<PAGE> 71
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.
BSB BANCORP, INC.,
as Depositor
By:
----------------------------------------
Name:
Title:
BANKERS TRUST COMPANY,
as Property Trustee
By:
----------------------------------------
Name:
Title:
BANKERS TRUST (DELAWARE),
as Delaware Trustee
By:
----------------------------------------
Name:
Title:
Agreed to and Accepted by:
- ----------------------
Name:
Title: Administrator
- ----------------------
Name:
Title: Administrator
- 64 -
<PAGE> 72
EXHIBIT A
[INSERT CERTIFICATE OF TRUST FILED WITH DELAWARE]
- 1 -
<PAGE> 73
EXHIBIT B
[INSERT FORM OF CERTIFICATE DEPOSITARY AGREEMENT]
- 1 -
<PAGE> 74
EXHIBIT C
THIS CERTIFICATE IS NOT TRANSFERABLE EXCEPT TO THE
DEPOSITOR OR AN AFFILIATE OF THE DEPOSITOR
IN COMPLIANCE WITH APPLICABLE LAW AND
SECTION 5.11 OF THE TRUST AGREEMENT
Certificate Number Number of Common Securities
C-__
Certificate Evidencing Common Securities
of
BSB Capital Trust I
_____% Common Securities
(liquidation amount $1,000 per Common Security)
BSB Capital Trust I, a statutory business trust formed under the laws of
the State of Delaware (the "Issuer Trust"), hereby certifies that BSB Bancorp,
Inc. (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 designated the ____% Common Securities (liquidation amount
$1,000 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 July ___,
1998, as the same may be amended from time to time (the "Trust Agreement") among
BSB Bancorp, Inc., as Depositor, Bankers Trust Company, as Property Trustee,
Bankers Trust (Delaware), as Delaware Trustee, the Administrators signatory
thereto, and the Holders of Trust
- 1 -
<PAGE> 75
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.
Upon receipt of this certificate, the Holder is bound by the Trust
Agreement and is entitled to the benefits thereunder.
Terms used but not defined herein have the meanings set forth in the Trust
Agreement.
IN WITNESS WHEREOF, one of the Administrators of the Issuer Trust has
executed this certificate this______day of______,____ .
BSB CAPITAL TRUST I
By:
-------------------------
Name:
Title: Administrator
AUTHENTICATED AND REGISTERED:
BANKERS TRUST COMPANY,
as Property Trustee and Securities Registrar
By:
----------------------
Name:
Authorized Signatory
- 2 -
<PAGE> 76
EXHIBIT D
[IF THE CAPITAL SECURITIES CERTIFICATE IS TO BE A GLOBAL CAPITAL SECURITIES
CERTIFICATE, INSERT -- This Capital Securities Certificate is a Global Capital
Securities Certificate within the meaning of the Trust Agreement hereinafter
referred to and is registered in the name of a Depositary or a nominee of a
Depositary. This Capital Securities Certificate is exchangeable for Capital
Securities Certificates registered in the name of a person other than the
Depositary or its nominee only in the limited circumstances described in the
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 Capital Securities Certificate is presented by an authorized
representative of The Depository Trust Company, a New York Corporation ("DTC"),
to BSB Capital Trust I or its agent for registration of transfer, exchange or
payment, and any Capital Securities Certificate issued is registered in the name
of such nominee as is requested by an authorized representative of DTC (and any
payment is made to Cede & Co. or 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.]
THE CAPITAL SECURITIES EVIDENCED HEREBY AND ANY JUNIOR SUBORDINATED
DEBENTURES ISSUABLE IN CONNECTION THEREWITH HAVE NOT BEEN AND WILL NOT BE
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
THE INITIAL PURCHASER, (I) TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A
QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT)
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 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) AND (B) BY
SUBSEQUENT PURCHASERS AS SET FORTH IN (A) ABOVE AND, IN ADDITION, TO AN
INSTITUTIONAL ACCREDITED INVESTOR IN A TRANSACTION EXEMPT FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE
- 1 -
<PAGE> 77
WITH ANY APPLICABLE SECURITIES LAWS OF THE STATES OF THE UNITED STATES. THE
HOLDER OF THIS CAPITAL SECURITY AGREES FOR THE BENEFIT OF THE ISSUER TRUST THAT
THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER
OF THIS CAPITAL SECURITY FROM IT OF THE RESALE RESTRICTIONS REFERRED TO ABOVE.
NO REPRESENTATION CAN BE MADE AS TO THE AVAILABILITY OF THE EXEMPTION PROVIDED
BY RULE 144 FOR RESALES OF THE CAPITAL SECURITIES OR ANY JUNIOR SUBORDINATED
DEBENTURES DISTRIBUTABLE TO HOLDERS OF THE CAPITAL SECURITIES.
THE CAPITAL SECURITIES WILL BE ISSUED AND MAY BE TRANSFERRED ONLY IN BLOCKS
HAVING A LIQUIDATION AMOUNT OF NOT LESS THAN $100,000 (100 CAPITAL SECURITIES).
ANY SUCH TRANSFER OF CAPITAL SECURITIES IN A BLOCK HAVING A LIQUIDATION AMOUNT
OF LESS THAN $100,000 SHALL BE DEEMED TO BE VOID AND OF NO LEGAL EFFECT
WHATSOEVER. ANY SUCH TRANSFEREE SHALL BE DEEMED NOT TO BE THE HOLDER OF SUCH
CAPITAL SECURITIES FOR ANY PURPOSE, INCLUDING BUT NOT LIMITED TO THE RECEIPT OF
DISTRIBUTIONS OF SUCH CAPITAL SECURITIES, AND SUCH TRANSFEREE SHALL BE DEEMED TO
HAVE NO INTEREST WHATSOEVER IN SUCH CAPITAL SECURITIES.
NO EMPLOYEE BENEFIT OR OTHER PLAN OR INDIVIDUAL RETIREMENT ACCOUNT SUBJECT
TO TITLE I OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED
("ERISA"), OR SECTION 4975 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE
"CODE") (EACH, A "PLAN"), NO ENTITY WHOSE UNDERLYING ASSETS INCLUDE "PLAN
ASSETS" BY REASON OF ANY PLAN'S INVESTMENT IN THE ENTITY (A "PLAN ASSET
ENTITY"), AND NO PERSON INVESTING "PLAN ASSETS" OF ANY PLAN, MAY ACQUIRE OR HOLD
THIS CAPITAL SECURITIES CERTIFICATE OR ANY INTEREST HEREIN, UNLESS SUCH PURCHASE
OR HOLDING IS COVERED BY THE EXEMPTIVE RELIEF PROVIDED BY U.S. DEPARTMENT OF
LABOR PROHIBITED TRANSACTION CLASS EXEMPTION ("PTCE") 96-23, 95-60, 91-38, 90-1
OR 84-14 OR ANOTHER APPLICABLE EXEMPTION WITH RESPECT TO SUCH PURCHASE OR
HOLDING. ANY PURCHASER OR HOLDER OF THIS CAPITAL SECURITIES CERTIFICATE OR ANY
INTEREST HEREIN THAT IS A PLAN OR A PLAN ASSET ENTITY OR IS PURCHASING SUCH
SECURITIES ON BEHALF OF OR WITH "PLAN ASSETS" WILL BE DEEMED TO HAVE REPRESENTED
BY ITS PURCHASE AND HOLDING HEREOF THAT (A) THE PURCHASE AND HOLDING OF THE
CAPITAL SECURITIES IS COVERED BY THE EXEMPTIVE RELIEF PROVIDED BY PTCE 96-23,
95-60, 91-38, 90-1 OR 84-14 OR
- 2 -
<PAGE> 78
ANOTHER APPLICABLE EXEMPTION, (B) THE COMPANY AND THE ADMINISTRATORS ARE NOT
"FIDUCIARIES" WITHIN THE MEANING OF SECTION 3(21) OF ERISA AND THE REGULATIONS
THEREUNDER, WITH RESPECT TO SUCH PERSON'S INTEREST IN THE CAPITAL SECURITIES OR
THE JUNIOR SUBORDINATED DEBENTURES, AND (C) IN PURCHASING THE CAPITAL SECURITIES
SUCH PERSON APPROVES THE PURCHASE OF THE JUNIOR SUBORDINATED DEBENTURES AND THE
APPOINTMENT OF THE ISSUER TRUSTEES.
- 3 -
<PAGE> 79
CERTIFICATE NUMBER AGGREGATE LIQUIDATION AMOUNT
P-__________________________
(CAPITAL SECURITIES)
CUSIP NO. 895849 AA 5
CERTIFICATE EVIDENCING CAPITAL SECURITIES
OF
BSB CAPITAL TRUST I
_____% CAPITAL SECURITIES
(LIQUIDATION AMOUNT $1,000 PER CAPITAL SECURITY)
BSB Capital Trust I, a statutory business trust formed under the laws of
the State of Delaware (the "Issuer Trust"), hereby certifies that
___________________________ (the "Holder") is the registered owner of ____
Dollars ($ ____ ) aggregate liquidation amount of capital securities of the
Trust representing a preferred undivided beneficial interest in the assets of
the Issuer Trust and designated the BSB Capital Trust _____% Capital Securities
(liquidation amount $1,000 per Capital Security) (the "Capital Securities"). The
Capital Securities are transferable on the books and records of the Issuer
Trust, in person or by a duly authorized attorney, upon surrender of this
certificate duly endorsed and in proper form for transfer as provided in Section
5.5 of the Trust Agreement (as defined below). The designations, rights,
privileges, restrictions, preferences and other terms and provisions of the
Capital Securities are set forth in, and this certificate and the Capital
Securities represented hereby are issued and shall in all respects be subject to
the terms and provisions of, the Amended and Restated Trust Agreement of the
Issuer Trust, dated as of July ___, 1998, as the same may be amended from time
to time (the "Trust Agreement"), among BSB Bancorp, Inc., as Depositor, Bankers
Trust Company, as Property Trustee, Bankers Trust (Delaware), as Delaware
Trustee, the Administrators signatory thereto, and the Holders of Trust
Securities, including the designation of the terms of the Capital Securities as
set forth therein. The Holder is entitled to the benefits of the Guarantee
Agreement entered into by BSB Bancorp, Inc., a Delaware corporation, and Bankers
Trust Company, as Guarantee Trustee, dated as of July ___, 1998 (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.
- 4 -
<PAGE> 80
Upon receipt of this certificate, the Holder is bound by the Trust
Agreement and is entitled to the benefits thereunder.
Terms used but not defined herein have the meanings set forth in the Trust
Agreement.
IN WITNESS WHEREOF, one of the Administrators of the Issuer Trust has
executed this certificate this ______ day of __________, _______.
BSB CAPITAL TRUST I
By:
------------------------------
Name:
Administrator
AUTHENTICATED AND REGISTERED:
BANKERS TRUST COMPANY,
as Property Trustee and Securities Registrar
By:
---------------------------
Name:
Authorized Signatory
- 5 -
<PAGE> 81
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this Capital
Security to:
- --------------------------------------------------------------------------------
(Insert assignee's social security or tax
identification number)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Insert address and zip code of assignee)
and irrevocably appoints
-------------------------------------------------------
- --------------------------------------------------------------------------------
agent to trasfer this Capital Securities Certificate on the books of the Issuer
Trust. The agent may substitute another to act for him or her.
Date:
----------------
Signature:
----------------------------------
(Sign exactly as your name appears
on the other side of this Capital
Securities Certificate)
The signature(s) should be guaranteed by an eligible guarantor institution
(banks, stockbrokers, savings and loan associations and credit unions with
membership in an approved signature guarantee medallion program), pursuant to
S.E.C. Rule 17Ad-15.
- 6 -
<PAGE> 82
EXHIBIT E
[Form of Restricted Securities Certificate]
RESTRICTED SECURITIES CERTIFICATE
(For transfers pursuant to Section 5.5(b)
of the Trust Agreement)
[ ],
-------------------------
as Security Registrar
[address]
Re: _____% Capital Securities (liquidation amount $1,000 per Capital
Security) of BSB Capital Trust I (the "Trust") (the "Capital
Securities")
Reference is made to the Amended and Restated Trust Agreement, dated as of
July ____, 1998 (the "Trust Agreement"), among BSB Bancorp, Inc., as Depositor,
Bankers Trust Company, as Property Trustee and Bankers Trust (Delaware), as
Delaware Trustee, and the Holders (as defined therein) from time to time. Terms
used herein and defined in the Trust Agreement or in Regulation D, Rule 144A or
Rule 144 under the U.S. Securities Act of 1933 (the "Securities Act") are used
herein as so defined.
This certificate relates to $__________ aggregate Liquidation Amount of
Capital Securities, which are evidenced by the following certificate(s) (the
"Specified Securities"):
CUSIP No(s).
------------------------
CERTIFICATE No(s).
----------------------
CURRENTLY IN BOOK-ENTRY FORM: __ Yes __ No (check one)
The person in whose name this certificate is executed below (the "Undersigned")
hereby certifies that either (i) it is the sole beneficial owner of the
Specified Securities or (ii) it is acting on behalf of all the beneficial owners
of the Specified Securities and is duly authorized by them to do so. Such
beneficial owner or owners are referred to herein collectively as the "Owner."
If the
- 1 -
<PAGE> 83
Specified Securities are represented by a Book-Entry Capital Securities
Certificate, they are held through the Clearing Agency or a Clearing Agency
Participant in the name of the Undersigned, as or on behalf of the Owner. If the
Specified Securities are not represented by a Book-Entry Capital Securities
Certificate, they are registered in the name of the Undersigned, as or on behalf
of the Owner.
The Owner has requested that the Specified Securities be transferred to a
person (the "Transferee") who will take delivery in the form of a Restricted
Capital Security. In connection with such transfer, the Owner hereby certifies
that, unless such transfer is being effected pursuant to an effective
registration statement under the Securities Act, it is being effected in
accordance with Rule 144A, Rule 904 or Rule 144 under the Securities Act and all
applicable securities laws of the states of the United States and other
jurisdictions. Accordingly, the Owner hereby further certifies as:
(1) Rule 144A Transfers. If the transfer is being effected in accordance
with Rule 144A:
(A) the Specified Securities are being transferred to a person that the
Owner and any person acting on its behalf reasonably believe is a
"qualified institutional buyer" within the meaning of Rule 144A,
acquiring for its own account or for the account of a qualified
institutional buyer; and
(B) the Owner and any person acting on its behalf have taken reasonable
steps to ensure that the Transferee is aware that the Owner may be
relying on Rule 144A in connection with the transfer; and
(2) Rule 904 Transfers. If the transfer is being effected in accordance
with Rule 904:
(A) the Owner is not a distributor of the Securities, an affiliate of
the Depositor or the Trust or any such distributor or a person acting
on behalf of any of the foregoing;
(B) the offer of the Specified Securities was not made to a person in
the United States;
(C) either:
- 2 -
<PAGE> 84
(i) at the time the buy order was originated, the Transferee
was outside the United States or the Owner and any person
acting on its behalf reasonably believed that the Transferee
was outside the United States, or
(ii) the transaction is being executed in, on or through the
facilities of the Eurobond market, as regulated by the
Association of International Bond Dealers, or another
designated offshore securities market and neither the Owner
nor any person acting on its behalf knows that the
transaction has been prearranged with a buyer in the United
States;
(D) no directed selling efforts within the meaning of Rule
902 of Regulation S have been made in the United States by
or on behalf of the Owner or any affiliate thereof; and
(E) the transaction is not part of a plan or scheme to evade
the registration requirements of the Securities Act.
(3) Rule 144 Transfers. If the transfer is being effected pursuant to
Rule 144:
(A) the transfer is occurring after a holding period of at least
two years (computed in accordance with paragraph (d) of Rule 144
or such shorter time as may be provided therein) has elapsed since
the date the Specified Securities were acquired from the Depositor
or the Trust or from an affiliate (as such term is defined in Rule
144) of the Depositor or the Trust, whichever is later, and is
being effected in accordance with the applicable amount, manner of
sale and notice requirements of paragraphs (e), (f) and (h) of
Rule 144;
(B) the transfer is occurring after a holding period of at least
three years (or such shorter time as may be provided in Rule
144(k) has elapsed since the date the Specified Securities were
acquired from the Depositor or the Trust or from an affiliate (as
such term is defined in Rule 144) of the Depositor or the Trust,
whichever is later, and the Owner is not, and during the preceding
three months has not been, an affiliate of the Depositor or the
Trust; or
(C) the Owner is a "qualified institutional buyer" within the
meaning of Rule 144A, and is transferring the Securities to an
institution that is an "accredited investor" within the meaning of
Rule 501(a)(1), (2), (3) or (7) of Regulation D under the
Securities Act in a transaction exempt from the registration
requirements of the Securities Act.
- 3 -
<PAGE> 85
This certificate and the statements contained herein are made for your
benefit and the benefit of the Depositor, the Trust and the Initial Purchaser.
Dated:
-------------------------------------------------------
(Print the name of the Undersigned, as such term
is defined in the second paragraph of this certificate.)
By:
--------------------------------
Name:
Title:
(If the Undersigned is a corporation, partnership or
fiduciary, the title of the person signing on behalf
of the Undersigned must be stated.)
- 4 -
<PAGE> 1
EXHIBIT 4.1
===================================================
JUNIOR SUBORDINATED INDENTURE
Between
BSB BANCORP, INC.
and
BANKERS TRUST COMPANY
(as Trustee)
dated as of
July 24, 1998
===================================================
<PAGE> 2
BSB CAPITAL TRUST I
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>
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
</TABLE>
<PAGE> 3
<TABLE>
<S> <C>
(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> 4
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
ARTICLE I DEFINITIONS AND OTHER PROVISIONS OF
GENERAL APPLICATION . . . . . . . . . . . . . . . . . . . . . . . . 1
SECTION 1.1. Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
SECTION 1.2. Compliance Certificate and Opinions . . . . . . . . . . . . . . . . 11
SECTION 1.3. Forms of Documents Delivered to
Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
SECTION 1.4. Acts of Holders . . . . . . . . . . . . . . . . . . . . . . . . . . 12
SECTION 1.5. Notices, Etc. to Trustee and Company . . . . . . . . . . . . . . . 14
SECTION 1.6. Notice to Holders; Waiver . . . . . . . . . . . . . . . . . . . . . 14
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. Forms 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 . . . . . . . . . . . . . . . . . . . . . . . . . . 25
SECTION 2.5. Form of Trustee's Certificate
of Authentication . . . . . . . . . . . . . . . . . . . . . . . . . 26
ARTICLE III THE SECURITIES . . . . . . . . . . . . . . . . . . . . . . . . . . 26
SECTION 3.1. Title and Terms . . . . . . . . . . . . . . . . . . . . . . . . . . 26
SECTION 3.2. Denominations . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
SECTION 3.3. Execution, Authentication, Delivery
and Dating . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
</TABLE>
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SECTION 3.4. Temporary Securities . . . . . . . . . . . . . . . . . . . . . . . 31
SECTION 3.5. Global Securities . . . . . . . . . . . . . . . . . . . . . . . . . 31
SECTION 3.6. Registration, Transfer and Exchange
Generally; Certain Transfers and
Exchanges; Securities Act Legends . . . . . . . . . . . . . . . . . 33
SECTION 3.7. Mutilated, Lost and Stolen Securities . . . . . . . . . . . . . . . 35
SECTION 3.8. Payment of Interest and Additional
Interest; Interest Rights Preserved . . . . . . . . . . . . . . . . 36
SECTION 3.9. Persons Deemed Owners . . . . . . . . . . . . . . . . . . . . . . . 38
SECTION 3.10. Cancellation . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
SECTION 3.11. Computation of Interest . . . . . . . . . . . . . . . . . . . . . . 38
SECTION 3.12. Deferrals of Interest Payment Dates . . . . . . . . . . . . . . . . 38
SECTION 3.13. Right of Set-Off . . . . . . . . . . . . . . . . . . . . . . . . . 40
SECTION 3.14. Agreed Tax Treatment . . . . . . . . . . . . . . . . . . . . . . . 40
SECTION 3.15. Shortening or Extension of Stated
Maturity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
SECTION 3.16. CUSIP Numbers . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
ARTICLE IV SATISFACTION AND DISCHARGE . . . . . . . . . . . . . . . . . . . . 41
SECTION 4.1. Satisfaction and Discharge of Indenture . . . . . . . . . . . . . . 41
SECTION 4.2. Application of Trust Money . . . . . . . . . . . . . . . . . . . . 42
ARTICLE V REMEDIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
SECTION 5.1. Events of Default . . . . . . . . . . . . . . . . . . . . . . . . . 42
SECTION 5.2. Acceleration of Maturity; Rescission
and Annulment . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
SECTION 5.3. Collection of Indebtedness and Suits
for Enforcement by Trustee . . . . . . . . . . . . . . . . . . . . 44
SECTION 5.4. Trustee May File Proofs of Claim . . . . . . . . . . . . . . . . . 45
SECTION 5.5. Trustee May Enforce Claim Without
Possession of Securities . . . . . . . . . . . . . . . . . . . . . 45
SECTION 5.6. Application of Money Collected . . . . . . . . . . . . . . . . . . 46
SECTION 5.7. Limitation on Suits . . . . . . . . . . . . . . . . . . . . . . . . 46
SECTION 5.8. Unconditional Right of Holders to
Receive Principal, Premium and
Interest; Direct Action by Holders
of Capital Securities . . . . . . . . . . . . . . . . . . . . . . . 47
</TABLE>
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SECTION 5.9. Restoration of Rights and Remedies . . . . . . . . . . . . . . . . 47
SECTION 5.10. Rights and Remedies Cumulative . . . . . . . . . . . . . . . . . . 47
SECTION 5.11. Delay or Omission Not Waiver . . . . . . . . . . . . . . . . . . . 48
SECTION 5.12. Control by Holders . . . . . . . . . . . . . . . . . . . . . . . . 48
SECTION 5.13. Waiver of Past Defaults . . . . . . . . . . . . . . . . . . . . . . 48
SECTION 5.14. Undertaking for Costs . . . . . . . . . . . . . . . . . . . . . . . 49
SECTION 5.15. Waiver of Usury, Stay or Extension Laws . . . . . . . . . . . . . . 49
ARTICLE VI THE TRUSTEE . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
SECTION 6.1. Certain Duties and Responsibilities . . . . . . . . . . . . . . . . 50
SECTION 6.2. Notice of Defaults . . . . . . . . . . . . . . . . . . . . . . . . 51
SECTION 6.3. Certain Rights of Trustee . . . . . . . . . . . . . . . . . . . . . 51
SECTION 6.4. Not Responsible for Recitals or
Issuance of Securities . . . . . . . . . . . . . . . . . . . . . . 52
SECTION 6.5. May Hold Securities . . . . . . . . . . . . . . . . . . . . . . . . 52
SECTION 6.6. Money Held in Trust . . . . . . . . . . . . . . . . . . . . . . . . 52
SECTION 6.7. Compensation and Reimbursements . . . . . . . . . . . . . . . . . . 53
SECTION 6.8. Disqualification; Conflicting
Interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
SECTION 6.9. Corporate Trustee Required;
Eligibility . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
SECTION 6.10. Resignation and Removal; Appointment
of Successor . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
SECTION 6.11. Acceptance of Appointment by
Successor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
SECTION 6.12. Merger, Conversion, Consolidation or
Succession to Business . . . . . . . . . . . . . . . . . . . . . . 56
SECTION 6.13. Preferential Collection of Claims
Against Company . . . . . . . . . . . . . . . . . . . . . . . . . . 56
SECTION 6.14. Appointment of Authenticating Agent . . . . . . . . . . . . . . . . 57
ARTICLE VII HOLDER'S LISTS AND REPORTS BY TRUSTEE,
PAYING AGENT AND COMPANY . . . . . . . . . . . . . . . . . . . . . 58
SECTION 7.1. Company to Furnish Trustee Names and
Addresses of Holders . . . . . . . . . . . . . . . . . . . . . . . 58
SECTION 7.2. Preservation of Information;
Communications to Holders . . . . . . . . . . . . . . . . . . . . . 58
SECTION 7.3. Reports by Trustee and Paying Agent . . . . . . . . . . . . . . . . 59
</TABLE>
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SECTION 7.4. Reports by Company . . . . . . . . . . . . . . . . . . . . . . . . 59
ARTICLE VIII CONSOLIDATION, MERGER, CONVEYANCE,
TRANSFER OR LEASE . . . . . . . . . . . . . . . . . . . . . . . . . 59
SECTION 8.1. Company May Consolidate, Etc., Only
on Certain Terms . . . . . . . . . . . . . . . . . . . . . . . . . 59
SECTION 8.2. Successor Company Substituted . . . . . . . . . . . . . . . . . . . 60
ARTICLE IX SUPPLEMENTAL INDENTURES . . . . . . . . . . . . . . . . . . . . . . 61
SECTION 9.1. Supplemental Indentures Without Consent
of Holders . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
SECTION 9.2. Supplemental Indentures With Consent
of Holders . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
SECTION 9.3. Execution of Supplemental Indentures . . . . . . . . . . . . . . . 64
SECTION 9.4. Effect of Supplemental Indentures . . . . . . . . . . . . . . . . . 64
SECTION 9.5. Conformity with Trust Indenture Act . . . . . . . . . . . . . . . . 64
SECTION 9.6. Reference in Securities to
Supplemental Indentures . . . . . . . . . . . . . . . . . . . . . . 64
ARTICLE X COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
SECTION 10.1. Payment of Principal, Premium and
Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
SECTION 10.2. Maintenance of Office or Agency . . . . . . . . . . . . . . . . . . 65
SECTION 10.3. Money for Security Payments to be
Held in Trust . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
SECTION 10.4. Statement as to Compliance . . . . . . . . . . . . . . . . . . . . 66
SECTION 10.5. Waiver of Certain Covenants . . . . . . . . . . . . . . . . . . . . 67
SECTION 10.6. Additional Sums . . . . . . . . . . . . . . . . . . . . . . . . . . 67
SECTION 10.7. Additional Covenants . . . . . . . . . . . . . . . . . . . . . . . 68
SECTION 10.8. Federal Tax Reports . . . . . . . . . . . . . . . . . . . . . . . . 69
ARTICLE XI REDEMPTION OF SECURITIES . . . . . . . . . . . . . . . . . . . . . 69
SECTION 11.1. Applicability of This Article . . . . . . . . . . . . . . . . . . . 69
SECTION 11.2 Election to Redeem; Notice of Trustee . . . . . . . . . . . . . . . 69
SECTION 11.3. Selection of Securities to be Redeemed . . . . . . . . . . . . . . 69
</TABLE>
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SECTION 11.4. Notice of Redemption . . . . . . . . . . . . . . . . . . . . . . . 70
SECTION 11.5. Deposit of Redemption Price . . . . . . . . . . . . . . . . . . . . 71
SECTION 11.6. Payment of Securities Called for
Redemption . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
SECTION 11.7. Right of Redemption of Securities
Initially Issued to the Issuer Trust . . . . . . . . . . . . . . . 71
ARTICLE XII SINKING FUNDS . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
ARTICLE XIII SUBORDINATION OF SECURITIES . . . . . . . . . . . . . . . . . . . . 72
SECTION 13.1. Securities Subordinate to Senior
Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
SECTION 13.2. No Payment When Senior Indebtedness
in Default; Payment Over of Proceeds
Upon Dissolution, Etc. . . . . . . . . . . . . . . . . . . . . . . 72
SECTION 13.3. Payment Permitted If No Default . . . . . . . . . . . . . . . . . . 74
SECTION 13.4. Subrogation to Rights of Holders of
Senior Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . 74
SECTION 13.5. Provisions Solely to Define Relative
Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75
SECTION 13.6. Trustee to Effectuate Subordination . . . . . . . . . . . . . . . . 75
SECTION 13.7. No Waiver of Subordination Provisions . . . . . . . . . . . . . . . 75
SECTION 13.8. Notice to Trustee . . . . . . . . . . . . . . . . . . . . . . . . . 76
SECTION 13.9. Reliance on Judicial Order or
Certificate of Liquidating Agent . . . . . . . . . . . . . . . . . 76
SECTION 13.10. Trustee Not Fiduciary for Holders of
Senior Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . 77
SECTION 13.11. Rights of Trustee as Holder of Senior
Indebtedness; Preservation of
Trustee's Rights . . . . . . . . . . . . . . . . . . . . . . . . . 77
SECTION 13.12. Article Applicable to Paying Agents . . . . . . . . . . . . . . . . 77
SECTION 13.13. Certain Conversions or Exchanges
Deemed Payment . . . . . . . . . . . . . . . . . . . . . . . . . . 77
ANNEX A FORM OF RESTRICTED SECURITIES
CERTIFICATE
</TABLE>
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<PAGE> 9
JUNIOR SUBORDINATED INDENTURE
THIS JUNIOR SUBORDINATED INDENTURE, dated as of July 24, 1998, is
between BSB BANCORP, INC., a Delaware corporation (the "Company"), having its
principal office at 58-68 Exchange Street, Binghamton, New York 13902, and
BANKERS TRUST COMPANY, as Trustee, having its principal office at Four Albany
Street, 4th Floor, New York, New York 10006 (the "Trustee").
RECITALS OF THE COMPANY
WHEREAS, the Company has duly authorized the execution and delivery of
this Indenture to provide for the issuance from time to time of its unsecured
junior subordinated debt in securities in series (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 BSB Capital Trust I, a Delaware business trust (the "Issuer
Trust") of undivided preferred beneficial interests in the assets of the Issuer
Trust (the "Capital Securities") and common undivided interests in the assets
of the Issuer Trust (the "Common Securities" and, collectively with the Capital
Securities, the "Trust Securities"), and to provide the terms and conditions
upon which the Securities are to be authenticated, issued and delivered; and
WHEREAS, all things necessary to make this Indenture a valid agreement
of the Company, in accordance with its terms, have been done.
NOW THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the
Securities by the Holders (as such term is defined in Section 1.1 hereof)
thereof, it is mutually covenanted and agreed, for the equal and proportionate
benefit of all Holders of the Securities or of any series thereof, and
intending to be legally bound hereby, as follows:
ARTICLE I.
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
SECTION 1.1. Definitions.
For all purposes of this Indenture, except as otherwise expressly
provided or unless the context otherwise requires:
(1) the terms defined in this Article I have the meanings assigned to
them in this Article, and include the plural as well as the singular;
(2) all other terms used herein that are defined in the Trust
Indenture Act, either directly or by reference therein, have the meanings
assigned to them therein;
<PAGE> 10
(3) the words "include," "includes" and "including" shall be deemed
to be followed by the phrase "without limitation";
(4) all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with generally accepted accounting
principles as in effect at the time of computation;
(5) whenever the context may require, any gender shall be deemed to
include the other;
(6) unless the context otherwise requires, any reference to an
"Article" or a "Section" refers to an Article or a Section, as the case may be,
of this Indenture; and
(7) the words "hereby", "herein", "hereof" and "hereunder" and other
words of similar import refer to this Indenture as a whole and not to any
particular Article, Section or other subdivision.
"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 Company up to an amount not to
exceed, when taken together with all cumulative preferred stock of the Company,
if any, 25% of the Company'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
<PAGE> 11
the ownership of voting securities, by contract or otherwise; and the terms
"controlling" and "controlled" have meanings correlative to the foregoing.
"Agent Member" means any member of, or participant in, the Depositary.
"Applicable Procedures" means, with respect to any transfer or
transaction involving a Global Security or beneficial interest therein, the
rules and procedures of the Depositary for such Global Security, in each case
to the extent applicable to such transaction and as in effect from time to
time.
"Authenticating Agent" means any Person authorized by the Trustee
pursuant to Section 6.14 to act on behalf of the Trustee to authenticate
Securities of one or more series.
"Board of Directors" means the board of directors of the Company or
the executive committee of the board of directors of the Company (or any other
committee of the board of directors of the Company performing similar
functions) or, for purposes of this Indenture, a committee designated by the
board of directors of the Company (or such committee), comprised of two or more
members of the board of directors of the Company or officers of the Company, or
both.
"Board Resolution" means a copy of a resolution certified by the
Secretary or any Assistant Secretary of the Company to have been duly adopted
by the Board of Directors, or such committee of the Board of Directors or
officers of the Company to which authority to act on behalf of the Board of
Directors has been delegated, and to be in full force and effect on the date
of such certification, and delivered to the Trustee.
"Business Day" means any day other than (i) a Saturday or Sunday, (ii)
a day on which banking institutions in the City of New York are authorized or
required by law or executive order to remain closed, or (iii) a day on which
the Corporate Trust Office of the Trustee, or, with respect to the Securities
of a series initially issued to 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 Securities" has the meaning specified in the first recital of
this Indenture.
"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 Capital Securities of the Issuer Trust, there is
<PAGE> 12
more than an insubstantial risk that the Company will not be entitled to treat
an amount equal to the Liquidation Amount (as such term is defined in the Trust
Agreement) of such Capital 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
Federal Reserve, as then in effect and applicable to the Company.
"Commission" means the Securities and Exchange Commission, as from
time to time constituted, created under the Exchange Act, or, if at any time
after the execution of this instrument such Commission is not existing and
performing the duties now assigned to it under the Trust Indenture Act, then
the body performing such duties on such date.
"Common Securities" has the meaning specified in the first recital of
this Indenture.
"Common Stock" means the common stock, $0.01 par value per share, of
the Company.
"Company" means the Person named as the "Company" in the preamble of
this instrument until a successor entity shall have become such pursuant to the
applicable provisions of this Indenture, and thereafter "Company" shall mean
such successor entity.
"Company Request" and "Company Order" mean, respectively, the written
request or order signed in the name of the Company by its Chairman of the Board
of Directors, any Vice Chairman of the Board of Directors, its President or a
Vice President, and by its Chief Financial Officer, its Treasurer, or its
Secretary or an Assistant Secretary, and delivered to the Trustee.
"Corporate Trust Office" means the principal office of the Trustee at
which at any particular time its corporate trust business shall be
administered, which office at the date hereof is located at Four Albany Street,
4th Floor, New York, New York 10006.
"Creditor" has the meaning specified in Section 6.7.
"Defaulted Interest" has the meaning specified in Section 3.8.
"Delaware Trustee" means, with respect to the Issuer Trust, the Person
identified as the "Delaware Trustee" in the Trust Agreement, solely in its
capacity as Delaware Trustee of the Issuer Trust under the Trust Agreement and
not in its individual capacity, or its successor in interest in such capacity,
or any successor Delaware trustee appointed as therein provided.
"Depositary" means, with respect to the Securities of any series
issuable or issued in whole or in part in the form of one or more Global
Securities, the Person designated as Depositary by the Company pursuant to
Section 3.1 with respect to such series (or any successor thereto).
<PAGE> 13
"Discount Security" means any security that provides for an amount
less than the principal amount thereof to be due and payable upon a declaration
of acceleration of the Maturity thereof pursuant to Section 5.2.
"Dollar" or "$" 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.
"Extension Period" has the meaning specified in Section 3.12.
"Federal Reserve" means the Board of Governors of the Federal Reserve
System.
"Global Security" means a Security in the form prescribed in Section
2.4 evidencing all or part of a series of Securities, issued to the Depositary
or its nominee for such series, and registered in the name of such Depositary
or its nominee.
"Guarantee" means, with respect to the Issuer Trust, the Guarantee
Agreement, dated July 24, 1998, executed by the Company for the benefit of the
Holders of the Capital 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, as to each series of Securities, the
Stated Maturity of an installment of interest on such Securities.
<PAGE> 14
"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 Capital Securities of the Issuer Trust.
"Issuer Trust" has the meaning specified in the first recital of this
Indenture.
"Liquidation Amount" shall have the meaning assigned in the Trust
Agreement.
"Maturity" when used with respect to any Security means the date on
which the principal of such Security becomes due and payable as therein or
herein provided, whether at the Stated Maturity or by declaration of
acceleration, call for redemption or otherwise.
"Notice of Default" means a written notice of the kind specified in
Section 5.1(3).
"Officers' Certificate" means, 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 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.
<PAGE> 15
Provided, however, that, if this Indenture is qualified under the Trust
Indenture Act, 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:
(i) Securities theretofore canceled by the Trustee or delivered to
the Trustee for cancellation;
(ii) Securities for whose payment money in the necessary amount has
been theretofore deposited with the Trustee or any Paying Agent in trust for
the Holders of such Securities; and
(iii) Securities in substitution for or in lieu of 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 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'
<PAGE> 16
Certificate as conclusive evidence of the facts therein set forth and of the
fact that all Securities not listed therein are Outstanding for the purpose of
any such determination.
"Paying Agent" means the Trustee or any Person authorized by the
Company to pay the principal of (or premium, if any) or interest on, 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 of any
series, the place or places where the principal of (and premium, if any) and
interest on the Securities of such series are payable pursuant to Section 3.1.
"Predecessor Security" of any particular Security means every previous
Security evidencing all or a portion of the same debt as that evidenced by such
particular Security. For the purposes of this definition, any security
authenticated and delivered under Section 3.7 in lieu of a mutilated,
destroyed, lost or stolen Security shall be deemed to evidence the same debt as
the mutilated, destroyed, lost or stolen Security.
"Principal Subsidiary Bank" means each of (i) BSB Bank & Trust
Company, (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
banking 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.
"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.
<PAGE> 17
"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 of a series means, unless otherwise
provided pursuant to Section 3.1 with respect to Securities of such series, the
close of business on the fifteenth day of the month 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, $0.01 par value per share,
of rights entitling the holders thereof to receive, 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.
"Securities Register" and "Securities Registrar" have the respective
meanings specified in Section 3.6.
<PAGE> 18
"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 Capital Securities.
"Special Record Date" for the payment of any Defaulted Interest means
a date fixed by the Trustee pursuant to Section 3.8.
"Stated Maturity," when used with respect to any Security or any
installment of principal thereof or interest thereon, means the date specified
pursuant to the terms of such Security as the fixed date on which the principal
of such Security or such installment of principal or interest is due and
payable, as such date may, in the case of such principal, be shortened or
extended as provided pursuant to the terms of such Security and this Indenture.
"Subsidiary" means an entity more than 50% of the outstanding voting
stock of which is owned, directly or indirectly, by the Company or by one or
more other Subsidiaries, or by the Company and one or more other Subsidiaries.
For purposes of this definition, "voting stock" means stock that ordinarily has
voting power for the election of directors, whether at all times or only so
long as no senior class of stock has such voting power by reason of any
contingency.
"Successor Security" of any particular Security means every Security
issued after, and evidencing all or a portion of the same debt as that
evidenced by, such particular Security; and, for
<PAGE> 19
the purposes of this definition, any Security authenticated and delivered under
Section 3.7 in exchange for or in lieu of a mutilated, destroyed, lost or
stolen Security shall be deemed to evidence the same debt as the mutilated,
destroyed, lost or stolen Security.
"Tax Event" means the receipt by 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 Capital Securities of the Issuer Trust, there is
more than an insubstantial risk that (i) the Issuer Trust is, or will be within
90 days of the delivery of such Opinion of Counsel, subject to United States
Federal income tax with respect to income received or accrued on the
corresponding series of Securities issued by the Company to the Issuer Trust,
(ii) interest payable by the Company on such corresponding series of Securities
is not, or within 90 days of the delivery of such Opinion of Counsel will not
be, deductible by the Company, in whole or in part, for United States federal
income tax purposes, or (iii) the Issuer Trust is, or will be within 90 days of
the delivery of such Opinion of Counsel, subject to more than a de minimis
amount of other taxes, duties or other governmental charges.
"Trust Agreement" means the Amended and Restated Trust Agreement,
dated as of July 24, 1998, 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 preamble of
this Indenture, solely in its capacity as such and not in its individual
capacity, until a successor Trustee shall have become such pursuant to the
applicable provisions of this Indenture, and thereafter "Trustee" shall mean or
include each Person who is then a Trustee hereunder and, if at any time there
is more than one such Person, "Trustee" as used with respect to the Securities
of any series shall mean the Trustee with respect to Securities of that series.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as
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."
<PAGE> 20
SECTION 1.2. Compliance Certificate and Opinions.
Upon any application or request by the Company to the Trustee to take
any action under any provision of this Indenture, the Company shall furnish to
the Trustee an Officers' Certificate stating that all conditions precedent
(including covenants compliance with which constitutes a condition precedent),
if any, provided for in this Indenture relating to the proposed action have
been complied with and an Opinion of Counsel stating that, in the opinion of
such counsel, all such conditions precedent (including covenants compliance
with which constitutes a condition precedent), if any, have been complied with,
except that in the case of any such application or request as to which the
furnishing of such documents is specifically required by any provision of this
Indenture relating to such particular application or request, no additional
certificate or opinion need be furnished.
Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture (other than the
certificates provided pursuant to Section 10.4) shall include:
(1) a statement by each individual signing such certificate or
opinion that such individual has read such covenant or condition and the
definitions herein relating thereto;
(2) a brief statement as to the nature and scope of the examination
or investigation upon which the statements or opinions of such individual
contained in such certificate or opinion are based;
(3) a statement that, in the opinion of such individual, he or she
has made such examination or investigation as is necessary to enable him or her
to express an informed opinion as to whether or not such covenant or condition
has been complied with; and
(4) a statement as to whether, in the opinion of such individual,
such condition or covenant has been complied with.
SECTION 1.3. Forms of Documents Delivered to Trustee.
(1) 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.
(2) 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
<PAGE> 21
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.
(3) Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions, or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
SECTION 1.4. Acts of Holders.
(1) Any request, demand, authorization, direction, notice, consent,
waiver or other action provided by this Indenture 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 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.
(2) 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.
(3) 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.
(4) The ownership of Securities shall be proved by the Securities
Register.
(5) 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
<PAGE> 22
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.
(6) The Company may set any day as a record date for the purpose of
determining the Holders of Outstanding Securities of any series entitled to
give, make or take any request, demand, authorization, direction, notice,
consent, waiver or other action provided or permitted by this Indenture to be
given, made or taken by Holders of Securities of such series, provided that the
Company may not set a record date for, and the provisions of this Section
1.4(6) shall not apply with respect to, the giving or making of any notice,
declaration, request or direction referred to in Section 1.4(7). If any record
date is set pursuant to this Section 1.4(6), the Holders of Outstanding
Securities of the relevant series on such record date, and no other Holders,
shall be entitled to take the relevant action, whether or not such Holders
remain Holders after such record date, provided, 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 of such series on such record date. Nothing in this
Section 1.4(6) shall be construed to prevent the Company from setting a new
record date for any action for which a record date has previously been set
pursuant to this Section 1.4(6) (whereupon the record date previously set shall
automatically and with no action by any Person be cancelled and of no effect),
and nothing in this Section 1.4(6) shall be construed to render ineffective any
action taken by Holders of the requisite principal amount of Outstanding
Securities of the relevant series on the date such action is taken. Promptly
after any record date is set pursuant to this Section 1.4(6), the Company, at
its own expense, shall cause notice of such record date, the proposed action by
Holders and the applicable Expiration Date to be given to the Trustee in
writing and to each Holder of Securities of the relevant series in the manner
set forth in Section 1.6.
(7) The Trustee may set any day as a record date for the purpose of
determining the Holders of Outstanding Securities of any series entitled to
join in the giving or making of (i) any Notice of Default, (ii) any declaration
of acceleration referred to in Section 5.2, (iii) any request to institute
proceedings referred to in Section 5.7(2), or (iv) any direction referred to in
Section 5.12, in each case with respect to Securities of such series. If any
record date is set pursuant to this Section 1.4(7), the Holders of Outstanding
Securities of such series on such record date, and no other Holders, shall be
entitled to join in such notice, declaration, request or direction, whether or
not such Holders remain Holders after such record date, provided, 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 of such series on such record date. Nothing in this
Section 1.4(7) 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(7) (whereupon the record date previously set shall
automatically and with no action by any Person be cancelled and of no effect)
and nothing in this paragraph shall be construed to render ineffective any
action taken by Holders of the requisite principal amount of Outstanding
Securities of the relevant series on the date such action is taken. Promptly
after any record date is set pursuant to this Section
<PAGE> 23
1.4(7), the Trustee, at the Company's expense, shall cause notice of such
record date, the proposed action by Holders and the applicable Expiration Date
to be given to the Company in writing and to each Holder of Securities of the
relevant series in the manner set forth in Section 1.6.
(8) 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 of the relevant series in the
manner set forth in Section 1.6 on or prior to the existing Expiration Date.
If an Expiration Date is not designated with respect to any record date set
pursuant to this Section, the party hereto that set such record date shall be
deemed to have initially designated the 180th day after such record date as the
Expiration Date with respect thereto, subject to its right to change the
Expiration Date as provided in this Section 1.4(8). Notwithstanding the
foregoing, no Expiration Date shall be later than the 180th day after the
applicable record date.
(9) Without limiting the foregoing, a Holder entitled hereunder to
take any action hereunder with regard to any particular Security may do so with
regard to all or any part of the principal amount of such Security or by one or
more duly appointed agents each of which may do so pursuant to such appointment
with regard to all or any part of such principal amount.
SECTION 1.5. Notices, Etc. to Trustee and Company.
Any request, demand, authorization, direction, notice, consent, waiver
or Act of Holders or other document provided or permitted by this Indenture to
be made upon, given or furnished to, or filed with,
(1) the Trustee by any Holder, any holder of Capital Securities or the
Company shall be sufficient for every purpose hereunder if made, given,
furnished or filed in writing to or with the Trustee at its Corporate Trust
Office, or
(2) the Company by the Trustee, any Holder or any holder of Capital
Securities shall be sufficient for every purpose (except as otherwise provided
in Section 5.1) hereunder if in writing and mailed, first class, postage
prepaid, to the Company addressed to it at the address of its principal office
specified in the preamble 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
<PAGE> 24
in the Securities Register, not later than the latest date, and not earlier
than the earliest date, prescribed for the giving of such notice. If, by
reason of the suspension of or irregularities in regular mail services or for
any other reason, it shall be impossible or impracticable to mail notice of any
event to Holders when said notice is required to be given pursuant to any
provision of this Indenture or of the relevant Securities, then any manner of
giving such notice as shall be satisfactory to the Trustee shall be deemed to
be a sufficient giving of such notice. In any case where notice to Holders is
given by mail, neither the failure to mail such notice, nor any defect in any
notice so mailed, to any particular Holder shall affect the sufficiency of such
notice with respect to other Holders. Where this Indenture provides for notice
in any manner, such notice may be waived in writing by the Person entitled to
receive such notice, either before or after the event, and such waiver shall be
the equivalent of such notice. Waivers of notice by Holders shall be filed
with the Trustee, but such filing shall not be a condition precedent to the
validity of any action taken in reliance upon such waiver.
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.
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,
<PAGE> 25
the Holders of the Securities and, to the extent expressly provided in Sections
5.2, 5.8, 5.9, 5.11, 5.13, 9.1 and 9.2, the holders of Capital Securities, any
benefit or any legal or equitable right, remedy or claim under this Indenture.
SECTION 1.12. Governing Law.
THIS INDENTURE AND THE SECURITIES SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
SECTION 1.13. Non-Business Days.
If any Interest Payment Date, Redemption Date or Stated Maturity of
any Security shall not be a Business Day, then (notwithstanding any other
provision of this Indenture or the Securities) payment of interest or principal
(and premium, if any) or other amounts in respect of such Security need not be
made on such date, but may be made on the next succeeding Business Day (and no
interest shall accrue in respect of the amounts whose payment is so delayed for
the period from and after such Interest Payment Date, Redemption Date or Stated
Maturity, as the case may be, until such next succeeding Business Day) except
that, if such Business Day is in the next succeeding calendar year, such
payment shall be made on the immediately preceding Business Day (in each case
with the same force and effect as if made on the Interest Payment Date or
Redemption Date or at the Stated Maturity).
ARTICLE II.
SECURITY FORMS
SECTION 2.1. Forms Generally.
(1) The Securities of each series 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 such legends or endorsements
placed thereon as may be required to comply with applicable tax laws or the
rules of any securities exchange or as may, consistently herewith, be
determined by the officers executing such securities, as evidenced by their
execution of the Securities. If the form of Securities of any series is
established by action taken pursuant to a Board Resolution, a copy of an
appropriate record of such action shall be certified by the Secretary or an
Assistant Secretary of the Company and delivered to the Trustee at or prior to
the delivery of the Company Order contemplated by Section 3.3 with respect to
the authentication and delivery of such Securities.
<PAGE> 26
(2) 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.
(3) Securities distributed to holders of Global Capital Securities
(as defined in the applicable 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 Capital Securities
other than Global Capital 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.
BSB BANCORP, INC.
___% Junior Subordinated Deferrable Interest Debentures
due _____ __, 2028
[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 OF THE SECURITIES ACT,
AND, IN EACH CASE IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF THE
STATES AND OTHER JURISDICTIONS OF
<PAGE> 27
THE UNITED STATES. THE HOLDER OF THIS SECURITY AGREES THAT IT WILL COMPLY WITH
THE FOREGOING RESTRICTIONS. SECURITIES OWNED BY AN INITIAL INVESTOR THAT IS
NOT A QUALIFIED INSTITUTIONAL BUYER MAY NOT BE HELD IN GLOBAL FORM AND MAY NOT
BE TRANSFERRED WITHOUT CERTIFICATION THAT THE TRANSFER COMPLIES WITH THE
FOREGOING RESTRICTIONS, AS PROVIDED IN THE INDENTURE REFERRED TO BELOW. NO
REPRESENTATION CAN BE MADE AS TO THE AVAILABILITY OF THE EXEMPTION PROVIDED BY
RULE 144 FOR RESALES OF THE CAPITAL SECURITIES.]
No. $_________
BSB BANCORP, INC., a Delaware corporation (hereinafter called the
"Company", which term includes any successor Person under the Indenture
hereinafter referred to), for value received, hereby promises to pay to
______________________, or registered assigns, the principal sum of _________
Dollars on ________, [if the Security is a Global Security, then insert, if
applicable-- _____ __, 2028, or such other principal amount represented hereby
as may be set forth in the records of the Securities Registrar hereinafter
referred to in accordance with the Indenture,] [; provided that the Company may
(i) shorten the Stated Maturity of the principal of this Security to a date not
earlier than ___________, and (ii) extend the Stated Maturity of the principal
of this Security at any time on one or more occasions, subject to certain
conditions specified in Section 3.15 of the Indenture, but in no event to a
date later than _________]. The Company further promises to pay interest on
said principal from_______________, or from the most recent Interest Payment
Date to which interest has been paid or duly provided for, [monthly]
[quarterly] [semi-annually] [if applicable, insert--(subject to deferral as set
forth herein)] in arrears on [insert applicable Interest Payment Dates] of each
year, commencing _______ at the [variable rate equal to [insert applicable
interest rate formula]] [rate of ____%] per annum, [if applicable
insert--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 [if applicable, insert--; provided that any overdue
principal, premium or Additional Sums and any overdue installment of interest
shall bear Additional Interest at the [variable rate equal to [insert
applicable interest rate formula]] [rate of ____%] per annum (to the extent
that the payment of such interest shall be legally enforceable), compounded
[monthly] [quarterly] [semi-annually], from the dates such amounts are due
until they are paid or made available for payment, and such interest shall be
payable on demand]. The amount of interest payable for any period less than a
full interest period shall be computed on the basis of a 360-day year of twelve
30-day months and the actual days elapsed in a partial month in such period.
The amount of interest payable for any full interest period shall be computed
by dividing the applicable rate per annum by [twelve/four/two]. The interest
so payable, and punctually paid or duly provided for, on any Interest Payment
Date will, as provided in the Indenture, be paid to the Person in whose name
this Security (or one or more Predecessor Securities) is registered at the
close of business on the Regular Record Date for such interest installment [if
applicable, insert--, which shall be the [__________ or ____________] (whether
or not a Business Day), as the case may be, next preceding such Interest
Payment Date]. Any such interest not so punctually paid or duly provided for
shall forthwith cease to be payable to the Holder on
<PAGE> 28
such Regular Record Date and may either be paid to the Person in whose name
this Security (or one or more Predecessor Securities) is registered at the
close of business on a Special Record Date for the payment of such Defaulted
Interest to be fixed by the Trustee (notice whereof shall be given to Holders
of Securities of this series not less than 10 days prior to such Special
Record Date) or be paid at any time in any other lawful manner not inconsistent
with the requirements of any securities exchange on which the Securities of
this series may be listed, and upon such notice as may be required by such
exchange, all as more fully provided in said Indenture.
[If applicable, insert--So long as no Event of Default has occurred
and is continuing, the Company shall have the right, at any time during the
term of this Security, from time to time to defer the payment of interest on
this Security for up to _________ consecutive [monthly] [quarterly]
[semi-annual] interest payment periods with respect to each deferral period
(each an "Extension Period") [if applicable, insert--, 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 [If Stated Maturity can be
shortened or extended, insert--, as then in effect,] and no such Extension
Period may end on a date other than an Interest Payment Date; and provided,
further, however, that during any such Extension Period, the Company shall not
(i) declare or pay any dividends or distributions on, or redeem, purchase,
acquire or make a liquidation payment with respect to, any of the Company's
capital stock, or (ii) make any payment of principal of or interest or premium,
if any, on or repay, repurchase or redeem any debt securities of the Company
that rank pari passu in all respects with or junior in interest to this
Security (other than (a) repurchases, redemptions or other acquisitions of
shares of capital stock of the Company in connection with any employment
contract, benefit plan or other similar arrangement with or for the benefit of
any one or more employees, officers, directors or consultants, in connection
with a dividend reinvestment or 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
Extension Period shall exceed _______ consecutive [monthly] [quarterly]
[semi-annual] interest payment periods, extend
<PAGE> 29
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
[variable rate equal to [insert applicable interest rate formula]] [rate of
____%] per annum, compounded [monthly] [quarterly] [semi-annually] and
calculated as set forth in the preamble of this Security, from the date on
which such amounts would otherwise have been due and payable until paid or made
available for payment. The Company shall give the Holder of this Security and
the Trustee notice of its election to begin any Extension Period at least one
Business Day prior to the next succeeding Interest Payment Date on which
interest on this Security would be payable but for such deferral [if
applicable, insert--or so long as such securities are held by [insert name of
applicable Issuer Trust], at least one Business Day prior to the earlier of (i)
the next succeeding date on which Distributions on the Capital Securities of
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 Capital Securities of the record date or the date such
Distributions are payable, but in any event not less than one Business Day
prior to such record date.]
Payment of the principal of (and premium, if any) and interest on this
Security will be made at the office or agency of the Company maintained for
that purpose in the United States, in such coin or currency of the United
States of America as at the time of payment is legal tender for payment of
public and private debts [if applicable, insert--; provided, however that at
the option of the Company payment of interest may be made (i) by check mailed
to the address of the Person entitled thereto as such address shall appear in
the Securities Register, or (ii) if to a Holder of $1,000,000 or more in
aggregate principal amount of this Security, by wire transfer in immediately
available funds upon written request to the Trustee not later than 15 calendar
days prior to the date on which the interest is payable].
The indebtedness evidenced by this Security is, to the extent provided
in the Indenture, subordinate and subject in right of payments to the prior
payment in full of all Senior Indebtedness, and this Security is issued subject
to the provisions of the Indenture with respect thereto. Each Holder of this
Security, by accepting the same, (a) agrees to and shall be bound by such
provisions, (b) authorizes and directs the Trustee on his or her behalf to take
such actions as may be necessary or appropriate to effectuate the subordination
so provided, and (c) appoints the Trustee his or her attorney-in-fact for any
and all such purposes. Each Holder hereof, by his or her acceptance hereof,
waives all notice of the acceptance of the subordination provisions contained
herein and in the Indenture by each holder of Senior Indebtedness, whether now
outstanding or hereafter incurred, and waives reliance by each such holder upon
said provisions.
<PAGE> 30
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 under its corporate seal.
<TABLE>
<S> <C>
BSB BANCORP, INC.
By:
---------------------------
Name:
Title:
Attest:
</TABLE>
Secretary or Assistant Secretary
SECTION 2.3. Form of Reverse of Security.
This Security is one of a duly authorized issue of securities of the
Company (herein called the "Securities"), issued and to be issued in one or
more series under the Junior Subordinated Indenture, dated as of July __, 1998
(herein called the "Indenture"), between the Company and Bankers Trust Company,
as Trustee (herein called the "Trustee", which term includes any successor
trustee under the Indenture), to which Indenture and all indentures
supplemental thereto reference is hereby made for a statement of the respective
rights, limitations of rights, duties and immunities thereunder of the Company,
the Trustee, the holders of Senior Indebtedness and the Holders of the
Securities, and of the terms upon which the Securities are, and are to be,
authenticated and delivered. This Security is one of the series designated on
the face hereof [if applicable, insert--, 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 July ___, 1998 (as modified, amended or supplemented from time to
time the "Trust Agreement"), relating to BSB Capital Trust I (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 [if applicable,
insert--or the Trust Agreement, as the case may be].
<PAGE> 31
[If applicable, insert--The Company has the right to redeem this
Security (i) on or after ____________, in whole at any time or in part from
time to time, or (ii) in whole (but not in part), at any time within 90 days
following the occurrence and during the continuation of a Tax Event, Investment
Company Event, or Capital Treatment Event, in each case at the Redemption Price
described below, and subject to possible regulatory approval.]
In the 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--In the case of a redemption on or after
___________, the Redemption Price shall equal the following prices, expressed
in percentages of the principal amount hereof, together with accrued interest
to but excluding the date fixed for redemption, if redeemed during the
12-month period beginning ___________:
<TABLE>
<S> <C>
Redemption
Year Price
---- -----
</TABLE>
and 100% on or after __________.
In the case of a redemption on or after __________ following a Tax
Event, Investment Company Event or Capital Treatment Event, the Redemption
Price shall equal the Redemption Price then applicable to a redemption under
the preceding paragraph.
In the case of a redemption prior to _________ following a Tax Event,
Investment Company Event or Capital Treatment Event in respect of the Issuer
Trust, the Redemption Price shall equal the Make-Whole Amount for a
corresponding $_________ principal amount hereof, together with accrued
interest to but excluding the date fixed for redemption, which Make-Whole
Amount will be equal to the greater of (i) 100% of the principal amount hereof,
and (ii) as determined by a Quotation Agent (as defined in the Trust
Agreement), the sum of the present values of the principal amount hereof and
premium, if any, payable as part of the Redemption Price with respect to an
optional redemption hereof on ___________, together with the present values of
scheduled payments of interest (not including the portion of any such payments
of interest accrued as of the Redemption Date) from the date fixed for
redemption to ___________, in each case discounted to the date fixed for
redemption on a [monthly] [quarterly] [semi-annual] basis (assuming a 360-day
year consisting of 30-day months) at the Adjusted Treasury Rate (as defined in
the Trust Agreement).]
<PAGE> 32
[If the Security is subject to redemption of any kind, insert--In the
event of redemption of this Security in part only, a new Security or Securities
of this series for the unredeemed portion hereof will be issued in the name of
the Holder hereof upon the cancellation hereof.]
[If applicable, insert--Pursuant to the Registration Rights Agreement,
in the event that: (i) (A) neither the Exchange Offer Registration Statement
nor a Shelf Registration Statement is filed with the Commission on or prior to
the 150th day after the Issue Date or (B) notwithstanding that the Company and
the Issuer Trust have consummated or will consummate an Exchange Offer, the
Company and the Issuer Trust are required to file a Shelf Registration
Statement and such Shelf Registration Statement is not filed on or prior to the
date required by the Registration Rights Agreement, then commencing on the day
after the applicable required filing date, liquidated damages shall accrue on
the principal amount of the Junior Subordinated Debentures and, if the Exchange
Offer has been consummated, the New Junior Subordinated Debentures, each at a
rate of ____% per annum; or (ii) (A) neither the Exchange Offer Registration
Statement nor a Shelf Registration Statement is declared effective by the
Commission on or prior to the _______ day after the Issue Date or (B)
notwithstanding that the Company and the Issuer Trust have consummated or will
consummate an Exchange Offer, the Company and the Issuer Trust are required to
file a Shelf Registration Statement and such Shelf Registration Statement is
not declared effective by the Commission on or prior to the _____ day after the
date such Shelf Registration Statement was required to be filed, then,
commencing on the _____ day after the Issue Date, liquidated damages shall
accrue on the principal amount of the Junior Subordinated Debentures and, if
the Exchange Offer has been consummated, the New Junior Subordinated
Debentures, each at a rate of ____% per annum; or (iii) (A) the Issuer Trust
has not exchanged New Capital Securities for all Capital Securities validly
tendered for exchange by their respective Holders or the Company has not
exchanged the New Guarantee or New Junior Subordinated Debentures for the
Guarantee or Junior Subordinated Debentures validly tendered, in accordance
with the terms of the Exchange Offer on or prior to the _____ day after the
date on which the Exchange Offer Registration Statement was declared effective
or (B) if applicable, the Shelf Registration Statement has been declared
effective and such Shelf Registration Statement ceases to be effective at any
time prior to the expiration of the Rule 144(K) Period (other than after such
time as all Capital Securities have been disposed of thereunder or otherwise
cease to be Registrable Securities), then liquidated damages shall accrue on
the principal amount of the Junior Subordinated Debentures and, if the Exchange
Offer has been consummated, the New Junior Subordinated Debentures, each at a
rate of ____% per annum commencing on (x) the ____ day after such effective
date, in the case of (A) above, or (y) the day such Shelf Registration
Statement ceases to be effective in the case of B above; provided, however,
that the liquidated damages on the Junior Subordinated Debentures and, if the
Exchange Offer has been consummated, the New Junior Subordinated Debentures,
may not exceed in the aggregate ____% per annum; provided, further, however,
that (1) upon the filing of the Exchange Offer Registration Statement or a
Shelf Registration Statement (in the case of clause (i) above), (2) upon the
effectiveness of the Exchange Offer Registration Statement or a Shelf
Registration Statement (in the case of clause (ii) above), or (3) upon the
exchange of New Capital Securities, the New Guarantee and New Junior
Subordinated Debentures for all Capital Securities, the Guarantee and
<PAGE> 33
all Junior Subordinated Debentures tendered (in the case of clause (iii)(A)
above), or upon the effectiveness of the Shelf Registration Statement which had
ceased to remain effective (in the case of clause (iii)(B) above) liquidated
damages on the Junior Subordinated Debentures and, if the Exchange Offer has
been consummated, the New Junior Subordinated Debentures, shall cease to accrue
and accumulate.
Any amounts of liquidated damages due pursuant to the preceding
paragraph, will be payable in cash on the next succeeding Interest Payment Date
to Holders on the relevant Regular Record Date.]
[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 of each series to be affected by such supplemental
indenture. The Indenture also contains provisions permitting Holders of
specified percentages in principal amount of the Securities of each series at
the time Outstanding, on behalf of the Holders of all Securities of such
series, to waive compliance by the Company with certain provisions of the
Indenture and certain past defaults under the Indenture and their consequences.
Any such consent or waiver by the Holder of this Security shall be conclusive
and binding upon such Holder and upon all future Holders of this Security and
of any Security issued upon the registration of transfer hereof or in exchange
herefor or in lieu hereof, whether or not notation of such consent or waiver is
made upon this Security.
[If the Security is not a Discount Security, insert--As provided in
and subject to the provisions of the Indenture, if an Event of Default with
respect to the Securities of this series at the time Outstanding occurs and is
continuing, then and in every such case the Trustee or the Holders of not less
than 25% in aggregate principal amount of the Outstanding Securities of this
series may declare the principal amount of all the Securities of this series to
be due and payable immediately, by a notice in writing to the Company (and to
the Trustee if given by Holders) [if applicable, insert--, provided that, if
upon an Event of Default, the Trustee or such Holders fail to declare the
principal of all the Outstanding Securities of this series to be immediately
due and payable, the holders of at least 25% in aggregate Liquidation Amount of
the Capital Securities then outstanding shall have the right to make such
declaration by a notice in writing to the Company and the Trustee]; and upon
any such declaration the principal amount of and the accrued interest
(including any Additional Interest) on all the Securities of this series shall
become immediately due and
<PAGE> 34
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 of this series at the time Outstanding occurs and is
continuing, then and in every such case the Trustee or the Holders of not less
than 25% in aggregate principal amount of the Outstanding Securities of this
series may declare an amount of principal of the Securities of this series to
be due and payable immediately, by a notice in writing to the Company (and to
the Trustee if given by Holders) [if applicable, insert--, provided that, if
upon an Event of Default, the Trustee or such Holders fail to declare such
principal amount of the Outstanding Securities of this series to be immediately
due and payable, the Holders of at least 25% in aggregate Liquidation Amount of
the Capital Securities then outstanding shall have the right to make such
declaration by a notice in writing to the Company and the Trustee. The
principal amount payable 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 of this series shall become immediately due and payable,
provided that the payment of such principal and interest (including any
Additional Interest) on all the Securities of this series 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 this series, of like tenor, of authorized denominations and for the same
aggregate principal amount, will be issued to the designated transferee or
transferees.
The Securities of this series are issuable only in registered form
without coupons in denominations of $100,000 and any integral multiple of
$1,000 in excess thereof. As provided in the Indenture and subject to certain
limitations therein set forth, Securities of this series are
<PAGE> 35
exchangeable for a like aggregate principal amount of Securities of this series
and of like tenor of a different authorized denomination, as requested by the
Holder surrendering the same.
No service charge shall be made for any such registration of transfer
or exchange, but the Company may require payment of a sum sufficient to cover
any tax or other governmental charge payable in connection therewith.
Prior to due presentment of this Security for registration of
transfer, the Company, the Trustee and any agent of the Company or the Trustee
may treat the Person in whose name this Security is registered as the owner
hereof for all purposes, whether or not this Security be overdue, and neither
the Company, the Trustee nor any such agent shall be affected by notice to the
contrary.
The Company and, by its acceptance of this Security or a beneficial
interest therein, the Holder of, and any Person that acquires a beneficial
interest in, this Security agrees that for United States federal, state and
local tax purposes it is intended that this Security constitute indebtedness.
THIS SECURITY SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK.
THIS SECURITY IS A DIRECT AND UNSECURED OBLIGATION OF THE COMPANY,
DOES NOT EVIDENCE DEPOSITS AND IS NOT INSURED BY THE FEDERAL DEPOSIT INSURANCE
CORPORATION OR ANY OTHER INSURER OR GOVERNMENT AGENCY.
SECTION 2.4. Additional Provisions Required in Global Security.
Unless otherwise specified as contemplated by Section 3.1, any Global
Security issued hereunder shall, in addition to the provisions contained in
Sections 2.2 and 2.3, bear a legend in substantially the following form:
THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE
HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY
OR A NOMINEE OF A DEPOSITARY. THIS SECURITY IS EXCHANGEABLE FOR
SECURITIES REGISTERED IN THE NAME OF A PERSON OTHER THAN THE
DEPOSITARY OR ITS NOMINEE ONLY IN THE LIMITED CIRCUMSTANCES DESCRIBED
IN THE INDENTURE AND MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE
DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE
DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY,
EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE.
<PAGE> 36
SECTION 2.5. Form of Trustee's Certificate of Authentication.
The Trustee's certificates of authentication shall be in substantially
the following form:
This is one of the Securities of the series designated therein
referred to in the within-mentioned Indenture.
<TABLE>
<S> <C>
Dated: BANKERS TRUST COMPANY,
as Trustee
By:
-----------------------------
Authorized Signatory
</TABLE>
ARTICLE III.
THE SECURITIES
SECTION 3.1. Title and Terms.
(1) The aggregate principal amount of Securities that may be
authenticated and delivered under this Indenture is unlimited.
(2) The Securities may be issued in one or more series. There shall
be established in or pursuant to a Board Resolution and, subject to Section
3.3, set forth or determined in the manner provided, in an Officers'
Certificate, or established in one or more indentures supplemental hereto,
prior to the issuance of Securities as a series:
(a) the title of the securities of such series, which shall
distinguish the Securities of the series from all other Securities;
(b) the limit, if any, upon the aggregate principal amount of
the Securities of such series that may be authenticated and delivered
under this Indenture (except for Securities authenticated and
delivered upon registration of transfer of, or in exchange for, or in
lieu of, other Securities of the series pursuant to Section 3.4, 3.5,
3.6, 9.6 or 11.6 and except for any Securities that, pursuant to
Section 3.3, are deemed never to have been authenticated and delivered
hereunder); provided, however, that the authorized aggregate principal
amount of such series may be increased above such amount by a Board
Resolution to such effect;
<PAGE> 37
(c) the Person to whom any interest on a Security of the
series shall be payable, if other than the Person in whose name that
security (or one or more Predecessor Securities) is registered at the
close of business on the Regular Record Date for such interest;
(d) the Stated Maturity or Maturities on which the principal
of the Securities of such series is payable or the method of
determination thereof, and any dates on which or circumstances under
which, the Company shall have the right to extend or shorten such
Stated Maturity or Maturities;
(e) the rate or rates, if any, at which the Securities of
such series shall bear interest, if any, the rate or rates and extent
to which Additional Interest, if any, shall be payable with respect to
any Securities of such series, the date or dates from which any such
interest or Additional Interest shall accrue, the Interest Payment
Dates on which such interest shall be payable, the right, pursuant to
Section 3.12 or as otherwise set forth therein, of the Company to
defer or extend an Interest Payment Date, and the Regular Record Date
for the interest payable on any Interest Payment Date or the method by
which any of the foregoing shall be determined;
(f) the place or places where the principal of (and premium,
if any) and interest or Additional Interest on the Securities of such
series shall be payable, the place or places where the Securities of
such series may be presented for registration of transfer or exchange,
any restrictions that may be applicable to any such transfer or
exchange in addition to or in lieu of those set forth herein and the
place or places where notices and demands to or upon the Company in
respect of the Securities of such series may be made;
(g) the period or periods within or the date or dates on
which, if any, the price or prices at which and the terms and
conditions upon which the Securities of such series may be redeemed,
in whole or in part, at the option of the Company, and if other than
by a Board Resolution, the manner in which any election by the Company
to redeem such Securities shall be evidenced;
(h) the obligation or the right, if any, of the Company to
redeem, repay or purchase the Securities of such series pursuant to
any sinking fund, amortization or analogous provisions, or at the
option of a Holder thereof, and the period or periods within which,
the price or prices at which, the currency or currencies (including
currency unit or units) in which and the other terms and conditions
upon which Securities of the series shall be redeemed, repaid or
purchased, in whole or in part, pursuant to such obligation;
(i) the denominations in which any Securities of such series
shall be issuable, if other than denominations of $1,000 and any
integral multiple thereof;
<PAGE> 38
(j) if other than Dollars, the currency or currencies
(including any currency unit or units) in which the principal of (and
premium, if any) and interest and Additional Interest, if any, on the
Securities of the series shall be payable, or in which the Securities
of the series shall be denominated and the manner of determining the
equivalent thereof in Dollars for purposes of the definition of
Outstanding;
(k) the additions, modifications or deletions, if any, in the
Events of Default or covenants of the Company set forth herein with
respect to the Securities of such series;
(l) if, other than the principal amount thereof, the portion
of the principal amount of Securities of such series that shall be
payable upon declaration of acceleration of the Maturity thereof;
(m) if the principal amount payable at the Stated Maturity of
any Securities of the series will not be determinable as of any one or
more dates prior to the Stated Maturity, the amount which shall be
deemed to be the principal amount of such Securities as of any such
date for any purpose thereunder or hereunder, including the principal
amount thereof which shall be due and payable upon any Maturity other
than the Stated Maturity or which shall be deemed to be Outstanding as
of any date prior to the Stated Maturity (or, in any such case, the
manner in which such amount deemed to be the principal amount shall be
determined);
(n) if applicable, that the Securities of the series, in
whole or in any specified part, shall be defeasible and, if other than
by a Board Resolution, the manner in which any election by the Company
to defease such Securities shall be evidenced;
(o) the additions or changes, if any, to this Indenture with
respect to the Securities of such series as shall be necessary to
permit or facilitate the issuance of the Securities of such series in
bearer form, registrable or not registrable as to principal, and with
or without interest coupons;
(p) any index or indices used to determine the amount of
payments of principal of and premium, if any, on the Securities of
such series or the manner in which such amounts will be determined;
(q) if applicable, that any Securities of the series shall be
issuable in whole or in part in the form of one or more Global
Securities and, in such case, the respective Depositaries for such
Global Securities, the form of any legend or legends that shall be
borne by any such Global Security in addition to or in lieu of that
set forth in Section 2.4 and any circumstances in addition to or in
lieu of those set forth in Section 3.5 in which any such Global
Security may be exchanged in whole or in part for Securities
registered, and any transfer of such Global Security in whole or in
part may be registered, in the name or names of Persons other than the
Depositary for such Global Security or a nominee thereof;
<PAGE> 39
(r) the appointment of any Paying Agent or agents for the
Securities of such series;
(s) the terms of any right to convert or exchange Securities
of such series into any other securities or property of the Company,
and the additions or changes, if any, to this Indenture with respect
to the Securities of such series to permit or facilitate such
conversion or exchange;
(t) if such Securities are to be issued to the Issuer Trust,
the form or forms of the Trust Agreement and Guarantee relating
thereto;
(u) if, other than as set forth herein, the relative degree,
if any, to which the Securities or the series shall be senior to or be
subordinated to other series of Securities in right of payment,
whether such other series of Securities are Outstanding or not;
(v) any addition to or change in the Events of Default which
applies to any Securities of the series and any change in the right of
the Trustee or the requisite Holders of such Securities to declare the
principal amount thereof due and payable pursuant to Section 5.2;
(w) any addition to or change in the covenants set forth in
Article X which applies to Securities of the series; and
(x) any other terms of the Securities of such series (which
terms shall not be inconsistent with the provisions of this Indenture,
except as permitted by Section 9.1(6)).
(3) All Securities of any one series shall be substantially identical
except as to denomination and except as may otherwise be provided herein or in
or pursuant to such Board Resolution and set forth, or determined in the manner
provided, in such Officers' Certificate or in any indenture supplemental
hereto.
(4) If any of the terms of the series are established by action taken
pursuant to a Board Resolution, a copy of an appropriate record of such action
shall be certified by the Secretary or an Assistant Secretary of the Company
and delivered to the Trustee at or prior to the delivery of the Officers'
Certificate setting forth the terms of the series.
(5) The securities shall be subordinated in right of payment to
Senior Indebtedness as provided in Article XIII.
SECTION 3.2. Denominations.
<PAGE> 40
The Securities of each series shall be in registered form without
coupons and shall be issuable in minimum denominations of $100,000 and any
integral multiples of $1,000 in excess thereof, unless otherwise specified as
contemplated by Section 3.1(i).
SECTION 3.3. Execution, Authentication, Delivery and Dating.
(1) The Securities shall be executed on behalf of the Company by its
Chairman of the Board, its Vice Chairman of the Board, its President or one of
its Vice Presidents, 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.
(2) Securities bearing the manual or facsimile signatures of
individuals who were at any time the proper officers of the Company shall bind
the Company, notwithstanding that such individuals or any of them have ceased
to hold such offices prior to the authentication and delivery of such
Securities or did not hold such offices at the date of such Securities. At any
time and from time to time after the execution and delivery of this Indenture,
the Company may deliver Securities of any series executed by the Company to the
Trustee for authentication, together with a Company Order for the
authentication and delivery of such Securities, and the Trustee in accordance
with the Company Order shall authenticate and deliver such Securities. If the
form or terms of the Securities of the series have been established by or
pursuant to one or more Board Resolutions as permitted by Sections 2.1 and 3.1,
in authenticating such Securities, and accepting the additional
responsibilities under this Indenture in relation to such Securities, the
Trustee shall be entitled to receive, and (subject to Section 6.1) shall be
fully protected in relying upon, an Opinion of Counsel stating,
(a) 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;
(b) 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
(c) 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.
(3) 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
<PAGE> 41
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.
(4) Notwithstanding the provisions of Section 3.1 and Section 3.3(2),
if all Securities of a series are not to be originally issued at one time, it
shall not be necessary to deliver the Officers' Certificate otherwise required
pursuant to Section 3.1 or the Company Order and Opinion of Counsel otherwise
required pursuant to Section 3.3(2) at or prior to the authentication of each
Security of such series if such documents are delivered at or prior to the
authentication upon original issuance of the first Security of such series to
be issued.
(5) Each Security shall be dated the date of its authentication.
(6) 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.
(1) Pending the preparation of definitive Securities of any series,
the Company may execute, and upon receipt of a Company Order the Trustee shall
authenticate and deliver, temporary Securities that are printed, lithographed,
typewritten, mimeographed or otherwise produced, in any denomination,
substantially of the tenor of the definitive Securities of such series in lieu
of which they are issued and with such appropriate insertions, omissions,
substitutions and other variations as the officers executing such Securities
may determine, as evidenced by their execution of such Securities.
(2) If temporary Securities of any series are issued, the Company
will cause definitive Securities of such series to be prepared without
unreasonable delay. After the preparation of definitive Securities, the
temporary Securities shall be exchangeable for definitive Securities upon
surrender of the temporary Securities at the office or agency of the Company
designated for that purpose without charge to the Holder. Upon surrender for
cancellation of any one or more temporary Securities, the Company shall execute
and the Trustee shall authenticate and deliver in exchange therefor one or more
definitive securities of the same series, of any authorized denominations
having the same Original Issue Date and Stated Maturity and having the same
terms
<PAGE> 42
as such temporary Securities. Until so exchanged, the temporary Securities of
any series shall in all respects be entitled to the same benefits under this
Indenture as definitive Securities of such series.
SECTION 3.5. Global Securities.
(1) 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.
(2) 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.
(3) If any Global Security is to be exchanged for other Securities or
cancelled in whole, it shall be surrendered by or on behalf of the Depositary
or its nominee to the Securities Registrar for exchange or cancellation as
provided in this Article III. If any Global Security is to be exchanged for
other Securities or cancelled in part, or if another Security is to be
exchanged in whole or in part for a beneficial interest in any Global Security,
then either (i) such Global Security shall be so surrendered for exchange or
cancellation as provided in this Article III or (ii) the principal amount
thereof shall be reduced or increased by an amount equal to the portion thereof
to be so exchanged or cancelled, or equal to the principal amount of such other
Security to be so exchanged for a beneficial interest therein, as the case may
be, by means of an appropriate adjustment made on the records of the Securities
Registrar, whereupon the Trustee, in accordance with the Applicable Procedures,
shall instruct the Depositary or its authorized representative to make a
corresponding adjustment to its records. Upon any such surrender or adjustment
of a Global Security by the Depositary, accompanied by registration
instructions, the Trustee shall, subject to Section 3.6(2) 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.
(4) 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
<PAGE> 43
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.
(5) 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.
(6) 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.
(1) The Company shall cause to be kept at the Corporate Trust Office
of the Trustee a register in which, subject to such reasonable regulations as
it may prescribe, the Company shall provide for the registration of Securities
and transfers of Securities. Such register is herein sometimes referred to as
the "Securities Register." The Trustee is hereby appointed "Securities
Registrar" for the purpose of registering Securities and transfers of
Securities as herein provided.
Upon surrender for registration of transfer of any Security at the
offices or agencies of the Company designated for that purpose, the Company
shall execute, and the Trustee shall authenticate and deliver, in the name of
the designated transferee or transferees, one or more new Securities of the
same series of any authorized denominations of like tenor and aggregate
principal amount and bearing such restrictive legends as may be required by
this Indenture.
At the option of the Holder, Securities may be exchanged for other
Securities of the same series 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 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.
<PAGE> 44
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, exchange or register the transfer of
any Security of any series during a period beginning at the opening of business
15 days before the day of selection for redemption of Securities of that series
pursuant to Article XI and ending at the close of business on the day of
mailing of the notice of redemption, or (ii) to register the transfer of or
exchange any Security so selected for redemption in whole or in part, except,
in the case of any such Security to be redeemed in part, any portion thereof
not to be redeemed.
(2) 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(2).
(a) 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 (2)(a)
and subject to the Applicable Procedures. Upon receipt by the
Securities Registrar of (A) such Security as provided in Section
3.6(1) 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(1) and increase the aggregate principal amount of the
Global Security by the specified principal amount as provided in
Section 3.5(3).
(b) 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(1), provided that if
the Security to be transferred in whole or in part is a Restricted
Security, the Securities Registrar shall have received a Restricted
Securities Certificate duly executed by the transferor Holder or such
Holder's attorney duly authorized in writing.
<PAGE> 45
(c) 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.
(d) 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.
(e) Limitations Relating to Principal Amount.
Notwithstanding any other provision of this Indenture and unless
otherwise specified as permitted by Section 3.1; Securities or
portions thereof may be transferred or exchanged only in principal
amounts of not less than $100,000. Any transfer, exchange or other
disposition of Securities in contravention of this Section 3.6(2)(e)
shall be deemed to be void and of no legal effect whatsoever, any such
transferee shall be deemed not to be the Holder or owner of any
beneficial interest in such Securities for any purpose, including but
not limited to the receipt of interest payable on such Securities, and
such transferee shall be deemed to have no interest whatsoever in such
Securities.
(3) Restricted Securities Legend. Except as set forth below, all
Securities shall bear a Restricted Securities Legend:
(a) subject to the following clauses of this Section 3.6(3),
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;
(b) subject to the following clauses of this Section 3.6(3),
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(2)(b) or (c) to be issued
in the form of a Restricted Security, bear a Restricted Securities
Legend;
(c) a new Security (other than a Global Security) that does
not bear a Restricted Securities Legend may be issued in exchange for
or in lieu of a Restricted Security or any portion thereof that bears
such a legend if, in the Company's judgment, placing such a legend
upon such new Security is not necessary to ensure compliance with the
registration requirements of the Securities Act, and the Trustee, at
the written direction of the Company
<PAGE> 46
in the form of an Officers' Certificate, shall authenticate and
deliver such a new Security as provided in this Article III;
(d) notwithstanding the foregoing provisions of this Section
3.6(3), 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
(e) Securities distributed to a holder of Capital Securities
upon dissolution of the Issuer Trust shall bear a Restricted
Securities Legend if the Capital Securities so held bear a similar
legend.
SECTION 3.7. Mutilated, Lost and Stolen Securities.
(1) If any mutilated Security is surrendered to the Trustee together
with such Security or indemnity as may be required by the Company or the
Trustee to save each of them harmless, the Company shall execute and the
Trustee shall authenticate and deliver in exchange therefor a new Security of
the same series, of like tenor and aggregate principal amount, bearing the same
legends, and bearing a number not contemporaneously outstanding.
(2) 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 the same series, of like tenor and aggregate
principal amount and bearing the same legends as such destroyed, lost or stolen
Security, and bearing a number not contemporaneously outstanding.
(3) 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.
(4) 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.
<PAGE> 47
(5) Every new Security issued pursuant to this Section in lieu of any
destroyed, lost or stolen Security shall constitute an original additional
contractual obligation of the Company, whether or not the destroyed, lost or
stolen Security shall be at any time enforceable by anyone, and shall be
entitled to all the benefits of this Indenture equally and proportionately with
any and all other Securities of such series duly issued hereunder.
(6) 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.
(1) Interest and Additional Interest on any Security of any series
that is payable, and is punctually paid or duly provided for, on any Interest
Payment Date, shall be paid to the Person in whose name that Security (or one
or more Predecessor Securities) is registered at the close of business on the
Regular Record Date for such interest in respect of Securities of such series,
except that, unless otherwise provided in the Securities of such series,
interest payable on the Stated Maturity of the principal of a Security shall be
paid to the Person to whom principal is paid. The initial payment of interest
on any Security of any series that is issued between a Regular Record Date and
the related Interest Payment Date shall be payable as provided in such Security
or in the Board Resolution pursuant to Section 3.1 with respect to the related
series of Securities.
(2) Any interest on any Security that is due and payable, but is not
timely paid or duly provided for, on any Interest Payment Date for Securities
of such series (herein called "Defaulted Interest"), shall forthwith cease to
be payable to the registered Holder on the relevant Regular Record Date by
virtue of having been such Holder, and such Defaulted Interest may be paid by
the Company, at its election in each case, as provided in clause (a) or (b)
below:
(a) The Company may elect to make payment of any Defaulted
Interest to the Persons in whose names the Securities of such series
in respect of which interest is in default (or their respective
Predecessor Securities) are registered at the close of business on a
Special Record Date for the payment of such Defaulted Interest, which
shall be fixed in the following manner. The Company shall notify the
Trustee in writing of the amount of Defaulted Interest proposed to be
paid on each Security and the date of the proposed payment, and 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
<PAGE> 48
of the notice of the proposed payment. The Trustee shall promptly
notify the Company of such Special Record Date and, in the name and at
the expense of the Company, shall cause notice of the proposed payment
of such Defaulted Interest and the Special Record Date therefor to be
mailed, first class, postage prepaid, to each Holder of a Security of
such series at the address of such Holder as it appears in the
Securities Register not less than 10 days prior to such Special Record
Date. The Trustee may, in its discretion, in the name and at the
expense of the Company, cause a similar notice to be published at
least once in a newspaper, customarily published in the English
language on each Business Day and of general circulation in the
Borough of Manhattan, The City of New York, New York, but such
publication shall not be a condition precedent to the establishment of
such Special Record Date. Notice of the proposed payment of such
Defaulted Interest and the Special Record Date therefor having been
mailed as aforesaid, such Defaulted Interest shall be paid to the
Persons in whose names the Securities of such series (or their
respective Predecessor Securities) are registered on such Special
Record Date and shall no longer be payable pursuant to the following
clause (b).
(b) The Company may make payment of any Defaulted Interest in
any other lawful manner not inconsistent with the requirements of any
securities exchange on which the Securities of the series in respect
of which interest is in default may be listed and, upon such notice as
may be required by such exchange (or by the Trustee if the Securities
are not listed), if, after notice given by the Company to the Trustee
of the proposed payment pursuant to this clause (b), such payment
shall be deemed practicable by the Trustee.
(3) Subject to the foregoing provisions of this Section, each Security
delivered under this Indenture upon transfer of or in exchange for or in lieu
of any other Security shall carry the rights to interest accrued and unpaid,
and to accrue interest, that were carried by such other Security.
SECTION 3.9. Persons Deemed Owners.
(1) 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.
(2) 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
<PAGE> 49
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.
Except as otherwise specified as contemplated by Section 3.1 for
Securities of any series, interest on the Securities of each series for any
period shall be computed on the basis of a 360-day year of twelve 30-day months
and the actual number of days elapsed in any partial month in such period, and
interest on the Securities of each series for a full period shall be computed
by dividing the rate per annum by the number of interest periods that together
constitute a full twelve months.
SECTION 3.12. Deferrals of Interest Payment Dates.
(1) If specified as contemplated by Section 2.1 or Section 3.1 with
respect to the Securities of a particular series, so long as no Event of
Default has occurred and is continuing, the Company shall have the right, at
any time during the term of such series, from time to time to defer the payment
of interest on such Securities for such period or periods (each an "Extension
Period") not to exceed the number of consecutive quarterly, semi-annual or
other periods that equal five years with respect to each Extension Period,
during which Extension Periods the Company shall, if so specified as
contemplated by Section 3.1, have the right to make partial payments of
interest on any Interest Payment Date. No Extension Period shall end on a date
other than an Interest Payment Date. At the end of any such Extension Period,
the Company shall pay all interest then accrued and unpaid on the Securities
(together with Additional Interest thereon, if any, at the rate specified for
the Securities of such series to the extent permitted by applicable law);
provided, however, that no Extension Period shall extend beyond the Stated
Maturity of the principal of the Securities of such series; and provided
further, however, that, during any such Extension Period, the Company shall not
(i) declare or pay any dividends or distributions on, or redeem, purchase,
acquire or make a liquidation payment with respect to, any of the Company's
capital stock, or (ii) make any payment of principal of or interest or premium,
if any, on or repay, repurchase or redeem any debt securities
<PAGE> 50
of the Company that rank pari passu in all respects with or junior in interest
to the Securities of such series (other than (A) repurchases, redemptions or
other acquisitions of shares of capital stock of the Company in connection with
any employment contract, benefit plan or other similar arrangement with or for
the benefit of any one or more employees, officers, directors or consultants,
in connection with a dividend reinvestment or 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 as and to the extent as
may be specified as contemplated by Section 3.1. The Company shall give the
Holders of the Securities of such series and the Trustee notice of its election
to begin any such Extension Period at least one Business Day prior to the next
succeeding Interest Payment Date on which interest on Securities of such series
would be payable but for such deferral or, with respect to any Securities of a
series issued to 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 (a) the
next succeeding date on which Distributions (as defined in the Trust Agreement)
on the Capital Securities of the Issuer Trust would be payable but for such
deferral, and (b) the date on which the Property Trustee of the Issuer Trust is
required to give notice to holders of such Capital Securities of the record
date or the date such Distributions are payable, but in any event not less
than one Business Day prior to such record date.
(2) The Trustee shall promptly give notice of the Company's election
to begin any such Extension Period to the Holders of the Outstanding Securities
of such series.
<PAGE> 51
SECTION 3.13. Right of Set-Off.
With respect to the Securities of a series 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 Capital 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, the
Issuer Trust 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 a beneficial interest in
the indebtedness of the Company.
SECTION 3.15. Extension of Stated Maturity.
If specified as contemplated by Section 2.1 or Section 3.1 with
respect to the Securities of a particular series, the Company shall have the
right to extend the Stated Maturity of the principal of the Securities of such
series at any time at its election for one or more periods, provided that, at
the time such election is made and at the time of extension, such conditions as
may be specified in such Securities shall have been satisfied.
SECTION 3.16. CUSIP Numbers.
The Company, in issuing the Securities, may use "CUSIP" numbers (if
then generally in use), and, if so, the Trustee shall use "CUSIP" numbers in
notice of redemption and other similar or related materials as a convenience to
Holders; provided that any such notice or other materials may state that no
representation is made as to the correctness of such numbers either as printed
on the Securities or as contained in any notice of redemption or other
materials and that reliance may be placed only on the other identification
numbers printed on the Securities, and any such redemption shall not be
affected by any defect in or omission of such numbers.
ARTICLE IV.
SATISFACTION AND DISCHARGE
SECTION 4.1. Satisfaction and Discharge of Indenture.
<PAGE> 52
This Indenture shall, upon Company Request, cease to be of further
effect (except as to any surviving rights of registration of transfer or
exchange of Securities herein expressly provided for and as otherwise provided
in this Section 4.1) and the Trustee, on demand of and at the expense of the
Company, shall execute proper instruments acknowledging satisfaction and
discharge of this Indenture, when:
(1) either
(a) all Securities theretofore authenticated and delivered
(other than (i) Securities that have been destroyed, lost or stolen
and that have been replaced or paid as provided in Section 3.7 and
(ii) Securities for whose payment money has theretofore been deposited
in trust or segregated and held in trust by the Company and thereafter
repaid to the Company or discharged from such trust, as provided in
Section 10.3) have been delivered to the Trustee for cancellation; or
(b) all such Securities not theretofore delivered to the
Trustee for cancellation
(i) have become due and payable, or
(ii) will become due and payable at their Stated
Maturity within one year of the date of deposit, or
(iii) are to be called for redemption within one
year under arrangements satisfactory to the Trustee for the
giving of notice of redemption by the Trustee in the name, and
at the expense, of the Company,
and the Company, in the case of subclause (b)(i), (ii) or (iii) above, has
deposited or caused to be deposited with the Trustee as trust funds in trust
for such purpose an amount in the currency or currencies in which the
Securities of such series are payable sufficient to pay and discharge the
entire indebtedness on such Securities not theretofore delivered to the Trustee
for cancellation, for the principal (and premium, if any) and interest
(including any Additional Interest) to the date of such deposit (in the case of
Securities that have become due and payable) or to the Stated Maturity or
Redemption Date, as the case may be;
(2) the Company has paid or caused to be paid all other sums payable
hereunder by the Company; and
(3) the Company has delivered to the Trustee an Officers' Certificate
and an Opinion of Counsel each stating that all conditions precedent herein
provided for relating to the satisfaction and discharge of this Indenture have
been complied with.
<PAGE> 53
(4) Notwithstanding the satisfaction and discharge of this Indenture,
the obligations of the Company to the Trustee under Section 6.7, the
obligations of the Trustee to any Authenticating Agent under Section 6.14 and,
if money shall have been deposited with the Trustee pursuant to subclause (b)
of clause (1) of this Section, the obligations of the Trustee under Section 4.2
and the last paragraph of Section 10.3 shall survive.
SECTION 4.2. Application of Trust Money.
Subject to the provisions of the last paragraph of Section 10.3, all
money deposited with the Trustee pursuant to Section 4.1 shall be held in trust
and applied by the Trustee, in accordance with the provisions of the Securities
and this Indenture, to the payment, either directly or through any Paying Agent
(including the Company acting as its own Paying Agent) as the Trustee may
determine, to the Persons entitled thereto, of the principal (and premium, if
any) and interest and Additional Interest for the payment of which such money
or obligations have been deposited with or received by the Trustee.
ARTICLE V.
REMEDIES
SECTION 5.1. Events of Default.
"Event of Default", wherever used herein with respect to the
Securities of any series, means any one of the following events (whatever the
reason for such Event of Default and whether it shall be voluntary or
involuntary or be effected by operation of law or pursuant to any judgment,
decree or order of any court or any order, rule or regulation of any
administrative or governmental body):
(1) default in the payment of any interest upon any Security of that
series, including any Additional Interest in respect thereof, when it becomes
due and payable, and continuance of such default for a period of 30 days
(subject to the deferral of any due date in the case of an Extension Period);
or
(2) default in the payment of the principal of (or premium, if any,
on) any Security of that series at its Maturity; or
(3) failure on the part of the Company duly to observe or perform any
other of the covenants or agreements on the part of the Company in the
Securities of that series or in this Indenture for a period of 90 days after
the date on which written notice of such failure (a "Notice of Default"),
requiring the Company to remedy the same, shall have been given to the Company
by the Trustee by registered or certified mail or to the Company and the
Trustee by the Holders of at least 25% in aggregate principal amount of the
Outstanding Securities of that series; or
(4) any other Event of Default provided with respect to Securities of
that series.
<PAGE> 54
SECTION 5.2. Acceleration of Maturity; Rescission and Annulment.
(1) If an Event of Default (other than an Event of Default specified
in Section 5.1(4)) with respect to Securities of any series at the time
Outstanding occurs and is continuing, then, and in every such case, the Trustee
or the Holders of not less than 25% in aggregate principal amount of the
Outstanding Securities of that series may declare the principal amount (or, if
the Securities of that series are Discount Securities, such portion of the
principal amount as may be specified in the terms of that series) of all the
Securities of that series to be due and payable immediately, by a notice in
writing to the Company (and to the Trustee if given by Holders), provided that,
in the case of the Securities of a series issued to the Issuer Trust, if, upon
an Event of Default, the Trustee or the Holders of not less than 25% in
principal amount of the Outstanding Securities of such series fail to declare
the principal of all the Outstanding Securities of such series to be
immediately due and payable, the holders of at least 25% in aggregate
Liquidation Amount (as defined in the Trust Agreement) of the related series of
Capital 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 of such series shall become immediately due and
payable. If an Event of Default specified in Section 5.1(4) with respect to
Securities of any series at the time Outstanding occurs, the principal amount
of all the Securities of such series (or, if the Securities of such series are
Discount Securities, such portion of the principal amount of such Securities as
may be specified by the terms of that series) shall automatically, and without
any declaration or other action on the part of the Trustee or any Holder,
become immediately due and payable. Payment of principal and interest
(including any Additional Interest) on such Securities shall remain
subordinated to the extent provided in Article XIII notwithstanding that such
amount shall become immediately due and payable as herein provided.
(2) At any time after such a declaration of acceleration with respect
to Securities of any series has been made and before a judgment or decree for
payment of the money due has been obtained by the Trustee as hereinafter in
this Article provided, the Holders of a majority in aggregate principal amount
of the Outstanding Securities of that series, by written notice to the Company
and the Trustee, may rescind and annul such declaration and its consequences
if:
(a) the Company has paid or deposited with the Trustee a sum
sufficient to pay:
(i) all overdue installments of interest on all
Securities of such series;
(ii) any accrued Additional Interest on all Securities
of such series;
(iii) the principal of (and premium, if any, on) any
Securities of such series that have become due otherwise than
by such declaration of acceleration and interest and
Additional Interest thereon at the rate borne by the
Securities; and
<PAGE> 55
(iv) 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
(b) all Events of Default with respect to Securities of that
series, other than the non-payment of the principal of Securities of
that series that has become due solely by such acceleration, have been
cured or waived as provided in Section 5.13.
(3) If the Holders of such 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 the related series of Capital
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 (1) and (2) above of this Section 5.2.
(4) 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.
(1) The Company covenants that if:
(a) default is made in the payment of any installment of
interest (including any Additional Interest) on any Security of any
series when such interest becomes due and payable and such default
continues for a period of 30 days, or
(b) 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.
(2) 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.
<PAGE> 56
(3) If an Event of Default with respect to Securities of any series
occurs and is continuing, the Trustee may in its discretion proceed to protect
and enforce its rights and the rights of the Holders of Securities of such
series by such appropriate judicial proceedings as the Trustee shall deem most
effectual to protect and enforce any such rights, whether for the specific
enforcement of any covenant or agreement in this Indenture or in aid of the
exercise of any power granted herein, or to enforce any other proper remedy.
SECTION 5.4. Trustee May File Proofs of Claim.
In case of any receivership, insolvency, liquidation, bankruptcy,
reorganization, arrangement, adjustment, composition or other judicial or
administrative proceeding relative to the Company or any other obligor upon the
Securities or the property of the Company or of such other obligor or their
creditors,
(1) the Trustee (irrespective of whether the principal of the
Securities of any series shall then be due and payable as therein expressed or
by declaration or otherwise and irrespective of whether the Trustee shall have
made any demand on the Company for the payment of overdue principal (and
premium, if any) or interest (including any Additional Interest)) shall be
entitled and empowered, by intervention in such proceeding or otherwise,
(a) 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
(b) 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
(2) 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
<PAGE> 57
Trustee may, on behalf of the Holders, vote for the election of a trustee in
bankruptcy or similar official and be a member of a creditors' or other similar
committee.
SECTION 5.5. Trustee May Enforce Claim Without Possession of
Securities.
All rights of action and claims under this Indenture or the Securities
may be prosecuted and enforced by the Trustee without the possession of any of
the Securities or the production thereof in any proceeding relating thereto,
and any such proceeding instituted by the Trustee shall be brought in its own
name as trustee of an express trust, and any recovery of judgment shall,
subject to Article XIII and after provision for the payment of all the amounts
owing the Trustee and any predecessor Trustee under Section 6.7, its agents and
counsel, be for the ratable benefit of the Holders of the Securities in respect
of which such judgment has been recovered.
SECTION 5.6. Application of Money Collected.
Any money or property collected or to be applied by the Trustee with
respect to a series of Securities pursuant to this Article 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;
SECOND: Subject to Article XIII, to the payment of the amounts then
due and unpaid upon Securities of such series for principal (and premium, if
any) and interest (including any Additional Interest) in respect of which or
for the benefit of which such money has been collected, ratably, without
preference or priority of any kind, according to the amounts due and payable on
such series of Securities for principal (and premium, if any) and interest
(including any Additional Interest), respectively; and
THIRD: The balance, if any, to the Person or Persons entitled
thereto.
SECTION 5.7. Limitation on Suits.
Subject to Section 5.8, no Holder of any Securities of any series
shall have any right to institute any proceeding, judicial or otherwise, with
respect to this Indenture or for the appointment of a receiver, assignee,
trustee, liquidator, sequestrator (or other similar official) or for any other
remedy hereunder, unless:
<PAGE> 58
(1) such Holder has previously given written notice to the
Trustee of a continuing Event of Default with respect to the
Securities of that series;
(2) the Holders of not less than 25% in aggregate principal
amount of the Outstanding Securities of that series shall have made
written request to the Trustee to institute proceedings in respect of
such Event of Default in its own name as Trustee hereunder;
(3) such Holder or Holders have offered to the Trustee
reasonable indemnity against the costs, expenses and liabilities to be
incurred in compliance with such request;
(4) the Trustee for 60 days after its receipt of such notice,
request and offer of indemnity has failed to institute any such
proceeding; and
(5) no direction inconsistent with such written request has
been given to the Trustee during such 60-day period by the Holders of
a majority in aggregate principal amount of the Outstanding Securities
of that series;
it being understood and intended that no one or more of such Holders shall have
any right in any manner whatever by virtue of, or by availing itself of, any
provision of this Indenture to affect, disturb or prejudice the rights of any
other Holders of Securities, or to obtain or to seek to obtain priority or
preference over any other of such Holders or to enforce any right under this
Indenture, except in the manner herein provided and for the equal and ratable
benefit of all such Holders.
SECTION 5.8. Unconditional Right of Holders to Receive Principal,
Premium and Interest; Direct Action by Holders of
Capital Securities.
Notwithstanding any other provision in this Indenture, the Holder of
any Security of any series shall have the right, which is absolute and
unconditional, to receive payment of the principal of (and premium, if any) and
(subject to Sections 3.8 and 3.12) interest (including any Additional 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 series of Capital Securities issued by the Issuer
Trust shall have the right, upon the occurrence of an Event of Default
described in Section 5.1(1) or 5.1(2), to institute a suit directly against the
Company for enforcement of payment to such holder of principal of (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
Capital Securities held by such holder.
SECTION 5.9. Restoration of Rights and Remedies.
<PAGE> 59
If the Trustee, any Holder or any holder of Capital 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 Capital Securities, then, and in every such case, the
Company, the Trustee, such Holders and such holder of Capital Securities shall,
subject to any determination in such proceeding, be restored severally and
respectively to their former positions hereunder, and thereafter all rights and
remedies of the Trustee, such Holder and such holder of Capital Securities
shall continue as though no such proceeding had been instituted.
SECTION 5.10. Rights and Remedies Cumulative.
Except as otherwise provided in the last paragraph of Section 3.7, no
right or remedy herein conferred upon or reserved to the Trustee or the Holders
is intended to be exclusive of any other right or remedy, and every right and
remedy shall, to the extent permitted by law, be cumulative and in addition to
every other right and remedy given hereunder or now or hereafter existing at
law or in equity or otherwise. The assertion or employment of any right or
remedy hereunder, or otherwise, shall not prevent the concurrent assertion or
employment of any other appropriate right or remedy.
SECTION 5.11. Delay or Omission Not Waiver.
(1) No delay or omission of the Trustee, any Holder of any Security
with respect to the Securities of the related series or any holder of any
Capital Security to exercise any right or remedy accruing upon any Event of
Default with respect to the Securities of the related series shall impair any
such right or remedy or constitute a waiver of any such Event of Default or an
acquiescence therein.
(2) 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
Capital Securities by Section 5.8 may be exercised from time to time, and as
often as may be deemed expedient, by the Trustee, the Holders or the holders of
Capital Securities, as the case may be.
SECTION 5.12. Control by Holders.
The Holders of not less than a majority in aggregate principal amount
of the Outstanding Securities of any series shall have the right to direct the
time, method and place of conducting any proceeding for any remedy available to
the Trustee or exercising any trust or power conferred on the Trustee, with
respect to the Securities of such series, provided that:
(1) such direction shall not be in conflict with any rule of
law or with this Indenture;
<PAGE> 60
(2) the Trustee may take any other action deemed proper by
the Trustee that is not inconsistent with such direction; and
(3) subject to the provisions of Section 6.1, the Trustee
shall have the right to decline to follow such direction if a
Responsible Officer or Officers of the Trustee shall, in good faith,
determine that the proceeding so directed would be unjustly
prejudicial to the Holders not joining in any such direction or would
involve the Trustee in personal liability.
SECTION 5.13. Waiver of Past Defaults.
(1) The Holders of not less than a majority in aggregate principal
amount of the Outstanding Securities of any series affected thereby and the
holders of a majority in aggregate Liquidation Amount of the Capital Securities
issued by the Issuer Trust may waive any past default hereunder and its
consequences with respect to such series except a default:
(a) in the payment of the principal of (or premium, if any)
or interest (including any Additional Interest) on any Security of
such series (unless such default has been cured and the Company has
paid to or deposited with the Trustee a sum sufficient to pay all
matured installments of interest (including Additional Interest) and
all principal of (and premium, if any) all Securities of that series
due otherwise than by acceleration), or
(b) in respect of a covenant or provision hereof that under
Article IX cannot be modified or amended without the consent of each
Holder of any Outstanding Security of such series affected.
(2) Any such waiver shall be deemed to be on behalf of the Holders of
all the Securities of such series, or in the case of waiver by holders of
Capital Securities issued by the Issuer Trust, by all holders of Capital
Securities issued by the Issuer Trust.
(3) 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
<PAGE> 61
the provisions of this Section shall not apply to any suit instituted by the
Trustee, to any suit instituted by any Holder, or group of Holders, holding in
the aggregate more than 10% in aggregate principal amount of the Outstanding
Securities of any series, or to any suit instituted by any Holder for the
enforcement of the payment of the principal of (or premium, if any) or interest
(including any Additional Interest) on any Security on or after the 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.
(1) Except during the continuance of an Event of Default,
(a) 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
(b) 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.
(2) 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.
<PAGE> 62
(3) 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
(a) this subsection shall not be construed to limit the
effect of subsection (a) of this Section 6.1(1);
(b) 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
(c) the Trustee shall not be liable with respect to any
action taken or omitted to be taken by it in good faith in accordance
with the direction of Holders pursuant to Section 5.12 relating to the
time, method and place of conducting any proceeding for any remedy
available to the Trustee, or exercising any trust or power conferred
upon the Trustee, under this Indenture with respect to the Securities
of a series.
(4) 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.
(5) Whether or not therein expressly so provided, every provision of
this Indenture relating to the conduct or affecting the liability of or
affording protection to the Trustee shall be subject to the provisions of this
Section.
SECTION 6.2. Notice of Defaults.
Within 90 days after actual knowledge by a Responsible Officer of the
Trustee of the occurrence of any default hereunder with respect to the
Securities of any series, the Trustee shall transmit by mail to all Holders of
Securities of such series, as their names and addresses appear in the
Securities Register, notice of such default, unless such default shall have
been cured or waived; provided, however, that, except in the case of a default
in the payment of the principal of (or premium, if any) or interest (including
any Additional Interest) on any Security of such series, the Trustee shall be
protected in withholding such notice if and so long as the board of directors,
the executive committee or a trust committee of directors and/or Responsible
Officers of the Trustee in good faith determines that the withholding of such
notice is in the interests of the Holders of Securities of such series; and
provided further, that, in the case of any default of the character specified
in Section 5.1(3), no such notice to Holders of Securities of such series shall
be given until at least 30 days after the occurrence thereof. For the purpose
of this Section 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 Securities of such series.
<PAGE> 63
SECTION 6.3. Certain Rights of Trustee.
Subject to the provisions of Section 6.1:
(1) 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;
(2) 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;
(3) 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;
(4) 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;
(5) 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 circumstance in the conduct of his own
affairs.
(6) 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
(7) 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
<PAGE> 64
responsible for any misconduct or negligence on the part of any agent or
attorney appointed with due care by it hereunder.
SECTION 6.4. Not Responsible for Recitals or Issuance of Securities.
The recitals contained herein and in the Securities, except the
Trustee's certificates of authentication, shall be taken as the statements of
the Company, and neither the Trustee nor any Authenticating Agent assumes any
responsibility for their correctness. The Trustee makes no representations as
to the validity or sufficiency of this Indenture or of the Securities. Neither
the Trustee nor any Authenticating Agent shall be accountable for the use or
application by the Company of the Securities or the proceeds thereof.
SECTION 6.5. May Hold Securities.
The Trustee, any Authenticating Agent, any Paying Agent, any
Securities Registrar or any other agent of the Company, in its individual or
any other capacity, may become the owner or pledgee of Securities and, subject
to Sections 6.8 and 6.13, may otherwise deal with the Company with the same
rights it would have if it were not Trustee, Authenticating Agent, Paying
Agent, Securities Registrar or such other agent.
SECTION 6.6. Money Held in Trust.
Money held by the Trustee in trust hereunder need not be segregated
from other funds except to the extent required by law. The Trustee shall be
under no liability for interest on any money received by it hereunder except as
otherwise agreed with the Company.
SECTION 6.7. Compensation and Reimbursement.
(1) 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).
(2) 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.
(3) Since the Issuer Trust is being formed solely to facilitate an
investment in the Trust Securities, the Company, as Holder of the Common
Securities, hereby covenants to pay all debts and obligations (other than with
respect to the Capital Securities and the Common Securities) and
<PAGE> 65
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.
(4) 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 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.
(5) When the Trustee incurs expenses or renders services after an
Event of Default specified in Section 5.1(4) occurs, the expenses and the
compensation for the services are intended to constitute expenses of
administration under the Bankruptcy Reform Act of 1978 or any successor
statute.
SECTION 6.8. Disqualification; Conflicting Interests.
The Trustee for the Securities of any series issued hereunder shall be
subject to, 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:
<PAGE> 66
(1) 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
(2) an entity or other Person organized and doing business under the
laws of a foreign government that is permitted to act as Trustee pursuant to a
rule, regulation or order of the Commission, authorized under such laws to
exercise corporate trust powers, and subject to supervision or examination by
authority of such foreign government or a political subdivision thereof
substantially equivalent to supervision or examination applicable to United
States institutional trustees;
in either case having a combined capital and surplus of at least $50,000,000,
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 of any series issued hereunder.
SECTION 6.10. Resignation and Removal; Appointment of Successor.
(1) 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.
(2) The Trustee may resign at any time with respect to the Securities
of one or more series by giving written notice thereof to the Company. If an
instrument of acceptance by a successor Trustee shall not have been delivered
to the Trustee within 30 days after the giving of such notice of resignation,
the resigning Trustee may petition any court of competent jurisdiction for the
appointment of a successor Trustee with respect to the Securities of such
series.
(3) The Trustee may be removed at any time with respect to the
Securities of any series by Act of the Holders of a majority in aggregate
principal amount of the Outstanding Securities of such series, delivered to the
Trustee and to the Company.
(4) If at any time:
<PAGE> 67
(a) 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,
(b) 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
(c) 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, (i) the Company, acting pursuant to the authority of a
Board Resolution, may remove the Trustee with respect to the Securities of all
series issued hereunder, or (ii) subject to Section5.14, any Holder who has
been a bona fide Holder of a Security for at least six months may, on behalf of
such Holder and all others similarly situated, petition any court of competent
jurisdiction for the removal of the Trustee with respect to the Securities of
all series issued hereunder and the appointment of a successor Trustee or
Trustees.
(5) If the Trustee shall resign, be removed or become incapable of
acting, or if a vacancy shall occur in the office of Trustee for any cause with
respect to the Securities of one or more series, the Company, by a Board
Resolution, shall promptly appoint a successor Trustee with respect to the
Securities of that or those series. If, within one year after such
resignation, removal or incapability, or the occurrence of such vacancy, a
successor Trustee with respect to the Securities of any series shall be
appointed by Act of the Holders of a majority in aggregate principal amount of
the Outstanding Securities of such series delivered to the Company and the
retiring Trustee, the successor Trustee so appointed shall, forthwith upon its
acceptance of such appointment, become the successor Trustee with respect to
the Securities of such series and supersede the successor Trustee appointed by
the Company. If no successor Trustee with respect to the Securities of any
series shall have been so appointed by the Company or the Holders and accepted
appointment in the manner hereinafter provided, any Holder who has been a bona
fide Holder of a Security of such series for at least six months may, subject
to Section 5.14, on behalf of such Holder and all others similarly situated,
petition any court of competent jurisdiction for the appointment of a successor
Trustee with respect to the Securities of such series.
(6) The Company shall give notice of each resignation and each
removal of the Trustee with respect to the Securities of any series and each
appointment of a successor Trustee with respect to the Securities of any series
by mailing written notice of such event by first-class mail, postage prepaid,
to the Holders of Securities of such series as their names and addresses appear
in the Securities Register. Each notice shall include the name of the
successor Trustee with respect to the Securities of such series and the address
of its Corporate Trust Office.
<PAGE> 68
SECTION 6.11. Acceptance of Appointment by Successor.
(1) 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.
(2) Upon request of any such successor Trustee, the Company shall
execute any and all instruments for more fully and certainly vesting in and
confirming to such successor Trustee all rights, powers and trusts referred to
in paragraph (1) or (2) of this Section, as the case may be.
(3) 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.
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).
<PAGE> 69
SECTION 6.14. Appointment of Authenticating Agent.
(1) The Trustee may appoint an Authenticating Agent or Agents with
respect to one or more series of Securities, which shall be authorized to act
on behalf of the Trustee to authenticate Securities of such series issued upon
original issue and upon exchange, registration of transfer or partial
redemption thereof or pursuant to Section 3.6, and Securities so authenticated
shall be entitled to the benefits of this Indenture and shall be valid and
obligatory for all purposes as if authenticated by the Trustee hereunder.
Wherever reference is made in this Indenture to the authentication and delivery
of Securities by the Trustee or the Trustee's certificate of authentication,
such reference shall be deemed to include authentication and delivery on behalf
of the Trustee by an Authenticating Agent. Each Authenticating Agent shall be
acceptable to the Company and shall at all times be an entity organized and
doing business under the laws of the United States of America, or of any state
or territory thereof or of the District of Columbia, authorized under such laws
to act as Authenticating Agent, having a combined capital and surplus of not
less than $50,000,000 and subject to supervision or examination by federal or
state authority. If such Authenticating Agent publishes reports of condition
at least annually, pursuant to law or to the requirements of said supervising
or examining authority, then for the purposes of this Section the combined
capital and surplus of such Authenticating Agent shall be deemed to be its
combined capital and surplus as set forth in its most recent report of
condition so published. If at any time an Authenticating Agent shall cease to
be eligible in accordance with the provisions of this Section 6.14, such
Authenticating Agent shall resign immediately in the manner and with the effect
specified in this Section 6.14.
(2) 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.
(3) An Authenticating Agent may resign at any time by giving written
notice thereof to the Trustee and to the Company. The Trustee may at any time
terminate the agency of an Authenticating Agent by giving written notice
thereof to such Authenticating Agent and to the Company. Upon receiving such a
notice of resignation or upon such a termination, or in case at any time such
Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section, the Trustee may appoint a successor Authenticating
Agent, which shall be acceptable to the Company and shall give notice of such
appointment in the manner provided in Section 1.6 to all Holders of Securities
of the series with respect to which such Authenticating Agent will serve. Any
successor Authenticating Agent upon acceptance hereunder shall become vested
with all the rights, powers and duties of its predecessor hereunder, with like
effect as if originally named as an
<PAGE> 70
Authenticating Agent. No successor Authenticating Agent shall be appointed
unless eligible under the provision of this Section.
(4) 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.
(5) If an appointment with respect to one or more series is made
pursuant to this Section 6.4, the Securities of such series may have endorsed
thereon, in addition to the Trustee's certificate of authentication, an
alternative certificate of authentication in the following form:
This is one of the Securities referred to in the within mentioned
Indenture.
<TABLE>
<S> <C>
Dated: BANKERS TRUST COMPANY,
as Trustee
By:
----------------------------------
As Authenticating Agent
Name:
Title:
</TABLE>
ARTICLE VII.
HOLDER'S LISTS AND REPORTS BY TRUSTEE, PAYING AGENT AND COMPANY
SECTION 7.1. Company to Furnish Trustee Names and Addresses of
Holders.
The Company will furnish or cause to be furnished to the Trustee:
(1) semi-annually, not more than 15 days after January 15 and July 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
(2) 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.
<PAGE> 71
(1) 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.
(2) 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.
(3) 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.
(1) 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.
(2) 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, 1999.
(3) 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.
(4) 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
<PAGE> 72
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.
The Company shall not consolidate with or merge into any other Person
or convey, transfer or lease its properties and assets substantially as an
entirety to any Person, and no Person shall consolidate with or merge into the
Company or convey, transfer or lease its properties and assets substantially as
an entirety to the Company, unless:
(1) if the Company shall consolidate with or merge into
another Person or convey, transfer or lease its properties and assets
substantially as an entirety to any Person, the entity formed by such
consolidation or into which the Company is merged or the Person that
acquires by conveyance or transfer, or that leases, the properties and
assets of the Company substantially as an entirety shall be an entity
organized and existing under the laws of the United States of America
or any state thereof or the District of Columbia and shall expressly
assume, by an indenture supplemental hereto, executed and delivered to
the Trustee, in form satisfactory to the Trustee, the due and punctual
payment of the principal of (and premium, if any), and interest
(including any Additional Interest) on all the Securities of every
series and the performance of every covenant of this Indenture on the
part of the Company to be performed or observed; provided, however,
that nothing herein shall be deemed to restrict or prohibit, and no
supplemental indenture shall be required in the case of, the merger of
a Principal Subsidiary Bank with and into a Principal Subsidiary Bank
or the Company, the consolidation of Principal Subsidiary Banks into a
Principal Subsidiary Bank or the Company, or the sale or other
disposition of all or substantially all of the assets of any Principal
Subsidiary Bank to another Principal Subsidiary Bank or the Company,
if, in any such case in which the surviving, resulting or acquiring
entity is not the Company, the Company would own, directly or
indirectly, at least 80% of the voting securities of the Principal
Subsidiary Bank (and of any other Principal Subsidiary Bank any voting
securities of which are owned, directly or indirectly, by such
Principal Subsidiary Bank) surviving such merger, resulting from such
consolidation or acquiring such assets;
(2) immediately after giving effect to such transaction, no
Event of Default, and no event that, after notice or lapse of time, or
both, would constitute an Event of Default, shall have occurred and be
continuing; and
(3) the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that such
consolidation, merger, conveyance, transfer or
<PAGE> 73
lease and any such supplemental indenture comply with this Article and
that all conditions precedent herein provided for relating to such
transaction have been complied with and, in the case of a transaction
subject to this Section 8.1 but not requiring a supplemental indenture
under paragraph (1) of this Section 8.1, an Officer's Certificate or
Opinion of Counsel to the effect that the surviving, resulting or
successor entity is legally bound by the Indenture and the Securities;
and the Trustee, subject to Section 6.1, may rely upon such Officers'
Certificates and Opinions of Counsel as conclusive evidence that such
transaction complies with this Section 8.1.
SECTION 8.2. Successor Company Substituted.
(1) Upon any consolidation or merger by the Company with or into any
other Person, or any conveyance, transfer or lease by the Company of its
properties and assets substantially as an entirety to any Person in accordance
with Section 8.1, the successor entity formed by such consolidation or into
which the Company is merged or to which such conveyance, transfer or lease is
made shall succeed to, and be substituted for, and may exercise every right and
power of, the Company under this Indenture with the same effect as if such
successor Person had been named as the Company herein; and in the event of any
such conveyance, transfer or lease the Company shall be discharged from all
obligations and covenants under the Indenture and the Securities.
(2) 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.
(3) 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
<PAGE> 74
Indenture or enter into one or more indentures supplemental hereto, in form
satisfactory to the Trustee, for any of the following purposes:
(1) to evidence the succession of another Person to the
Company, and the assumption by any such successor of the covenants of
the Company herein and in the Securities contained;
(2) to convey, transfer, assign, mortgage or pledge any
property to or with the Trustee or to surrender any right or power
herein conferred upon the Company;
(3) to establish the form or terms of Securities of any
series as permitted by Sections 2.1 or 3.1;
(4) to facilitate the issuance of Securities of any series in
certificated or other definitive form;
(5) to add to the covenants of the Company for the benefit of
the Holders of all or any series of Securities (and if such covenants
are to be for the benefit of less than all series of Securities,
stating that such covenants are expressly being included solely for
the benefit of the series specified) or to surrender any right or
power herein conferred upon the Company;
(6) to add any additional Events of Default for the benefit
of the Holders of all or any series of Securities (and if such
additional Events of Defaults are to be for the benefit of less than
all series of Securities, stating that such additional Events of
Default are expressly being included solely for the benefit of the
series specified);
(7) 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;
(8) to cure any ambiguity, to correct or supplement any
provision herein that may be defective or inconsistent with any other
provision herein, or to make any other provisions with respect to
matters or questions arising under this Indenture, provided that such
action pursuant to this clause (8) shall not adversely affect the
interest of the Holders of Securities of any series in any material
respect or, in the case of the Securities of a series issued to the
Issuer Trust and for so long as any of the corresponding series of
Capital Securities issued by the Issuer Trust shall remain
outstanding, the holders of such Capital Securities;
(9) to evidence and provide for the acceptance of appointment
hereunder by a successor Trustee with respect to the Securities of one
or more series and to add to or change any of the provisions of this
Indenture as shall be necessary to provide for or
<PAGE> 75
facilitate the administration of the trusts hereunder by more than one
Trustee, pursuant to the requirements of Section 6.11(2); or
(10) to comply with the requirements of the Commission in
order to effect or maintain the qualification of this Indenture under
the Trust Indenture Act.
SECTION 9.2. Supplemental Indentures with Consent of Holders.
With the consent of the Holders of not less than a majority in
aggregate principal amount of the Outstanding Securities of each series
affected by such supplemental indenture, by Act of said Holders delivered to
the Company and the Trustee, the Company, when authorized by a Board
Resolution, and the Trustee may enter into an indenture or indentures
supplemental hereto for the purpose of adding any provisions to or changing in
any manner or eliminating any of the provisions of this Indenture or of
modifying in any manner the rights of the Holders of Securities of such series
under this Indenture; provided, however, that no such supplemental indenture
shall, without the consent of the Holder of each Outstanding Security of each
series affected thereby:
(1) change the Stated Maturity of the principal of, or any
installment of interest (including any Additional Interest) on, any
Security, or reduce the principal amount thereof or the rate of
interest thereon or any premium payable upon the redemption thereof,
or reduce the amount of principal of a Discount Security that would be
due and payable upon a declaration of acceleration of the 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),
(2) reduce the percentage in aggregate principal amount of
the Outstanding Securities of any series, the consent of whose Holders
is required for any such supplemental indenture, or the consent of
whose Holders is required for any waiver (of compliance with certain
provisions of this Indenture or certain defaults hereunder and their
consequences) provided for in this Indenture, or
(3) modify any of the provisions of this Section, Section
5.13 or Section 10.5, except to increase any such percentage or to
provide that certain other provisions of this Indenture cannot be
modified or waived without the consent of the Holder of each Security
affected thereby;
provided, further, that, in the case of the Securities of a series issued to
the Issuer Trust, so long as any of the corresponding series of Capital
Securities issued by the Issuer Trust remains outstanding, (i) no such
amendment shall be made that adversely affects the holders of such Capital
Securities in any material respect, and no termination of this Indenture shall
occur, and no waiver of any Event
<PAGE> 76
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
Capital Securities then outstanding unless and until the principal of (and
premium, if any, on) the Securities of such series and all accrued and (subject
to Section 3.8) unpaid interest (including any Additional Interest) thereon
have been paid in full, and (ii) no amendment shall be made to Section 5.8 of
this Indenture that would impair the rights of the holders of Capital
Securities issued by the Issuer Trust provided therein without the prior
consent of the holders of each such Capital Security then outstanding unless
and until the principal of (and premium, if any, on) the Securities of such
series and all accrued and (subject to Section 3.8) unpaid interest (including
any Additional Interest) thereon have been paid in full.
A supplemental indenture that changes or eliminates any covenant or
other provision of this Indenture that has expressly been included solely for
the benefit of one or more particular series of Securities or any corresponding
series of Capital Securities of the Issuer Trust that holds the Securities of
any series, or that modifies the rights of the Holders of Securities of such
series or holders of such Capital Securities of such corresponding series with
respect to such covenant or other provision, shall be deemed not to affect the
rights under this Indenture of the Holders of Securities of any other series or
holders of Capital Securities of any other such corresponding series.
It shall not be necessary for any Act of Holders under this Section to
approve the particular form of any proposed supplemental indenture, but it
shall be sufficient if such Act shall approve the substance thereof.
SECTION 9.3. Execution of Supplemental Indentures.
In executing or accepting the additional trusts created by any
supplemental indenture permitted by this Article 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.
<PAGE> 77
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 may, and shall if required by
the Company, bear a notation in form approved by the Company as to any matter
provided for in such supplemental indenture. If the Company shall so
determine, new Securities of any series so modified as to conform, in the
opinion of the Company, to any such supplemental indenture may be prepared and
executed by the Company and authenticated and delivered by the Trustee in
exchange for Outstanding Securities of such series.
ARTICLE X.
COVENANTS
SECTION 10.1. Payment of Principal, Premium and Interest.
The Company covenants and agrees for the benefit of each series of
Securities that it will duly and punctually pay the principal of (and premium,
if any) and interest (including any Additional Interest) on the Securities of
that series in accordance with the terms of such Securities and this Indenture.
SECTION 10.2. Maintenance of Office or Agency.
(1) The Company will maintain in each Place of Payment for any series
of Securities an office or agency where Securities of that series may be
presented or surrendered for payment, where Securities of that series may be
surrendered for registration of transfer or exchange and where notices and
demands to or upon the Company in respect of the Securities of that series and
this Indenture may be served. The Company initially appoints the Trustee,
acting through its Corporate Trust 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.
(2) 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
<PAGE> 78
rescission shall in any manner relieve the Company of its obligation to
maintain an office or agency in each Place of Payment for Securities of any
series for such purposes. The Company will give prompt written notice to the
Trustee of any such designation and any change in the location of any such
office or agency.
SECTION 10.3. Money for Security Payments to be Held in Trust.
(1) If the Company shall at any time act as its own Paying Agent with
respect to any series of Securities, it will, on or before each due date of the
principal of (and premium, if any) or interest (including Additional Interest)
on any of the Securities of such series, segregate and hold in trust for the
benefit of the Persons entitled thereto a sum sufficient to pay the principal
(and premium, if any) or interest (including Additional Interest) so becoming
due until such sums shall be paid to such Persons or otherwise disposed of as
herein provided, and will promptly notify the Trustee of its failure so to act.
(2) Whenever the Company shall have one or more Paying Agents, it
will, prior to 10:00 a.m., New York City time, on each due date of the
principal of (or premium, if any) or interest, including Additional Interest on
any Securities, deposit with a Paying Agent a sum sufficient to pay the
principal (and premium, if any) or interest, including Additional Interest so
becoming due, such sum to be held in trust for the benefit of the Persons
entitled to such principal (and premium, if any) or interest, including
Additional Interest, and (unless such Paying Agent is the Trustee) the Company
will promptly notify the Trustee of its failure so to act.
(3) 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:
(a) hold all sums held by it for the payment of the principal
of (and premium, if any) or interest (including Additional Interest)
on the Securities of a series in trust for the benefit of the Persons
entitled thereto until such sums shall be paid to such Persons or
otherwise disposed of as herein provided;
(b) 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 of any Series;
(c) at any time during the continuance of any default with
respect to a series of Securities, upon the written request of the
Trustee, forthwith pay to the Trustee all sums so held in trust by
such Paying Agent with respect to such series; and
(d) comply with the provisions of the Trust Indenture Act
applicable to it as a Paying Agent.
<PAGE> 79
(4) 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.
(5) Any money deposited with the Trustee or any Paying Agent, or then
held by the Company in trust for the payment of the principal of (and premium,
if any) or interest (including Additional Interest) on any Security and
remaining unclaimed for two years after such principal (and premium, if any) or
interest (including Additional Interest) has become due and payable shall
(unless otherwise required by mandatory provision of applicable escheat or
abandoned or unclaimed property law) be paid on Company Request to the Company,
or (if then held by the Company) shall (unless otherwise required by mandatory
provision of applicable escheat or abandoned or unclaimed property law) be
discharged from such trust; and the Holder of such Security shall thereafter,
as an unsecured general creditor, look only to the Company for payment thereof,
and all liability of the Trustee or such Paying Agent with respect to such
trust money, and all liability of the Company as trustee thereof, shall
thereupon cease; provided, however, that the Trustee or such Paying Agent,
before being required to make any such repayment, may at the expense of the
Company cause to be published once, in a newspaper published in the English
language, customarily published on each Business Day and of general circulation
in the Borough of Manhattan, the City of New York, notice that such money
remains unclaimed and that, after a date specified therein, which shall not be
less than 30 days from the date of such publication, any unclaimed balance of
such money then remaining will be repaid to the Company.
SECTION 10.4. Statement as to Compliance.
The Company shall deliver to the Trustee, within 120 days after the
end of each fiscal year of the Company ending after the date hereof, an
Officers' Certificate covering the preceding calendar year, stating whether or
not to the best knowledge of the signers thereof the Company is in default in
the performance, observance or fulfillment of or compliance with any of the
terms, provisions, covenants and conditions of this Indenture, and if the
Company shall be in default, specifying all such defaults and the nature and
status thereof of which they may have knowledge. For the purpose of this
Section 10.4, compliance shall be determined without regard to any grace period
or requirement of notice provided pursuant to the terms of this Indenture.
SECTION 10.5. Waiver of Certain Covenants.
Subject to the rights of holders of Capital Securities specified in
Section 9.2, if any, the Company may omit in any particular instance to comply
with any covenant or condition provided pursuant to Section 3.1, 9.1(3) or
9.1(4) with respect to the Securities of any series, if before or after
<PAGE> 80
the time for such compliance the Holders of at least a majority in aggregate
principal amount of the Outstanding Securities of such series shall, by Act of
such Holders, either waive such compliance in such instance or generally waive
compliance with such covenant or condition, but no such waiver shall extend to
or affect such covenant or condition except to the extent so expressly waived,
and, until such waiver shall become effective, the obligations of the Company
in respect of any such covenant or condition shall remain in full force and
effect.
SECTION 10.6. Additional Sums.
So long as no Event of Default has occurred and is continuing and
except as otherwise specified as contemplated by Section 2.1 or Section 3.1, if
(i) the Issuer Trust is the Holder of all of the Outstanding Securities of such
series, and (ii) a Tax Event described in clause (i) or (iii) 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 to 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 of such series, 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 related Capital Securities and Common Securities that at any time
remain outstanding in accordance with the terms thereof shall not be reduced as
a result of such Additional Taxes (the "Additional Sums"). Whenever in this
Indenture or the Securities there is a reference in any context to the payment
of principal of or interest on the Securities, such mention shall be deemed to
include mention of the payments of the Additional Sums provided for in this
paragraph to the extent that, in such context, Additional Sums are, were or
would be payable in respect thereof pursuant to the provisions of this
paragraph and express mention of the payment of Additional Sums (if applicable)
in any provisions hereof shall not be construed as excluding Additional Sums in
those provisions hereof where such express mention is not made; provided,
however, that the deferral of the payment of interest pursuant to Section 3.12
or the Securities shall not defer the payment of any Additional Sums that may
be due and payable.
<PAGE> 81
SECTION 10.7. Additional Covenants.
The Company covenants and agrees with each Holder of Securities of
each series that it shall not (1) 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 (2) make any payment of principal
of or interest or premium, if any, on or repay, repurchase or redeem any debt
securities of the Company that rank pari passu in all respects with or junior
in interest to the Securities of such series (other than (a) repurchases,
redemptions or other acquisitions of shares of capital stock of the Company in
connection with any employment contract, benefit plan or other similar
arrangement with or for the benefit of any one or more employees, officers,
directors or consultants, in connection with a dividend reinvestment or
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, (b)
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, (c) the purchase of fractional interests in shares of
the Company's capital stock pursuant to the conversion or exchange provisions
of such capital stock or the security being converted or exchanged, (d) any
declaration of a dividend in connection with any Rights Plan, or the issuance
of rights, stock or other property under any Rights Plan, or the redemption or
repurchase of rights pursuant thereto, or (e) any dividend in the form of
stock, warrants, options or other rights where the dividend stock or the stock
issuable upon exercise of such warrants, options or other rights is the same
stock as that on which the dividend is being paid or ranks pari passu with or
junior to such stock) if at such time (i) there shall have occurred any event
(A) of which the Company has actual knowledge that with the giving of notice or
the lapse of time, or both, would constitute an Event of Default with respect
to the Securities of such series, and (B) which the Company shall not have
taken reasonable steps to cure, (ii) if the Securities of such series are held
by the Issuer Trust, the Company shall be in default with respect to its
payment of any obligations under the Guarantee relating to the Capital
Securities issued by the Issuer Trust, or (iii) the Company shall have given
notice of its election to begin an Extension Period with respect to the
Securities of such series as provided herein and shall not have rescinded such
notice, or such Extension Period, or any extension thereof, shall be
continuing.
The Company also covenants with each Holder of Securities of a series
issued to the Issuer Trust (i) 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, (ii) as holder of such Common Securities,
not to voluntarily terminate, windup or liquidate the Issuer Trust, other than
(a) in connection with a distribution of the Securities of such series to the
holders of the related Capital Securities in liquidation of the Issuer Trust,
or (b) in connection with certain mergers, consolidations or amalgamations
permitted by the Trust Agreement, and (iii) to use its reasonable efforts,
consistent
<PAGE> 82
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.
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 of any series as permitted or required by any
form of Security issued pursuant to this Indenture shall be made in accordance
with such form of Security and this Article; provided, however, that, if any
provision of any such form of Security shall conflict with any provision of
this Article XI, the provision of such form of Security shall govern. Except
as otherwise set forth in the form of Security, each Security shall be subject
to partial redemption only in the amount of $100,000 or any integral multiples
of $1,000 in excess thereof.
SECTION 11.2. Election to Redeem; Notice to Trustee.
The election of the Company to redeem any Securities shall be
evidenced by or pursuant to a Board Resolution. In case of any redemption at
the election of the Company, the Company shall, not less than 30 nor more than
60 days prior to the Redemption Date (unless a shorter notice shall be
satisfactory to the Trustee), notify the Trustee and, in the case of Securities
of a series held by the Issuer Trust, the Property Trustee under the Trust
Agreement, of such date and of the principal amount of Securities of the
applicable series to be redeemed and provide the additional information
required to be included in the notice or notices contemplated by Section 11.4;
provided that, in the case of any series of Securities initially issued to the
Issuer Trust, 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.
<PAGE> 83
SECTION 11.3. Selection of Securities to be Redeemed.
(1) If less than all the Securities of any series are to be redeemed,
the particular Securities to be redeemed shall be selected not more than 60
days prior to the Redemption Date by the Trustee, from the Outstanding
Securities of such series not previously called for redemption, by such method
as the Trustee shall deem fair and appropriate and which may provide for the
selection for redemption of a portion of the principal amount of any Security
of such series, provided that the unredeemed portion of the principal amount of
any Security shall be in an authorized denomination (which shall not be less
than the minimum authorized denomination) for such Security.
(2) The Trustee shall promptly notify the Company in writing of the
Securities selected for partial redemption and the principal amount thereof to
be redeemed. For all purposes of this Indenture, unless the context otherwise
requires, all provisions relating to the redemption of Securities shall relate,
in the case of any Security redeemed or to be redeemed only in part, to the
portion of the principal amount of such Security that has been or is to be
redeemed.
SECTION 11.4. Notice of Redemption.
Notice of redemption shall be given by first-class mail, postage
prepaid, mailed not later than the thirtieth day, and not earlier than the
sixtieth day, prior to the Redemption Date, to each Holder of Securities to be
redeemed, at the address of such Holder as it appears in the Securities
Register.
With respect to Securities of such series to be redeemed, each notice
of redemption shall state:
(1) the Redemption Date;
(2) 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);
(3) if less than all Outstanding Securities of such particular series
are to be redeemed, the identification (and, in the case of partial redemption,
the respective principal amounts) of the particular Securities to be redeemed;
(4) 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;
<PAGE> 84
(5) the place or places where such Securities are to be surrendered
for payment of the Redemption Price;
(6) such other provisions as may be required in respect of the terms
of a particular series of Securities; and
(7) that the redemption is for a sinking fund, if such is the case.
Notice of redemption of Securities to be redeemed at the election of
the Company shall be given by the Company or, at the Company's request, by the
Trustee in the name and at the expense of the Company and shall be irrevocable.
The notice, if mailed in the manner provided above, shall be conclusively
presumed to have been duly given, whether or not the Holder receives such
notice. In any case, a failure to give such notice by mail or any defect in
the notice to the Holder of any Security designated for redemption as a whole
or in part shall not affect the validity of the proceedings for the redemption
of any other Security.
SECTION 11.5. Deposit of Redemption Price.
Prior to 10:00 a.m., New York City time, on the Redemption Date
specified in the notice of redemption given as provided in Section 11.4, the
Company will deposit with the Trustee or with one or more Paying Agents (or if
the Company is acting as its own Paying Agent, the Company will segregate and
hold in trust as provided in Section 10.3) an amount of money sufficient to pay
the Redemption Price of, and any accrued interest (including Additional
Interest) on, all the Securities (or portions thereof) that are to be redeemed
on that date.
SECTION 11.6. Payment of Securities Called for Redemption.
(1) If any notice of redemption has been given as provided in Section
11.4, the Securities or portion of Securities with respect to which such notice
has been given shall become due and payable on the date and at the place or
places stated in such notice at the applicable Redemption Price, together with
accrued interest (including any Additional Interest) to the Redemption Date.
On presentation and surrender of such Securities at a Place of Payment in said
notice specified, the said Securities or the specified portions thereof shall
be paid and redeemed by the Company at the applicable Redemption Price,
together with accrued interest (including any Additional Interest) to the
Redemption Date; provided, however, that, unless otherwise specified as
contemplated by Section 3.1, installments of interest (including Additional
Interest) whose Stated Maturity is on or prior to the Redemption Date will be
payable to the Holders of such Securities, or one or more Predecessor
Securities, registered as such at the close of business on the relevant record
dates according to their terms and the provisions of Section 3.8.
<PAGE> 85
(2) Upon presentation of any Security redeemed in part only, the
Company shall execute and the Trustee shall authenticate and deliver to the
Holder thereof, at the expense of the Company, a new Security or Securities of
the same series, of authorized denominations, in aggregate principal amount
equal to the unredeemed portion of the Security so presented and having the
same Original Issue Date, Stated Maturity and terms.
(3) 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.
Except as otherwise specified as contemplated by Section 3.1, (1) the
Company, at its option, may redeem such Securities (a) on or after July 31,
2008, in whole at any time or in part from time to time, or (b) 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.
(2) If less than all the Securities of any such series are to be
redeemed, the aggregate principal amount of such Securities remaining
Outstanding after giving effect to such redemption shall be sufficient to
satisfy any provisions of the Trust Agreement related to the Issuer Trust to
which such Securities were issued.
ARTICLE XII.
SINKING FUNDS
Except as may be provided in any supplemental or amended indenture, no
sinking fund shall be established or maintained for the retirement of
Securities of any series.
ARTICLE XIII.
SUBORDINATION OF SECURITIES
SECTION 13.1. Securities Subordinate to Senior Indebtedness.
The Company covenants and agrees, and each Holder of a Security, by
its acceptance thereof, likewise covenants and agrees, that, to the extent and
in the manner hereinafter set forth in this Article, the payment of the
principal of (and premium, if any) and interest (including any Additional
Interest) on each and all of the Securities of each and every series are hereby
expressly
<PAGE> 86
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.
(1) If the Company shall default in the payment of any principal of
(or premium, if any) or interest on any Senior Indebtedness when the same
becomes due and payable, whether at maturity or at a date fixed for prepayment
or by declaration of acceleration or otherwise, then, upon written notice of
such default to the Company by the holders of Senior Indebtedness or any
trustee therefor, unless and until such default shall have been cured or waived
or shall have ceased to exist, no direct or indirect payment (in cash,
property, securities, by set-off or otherwise) shall be made or agreed to be
made on account of the principal of (or premium, if any) or interest (including
Additional Interest) on any of the Securities, or in respect of any redemption,
repayment, retirement, purchase or other acquisition of any of the Securities.
(2) In the event of (a) any insolvency, bankruptcy, receivership,
liquidation, reorganization, readjustment, composition or other similar
proceeding relating to the Company, its creditors or its property, (b) any
proceeding for the liquidation, dissolution or other winding-up of the Company,
voluntary or involuntary, whether or not involving insolvency or bankruptcy
proceedings, (c) any assignment by the Company for the benefit of creditors or
(d) any other marshalling of the assets of the Company (each such event, if
any, herein sometimes referred to as a "Proceeding"), all Senior Indebtedness
(including any interest thereon accruing after the commencement of any such
proceedings) shall first be paid in full before any payment or distribution,
whether in cash, securities or other property, shall be made to any Holder of
any of the Securities on account thereof. Any payment or distribution, whether
in cash, securities or other property (other than securities of the Company or
any other entity provided for by a plan of reorganization or readjustment, the
payment of which is subordinate, at least to the extent provided in these
subordination provisions with respect to the indebtedness evidenced by the
Securities, to the payment of all Senior Indebtedness at the time outstanding
and to any securities issued in respect thereof under any such plan of
reorganization or readjustment), which would otherwise (but for these
subordination provisions) be payable or deliverable in respect of the
Securities of any series shall be paid or delivered directly to the holders of
Senior Indebtedness in accordance with the priorities then existing among such
holders until all Senior Indebtedness (including any interest thereon accruing
after the commencement of any Proceeding) shall have been paid in full.
(3) 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
<PAGE> 87
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.
(4) 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.
(5) 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.
(6) The securing of any obligations of the Company, otherwise ranking
on a parity with the Securities or ranking junior to the Securities shall not
be deemed to prevent such obligations from constituting, respectively,
obligations ranking on a parity with the Securities or ranking junior to the
Securities.
SECTION 13.3. Payment Permitted If No Default.
Nothing contained in this Article XIII or elsewhere in this Indenture
or in any of the Securities shall prevent (i) the Company, at any time, except
during the pendency of the conditions described in Section 13.2(1) 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 (ii) 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
<PAGE> 88
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 XIII.
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 XIII (equally and
ratably with the holders of all indebtedness of the Company that by its express
terms is subordinated to Senior Indebtedness of the Company to substantially
the same extent as the Securities are subordinated to the Senior Indebtedness
and is entitled to like rights of subrogation by reason of any payments or
distributions made to holders of such Senior Indebtedness) to the rights of the
holders of such Senior Indebtedness to receive payments and distributions of
cash, property and securities applicable to the Senior Indebtedness until the
principal of (and premium if any) and interest (including Additional Interest)
on the Securities shall be paid in full. For purposes of such subrogation, no
payments or distributions to the holders of the Senior Indebtedness of any
cash, property or securities to which the Holders of the Securities or the
Trustee would be entitled except for the provisions of this Article XIII, and
no payments pursuant to the provisions of this Article XIII 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: (i) impair, as between the Company and the
Holders of the Securities, the obligations of the Company, which are absolute
and unconditional, to pay to the Holders of the Securities the principal of
(and premium, if any) and interest (including any Additional Interest) on the
Securities as and when the same shall become due and payable in accordance with
their terms; or (ii) 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 (iii) prevent the Trustee
or the Holder of any Security (or to the extent expressly provided herein, the
holder of any Capital Security) from exercising all remedies otherwise
permitted by applicable law upon default under this Indenture, including filing
and voting claims in any Proceeding, subject to the rights, if any, under this
Article XIII of the holders of Senior Indebtedness to receive cash, property
and securities otherwise payable or deliverable to the Trustee or such Holder.
<PAGE> 89
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.
(1) 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.
(2) Without in any way limiting the generality of Section 13.7(1),
the holders of Senior Indebtedness may, at any time and from time to time,
without the consent of or notice to the Trustee or the Holders of the
Securities of any series, without incurring responsibility to such Holders of
the Securities and without impairing or releasing the subordination provided in
this Article 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: (a) 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; (b) sell,
exchange, release or otherwise deal with any property pledged, mortgaged or
otherwise securing Senior Indebtedness; (c) release any Person liable in any
manner for the collection of Senior Indebtedness; and (d) exercise or refrain
from exercising any rights against the Company and any other Person.
SECTION 13.8. Notice to Trustee.
(1) 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 XIII 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
<PAGE> 90
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.
(2) 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 XIII, 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 XIII, 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 XIII or otherwise.
SECTION 13.11. Rights of Trustee as Holder of Senior Indebtedness;
Preservation of Trustee's Rights.
<PAGE> 91
The Trustee in its individual capacity shall be entitled to all the
rights set forth in this Article XIII 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.
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 XIII in addition to or in place of the Trustee.
SECTION 13.13. Certain Conversions or Exchanges Deemed Payment.
For purposes of this Article XIII only, (a) the issuance and delivery
of junior securities upon conversion or exchange of Securities of any series
shall not be deemed to constitute a payment or distribution on account of the
principal of (or premium, if any, on) or interest (including any Additional
Interest) on such Securities or on account of the purchase or other acquisition
of such Securities, and (b) the payment, issuance or delivery of cash, property
or securities (other than junior securities) upon conversion or exchange of a
Security of any series shall be deemed to constitute payment on account of the
principal of such security. For the purposes of this Section 13.13, 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 XIII.
* * * * *
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.
BSB BANCORP, INC.
<PAGE> 92
By:
----------------------------------
Name:
Title:
BANKERS TRUST COMPANY,
as Trustee,
By:
----------------------------------
Name:
Title:
<PAGE> 93
ANNEX A
FORM OF RESTRICTED SECURITIES CERTIFICATE
RESTRICTED SECURITIES CERTIFICATE
(For transfers pursuant to Section 3.6(b) of
the Indenture referred to below)
[ ],
as Securities Registrar
[address]
Re: Junior Subordinated Deferrable Interest Debentures of
BSB Bancorp, Inc. (the "Securities")
Reference is made to the Junior Subordinated Indenture, dated as of
July __, 1998 (the "Indenture"), between BSB Bancorp, Inc., a Delaware
corporation, and Bankers Trust Company, as Trustee. Terms used herein and
defined in the Indenture or in Regulation S, Rule 144A or Rule 144 under the
United States Securities Act of 1933, amended (the "Securities Act") are used
here as so defined.
This certificate relates to $_______ aggregate principal amount of
Securities, which are evidenced by the following certificate(s) (the "Specified
Securities"):
CUSIP No(s).
CERTIFICATE No(s).
CURRENTLY IN GLOBAL FORM: Yes ____ No ____ (check one)
The person in whose name this certificate is executed below (the
"Undersigned") hereby certifies that either (i) it is the sole beneficial owner
of the Specified Securities or (ii) it is acting on behalf of all the
beneficial owners of the Specified Securities and is duly authorized by them to
do so. Such beneficial owner or owners are referred to herein collectively as
the "Owner". If the Specified Securities are represented by a Global Security,
they are held through a Depositary or an Agent Member in the name of the
Undersigned, as or on behalf of the Owner. If the Specified Securities are
not represented by a Global Security, they are registered in the name of the
Undersigned, as or on behalf of the Owner.
<PAGE> 94
The Owner has requested that the Specified Securities be transferred
to a person (the "Transferee") who will take delivery in the form of a
Restricted Security. In connection with such transfer, the Owner hereby
certifies that, unless such transfer is being effected pursuant to an effective
registration statement under the Securities Act, it is being effected in
accordance with Rule 144A, Rule 904 of Regulation S or Rule 144 under the
Securities Act and all applicable securities laws of the states of the United
States and other jurisdictions. Accordingly, the Owner hereby further
certifies that
(1) Rule 144A Transfers. If the transfer is being effected in
accordance with Rule 144A:
(a) the Specified Securities are being transferred to a
person that the Owner and any person acting on its behalf reasonably
believe is a "qualified institutional buyer" within the meaning of
Rule 144A, acquiring for its own account or for the account of a
qualified institutional buyer; and
(b) the Owner and any person acting on its behalf have taken
reasonable steps to ensure that the Transferee is aware that the Owner
may be relying on Rule 144A in connection with the transfer; and
(2) Rule 904 Transfers. If the transfer is being effected in
accordance with Rule 904:
(a) the Owner is not a distributor of the Securities, an
affiliate of the Company or any such distributor or a person acting in
behalf of any of the foregoing;
(b) the offer of the Specified Securities was not made to a
person in the United States;
(c) either;
(i) at the time the buy order was originated, the
Transferee was outside the United States or the Owner and any
person acting on its behalf reasonably believed that the
Transferee was outside the United States, or
(ii) the transaction is being executed in, on or
through the facilities of the Eurobond market, as regulated by
the Association of International Bond Dealers, or another
designated offshore securities market and neither the Owner
nor any person acting on its behalf know that the transaction
has been prearranged with a buyer in the United States;
(d) no directed selling efforts within the meaning of Rule
902 of Regulation S have been made in the United States by or on
behalf of the Owner or any affiliate thereof; and
<PAGE> 95
(e) the transaction is not part of a plan or scheme to evade
the registration requirements of the Securities Act.
(3) Rule 144 Transfers. If the transfer is being effected pursuant
to Rule 144:
(a) the transfer is occurring after a holding period of at
least two years (computed in accordance with paragraph (d) of Rule
144) has elapsed since the date the Specified Securities were acquired
from the Company or from an affiliate (as such term is defined in Rule
144) of the Company, whichever is later, and is being effected in
accordance with the applicable amount, manner of sale and notice
requirements of paragraphs (e), (f) and (h) of Rule 144;
(b) the transfer is occurring after a holding period by the
Owner of at least three years has elapsed since the date the Specified
Securities were acquired from the Company or from an affiliate (as
such term is defined in Rule 144) of the Company, whichever is later,
and the Owner is not, and during the preceding three months has not
been, an affiliate of the Company; or
(c) the Owner is a Qualified Institutional Buyer under Rule
144A or has acquired the Securities otherwise in accordance with
Sections (1), (2) or (3) hereof and is transferring the Securities to
an institutional accredited investor in a transaction exempt from the
requirements of the Securities Act.
This certificate and the statements contained herein are made for your
benefit and the benefit of the Company and the Initial Purchasers (as defined
in the Trust Agreement relating to the Issuer Trust to which the Securities
were initially issued).
<TABLE>
<S> <C>
(Print the name of the Undersigned, as such term is defined in the
second paragraph of this certificate.)
Dated: By:
-------------------- --------------------
Name:
Title:
(If the Undersigned is a corporation, partnership or fiduciary, the title
of the person signing on behalf of the Undersigned must be stated.)
</TABLE>
<PAGE> 1
EXHIBIT 4.7
================================================================================
GUARANTEE AGREEMENT
Between
BSB BANCORP, INC.
(as Guarantor)
and
BANKERS TRUST COMPANY
(as Guarantee Trustee)
dated as of
July 24, 1998
================================================================================
<PAGE> 2
BSB CAPITAL TRUST I
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>
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
</TABLE>
<PAGE> 3
<TABLE>
<S> <C>
(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> 4
TABLE OF CONTENTS
-----------------
<TABLE>
<CAPTION>
PAGE
----
<S> <C> <C>
ARTICLE I. DEFINITIONS
Section 1.1. Definitions....................................................... 1
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.................................. 5
Section 2.4. Periodic Reports to the Guarantee Trustee......................... 5
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............................................. 6
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............................... 8
Section 3.3. Indemnity......................................................... 10
Section 3.4. Expenses.......................................................... 10
ARTICLE IV. GUARANTEE TRUSTEE
Section 4.1. Guarantee Trustee; Eligibility.................................... 10
Section 4.2. Appointment, Removal and Resignation
of the Guarantee Trustee.............................. 11
ARTICLE V. GUARANTEE
Section 5.1. Guarantee......................................................... 11
Section 5.2. Waiver of Notice and Demand....................................... 12
Section 5.3. Obligations Not Affected.......................................... 12
Section 5.4. Rights of Holders................................................. 13
Section 5.5. Guarantee of Payment.............................................. 13
Section 5.6. Subrogation....................................................... 13
Section 5.7. Independent Obligations........................................... 13
</TABLE>
<PAGE> 5
<TABLE>
<S> <C> <C>
ARTICLE VI. COVENANTS AND SUBORDINATION
Section 6.1. Subordination..................................................... 14
Section 6.2. Pari Passu Guarantees............................................. 14
ARTICLE VII. TERMINATION
Section 7.1. Termination....................................................... 14
ARTICLE VIII. MISCELLANEOUS
Section 8.1. Successors and Assigns............................................ 14
Section 8.2. Amendments........................................................ 15
Section 8.3. Notices........................................................... 15
Section 8.4. Benefit........................................................... 16
Section 8.5. Interpretation.................................................... 16
Section 8.6. Governing Law..................................................... 17
Section 8.7. Counterparts...................................................... 17
</TABLE>
<PAGE> 6
GUARANTEE AGREEMENT
-------------------
THIS GUARANTEE AGREEMENT, dated as of July 24, 1998 (the "Guarantee
Agreement"), is executed and delivered by BSB BANCORP, INC., a Delaware
corporation (the "Guarantor") having its principal office at 58-68 Exchange
Street, Binghamton, New York 13902, and BANKERS TRUST COMPANY, a New York
banking corporation, as trustee (the "Guarantee Trustee"), for the benefit of
the Holders (as defined herein) from time to time of the Capital Securities (as
defined herein) of BSB Capital Trust I, a Delaware statutory business trust (the
"Issuer Trust").
WHEREAS, pursuant to an Amended and Restated Trust Agreement (the "Trust
Agreement"), dated as of July 24, 1998, among BSB Bancorp, Inc., 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 $30,000,000 aggregate Liquidation Amount (as defined herein) of
its 8.125% Capital Securities, Liquidation Amount $1,000 per capital security
(the "Capital 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 Capital 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 July 31, 2028 (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 the Capital Securities,
the Guarantor desires irrevocably and unconditionally to agree, to the extent
set forth herein, to pay to the Holders of the Capital 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 Capital
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 Capital Securities.
ARTICLE I.
DEFINITIONS
SECTION 1.1. Definitions.
<PAGE> 7
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.
"Capital Securities" shall have the meaning specified in the first
recital of this Guarantee Agreement.
"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 July 24, 1998 and payable semiannually in arrears on January
31 and July 31 of each year, commencing January 31, 1999, at an annual rate of
8.125% of the Liquidation Amount.
"Event of Default" means (i) a default by the Guarantor in any of its
payment obligations under this Guarantee Agreement, or (ii) a default by the
Guarantor in any other obligation hereunder that remains unremedied for 30 days.
"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 Capital Securities, to the extent not
paid or made by or on behalf of the Issuer Trust: (i) any accrued and unpaid
Distributions (as defined in the Trust Agreement) required to be paid on the
Capital Securities, to the extent the Issuer Trust shall have funds on hand
available therefor at such time, (ii) the Redemption Price, with respect to the
Capital Securities called for redemption by the Issuer Trust to the extent that
the Issuer Trust shall have funds on hand available therefor at such time, and
(iii) upon a voluntary or involuntary termination, winding-up or liquidation of
the Issuer Trust, unless the Junior Subordinated Debentures are distributed to
the Holders, the lesser of (a) the aggregate of the Liquidation Amount and all
accumulated and unpaid Distributions to the date of payment to the extent the
Issuer Trust shall have funds on hand available to make such payment at such
time and (b) the
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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 preamble of this
Guarantee Agreement.
"Holder" means any holder, as registered on the books and records of the
Issuer Trust, of any Capital Securities; provided, however, that, in determining
whether the holders of the requisite percentage of Capital Securities have given
any request, notice, consent or waiver hereunder, "Holder" shall not include the
Guarantor, the Guarantee Trustee, or any Affiliate of the Guarantor or the
Guarantee Trustee.
"Indenture" means the Junior Subordinated Indenture dated as of July 24,
1998, between BSB Bancorp, Inc. 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 preamble of this
Guarantee Agreement.
"Like Amount" means (i) with respect to a redemption of Capital
Securities, Capital 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 Capital Securities, (ii) with respect to a
distribution of Junior Subordinated Debentures to Holders of Capital 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 Capital Securities of the Holder to whom such Junior Subordinated
Debentures are distributed, and (iii) with respect to any distribution of an
Additional Amount to Holders of Capital Securities, Junior Subordinated
Debentures having a principal amount equal to the Liquidation Amount of the
Capital Securities in respect of which such distribution is made.
"Liquidation Amount" means the stated amount of $1,000 per Capital
Security.
"Majority in Liquidation Amount of the Capital Securities" means, except
as provided by the Trust Indenture Act, Capital Securities representing more
than 50% of the aggregate Liquidation Amount of all then outstanding Capital
Securities issued by the Issuer Trust.
"Officers' Certificate" means, with respect to any person, a certificate
signed by the Chairman of the Board, Chief Executive Officer, President, or Vice
President, and by the Chief Financial Officer, Treasurer, an Associate
Treasurer, an Assistant Treasurer, the Secretary or an Assistant Secretary of
the Company, and delivered to the Guarantee Trustee. Any Officers'
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Certificate delivered with respect to compliance with a condition or covenant
provided for in this Guarantee Agreement shall include:
(i) a statement by each officer signing the Officers' Certificate
that such officer has read the covenant or condition and the definitions
relating thereto;
(ii) a brief statement of the nature and scope of the examination
or investigation undertaken by such officer in rendering the Officers'
Certificate;
(iii) 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
(iv) 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.
"Property Trustee" shall have the meaning specified in the first recital
of this Guarantee Agreement.
"Redemption Date" means, with respect to any Capital Security to be
redeemed, the date fixed for such redemption by or pursuant to the Trust
Agreement; provided that each Junior Subordinated Debenture Redemption Date (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 Capital
Securities.
"Redemption Price" shall have the meaning specified in the Trust
Agreement.
"Responsible Officer" means, when used with respect to the Guarantee
Trustee, any officer assigned to the Corporate Trust Office, including any
managing director, principal, vice president, assistant vice president,
assistant treasurer, assistant secretary or any other officer of the Guarantee
Trustee customarily performing functions similar to those performed by any of
the above 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.
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"Trust Agreement" shall have the meaning specified in the Recitals to
this Guarantee Agreement.
"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 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) semiannually, not more than 15 days after January 15 and July
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 dates; 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.
SECTION 2.3. Reports by the Guarantee Trustee.
Within 60 days of January 31 of each year, commencing January 31, 1999,
the Guarantee Trustee shall provide to the Holders such reports, if any, as are
required by Section 313 of the Trust Indenture Act in the form and in the manner
provided by Section 313 of the Trust Indenture Act. If this Guarantee Agreement,
shall have been qualified under the Trust Indenture Act, the Guarantee Trustee
also shall comply with the requirements of Section 313(d) of the Trust Indenture
Act.
SECTION 2.4. Periodic Reports to the Guarantee Trustee.
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The Guarantor shall provide to the Guarantee Trustee, and the Holders
such documents, reports and information, if any, as required by Section 314 of
the Trust Indenture Act and the compliance certificate required by Section 314
of the Trust Indenture Act, in the form, in the manner and at the times required
by Section 314 of the Trust Indenture Act, provided that such documents, reports
and information shall be required to be provided to the Securities and Exchange
Commission only if this Guarantee Agreement shall have been qualified under the
Trust Indenture Act.
SECTION 2.5. Evidence of Compliance with Conditions Precedent.
The Guarantor shall provide to the Guarantee Trustee such evidence of
compliance with such conditions precedent, if any, provided for in this
Guarantee Agreement that relate to any of the matters set forth in Section
314(c) of the Trust Indenture Act. Any certificate or opinion required to be
given by an officer pursuant to Section 314(c)(1) may be given in the form of an
Officers' Certificate.
SECTION 2.6. Events of Default; Waiver.
The Holders of a Majority in Liquidation Amount of the Capital Securities
may, by vote, on behalf of the Holders, waive any past Event of Default and its
consequences. Upon such waiver, any such Event of Default shall cease to exist,
and any Event of Default arising therefrom shall be deemed to have been cured,
for every purpose of this Guarantee Agreement, but no such waiver shall extend
to any subsequent or other default or Event of Default or impair any right
consequent therefrom.
SECTION 2.7. Event of Default; Notice.
(a) The Guarantee Trustee shall, within 90 days after the occurrence
of an Event of Default, transmit by mail, first class postage prepaid, to the
Holders, 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 (i) unless 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 of the Guarantee Trustee
charged with administration of the Trust Agreement shall have obtained actual
knowledge thereof.
SECTION 2.8. Conflicting Interests.
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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(iv) or to a Successor Guarantee Trustee on
acceptance by such Successor Guarantee Trustee of its appointment to act as
Successor Guarantee Trustee hereunder. The right, title and interest of the
Guarantee Trustee, as such, hereunder shall automatically vest in any Successor
Guarantee Trustee, upon acceptance by such Successor Guarantee Trustee of its
appointment hereunder, and such vesting and cessation of title shall be
effective whether or not conveyancing documents have been executed and delivered
pursuant to the appointment of such Successor Guarantee Trustee.
(b) If an Event of Default has occurred and is continuing, the
Guarantee Trustee shall enforce this Guarantee Agreement for the benefit of the
Holders.
(c) The Guarantee Trustee, before the occurrence of any Event of
Default and after the curing of all Events of Default that may have occurred,
shall be obligated to perform only such duties as are specifically set forth in
this Guarantee Agreement (including pursuant to Section 2.1), and no implied
covenants shall be read into this Guarantee Agreement against the Guarantee
Trustee. If an Event of Default has occurred (that has not been cured or waived
pursuant to Section 2.6), the Guarantee Trustee shall exercise such of the
rights and powers vested in it by this Guarantee Agreement, and use the same
degree of care and skill in its exercise thereof, as a prudent person would
exercise or use under the circumstances in the conduct of his or her own
affairs.
(d) No provision of this Guarantee Agreement shall be construed to
relieve the Guarantee Trustee from liability for its own negligent action, its
own negligent failure to act or its own 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:
(A) the duties and obligations of the Guarantee
Trustee shall be determined solely by the express provisions of
this Guarantee Agreement (including pursuant to Section 2.1), and
the Guarantee Trustee shall not be liable except for the
performance of such duties and obligations as are specifically set
forth in this Guarantee Agreement (including pursuant to Section
2.1); and
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(B) in the absence of bad faith on the part of the
Guarantee Trustee, the Guarantee Trustee may conclusively rely, as
to the truth of the statements and the correctness of the opinions
expressed therein, upon any certificates or opinions furnished to
the Guarantee Trustee and conforming to the requirements of this
Guarantee Agreement; but in the case of any such certificates or
opinions that by any provision hereof or of the Trust Indenture
Act are specifically required to be furnished to the Guarantee
Trustee, the Guarantee Trustee shall be under a duty to examine
the same to determine whether or not they conform to the
requirements of this Guarantee Agreement;
(ii) the Guarantee Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer of the Guarantee
Trustee, unless it shall be proved that the Guarantee Trustee was
negligent in ascertaining the pertinent facts upon which such judgment
was made;
(iii) the Guarantee Trustee shall not be liable with respect to
any action taken or omitted to be taken by it in good faith in accordance
with the direction of the Holders of not less than a Majority in
Liquidation Amount of the Capital Securities relating to the time, method
and place of conducting any proceeding for any remedy available to the
Guarantee Trustee, or exercising any trust or power conferred upon the
Guarantee Trustee under this Guarantee Agreement; and
(iv) no provision of this Guarantee Agreement shall require the
Guarantee Trustee to expend or risk its own funds or otherwise incur
personal financial liability in the performance of any of its duties or
in the exercise of any of its rights or powers if the Guarantee Trustee
shall have reasonable grounds for believing that the repayment of such
funds or liability is not assured to it under the terms of this Guarantee
Agreement or adequate indemnity against such risk or liability is not
reasonably assured to it.
SECTION 3.2. Certain Rights of Guarantee Trustee.
(a) Subject to the provisions of Section 3.1:
(i) the Guarantee Trustee may conclusively rely and shall be
fully protected in acting or refraining from acting upon any resolution,
certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note, other evidence of
indebtedness or other paper or document reasonably believed by it to be
genuine and to have been signed, sent or presented by the proper party or
parties;
(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;
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(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 written advice or 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 the purposes of this Section 3.3, shall include its directors, officers,
employees and agents) 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 meeting the requirements of
Section 310(a) of the Trust Indenture Act. If such
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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 Capital Securities, delivered to
the Guarantee Trustee.
(d) If a resigning Guarantee Trustee shall fail to appoint a
successor, or if a Guarantee Trustee shall be removed or become incapable of
acting as Guarantee Trustee, or if any vacancy shall occur in the office of any
Guarantee Trustee for any cause, the Holders of the Capital Securities, by Act
of the Holders of record of not less than 25% in aggregate Liquidation Amount of
the Capital Securities then outstanding delivered to such Guarantee Trustee,
shall promptly appoint a successor Guarantee Trustee. If no Successor Guarantee
Trustee shall have been so appointed by the Holders of the Capital Securities
and such appointment accepted by the Successor Guarantee Trustee, any Holder, on
behalf of himself and all others similarly situated, may petition any court of
competent jurisdiction for the appointment of a Successor Guarantee Trustee.
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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 Capital Securities to be
performed or observed by the Issuer Trust;
(b) the extension of time for the payment by the Issuer Trust of all
or any portion of the Distributions (other than an extension of time for payment
of Distributions that results from the extension of any interest payment period
on the Junior Subordinated Debentures as so provided in the Indenture),
Redemption Price, Liquidation Distribution or any other sums payable under the
terms of the Capital Securities or the extension of time for the performance of
any other obligation under, arising out of, or in connection with, the Capital
Securities;
(c) any failure, omission, delay or lack of diligence on the part of
the Holders to enforce, assert or exercise any right, privilege, power or remedy
conferred on the Holders pursuant to the terms of the Capital Securities, or any
action on the part of the Issuer Trust granting indulgence or extension of any
kind;
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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 Capital
Securities;
(f) the settlement or compromise of any obligation guaranteed hereby
or hereby incurred; or
(g) any other circumstance whatsoever that might otherwise constitute
a legal or equitable discharge or defense of a guarantor (other than payment of
the underlying obligation), it being the intent of this Section 5.3 that the
obligations of the Guarantor hereunder shall be absolute and unconditional under
any and all circumstances.
There shall be no obligation of the Holders to give notice to, or obtain
the consent of, the Guarantor with respect to the happening of any of the
foregoing.
SECTION 5.4. Rights of Holders.
The Guarantor expressly acknowledges that: (i) this Guarantee Agreement
will be deposited with the Guarantee Trustee to be held for the benefit of the
Holders; (ii) the Guarantee Trustee has the right to enforce this Guarantee
Agreement on behalf of the Holders; (iii) the Holders of a Majority in
Liquidation Amount of the Capital Securities have the right to direct the time,
method and place of conducting any proceeding for any remedy available to the
Guarantee Trustee in respect of this Guarantee Agreement or exercising any trust
or power conferred upon the Guarantee Trustee under this Guarantee Agreement;
and (iv) any Holder may institute a legal proceeding directly against the
Guarantor to enforce its rights under this Guarantee Agreement, without first
instituting a legal proceeding against the Guarantee Trustee, the Issuer Trust
or any other Person.
SECTION 5.5. Guarantee of Payment.
This Guarantee Agreement creates a guarantee of payment and not of
collection. This Guarantee Agreement will not be discharged except by payment of
the Guarantee Payments in full (without duplication of amounts theretofore paid
by the Issuer Trust) or upon the distribution of 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
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result of payment under this Guarantee Agreement, if at the time of any such
payment, any amounts are due and unpaid under this Guarantee Agreement. If any
amount shall be paid to the Guarantor in violation of the preceding sentence,
the Guarantor agrees to hold such amount in trust for the Holders and to pay
over such amount to the Holders.
SECTION 5.7. Independent Obligations.
The Guarantor acknowledges that its obligations hereunder are independent
of the obligations of the Issuer Trust with respect to the Capital Securities
and that the Guarantor shall be liable as principal and as debtor hereunder to
make Guarantee Payments pursuant to the terms of this Guarantee Agreement
notwithstanding the occurrence of any event referred to in subsections (a)
through (g), inclusive, of Section 5.3 hereof.
ARTICLE VI.
COVENANTS AND SUBORDINATION
SECTION 6.1. Subordination.
This Guarantee Agreement will constitute an unsecured obligation
of the Guarantor and will rank subordinate and junior in right of payment to all
Senior Indebtedness of the Guarantor to the extent and in the manner set forth
in the Indenture with respect to the Junior Subordinated Debentures, and the
provisions of Article XIII of the Indenture will apply, mutatis mutandis, to the
obligations of the Guarantor hereunder. The obligations of the Guarantor
hereunder do not constitute Senior Indebtedness of the Guarantor.
SECTION 6.2. Pari Passu Guarantees.
The obligations of the Guarantor under this Guarantee Agreement shall
rank pari passu with any similar guarantee agreements issued by the Guarantor on
behalf of the holders of preferred or capital securities issued by the Issuer
Trust and with any other security, guarantee or other obligation that is
expressly stated to rank pari passu with the obligations of the Guarantor under
this Guarantee Agreement.
ARTICLE VII.
TERMINATION
SECTION 7.1. Termination.
This Guarantee Agreement shall terminate and be of no further force and
effect upon (i) full payment of the Redemption Price of all Capital Securities,
(ii) the distribution of Junior Subordinated Debentures to the Holders in
exchange for all of the Capital Securities or (iii) full payment of the amounts
payable in accordance with Article IX of the Trust Agreement upon liquidation of
the Issuer Trust. Notwithstanding the foregoing, this Guarantee Agreement will
continue to be effective or will be reinstated, as the case may be, if at any
time any Holder is
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<PAGE> 20
required to repay any sums paid with respect to the Capital Securities or this
Guarantee Agreement.
ARTICLE VIII.
MISCELLANEOUS
SECTION 8.1. Successors and Assigns.
All guarantees and agreements contained in this Guarantee Agreement shall
bind the successors, assigns, receivers, trustees and representatives of the
Guarantor and shall inure to the benefit of the Holders of the Capital
Securities then outstanding. Except in connection with a consolidation, merger
or sale involving the Guarantor that is permitted under Article VIII of the
Indenture and pursuant to which the assignee agrees in writing to perform the
Guarantor's 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
Capital Securities. The provisions of Article VI of the Trust Agreement
concerning meetings of the Holders shall apply to the giving of such approval.
SECTION 8.3. Notices.
Any notice, request or other communication required or permitted to be
given hereunder shall be in writing, duly signed by the party giving such
notice, and delivered, telecopied (confirmed by delivery of the original) or
mailed by first class mail as follows:
(a) if given to the Guarantor, to the address or telecopy number set
forth below or such other address or telecopy number or to the attention of such
other Person as the Guarantor may give notice to the Holders:
BSB Bancorp, Inc.
58-68 Exchange Street
Binghamton, New York 13902
Facsimile No.: (607) 779-2516
Attention: Office of the Secretary
(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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<PAGE> 21
BSB Capital Trust I
c/o BSB Bancorp, Inc.
58-68 Exchange Street
Binghamton, New York 13902
Facsimile No.: (607) 779-2516
Attention: Office of the Secretary
with a copy to:
Bankers Trust Company
Four Albany Street - 4th Floor
New York, NY 10006
Facsimile No.: (212) 250-6961
Attention: Corporate Trust and Agency Group;
Corporate Market Services
(c) if given to the Guarantee Trustee:
Bankers Trust Company
Four Albany Street - 4th Floor
New York, NY 10006
Facsimile No.: (212) 250-6961
Attention: Corporate Trust and Agency Group;
Corporate Market Services
(d) if given to any Holder, at the address set forth on the books and
records of the Issuer Trust.
All notices hereunder shall be deemed to have been given when received in
person, telecopied with receipt confirmed, or mailed by first class mail,
postage prepaid, except that if a notice or other document is refused delivery
or cannot be delivered because of a changed address of which no notice was
given, such notice or other document shall be deemed to have been delivered on
the date of such refusal or inability to deliver.
SECTION 8.4. Benefit.
This Guarantee Agreement is solely for the benefit of the Holders and is
not separately transferable from the Capital Securities.
SECTION 8.5. Interpretation.
In this Guarantee Agreement, unless the context otherwise requires:
(a) capitalized terms used in this Guarantee Agreement but not defined
in the preamble hereto have the respective meanings assigned to them in Section
1.1;
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<PAGE> 22
(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.
[Remainder of page left intentionally blank; signatures appear on following
page.]
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<PAGE> 23
THIS GUARANTEE AGREEMENT is executed as of the day and year first above written.
BSB BANCORP, INC.,
as Guarantor
By:
----------------------------------------------
Name:
Title:
BANKERS TRUST COMPANY,
as Guarantee Trustee, and not in its
individual capacity
By:
----------------------------------------------
Name:
Title:
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<PAGE> 1
EXHIBIT 4.8
BSB CAPITAL TRUST I
$30,000,000 8.125% CAPITAL SECURITIES
FULLY AND UNCONDITIONALLY GUARANTEED AS TO DISTRIBUTIONS
AND OTHER PAYMENTS BY
BSB BANCORP, INC.
REGISTRATION RIGHTS AGREEMENT
New York, New York
July 24, 1998
Keefe, Bruyette & Woods, Inc.
Two World Trade Center
New York, New York 10048
Dear Sirs:
BSB Capital Trust I (the "Trust"), a statutory business trust formed
under the laws of the state of Delaware by BSB Bancorp, Inc. (the "Company"),
proposes to issue and sell to you, as the Initial Purchaser (the "Initial
Purchaser") named in the Purchase Agreement of even date herewith (the
"Purchase Agreement"), $30,000,000 aggregate liquidation amount of 8.125%
Capital Securities (liquidation amount $1,000 per Capital Security) (the
"Capital Securities") of the Trust. The issuance and sale of the Capital
Securities pursuant to the Purchase Agreement is referred to herein as the
"Initial Placement." The Capital Securities, together with the guarantee of
the Company with respect thereto (the "Guarantee") and the 8.125% Junior
Subordinated Deferrable Interest Debentures of the Company (the "Junior
Subordinated Debentures"), are collectively referred to herein as the
"Registrable Securities." As an inducement to the Initial Purchaser to enter
into the Purchase Agreement and in satisfaction of a condition to the
obligations of the Initial Purchaser thereunder, the Company and the Trust
agree with you, (i) for your benefit as Initial Purchaser and (ii) for the
benefit of the holders from time to time of the Registrable Securities and the
Exchange Securities (as defined below), including the Initial Purchaser (each
of the foregoing a "Holder" and together the "Holders"), as follows:
1. Definitions. Capitalized terms used herein without definition shall
have their respective meanings set forth in the Purchase Agreement.
As used in this Agreement, the following capitalized defined terms
shall have the following meanings:
"Additional Interest" has the meaning set forth in Section 3(c) hereof.
<PAGE> 2
"Affiliate" of any specified person means any other person which, directly or
indirectly, is in control of, is controlled by, or is under common control
with, such specified person. For purposes of this definition, control of a
person means the power, direct or indirect, to direct or cause the direction of
the management and policies of such person whether by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"Capital Securities" has the meaning set forth in the preamble hereto.
"Commission" means the Securities and Exchange Commission.
"Company" has the meaning set forth in the preamble hereto.
"DTC" means the Depository Trust Company.
"Exchange Act" means the Securities Exchange Act of 1934, as amended, and the
rules and regulations of the Commission promulgated thereunder.
"Exchange Offer Prospectus" means the Prospectus contained in the Exchange
Offer Registration Statement, as it may be amended or supplemented from time to
time.
"Exchange Offer Registration Period" means the one-year period following the
consummation of the Registered Exchange Offer, exclusive of any period during
which any stop order shall be in effect suspending the effectiveness of the
Exchange Offer Registration Statement, or the Company otherwise fails to
maintain continuous effectiveness of the Exchange Offer Registration Statement.
"Exchange Offer Registration Statement" means a registration statement of the
Company and the Trust on an appropriate form under the Securities Act with
respect to the Registered Exchange Offer, all amendments and supplements to
such registration statement, including post-effective amendments, in each case
including the Prospectus contained therein, all exhibits thereto and all
material incorporated by reference therein.
"Exchange Securities" means the securities of the Company and the Trust issued
pursuant to a Registered Exchange Offer in the same aggregate principal amount
or in the same number or liquidation amount, as the case may be, and containing
terms that are identical in all material respects to the terms of the
Registrable Securities except (i) the Exchange Securities shall have been
registered for sale under the Securities Act to Holders and (ii) the interest
rate step-up provisions and the transfer restrictions under the Securities Act
in the Registrable Securities will be modified or eliminated, as appropriate,
in the Exchange Securities.
"Exchanging Dealer" means any Holder (which may include the Initial Purchaser)
which is a broker-dealer electing to exchange Registrable Securities, acquired
for its own account as a result of market-making activities or other trading
activities, for Exchange Securities.
2
<PAGE> 3
"Final Offering Memorandum" means the final Offering Memorandum issued in
connection with the Initial Placement and dated as of July 21, 1998 relating to
the Registrable Securities.
"Guarantee" has the meaning set forth in the preamble hereto.
"Holder" has the meaning set forth in the preamble hereto.
"Initial Placement" has the meaning set forth in the preamble hereto.
"Initial Purchaser" has the meaning set forth in the preamble hereto.
"Interest Payment Date" has the meaning set forth in Section 3(c) hereof.
"Letter of Transmittal" has the meaning set forth in Section 2(c)(i) hereof.
"Managing Underwriters" means the investment banker or investment bankers and
manager or managers that shall administer an underwritten offering.
"New Capital Securities" has the meaning set forth in Section 2(e) hereof.
"New Guarantee" has the meaning set forth in Section 2(e) hereof.
"New Junior Subordinated Debentures" has the meaning set forth in Section 2(e)
hereof.
"Prospectus" means the prospectus included in any Registration Statement
(including, without limitation, a prospectus that discloses information
previously omitted from a prospectus filed as part of an effective registration
statement in reliance upon Rule 430A under the Securities Act), as amended or
supplemented by any prospectus supplement, with respect to the terms of the
offering of any portion of the Registrable Securities or the Exchange
Securities, covered by such Registration Statement, and all amendments and
supplements to the Prospectus, including post-effective amendments.
"Purchase Agreement" has the meaning set forth in the preamble hereto.
"Registered Exchange Offer" means the offer to the Holders to issue and deliver
to such Holders, in exchange for the Registrable Securities, a like principal
amount, stated liquidation amount or number, as the case may be, of the
Exchange Securities.
"Registrable Securities" has the meaning set forth in the preamble hereto.
"Registration Default" has the meaning set forth in Section 3(c) hereof.
"Registration Statement" means any Exchange Offer Registration Statement or
Shelf Registration Statement that covers any of the Registrable Securities or
the Exchange Securities pursuant to the provisions of this Agreement,
amendments and supplements to such registration statement, including
post-effective amendments, in each case including the Prospectus contained
therein, all exhibits thereto and all material incorporated by reference
therein.
3
<PAGE> 4
"Securities Act" means the Securities Act of 1933, as amended, and the rules
and regulations of the Commission promulgated thereunder.
"Shelf Registration" means a registration effected pursuant to Section 3
hereof.
"Shelf Registration Period" has the meaning set forth in Section 3(b) hereof.
"Shelf Registration Statement" means a "shelf" registration statement of the
Company and the Trust pursuant to the provisions of Section 3 hereof which
covers some or all of the Registrable Securities or Exchange Securities, as
applicable, on an appropriate form under Rule 415 under the Securities Act, or
any similar rule that may be adopted by the Commission, amendments and
supplements to such registration statement, including post-effective
amendments, in each case including the Prospectus contained therein, all
exhibits thereto and all material incorporated by reference therein.
"Transfer Restricted Securities" has the meaning set forth in Section 3(c)
hereof.
"Trust" has the meaning set forth in the preamble hereto.
"Underwriter" means any underwriter of Registrable Securities or Exchange
Securities in connection with an offering thereof under a Shelf Registration
Statement.
2. Registered Exchange Offer; Resales of Exchange Securities by
Exchanging Dealers; Private Exchange.
(a) Except as otherwise provided herein, the Company and the Trust
shall prepare and, not later than 150 days following the
Closing Date, shall file with the Commission the Exchange
Offer Registration Statement with respect to the Registered
Exchange Offer. The Company and the Trust shall use their
reasonable best efforts to cause the Exchange Offer
Registration Statement to be declared effective under the
Securities Act within 180 days of the Closing Date. The
Company and the Trust shall use their reasonable best efforts
to consummate the Registered Exchange Offer within 210 days of
the Closing Date.
(b) Upon the date the Exchange Offer Registration Statement is
declared effective, the Company and the Trust shall promptly
commence the Registered Exchange Offer, it being the objective
of such Registered Exchange Offer to enable each Holder
electing to exchange Registrable Securities for Exchange
Securities (assuming that such Holder is not an affiliate of
the Company within the meaning of the Securities Act, acquires
the Exchange Securities in the ordinary course of such
Holder's business, is not a broker-dealer tendering
Registrable Securities acquired directly from the Company, and
has no arrangements with any person to participate in a public
distribution (within the meaning of the Securities Act) of the
Exchange Securities) to trade such Exchange Securities from
and after their receipt without any limitations or
restrictions under the Securities Act and without material
restrictions under the securities laws of a substantial
proportion of the
4
<PAGE> 5
several states of the United States (other than requiring
minimum transfers in blocks having an aggregate liquidation
preference of $100,000).
(c) In connection with the Registered Exchange Offer, the Company
and the Trust shall:
(i) mail to each Holder a copy of the Prospectus forming
part of the Exchange Offer Registration Statement,
together with an appropriate letter of transmittal
(the "Letter of Transmittal") and related documents;
(ii) keep the Registered Exchange Offer open for not less
than 30 days (or longer if required by applicable
law) after the date notice thereof is mailed to the
Holders;
(iii) utilize the services of a depositary for the
Registered Exchange Offer with an address in the
Borough of Manhattan, The City of New York; and
(iv) comply in all material respects with all applicable
laws relating to the Exchange Offer.
(d) As soon as practicable after the close of the Registered
Exchange Offer, the Company and the Trust shall:
(i) accept for exchange and cancel all Registrable
Securities tendered and not validly withdrawn
pursuant to the Registered Exchange Offer;
(ii) issue Exchange Securities to each tendering Holder in
a principal amount, stated liquidation amount or
number, as the case may be, equal to the Registrable
Securities accepted for exchange and canceled
pursuant to the Registered Exchange Offer; and
(iii) issue Exchange Securities to the Initial Purchaser at
its request in exchange for Registrable Securities
acquired by it as part of the Initial Placement
containing terms that are identical to the Exchange
Securities issued to Holders in the Registered
Exchange Offer (except that such Exchange Securities
may contain the transfer restrictions contained in
the Registrable Securities for which they are
exchanged) and use reasonable best effort to cause
the CUSIP Service Bureau to issue the same CUSIP
number for such Exchange Securities as is issued for
the Exchange Securities issued in the Registered
Exchange Offer.
(e) The Company, the Trust and the Initial Purchaser on behalf of
the Holders hereby acknowledge that, in order to effect a
Registered Exchange Offer and to comply with clause (d)(iii)
above, (i) the Company will be required to issue new junior
subordinated debentures ("New Junior Subordinated Debentures")
to the Trust in exchange for a like principal amount of Junior
Subordinated Debentures and
5
<PAGE> 6
(ii) the Trust will be required to issue new capital
securities ("New Capital Securities") in exchange for a like
amount of stated liquidation amount of Capital Securities.
The parties hereto acknowledge that the Guarantee by its
express terms covers the New Capital Securities as well as the
Capital Securities. The parties hereto further acknowledge
that the New Junior Subordinated Debentures, the New Capital
Securities and the guarantee issuable as described in this
paragraph (the "New Guarantee"), which collectively constitute
the Exchange Securities, shall be identical in all material
respects to the securities they replace, except that (x) such
Exchange Securities issued pursuant to the Exchange Offer
shall be registered for sale under the Securities Act to
Holders and (y) the interest rate step-up provisions and the
transfer restrictions under the Securities Act in the
securities being replaced by the Exchange Securities will be
modified and eliminated, as appropriate, in the Exchange
Securities.
(f) The Initial Purchaser, the Company and the Trust acknowledge
that, pursuant to current interpretations by the staff of the
Commission of Section 5 of the Securities Act, and in the
absence of an applicable exemption therefrom, each Exchanging
Dealer may be deemed an "underwriter" within the meaning of
the Securities Act and, therefore, is required to deliver a
Prospectus in connection with any resales of any Exchange
Securities received by such Exchanging Dealer pursuant to the
Registered Exchange Offer in exchange for Registrable
Securities acquired for its own account as a result of
market-making activities or other trading activities.
Accordingly, the Company and the Trust shall:
(i) include the information set forth in (A) Annex A
hereto, on the cover of the Prospectus forming a part
of the Exchange Offer Registration Statement, (B)
Annex B hereto, in the forepart of the Prospectus
forming a part of the Exchange Offer Registration
Statement in a section setting forth details of the
Exchange Offer, (C) Annex C hereto, in the
underwriting or plan of distribution section of the
Prospectus forming a part of the Exchange Offer
Registration Statement, and such other information
with respect to resales of the Exchange Securities by
Exchanging Dealers that the Commission may require in
connection therewith, and (D) Annex D hereto, in the
Letter of Transmittal delivered pursuant to the
Registered Exchange Offer; and
(ii) use their reasonable best efforts to keep the
Exchange Offer Registration Statement continuously
effective under the Securities Act during the
Exchange Offer Registration Period for delivery by
Exchanging Dealers in connection with sales of
Exchange Securities received pursuant to the
Registered Exchange Offer, as contemplated by Section
4(i) hereof.
3. Shelf Registration. If (i) the Company, the Trust or the holders of a
majority of the aggregate liquidation amount of outstanding Capital
Securities are not required to file the Exchange Offer Registration
Statement or permitted to consummate the Registered
6
<PAGE> 7
Exchange Offer because the Registered Exchange Offer is not permitted
by applicable law or Commission policy, (ii) the Initial Purchaser so
requests with respect to Registrable Securities held by it following
consummation of the Registered Exchange Offer that are not "freely
tradable" Exchange Securities, (iii) the Company has received an
opinion of counsel, rendered by a law firm having a recognized
national tax practice, to the effect that, as a result of the
consummation of the Registered Exchange Offer, there is more than an
insubstantial risk that (x) the Trust would be subject to United
States federal income tax with respect to income received or accrued
on the Junior Subordinated Debentures or New Junior Subordinated
Debentures, (y) interest payable by the Company on such Junior
Subordinated Debentures or New Junior Subordinated Debentures would
not be deductible by the Company, in whole or in part, for United
States federal income tax purposes, or (z) the Trust would be subject
to more than a de minimis amount of other taxes, duties or other
governmental charges, (iv) any holder of Transfer Restricted
Securities notifies the Company and the Trust on or before the 20th
business day following the consummation of the Registered Exchange
Offer that (A) it is prohibited by law or Commission policy from
participating in the Registered Exchange Offer, (B) it may not resell
the New Capital Securities, the New Guarantee and the New Junior
Subordinated Debentures acquired by it in the Registered Exchange
Offer to the public without delivering a prospectus and the prospectus
contained in the Exchange Offer Registration Statement is not
appropriate or available for such resales or (C) it is a broker-dealer
and owns Capital Securities acquired directly from the Trust or an
affiliate of the Trust, or (v) any Holder that is a broker-dealer, is
not an affiliate of the Company or the Trust and is not eligible to
participate in the Registered Exchange Offer so requests with respect
to Registrable Securities held by it following the consummation of the
Registered Exchange Offer that are not "freely tradable" Exchange
Securities (it being understood that, for purposes of this Section 3,
(x) the requirement that the Initial Purchaser deliver a Prospectus
containing the information required by Items 507 and/or 508 of
Regulation S-K under the Securities Act in connection with sales of
Exchange Securities acquired in exchange for such Registrable
Securities shall result in such Exchange Securities being not "freely
tradable" but (y) the requirement that an Exchanging Dealer deliver a
Prospectus in connection with sales of Exchange Securities acquired in
the Registered Exchange Offer in exchange for Registrable Securities
acquired as a result of market-making activities or other trading
activities shall not result in such Exchange Securities being not
"freely tradable"), the following provisions shall apply:
(a) The Company and the Issuer Trust will use their reasonable
best efforts to file the Shelf Registration Statement with the
Commission on or prior to 150 days after any occurrence
described in clauses (i) - (v) of the preceding paragraph and
to cause the Shelf Registration to be declared effective by
the Commission on or prior to 180 days after such filing
obligation arises; provided that with respect to Exchange
Securities received by the Initial Purchaser in exchange for
Registrable Securities constituting any portion of an unsold
allotment, the Company and the Trust may, if permitted by
current interpretations by the Commission's staff, file a
post-effective amendment to the Exchange Offer Registration
Statement
7
<PAGE> 8
containing the information required by Regulation S-K Items
507 and/or 508, as applicable, in satisfaction of their
obligations under this paragraph (a) with respect thereto, and
any such Exchange Offer Registration Statement, as so amended,
shall be referred to herein as, and governed by the provisions
herein applicable to, a Shelf Registration Statement; and
provided further, that with respect to a Shelf Registration
Statement required pursuant to clause (ii) of the preceding
paragraph, the consummation of a Registered Exchange Offer
shall relieve the Company and the Trust of their obligations
under this Section 3(a) but only in respect of their
obligations under such clause (ii).
(b) The Company and the Trust shall each use its reasonable best
efforts to keep the Shelf Registration Statement continuously
effective in order to permit the Prospectus forming part
thereof to be usable by Holders for a period (the "Shelf
Registration Period") of two years from the date the Shelf
Registration Statement is declared effective by the
Commission, or such shorter period that will terminate upon
the earlier of the following: (A) when all the Registrable
Securities or Exchange Securities, as applicable, covered by
such Shelf Registration Statement have been sold pursuant to
the Shelf Registration Statement, or (B) when in the written
opinion of counsel to the Company and the Trust, all
outstanding Registrable Securities or Exchange Securities held
by persons that are not affiliates of the Company or the Trust
may be resold without registration under the Securities Act
pursuant to Rule 144(k) under the Securities Act or any
successor provision. Furthermore, the Company and the Trust
shall each use its reasonable best efforts, upon the
effectiveness of the Shelf Registration Statement and promptly
upon the request of any Holder, to take any action reasonably
necessary to register the sale of any Registrable Securities
or Exchange Securities of such Holder and to identify such
Holder as a selling securityholder, provided that such Holder
provides the Company with all information reasonably necessary
to effect such registration. The Company and the Trust shall
be deemed not to have used their reasonable best efforts to
keep the Shelf Registration Statement effective during the
requisite period if either the Company or the Trust
voluntarily takes any action that would result in Holders of
securities covered thereby not being able to offer and sell
such securities during that period, unless (i) such action is
required by applicable law, or (ii) such action is taken by
the Company in good faith and for valid business reasons (not
including avoidance of the Company's obligations hereunder),
including the acquisition or divestiture of assets, so long as
the Company promptly thereafter complies with the requirements
of Section 4(l) hereof, if applicable.
(c) Except as described below, in the event that either (a)
Exchange Offer Registration Statement is not filed with the
Commission on or prior to the 150th day following the Closing
Date, (b) the Exchange Offer Registration Statement is not
declared effective on or prior to the 180th day following the
Closing Date, (c) the Company and the Trust are obligated to
file the Shelf Registration Statement under Section 3(b) and
the Shelf Registration Statement is not filed with the
8
<PAGE> 9
Commission on or prior to 150 days after such filing
obligation arises, (d) the Shelf Registration is not declared
effective by the Commission on or prior to 180 days after the
obligation to file the Shelf Registration Statement arises,
(e) the Exchange Offer is not consummated within 210 days
following the Closing Date, or (f) the Shelf Registration
Statement or the Exchange Offer Registration Statement is
declared effective but thereafter ceases to be effective or
usable in connection with resales of Transfer Restricted
Securities during the Exchange Offer Registration Period or
the Shelf Registration Period, as applicable (each such event
referred to in clauses (a) through (f) above a "Registration
Default"), liquidated damages accruing on the principal or
liquidation amount (the "Additional Interest") will become
payable on the Capital Securities, and any outstanding New
Capital Securities, immediately following the occurrence of
such Registration Default at a rate of 0.25% per annum. In
each case such Additional Interest will be payable in cash
semiannually in arrears on the 31st day of January and July of
each year (each an "Interest Payment Date").
For purposes of the foregoing, "Transfer Restricted Securities" means
each Capital Security, Guarantee or Junior Subordinated Debenture until (i) the
date on which such Capital Security, Guarantee or Junior Subordinated Debenture
has been exchanged by a person other than a broker-dealer for a New Capital
Security, New Guarantee or New Junior Subordinated Debenture in the Exchange
Offer, (ii) following the exchange by a broker-dealer in the Exchange Offer of
a Security, the date on which such Security is sold to a purchaser who receives
from such broker-dealer on or prior to the date of such sale a copy of the
prospectus contained in the Exchange Offer Registration Statement, (iii) the
date on which such Capital Security, Guarantee or Junior Subordinated Debenture
has been effectively registered under the Securities Act and disposed of in
accordance with the Shelf Registration Statement or (iv) the date on which such
Capital Security, Guarantee or Junior Subordinated Debenture is distributed to
the public pursuant to Rule 144 under the Securities Act.
(d) Upon (w) the filing of the Exchange Offer Registration
Statement, as described above, after the 150-day period
described in clause (a) of the preceding paragraph, (x) the
effectiveness of the Exchange Offer Registration Statement, as
described above, after the 180-day period described in clause
(b) of the preceding paragraph, (y) the consummation of the
Exchange Offer or the effectiveness of a Shelf Registration
Statement within the periods described in clauses (d) and (e)
of the preceding paragraph, or (z) the discontinuation of any
Registration Default described in clause (f) of the preceding
paragraph, the Additional Interest payable on the Registrable
Securities from the date of such filing, effectiveness or
consummation, as the case may be, will cease to accrue and all
accrued and unpaid Additional Interest as of the occurrence of
(w), (x), (y) or (z) shall be paid to the holders of the
Registrable Securities on the next Interest Payment Date.
(e) In the event that a Shelf Registration Statement is declared
effective hereunder, if the Company or the Trust fails to keep
such Shelf Registration Statement continuously effective for
the period required hereby, then from the next day
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<PAGE> 10
following such time as the Shelf Registration Statement is no
longer effective until the earlier of (i) the date that the
Shelf Registration Statement is again deemed effective, (ii)
the date that is the second anniversary of the date of the
original issuance of the Registrable Securities or (iii) the
date as of which all of the Registrable Securities covered by
the Shelf Registration Statement are sold pursuant thereto or
may be sold without registration pursuant to Rule 144 under
the Securities Act, Additional Interest shall accrue at a rate
per annum equal to 0.25% of the principal amount or
liquidation amount, as applicable, of the Registrable
Securities and shall be payable in cash, in arrears on each
Interest Payment Date; it being understood that after the
Registered Exchange Offer has been consummated, no Additional
Interest shall accrue in respect of Registrable Securities,
without prejudice to any other claim that any Holder may have
for any failure by the Company to obtain or maintain
continuous effectiveness of the Exchange Offer Registration
Statement or a Shelf Registration Statement in accordance with
the terms of this Agreement.
4. Registration Procedures. In connection with any Shelf Registration
Statement and, to the extent applicable, any Exchange Offer
Registration Statement, the following provisions shall apply:
(a) The Company and the Trust shall furnish to the Initial
Purchaser, prior to the filing thereof with the Commission, a
copy of any Registration Statement, and each amendment thereto
and each amendment or supplement, if any, to the Prospectus
included therein and shall use their reasonable best efforts
to reflect in each such document, when so filed with the
Commission, such comments as the Initial Purchaser reasonably
may propose.
(b) The Company and the Trust shall ensure that (i) any
Registration Statement and any amendment thereto and any
Prospectus forming part thereof and any amendment or
supplement thereto (and each document incorporated therein by
reference) complies in all material respects with the
Securities Act and the Exchange Act and the respective rules
and regulations thereunder, (ii) any Registration Statement
and any amendment thereto does not, when it becomes effective,
contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein or
necessary to make the statements therein not misleading and
(iii) any Prospectus forming part of any Registration
Statement, and any amendment or supplement to such Prospectus,
does not as of the date thereof include an untrue statement of
a 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.
(c) (1) The Company and the Trust shall advise the Initial
Purchaser and, in the case of a Shelf Registration Statement,
the Holders of securities covered thereby, and, if requested
by the Initial Purchaser or any such Holder, confirm such
advice in writing:
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<PAGE> 11
(i) when the Registration Statement and any amendment
thereto has been filed with the Commission and when
the Registration Statement or any post-effective
amendment thereto has become effective; and
(ii) of any request by the Commission for amendments or
supplements to the Registration Statement or the
Prospectus included therein or for additional
information.
(2) The Company and the Trust shall advise the
Initial Purchaser and, in the case of a Shelf Registration Statement, the
Holders of securities covered thereby, and, in the case of an Exchange Offer
Registration Statement, any Exchanging Dealer that has provided in writing to
the Company a telephone or facsimile number and address for notices, and, if
requested by the Initial Purchaser or any such Holder or Exchanging Dealer,
confirm such advice in writing of:
(i) the issuance by the Commission of any stop order
suspending the effectiveness of the Registration
Statement or the initiation of any proceedings for
that purpose;
(ii) the receipt by the Company or the Trust of any
notification with respect to the suspension of the
qualification of the securities included therein for
sale in any jurisdiction or the initiation or overtly
threatening of any proceeding for such purpose;
(iii) the happening of any event that requires the making
of any changes in the Registration Statement or the
Prospectus so that, as of such date, the statements
therein are not misleading and do not omit to state a
material fact required to be stated therein or
necessary to make the statements therein (in the case
of the Prospectus, in light of the circumstances
under which they were made) not misleading (which
advice shall be accompanied by an instruction to
suspend the use of the Prospectus until the requisite
changes have been made); and
(iv) the Company's or the Trust's determination that a
post-effective amendment to a Registration Statement
would be appropriate;
and upon receipt of any such advice, such Holder or Exchanging Dealer shall
forthwith discontinue disposition of Registrable Securities pursuant to a
Registration Statement until such Holder's or Exchanging Dealer's receipt of
the copies of the supplemented or amended Prospectus contemplated by Section
4(l) hereof or until it is advised in writing by the Trust and the Company that
the use of the applicable Prospectus may be resumed.
(d) The Company and the Trust shall use their reasonable best
efforts to prevent the issuance, and if issued to obtain the
withdrawal, of any order suspending the effectiveness of any
Registration Statement at the earliest possible time.
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<PAGE> 12
(e) On or prior to the time that an Exchange Offer Registration
Statement or Shelf Registration Statement is first effective
under the Securities Act, the Company may, in its discretion,
cause the Capital Securities or New Capital Securities,
respectively, to be duly authorized for listing, subject in
the case of an Exchange Offer Registration Statement to
official notice of issuance, on the New York Stock Exchange as
a fixed income security (or, if such listing is unavailable,
as an equity security) and thereafter shall maintain such
listing; or, in the alternative, the Company may, in its
discretion, cause the Capital Securities or New Capital
Securities, respectively, to be freely tradable to the same
extent as if duly authorized for listing on the New York Stock
Exchange as described above.
(f) The Company and the Trust shall furnish to each Holder of
securities included within the coverage of any Shelf
Registration Statement, without charge, at least one copy of
such Shelf Registration Statement and any post-effective
amendment thereto, including financial statements and
schedules, and, if the Holder so requests in writing, all
exhibits filed therewith (including those incorporated by
reference).
(g) The Company and the Trust shall, during the Shelf Registration
Period, deliver to each Holder of securities included within
the coverage of any Shelf Registration Statement, without
charge, as many copies of the Prospectus (including each
preliminary Prospectus) included in such Shelf Registration
Statement and any amendment or supplement thereto as such
Holder may reasonably request; and the Company and the Trust
each consents to the use of the Prospectus or any amendment or
supplement thereto by each of the selling Holders of
securities in connection with the offering and sale of the
securities covered by the Prospectus or any amendment or
supplement thereto.
(h) The Company and the Trust shall furnish to each Exchanging
Dealer that so requests, without charge, at least one copy of
the Exchange Offer Registration Statement and any
post-effective amendment thereto, including financial
statements and schedules, any documents incorporated by
reference therein, and, if the Exchanging Dealer so requests
in writing, all exhibits filed therewith (including those
incorporated by reference).
(i) The Company and the Trust shall, during the Exchange Offer
Registration Period, promptly deliver to each Exchanging
Dealer, without charge, as many copies of the final Prospectus
included in such Exchange Offer Registration Statement and any
amendment or supplement thereto as such Exchanging Dealer may
reasonably request for delivery by such Exchanging Dealer in
connection with a sale of Exchange Securities received by it
pursuant to the Registered Exchange Offer; and the Company and
the Trust each consent to the use of the Prospectus or any
amendment or supplement thereto by any such Exchanging Dealer,
as aforesaid.
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<PAGE> 13
(j) Prior to the Registered Exchange Offer or any other offering
of securities pursuant to any Registration Statement, the
Company and the Trust shall register or qualify or cooperate
with the Holders of securities included therein and their
respective counsel in connection with the registration or
qualification of such securities for offer and sale under the
securities or blue sky laws of such jurisdictions as any such
Holders reasonably request in writing and do any and all other
acts or things necessary or advisable to enable the offer and
sale in such jurisdictions of the securities covered by such
Registration Statement; provided, however, that in no event
shall the Company or the Trust be required to qualify
generally to do business in any jurisdiction where it is not
then so qualified or to take any action which would subject it
to general service of process or to taxation in any such
jurisdiction where it is not then so subject.
(k) The Company and the Trust shall cooperate with the Holders of
Registrable Securities or Exchange Securities, as the case may
be, to facilitate the timely preparation and delivery within
the times required by normal-way settlement of certificates
representing securities to be sold pursuant to any
Registration Statement free of any restrictive legends and in
such denominations and registered in such names as Holders may
reasonably request prior to sales of securities pursuant to
such Registration Statement.
(l) If (i) Shelf Registration is filed pursuant to Section 3
hereof, or (ii) a Prospectus contained in the Exchange Offer
Registration Statement filed pursuant to Section 2 hereof is
required to be delivered under the Securities Act by any
Exchanging Dealer who seeks to sell Registrable Securities or
Exchange Securities during the Shelf Registration Period or
the Exchange Offer Registration Period, as the case may be,
upon the occurrence of any event contemplated by paragraph
4(c)(2)(i), 4(c)(2)(iii) or 4(c)(2)(iv) hereof, the Company
and the Trust shall, as promptly as practicable, prepare and
file with the Commission, at the sole expense of the Company,
a supplement or post-effective amendment to the Registration
Statement or a supplement to the related Prospectus or any
document incorporated or deemed to be incorporated therein by
reference, or file any other required document so that, as
thereafter delivered to the purchasers of the Registrable
Securities being sold thereunder or to the purchasers of the
Exchange Securities to whom such Prospectus will be delivered
by an Exchanging Dealer, any such Prospectus will not contain
an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances
under which they were made, not misleading.
(m) Not later than the effective date of any such Registration
Statement hereunder, the Company and the Trust shall provide a
CUSIP number for the Capital Securities or the New Capital
Securities, as the case may be, registered under such
Registration Statement. In the event of and at the time of
any distribution of the Junior Subordinated Debentures to
Holders, the Company and the Trust shall
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<PAGE> 14
provide a CUSIP number for the Junior Subordinated Debentures
or the New Junior Subordinated Debentures and provide the
applicable trustee with certificates for such securities, in a
form eligible for deposit with DTC. The Company and the Trust
shall use their reasonable best efforts to cause the CUSIP
Service Bureau to issue the same CUSIP number for all Exchange
Securities or Registrable Securities, as the case may be,
delivered pursuant to a Registration Statement as was
originally issued for the Registrable Securities.
(n) The Company and the Trust shall use their best efforts to
comply with all applicable rules and regulations of the
Commission to the extent and so long as they are applicable to
the Registered Exchange Offer, the Exchange Offer Registration
Statement or the Shelf Registration Statement and shall make
generally available to their security holders as soon as
practicable after the effective date of the applicable
Registration Statement an earnings statement satisfying the
provisions of Section 11(a) of the Securities Act.
(o) The Company and the Trust shall cause the indenture relating
to the Junior Subordinated Debentures, the Capital Securities
Guarantee and the declaration of trust of the Trust pursuant
to which the terms of the Capital Securities are established,
or any corresponding documents in respect of the Exchange
Securities, as the case may be, to be qualified under the
Trust Indenture Act in a timely manner.
(p) The Company and the Trust shall, if requested, use their
reasonable best efforts promptly to incorporate in a
Prospectus supplement or post-effective amendment to a Shelf
Registration Statement, such information as the Managing
Underwriters reasonably agree should be included therein and
shall make all required filings of such Prospectus supplement
or post-effective amendment as soon as practicable after they
are notified of the matters to be incorporated in such
Prospectus supplement or post-effective amendment.
(q) In the case of any Shelf Registration Statement, the Company
and the Trust shall enter into such agreements (including an
underwriting agreement) and take all other appropriate
actions, if any, in order to facilitate the registration or
the disposition of the Registrable Securities or the Exchange
Securities, as the case may be, to be registered thereunder.
(r) In connection therewith, if an underwriting agreement is
entered into, the Company and the Trust shall cause the same
to contain indemnification provisions and procedures no less
favorable than those set forth in Section 6 hereof (or such
other provisions and procedures acceptable to the Managing
Underwriters, if any), with respect to all parties to be
indemnified pursuant to Section 6 hereof.
(s) In the case of any underwritten offering under a Shelf
Registration Statement or at the request of the Initial
Purchaser to the extent that the Initial Purchaser has
Registrable Securities or Exchange Securities eligible for
resale thereunder, the
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<PAGE> 15
Company and the Trust shall (i) make reasonably available for
inspection by a representative of the Holders of a majority of
the securities to be registered thereunder, the Initial
Purchaser (if applicable) and any underwriter participating in
any disposition pursuant to such Registration Statement, and
any attorney, accountant or other agent retained by any such
Holders, Initial Purchaser or underwriter all relevant
financial and other records, pertinent corporate documents and
properties of the Company, its subsidiaries and the Trust;
(ii) cause the Company's officers, directors and employees and
the trustees of the Trust to supply all relevant information
reasonably requested by the representative of the Holders, the
Initial Purchaser (if applicable) or any such underwriter,
attorney, accountant or agent in connection with any such
Registration Statement as is customary for similar due
diligence examinations; provided, however, that any
information that is designated in writing by the Company and
the Trust, in good faith, as confidential at the time of
delivery of such information shall be kept confidential by the
Holders, the Initial Purchaser (if applicable) or any such
underwriter, attorney, accountant or agent, unless such
disclosure is made in connection with a court proceeding or
required by law, or such information becomes available to the
public generally or through a third party without an
accompanying obligation of confidentiality; (iii) make such
representations and warranties to the Holders of securities
registered thereunder, the Initial Purchaser (if applicable)
and the underwriters, if any, in form, substance and scope as
are customarily made by issuers to underwriters in primary
underwritten offerings and covering matters including, but not
limited to, those set forth in the Purchase Agreement; (iv)
obtain opinions of counsel to the Company and the Trust (who
may be the general counsel of the Company) and updates thereof
(which counsel and opinions (in form, scope and substance)
shall be reasonably satisfactory to the Managing Underwriters,
if any) in customary form and scope addressed to each selling
Holder, Initial Purchaser (if applicable) and the
underwriters, if any, covering such matters as are customarily
covered in opinions requested in underwritten offerings and
such other matters as may be reasonably requested by such
Holders, Initial Purchaser (if applicable) and underwriters;
(v) obtain "cold comfort" letters and updates thereof from the
independent certified public accountants of the Company (and
if necessary, any other independent certified accountants of
any subsidiary of the Company or of any business acquired by
the Company for which financial statements and financial data
are, or are required to be, included in the Registration
Statement), addressed to each selling Holder of securities
registered thereunder, the Initial Purchaser (if applicable)
and the underwriters, if any, and covering matters of the type
customarily covered in "cold comfort" letters in connection
with primary underwritten offerings; and (vi) deliver such
documents and certificates as may be reasonably requested by
any such Holders, the Initial Purchaser (if applicable) or the
Managing Underwriters, if any, including those to evidence
compliance with Section 4(l) hereof and with any customary
conditions contained in the underwriting agreement or other
agreement entered into by the Company and the Trust. The
foregoing actions set forth in clauses (iii), (iv), (v) and
(vi) of this Section 4(s) shall be performed at (A)
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<PAGE> 16
the effectiveness of such Registration Statement and each
post-effective amendment thereto and (B) each closing under
any underwriting or similar agreement as and to the extent
required thereunder.
5. Registration Expenses. The Company shall bear all expenses incurred
in connection with the performance of its obligations under Sections
2, 3 and 4 hereof and, in the event of any Shelf Registration
Statement, will reimburse the Holders for the reasonable fees and
disbursements of one firm of counsel designated by the majority of the
Holders of the Registrable Securities or Exchange Securities, as the
case may be, covered by such Shelf Registration Statement to act as
counsel for the Holders in connection therewith.
6. Indemnification and Contribution.
(a) In connection with any Registration Statement, the Company
agrees to indemnify and hold harmless the Trust, each Holder
of securities covered thereby (including the Initial Purchaser
and, with respect to any Prospectus delivery as contemplated
in Section 4(i) hereof, each Exchanging Dealer), the
directors, officers, employees and agents of each such Holder
and each person who controls any such Holder within the
meaning of either the Securities Act or the Exchange Act
against any and all losses, claims, damages or liabilities,
joint or several, to which they or any of them may become
subject under the Securities Act, the Exchange Act or other
Federal or state statutory law or regulation, at common law or
otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or
are based upon any untrue statement or alleged untrue
statement of a material fact contained in the Registration
Statement (including all documents incorporated by referenced
therein) as originally filed or in any amendment thereof, or
in any preliminary prospectus or Prospectus, or in any
amendment or supplement thereto, or arise out of or are based
upon the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to
make the statements therein not misleading, and agrees to
reimburse each such indemnified party, as incurred, for any
legal or other expenses reasonably incurred by them in
connection with investigating or defending any such loss,
claim, damage, liability or action; provided, however, that
the Company will not be liable in any case to the extent that
any such loss, claim, damage or liability arises out of or is
based upon any such untrue statement or alleged untrue
statement or omission or alleged omission made therein in
reliance upon and in conformity with written information
furnished to the Company by or on behalf of any such Holder
specifically for inclusion therein; and provided, further,
that the Company will not be liable under the provisions of
this Section 6 with respect to the Prospectus to the extent
that any such loss, claim, damage or liability results from
the fact that the indemnified party sold securities covered by
the Registration Statement to a person to whom there was not
sent or given, within the time required by the Securities Act,
a copy of the Prospectus (as then amended or supplemented if
the Company shall have furnished such amendments or
supplements thereto to the indemnified party in accordance
with the provisions of
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<PAGE> 17
Section 4 hereof) if the Prospectus (as so amended or
supplemented) would have cured the defect giving rise to such
loss, claim, damage or liability. This indemnity agreement
will be in addition to any liability which the Company may
otherwise have.
The Company also agrees to indemnify or contribute to Losses, as
provided in Section 6(d) hereof, of any underwriters of Securities registered
under a Shelf Registration Statement, their officers and directors and each
person who controls such underwriters on substantially the same basis as that
of the indemnification of the Initial Purchaser and the selling Holders
provided in this Section 6(a) and shall, if requested by any Holder, enter into
an underwriting agreement reflecting such agreement, as provided in Section
4(q) hereof.
(b) Each Holder of securities covered by a Registration Statement
(including the Initial Purchaser and, with respect to any
Prospectus delivery as contemplated in Section 4(i) hereof,
each Exchanging Dealer) severally agrees to indemnify and hold
harmless the Company, the Trust, each of their directors,
trustees, administrators, officers and each person who
controls the Company or the Trust within the meaning of either
the Securities Act or the Exchange Act, to the same extent as
the foregoing indemnity from the Company to each such Holder,
but only with reference to written information relating to
such Holder furnished to the Company by or on behalf of such
Holder specifically for inclusion in the documents referred to
in the foregoing indemnity. This indemnity agreement will be
in addition to any liability which any such Holder may
otherwise have.
(c) Promptly after receipt by an indemnified party under this
Section 6 of notice of the commencement of any action, such
indemnified party will, if a claim in respect thereof is to be
made against the indemnifying party under this Section 6,
notify the indemnifying party in writing of the commencement
thereof; but the failure so to notify the indemnifying party
(i) will not relieve the indemnifying party from liability
under paragraph (a) or (b) above unless and to the extent the
indemnifying party did not otherwise learn of such action and
such failure results in the forfeiture by the indemnifying
party of substantial rights and defenses and (ii) will not, in
any event, relieve the indemnifying party from any obligations
to any indemnified party other than the indemnification
obligation provided in paragraph (a) or (b) above. The
indemnifying party shall be entitled to appoint counsel of the
indemnifying party's choice at the indemnifying party's
expense to represent the indemnified party in any action for
which indemnification is sought (in which case the
indemnifying party shall not thereafter be responsible for the
fees and expenses of any separate counsel retained by the
indemnified party or parties except as set forth below);
provided, however, that such counsel shall be satisfactory to
the indemnified party. Notwithstanding the indemnifying
party's election to appoint counsel to represent the
indemnified party in an action, the indemnified party shall
have the right to employ separate counsel (including local
counsel), and the indemnifying party shall bear the reasonable
fees, costs and expenses of one such separate counsel (in
addition to local counsel) designated by
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<PAGE> 18
the indemnified parties if (i) the use of counsel chosen by
the indemnifying party to represent the indemnified party
would present such counsel with a conflict of interest, (ii)
the actual or potential defendants in, or targets of, any such
action include both the indemnified party and the indemnifying
party and the indemnified party shall have reasonably
concluded that there may be legal defenses available to it
and/or other indemnified parties which are different from or
additional to those available to the indemnifying party, (iii)
the indemnifying party shall not have employed counsel
satisfactory to the indemnified party to represent the
indemnified party within a reasonable time after notice of the
institution of such action or (iv) the indemnifying party
shall authorize the indemnified party to employ separate
counsel at the expense of the indemnifying party. An
indemnifying party will not, without the prior written consent
of the indemnified parties, settle or compromise or consent to
the entry of any judgment with respect to any pending or
threatened claim, action, suit or proceeding in respect of
which indemnification or contribution may be sought hereunder
(whether or not the indemnified parties are actual or
potential parties to such claim or action) unless such
settlement, compromise or consent includes an unconditional
release of each indemnified party from all liability arising
out of such claim, action, suit or proceeding.
(d) In the event that the indemnity provided in paragraph (a) or
(b) of this Section 6 is unavailable to or insufficient to
hold harmless an indemnified party for any reason, then each
applicable indemnifying party, in lieu of indemnifying such
indemnified party, shall have a joint and several obligation
to contribute to the aggregate losses, claims, damages and
liabilities (including legal or other expenses reasonably
incurred in connection with investigating or defending same)
(collectively "Losses") to which such indemnified party may be
subject in such proportion as is appropriate to reflect the
relative benefits received by such indemnifying party, on the
one hand, and such indemnified party, on the other hand, from
the Initial Placement and the Registration Statement which
resulted in such Losses; provided, however, that in no case
shall the Initial Purchaser or any subsequent Holder of any
Registrable Security or Exchange Security be responsible, in
the aggregate, for any amount in excess of the purchase
discount or commission applicable to such security, or in the
case of an Exchange Security, applicable to the Registrable
Security which was exchangeable into such Exchange Security,
as set forth on the cover page of the Final Offering
Memorandum, nor shall any underwriter be responsible for any
amount in excess of the underwriting discount or commission
applicable to the securities purchased by such underwriter
under the Registration Statement which resulted in such
Losses. If the allocation provided by the immediately
preceding sentence is unavailable for any reason, the
indemnifying party and the indemnified party shall contribute
in such proportion as is appropriate to reflect not only such
relative benefits but also the relative fault of such
indemnifying party, on the one hand, and such indemnified
party, on the other hand, in connection with the statements or
omissions which resulted in such Losses as well as any other
relevant equitable
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<PAGE> 19
considerations. Benefits received by the Company shall be
deemed to be equal to the sum of (x) the total net proceeds
from the Initial Placement (before deducting expenses) as set
forth on the cover page of the Final Offering Memorandum and
(y) the total amount of additional interest which the Company
was not required to pay as a result of registering the
securities covered by the Registration Statement which
resulted in such Losses. Benefits received by the Initial
Purchaser shall be deemed to be equal to the total purchase
discounts and commissions as set forth on the cover page of
the Final Offering Memorandum, and benefits received by any
other Holders shall be deemed to be equal to the value of
receiving Registrable Securities or Exchange Securities, as
applicable, registered under the Securities Act. Benefits
received by any underwriter shall be deemed to be equal to the
total underwriting discounts and commissions, as set forth on
the cover page of the Prospectus forming a part of the
Registration Statement which resulted in such Losses.
Relative fault shall be determined by reference to whether any
alleged untrue statement or omission relates to information
provided by the indemnifying party, on the one hand, or by the
indemnified party, on the other hand. The parties agree that
it would not be just and equitable if contribution were
determined by pro rata allocation or any other method of
allocation which does not take account of the equitable
considerations referred to above. Notwithstanding the
provisions of this paragraph (d), no person guilty of
fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act) shall be entitled to contribution
from any person who was not guilty of such fraudulent
misrepresentation. For purposes of this Section 6, each
person who controls a Holder within the meaning of either the
Securities Act or the Exchange Act and each director, officer,
employee and agent of such Holder shall have the same rights
to contribution as such Holder, and each person who controls
the Company and the Trust within the meaning of either the
Securities Act or the Exchange Act, each officer of the
Company or trustee of the Trust who shall have signed the
Registration Statement and each director of the Company or
trustee of the Trust shall have the same rights to
contribution as the Company, subject in each case to the
applicable terms and conditions of this paragraph (d).
(e) The provisions of this Section 6 will remain in full force and
effect, regardless of any investigation made by or on behalf
of any Holder, the Company or the Trust or any of the
officers, directors or controlling persons referred to in this
Section 6, and will survive the sale by a Holder of securities
covered by a Registration Statement.
7. Participation in an Underwritten Offering. No Holder may participate
in an underwritten offering hereunder unless such Holder (a) agrees to
sell such Holder's Registrable Securities on the basis provided in the
underwriting arrangement approved by the Persons entitled hereunder to
approve such arrangements and (b) completes and executes all
reasonable questionnaires, powers of attorney, indemnities,
underwriting agreements, lock-up letters and other documents
reasonably required under the terms of such underwriting arrangements.
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<PAGE> 20
8. Selection of Underwriters. The Holders of Registrable Securities
covered by the Shelf Registration Statement who desire to do so may
sell the securities covered by the Shelf Registration Statement in an
underwritten offering, subject to the provisions of Section 4(s)
hereof. In any such underwritten offering, the underwriter or
underwriters and Managing Underwriters that will administer the
offering will be selected by the Holders of a majority in aggregate
liquidation amount of the Registrable Securities included in such
offering; provided, however, that such underwriters and managers must
be reasonably satisfactory to the Company and the Trust.
9. Miscellaneous.
(a) No Inconsistent Agreements. The Company and the Trust have
not, as of the date hereof, entered into, nor shall they, on
or after the date hereof, enter into, any agreement with
respect to their securities that is inconsistent with the
rights granted to the Holders herein or otherwise conflicts
with the provisions hereof.
(b) Amendments and Waivers. The provisions of this Agreement,
including the provisions of this sentence, may not be amended,
qualified, modified or supplemented, and waivers or consents
to departures from the provisions hereof may not be given,
unless the Company and the Trust have obtained the written
consent of the Holders of at least a majority in liquidation
amount of the Capital Securities then outstanding (or, after
the consummation of any Exchange Offer in accordance with
Section 2 hereof, of Exchange Securities then outstanding);
provided that, with respect to any matter that directly or
indirectly affects the rights of the Initial Purchaser
hereunder, the Company shall obtain the written consent of the
Initial Purchaser against which such amendment, qualification,
supplement, waiver or consent is to be effective.
Notwithstanding the foregoing (except the foregoing proviso),
a waiver or consent to departure from the provisions hereof
with respect to a matter that relates exclusively to the
rights of Holders whose securities are being sold pursuant to
a Registration Statement and that does not directly or
indirectly affect the rights of other Holders may be given by
the majority of such affected Holders, determined on the
basis of securities being sold rather than registered under
such Registration Statement.
(c) Notices. All notices and other communications provided for or
permitted hereunder shall be made in writing by hand-delivery,
first-class mail, telex, telecopier, or air courier
guaranteeing overnight delivery:
(i) if to a Holder, at the most current address given by
such Holder to the Company;
(ii) if to the Initial Purchaser, initially at the
respective addresses set forth in the Purchase
Agreement; and
(iii) if to the Company or the Trust, initially at their
addresses set forth in the Purchase Agreement.
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<PAGE> 21
All such notices and communications shall be deemed to have been duly
given when received. The Initial Purchaser, the Company or the Trust by notice
to the others may designate additional or different addresses for subsequent
notices or communications.
(d) Successors and Assigns. This Agreement shall inure to the
benefit of and be binding upon the successors and assigns of
each of the parties, including, without the need for an
express assignment or any consent by the Company or the Trust
thereto, subsequent Holders of Registrable Securities and/or
Exchange Securities. The Company and the Trust hereby agree
to extend the benefits of this Agreement to any Holder of
Registrable Securities and/or Exchange Securities and any such
Holder may specifically enforce the provisions of this
Agreement as if an original party hereto.
(e) Counterparts. This agreement may be executed in any number of
counterparts and by the parties hereto in separate
counterparts, each of which when so executed shall be deemed
to be an original and all of which taken together shall
constitute one and the same agreement.
(f) Headings. The headings in this agreement are for convenience
of reference only and shall not limit or otherwise affect the
meaning hereof.
(g) Governing Law. This agreement shall be governed by and
construed in accordance with the internal laws of the State of
New York applicable to agreements made and to be performed in
said State.
(h) Severability. In the event that any one or more of the
provisions contained herein, or the application thereof in any
circumstances, is held invalid, illegal or unenforceable in
any respect for any reason, the validity, legality and
enforceability of any such provision in every other respect
and of the remaining provisions hereof shall not be in any way
impaired or affected thereby, it being intended that all of
the rights and privileges of the parties shall be enforceable
to the fullest extent permitted by law.
(i) Securities Held by the Company, etc. Whenever the consent or
approval of Holders of a specified number, or percentage of
principal amount or liquidation amount, as the case may be, of
Registrable Securities or Exchange Securities is required
hereunder, Registrable Securities or Exchange Securities, as
applicable, held by the Company or its Affiliates (other than
subsequent Holders of Registrable Securities or Exchange
Securities if such subsequent Holders are deemed to be
Affiliates solely by reason of their holdings of such
Registrable Securities or Exchange Securities) shall not be
counted in determining whether such consent or approval was
given by the Holders of such required percentage.
21
<PAGE> 22
Please confirm your agreement by having your authorized officer sign a
copy of this Registration Rights Agreement in the space set forth below and
returning the signed copy to us.
Very truly yours,
BSB BANCORP, INC.
By:
-------------------------------------
Name:
Title:
BSB CAPITAL TRUST I
By: BSB BANCORP, INC.
as Depositor
By:
-------------------------------------
Name:
Title:
Accepted:
KEEFE, BRUYETTE & WOODS, INC.
By:
---------------------------------
Name:
Title:
Date: July 24, 1998
22
<PAGE> 23
ANNEX A
Based on interpretations by the staff of the Securities and Exchange Commission
(the "Commission"), as set forth in no-action letters issued to third parties,
the Company and the Trust believe that the Exchange Securities issued pursuant
to the Exchange Offer may be offered for resale, resold or otherwise
transferred by holders thereof (other than any holder that is an "affiliate" of
the Company or the Trust as defined under Rule 405 of the Securities Act),
provided that such Exchange Securities are acquired in the ordinary course of
such holders' business and such holders are not engaged in, and do not intend
to engage in, a distribution of such Exchange Securities and have no
arrangement or understanding with any person to participate in the distribution
of such Exchange Securities. However, the staff of the Commission has not
considered the Exchange Offer in the context of a no-action letter, and there
can be no assurance that the staff of the Commission would make a similar
determination with respect to the Exchange Offer as in such other
circumstances. By tendering the Registrable Securities in exchange for
Exchange Securities, each holder, other than a broker-dealer, will represent to
the Company and the Trust that: (i) it is not an affiliate of the Company or
the Trust (as defined under Rule 405 of the Securities Act); (ii) any Exchange
Securities to be received by it were acquired in the course of its ordinary
business; and (iii) it is not engaged in, and does not intend to engage in, a
distribution of the Exchange Securities and has no arrangement or understanding
to participate in a distribution of the Exchange Securities.
Each broker-dealer that receives Exchange Securities for its own account
pursuant to the Exchange Offer must acknowledge that it will deliver a
prospectus in connection with any resale of such Exchange Securities. The
Letter of Transmittal states that by so acknowledging and by delivering a
prospectus, a broker-dealer will not be deemed to admit that it is an
"underwriter" within the meaning of the Securities Act. This Prospectus, as it
may be amended or supplemented from time to time, may be used by a
broker-dealer in connection with resales of Exchange Securities received in
exchange for Registrable Securities where such Registrable Securities were
acquired by such broker-dealer as a result of market-making activities or other
trading activities. The Company and the Trust have agreed that, starting on
the date on which the Exchange Offer is consummated and ending on the close of
business one year after such date, they will make this Prospectus available to
any broker-dealer for use in connection with any such resale. See "Plan of
Distribution."
A-1
<PAGE> 24
ANNEX B
Based on interpretations by the staff of the Commission as set forth in
no-action letters issued to third parties, the Company and the Trust believe
that holders of Registrable Securities (other than any holder that is an
"affiliate" of the Company or the Trust as defined under Rule 405 of the
Securities Act) who exchange their Registrable Securities for Exchange
Securities pursuant to the Exchange Offer may offer such Exchange Securities
for resale, resell such Exchange Securities and otherwise transfer such
Exchange Securities without compliance with the registration and prospectus
delivery provisions of the Securities Act, provided that such Exchange
Securities are acquired in the ordinary course of such holders' business and
such holders are not engaged in, and do not intend to engage in, a distribution
of such Exchange Securities and have no arrangement or understanding with any
person to participate in the distribution of such Exchange Securities.
However, the staff of the Commission has not considered the Exchange Offer in
the context of a no-action letter, and there can be no assurance that the staff
of the Commission would make a similar determination with respect to the
Exchange Offer. Each broker-dealer that receives Exchange Securities for its
own account in exchange for Registrable Securities, where such Registrable
Securities were acquired by such broker-dealer as a result of market-making
activities or other trading activities, must acknowledge that it will deliver a
prospectus in connection with any resale of such Exchange Securities. See
"Plan of Distribution."
B-1
<PAGE> 25
ANNEX C
PLAN OF DISTRIBUTION
Each broker-dealer that receives Exchange Securities for its own account
pursuant to the Exchange Offer must acknowledge that it will deliver a
prospectus in connection with any resale of such Exchange Securities. This
Prospectus, as it may be amended or supplemented from time to time, may be used
by a broker-dealer in connection with resales of Exchange Securities received
in exchange for Registrable Securities where such Registrable Securities were
acquired as a result of market-making activities or other trading activities.
The Company and the Trust have agreed that, starting on the date on which the
Exchange Offer is consummated and ending on the close of business one year
after such date, they will make this Prospectus, as amended or supplemented,
available to any broker-dealer for use in connection with any such resale. In
addition, until , 199__, all dealers effecting transactions in the Exchange
Securities may be required to deliver a prospectus.
The Company and the Trust will not receive any proceeds from any sale of
Exchange Securities by broker-dealers. Exchange Securities received by
broker-dealers for their own account pursuant to the Exchange Offer may be sold
from time to time in one or more transactions in the over-the-counter market
[or the New York Stock Exchange], in negotiated transactions, through the
writing of options on the Exchange Securities or a combination of such methods
of resale, at market prices prevailing at the time of resale, at prices related
to such prevailing market prices or negotiated prices. Any such resale may be
made directly to purchasers or to or through brokers or dealers who may receive
compensation in the form of commissions or concessions from any such
broker-dealer and/or the purchasers of any such Exchange Securities. Any
broker-dealer that resells Exchange Securities that were received by it for its
own account pursuant to the Exchange Offer and any broker or dealer that
participates in a distribution of such Exchange Securities may be deemed to be
an "underwriter" within the meaning of the Securities Act and any profit on any
such resale of Exchange Securities and any commissions or concessions received
by any such persons may be deemed to be underwriting compensation under the
Securities Act. The Letter of Transmittal states that by acknowledging that it
will deliver and by delivering a prospectus, a broker-dealer will not be deemed
to admit that it is an "underwriter" within the meaning of the Securities Act.
For a period of one year after the date on which the Exchange Offer is
consummated, the Company and the Trust will promptly send additional copies of
this Prospectus and any amendment or supplement to this Prospectus to any
broker-dealer that requests such documents in the Letter of Transmittal. The
Company and the Trust have agreed to pay all expenses incident to the Exchange
Offer (including the expenses of one counsel for the Holders of the Registrable
Securities) other than commissions or concessions of any brokers or dealers and
will indemnify the Holders of the Registrable Securities (including any
broker-dealers) against certain liabilities, including liabilities under the
Securities Act.
[If applicable, add information required by Regulation S-K Items 507 and/or
508.]
C-1
<PAGE> 26
ANNEX D
_ CHECK HERE IF YOU ARE A BROKER-DEALER AND WISH TO RECEIVE 10
ADDITIONAL COPIES OF THE PROSPECTUS AND 10 COPIES OF ANY
AMENDMENTS OR SUPPLEMENTS THERETO.
Name:
-----------------------------
Address:
-----------------------------
-----------------------------
The undersigned acknowledges that this Exchange Offer is being made by the
Company and the Trust based upon the Company's and Trust's understanding of an
interpretation by the staff of the Securities and Exchange Commission (the
"Commission") as set forth in no-action letters issued to third parties, that
the Exchange Securities issued in exchange for Registrable Securities by
holders thereof (other than to holders that are "affiliates" of the Company or
the Trust within the meaning of Rule 405 under the Securities Act), may be so
issued without compliance with the registration and prospectus delivery
provisions of the Securities Act, provided that: (i) such holders are not
affiliates of the Company or the Trust within the meaning of Rule 405 under the
Securities Act; (ii) such Exchange Securities are acquired in the ordinary
course of such holders' business; and (iii) such holders are not engaged in,
and do not intend to engage in, a distribution of such Exchange Securities and
have no arrangement or understanding with any person to participate in the
distribution of such Exchange Securities. However, the staff of the Commission
has not considered the Exchange Offer in the context of a no-action letter and
there can be no assurance that the staff of the Commission would make a similar
determination with respect to the Exchange Offer as in other circumstances. If
a holder of Registrable Securities is an affiliate of the Company, or is
engaged in or intends to engage in a distribution of the Exchange Securities or
has any arrangement or understanding with respect to the distribution of the
Exchange Securities to be acquired pursuant to the Exchange Offer, such holder
could not rely on the applicable interpretations of the staff of the Commission
and must comply with the registration and prospectus delivery requirements of
the Securities Act in connection with any secondary resale transaction. If the
undersigned is a broker-dealer that will receive Exchange Securities for its
own account in exchange for Registrable Securities, it represents that the
Registrable Securities to be exchanged for Exchange Securities were acquired by
it as a result of market-making activities or other trading activities and
acknowledges that it will deliver a prospectus in connection with any resale of
such Exchange Securities; however, by so acknowledging and by delivering a
prospectus, the undersigned will not be deemed to admit that it is an
"underwriter" within the meaning of the Securities Act.
C-2
<PAGE> 1
EXHIBIT 4.9
- --------------------------------------------------------------------------------
FORM OF
EXCHANGE GUARANTEE AGREEMENT
BETWEEN
BSB BANCORP, INC.
(AS GUARANTOR)
AND
BANKERS TRUST COMPANY
(AS GUARANTEE TRUSTEE)
DATED AS OF
, 1998
- --------------------------------------------------------------------------------
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
ARTICLE I. DEFINITIONS
Section 1.1. Definitions........................................ 1
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................... 5
Section 2.4. Periodic Reports to the Guarantee Trustee.......... 5
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.............................. 6
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................ 8
Section 3.3. Indemnity.......................................... 10
Section 3.4. Expenses........................................... 10
ARTICLE IV. GUARANTEE TRUSTEE
Section 4.1. Guarantee Trustee; Eligibility..................... 10
Section 4.2. Appointment, Removal and Resignation of the
Guarantee Trustee.................................. 11
ARTICLE V. GUARANTEE
Section 5.1. Guarantee.......................................... 11
Section 5.2. Waiver of Notice and Demand........................ 12
Section 5.3. Obligations Not Affected........................... 12
Section 5.4. Rights of Holders.................................. 13
Section 5.5. Guarantee of Payment............................... 13
Section 5.6. Subrogation........................................ 13
Section 5.7. Independent Obligations............................ 13
ARTICLE VI. COVENANTS AND SUBORDINATION
Section 6.1. Subordination...................................... 14
Section 6.2. Pari Passu Guarantees.............................. 14
ARTICLE VII. TERMINATION
Section 7.1. Termination........................................ 14
ARTICLE VIII. MISCELLANEOUS
Section 8.1. Successors and Assigns............................. 14
Section 8.2. Amendments......................................... 15
Section 8.3. Notices............................................ 15
Section 8.4. Benefit............................................ 16
Section 8.5. Interpretation..................................... 16
Section 8.6. Governing Law...................................... 17
Section 8.7. Counterparts....................................... 17
</TABLE>
<PAGE> 3
CROSS REFERENCE TABLE
Certain Sections of this Exchange Guarantee relating
to Sections 310 through 318 of the Trust Indenture Act of 1939:
<TABLE>
<CAPTION>
Trust Indenture Act Section Exchange Guarantee Section
- --------------------------- --------------------------
<S> <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>
* This reconciliation and tie shall not, for any purpose, be deemed to be a part
of the Exchange Guarantee.
<PAGE> 4
EXCHANGE GUARANTEE AGREEMENT
THIS EXCHANGE GUARANTEE AGREEMENT, dated as of , 1998 (the "Exchange
Guarantee"), is executed and delivered by BSB BANCORP, INC., a Delaware
corporation (the "Guarantor") having its principal office at 58-68 Exchange
Street, Binghamton, New York 13902, and BANKERS TRUST COMPANY, a New York
banking corporation, as trustee (the "Guarantee Trustee"), for the benefit of
the Holders (as defined herein) from time to time of the Exchange Capital
Securities (as defined herein) of BSB Capital Trust I, a Delaware statutory
business trust (the "Issuer Trust").
WHEREAS, pursuant to an Amended and Restated Trust Agreement (the
"Trust Agreement"), dated as of July 24, 1998, among BSB Bancorp, Inc., 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 (i) issued on July 24, 1998, $30,000,000 aggregate
Liquidation Amount (as defined herein) of its 8.125% Original Capital
Securities, Liquidation Amount $1,000 per original capital security
(collectively, the "Original Capital Securities") and (ii) is issuing on the
date hereof $30,000,000 aggregate Liquidation Amount of its 8.125% Exchange
Capital Securities, Liquidation Amount $1,000 per exchange capital security
(collectively, the "Exchange Capital Securities," and together with the Original
Capital Securities, the "Capital Securities") in connection with the Exchange
Offer (as defined in the Trust Agreement).
WHEREAS, as incentive for the Holders to exchange the Original
Capital Securities for the Exchange Capital Securities, the Guarantor desires
irrevocably and unconditionally to agree, to the extent set forth in this
Exchange Guarantee, to pay the Guarantee Payments (as defined below) to the
Holders of the Exchange Capital Securities, and the Guarantor agrees to make
certain other payments on the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the exchange by each Holder of
Exchange Capital Securities, which exchange the Guarantor hereby acknowledges
shall benefit the Guarantor, the Guarantor executes and delivers this Exchange
Guarantee for the benefit of the Holders.
<PAGE> 5
ARTICLE I.
DEFINITIONS
SECTION 1.1. Definitions.
As used in this Exchange Guarantee, the terms set forth below shall,
unless the context otherwise requires, have the following meanings. Capitalized
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.
"Capital Securities" shall have the meaning specified in the first recital
of this Exchange Guarantee.
"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 Exchange Guarantee.
"Distributions" means preferential cumulative cash distributions
accumulating from July 24, 1998 and payable semiannually in arrears on January
31 and July 31 of each year, commencing January 31, 1999, at an annual rate of
8.125% of the Liquidation Amount.
"Event of Default" means (i) a default by the Guarantor in any of its
payment obligations under this Exchange Guarantee, or (ii) a default by the
Guarantor in any other obligation hereunder that remains unremedied for 30 days.
"Exchange Guarantee" means this Exchange Guarantee Agreement, as modified,
amended or supplemented from time to time.
"Exchange Junior Subordinated Debentures" means the Exchange Junior
Subordinated Debentures to be issued by BSB Bancorp, Inc. in connection with the
Exchange Offer (as defined in the Trust Agreement).
"Guarantee Payments" means the following payments or distributions,
without duplication, with respect to the Exchange Capital Securities, to the
extent not paid or made by or on behalf of the Issuer Trust: (i) any accrued and
unpaid Distributions (as defined in the Trust Agreement) required to be paid on
the Exchange Capital Securities, to the extent the Issuer Trust shall have funds
on hand available therefor at such time, (ii) the Redemption Price, with respect
to the Exchange Capital Securities called for redemption by the Issuer Trust to
the extent that the Issuer Trust shall have funds on hand available therefor at
such time, and (iii) upon a voluntary or involuntary termination, winding-up or
liquidation of the Issuer Trust, unless the Exchange Junior Subordinated
Debentures are distributed to the Holders, the lesser of (a) the aggregate of
the Liquidation Amount and all accumulated and unpaid Distributions to the date
of payment to the extent the Issuer Trust shall have funds on hand available to
make such payment at such time and (b) the amount of assets of the
<PAGE> 6
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 Exchange Guarantee and thereafter means each such Successor
Guarantee Trustee.
"Guarantor" shall have the meaning specified in the preamble of this
Exchange Guarantee.
"Holder" means any holder, as registered on the books and records of the
Issuer Trust, of any Exchange Capital Securities; provided, however, that, in
determining whether the holders of the requisite percentage of Exchange Capital
Securities have given any request, notice, consent or waiver hereunder, "Holder"
shall not include the Guarantor, the Guarantee Trustee, or any Affiliate of the
Guarantor or the Guarantee Trustee.
"Indenture" means the Junior Subordinated Indenture dated as of July 24,
1998, between BSB Bancorp, Inc. 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 preamble of this
Exchange Guarantee.
"Like Amount" means (i) with respect to a redemption of Exchange Capital
Securities, Exchange Capital Securities having a Liquidation Amount equal to the
principal amount of Exchange 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 Exchange Capital
Securities, (ii) with respect to a distribution of Exchange Junior Subordinated
Debentures to Holders of Exchange Capital Securities in connection with a
dissolution or liquidation of the Issuer Trust, Exchange Junior Subordinated
Debentures having a principal amount equal to the Liquidation Amount of the
Exchange Capital Securities of the Holder to whom such Exchange Junior
Subordinated Debentures are distributed, and (iii) with respect to any
distribution of an Additional Amount to Holders of Exchange Capital Securities,
Exchange Junior Subordinated Debentures having a principal amount equal to the
Liquidation Amount of the Exchange Capital Securities in respect of which such
distribution is made.
"Liquidation Amount" means the stated amount of $1,000 per Exchange
Capital Security.
"Majority in Liquidation Amount of the Exchange Capital Securities" means,
except as provided by the Trust Indenture Act, Exchange Capital Securities
representing more than 50% of the aggregate Liquidation Amount of all then
outstanding Exchange Capital 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 Vice
President, and by the Chief Financial Officer, Treasurer, an Associate
Treasurer, an Assistant Treasurer, the Secretary or an Assistant Secretary of
the Company, and delivered to the Guarantee Trustee. Any Officers' Certificate
delivered with respect to compliance with a condition or covenant provided for
in this Exchange Guarantee shall include:
(i) a statement by each officer signing the Officers' Certificate
that such officer has read the covenant or condition and the definitions
relating thereto;
(ii) a brief statement of the nature and scope of the examination
or investigation undertaken by such officer in rendering the Officers'
Certificate;
<PAGE> 7
(iii) 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
(iv) 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.
"Property Trustee" shall have the meaning specified in the first recital
of this Exchange Guarantee.
"Redemption Date" means, with respect to any Exchange Capital Security to
be redeemed, the date fixed for such redemption by or pursuant to the Trust
Agreement; provided that each Exchange Junior Subordinated Debenture Redemption
Date (as such term is defined in the Indenture) and the stated maturity of the
Exchange Junior Subordinated Debentures shall be a Redemption Date for a Like
Amount of Exchange Capital Securities.
"Redemption Price" shall have the meaning specified in the Trust
Agreement.
"Responsible Officer" means, when used with respect to the Guarantee
Trustee, any officer assigned to the Corporate Trust Office, including any
managing director, principal, vice president, assistant vice president,
assistant treasurer, assistant secretary or any other officer of the Guarantee
Trustee customarily performing functions similar to those performed by any of
the above designated officers and having direct responsibility for the
administration of this Exchange Guarantee, 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" shall have the meaning specified in the Recitals to this
Exchange Guarantee.
"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 to be a part of and govern this
Exchange Guarantee, the provision of the Trust Indenture Act shall control. If
any provision of this Exchange Guarantee modifies or excludes any provision of
the Trust Indenture Act that may be so modified or excluded, the latter
provision shall be deemed to apply to this Exchange Guarantee as so modified or
excluded, as the case may be.
SECTION 2.2. List of Holders.
<PAGE> 8
(a) The Guarantor will furnish or cause to be furnished to the
Guarantee Trustee:
(i) semiannually, not more than 15 days after January 15 and July
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 dates; 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.
SECTION 2.3. Reports by the Guarantee Trustee.
Within 60 days of January 31 of each year, commencing January 31, 1999,
the Guarantee Trustee shall provide to the Holders such reports, if any, as are
required by Section 313 of the Trust Indenture Act in the form and in the manner
provided by Section 313 of the Trust Indenture Act. If this Guarantee Agreement,
shall have been qualified under the Trust Indenture Act, the Guarantee Trustee
also shall comply with the requirements of Section 313(d) of the Trust Indenture
Act.
SECTION 2.4. Periodic Reports to the Guarantee Trustee.
The Guarantor shall provide to the Guarantee Trustee, and the Holders such
documents, reports and information, if any, as required by Section 314 of the
Trust Indenture Act and the compliance certificate required by Section 314 of
the Trust Indenture Act, in the form, in the manner and at the times required by
Section 314 of the Trust Indenture Act, provided that such documents, reports
and information shall be required to be provided to the Securities and Exchange
Commission only if this Exchange Guarantee shall have been qualified under the
Trust Indenture Act.
SECTION 2.5. Evidence of Compliance with Conditions Precedent.
The Guarantor shall provide to the Guarantee Trustee such evidence of
compliance with such conditions precedent, if any, provided for in this Exchange
Guarantee that relate to any of the matters set forth in Section 314(c) of the
Trust Indenture Act. Any certificate or opinion required to be given by 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 Exchange Capital
Securities may, by vote, on behalf of the Holders, waive any past Event of
Default and its consequences. Upon such waiver, any such Event of Default shall
cease to exist, and any Event of Default arising therefrom shall be deemed to
have been cured, for every purpose of this Exchange Guarantee, but no such
waiver shall extend to any subsequent or other default or Event of Default or
impair any right consequent therefrom.
SECTION 2.7. Event of Default; Notice.
(a) The Guarantee Trustee shall, within 90 days after the occurrence of
an Event of Default, 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,
<PAGE> 9
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 (i) unless a Responsible Officer charged with the
administration of this Exchange Guarantee shall have received written notice of
such Event of Default, or (ii) a Responsible Officer 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
Exchange Guarantee for the purposes of clause (i) of the first proviso contained
in Section 310(b) of the Trust Indenture Act.
ARTICLE III.
POWERS, DUTIES AND RIGHTS OF THE GUARANTEE TRUSTEE
SECTION 3.1. Powers and Duties of the Guarantee Trustee.
(a) This Exchange Guarantee shall be held by the Guarantee Trustee for
the benefit of the Holders, and the Guarantee Trustee shall not transfer this
Exchange Guarantee to any Person except to a Holder exercising his or her rights
pursuant to Section 5.4(iv) or to a Successor Guarantee Trustee on acceptance by
such Successor Guarantee Trustee of its appointment to act as Successor
Guarantee Trustee hereunder. The right, title and interest of the Guarantee
Trustee, as such, hereunder shall automatically vest in any Successor Guarantee
Trustee, upon acceptance by such Successor Guarantee Trustee of its appointment
hereunder, and such vesting and cessation of title shall be effective whether or
not conveyancing documents have been executed and delivered pursuant to the
appointment of such Successor Guarantee Trustee.
(b) If an Event of Default has occurred and is continuing, the Guarantee
Trustee shall enforce this Exchange Guarantee for the benefit of the Holders.
(c) The Guarantee Trustee, before the occurrence of any Event of Default
and after the curing of all Events of Default that may have occurred, shall be
obligated to perform only such duties as are specifically set forth in this
Exchange Guarantee (including pursuant to Section 2.1), and no implied covenants
shall be read into this Exchange Guarantee 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 Exchange Guarantee, and use the same degree of care and
skill in its exercise thereof, as a prudent person would exercise or use under
the circumstances in the conduct of his or her own affairs.
(d) No provision of this Exchange Guarantee shall be construed to
relieve the Guarantee Trustee from liability for its own negligent action, its
own negligent failure to act or its own 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:
(A) the duties and obligations of the Guarantee Trustee shall
be determined solely by the express provisions of this Exchange
Guarantee (including pursuant to Section 2.1), and the Guarantee
Trustee shall not be liable except for the performance
<PAGE> 10
of such duties and obligations as are specifically set forth in this
Exchange Guarantee (including pursuant to Section 2.1); and
(B) in the absence of bad faith on the part of the Guarantee
Trustee, the Guarantee Trustee may conclusively rely, as to the
truth of the statements and the correctness of the opinions
expressed therein, upon any certificates or opinions furnished to
the Guarantee Trustee and conforming to the requirements of this
Exchange Guarantee; but in the case of any such certificates or
opinions that by any provision hereof or of the Trust Indenture Act
are specifically required to be furnished to the Guarantee Trustee,
the Guarantee Trustee shall be under a duty to examine the same to
determine whether or not they conform to the requirements of this
Exchange Guarantee;
(ii) the Guarantee Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer of the Guarantee
Trustee, unless it shall be proved that the Guarantee Trustee was
negligent in ascertaining the pertinent facts upon which such judgment
was made;
(iii) the Guarantee Trustee shall not be liable with respect to
any action taken or omitted to be taken by it in good faith in
accordance with the direction of the Holders of not less than a
Majority in Liquidation Amount of the Exchange Capital Securities
relating to the time, method and place of conducting any proceeding for
any remedy available to the Guarantee Trustee, or exercising any trust
or power conferred upon the Guarantee Trustee under this Exchange
Guarantee; and
(iv) no provision of this Exchange Guarantee shall require the
Guarantee Trustee to expend or risk its own funds or otherwise incur
personal financial liability in the performance of any of its duties or
in the exercise of any of its rights or powers if the Guarantee Trustee
shall have reasonable grounds for believing that the repayment of such
funds or liability is not assured to it under the terms of this
Exchange Guarantee or 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;
(ii) any direction or act of the Guarantor contemplated by this
Exchange Guarantee shall be sufficiently evidenced by an Officers'
Certificate unless otherwise prescribed herein;
(iii) whenever, in the administration of this Exchange Guarantee,
the Guarantee Trustee shall deem it desirable that a matter be proved or
established before taking, suffering or omitting to take any action
hereunder, the Guarantee Trustee (unless other evidence is herein
specifically prescribed) may, in the absence of bad faith on its part,
request and conclusively rely upon an Officers' Certificate which, upon
receipt of such request from the Guarantee Trustee, shall be promptly
delivered by the Guarantor;
(iv) the Guarantee Trustee may consult with legal counsel, and the
written advice or opinion of such legal counsel with respect to legal
matters shall be full and complete
<PAGE> 11
authorization and protection in respect of any action taken, suffered or
omitted to be taken by it hereunder in good faith and in accordance with
such advice or opinion. Such legal counsel may be legal counsel to the
Guarantor or any of its Affiliates and may be one of its employees. The
Guarantee Trustee shall have the right at any time to seek instructions
concerning the administration of this Exchange Guarantee from any court of
competent jurisdiction;
(v) the Guarantee Trustee shall be under no obligation to exercise
any of the rights or powers vested in it by this Exchange Guarantee at the
request or direction of any Holder, unless such Holder shall have provided
to the Guarantee Trustee such security and indemnity 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
(viii) whenever in the administration of this Exchange Guarantee
the Guarantee Trustee shall deem it desirable to receive instructions
with respect to enforcing any remedy or right or taking any other
action hereunder, the Guarantee Trustee (A) may request instructions
from the Holders, (B) may refrain from enforcing such remedy or right
or taking such other action until such instructions are received and
(C) shall be fully protected in acting in accordance with such
instructions.
(b) No provision of this Exchange Guarantee shall be deemed to impose
any duty or obligation on the Guarantee Trustee to perform any act or acts or
exercise any right, power, duty or obligation conferred or imposed on it in any
jurisdiction in which it shall be illegal, or in which the Guarantee Trustee
shall be unqualified or incompetent in accordance with applicable law, to
perform any such act or acts or to exercise any such right, power, duty or
obligation. No permissive power or authority available to the Guarantee Trustee
shall be construed to be a duty to act in accordance with such power and
authority.
SECTION 3.3. Indemnity.
The Guarantor agrees to indemnify the Guarantee Trustee (which, for
the purposes of this Section 3.3, shall include its directors, officers,
employees and agents) for, and to hold the Guarantee Trustee harmless against,
any loss, liability or expense incurred without negligence,
<PAGE> 12
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 Exchange
Guarantee, 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 Exchange Guarantee.
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 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.
<PAGE> 13
(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 Exchange Capital Securities,
delivered to the Guarantee Trustee.
(d) If a resigning Guarantee Trustee shall fail to appoint a successor,
or if a Guarantee Trustee shall be removed or become incapable of acting as
Guarantee Trustee, or if any vacancy shall occur in the office of any Guarantee
Trustee for any cause, the Holders of the Exchange Capital Securities, by Act of
the Holders of record of not less than 25% in aggregate Liquidation Amount of
the Exchange Capital Securities then outstanding delivered to such Guarantee
Trustee, shall promptly appoint a successor Guarantee Trustee. If no Successor
Guarantee Trustee shall have been so appointed by the Holders of the Exchange
Capital Securities and such appointment accepted by the Successor Guarantee
Trustee, any Holder, on behalf of himself and all others similarly situated, may
petition any court of competent jurisdiction for the appointment of a Successor
Guarantee Trustee.
ARTICLE V.
GUARANTEE
SECTION 5.1. Guarantee.
The Guarantor irrevocably and unconditionally agrees to pay in full 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 Exchange Guarantee
and of any liability to which it applies or may apply, presentment, demand for
payment, any right to require a proceeding first against the Guarantee Trustee,
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 Exchange Guarantee shall in no way be affected or impaired by reason of the
happening from time to time of any of the following:
(a) the release or waiver, by operation of law or otherwise, of the
performance or observance by the Issuer Trust of any express or implied
agreement, covenant, term or condition relating to the Exchange Capital
Securities to be performed or observed by the Issuer Trust;
(b) the extension of time for the payment by the Issuer Trust of all or
any portion of the Distributions (other than an extension of time for payment of
Distributions that results from the extension of any interest payment period on
the Exchange Junior Subordinated Debentures as so provided in the Indenture),
Redemption Price, Liquidation Distribution or any other sums payable under the
terms of the Exchange Capital Securities or the extension of time for the
performance of any other obligation under, arising out of, or in connection
with, the Exchange Capital Securities;
<PAGE> 14
(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 Exchange Capital
Securities, or any action on the part of the Issuer Trust granting indulgence or
extension of any kind;
(d) the voluntary or involuntary liquidation, dissolution, sale of any
collateral, receivership, insolvency, bankruptcy, assignment for the benefit of
creditors, reorganization, arrangement, composition or readjustment of debt of,
or other similar proceedings affecting, the Issuer Trust or any of the assets of
the Issuer Trust;
(e) any invalidity of, or defect or deficiency in, the Exchange Capital
Securities;
(f) the settlement or compromise of any obligation guaranteed hereby or
hereby incurred; or
(g) any other circumstance whatsoever that might otherwise constitute a
legal or equitable discharge or defense of a guarantor (other than payment of
the underlying obligation), it being the intent of this Section 5.3 that the
obligations of the Guarantor hereunder shall be absolute and unconditional under
any and all circumstances.
There shall be no obligation of the Holders to give notice to, or obtain
the consent of, the Guarantor with respect to the happening of any of the
foregoing.
SECTION 5.4. Rights of Holders.
The Guarantor expressly acknowledges that: (i) this Exchange Guarantee
will be deposited with the Guarantee Trustee to be held for the benefit of the
Holders; (ii) the Guarantee Trustee has the right to enforce this Exchange
Guarantee on behalf of the Holders; (iii) the Holders of a Majority in
Liquidation Amount of the Exchange Capital Securities have the right to direct
the time, method and place of conducting any proceeding for any remedy available
to the Guarantee Trustee in respect of this Exchange Guarantee or exercising any
trust or power conferred upon the Guarantee Trustee under this Exchange
Guarantee; and (iv) any Holder may institute a legal proceeding directly against
the Guarantor to enforce its rights under this Exchange Guarantee, without first
instituting a legal proceeding against the Guarantee Trustee, the Issuer Trust
or any other Person.
SECTION 5.5. Guarantee of Payment.
This Exchange Guarantee creates a guarantee of payment and not of
collection. This Exchange Guarantee will not be discharged except by payment of
the Guarantee Payments in full (without duplication of amounts theretofore paid
by the Issuer Trust) or upon the distribution of Exchange Junior Subordinated
Debentures to Holders as provided in the Trust Agreement.
SECTION 5.6. Subrogation.
The Guarantor shall be subrogated to all rights (if any) of the Holders
against the Issuer Trust in respect of any amounts paid to the Holders by the
Guarantor under this Exchange Guarantee; provided, however, that the Guarantor
shall not (except to the extent required by mandatory provisions of law) be
entitled to enforce or exercise any rights which it may acquire by way of
subrogation or any indemnity, reimbursement or other agreement, in all cases as
a result of payment under this Exchange Guarantee, if at the time of any such
payment, any amounts are due and unpaid under this Exchange Guarantee. If any
amount shall be paid to the Guarantor in violation of the preceding sentence,
the Guarantor agrees to hold such amount in trust for the Holders and to pay
over such amount to the Holders.
<PAGE> 15
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 Exchange Capital
Securities and that the Guarantor shall be liable as principal and as debtor
hereunder to make Guarantee Payments pursuant to the terms of this Exchange
Guarantee notwithstanding the occurrence of any event referred to in subsections
(a) through (g), inclusive, of Section 5.3 hereof.
ARTICLE VI.
COVENANTS AND SUBORDINATION
SECTION 6.1. Subordination.
This Exchange Guarantee will constitute an unsecured obligation of
the Guarantor and will rank subordinate and junior in right of payment to all
Senior Indebtedness of the Guarantor to the extent and in the manner set forth
in the Indenture with respect to the Exchange 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 Exchange Guarantee 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 Exchange Guarantee.
ARTICLE VII.
TERMINATION
SECTION 7.1. Termination.
This Exchange Guarantee shall terminate and be of no further force and
effect upon (i) full payment of the Redemption Price of all Exchange Capital
Securities, (ii) the distribution of Exchange Junior Subordinated Debentures to
the Holders in exchange for all of the Exchange Capital Securities or (iii) full
payment of the amounts payable in accordance with Article IX of the Trust
Agreement upon liquidation of the Issuer Trust. Notwithstanding the foregoing,
this Exchange Guarantee will 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 Exchange Capital Securities or this Exchange Guarantee.
ARTICLE VIII.
MISCELLANEOUS
SECTION 8.1. Successors and Assigns.
All guarantees and agreements contained in this Exchange Guarantee shall
bind the successors, assigns, receivers, trustees and representatives of the
Guarantor and shall inure to the benefit of the Holders of the Exchange Capital
Securities then outstanding. Except in connection with a consolidation, merger
or sale involving the Guarantor that is permitted under Article VIII of the
Indenture and pursuant to which the assignee agrees in writing to perform the
Guarantor's
<PAGE> 16
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 Exchange Guarantee may only be amended with the prior approval
of the Holders of not less than a Majority in Liquidation Amount of the Exchange
Capital Securities. The provisions of Article VI of the Trust Agreement
concerning meetings of the Holders shall apply to the giving of such approval.
SECTION 8.3. Notices.
Any notice, request or other communication required or permitted to be
given hereunder shall be in writing, duly signed by the party giving such
notice, and delivered, telecopied (confirmed by delivery of the original) or
mailed by first class mail as follows:
(a) if given to the Guarantor, to the address or telecopy number set
forth below or such other address or telecopy number or to the attention of such
other Person as the Guarantor may give notice to the Holders:
BSB Bancorp, Inc.
58-68 Exchange Street
Binghamton, New York 13902
Facsimile No.: (607) 779-2516
Attention: Office of the Secretary
(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:
BSB Capital Trust I
c/o BSB Bancorp, Inc.
58-68 Exchange Street
Binghamton, New York 13902
Facsimile No.: (607) 779-2516
Attention: Office of the Secretary
with a copy to:
Bankers Trust Company
Four Albany Street - 4th Floor
New York, NY 10006
Facsimile No.: (212) 250-6961
Attention: Corporate Trust and Agency Group;
Corporate Market Services
(c) if given to the Guarantee Trustee:
Bankers Trust Company
Four Albany Street - 4th Floor
New York, NY 10006
Facsimile No.: (212) 250-6961
<PAGE> 17
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 Exchange Guarantee is solely for the benefit of the Holders and
is not separately transferable from the Exchange Capital Securities.
SECTION 8.5. Interpretation.
In this Exchange Guarantee, unless the context otherwise requires:
(a) capitalized terms used in this Exchange Guarantee but not defined in
the preamble hereto have the respective meanings assigned to them in Section
1.1;
(b) a term defined anywhere in this Exchange Guarantee has the same
meaning throughout;
(c) all references to "the Exchange Guarantee" or "this Exchange
Guarantee" are to this Exchange Guarantee as modified, supplemented or amended
from time to time;
(d) all references in this Exchange Guarantee to Articles and Sections
are to Articles and Sections of this Exchange Guarantee unless otherwise
specified;
(e) a term defined in the Trust Indenture Act has the same meaning when
used in this Exchange Guarantee unless otherwise defined in this Exchange
Guarantee or unless the context otherwise requires;
(f) a reference to the singular includes the plural and vice versa; and
(g) the masculine, feminine or neuter genders used herein shall include
the masculine, feminine and neuter genders.
SECTION 8.6. Governing Law.
THIS EXCHANGE GUARANTEE SHALL BE GOVERNED BY AND CONSTRUED AND INTERPRETED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO THE
CONFLICT OF LAW PRINCIPLES THEREOF.
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.
<PAGE> 18
THIS EXCHANGE GUARANTEE is executed as of the day and year first above
written.
BSB BANCORP, INC.,
as Guarantor
By:
------------------------------------
Name:
Title:
BANKERS TRUST COMPANY,
as Guarantee Trustee, and not in its
individual capacity
By:
------------------------------------
Name:
Title:
<PAGE> 1
EXHIBIT 10
BSB CAPITAL TRUST I
$30,000,000 8.125% Capital Securities
Fully and Unconditionally Guaranteed as to Distributions
and Other Payments by
BSB BANCORP, INC.
PURCHASE AGREEMENT
New York, New York
July 21, 1998
Keefe, Bruyette & Woods, Inc.
Two World Trade Center
85th Floor
New York, New York 10048
Ladies and Gentlemen:
BSB Bancorp, Inc., a Delaware corporation (the "Company"), and BSB
Capital Trust I, a Delaware statutory business trust (the "Trust"), propose to
sell to you (the "Initial Purchaser") $30,000,000 aggregate liquidation amount
8.125% Capital Securities of the Trust, having a stated liquidation amount of
$1,000 per capital security (the "Capital Securities"), on the terms and
conditions set forth herein.
The Capital Securities will be fully and unconditionally guaranteed
on a subordinated basis by the Company with respect to distributions and amounts
payable upon liquidation, redemption or repayment (the "Guarantee") pursuant to
the Capital Securities Guarantee Agreement (the "Guarantee Agreement"), to be
dated as of the Closing Date specified in Section 3 hereof and executed and
delivered by the Company and Bankers Trust Company, as trustee (the "Guarantee
Trustee"), for the benefit of the holders from time to time of the Capital
Securities. The entire proceeds from the sale of the Capital Securities will be
combined with the entire proceeds from the sale by the Trust to the Company of
its common securities (the "Common Securities") and will be used by the Trust to
purchase $30,928,000 principal amount of the 8.125% Junior Subordinated
Deferrable Interest Debentures of the Company (the "Junior Subordinated
Debentures"). The Capital Securities and the Common Securities for the Trust
will be issued pursuant to the Amended and Restated Trust Agreement (the "Trust
Agreement"), to be dated as of the Closing Date among the Company, as Depositor,
Bankers Trust (Delaware), a Delaware corporation (the "Delaware Trustee"),
Bankers Trust Company (the "Property Trustee"), and the holders from time to
time of
-3-
<PAGE> 2
undivided beneficial interests in the assets of the Trust. The Common Securities
will be fully and unconditionally guaranteed on a subordinated basis by the
Company with respect to distributions and amounts payable upon liquidation,
redemption or repayment pursuant to the Guarantee Agreement. The Junior
Subordinated Debentures will be issued pursuant to an Indenture, to be dated as
of the Closing Date, (the "Indenture"), between the Company and Bankers Trust
Company, as trustee (the "Indenture Trustee").
Holders of the Securities (as defined herein) will be entitled to
the benefits of the Registration Rights Agreement, dated the date hereof, among
the Company, the Trust and the Initial Purchaser, on terms reasonably acceptable
to the Company and the Initial Purchaser (the "Registration Rights Agreement").
The Capital Securities, the Guarantee and the Junior Subordinated
Debentures are collectively referred to herein as the "Securities." This
Agreement, the Indenture, the Trust Agreement, the Guarantee Agreement, the
Registration Rights Agreement and the Securities are referred to collectively as
the "Operative Documents." Capitalized terms used herein without definition have
the respective meanings specified in the Final Memorandum (as defined below).
The sale of the Capital Securities to the Initial Purchaser will be
made without registration of any of the Securities under the Securities Act of
1933, as amended (the "Securities Act"), in reliance upon exemptions from the
registration requirements of the Securities Act. The Initial Purchaser has
advised the Company that the Initial Purchaser will offer and sell the Capital
Securities purchased hereunder in accordance with Section 4 hereof as soon as it
deems advisable.
In connection with the sale of the Capital Securities, the Company
and the Trust have prepared a final offering memorandum, dated July 21, 1998
(including any and all exhibits thereto and any information incorporated by
reference therein, the "Final Memorandum"). The Final Memorandum sets forth
certain information concerning the Company, the Trust and the Securities. Each
of the Company and the Trust hereby confirms that it has authorized the use of
the Final Memorandum, and any amendment or supplement thereto, in connection
with the offer and sale of the Securities by the Initial Purchaser. Unless
stated to the contrary, all references herein to the Final Memorandum are to the
Final Memorandum at the Execution Time (as defined below) and are not meant to
include any amendment or supplement, or any information incorporated by
reference therein, subsequent to the Execution Time and any references herein to
the terms "amend," "amendment" or "supplement" with respect to the Final
Memorandum shall be deemed to refer to and include any information filed under
the Securities Exchange Act of 1934, as amended (the "Exchange Act"), subsequent
to the Execution Time which is incorporated by reference therein.
1. Representations and Warranties. The Company and the Trust
jointly and severally represent and warrant to, and agree with, the Initial
Purchaser as set forth below in this Section 1.
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(a) The Company is duly incorporated and validly existing
as a corporation in good standing under the laws of the State of Delaware with
corporate power and authority to own, lease, and operate its properties and
conduct its business substantially as described in the Final Memorandum; the
Company is duly registered under the Bank Holding Company Act of 1956, as
amended; the Company has no subsidiaries except those described in the Final
Memorandum (each a "Subsidiary"); the Company owns, directly or indirectly,
beneficially and of record all of the outstanding capital stock of each
Subsidiary free and clear of any claim, lien, encumbrance or security interest,
except as described in the Final Memorandum. The Company and each of its
Subsidiaries is duly qualified to do business and is in good standing as a
foreign corporation in each jurisdiction in which any of them own or lease
properties, has an office, or in which the business conducted by any of them
makes such qualification necessary, except where the failure to so qualify would
not be reasonably likely to have a material adverse effect on the financial
condition, business, assets, properties, results of operations, or net worth of
the Company and its Subsidiaries taken as a whole, or on the ability of the
Company and the Trust to consummate the transactions contemplated by this
Agreement ("Material Adverse Effect"); and no proceeding has been instituted in
any jurisdiction revoking, limiting or curtailing, or seeking to revoke, limit
or curtail, such power and authority or qualification.
(b) The Trust Agreement has been duly authorized by the
Company and, on the Closing Date, will have been duly executed and delivered by
the Company and the Administrators (as defined in the Trust Agreement) of the
Trust, and, assuming due authorization, execution and delivery by the Delaware
Trustee and the Property Trustee, be a valid and binding obligation of the
Company and such Administrators, enforceable against them in accordance with its
terms, subject to applicable bankruptcy, insolvency and similar laws affecting
creditors' rights generally and to general principles of equity ("Bankruptcy and
Equity"). Each of the Administrators of the Trust is an employee of the Company
and has been duly authorized by the Company to execute and deliver the Trust
Agreement.
(c) Each of the Guarantee Agreement, and the Indenture has
been duly authorized by the Company and, on the Closing Date will have been duly
executed and delivered by the Company, and, assuming due authorization,
execution and delivery by the Guarantee Trustee, in the case of the Guarantee,
and by the Indenture Trustee, in the case of the Indenture, will be a valid and
binding obligation of the Company enforceable against it in accordance with its
terms, subject to Bankruptcy and Equity.
(d) The Capital Securities, the Exchange Securities (as
defined in the Registration Rights Agreement) and the Common Securities have
been duly authorized by the Trust Agreement and, when issued and delivered
against payment therefor on the Closing Date to the Initial Purchaser, in the
case of the Capital Securities, and to the Company, in the case of the Common
Securities, or, in the case of the Exchange Securities, when issued and
delivered in accordance with the Registration Rights Agreement in exchange for
Capital Securities, will be validly issued and represent undivided beneficial
interests in the assets of the Trust. The issuance of none of the Capital
Securities, the Exchange Securities or the Common Securities is subject to
preemptive or other similar rights. On the Closing Date, all of the
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<PAGE> 4
issued and outstanding Common Securities will be directly owned by the Company
free and clear of any pledge, security interest, claim, lien or other
encumbrance.
(e) The Junior Subordinated Debentures have been duly
authorized by the Company and, at the Closing Date, will have been duly executed
and delivered to the Indenture Trustee for authentication in accordance with the
Indenture, and, when authenticated in the manner provided for in the Indenture
and delivered against payment therefor by the Trust as described in the Final
Memorandum, will constitute valid and binding obligations of the Company
entitled to the benefits of the Indenture and enforceable against the Company in
accordance with their terms, subject to Bankruptcy and Equity.
(f) Each of this Agreement and the Registration Rights
Agreement has been duly authorized, executed and delivered by the Company and
the Trust.
(g) The Securities, the Common Securities and the Operative
Documents will on the Closing Date conform in all material respects to the
descriptions thereof contained in the Final Memorandum.
(h) Neither the Trust nor the Company or any Subsidiary,
is, or with the giving of notice or lapse of time or both will be, in
violation or breach of, or in default under, nor will the execution or delivery
of, or the performance and consummation of the transactions contemplated by
this Agreement (including the offer, sale, or delivery of the Capital
Securities), conflict with, or result in a violation or breach of, or
constitute a default under, any provision of the organizational documents of
the Trust or the Certificate of Incorporation or Bylaws (as amended or
restated) of the Company, or other governing documents of the Trust, the
Company or any Subsidiary, or of any provision of any agreement, contract,
mortgage, deed of trust, lease, loan agreement, indenture, note, bond, or other
evidence of indebtedness, or other material agreement or instrument to which
the Trust, the Company or any Subsidiary is a party or by which any of them is
bound or to which any of their properties is subject, except for such
conflicts, violations, breaches and defaults which would not be reasonably
likely to have a Material Adverse Effect nor will the performance by the
Company or the Trust of their obligations hereunder violate any rule,
regulation, order, or decree, applicable to the Trust, the Company or any
Subsidiary of any court or any regulatory body, administrative agency, or other
governmental body having jurisdiction over the Trust, the Company or any
Subsidiary or any of their respective properties, or any order of any court or
governmental agency or authority entered in any proceeding to which the Trust,
the Company or any Subsidiary was or is now a party or by which it is bound,
except those violations, if any, described in the Final Memorandum or which
would not be reasonably likely to have a Material Adverse Effect. No consent,
approval, filing, authorization, registration, qualification, or order,
including with or by any bank regulatory agency, is required for the execution,
delivery, and performance of this Agreement or the consummation of the
transactions contemplated by this Agreement (other than such that have been
obtained or made, or those which the failure to obtain or make would not be
reasonably likely to have a Material Adverse Effect), except for compliance
with the Securities Act, the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), and the Blue Sky Laws applicable to
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<PAGE> 5
the offering of the Capital Securities by the Initial Purchaser. This Agreement
constitutes a valid and binding obligation of the Company and the Trust and is
enforceable against the Company and the Trust in accordance with its terms.
(i) Other than as disclosed in the Final Memorandum, there
is no material litigation or governmental proceeding, action, or investigation
pending or, to the knowledge of the Trust or the Company, threatened, to which
the Trust, the Company or any Subsidiary is or may be a party or to which
property owned or leased by the Company or any Subsidiary is or may be subject,
or related to environmental or discrimination matters, or which questions the
validity of this Agreement or any action taken or to be taken pursuant hereto.
(j) Either the Company or a Subsidiary, as the case may be,
has good and marketable title in fee simple to all items of real property and
good title to all the personal properties and assets reflected as owned by the
Company or a Subsidiary in the Final Memorandum, in each case clear of all
liens, mortgages, pledges, charges, or encumbrances of any kind or nature except
those, if any, reflected in the financial statements described above (or
elsewhere in the Final Memorandum) or which are not material to the Company and
its Subsidiaries taken as a whole; all properties held or used by the Company or
a Subsidiary under leases, licenses, franchises or other agreements are held by
them under valid, existing, binding, and enforceable leases, franchises,
licenses, or other agreements with respect to which it is not in material
default.
(k) All documents delivered or to be delivered by the
Company, the Trust or any of their representatives in connection with the
issuance and sale of the Capital Securities were on the dates on which they were
delivered, or will be on the dates on which they are to be delivered, true,
complete, and correct in all material respects. The Incorporated Documents, when
they were or are filed with the Securities and Exchange Commission (the
"Commission"), as the case may be, complied or will comply, as the case may be,
in all material respects with the applicable requirements of the Securities Act
and the Exchange Act, as applicable.
(l) The Company and each Subsidiary have filed all
necessary federal and all state and foreign income and franchise tax returns
and paid all taxes shown as due thereon, except those being contested in good
faith; and no tax deficiency has been asserted or threatened against the
Company or any Subsidiary that would be reasonably likely to have a Material
Adverse Effect, except as described in the Final Memorandum.
(m) The Company or a Subsidiary owns or possesses adequate
rights to use all trademarks, service marks, trade names, trademark
registrations, servicemark registrations, copyrights, and licenses necessary for
the conduct of the business of the Company and the Subsidiaries or ownership of
their respective properties, and neither the Company nor any Subsidiary has
received notice of conflict with the asserted rights of others in respect
thereof which has not been resolved.
(n) The Company and each Subsidiary have in place and
effective such policies of insurance, with limits of liability in such amounts,
as are normal and prudent
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<PAGE> 6
in the ordinary scope of business similar to that of the Company and such
Subsidiary in the respective jurisdiction in which they conduct business.
(o) The Company and each Subsidiary have and hold and, at
the Closing Date, are operating in compliance with, and have fulfilled and
performed all of their material obligations with respect to, all permits,
certificates, franchises, grants, easements, consents, licenses, approvals,
charters, registrations, authorizations, and orders (collectively, "Permits")
required under all laws, rules, and regulations in connection with their
respective businesses, and all of such Permits are in full force and effect
except where the failure to have, hold, fulfill or perform such obligations
would not be reasonably likely to have a Material Adverse Effect; and to the
Company's knowledge, there is no pending proceeding, and neither the Company nor
any Subsidiary has received notice of any threatened proceeding, relating to the
revocation or modification of any such Permits. Neither the Company nor any
Subsidiary is (by virtue of any action, omission to act, contract to which it is
a party or by which it is bound, or any occurrence or state of facts whatsoever)
in violation of any applicable federal, state, municipal, or local statutes,
laws, ordinances, rules, regulations and/or orders issued pursuant to foreign,
federal, state, municipal, or local statutes, laws, ordinances, rules, or
regulations (including those relating to any aspect of banking, bank holding
companies, environmental protection, occupational safety and health, and equal
employment practices) heretofore or currently in effect, except such violation
that has been fully cured or satisfied without recourse or that is not
reasonably likely to have a Material Adverse Effect.
(p) The deposits of BSB Bank & Trust Company are insured by
the Federal Deposit Insurance Corporation ("FDIC") up to the legal limits.
(q) The Final Memorandum, at the date hereof, does not and
at the Closing Date will not (and any amendment or supplement thereto, at the
date thereof and at the Closing Date, will not), contain any untrue statement of
a material fact or omit to state any material fact necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading; provided, however, that the Company and the Trust make no
representation or warranty as to the information contained in or omitted from
the Final Memorandum, or any amendment or supplement thereto, in reliance upon
and in conformity with information furnished in writing to the Company by or on
behalf of the Initial Purchaser specifically for inclusion therein.
(r) Neither the Company nor the Trust, nor any of their
Affiliates (as defined in Rule 501(b) of Regulation D under the Securities Act
("Regulation D")), nor any person acting on its or their behalf has, directly or
indirectly, made offers or sales of any security, or solicited offers to buy any
security, under circumstances that would require the registration of any of the
Securities under the Securities Act.
(s) Neither the Company nor the Trust, nor any of their
Affiliates, nor any person acting on its or their behalf has engaged in any form
of general solicitation or general advertising (within the meaning of Regulation
D) in connection with any offer or sale of any of the Securities. Neither the
Company nor any Affiliate has engaged in any distribution of any of the
Securities or entered into any agreement with respect to the
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<PAGE> 7
distribution of any of the Securities except with the Initial Purchaser. The
Company has not offered or sold, and will not offer or sell, any of the
Securities, except as contemplated by this Agreement.
(t) The Securities satisfy the eligibility requirements of
Rule 144A(d)(3) under the Securities Act.
(u) Neither the Company nor the Trust is an "investment
company," or an entity "controlled" by an "investment company," in each case
within the meaning of Section 3(c) of the Investment Company Act of 1940, as
amended (the "Investment Company Act"), without regard to Section 3(c) of the
Investment Company Act.
(v) The Company is subject to and in full compliance with
the reporting requirements of Section 13 or Section 15(d) of the Exchange Act.
(w) Neither the Company nor the Trust has paid or agreed to
pay to any person any compensation for soliciting another to purchase any of the
Securities (except as contemplated by this Agreement).
(x) The Trust has been duly created and is validly existing
in good standing as a business trust under the Delaware Business Trust Act, 12
Del. C. 3801, et seq. (the "Business Trust Act") with the trust power and
authority to own property and to conduct its business substantially as described
in the Final Memorandum and to enter into and perform its obligations under the
Operative Documents. The Trust is duly qualified to transact business as a
foreign entity and is in good standing in each jurisdiction in which such
qualification is necessary, except where the failure to so qualify or be in good
standing would not be reasonably likely to have a material adverse effect on the
financial condition, business, assets, properties, results of operation, or net
worth of the Trust. The Trust is not a party to or otherwise bound by any
agreement other than the Operative Documents. The Trust is and will, under
current law, be classified for federal income tax purposes as a grantor trust
and not as an association taxable as a corporation.
(y) The consolidated financial statements (including the
notes thereto) and schedules of the Company and its consolidated subsidiaries
appended to or included or incorporated by reference in the Final Memorandum
comply as to form in all material respects with the requirements of the
Securities Act and fairly present in all material respects, in accordance with
generally accepted accounting principles, the financial position of the Company
and its consolidated subsidiaries, and the results of operations and changes in
financial condition as of the dates and for the periods therein specified,
subject, in the case of interim financial statements, to normal, recurring
year-end adjustments. Such consolidated financial statements and schedules have
been prepared in accordance with generally accepted accounting principles
consistently applied throughout the periods involved (except as otherwise noted
therein).
(z) Since the respective dates as of which information is
provided in the Final Memorandum, except as otherwise specifically stated
therein, there has been no
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<PAGE> 8
material adverse change or development (resulting from litigation or otherwise)
with respect to the indebtedness of the Company or any Subsidiary (except as may
result from the closing of the transactions contemplated by this Agreement), or
the financial condition, capital stock, earnings, business or properties of the
Company and its Subsidiaries, taken as a whole, whether or not arising in the
ordinary course of business (a "Material Adverse Change").
(aa) The provisions of any employee benefit plan ("Benefit
Plan") as defined in Section 3(3) of the Employee Retirement Income Security Act
of 1974, as amended ("ERISA"), in which the Company or any Subsidiary is a
participating employer are in compliance with ERISA and applicable provisions of
the Internal Revenue Code of 1986, as amended (the "Code"), in all material
respects, and neither the Company nor any Subsidiary is in violation of ERISA or
applicable provisions of the Code. The Company, each Subsidiary, or the plan
sponsor thereof, as the case may be, has duly and timely filed the reports
required to be filed by ERISA in connection with the maintenance of any Benefit
Plans in which the Company or any Subsidiary is a participating employer, and no
facts, including any "reportable event" as defined by ERISA and the regulations
thereunder, exist in connection with any Benefit Plan in which the Company or
any Subsidiary is a participating employer which might constitute grounds for
the termination of such plan by the Pension Benefit Guaranty Corporation or for
the appointment by the appropriate U.S. District Court of a trustee to
administer any such plan or result in a material liability to the Company or any
Subsidiary under Title IV of ERISA.
Any certificate signed by any officer of the Company and delivered
to the Initial Purchaser or to counsel for the Initial Purchaser pursuant to the
terms of this Agreement shall be deemed a representation and warranty by the
Company to the Initial Purchaser as to the matters covered thereby.
2. Purchase and Sale. Subject to the terms and conditions and
in reliance upon the representations and warranties herein set forth, the
Company and the Trust jointly and severally agree to sell to the Initial
Purchaser, and the Initial Purchaser agrees to purchase from the Company and
the Trust, the Capital Securities with an aggregate stated liquidation amount
of $30,000,000 at a purchase price equal to 100% of the stated liquidation
amount thereof. As compensation to the Initial Purchaser for its commitments
hereunder and in view of the fact that the proceeds from the sale of the
Capital Securities will be used to purchase Junior Subordinated Debentures of
the Company, the Company will pay, on the Closing Date concurrently with the
purchases and sales pursuant to the preceding sentence, to the Initial
Purchaser, a commission per Capital Security equal to 2.25% of the stated
liquidation amount thereof. Any payment pursuant to this Section 2 shall be
made by wire transfer in immediately available funds to the U.S. account
designated in writing by the party entitled to receive such payment.
3. Delivery and Payment. Delivery of and payment for the
Capital Securities shall be made at 9:30 AM, New York City time, on July 24,
1998, or such later date as the Initial Purchaser shall designate, which date
and time may be postponed by agreement between the Initial Purchaser, on the
one hand, and the Company and the Trust, on the other hand, (such date and time
of delivery and payment for the Capital Securities being herein
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<PAGE> 9
called the "Closing Date").
Delivery of the Capital Securities shall be made at such location,
and in such names and denominations, as the Initial Purchaser shall designate at
least one business day in advance of the Closing Date. The Company and the Trust
agree to have the Capital Securities available for inspection and checking by
the Initial Purchaser in New York, New York, not later than 1:00 PM on the
business day prior to the Closing Date. The closing for the purchase and sale of
the Capital Securities shall occur at the offices of Arnold & Porter, 555
Twelfth Street, N.W., Washington, D.C. 20004, or such other place as the parties
hereto shall agree.
4. Offering by the Initial Purchaser. It is understood that the
Initial Purchaser proposes to offer the Capital Securities for sale as set forth
in the Final Memorandum. The Initial Purchaser represents and warrants to and
agrees with the Company and the Trust that:
(a) It has not offered or sold, and will not offer or sell,
any of the Securities except to those it reasonably believes to be (i) qualified
institutional buyers (as defined in Rule 144A under the Securities Act) and
that, in connection with each such sale, it has taken or will take reasonable
steps to ensure that the purchaser of any Capital Securities is aware that such
sale is being made in reliance on Rule 144A or (ii) other institutional
"accredited investors" (as defined in Rule 501(a)(1), (2), (3) or (7) of
Regulation D).
(b) Neither it nor any person acting on its behalf has made
or will make offers or sales of any of the Securities by means of any form of
general solicitation or general advertising (within the meaning of Regulation
D).
(c) The Initial Purchaser will deliver to each purchaser of
the Capital Securities, in connection with its original placement of the Capital
Securities, a copy of the Final Memorandum as amended and supplemented at the
date of such delivery.
5. Covenants. The Company and the Trust covenant with the
Initial Purchaser that:
(a) The Company and the Trust will furnish to the Initial
Purchaser and to counsel for the Initial Purchaser, without charge, during the
period referred to in paragraph (c) below, as many copies of the Final
Memorandum and any amendments and supplements thereto as it may reasonably
request. The Company will pay the expenses of printing or other production of
all documents relating to the offering.
(b) Neither the Company nor the Trust will amend or
supplement the Final Memorandum, other than by filing documents under the
Exchange Act which are incorporated by reference therein, without the prior
written consent of the Initial Purchaser; provided, however, that, prior to the
completion of the distribution of the Capital Securities by the Initial
Purchaser (as determined by the Initial Purchaser), neither the Company nor the
Trust will file any document under the Exchange Act which is incorporated by
reference in the Final Memorandum unless, prior to such proposed filing, the
Company or the Trust has
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<PAGE> 10
furnished the Initial Purchaser with a copy of such document for its review and
the Initial Purchaser has not reasonably objected to the filing of such
document, except that the Company can file any such document under the Exchange
Act which counsel to the Company shall advise the Company is required in order
to comply with applicable law. The Company and the Trust will promptly advise
the Initial Purchaser when any document filed under the Exchange Act which is
incorporated by reference in the Final Memorandum shall have been filed with the
Commission.
(c) If at any time prior to the completion of the
distribution of the Capital Securities by the Initial Purchaser (as determined
by the Initial Purchaser), any event occurs as a result of which the Final
Memorandum, as then amended or supplemented, would include any untrue statement
of a material fact or omit to state any material fact necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, or if it should be necessary to amend or supplement the
Final Memorandum to comply with applicable law, the Company and the Trust will
promptly notify the Initial Purchaser of the same and, subject to the
requirements of paragraph (b) of this Section 5, will prepare and provide to the
Initial Purchaser pursuant to paragraph (a) of this Section 5 an amendment or
supplement which will correct such statement or omission or effect such
compliance.
(d) The Company and the Trust, in cooperation with the
Initial Purchaser, will arrange for the qualification of the Capital Securities
for sale by the Initial Purchaser under the laws of such jurisdictions as the
Initial Purchaser may designate and will maintain such qualifications in effect
so long as required for the sale of the Capital Securities; provided, however,
that neither the Company nor the Trust shall be obligated to qualify to do
business in any jurisdiction where it is not now so qualified or to take any
action which would subject it to general service of process or to taxation in
any jurisdiction where it is not now so subject. The Company or the Trust, as
the case may be, will promptly advise the Initial Purchaser of the receipt by
the Company or the Trust, as the case may be, of any notification with respect
to the suspension of the qualification of the Capital Securities for sale in any
jurisdiction or the initiation or threatening of any proceeding for such
purpose.
(e) On or prior to the second anniversary of the Closing
Date, neither the Company nor the Trust will, nor will either of them permit any
of its Affiliates to, resell any Capital Securities that have been acquired by
any of them.
(f) Neither the Company nor the Trust will, nor will either
of them permit any of its Affiliates, nor any person acting on its or their
behalf, to, directly or indirectly, make offers or sales of any security, or
solicit offers to buy any security, under circumstances that would require the
registration of any of the Securities under the Securities Act.
(g) Neither the Company nor the Trust will, nor will either
of them permit any of its Affiliates, nor any person acting on its or their
behalf, to, engage in any form of general solicitation or general advertising
(within the meaning of Regulation D) in
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connection with any offer or sale of the any of the Securities. Neither the
Company nor any Affiliates will engage in any distribution of any of the
Securities or enter into any agreement with respect to the distribution of any
of the Securities, except with the Initial Purchaser. The Company will not offer
or sell any of the Securities, except as contemplated by this Agreement.
(h) So long as any of the Securities are outstanding and
are "restricted securities" within the meaning of Rule 144(a)(3) under the
Securities Act, each of the Company and the Trust will, during any period in
which it is not subject to and in compliance with Section 13 or 15(d) of the
Exchange Act or it is not exempt from such reporting requirements pursuant to
and in compliance with Rule 12g3-2(b) under the Exchange Act, provide to each
holder of such restricted securities and to each prospective purchaser (as
designated by such holder) of such restricted securities, upon the request of
such holder or prospective purchaser, any information required to be provided
by Rule 144A(d)(4) under the Securities Act. This covenant is intended to be
for the benefit of the holders, and the prospective purchasers designated by
such holders, from time to time of such restricted securities. The information
provided by the Company and the Trust pursuant to this Section 5(h) will not,
at the date thereof, contain any untrue statement of a material fact or omit to
state any material fact necessary to make the statements therein, in the light
of the circumstances under which they were made, not misleading.
(i) Each of the Company and the Trust will cooperate with
the Initial Purchaser and use its best efforts to permit the Capital Securities
to be eligible for clearance and settlement through the electronic book-entry
system of The Depository Trust Company.
(j) Neither the Company nor the Trust will, until 90 days
following the Closing Date, without the prior written consent of the Initial
Purchaser, offer, sell, contract to sell, grant any option to purchase or
otherwise dispose of, directly or indirectly (other than the Exchange
Securities), (i) any Capital Securities or other securities of the Trust other
than the sale of the Common Securities to the Company and the sale of the
Capital Securities to the Initial Purchaser, in each case as contemplated by
this Agreement, (ii) any securities that are substantially similar to the
Securities or (iii) any other securities convertible into, or exercisable or
exchangeable for, any of (i) or (ii), or enter into an agreement, or announce an
intention, to do any of the foregoing.
(k) Except as reflected in or contemplated by the Final
Memorandum, since the respective dates as of which information is given in the
Final Memorandum and prior to the Closing Date:
(i) neither the Company nor any Subsidiary will incur
any material liabilities or obligations, direct or contingent, or enter into any
material transaction not in the ordinary course of business without the prior
consent of the Initial Purchaser; and
(ii) neither the Company nor any Subsidiary will pay
or declare any dividend or other distribution with respect to its capital
stock and neither the
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<PAGE> 12
Company nor any Subsidiary will become delinquent in the payment of principal or
interest on any outstanding debt obligations; and
(l) The Company agrees to pay (i) the costs incident to the
authorization, issuance, sale and delivery of the Capital Securities and any
taxes payable in that connection; (ii) the costs incident to the preparation and
printing of the Final Memorandum and any amendments or supplements thereto;
(iii) the costs of distributing the Final Memorandum and any amendments or
supplements thereto; (iv) the fees and expenses of qualifying the Capital
Securities under the securities laws of the several jurisdictions as provided in
Section 5(d) hereof and of preparing, printing and distributing Preliminary and
Supplemental Blue Sky Memoranda (including related reasonable fees and expenses
of counsel to the Initial Purchaser); (v) all fees and expenses, if any,
incurred in connection with the admission of such Securities for trading in
PORTAL; (vi) the fees and expenses of the Property Trustee (as defined in the
Trust Agreement), the Guarantee Trustee and the Indenture Trustee; and (vii)
all other costs and expenses incident to the performance of the obligations of
the Company and the Trust.
6. Conditions to the Obligations of the Initial Purchaser. The
obligations of the Initial Purchaser to purchase the Capital Securities shall be
subject to the accuracy of the representations and warranties on the part of the
Company and the Trust contained herein as of the date and time that this
Agreement is executed (the "Execution Time") and the Closing Date, to the
accuracy of the statements of the Company and the Trust made in any Capital
Securities pursuant to the provisions hereof, to the performance by the Company
and the Trust of their obligations hereunder and to the following additional
conditions:
(a) The Company shall have furnished to the Initial
Purchaser on the Closing Date, except as otherwise expressly provided below:
(i) An opinion of Hogan & Hartson L.L.P. counsel to
the Company, dated as of the Closing Date, in form and substance substantially
in the form attached hereto as Exhibit A.
(ii) The favorable opinion, dated the Closing Date, of
White & Case, counsel to the Property Trustee and the Delaware Trustee,
substantially in the form attached hereto as Exhibit B.
(iii) The favorable opinion, dated the Closing Date, of
Morris, James, Hitchens & Williams, special Delaware counsel to the Company and
the Trust, substantially to the effect and in the form attached hereto as
Exhibit C.
(iv) The favorable opinion, dated the Closing Date, of
Richards, Layton & Finger, special Delaware counsel to the Delaware Trustee,
substantially to the effect and in the form attached hereto as Exhibit D.
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(v) The favorable opinion, dated the Closing Date, of
Arnold & Porter, counsel to the Initial Purchaser as to such matters as the
Initial Purchaser shall reasonably request.
In rendering such opinions specified in clause (a)(i), (ii) or (v)
above, counsel may rely upon an opinion or opinions, each dated the Closing
Date, of other counsel retained by them or the Company as to laws of any
jurisdiction other than the United States or the State of New York, 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 Initial Purchaser, and (B)
counsel shall state in their opinion that they believe that they and the Initial
Purchaser are 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 of the Company, its subsidiaries and the Trust and
certificates of public officials.
(b) At the time this Agreement is executed and also on the
Closing Date, there shall be delivered to the Initial Purchaser a letter
addressed to the Initial Purchaser from PricewaterhouseCoopers LLP, the
Company's independent accountants, the first letter to be dated the date of this
Agreement and the second letter to be dated the Closing Date, which shall be in
form and substance reasonably satisfactory to the Initial Purchaser and shall
contain information as of a date within five days of the date of such letter.
There shall not have been any change set forth in any letter referred to in this
subsection (b) that makes it impracticable or inadvisable in the reasonable
judgment of the Initial Purchaser proceed with the public offering or purchase
of the Capital Securities as contemplated hereby.
(c) On the Closing Date, a certificate signed by the
Chairman of the Board, the President, a Vice Chairman of the Board or any
Executive or Senior Vice President and the principal financial or accounting
officer of the Company, dated the Closing Date, to the effect that the signers
of such certificate have carefully examined the Final Memorandum and this
Agreement and that:
(i) The representations and warranties of each of the
Company and the Trust in this Agreement are true and correct in all material
respects on and as of the Closing Date, with the same effect as if made on the
Closing Date, and each of the Company and the Trust has complied in all material
respects with all the agreements and satisfied in all material respects all the
conditions on its part to be performed or satisfied at or prior to the Closing
Date; and
(ii) Each of the respective signatories of the
certificate has carefully examined the Final Memorandum, and any amendments or
supplements thereto, and, to his knowledge, such documents contain all material
statements and information required to be made therein, and neither the Final
Memorandum 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, in the light of the
circumstances under which they were made, not misleading and, since the date of
the Final Memorandum, no
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<PAGE> 14
event has occurred that was required to be set forth in an amended or
supplemented Final Memorandum that has not been so set forth; provided, however,
that no
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<PAGE> 15
representation need be made as to information contained in or omitted from the
Final Memorandum or any amendment or supplement in reliance upon and in
conformity with written information furnished to the Company and the Trust by
the Initial Purchaser; and
(iii) Since the date of the Final Memorandum, there has
not been any Material Adverse Change or a development involving a prospective
Material Adverse Change of the Company and its Subsidiaries taken as a whole,
whether or not arising from transactions in the ordinary course of business,
except as disclosed in the Final Memorandum as heretofore amended or (but only
if the Initial Purchaser expressly consents thereto in writing) as disclosed in
an amendment or supplement thereto delivered to the Initial Purchaser after the
execution of this Agreement; since such date and except as so disclosed or in
the ordinary course of business, neither the Company nor any Subsidiary has
incurred any liability or obligation, direct or indirect, or entered into any
transaction that is material to the Company or such Subsidiary, as the case may
be, not contemplated in the Final Memorandum; since such date and except as so
disclosed there has not been any change in the outstanding capital stock of the
Company, or any change that is material to the Company and its Subsidiaries
taken as a whole in the short-term debt or long-term debt of the Company or any
Subsidiary; since such date and except as so disclosed, neither the Company nor
any of its Subsidiaries have incurred any material contingent obligations, and
no material litigation is pending or, to their knowledge threatened against the
Company or any Subsidiary; since such date and except as so disclosed, no labor
problem exists or is imminent with employees of the Company or any Subsidiary
that would be reasonably likely to have a Material Adverse Effect; and, since
such date and except as so disclosed, neither the Company nor any of its
Subsidiaries have sustained any material loss or interference from any strike,
fire, flood, windstorm, accident or other calamity (whether or not insured) or
from any court or governmental action, order, or decree.
(d) Subsequent to the Execution Time, there shall not have
been any decrease in the ratings of any of the Company's debt securities by any
"nationally recognized statistical rating organization" (as defined for purposes
of Rule 436(g) under the Securities Act) or any notice given of any intended or
potential decrease in any such rating or of a possible change in any such
ratings that does not indicate the direction of a possible change.
(e) Prior to the Closing Date, the Company and the Trust
shall have furnished to the Initial Purchaser such further information,
certificates and documents as the Initial Purchaser may reasonably request.
(f) At the Closing Date, each of the Operative Documents
shall have been duly authorized, executed and delivered by each party thereto,
and copies thereof shall have been delivered to the Initial Purchaser.
If any of the conditions specified in this Section 6 shall not have
been fulfilled in all material respects when and as provided in this Agreement,
or if any of the opinions, certificates and documents mentioned above or
elsewhere in this Agreement shall not be in all material respects reasonably
satisfactory in form and substance to the Initial Purchaser and counsel for the
Initial Purchaser, this Agreement and all obligations of the Initial Purchaser
hereunder may be canceled at, or at any time prior to, the Closing Date by the
Initial
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<PAGE> 16
Purchaser. Notice of such cancellation shall be given to the Company and the
Trust in writing or by telephone or telegraph confirmed in writing.
The documents required to be delivered by this Section 6 shall be
delivered at the offices of counsel for the Initial Purchaser on the Closing
Date.
7. Reimbursement of Initial Purchaser's Expenses. If the sale
of the Capital Securities provided for herein is terminated or indefinitely
suspended because any condition to the obligations of the Initial Purchaser set
forth in Section 6 hereof is not satisfied or because of any refusal, inability
or failure on the part of the Company or the Trust to perform any agreement
herein or comply with any provision hereof other than by reason of a default by
the Initial Purchaser, the Company will reimburse the Initial Purchaser upon
demand for all out-of-pocket expenses (including reasonable fees and
disbursements of counsel) that shall have been incurred by it in connection
with the proposed purchase and sale of the Capital Securities. Any such
termination or suspension shall be without liability of any party to the other
except that the provisions of this Section 7, and Sections 5(k) and 8 shall
remain effective and shall apply.
8. Indemnification and Contribution. (a) The Company and the
Trust agree jointly and severally to indemnify and hold harmless the Initial
Purchaser, the directors, officers, employees and agents of the Initial
Purchaser and each person who controls the Initial Purchaser within the meaning
of either the Securities Act or the Exchange Act against any and all losses,
claims, damages or liabilities, joint or several, to which they or any of them
may become subject under the Securities Act, the Exchange Act or other Federal
or state statutory law or regulation, at common law or otherwise, insofar as
such losses, claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon any untrue statement or alleged untrue statement
of a material fact contained in the Final Memorandum, or in any amendment
thereof or supplement thereto, or arise out of or are based upon the omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading, and agrees to reimburse each such
indemnified party, as incurred, for any legal or other expenses reasonably
incurred by them in connection with investigating or defending any such loss,
claim, damage, liability or action; provided, however, that the Company and the
Trust will not be liable in any such case to the extent that any such loss,
claim, damage or liability arises out of or is based upon any such untrue
statement or alleged untrue statement or omission or alleged omission made
therein in reliance upon and in conformity with written information furnished to
the Company and the Trust by or on behalf of the Initial Purchaser specifically
for inclusion therein; and provided, further, that the Company and the Trust
will not be liable under the provisions of this Section 8 with respect to the
Final Memorandum to the extent that any such loss, claim, damage or liability
results from the fact that the Initial Purchaser sold Capital Securities to a
person to whom there was not sent or given, at or prior to the written
confirmation of such sale, a copy of the Final Memorandum (as then amended or
supplemented if the Company shall have furnished such amendments or supplements
thereto to the Initial Purchaser prior to the written confirmation of such sale)
if the Final Memorandum (as so amended or supplemented) would have cured the
defect giving rise to such loss, claim, damage or liability. This indemnity
agreement will be in addition to any liability which the
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<PAGE> 17
Company or the Trust may otherwise have.
(b) The Company agrees to indemnify the Trust against all
loss, liability, claim, damage and expense whatsoever, as due from the Trust
under Section 8(a) hereunder.
(c) The Initial Purchaser agrees to indemnify and hold
harmless the Company and the Trust, each of their directors, trustees, officers
and each person who controls the Company or the Trust within the meaning of
either the Securities Act or the Exchange Act, to the same extent as the
foregoing indemnity from the Company and the Trust to the Initial Purchaser, but
only with reference to written information relating to the Initial Purchaser
furnished to the Company and the Trust by or on behalf of the Initial Purchaser
specifically for inclusion in the documents referred to in the foregoing
indemnity. This indemnity agreement will be in addition to any liability which
the Initial Purchaser may otherwise have. The Company and the Trust acknowledge
that the statements set forth in the final paragraph of the cover page, on the
inside front cover regarding Stabilization, and the statements regarding the
Initial Purchaser set forth in the second, third, sixth and seventh paragraphs
under the heading "Plan of Distribution" in the Final Memorandum constitute the
only information furnished in writing by or on behalf of the Initial Purchaser
for inclusion in the Final Memorandum, and the Initial Purchaser confirms that
such statements are correct.
(d) Promptly after receipt by an indemnified party under
this Section 8 of notice of the commencement of any action, such indemnified
party will, if a claim in respect thereof is to be made against the indemnifying
party under this Section 8, notify the indemnifying party in writing of the
commencement thereof; but the failure so to notify the indemnifying party (i)
will not relieve the indemnifying party from liability under paragraph (a), (b)
or (c) above unless and to the extent that the indemnifying party did not
otherwise learn of such action and such failure results in the forfeiture by the
indemnifying party of substantial rights and defenses and (ii) will not, in any
event, relieve the indemnifying party from any obligations to any indemnified
party other than the indemnification obligation provided in paragraph (a), (b)
or (c) above. The indemnifying party shall be entitled to appoint counsel of the
indemnifying party's choice at the indemnifying party's expense to represent the
indemnified party in any action for which indemnification is sought (in which
case the indemnifying party shall not thereafter be responsible for the fees and
expenses of any separate counsel retained by the indemnified party or parties
except as set forth below); provided, however, that such counsel shall be
reasonably satisfactory to the indemnified party. Notwithstanding the
indemnifying party's election to appoint counsel to represent the indemnified
party in an action, the indemnified party shall have the right to employ
separate counsel (including local counsel), and the indemnifying party shall
bear the reasonable fees, costs and expenses of one such separate counsel (in
addition to local counsel) if (i) the use of counsel chosen by the indemnifying
party to represent the indemnified party would present such counsel with a
conflict of interest, (ii) the actual or potential defendants in, or targets of,
any such action include both the indemnified party and the indemnifying party
and the indemnified party shall have reasonably concluded that there may be
legal defenses available to it and/or other indemnified parties which are
different from or additional to those available to
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<PAGE> 18
the indemnifying party, (iii) the indemnifying party shall not have employed
counsel reasonably satisfactory to the indemnified party to represent the
indemnified party within a reasonable time after notice of the institution of
such action or (iv) the indemnifying party shall authorize the indemnified
party to employ separate counsel at the expense of the indemnifying party. An
indemnifying party will not, without the prior written consent of the
indemnified parties, settle or compromise or consent to the entry of any
judgment with respect to any pending or threatened claim, action, suit or
proceeding in respect of which indemnification or contribution may be sought
hereunder (whether or not the indemnified parties are actual or potential
parties to such claim or action) unless such settlement, compromise or consent
includes an unconditional release of each indemnified party from all liability
arising out of such claim, action, suit or proceeding.
(e) In the event that the indemnity provided in paragraph
(a), (b) or (c) of this Section 8 is unavailable to or insufficient to hold
harmless any indemnified party for any reason, the Company, the Trust and the
Initial Purchaser agree to contribute to the aggregate losses, claims, damages
and liabilities (including legal or other expenses reasonably incurred in
connection with investigating or defending same) (collectively "Losses") to
which the Company, the Trust and the Initial Purchaser may be subject in such
proportion as is appropriate to reflect the relative benefits received by the
Company and the Trust and by the Initial Purchaser from the offering of the
Capital Securities; provided, however, that in no case shall the Initial
Purchaser be responsible for any amount in excess of the underwriting discount
or commission applicable to the Capital Securities purchased by the Initial
Purchaser hereunder. If the allocation provided by the immediately preceding
sentence is unavailable for any reason, the Company, the Trust and the Initial
Purchaser shall contribute in such proportion as is appropriate to reflect not
only such relative benefits but also the relative fault of the Company and the
Trust and of the Initial Purchaser in connection with the statement or omissions
which resulted in such Losses as well as any other relevant equitable
considerations. Benefits received by the Company and the Trust shall be deemed
to be equal to the total net proceeds from the offering of the Capital
Securities (before deducting expenses), and benefits received by the Initial
Purchaser shall be deemed to be equal to the total underwriting discounts and
commissions, in each case as set forth in the Final Memorandum. Relative fault
shall be determined by reference to whether any alleged untrue statement or
omission relates to information provided by the Company, the Trust or the
Initial Purchaser. The Company, the Trust and the Initial Purchaser agree that
it would not be just and equitable if contribution were determined by pro rata
allocation or any other method of allocation which does not take account of the
equitable considerations referred to above. Notwithstanding the provisions of
this paragraph (e), no person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. For purposes of this Section 8, each person who controls the
Initial Purchaser within the meaning of either the Securities Act or the
Exchange Act and each director, officer, employee and agent of the Initial
Purchaser shall have the same rights to contribution as the Initial Purchaser,
and each person who controls the Company or the Trust within the meaning of
either the Securities Act or the Exchange Act, each officer of the Company and
each director of the Company and each trustee or administrator of the Trust
shall have the same rights to contribution as the Company and the
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<PAGE> 19
Trust, subject in each case to applicable terms and conditions of this paragraph
(e).
9. Termination. This Agreement shall be subject to termination
in the absolute discretion of the Initial Purchaser, by notice given to the
Company and the Trust prior to delivery of and payment for the Capital
Securities, if prior to such time (i) trading in any of the Company's securities
shall have been suspended by the Commission or NASDAQ or trading in securities
generally on the NASDAQ National Market System shall have been suspended or
limited or minimum prices shall have been established on the NASDAQ National
Market System, (ii) a banking moratorium shall have been declared either by
Federal or New York State authorities or (iii) there shall have occurred any
outbreak or escalation of hostilities, declaration by the United States of a
national emergency or war or other calamity or crisis the effect of which on
financial markets is such as to make it, in the judgment of the Initial
Purchaser, impracticable or inadvisable to proceed with the offering or delivery
of the Capital Securities as contemplated by the Final Memorandum (exclusive of
any supplement thereto).
10. Representations and Indemnities to Survive. The respective
agreements, representations, warranties, indemnities and other statements of the
Company and the Trust or their respective officers or trustees and of the
Initial Purchaser set forth in or made pursuant to this Agreement will remain in
full force and effect, regardless of any investigation made by or on behalf of
the Initial Purchaser, the Company or the Trust or any of the officers,
directors or trustees, administrators or controlling persons referred to in
Section 8 hereof, and will survive delivery of and payment for the Capital
Securities. The provisions of Sections 7 and 8 hereof shall survive the
termination or cancellation of this Agreement.
11. Notices. All communications hereunder will be in writing and
effective only on receipt, and, if sent to the Initial Purchaser, will be
mailed, delivered or telegraphed and confirmed to it at Two World Trade Center,
85th Floor, New York, New York 10048, attention of Donald W. Delson; if sent to
the Company or the Trust, will be mailed, delivered or telegraphed and confirmed
to it at 58-68 Exchange Street, Binghampton, New York 13902 (telephone number
(607) 779-2492), Attention: Larry Denniston.
12. Successors. This Agreement will inure to the benefit of and
be binding upon the parties hereto and their respective successors and the
officers and directors and controlling persons referred to in Section 8 hereof,
and no other person will have any right or obligation hereunder.
13. Applicable Law. THIS AGREEMENT WILL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REFERENCE
TO PRINCIPLES OF CONFLICTS OF LAW.
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<PAGE> 20
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to us the enclosed duplicate hereof, whereupon
this letter and your acceptance shall represent a binding agreement among the
Company, the Trust and the Initial Purchaser.
Very truly yours,
BSB BANCORP, INC.
By:
-------------------------
Name:
Title:
BSB CAPITAL TRUST I
By:BSB BANCORP, INC.
as Depositor
By:
-------------------------
Name:
Title:
The foregoing Agreement is hereby
confirmed and accepted as of the
date first above written.
KEEFE, BRUYETTE & WOODS, INC.
By:
--------------------------
Name:
Title:
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<PAGE> 21
EXHIBIT A
The opinion of special counsel to the Company to be delivered
pursuant to Section 6(a)(i) of the Purchase Agreement shall be substantially to
the effect that:
1. The Company is a corporation existing and in good standing
under the laws of the State of Delaware with requisite corporate power and
authority to own its properties and conduct its business as described in the
Final Memorandum, except for such power and authority the absence of which would
not have a material adverse effect on the Company, and is registered as a bank
holding company under the Bank Holding Company Act of 1956, as amended.
2. The Company and each Subsidiary have been duly incorporated
or organized and are validly existing as corporations or banking associations
in good standing under the laws of the jurisdiction of organization, with full
corporate power and authority to own, lease, and operate their respective
properties and conduct their respective businesses as described in the Final
Memorandum; the Company and each Subsidiary are qualified to do business as
foreign corporations under the corporation laws of each jurisdiction in which
the Company or such Subsidiary, as the case may be, owns or leases properties,
has an office, or in which business is conducted and such qualification is
required, except where the failure to so qualify would not have a material
adverse effect.
3. The Company has full corporate power and authority to
execute, deliver, and perform the Purchase Agreement; the Purchase Agreement
has been duly authorized, executed and delivered by the Company, and
constitutes a legal, valid, and binding obligation of the Company and is
enforceable against each of the Company and the Trust in accordance with its
terms.
4. The Trust Agreement has been duly authorized, executed and
delivered by the Company, and is a valid and binding obligation of the Company,
enforceable against the Company in accordance with its terms.
5. The Guarantee Agreement has been duly authorized, executed
and delivered by the Company and is a valid and binding obligation of the
Company enforceable against the Company in accordance with its terms.
6. The Indenture has been duly authorized, executed and
delivered by the Company, has been duly qualified under the Trust Indenture
Act, and is a valid and binding agreement of the Company, enforceable against
the Company in accordance with its terms.
7. The Junior Subordinated Debentures have been duly authorized,
executed and delivered by the Company and when duly authenticated in accordance
with the Indenture and delivered and paid for in accordance with the Junior
Subordinated Debenture
A-1
<PAGE> 22
Purchase Agreement to be dated as of July __, 1998, by and between the Company
and the Trust, will be valid and binding obligations of the Company, entitled to
the benefits of the Indenture and enforceable against the Company in accordance
with their terms.
8. The Trust is not an "investment company" or an entity
"controlled" by an "investment company," as such terms are defined in the
Investment Company Act of 1940, as amended.
9. The statements set forth in the Final Memorandum under the
captions "Supervision, Regulation and Other Matters," "Description of Capital
Securities," "Description of Junior Subordinated Debentures," "Description of
Guarantee" and "Relationship Among the Capital Securities, the Junior
Subordinated Debentures and the Guarantee," insofar as they purport to describe
legal conclusions or provisions of the laws referred to therein, fairly
summarize the legal matters described therein.
10. To the extent that the summary set forth in the Final
Memorandum under the caption "Certain Federal Income Tax Consequences"
constitutes matters of law or purports to describe certain provisions of the
U.S. federal income tax laws, it is an accurate summary in all material
respects of the matters discussed therein, subject to the assumptions and
conditions described therein.
11. Neither the issue and sale of the Capital Securities or the
Junior Subordinated Debentures, the execution and delivery of the Operative
Documents by the Company or the Trust, the consummation of any other of the
transactions contemplated in any Operative Document nor the fulfillment of the
terms thereof will conflict with, result in a breach or violation of, or
constitute a default under any New York or United States law or regulation
applicable to the Company or the Trust (other than state securities laws (as to
which such counsel need express no opinion)).
12. Such counsel has no reason to believe that the Final
Memorandum (other than the financial statements and financial and statistical
data included therein, as to which no opinion need be rendered), at the
Execution Time, contained any untrue statement of a material fact or omitted to
state a material fact necessary in order to make the statements contained
therein, in the light of the circumstances under which they were made not
misleading.
13. To such counsel's knowledge, except as disclosed in the Final
Memorandum, there are no material legal or governmental proceedings pending to
which the Company or any Subsidiary is a party or of which any property of the
Company or any Subsidiary is the subject which are required to be disclosed in
the Final Memorandum or which would affect the consummation of the transactions
contemplated in the Purchase Agreement, the Indenture or the Capital Securities;
and to such counsel's knowledge there are no proceedings which are threatened by
governmental authorities or others.
A-2
<PAGE> 23
14. To such counsel's knowledge there are no contracts,
indentures, mortgages, loan agreements, notes, leases or other instruments
required to be described in the Final Memorandum other than those described
therein or incorporated by reference thereto, and such instruments as are
summarized in the Final Memorandum are fairly summarized in all material
respects.
15. No approval, authorization, consent, registration,
qualification or other order of any public board or body is required in
connection with the execution and delivery of the Purchase Agreement, the Trust
Agreement, the Guarantee Agreement, and the Indenture or the issuance and sale
of the Capital Securities or the consummation by the Company of the other
transactions contemplated by the Purchase Agreement, the Trust Agreement, the
Guarantee Agreement, or the Indenture, except such as have been obtained under
the Securities Act, the Exchange Act and the Trust Indenture Act or such as may
be required under the blue sky or securities laws of various states in
connection with the offering and sale of the Capital Securities (as to which
such counsel need express no opinion).
16. The execution and delivery of the Purchase Agreement, the
Trust Agreement, the Guarantee Agreement, and the Indenture, the issue and sale
of the Capital Securities and the Junior Subordinated Debentures, the compliance
by the Company with the provisions of the Capital Securities, the Junior
Subordinated Debentures, the Indenture and the Purchase Agreement and the
consummation of the transactions herein and therein contemplated will not
constitute a breach of, or default under, the articles of incorporation or
by-laws of the Company or a breach or default under any contract, indenture,
mortgage, loan agreement, note, lease or other instrument known to such counsel
to which either the Company or any Subsidiary is a party or by which either of
them or any of their respective properties may be bound except for such breaches
as would not have a material adverse effect on the Company and its Subsidiaries
considered as one enterprise, nor will such action result in a violation on the
part of the Company or any Subsidiary of any applicable law or regulation or of
any administrative, regulatory or court decree known to such counsel.
17. None of the Trust Agreement, the Indenture or the Guarantee
Agreement requires qualification under the Trust Indenture Act of 1939, as
amended, for the offer and sale of the Capital Securities to the Initial
Purchaser or the initial reoffer and resale of the Capital Securities by the
Initial Purchaser solely in the manner contemplated by the Offering Memorandum
and the Purchase Agreement.
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<PAGE> 24
EXHIBIT B
The opinion of counsel to the Property Trustee and the Delaware
Trustee to be delivered pursuant to Section 6(a)(ii) of the Purchase Agreement
shall be substantially to the effect that:
1. The Property Trustee 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.
2. 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.
3. 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.
4. 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 delivery of the Trust Agreement.
5. Each of the Trust Agreement, the Indenture and the Guarantee
Agreement has been duly executed and delivered by the Property Trustee, the
Indenture Trustee and the Guarantee Trustee, respectively, and constitutes a
legal, valid and binding obligation of the Property Trustee, the Indenture
Trustee and the Guarantee Trustee, respectively, enforceable against the
Property Trustee, 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 general
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.
6. The Subordinated Debentures delivered on the date hereof have
been duly authenticated by the Indenture Trustee in accordance with the terms of
the Indenture.
B-1
<PAGE> 25
EXHIBIT C
The opinion of counsel, as special Delaware counsel to the Company
and the Trust to be delivered pursuant to Section 6(a)(iii) of the Purchase
Agreement shall be substantially to the effect 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, and all
filings required under the laws of the State of Delaware with respect to the
creation and valid existence of the Trust as a business trust under the Delaware
Business Trust Act have been made.
2. Under the Delaware Business Trust Act and the Trust
Agreement, the Trust has the trust power and authority to own its property and
to its conduct its business, all as described in the Final Memorandum under the
caption "BSB Capital Trust I."
3. The Trust Agreement constitutes a valid and binding
obligation of the Company and the Trustees, and is enforceable against the
Company and the Trustees, in accordance with its terms.
4. Under the Delaware Business Trust Act and the Trust
Agreement, the Trust has the trust power and authority (i) to execute and
deliver, and to perform its obligations under, the Purchase Agreement, and (ii)
to issue and perform its obligations under the Capital Securities and the
Common Securities.
5. Under the Delaware Business Trust Act and the Trust
Agreement, the execution and delivery by the Trust of the Purchase Agreement,
and the performance by the Trust of its obligations thereunder, have been duly
authorized by all necessary trust action on the part of the Trust.
6. The Capital Securities have been duly authorized by the Trust
Agreement and are duly and validly issued and, subject to the qualifications set
forth herein, fully paid and nonassessable undivided beneficial interests in the
assets of the Trust and are entitled to the benefits of the Trust Agreement. The
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 Holders may be obligated to make payments and
provide indemnity and/or security as set forth in the Trust Agreement.
7. Under the Delaware Business Trust Act and the Trust
Agreement, the issuance of the Capital Securities and Common Securities is not
subject to preemptive rights.
C-1
<PAGE> 26
8. The Common Securities have been duly authorized by the Trust
Agreement and are duly and validly issued undivided beneficial interests in the
assets of the Trust and are entitled to the benefits of the Trust Agreement.
9. The issuance and sale by the Trust of the Capital Securities
and Common Securities, the purchase by the Trust of the Junior Subordinated
Debentures, the execution, delivery and performance by the Trust of the Purchase
Agreement, the consummation by the Trust of the transactions contemplated by the
Purchase Agreement and the compliance by the Trust with its obligations
thereunder are not prohibited by (i) any of the provisions of the Certificate of
Trust or the Trust Agreement or (ii) any applicable Delaware statute or
administrative regulation.
C-2
<PAGE> 27
EXHIBIT D
The opinion of counsel, as special Delaware counsel to Delaware
Trustee to be delivered pursuant to Section 6(a)(iv) of the Purchase Agreement
shall be substantially to the effect that:
1. Delaware Trustee is duly incorporated and is validly existing
in good standing as a banking corporation with trust powers under the laws of
the State of Delaware.
2. The Delaware 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 delivery of the Trust Agreement.
<PAGE> 1
EXHIBIT 21
SUBSIDIARIES OF BSB CAPITAL TRUST I
BSB Capital Trust I does not have any subsidiaries.
<PAGE> 1
[PRICEWATERHOUSECOOPERS LOGO]
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in this registration statement of
BSB Bancorp, Inc. and BSB Capital Trust I on Form S-4 (Registration Statement)
of our report dated January 23, 1998, on our audits of the consolidated
financial statements of BSB Bancorp, Inc. as of December 31, 1997 and
1996, and for the years ended December 31, 1997, 1996, and 1995, which report
is included in the Annual Report on Form 10-K. We also consent to the
reference to our firm under the caption "Selected Consolidated Financial
Data and Other Information."
/s/ PRICEWATERHOUSECOOPERS LLP
PricewaterhouseCoopers LLP
Syracuse, New York
September 25, 1998
<PAGE> 1
EXHIBIT 25
- --------------------------------------------------------------------------------
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------------------
FORM T-1
STATEMENT OF ELIGIBILITY UNDER THE TRUST INDENTURE ACT OF
1939 OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A
TRUSTEE PURSUANT TO SECTION 305(b)(2)
-----------
------------------------------
BANKERS TRUST COMPANY
(Exact name of trustee as specified in its charter)
<TABLE>
<S> <C>
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)
</TABLE>
BANKERS TRUST COMPANY
LEGAL DEPARTMENT
130 LIBERTY STREET, 31ST FLOOR
NEW YORK, NEW YORK 10006
(212) 250-2201
(Name, address and telephone number of agent for service)
---------------------------------
<TABLE>
<S> <C>
BSB BANCORP, INC. BSB CAPITAL TRUST I
(Exact name of obligor as specified (Exact name of Co-Registrant as specified
in its charter) in its charter)
</TABLE>
<TABLE>
<S> <C> <C> <C>
DELAWARE 16-1327860 DELAWARE APPLIED FOR
(State or other jurisdiction of (I.R.S. employer (State or other jurisdiction of (I.R.S. employer
Incorporation or organization) Identification no.) Incorporation or organization) Identification no.)
C/O BSB BANCORP, INC.
58-68 Exchange Street, 58-68 Exchange Street,
Binghamton, New York 13902 Binghamton, New York 13902
(Address, including zip code (Address, including zip code
of principal executive offices) of principal executive offices)
</TABLE>
EXCHANGE CAPITAL SECURITIES OF BSB CAPITAL TRUST I
EXCHANGE JUNIOR SUBORDINATED DEBENTURES DUE JULY 31, 2028 OF BSB BANCORP, INC.
EXCHANGE GUARANTEE OF CAPITAL SECURITIES BY BSB BANCORP, INC.
(Title of the indenture securities)
<PAGE> 2
ITEM 1.GENERAL INFORMATION.
Furnish the following information as to the trustee.
(a) Name and address of each examining or supervising authority
to which it is subject.
<TABLE>
<S> <C>
NAME ADDRESS
---- -------
Federal Reserve Bank (2nd District) New York, NY
Federal Deposit Insurance Corporation Washington, D.C.
New York State Banking Department Albany, NY
</TABLE>
(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.
<TABLE>
<S> <C>
EXHIBIT 1 - Restated Organization Certificate of Bankers Trust
Company dated August 7, 1990, Certificate of Amendment
of the Organization Certificate of Bankers Trust
Company dated June 21, 1995 - Incorporated herein by
reference to Exhibit 1 filed with Form T-1 Statement,
Registration No. 33-65171, Certificate of Amendment of
the Organization Certificate of Bankers Trust Company
dated March 20, 1996, incorporate by referenced to
Exhibit 1 filed with Form T-1 Statement, Registration
No. 333-25843 and Certificate of Amendment of the
Organization Certificate of Bankers Trust Company
dated June 19, 1997, copy attached.
EXHIBIT 2 - Certificate of Authority to commence business -
Incorporated herein by reference to Exhibit 2 filed with
Form T-1 Statement, Registration No. 33-21047.
EXHIBIT 3 - Authorization of the Trustee to exercise corporate trust
powers - Incorporated herein by reference to Exhibit 2
filed with Form T-1 Statement, Registration No. 33-
21047.
EXHIBIT 4 - Existing By-Laws of Bankers Trust Company, as amended on
November 18, 1997. Copy attached.
EXHIBIT 5 - Not applicable.
EXHIBIT 6 - Consent of Bankers Trust Company required by Section
321(b) of the Act. - Incorporated herein by reference to
Exhibit 4 filed with Form T-1 Statement, Registration
No. 22-18864.
EXHIBIT 7 - The latest report of condition of Bankers Trust Company
dated as of June 30, 1998. Copy attached.
EXHIBIT 8 - Not Applicable.
EXHIBIT 9 - Not Applicable.
</TABLE>
<PAGE> 3
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939, as
amended, the trustee, Bankers Trust Company, a corporation organized and
existing under the laws of the State of New York, has duly caused this statement
of eligibility to be signed on its behalf by the undersigned, thereunto duly
authorized, all in The City of New York, and State of New York, on the
__________, 1998.
BANKERS TRUST COMPANY
By: /s/ Ednora Linares
------------------
Ednora Linares
Assistant Vice President
<PAGE> 4
Exhibit 1
State of New York,
Banking Department
I, MANUEL KURSKY, Deputy Superintendent of Banks of the State of New York,
DO HEREBY APPROVE the annexed Certificate entitled "CERTIFICATE OF AMENDMENT OF
THE ORGANIZATION CERTIFICATE OF BANKERS TRUST COMPANY UNDER SECTION 8005 OF THE
BANKING LAW," dated June 19, 1997, providing for an increase in authorized
capital stock from $1,601,666,670 consisting of 100,166,667 shares with a par
value of $10 each designated as Common Stock and 600 shares with a par value of
$1,000,000 each designated as Series Preferred Stock to $2,001,666,670
consisting of 100,166,667 shares with a par value of $10 each designated as
Common Stock and 1,000 shares with a par value of $1,000,000 each designated as
Series Preferred Stock.
WITNESS, my hand and official seal of the Banking Department at the City of
New York,
this 27TH day of June in the Year of our Lord one
thousand nine hundred and NINETY-SEVEN.
/s/ Manuel Kursky
--------------------------------
Deputy Superintendent of Banks
<PAGE> 5
CERTIFICATE OF AMENDMENT
OF THE
ORGANIZATION CERTIFICATE
OF BANKERS TRUST
Under Section 8005 of the Banking Law
-----------------------------
We, James T. Byrne, Jr. and Lea Lahtinen, being respectively a Managing
Director and an Assistant Secretary of Bankers Trust Company, do hereby certify:
1. The name of the corporation is Bankers Trust Company.
2. The organization certificate of said corporation was filed by the
Superintendent of Banks on the 5th of March, 1903.
3. The organization certificate as heretofore amended is hereby amended
to increase the aggregate number of shares which the corporation shall have
authority to issue and to increase the amount of its authorized capital stock in
conformity therewith.
4. Article III of the organization certificate with reference to the
authorized capital stock, the number of shares into which the capital stock
shall be divided, the par value of the shares and the capital stock outstanding,
which reads as follows:
"III. The amount of capital stock which the corporation is hereafter
to have is One Billion, Six Hundred and One Million, Six Hundred
Sixty-Six Thousand, Six Hundred Seventy Dollars ($1,601,666,670),
divided into One Hundred Million, One Hundred Sixty-Six Thousand, Six
Hundred Sixty-Seven (100,166,667) shares with a par value of $10 each
designated as Common Stock and 600 shares with a par value of One
Million Dollars ($1,000,000) each designated as Series Preferred
Stock."
is hereby amended to read as follows:
"III. The amount of capital stock which the corporation is hereafter
to have is Two Billion One Million, Six Hundred Sixty-Six Thousand,
Six Hundred Seventy Dollars ($2,001,666,670), divided into One
Hundred Million, One Hundred Sixty-Six Thousand, Six Hundred
Sixty-Seven (100,166,667) shares with a par value of $10 each
designated as Common Stock and 1000 shares with a par value of One
Million Dollars ($1,000,000) each designated as Series Preferred
Stock."
<PAGE> 6
5. The foregoing amendment of the organization certificate was
authorized by unanimous written consent signed by the holder of all outstanding
shares entitled to vote thereon.
IN WITNESS WHEREOF, we have made and subscribed this certificate this 19th
day of June, 1997.
/s/ James T. Byrne, Jr.
-----------------------------------------
James T. Byrne, Jr.
Managing Director
/s/ Lea Lahtinen
-----------------------------------------
Lea Lahtinen
Assistant Secretary
State of New York )
) ss:
County of New York )
Lea Lahtinen, being fully sworn, deposes and says that she is an Assistant
Secretary of Bankers Trust Company, the corporation described in the foregoing
certificate; that she has read the foregoing certificate and knows the contents
thereof, and that the statements herein contained are true.
/s/ Lea Lahtinen
--------------------------
Lea Lahtinen
Sworn to before me this 19th day
of June, 1997.
/s/ Sandra L. West
- --------------------------------
Notary Public
SANDRA L. WEST
Notary Public State of New York
No. 31-4942101
Qualified in New York County
Commission Expires September 19, 1998
<PAGE> 7
Exhibit 2
BY-LAWS
NOVEMBER 18, 1997
BANKERS TRUST COMPANY
NEW YORK
<PAGE> 8
BY-LAWS
OF
BANKERS TRUST COMPANY
ARTICLE I
MEETINGS OF STOCKHOLDERS
SECTION 1. The annual meeting of the stockholders of this Company shall be held
at the office of the Company in the Borough of Manhattan, City of New York, on
the third Tuesday in January of each year, for the election of directors and
such other business as may properly come before said meeting.
SECTION 2. Special meetings of stockholders other than those regulated by
statute may be called at any time by a majority of the directors. It shall be
the duty of the Chairman of the Board, the Chief Executive Officer or the
President to call such meetings whenever requested in writing to do so by
stockholders owning a majority of the capital stock.
SECTION 3. At all meetings of stockholders, there shall be present, either in
person or by proxy, stockholders owning a majority of the capital stock of the
Company, in order to constitute a quorum, except at special elections of
directors, as provided by law, but less than a quorum shall have power to
adjourn any meeting.
SECTION 4. The Chairman of the Board or, in his absence, the Chief Executive
Officer or, in his absence, the President or, in their absence, the senior
officer present, shall preside at meetings of the stockholders and shall direct
the proceedings and the order of business. The Secretary shall act as secretary
of such meetings and record the proceedings.
ARTICLE II
DIRECTORS
SECTION 1. The affairs of the Company shall be managed and its corporate powers
exercised by a Board of Directors consisting of such number of directors, but
not less than ten nor more than twenty-five, as may from time to time be fixed
by resolution adopted by a majority of the directors then in office, or by the
stockholders. In the event of any increase in the number of directors,
additional directors may be elected within the limitations so fixed, either by
the stockholders or within the limitations imposed by law, by a majority of
directors then in office. One-third of the number of directors, as fixed from
time to time, shall constitute a quorum. Any one or more members of the Board of
Directors or any Committee thereof may participate in a meeting of the Board of
Directors or Committee thereof by means of a conference telephone or similar
communications equipment which allows all persons participating in the meeting
to hear each other at the same time. Participation by such means shall
constitute presence in person at such a meeting.
All directors hereafter elected shall hold office until the next annual meeting
of the stockholders and until their successors are elected and have qualified.
No person who shall have attained age 72 shall be eligible to be elected or
re-elected a director. Such
<PAGE> 9
director may, however, remain a director of the Company until the next annual
meeting of the stockholders of Bankers Trust New York Corporation (the Company's
parent) so that such director's retirement will coincide with the retirement
date from Bankers Trust New York Corporation.
No Officer-Director who shall have attained age 65, or earlier relinquishes his
responsibilities and title, shall be eligible to serve as a director.
SECTION 2. Vacancies not exceeding one-third of the whole number of the Board of
Directors may be filled by the affirmative vote of a majority of the directors
then in office, and the directors so elected shall hold office for the balance
of the unexpired term.
SECTION 3. The Chairman of the Board shall preside at meetings of the Board of
Directors. In his absence, the Chief Executive Officer or, in his absence, such
other director as the Board of Directors from time to time may designate shall
preside at such meetings.
SECTION 4. The Board of Directors may adopt such Rules and Regulations for the
conduct of its meetings and the management of the affairs of the Company as it
may deem proper, not inconsistent with the laws of the State of New York, or
these By-Laws, and all officers and employees shall strictly adhere to, and be
bound by, such Rules and Regulations.
SECTION 5. Regular meetings of the Board of Directors shall be held from time to
time on the third Tuesday of the month. If the day appointed for holding such
regular meetings shall be a legal holiday, the regular meeting to be held on
such day shall be held on the next business day thereafter. Special meetings of
the Board of Directors may be called upon at least two day's notice whenever it
may be deemed proper by the Chairman of the Board or, the Chief Executive
Officer 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.
<PAGE> 10
ARTICLE III
COMMITTEES
SECTION 1. There shall be an Executive Committee of the Board consisting of not
less than five directors who shall be appointed annually by the Board of
Directors. The Chairman of the Board shall preside at meetings of the Executive
Committee. In his absence, the Chief Executive Officer or, in his absence, such
other member of the Committee as the Committee from time to time may designate
shall preside at such meetings.
The Executive Committee shall possess and exercise to the extent permitted by
law all of the powers of the Board of Directors, except when the latter is in
session, and shall keep minutes of its proceedings, which shall be presented to
the Board of Directors at its next subsequent meeting. All acts done and powers
and authority conferred by the Executive Committee from time to time shall be
and be deemed to be, and may be certified as being, the act and under the
authority of the Board of Directors.
A majority of the Committee shall constitute a quorum, but the Committee may act
only by the concurrent vote of not less than one-third of its members, at least
one of whom must be a director other than an officer. Any one or more directors,
even though not members of the Executive Committee, may attend any meeting of
the Committee, and the member or members of the Committee present, even though
less than a quorum, may designate any one or more of such directors as a
substitute or substitutes for any absent member or members of the Committee, and
each such substitute or substitutes shall be counted for quorum, voting, and all
other purposes as a member or members of the Committee.
SECTION 2. There shall be an Audit Committee appointed annually by resolution
adopted by a majority of the entire Board of Directors which shall consist of
such number of directors, who are not also officers of the Company, as may from
time to time be fixed by resolution adopted by the Board of Directors. The
Chairman shall be designated by the Board of Directors, who shall also from time
to time fix a quorum for meetings of the Committee. Such Committee shall conduct
the annual directors' examinations of the Company as required by the New York
State Banking Law; shall review the reports of all examinations made of the
Company by public authorities and report thereon to the Board of Directors; and
shall report to the Board of Directors such other matters as it deems advisable
with respect to the Company, its various departments and the conduct of its
operations.
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.
<PAGE> 11
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.
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
<PAGE> 12
Audit Committee at least quarterly on any matters concerning the internal audit
program and the adequacy of the system of internal controls of the Company that
should be brought to the attention of the directors except those matters
responsibility for which has been vested in the General Credit Auditor. Should
the General Auditor deem any matter to be of special immediate importance, he
shall report thereon forthwith to the Audit Committee. The General Auditor shall
report to the Chief Financial Officer only for administrative purposes.
The General Credit Auditor shall be responsible to the Chief Executive Officer
and, through the Audit Committee, to the Board of Directors for the systems of
internal credit audit, shall perform such other duties as the Chief Executive
Officer may prescribe, and shall make such examinations and reports as may be
required by the Audit Committee. The General Credit Auditor shall have
unrestricted access to all records and may delegate such authority to
subordinates.
SECTION 3. The compensation of all officers shall be fixed under such plan or
plans of position evaluation and salary administration as shall be approved from
time to time by resolution of the Board of Directors.
SECTION 4. The Board of Directors, the Executive Committee, the Chairman of the
Board, the Chief Executive Officer or any person authorized for this purpose by
the Chief Executive Officer, shall appoint or engage all other employees and
agents and fix their compensation. The employment of all such employees and
agents shall continue during the pleasure of the Board of Directors or the
Executive Committee or the Chairman of the Board or the Chief Executive Officer
or any such authorized person; and the Board of Directors, the Executive
Committee, the Chairman of the Board, the Chief Executive Officer or any such
authorized person may discharge any such employees and agents at will.
<PAGE> 13
ARTICLE V
INDEMNIFICATION OF DIRECTORS, OFFICERS AND OTHERS
SECTION 1. The Company shall, to the fullest extent permitted by Section 7018 of
the New York Banking Law, indemnify any person who is or was made, or threatened
to be made, a party to an action or proceeding, whether civil or criminal,
whether involving any actual or alleged breach of duty, neglect or error, any
accountability, or any actual or alleged misstatement, misleading statement or
other act or omission and whether brought or threatened in any court or
administrative or legislative body or agency, including an action by or in the
right of the Company to procure a judgment in its favor and an action by or in
the right of any other corporation of any type or kind, domestic or foreign, or
any partnership, joint venture, trust, employee benefit plan or other
enterprise, which any director or officer of the Company is servicing or served
in any capacity at the request of the Company by reason of the fact that he, his
testator or intestate, is or was a director or officer of the Company, or is
serving or served such other corporation, partnership, joint venture, trust,
employee benefit plan or other enterprise in any capacity, against judgments,
fines, amounts paid in settlement, and costs, charges and expenses, including
attorneys' fees, or any appeal therein; provided, however, that no
indemnification shall be provided to any such person if a judgment or other
final adjudication adverse to the director or officer establishes that (i) his
acts were committed in bad faith or were the result of active and deliberate
dishonesty and, in either case, were material to the cause of action so
adjudicated, or (ii) he personally gained in fact a financial profit or other
advantage to which he was not legally entitled.
SECTION 2. The Company may indemnify any other person to whom the Company is
permitted to provide indemnification or the advancement of expenses by
applicable law, whether pursuant to rights granted pursuant to, or provided by,
the New York Banking Law or other rights created by (i) a resolution of
stockholders, (ii) a resolution of directors, or (iii) an agreement providing
for such indemnification, it being expressly intended that these By-Laws
authorize the creation of other rights in any such manner.
SECTION 3. The Company shall, from time to time, reimburse or advance to any
person referred to in Section 1 the funds necessary for payment of expenses,
including attorneys' fees, incurred in connection with any action or proceeding
referred to in Section 1, upon receipt of a written undertaking by or on behalf
of such person to repay such amount(s) if a judgment or other final adjudication
adverse to the 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
<PAGE> 14
circumstances, such person shall be unable to obtain indemnification from such
other enterprise or its insurer.
SECTION 5. Any person entitled to be indemnified or to the reimbursement or
advancement of expenses as a matter of right pursuant to this Article V may
elect to have the right to indemnification (or advancement of expenses)
interpreted on the basis of the applicable law in effect at the time of
occurrence of the event or events giving rise to the action or proceeding, to
the extent permitted by law, or on the basis of the applicable law in effect at
the time indemnification is sought.
SECTION 6. The right to be indemnified or to the reimbursement or advancement of
expense pursuant to this Article V (i) is a contract right pursuant to which the
person entitled thereto may bring suit as if the provisions hereof were set
forth in a separate written contract between the Company and the director or
officer, (ii) is intended to be retroactive and shall be available with respect
to events occurring prior to the adoption hereof, and (iii) shall continue to
exist after the rescission or restrictive modification hereof with respect to
events occurring prior thereto.
SECTION 7. If a request to be indemnified or for the reimbursement or
advancement of expenses pursuant hereto is not paid in full by the Company
within thirty days after a written claim has been received by the Company, the
claimant may at any time thereafter bring suit against the Company to recover
the unpaid amount of the claim and, if successful in whole or in part, the
claimant shall be entitled also to be paid the expenses of prosecuting such
claim. Neither the 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.
<PAGE> 15
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
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.
<PAGE> 16
I, Marc Parilla, Assistant Treasurer 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.
--------------------------
Assistant Treasurer
DATED: , 1998
<PAGE> 17
Exhibit 7
<TABLE>
<S> <C> <C> <C> <C>
Legal Title of Bank: Bankers Trust Company Call Date: 06/30/98 ST-BK: 36-4840 FFIEC 031
Address: 130 Liberty Street Vendor ID: D CERT: 00623 Page RC-1
City, State ZIP: New York, NY 10006 11
FDIC Certificate No.: | 0 | 0 | 6 | 2 | 3
</TABLE>
CONSOLIDATED REPORT OF CONDITION FOR INSURED COMMERCIAL
AND STATE-CHARTERED SAVINGS BANKS FOR JUNE 30, 1998
All schedules are to be reported in thousands of dollars. Unless otherwise
indicated, reported the amount outstanding as of the last business day of the
quarter.
SCHEDULE RC--BALANCE SHEET
<TABLE>
<CAPTION>
-----------------
C400
---------------------------
Dollar Amounts in Thousands RCFD Bil Mil Thou
- ---------------------------------------------------------------------------------------------------
<S> <C> <C>
ASSETS ///////////////////
1. Cash and balances due from depository institutions
(from Schedule RC-A): //////////////////
a. Noninterest-bearing balances and currency and coin (1) .... 0081 1,868,000 1.a.
b. Interest-bearing balances (2) ............................. 0071 2,041,000 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 7,419,000 2.b.
3. Federal funds sold and securities purchased under
agreements to resell........................................ 1350 41,837,000 3.
4. Loans and lease financing receivables: //////////////////
a. Loans and leases, net of unearned income (from
Schedule RC-C) RCFD 2122 20,707,000 RCFD 2122 20,707,000 ////////////////// 4.a.
b. LESS: Allowance for loan and lease losses...RCFD 3123 629,000 ////////////////// 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 20,078,000 4.d.
5. Trading Assets (from schedule RC-D) .......................... 3545 49,665,000 5.
6. Premises and fixed assets (including capitalized leases) ..... 2145 848,000 6.
7. Other real estate owned (from Schedule RC-M) ................. 2150 180,000 7.
8. Investments in unconsolidated subsidiaries and associated
companies (from Schedule RC-M) 2130 92,000 8.
9. Customers' liability to this bank on acceptances outstanding . 2155 512,000 9.
10. Intangible assets (from Schedule RC-M) ....................... 2143 270,000 10.
11. Other assets (from Schedule RC-F) ............................ 2160 6,442,000 11.
12. Total assets (sum of items 1 through 11) ..................... 2170 131,252,000 12.
---------------------------
</TABLE>
- --------------------------
(1) Includes cash items in process of collection and unposted debits.
(2) Includes time certificates of deposit not held for trading.
<PAGE> 18
<TABLE>
<S> <C> <C>
Legal Title of Bank: Bankers Trust Company Call Date: 06/30/98 ST-BK: 36-4840 FFIEC 031
Address: 130 Liberty Street Vendor ID: D CERT: 00623 Page RC-2
City, State ZIP: New York, NY 10006 12
FDIC Certificate No.: | 0 | 0 | 6 | 2 | 3
</TABLE>
<TABLE>
<CAPTION>
SCHEDULE RC--CONTINUED
-------------------------------
Dollar Amounts in Thousands ///////////// Bil Mil Thou
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C>
LIABILITIES ////////////////////////////
13. Deposits: ////////////////////////////
a. In domestic offices (sum of totals of columns A and C from
Schedule RC-E, part I) RCON 2200 26,791,000 13.a.
(1) Noninterest-bearing(1) .........RCON 6631 3,362,000 //////////////////////////// 13.a.(1)
(2) Interest-bearing ...............RCON 6636 23,429,000 //////////////////////////// 13.a.(2)
b. In foreign offices, Edge and Agreement subsidiaries, ////////////////////////////
and IBFs (from Schedule RC-E part II) RCFN 2200 22,089,000 13.b.
(1) Noninterest-bearing ............RCFN 6631 1,810,000 //////////////////////////// 13.b.(1)
(2) Interest-bearing ...............RCFN 6636 20,279,000 //////////////////////////// 13.b.(2)
14. Federal funds purchased and securities sold under
agreements to repurchase RCFD 2800 19,274,000 14.
15. a. Demand notes issued to the U.S. Treasury ................... RCON 2840 0 15.a.
b. Trading liabilities (from Schedule RC-D).................... RCFD 3548 30,729,000 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 7,891,000 16.a.
b. With a remaining maturity of more than one year through
three years............................................... A547 3,576,000 16.b.
c. With a remaining maturity of more than three years.......... A548 2,872,000 16.c
17. Not Applicable. //////////////////////////// 17.
18. Bank's liability on acceptances executed and outstanding ...... RCFD 2920 512,000 18.
19. Subordinated notes and debentures (2).......................... RCFD 3200 1,534,000 19.
20. Other liabilities (from Schedule RC-G) ........................ RCFD 2930 9,202,000 20.
21. Total liabilities (sum of items 13 through 20) ................ RCFD 2948 124,470,000 21.
22. Not Applicable ////////////////////////////
////////////////////////////
//////////////////////////// 22.
EQUITY CAPITAL ////////////////////////////
23. Perpetual preferred stock and related surplus ................. RCFD 3838 1,000,000 23.
24. Common stock .................................................. RCFD 3230 2,001,000 24.
25. Surplus (exclude all surplus related to preferred stock) ...... RCFD 3839 540,000 25.
26. a. Undivided profits and capital reserves ..................... RCFD 3632 3,693,000 26.a.
b. Net unrealized holding gains (losses) on available-for-sale
securities ............................................... RCFD 8434 (71,000) 26.b.
27. Cumulative foreign currency translation adjustments ........... RCFD 3284 (381,000) 27.
28. Total equity capital (sum of items 23 through 27) ............. RCFD 3210 6,782,000 28.
29. Total liabilities and equity capital (sum of items 21 and 28).. RCFD 3300 131,252,000 29
-----------------------------
</TABLE>
Memorandum
To be reported only with the March Report of Condition.
<TABLE>
<S> <C> <C>
1. Indicate in the box at the right the number of the statement below that Number
best describes the most comprehensive level of auditing work performed for ---------------------
the bank by independent external auditors as of any date during 1997............................ RCFD 6724 1 M.1
</TABLE>
<TABLE>
<S> <C>
1 = Independent audit of the bank conducted in accordance 4 = Directors' examination of the bank performed by other
with generally accepted auditing standards by a certified external auditors (may be required by state chartering
public accounting firm which submits a report on the bank authority)
2 = Independent audit of the bank's parent holding company 5 = Review of the bank's financial statements by external
conducted in accordance with generally accepted auditing auditors
standards by a certified public accounting firm which 6 = Compilation of the bank's financial statements by external
submits a report on the consolidated holding company auditors
(but not on the bank separately) 7 = Other audit procedures (excluding tax preparation work)
3 = Directors' examination of the bank conducted in 8 = No external audit work
accordance with generally accepted auditing standards
by a certified public accounting firm (may be required by
state chartering authority)
</TABLE>
- ----------------------
(1) Including total demand deposits and noninterest-bearing time and savings
deposits.
(2) Includes limited-life preferred stock and related surplus.
<PAGE> 1
EXHIBIT 99.1
LETTER OF TRANSMITTAL
BSB CAPITAL TRUST I
OFFER TO EXCHANGE ITS
8.125% EXCHANGE CAPITAL SECURITIES
("EXCHANGE CAPITAL SECURITIES")
(LIQUIDATION AMOUNT $1,000 PER CAPITAL SECURITY)
WHICH HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933
FOR ANY AND ALL OF ITS OUTSTANDING
8.125% ORIGINAL CAPITAL SECURITIES
("ORIGINAL CAPITAL SECURITIES")
(LIQUIDATION AMOUNT $1,000 PER CAPITAL SECURITY)
UNCONDITIONALLY GUARANTEED, AS DESCRIBED HEREIN, BY
BSB BANCORP, INC.
PURSUANT TO THE PROSPECTUS DATED _____, 1998
(AS THE SAME MAY BE AMENDED OR SUPPLEMENTED, THE "PROSPECTUS")
- --------------------------------------------------------------------------------
THE EXCHANGE OFFER AND WITHDRAWAL RIGHTS WILL
EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON _________________, 1998,
OR ON SUCH LATER DATE OR TIME TO WHICH
THE CORPORATION OR THE TRUST
MAY EXTEND THE EXCHANGE OFFER (THE "EXPIRATION DATE").
TENDERS MAY BE WITHDRAWN PRIOR TO 5:00 P.M.,
NEW YORK CITY TIME, ON THE EXPIRATION DATE.
- --------------------------------------------------------------------------------
The Exchange Agent For The Exchange Offer Is:
Bankers Trust Company
<TABLE>
<CAPTION>
By Mail: By Hand: By Overnight Mail:
<S> <C> <C>
BT Services Tennessee, Inc. Bankers Trust Company BT Services Tennessee, Inc.
Corporate Trust and Agency Group Corporate Trust and Agency Group Corporate Trust and Agency Group
Reorganization Unit Receipt and Delivery Window Reorganization Unit
P.O. Box 292737 123 Washington Street, 1st Floor 648 Grassmere Park Road
Nashville, TN 37229-2737 New York, NY 10006 Nashville, TN 37211
</TABLE>
For Information Call:
(800) 735-7777
Confirm: (615) 835-3572
Facsimile: (615) 835-3701
<PAGE> 2
DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS OTHER THAN AS
SET FORTH ABOVE OR TRANSMISSION OF THIS LETTER OF TRANSMITTAL VIA FACSIMILE TO A
NUMBER OTHER THAN AS SET FORTH ABOVE DOES NOT CONSTITUTE A VALID DELIVERY.
Capitalized terms used but not defined herein shall have the same
meaning given them in the Prospectus. As used herein, the term "Holder" means a
holder of Original Capital Securities, including any participant ("DTC
Participant") in the book-entry transfer facility system of The Depository Trust
Company ("DTC") whose name appears on a security position listing as the owner
of the Original Capital Securities. As used herein, the term "Certificates"
means physical certificates representing Original Capital Securities.
To participate in the Exchange Offer (as defined below), Holders
must tender by (a) book-entry transfer pursuant to the procedures set forth in
the Prospectus under "The Exchange Offer--Procedures for Tendering Original
Capital Securities," or (b) forwarding Certificates herewith. Holders who are
DTC Participants tendering by book-entry transfer must execute such tender
through the Automated Tender Offer Program ("ATOP") of DTC. A Holder using ATOP
should transmit its acceptance to DTC on or prior to the Expiration Date. DTC
will verify such acceptance, execute a book-entry transfer of the tendered
Original Capital Securities into the Exchange Agent's account at DTC and then
send to the Exchange Agent confirmation of such book-entry transfer (a
"book-entry confirmation"), including an agent's message ("Agent's Message")
confirming that DTC has received an express acknowledgment from such Holder that
such Holder has received and agrees to be bound by this Letter of Transmittal
and that the Trust and the Corporation may enforce this Letter of Transmittal
against such Holder. The book-entry confirmation must be received by the
Exchange Agent in order for the tender relating thereto to be effective.
Book-entry transfer to DTC in accordance with DTC's procedures does not
constitute delivery of the book-entry confirmation to the Exchange Agent.
If the tender is not made through ATOP, Certificates, as well as
this Letter of Transmittal (or facsimile thereof), properly completed and duly
executed, with any required signature guarantees, and any other documents
required by this Letter of Transmittal, must be received by the Exchange Agent
at its address set forth herein on or prior to the Expiration Date in order for
such tender to be effective.
Holders of Original Capital Securities who cannot complete the
procedures for delivery by book-entry transfer of such Original Capital
Securities on a timely basis or who cannot deliver their Certificates for such
Original Capital Securities and all other required documents to the Exchange
Agent on or prior to the Expiration Date, must, in order to participate in the
Exchange Offer, tender their Original Capital Securities according to the
guaranteed delivery procedures set forth in the Prospectus under "The Exchange
Offer--Procedures for Tendering Original Capital Securities."
THE METHOD OF DELIVERY OF THE BOOK-ENTRY CONFIRMATION OR
CERTIFICATES, THIS LETTER OF TRANSMITTAL, AND ALL OTHER REQUIRED DOCUMENTS IS AT
THE OPTION AND SOLE RISK OF THE TENDERING HOLDER, AND THE DELIVERY WILL BE
DEEMED MADE ONLY WHEN ACTUALLY RECEIVED BY THE EXCHANGE AGENT. IF DELIVERY IS BY
MAIL, REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY INSURED, OR
OVERNIGHT DELIVERY SERVICE IS RECOMMENDED. IN ALL CASES, SUFFICIENT TIME SHOULD
BE ALLOWED TO ENSURE TIMELY DELIVERY.
2
<PAGE> 3
NOTE: SIGNATURES MUST BE PROVIDED BELOW.
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY.
ALL TENDERING HOLDERS COMPLETE THIS BOX:
<TABLE>
<CAPTION>
===============================================================================================
DESCRIPTION OF ORIGINAL CAPITAL SECURITIES
- -----------------------------------------------------------------------------------------------
<S> <C>
If blank, please print name Original Capital Securities tendered
and address of registered (Attach additional list if necessary)
holder.
- -----------------------------------------------------------------------------------------------
Principal Amount of
Aggregate Principal Original Capital
Certificate Amount of Original Securities Tendered
Number(s)* Capital Securities (if less than all)**
----------------------------------------------------------------
----------------------------------------------------------------
----------------------------------------------------------------
----------------------------------------------------------------
----------------------------------------------------------------
TOTAL AMOUNT
TENDERED
- -----------------------------------------------------------------------------------------------
</TABLE>
* Need not be completed by book-entry holders.
** Original Capital Securities may be tendered in whole or in part in
denominations of $100,000 and integral multiples of $1,000 in excess
thereof, provided that if any Original Capital Securities are tendered for
exchange in part, the untendered principal amount thereof must be $100,000
or any integral multiple of $1,000 in excess thereof. All Original
Capital Securities held shall be deemed tendered unless a lesser number is
specified in this column. See Instruction 4.
================================================================================
3
<PAGE> 4
BOXES BELOW TO BE CHECKED BY ELIGIBLE INSTITUTIONS ONLY
[ ] CHECK HERE IF TENDERED ORIGINAL CAPITAL SECURITIES ARE BEING DELIVERED BY
BOOK-ENTRY TRANSFER MADE TO THE ACCOUNT MAINTAINED BY THE EXCHANGE AGENT
WITH DTC, AND COMPLETE THE FOLLOWING:
Name of Tendering Institution:
--------------------------------------------
DTC Account Number:
-------------------------------------------------------
Transaction Code Number:
--------------------------------------------------
[ ] CHECK HERE AND ENCLOSE A PHOTOCOPY OF THE NOTICE OF GUARANTEED DELIVERY IF
TENDERED ORIGINAL CAPITAL SECURITIES ARE BEING DELIVERED PURSUANT TO A
NOTICE OF GUARANTEED DELIVERY PREVIOUSLY SENT TO THE EXCHANGE AGENT, AND
COMPLETE THE FOLLOWING:
Name of Registered Holder(s):
------------------------------------------
Window Ticket Number (if any):
-----------------------------------------
Date of Execution of Notice of Guaranteed Delivery:
--------------------
Name of Institution which Guaranteed Delivery:
-------------------------
If Guaranteed Delivery is to be made By Book-Entry Transfer:
-----------
Name of Tendering Institution:
-----------------------------------------
DTC Account Number:
----------------------------------------------------
Transaction Code Number:
-----------------------------------------------
[ ] CHECK HERE IF YOU ARE A BROKER-DEALER WHO ACQUIRED THE ORIGINAL CAPITAL
SECURITIES FOR YOUR OWN ACCOUNT AS A RESULT OF MARKET MAKING OR OTHER
TRADING ACTIVITIES AND WISH TO RECEIVE 10 ADDITIONAL COPIES OF THE
PROSPECTUS AND 10 COPIES OF ANY AMENDMENTS OR SUPPLEMENTS THERETO.
Name:
---------------------------------------------------------------------
Address:
------------------------------------------------------------------
4
<PAGE> 5
Ladies and Gentlemen:
The undersigned hereby tenders to BSB Capital Trust I, a trust
formed under the laws of the State of Delaware (the "Trust") and BSB Bancorp,
Inc., a Delaware corporation (the "Corporation"), the above described aggregate
Liquidation Amount of the Trust's Original Capital Securities in exchange for a
like aggregate Liquidation Amount of the Trust's Exchange Capital Securities
which have been registered under the Securities Act of 1933, as amended (the
'Securities Act"), upon the terms and subject to the conditions set forth in the
Prospectus, receipt of which is hereby acknowledged, and in this Letter of
Transmittal (which, together with the Prospectus, constitute the "Exchange
Offer").
Subject to and effective upon the acceptance for exchange of all or
any portion of the Original Capital Securities tendered herewith in accordance
with the terms and conditions of the Exchange Offer (including, if the Exchange
Offer is extended or amended, the terms and conditions of any such extension or
amendment), the undersigned hereby sells, assigns and transfers to or upon the
order of the Trust all right, title and interest in and to such Original Capital
Securities as are being tendered herewith. The undersigned hereby irrevocably
constitutes and appoints the Exchange Agent as its agent and attorney-in-fact
(with full knowledge that the Exchange Agent is also acting as agent of the
Corporation and the Trust in connection with the Exchange Offer) with respect to
the tendered Original Capital Securities, with full power of substitution (such
power of attorney being deemed to be an irrevocable power coupled with an
interest) subject only to the right of withdrawal described in the Prospectus,
to (i) deliver Certificates for Original Capital Securities to the Corporation
or the Trust together with all accompanying evidences of transfer and
authenticity to, or upon the order of, the Trust, upon receipt by the Exchange
Agent, as the undersigned's agent, of the Exchange Capital Securities to be
issued in exchange for such Original Capital Securities, (ii) present
Certificates for such Original Capital Securities for transfer, and to transfer
the Original Capital Securities on the books of the Trust, and (iii) receive for
the account of the Trust all benefits and otherwise exercise all rights of
beneficial ownership of such Original Capital Securities, all in accordance with
the terms and conditions of the Exchange Offer.
THE UNDERSIGNED HEREBY REPRESENTS AND WARRANTS THAT THE UNDERSIGNED
HAS FULL POWER AND AUTHORITY TO TENDER, EXCHANGE, SELL, ASSIGN AND TRANSFER THE
ORIGINAL CAPITAL SECURITIES TENDERED HEREBY AND THAT, WHEN THE SAME ARE ACCEPTED
FOR EXCHANGE, THE TRUST WILL ACQUIRE GOOD, MARKETABLE AND UNENCUMBERED TITLE
THERETO, FREE AND CLEAR OF ALL LIENS, RESTRICTIONS, CHARGES AND ENCUMBRANCES,
AND THAT THE ORIGINAL CAPITAL SECURITIES TENDERED HEREBY ARE NOT SUBJECT TO ANY
ADVERSE CLAIMS OR PROXIES. THE UNDERSIGNED WILL, UPON REQUEST, EXECUTE AND
DELIVER ANY ADDITIONAL DOCUMENTS DEEMED BY THE TRUST OR THE EXCHANGE AGENT TO BE
NECESSARY OR DESIRABLE TO COMPLETE THE EXCHANGE, ASSIGNMENT AND TRANSFER OF THE
ORIGINAL CAPITAL SECURITIES TENDERED HEREBY, AND THE UNDERSIGNED WILL COMPLY
WITH ITS OBLIGATIONS UNDER THE REGISTRATION RIGHTS AGREEMENT. THE UNDERSIGNED
HAS READ AND AGREES TO ALL OF THE TERMS OF THE EXCHANGE OFFER.
The name(s) and address(es) of the registered Holder(s) of the
Original Capital Securities tendered hereby should be printed in the box
entitled "Description of Original Capital Securities" above, if they are not
already set forth in such box, as they appear on the Certificates representing
such Original Capital Securities or on the records of DTC, as the case may be.
The Certificate number(s) of any such Certificates and the principal amount of
such Original Capital Securities should be specified in such box as indicated
therein.
The undersigned understands that tenders of Original Capital
Securities pursuant to any one of the procedures described in "The Exchange
Offer--Procedures for Tendering Original Capital Securities" in the Prospectus
and in the instructions attached hereto will, upon the Corporation's and the
Trust's acceptance for exchange of such tendered Original Capital Securities,
constitute a binding agreement between the undersigned, the Corporation and the
Trust upon the terms and subject to the conditions of the Exchange Offer.
5
<PAGE> 6
The undersigned recognizes that, under certain circumstances set
forth in the Prospectus, the Corporation and the Trust may not be required to
accept for exchange any of the Original Capital Securities tendered hereby.
Unless otherwise indicated in the box entitled 'Special Issuance
Instructions" below, the undersigned hereby directs that the Exchange Capital
Securities be issued in the name(s) of the undersigned or credited to the
account at DTC indicated above in the case of a book-entry transfer of Original
Capital Securities.
If any Original Capital Securities are submitted for more Original
Capital Securities than are tendered or accepted for exchange, then, without
expense to the tendering Holder, promptly following the expiration or
termination of the Exchange Offer, such non-exchanged or non-tendered Original
Capital Securities will, if evidenced by Certificates, be returned, or will, if
evidenced by book-entry, be credited to the account at DTC indicated above. If
applicable, substitute Certificates representing non-exchanged Original Capital
Securities will be issued to the undersigned or non-exchanges Original Capital
Securities will be credited to the account at DTC indicated above in the case of
a book-entry transfer of Original Capital Securities.
Unless otherwise indicated under 'Special Delivery Instructions,"
certificates for Original Capital Securities and for Exchange Capital Securities
will be delivered to the undersigned at the address shown below the
undersigned's signature.
BY TENDERING ORIGINAL CAPITAL SECURITIES AND EXECUTING THIS LETTER
OF TRANSMITTAL, THE UNDERSIGNED HEREBY REPRESENTS AND AGREES THAT (1) THE
UNDERSIGNED IS NOT AN "AFFILIATE" (AS DEFINED IN RULE 144 UNDER THE SECURITIES
ACT) OF THE CORPORATION OR THE TRUST, (2) ANY EXCHANGE CAPITAL SECURITIES TO BE
RECEIVED BY THE UNDERSIGNED ARE BEING ACQUIRED IN THE ORDINARY COURSE OF ITS
BUSINESS, (3) THE UNDERSIGNED HAS NO ARRANGEMENT OR UNDERSTANDING WITH ANY
PERSON TO PARTICIPATE IN A DISTRIBUTION (WITHIN THE MEANING OF THE SECURITIES
ACT) OF EXCHANGE CAPITAL SECURITIES TO BE RECEIVED IN THE EXCHANGE OFFER, AND
(4) IF THE UNDERSIGNED IS NOT A BROKER-DEALER, THE UNDERSIGNED IS NOT ENGAGED
IN, AND DOES NOT INTEND TO ENGAGE IN, A DISTRIBUTION (WITHIN THE MEANING OF THE
SECURITIES ACT) OF SUCH EXCHANGE CAPITAL SECURITIES. BY TENDERING ORIGINAL
CAPITAL SECURITIES PURSUANT TO THE EXCHANGE OFFER AND EXECUTING THIS LETTER OF
TRANSMITTAL, A HOLDER OF ORIGINAL CAPITAL SECURITIES THAT IS A BROKER-DEALER
REPRESENTS AND AGREES, CONSISTENT WITH CERTAIN INTERPRETIVE LETTERS ISSUED BY
THE STAFF OF THE DIVISION OF CORPORATION FINANCE OF THE SECURITIES AND EXCHANGE
COMMISSION TO THIRD PARTIES, THAT (1) SUCH ORIGINAL CAPITAL SECURITIES ARE HELD
BY SUCH BROKER-DEALER ONLY AS A NOMINEE, OR (2) SUCH ORIGINAL CAPITAL SECURITIES
WERE ACQUIRED BY IT FOR ITS OWN ACCOUNT AS A RESULT OF MARKET-MAKING ACTIVITIES
OR OTHER TRADING ACTIVITIES AND IT WILL DELIVER THE PROSPECTUS MEETING THE
REQUIREMENTS OF THE SECURITIES ACT IN CONNECTION WITH ANY RESALE OF SUCH
EXCHANGE CAPITAL SECURITIES (PROVIDED THAT, BY SO ACKNOWLEDGING AND BY
DELIVERING THE PROSPECTUS, IT WILL NOT BE DEEMED TO ADMIT THAT IT IS AN
"UNDERWRITER" WITHIN THE MEANING OF THE SECURITIES ACT).
THE CORPORATION AND THE TRUST HAVE AGREED THAT, SUBJECT TO THE
PROVISIONS OF THE REGISTRATION RIGHTS AGREEMENT, THE PROSPECTUS MAY BE USED IN
CONNECTION WITH RESALES OF EXCHANGE CAPITAL SECURITIES RECEIVED IN EXCHANGE FOR
ORIGINAL CAPITAL SECURITIES BY A BROKER-DEALER WHO ACQUIRED ORIGINAL CAPITAL
SECURITIES FOR ITS OWN ACCOUNT AS A RESULT OF MARKET-MAKING OR OTHER TRADING
ACTIVITIES (A "PARTICIPATING BROKER-DEALER") FOR A PERIOD ENDING 180 DAYS AFTER
THE EXPIRATION DATE (SUBJECT TO EXTENSION UNDER CERTAIN LIMITED CIRCUMSTANCES
DESCRIBED IN THE PROSPECTUS) OR, IF EARLIER, WHEN ALL SUCH EXCHANGE CAPITAL
SECURITIES HAVE BEEN DISPOSED OF BY SUCH PARTICIPATING BROKER-DEALER. IN THAT
REGARD, EACH PARTICIPATING BROKER-DEALER, BY TENDERING SUCH ORIGINAL CAPITAL
6
<PAGE> 7
SECURITIES AND EXECUTING THIS LETTER OF TRANSMITTAL OR BY TENDERING THROUGH
BOOK-ENTRY TRANSFER IN LIEU THEREOF, AGREES THAT, UPON RECEIPT OF NOTICE FROM
THE CORPORATION OR THE TRUST OF THE OCCURRENCE OF ANY EVENT OR THE DISCOVERY OF
ANY FACT WHICH MAKES ANY STATEMENT CONTAINED OR INCORPORATED BY REFERENCE IN THE
PROSPECTUS UNTRUE IN ANY MATERIAL RESPECT OR WHICH CAUSES THE PROSPECTUS TO OMIT
TO STATE A MATERIAL FACT NECESSARY IN ORDER TO MAKE THE STATEMENTS CONTAINED OR
INCORPORATED BY REFERENCE THEREIN, IN LIGHT OF THE CIRCUMSTANCES UNDER WHICH
THEY WERE MADE, NOT MISLEADING OR OF THE OCCURRENCE OF CERTAIN OTHER EVENTS
SPECIFIED IN THE REGISTRATION RIGHTS AGREEMENT, SUCH PARTICIPATING BROKER-DEALER
WILL SUSPEND THE SALE OF EXCHANGE CAPITAL SECURITIES PURSUANT TO THE PROSPECTUS
UNTIL (1) THE CORPORATION AND THE TRUST HAVE AMENDED OR SUPPLEMENTED THE
PROSPECTUS TO CORRECT SUCH MISSTATEMENT OR OMISSION AND HAVE FURNISHED COPIES OF
THE AMENDED OR SUPPLEMENTED PROSPECTUS TO THE PARTICIPATING BROKER-DEALER OR (2)
THE CORPORATION OR THE TRUST HAS GIVEN NOTICE THAT THE SALE OF THE EXCHANGE
CAPITAL SECURITIES MAY BE RESUMED, AS THE CASE MAY BE. IF THE CORPORATION OR THE
TRUST GIVES SUCH NOTICE TO SUSPEND THE SALE OF THE EXCHANGE CAPITAL SECURITIES,
THEY SHALL EXTEND THE 180-DAY PERIOD REFERRED TO ABOVE DURING WHICH
PARTICIPATING BROKER-DEALERS ARE ENTITLED TO USE THE PROSPECTUS IN CONNECTION
WITH THE RESALE OF EXCHANGE CAPITAL SECURITIES BY THE NUMBER OF DAYS DURING THE
PERIOD FROM AND INCLUDING THE DATE OF THE GIVING OF SUCH NOTICE TO AND INCLUDING
THE DATE ON WHICH (1) PARTICIPATING BROKER-DEALERS SHALL HAVE RECEIVED COPIES OF
THE SUPPLEMENTED OR AMENDED PROSPECTUS NECESSARY TO PERMIT RESALES OF THE
EXCHANGE CAPITAL SECURITIES OR (2) THE CORPORATION OR THE TRUST HAS GIVEN NOTICE
THAT THE SALE OF EXCHANGE CAPITAL SECURITIES MAY BE RESUMED, AS THE CASE MAY BE.
AS A RESULT, A PARTICIPATING BROKER-DEALER WHO INTENDS TO USE THE
PROSPECTUS IN CONNECTION WITH RESALES OF EXCHANGE CAPITAL SECURITIES RECEIVED IN
EXCHANGE FOR ORIGINAL CAPITAL SECURITIES PURSUANT TO THE EXCHANGE OFFER MUST
NOTIFY THE CORPORATION AND THE TRUST, OR CAUSE THE CORPORATION AND THE TRUST TO
BE NOTIFIED, ON OR PRIOR TO THE EXPIRATION DATE, THAT IT IS A PARTICIPATING
BROKER-DEALER. SUCH NOTICE MAY BE GIVEN IN THE SPACE PROVIDED ABOVE OR MAY BE
DELIVERED TO THE EXCHANGE AGENT AT THE ADDRESS SET FORTH IN THE PROSPECTUS UNDER
"THE EXCHANGE OFFER--EXCHANGE AGENT."
Holders whose Original Capital Securities are accepted for exchange
will not receive Distributions on such Original Capital Securities and the
undersigned hereby waives the right to receive any Distributions on such
Original Capital Securities accumulated from and including July 24, 1998.
Accordingly, holders of Exchange Capital Securities (as of the record date) for
the payment of Distributions on January 31, 1999 will be entitled to
Distributions accumulated from and including July 24, 1998.
The undersigned will, upon request, execute and deliver any
additional documents deemed by the Corporation or the Trust to be necessary or
desirable to complete the sale, assignment and transfer of the Original Capital
Securities tendered hereby. All authority herein conferred or agreed to be
conferred in this Letter of Transmittal shall survive the death or incapacity of
the undersigned and any obligation of the undersigned hereunder shall be binding
upon the heirs, executors, administrators, personal representatives, trustees in
bankruptcy, legal representatives, successors and assigns of the undersigned.
Except as stated in the Prospectus, this tender is irrevocable.
THE UNDERSIGNED, BY COMPLETING THE BOX ENTITLED "DESCRIPTION OF
ORIGINAL CAPITAL SECURITIES" ABOVE AND SIGNING THIS LETTER, WILL BE DEEMED TO
HAVE TENDERED THE ORIGINAL CAPITAL SECURITIES AS SET FORTH IN SUCH BOX.
7
<PAGE> 8
HOLDER(S) SIGN HERE
(SEE ATTACHED INSTRUCTIONS 2, 5 AND 6)
(PLEASE COMPLETE SUBSTITUTE FORM W-9 ON THE LAST PAGE)
(NOTE: SIGNATURE(S) MUST BE GUARANTEED IF REQUIRED BY INSTRUCTION 2)
Must be signed by registered Holder(s) exactly as name(s) appear(s)
on Certificate(s) for the Original Capital Securities hereby tendered or on the
records of DTC, as the case may be, or by any person(s) authorized to become the
registered Holder(s) by endorsements and documents transmitted herewith
(including such opinions of counsel, certifications and other information as may
be required by the Trust to comply with the restrictions on transfer applicable
to the Original Capital Securities). If signature is by an attorney-in-fact,
executor, administrator, trustee, guardian, officer of a corporation or another
acting in a fiduciary capacity or representative capacity, set forth the
signatory's full title. See Instruction 5.
- --------------------------------------------------------------------------
(SIGNATURE(S) OF HOLDER(S))
Date:__________________________________________, 1998
Name(s):
------------------------------------------------------------------
(PLEASE PRINT)
Capacity (full title):
----------------------------------------------------
Address:
------------------------------------------------------------------
(INCLUDE ZIP CODE)
Area Code and Telephone Number:
-------------------------------------------
Tax Identification or Social Security Number(s):
--------------------------
8
<PAGE> 9
GUARANTEE OF SIGNATURE(S)
(SEE ATTACHED INSTRUCTIONS 2 AND 5)
- --------------------------------------------------------------------------
(AUTHORIZED SIGNATURE)
Date:__________________________________________, 1998
Name of Firm:
-------------------------------------------------------------
(PLEASE PRINT)
Capacity (full title):
----------------------------------------------------
Address:
------------------------------------------------------------------
(INCLUDE ZIP CODE)
Area Code and Telephone Number:
-------------------------------------------
9
<PAGE> 10
SPECIAL ISSUANCE INSTRUCTIONS
(SEE ATTACHED INSTRUCTIONS 1, 5 AND 6)
To be completed ONLY if certificates for Exchange Capital Securities
or non-tendered or non-exchanged Original Capital Securities are to be issued in
the name of someone other than the registered Holder(s) of the Original Capital
Securities whose name(s) appear(s) above.
Issue:
[ ] Non-tendered or non-exchanged Original Capital Securities to:
[ ] Exchange Capital Securities to:
Name(s):
------------------------------------------------------------------
Address:
------------------------------------------------------------------
(INCLUDE ZIP CODE)
Area Code and
Telephone Number:
---------------------------------------------------------
Tax Identification or Social Security Number(s):
--------------------------
10
<PAGE> 11
SPECIAL DELIVERY INSTRUCTIONS
(SEE ATTACHED INSTRUCTIONS 1, 5 AND 6)
To be completed ONLY if certificates for Exchange Capital Securities
or non-tendered or non-exchanged Original Capital Securities are to be sent to
someone other than the registered Holder(s) of the Original Capital Securities
whose name(s) appear(s) above, or such registered Holder(s) at an address other
than that shown above.
Mail:
[ ] Non-tendered or non-exchanged Original Capital Securities to:
[ ] Exchange Capital Securities to:
Name(s):
------------------------------------------------------------------
Address:
------------------------------------------------------------------
(INCLUDE ZIP CODE)
Area Code and
Telephone Number:
---------------------------------------------------------
Tax Identification or Social Security Number(s):
--------------------------
11
<PAGE> 12
INSTRUCTIONS
FORMING PART OF THE TERMS AND CONDITIONS OF THE EXCHANGE OFFER
1. BOOK-ENTRY TRANSFER; DELIVERY OF LETTER OF TRANSMITTAL AND
CERTIFICATES; GUARANTEED DELIVERY PROCEDURES. To tender in the Exchange Offer,
Holders must tender by (a) forwarding Certificates herewith or (b) book-entry
transfer pursuant to the procedures set forth in "The Exchange Offer-Procedures
for Tendering Original Capital Securities" in the Prospectus. Holders who are
DTC Participants tendering by book-entry transfer must execute such tender
through DTC's ATOP system. A Holder using ATOP should transmit its acceptance to
DTC on or prior to the Expiration Date. DTC will verify such acceptance, execute
a book-entry transfer of the tendered Original Capital Securities into the
Exchange Agent's account at DTC and then send to the Exchange Agent a book-entry
confirmation, including an Agent's Message confirming that DTC has received an
express acknowledgment from such Holder that such Holder has received and agrees
to be bound by this Letter of Transmittal and that the Trust and the Corporation
may enforce this Letter of Transmittal against such Holder. The book-entry
confirmation must be received by the Exchange Agent in order for the tender
relating thereto to be effective. Book-entry transfer to DTC in accordance with
DTC's procedure does not constitute delivery of the book-entry confirmation to
the Exchange Agent.
IF THE TENDER IS NOT MADE THROUGH ATOP, CERTIFICATES, AS WELL AS
THIS LETTER OF TRANSMITTAL (OR FACSIMILE THEREOF), PROPERLY COMPLETED AND DULY
EXECUTED, WITH ANY REQUIRED SIGNATURE GUARANTEES, AND ANY OTHER DOCUMENTS
REQUIRED BY THIS LETTER OF TRANSMITTAL, MUST BE RECEIVED BY THE EXCHANGE AGENT
AT ITS ADDRESS SET FORTH HEREIN ON OR PRIOR TO THE EXPIRATION DATE IN ORDER FOR
SUCH TENDER TO BE EFFECTIVE.
Original Capital Securities may be tendered in whole or in part in
the principal amount of $100,000 (100 Capital Securities) and integral multiples
of $1,000 in excess thereof, provided that, if any Original Capital Securities
are tendered for exchange in part, the untendered principal amount thereof must
be $100,000 (100 Capital Securities) or any integral multiple of $1,000 in
excess thereof.
Holders who wish to tender their Original Capital Securities and (i)
whose Original Capital Securities are not immediately available or (ii) who
cannot deliver their Original Capital Securities, this Letter of Transmittal and
all other required documents to the Exchange Agent on or prior to the Expiration
Date or (iii) who cannot complete the procedures for delivery by book-entry
transfer on a timely basis, may tender their Original Capital Securities by
properly completing and duly executing a notice to the Exchange Agent
guaranteeing delivery to the Exchange Agent of either certificates representing
the Original Capital Securities or a book-entry confirmation in compliance with
the requirements set forth in the Prospectus (the "Notice of Guaranteed
Delivery"), pursuant to the guaranteed delivery procedures set forth in the
Prospectus under "The Exchange Offer--Procedures for Tendering Original Capital
Securities--Guaranteed Delivery." Pursuant to such procedures: (i) such tender
must be made by or through an Eligible Institution (as defined below); (ii) a
properly completed and duly executed Notice of Guaranteed Delivery,
substantially in the form accompanying this Letter of Transmittal, must be
received by the Exchange Agent on or prior to the Expiration Date; and (iii) (a)
a book-entry confirmation or (b) the certificates representing all tendered
Original Capital Securities, in proper form for transfer, together with a
properly completed and duly executed Letter of Transmittal (or facsimile
thereof), with any required signature guarantees and any other documents
required by this Letter of Transmittal, must be received by the Exchange Agent
within three New York Stock Exchange trading days after the date of execution of
such Notice of Guaranteed Delivery, all as provided in the Prospectus under "The
Exchange Offer--Procedures for Tendering Original Capital Securities--Guaranteed
Delivery".
A Notice of Guaranteed Delivery may be delivered by hand or
transmitted by facsimile or mail to the Exchange Agent, and must include a
guarantee by an Eligible Institution in the form set forth in such Notice. For
Original Capital Securities to be properly tendered pursuant to the guaranteed
delivery procedure, the Exchange Agent must receive a Notice of Guaranteed
Delivery on or prior to the Expiration Date. As used herein and in the
Prospectus, "Eligible Institution" means a firm or other entity identified in
Rule 17Ad-15 under the Exchange Act as "an eligible guarantor institution,"
including (as such terms are defined therein) (i) a
12
<PAGE> 13
bank; (ii) a broker, dealer, municipal securities broker or dealer or government
securities broker or dealer; (iii) a credit union; (iv) a national securities
exchange, registered securities association or clearing agency; or (v) a savings
association that is a participant in a Securities Transfer Association.
THE METHOD OF DELIVERY OF THE BOOK-ENTRY CONFIRMATION OR
CERTIFICATES, THIS LETTER OF TRANSMITTAL, AND ALL OTHER REQUIRED DOCUMENTS IS AT
THE OPTION AND SOLE RISK OF THE TENDERING HOLDER AND THE DELIVERY WILL BE DEEMED
MADE ONLY WHEN ACTUALLY RECEIVED BY THE EXCHANGE AGENT. IF DELIVERY IS BY MAIL,
REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY INSURED, OR OVERNIGHT
DELIVERY SERVICE IS RECOMMENDED. IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED
TO ENSURE TIMELY DELIVERY.
Neither the Corporation nor the Trust will accept any alternative,
conditional or contingent tenders. Each tendering Holder, by book-entry transfer
through ATOP or execution of a Letter of Transmittal (or facsimile thereof),
waives any right to receive any notice of the acceptance of such tender.
2. GUARANTEE OF SIGNATURES. No signature guarantee on this Letter of
Transmittal is required if:
(i) this Letter of Transmittal is signed by the registered Holder(s) of
Original Capital Securities tendered herewith, unless such Holder(s)
has completed either the box entitled 'Special Issuance
Instructions" or the box entitled 'Special Delivery Instructions"
above, or
(ii) such Original Capital Securities are tendered for the account of a
firm that is an Eligible Institution.
In all other cases, an Eligible Institution must guarantee the
signature(s) on this Letter of Transmittal. See Instruction 5.
3. INADEQUATE SPACE. If the space provided in the box captioned
"Description of Original Capital Securities" is inadequate, the Certificate
number(s) and/or the principal amount of Original Capital Securities and any
other required information should be listed on a separate signed schedule which
is attached to this Letter of Transmittal.
4. PARTIAL TENDERS AND WITHDRAWAL RIGHTS. Tenders of Original
Capital Securities will be accepted only in the principal amount of $100,000
(100 Capital Securities) and integral multiples of $1,000 in excess thereof,
provided that if any Original Capital Securities are tendered for exchange in
part, the untendered principal amount thereof must be $100,000 (100 Capital
Securities) or any integral multiple of $1,000 in excess thereof. If less than
all the Original Capital Securities are to be tendered, fill in the principal
amount of Original Capital Securities that are to be tendered in the box
entitled "Principal Amount of Original Capital Securities Tendered." If
applicable, new Certificate(s) for the Original Capital Securities that were not
tendered will be sent to the address designated herein by such Holder promptly
after the Expiration Date. All Original Capital Securities represented by
Certificates delivered to the Exchange Agent will be deemed to have been
tendered unless otherwise indicated.
Except as otherwise provided herein, tenders of Original Capital
Securities may be withdrawn at any time on or prior to the Expiration Date. In
order for a withdrawal to be effective on or prior to such date, a written or
facsimile transmission of such notice of withdrawal must be timely received by
the Exchange Agent at one of its addresses set forth above or in the Prospectus
on or prior to such date. Any such notice of withdrawal must specify the name of
the person who tendered the Original Capital Securities to be withdrawn, the
aggregate principal amount of Original Capital Securities to be withdrawn, and,
if any Certificates for Original Capital Securities have been tendered, the name
of the registered Holder of the Original Capital Securities as set forth on any
such Certificates, if different from that of the person who tendered such
Original Capital Securities. If Certificates for the Original Capital Securities
have been delivered or otherwise identified
13
<PAGE> 14
to the Exchange Agent, then prior to the physical release of such Certificates,
the tendering Holder must submit the serial numbers shown on the particular
Certificates to be withdrawn and the signature on the notice of withdrawal must
be guaranteed by an Eligible Institution, except in the case of Original Capital
Securities tendered for the account of an Eligible Institution. If Original
Capital Securities have been tendered pursuant to the procedures for book-entry
transfer set forth in the Prospectus under "The Exchange Offer--Procedures for
Tendering Original Capital Securities," the notice of withdrawal must specify
the name and number of the account at DTC to be credited with the withdrawal of
Original Capital Securities. Withdrawals of tenders of Original Capital
Securities may not be rescinded. Original Capital Securities properly withdrawn
will not be deemed validly tendered for purposes of the Exchange Offer, but may
be retendered at any subsequent time on or prior to the Expiration Date by
following any of the procedures described herein.
All questions as to the validity, form and eligibility (including
time of receipt) of such withdrawal notices will be determined by the
Corporation and the Trust, in their sole discretion, whose determination shall
be final and binding on all parties. Neither the Corporation, the Trust, any
affiliates or assigns of the Corporation or the Trust, the Exchange Agent nor
any other person shall be under any duty to give any notification of any
irregularities in any notice of withdrawal or incur any liability for failure to
give any such notification. Any Original Capital Securities which have been
tendered but which are withdrawn will be returned or transferred by book-entry,
as the case may be, to the Holder thereof without cost to such Holder promptly
after withdrawal.
5. SIGNATURES ON LETTER OF TRANSMITTAL, ASSIGNMENTS AND
ENDORSEMENTS. If this Letter of Transmittal is signed by the registered
Holder(s) of the Original Capital Securities tendered hereby, the signature(s)
must correspond exactly with the name(s) as written on the face of the
Certificate(s) for such Original Capital Securities, without alteration,
enlargement or any change whatsoever, or as recorded in DTC's book-entry
transfer facility system, as the case may be.
If any Certificates tendered hereby are owned of record by two or
more joint owners, all such owners must sign this Letter of Transmittal.
If any tendered Original Capital Securities are registered in
different names on several Certificates, it will be necessary to complete, sign
and submit as many separate Letters of Transmittal as there are different
registrations of Certificates. If any tendered Original Capital Securities are
registered in different names in several book-entry accounts, proper procedures
for book-entry transfer must be followed for each account.
If this Letter of Transmittal or any Certificates or bond powers are
signed by trustees, executors, administrators, guardians, attorneys-in-fact,
officers of corporations or others acting in a fiduciary or representative
capacity, such persons should so indicate when signing and must submit proper
evidence satisfactory to the Corporation and the Trust, in their sole
discretion, of each such person's authority so to act.
When this Letter of Transmittal is signed by the registered
Holder(s) of the Original Capital Securities listed and transmitted hereby, or
book-entry transfer is effectuated by such Holder(s), no endorsement(s) of
Certificate(s) or separate bond power(s) are required except if Exchange Capital
Securities are to be issued in the name of a person other than the registered
Holder(s). If such exception applies, signature(s) on such Certificate(s) or
bond power(s) must be guaranteed by an Eligible Institution.
If this Letter of Transmittal is signed by a person other than the
registered Holder(s) of the Original Capital Securities listed, the
Certificate(s) must be endorsed or accompanied by appropriate bond powers,
signed exactly as the name(s) of the registered Holder(s) appear(s) on the
Certificates, and also must be accompanied by such opinions of counsel,
certifications and other information as the Corporation or the Trust may require
in accordance with the restrictions on transfer applicable to the Original
Capital Securities. In such event, signatures on such Certificates or bond
powers must be guaranteed by an Eligible Institution.
6. SPECIAL ISSUANCE AND DELIVERY INSTRUCTIONS. If Exchange Capital
Securities are to be issued in the name of a person other than the signer of
this Letter of Transmittal, or if
14
<PAGE> 15
Exchange Capital Securities are to be sent to someone other than the signer of
this Letter of Transmittal or to an address other than that shown above, the
appropriate boxes on this Letter of Transmittal should be completed. Original
Capital Securities not exchanged will be returned, if evidenced by Certificates,
by mail or, if tendered by book-entry transfer, by crediting the account at DTC
indicated above in Instruction 4.
7. IRREGULARITIES. The Corporation and the Trust will determine, in
their sole discretion, all questions as to the form of documents, validity,
eligibility (including time of receipt) and acceptance for exchange of any
tender of Original Capital Securities, which determination shall be final and
binding on all parties. The Corporation and the Trust reserve the absolute right
to reject any and all tenders determined by either of them not to be in proper
form or the acceptance of which, or exchange for which, may in the view of
counsel to the Corporation and the Trust be unlawful. The Corporation and the
Trust also reserve the absolute right, subject to applicable law, to waive any
of the conditions of the Exchange Offer set forth in the Prospectus under "The
Exchange Offer--Conditions to the Exchange Offer" or any conditions or
irregularity in any tender of Original Capital Securities of any particular
Holder whether or not similar conditions or irregularities are waived in the
case of other Holders. The Corporation's and the Trust's interpretation of the
terms and conditions of the Exchange Offer (including this Letter of Transmittal
and the instructions hereto) will be final and binding. No tender of Original
Capital Securities will be deemed to have been validly made until all
irregularities with respect to such tender have been cured or waived. The
Corporation, the Trust, any affiliates or assigns of the Corporation, the Trust,
the Exchange Agent, or any other person shall not be under any duty to give
notification of any irregularities in tenders or incur any liability for failure
to give such notification.
8. QUESTIONS, REQUESTS FOR ASSISTANCE AND ADDITIONAL COPIES.
Questions and requests for assistance may be directed to the Exchange Agent at
its address and telephone number set forth on the front cover of this Letter of
Transmittal. Additional copies of the Prospectus, the Notice of Guaranteed
Delivery and this Letter of Transmittal may be obtained from the Exchange Agent
or from your broker, dealer, commercial bank, trust company or other nominee.
9. 31% BACKUP WITHHOLDING; SUBSTITUTE FORM W-9. Under U.S. Federal
income tax law, a Holder whose tendered Original Capital Securities are accepted
for exchange is required to provide the Exchange Agent with such Holder's
correct taxpayer identification number ("TIN") on Substitute Form W-9 below. If
the Exchange Agent is not provided with the correct TIN, the Internal Revenue
Service (the "IRS") may subject the Holder or other payee to a $50 penalty. In
addition, payments to such Holders or other payees with respect to Original
Capital Securities exchanged pursuant to the Exchange Offer may be subject to
31% backup withholding.
The box in Part 2 of the Substitute Form W-9 may be checked if the
tendering Holder has not been issued a TIN and has applied for a TIN or intends
to apply for a TIN in the near future. If the box in Part 2 is checked, the
Holder or other payee must also complete the Certificate of Awaiting Taxpayer
Identification Number below in order to avoid backup withholding.
Notwithstanding that the box in Part 2 is checked and the Certificate of
Awaiting Taxpayer Identification Number is completed, the Exchange Agent will
withhold 31% of all payments made prior to the time a properly certified TIN is
provided to the Exchange Agent. The Exchange Agent will retain such amounts
withheld during the 60-day period following the date of the Substitute Form W-9.
If the Holder furnishes the Exchange Agent with its TIN within 60 days after the
date of the Substitute Form W-9, the amounts retained during the 60-day period
will be remitted to the Holder and no further amounts shall be retained or
withheld from payments made to the Holder thereafter. If, however, the Holder
has not provided the Exchange Agent with its TIN within such 60-day period,
amounts withheld will be remitted to the IRS as backup withholding. In addition,
31% of all payments made thereafter will be withheld and remitted to the IRS
until a correct TIN is provided.
The Holder is required to give the Exchange Agent the TIN (e.g.,
social security number or employer identification number) of the registered
owner of the Original Capital Securities or of the last transferee appearing on
the transfers attached to, or endorsed on, the Original Capital Securities. If
the Original Capital Securities are registered in more than one name or are not
in the name of the actual owner,
15
<PAGE> 16
consult the enclosed "Guidelines for Certification of Taxpayer Identification
Number on Substitute Form W-9" for additional guidance on which number to
report.
Certain Holders (including, among others, corporations, financial
institutions and certain foreign persons) may not be subject to these backup
withholding and reporting requirements. Such Holders should nevertheless
complete the attached Substitute Form W-9 below, and write "exempt" on the face
thereof, to avoid possible erroneous backup withholding. A foreign person may
qualify as an exempt recipient by submitting a properly completed IRS Form W-8,
signed under penalties of perjury, attesting to that holder's exempt status.
Please consult the enclosed "Guidelines for Certification of Taxpayer
Identification Number on Substitute Form W-9" for additional guidance on which
Holders are exempt from backup withholding.
Backup withholding is not an additional U.S. Federal income tax.
Rather, the U.S. Federal income tax liability of a person subject to backup
withholding will be reduced by the amount of tax withheld. If withholding
results in an overpayment of taxes, a refund may be obtained.
10. WAIVER OF CONDITIONS. The Corporation and the Trust reserve the
absolute right to waive satisfaction of any or all conditions enumerated in the
Prospectus.
11. NO CONDITIONAL TENDERS. No alternative, conditional or
contingent tenders will be accepted. All tendering Holders, by execution of this
Letter of Transmittal, shall waive any right to receive notice of the acceptance
of Original Capital Securities for exchange.
Neither the Corporation, the Trust, the Exchange Agent nor any other
person is obligated to give notice of any defect or irregularity with respect to
any tender of Original Capital Securities nor shall any of them incur any
liability for failure to give any such notice.
12. LOST, DESTROYED OR STOLEN CERTIFICATES. If any Certificate(s)
representing Original Capital Securities have been lost, destroyed or stolen,
the Holder should promptly notify the Exchange Agent. The Holder will then be
instructed as to the steps that must be taken in order to replace the
Certificate(s). This Letter of Transmittal and related documents cannot be
processed until the procedures for replacing lost, destroyed or stolen
Certificate(s) have been followed.
13. SECURITY TRANSFER TAXES. Holders who tender their Original
Capital Securities for exchange will not be obligated to pay any transfer taxes
in connection therewith. If, however, Exchange Capital Securities are to be
delivered to, or are to be issued in the name of, any person other than the
registered Holder of the Original Capital Securities tendered, or if a transfer
tax is imposed for any reason other than the exchange of Original Capital
Securities in connection with the Exchange Offer, then the amount of any such
transfer tax (whether imposed on the registered holder or any other persons)
will be payable by the tendering Holder. If satisfactory evidence of payment of
such taxes or exemption therefrom is not submitted with this Letter of
Transmittal, the amount of such transfer taxes will be billed directly to such
tendering Holder.
IMPORTANT: BOOK-ENTRY CONFIRMATION OR THIS LETTER OF
TRANSMITTAL (OR FACSIMILE THEREOF) AND ALL OTHER
REQUIRED DOCUMENTS MUST BE RECEIVED BY THE
EXCHANGE AGENT ON OR PRIOR TO THE EXPIRATION DATE.
16
<PAGE> 17
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
GUIDELINES FOR DETERMINING THE PROPER IDENTIFICATION NUMBER TO GIVE THE
PAYER. Social Security numbers have nine digits separated by two hyphens (i.e.,
000-00-0000). Employer identification numbers have nine digits separated by only
one hyphen (i.e., 00-0000000). The table below will help determine the number to
give the payer.
<TABLE>
<CAPTION>
GIVE THE SOCIAL SECURITY OR EMPLOYER IDENTIFICATION
FOR THIS TYPE OF ACCOUNT NUMBER OF
- ----------------------------------------------------------- ---------------------------------------------------------
<S> <C>
1. An individual's account........................... The individual
2. Two or more individuals (joint account)........... The actual owner of the account or, if combined funds,
any one of the individuals(1)
---
3. Husband and wife (joint account).................. The actual owner of the account or, if joint funds,
either person (1)
4. Custodian account of a minor (Uniform Gift
to Minors Act.................................... The minor(2)
---
5. Adult and minor (joint account)................... The adult or, if the minor is the only contributor, the
minor(1)
6. Account in the name of guardian or
committee for a designated ward, minor or
incompetent person.............................. The ward, minor or incompetent person(3)
---
7. a. The usual revocable savings trust
account (grantor is also trustee).............. The grantor-trustee(1)
b. So-called trust account that is not a legal
or valid trust under state law................. The actual owner(1)
8. Sole proprietorship account....................... The owner(4)
---
9. A valid trust, estate or pension trust............ The legal entity(5) (Do not furnish the identifying
---
number of the personal representative or trustee unless
the legal entity itself is not designated in the account
title.)
10. Corporate account................................. The corporation
11. Religious, charitable or educational
organization account............................. The organization
12. Partnership account............................... The partnership
13. Association, club or other tax-exempt
organization..................................... The organization
14. A broker or registered nominee.................... The broker or nominee
15. Account with the Department of Agriculture in the
name of a public entity (such as a state or
local government, school district or prison)
that receives agricultural program payments..... The public entity
- ----------------------------------------------------------- ---------------------------------------------------------
</TABLE>
- -------------------
(1) List first and circle the name of the person whose number you furnish.
(2) Circle the minor's name and furnish the minor's social security number.
(3) Circle the ward's, minor's or incompetent person's name and furnish such
person's social security number.
(4) Show the name of the owner.
(5) List first and circle the name of the legal trust, estate or pension
trust.
Note: If no name is circled when there is more than one name, the number will be
considered to be that of the first name listed.
17
<PAGE> 18
OBTAINING A NUMBER
If you don't have a taxpayer identification number or you don't know your
number, obtain Form SS-5, Application for A Social Security Number Card, or Form
SS-4, Application for Employer Identification Number, at the local office of the
Social Security Administration or the Internal Revenue Service and apply for a
number.
PAYEES EXEMPT FROM BACKUP WITHHOLDING
Payees specifically exempted from backup withholding on ALL payments
include the following:
- A corporation.
- A financial institution.
- An organization exempt from tax under Section 501(a) of the
Internal Revenue Code or an individual retirement plan.
- The United States or any agency or instrumentality thereof.
- A State, the District of Columbia, a possession of the United
States or any subdivision or instrumentality thereof.
- A foreign government, a political subdivision of a foreign
government or any agency or instrumentality thereof.
- An international organization or any agency or
instrumentality thereof.
- A dealer in securities or commodities required to register in
the United States or a possession of the United States.
- A real estate investment trust.
- A common trust fund operated by a bank under Section 584(a)
of the Internal Revenue Code.
- An exempt charitable remainder trust or a non-exempt trust
described in Section 4947(a)(1) of the Internal Revenue Code.
- An entity registered at all times under the Investment
Company Act of 1940.
- A foreign central bank of issue.
Payments of dividends and patronage dividends not generally subject to
backup withholding include the following:
- Payments to nonresident aliens subject to withholding under
Section 1441 of the Internal Revenue Code.
- Payments to partnerships not engaged in a trade or business
in the United States and which have at least one nonresident
partner.
- Payments of patronage dividends where the amount renewed is
not paid in money.
- Payments made by certain foreign organizations.
- Payments made to a nominee.
18
<PAGE> 19
Payments of interest not generally subject to backup withholding
include the following:
- Payments of interest on obligations issued by individuals.
Note: You may be subject to backup withholding if this
interest is $600 or more and is paid in the course of the
payer's trade or business and you have not provided your
correct taxpayer identification number to the payer.
- Payments of tax-exempt interest (including exempt-interest
dividends under Section 852 of the Internal Revenue Code).
- Payments described in Section 6049(b)(5) of the Internal
Revenue Code to non-resident aliens.
- Payments on tax-free covenant bonds under Section 1451 of the
Internal Revenue Code.
- Payments made by certain foreign organizations.
- Payments made to a nominee.
Exempt payees described above must still complete the Substitute Form W-9
enclosed herewith to avoid possible erroneous backup withholding. FILE THIS FORM
WITH THE PAYER, FURNISH YOUR TAXPAYER IDENTIFICATION NUMBER, WRITE EXEMPT ON THE
FACE OF THE FORM, AND RETURN IT TO THE PAYER. IF THE PAYMENTS ARE INTEREST,
DIVIDENDS OR PATRONAGE DIVIDENDS, ALSO SIGN AND DATE THE FORM.
Certain payments, other than interest, dividends and patronage dividends,
that are not subject to information reporting are also not subject to backup
withholding. For details, see the regulations under Sections 6041, 6041(a),
6042, 6044, 6045, 6049, 6050A and 6050N of the Internal Revenue Code.
PRIVACY ACT NOTICE. Section 6109 of the Internal Revenue Code requires
most recipients of dividend, interest, or other payments to give taxpayer
identification numbers to payers who must report the payments to the Internal
Revenue Service. The Internal Revenue Service uses the numbers for
identification purposes and to help verify the accuracy of the recipient's tax
return. Payers must be given the numbers whether or not recipients are required
to file tax returns. Payers must generally withhold 31% of taxable interest,
dividend and certain other payments to a payee who does not furnish a taxpayer
identification number to a payer. Certain penalties may also apply.
PENALTIES
(1) PENALTY FOR FAILURE TO FURNISH TAXPAYER IDENTIFICATION NUMBER. If
you fail to furnish your taxpayer identification number to a payer, you are
subject to a penalty of $50 for each such failure which is due to reasonable
cause and not to willful neglect.
(2) CIVIL PENALTY FOR FALSE INFORMATION WITH RESPECT TO WITHHOLDING. If
you make a false statement with no reasonable basis which results in no
imposition of backup withholding, you are subject to a penalty of $500.
(3) CRIMINAL PENALTY FOR FALSIFYING INFORMATION. Falsifying
certifications or affirmations may subject you to criminal penalties including
fines and/or imprisonment.
FOR ADDITIONAL INFORMATION CONTACT YOUR TAX CONSULTANT OR THE INTERNAL
REVENUE SERVICE.
19
<PAGE> 20
TO BE COMPLETED BY ALL TENDERING SECURITYHOLDERS
(SEE INSTRUCTION 9)
<TABLE>
<CAPTION>
PAYOR'S NAME: BANKERS TRUST COMPANY
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
SUBSTITUTE PART 1 - PLEASE PROVIDE YOUR TIN IN
FORM W-9 THE BOX AT RIGHT AND CERTIFY BY -----------------------------------
DEPARTMENT OF THE TREASURY SIGNING AND DATING BELOW: Social Security Number or
INTERNAL REVENUE SERVICE Taxpayer Identification Number
PAYER'S REQUEST FOR
TAXPAYER
IDENTIFICATION NUMBER
("TIN")
AND CERTIFICATION
---------------------------------------------------------------------------------------
PART 2 - TIN Applied For [ ]
---------------------------------------------------------------------------------------
CERTIFICATION-UNDER THE PENALTIES OF PERJURY, I CERTIFY THAT:
(1) The number shown on this form is my correct taxpayer identification number (or
I am waiting for a number to be issued to me).
(2) I am not subject to backup withholding either because (i) I am exempt from
backup withholding, (ii) I have not been notified by the Internal Revenue Service
("IRS") that I am subject to backup withholding as a result of a failure to report
all interest or dividends, or (iii) the IRS has notified me that I am no longer
subject to backup withholding, and
(3) any other information provided on this form is true and correct.
Signature: Date:
-------------------------- --------------------
- --------------------------------------------------------------------------------------------------------------------------
</TABLE>
- --------------------------------------------------------------------------------
You must cross out item (iii) in Part (2) above if you have been notified by the
IRS that you are subject to backup withholding because of underreporting
interest or dividends on your tax return and you have not been notified by the
IRS that you are no longer subject to backup withholding.
- --------------------------------------------------------------------------------
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY IN CERTAIN CIRCUMSTANCES
RESULT IN BACKUP WITHHOLDING OF 31% OF ANY AMOUNTS PAID TO YOU PURSUANT
TO THE EXCHANGE OFFER. PLEASE REVIEW THE ENCLOSED GUIDELINES FOR
CERTIFICATION OF TAXPAYER IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9
FOR ADDITIONAL DETAILS.
YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU CHECKED THE BOX
IN PART 2 OF THE SUBSTITUTE FORM W-9
- --------------------------------------------------------------------------------
CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER
I certify under penalties of perjury that a taxpayer identification number has
not been issued to me, and either (1) I have mailed or delivered an application
to receive a taxpayer identification number to the appropriate Internal Revenue
Service Center or Social Security Administration Office or (2) I intend to mail
or deliver an application in the near future. I understand that if I do not
provide a taxpayer identification number by the time of payment, 31% of all
payments made to me on account of the Exchange Capital Securities shall be
retained until I provide a taxpayer identification number to the Exchange Agent
and that, if I do not provide my taxpayer identification number within 60 days,
such retained amounts shall be remitted to the Internal Revenue Service as
backup withholding and 31% of all reportable payments made to me thereafter will
be withheld and remitted to the Internal Revenue Service until I provide a
taxpayer identification number.
- -------------------------------------------- ----------------------------------
Signature(s) Date
20
<PAGE> 1
EXHIBIT 99.2
NOTICE OF GUARANTEED DELIVERY
FOR TENDER OF
8.125% ORIGINAL CAPITAL SECURITIES
(LIQUIDATION AMOUNT $1,000 PER CAPITAL SECURITY)
OF
BSB CAPITAL TRUST I
UNCONDITIONALLY GUARANTEED BY
BSB BANCORP, INC.
This Notice of Guaranteed Delivery, or one substantially equivalent
to this form, must be used to accept the Exchange Offer (as defined below) if
(i) certificates for the Trust's (as defined below) 8.125% Original Capital
Securities (the "Original Capital Securities") are not immediately available,
(ii) Original Capital Securities, the Letter of Transmittal and all other
required documents cannot be delivered to Bankers Trust Company (the "Exchange
Agent") on or prior to the Expiration Date (as defined in the Prospectus
referred to below) or (iii) the procedures for delivery by book-entry transfer
cannot be completed on a timely basis. This Notice of Guaranteed Delivery may be
delivered by hand, overnight courier or mail, or transmitted by facsimile
transmission, to the Exchange Agent. See "The Exchange Offer--Procedures for
Tendering Original Capital Securities" in the Prospectus. In addition, in order
to utilize the guaranteed delivery procedure to tender Original Capital
Securities pursuant to the Exchange Offer, a completed, signed and dated Letter
of Transmittal relating to the Original Capital Securities (or facsimile
thereof) must also be received by the Exchange Agent on or prior to the
Expiration Date. Capitalized terms not defined herein have the meanings assigned
to them in the Prospectus.
The Exchange Agent For The Exchange Offer Is:
Bankers Trust Company
<TABLE>
<S> <C> <C>
By Mail: By Hand: By Overnight Mail:
BT Services Tennessee, Inc. Bankers Trust Company BT Services Tennessee, Inc.
Corporate Trust and Agency Group Corporate Trust and Agency Group Corporate Trust and Agency Group
Reorganization Unit Receipt and Delivery Window Reorganization Unit
P.O. Box 292737 123 Washington Street, 1st Floor 648 Grassmere Park Road
Nashville, TN 37229-2737 New York, NY 10006 Nashville, TN 37211
</TABLE>
For Information Call:
(800) 735-7777
Confirm: (615) 835-3572
Facsimile: (615) 835-3701
Delivery of this Notice of Guaranteed Delivery to an address other than as
set forth above or transmission of this Notice of Guaranteed Delivery via
facsimile to a number other than as set forth above will not constitute a valid
delivery.
THIS NOTICE OF GUARANTEED DELIVERY IS NOT TO BE USED TO GUARANTEE
SIGNATURES. IF A SIGNATURE ON A LETTER OF TRANSMITTAL IS REQUIRED TO BE
GUARANTEED BY AN "ELIGIBLE INSTITUTION" UNDER THE INSTRUCTIONS THERETO, SUCH
SIGNATURE GUARANTEE MUST APPEAR IN THE APPLICABLE SPACE PROVIDED IN THE
SIGNATURE BOX ON THE LETTER OF TRANSMITTAL.
<PAGE> 2
Ladies and Gentlemen:
The undersigned hereby tenders to BSB Capital Trust I, a Delaware
business trust (the "Trust") and to BSB Bancorp, Inc., a Delaware Corporation
(the "Corporation"), upon the terms and subject to the conditions set forth in
the Prospectus dated _________, 1998 (as the same may be amended or supplemented
from time to time, the "Prospectus"), and the related Letter of Transmittal
(which together constitute the "Exchange Offer"), receipt of which is hereby
acknowledged, the aggregate principal amount of Original Capital Securities set
forth below pursuant to the guaranteed delivery procedures set forth in the
Prospectus under the caption "The Exchange Offer--Procedures for Tendering
Original Capital Securities."
Aggregate Liquidation Amount:
--------------------------------------------------
Name(s) of Registered Holder(s):
------------------------------------------------
Amount Tendered: $ *
------------------------------------
Certificate No(s)
(if available):
-----------------------------------------------------------------
Total Liquidation Amount Represented by Original
Capital Securities Certificate(s): $
-----------------------------------------
If Original Capital Securities will be tendered by book-entry transfer, provide
the following information:
DTC Account Number:
-------------------------------------------------
Date:
---------------------------------------------------------------
- --------------------------------
* Must be in denominations of a Liquidation Amount of $1,000 and any integral
multiple thereof, and not less than $100,000 aggregate Liquidation Amount.
2
<PAGE> 3
- --------------------------------------------------------------------------------
All authority herein conferred or agreed to be conferred shall
survive the death or incapacity of the undersigned and every obligation of
the undersigned hereunder shall be binding upon the heirs, personal
representatives, successors and assigns of the undersigned.
- --------------------------------------------------------------------------------
PLEASE SIGN HERE:
X
-------------------------------------- -------------------------------
X
-------------------------------------- -------------------------------
Signature(s) of Owner(s) Date
or Authorized Signatory
Area Code and Telephone Number:
-------------------------------------------------
This Notice of Guaranteed Delivery must be signed by the holder(s)
of the Original Capital Securities as their name(s) appear(s) on certificates
for Original Capital Securities or on a security position listing, or by
person(s) authorized to become registered holder(s) by endorsement and documents
transmitted with this Notice of Guaranteed Delivery. If signature is by a
trustee, executor, administrator, guardian, attorney-in-fact, officer or other
person acting in a fiduciary or representative capacity, such person must set
forth his or her full title below.
Please print name(s) and address(es):
Name(s):
------------------------------------------------------------------------
------------------------------------------------------------------------
------------------------------------------------------------------------
Capacity:
------------------------------------------------------------------------
Address(es):
------------------------------------------------------------------------
------------------------------------------------------------------------
------------------------------------------------------------------------
3
<PAGE> 4
GUARANTEE
(NOT TO BE USED FOR SIGNATURE GUARANTEE)
The undersigned, a firm or other entity identified in Rule 17Ad-15
under the Securities Exchange Act of 1934, as amended, as an "eligible guarantor
institution," including (as such terms are defined therein): (i) a bank; (ii) a
broker, dealer, municipal securities broker, municipal securities dealer,
government securities broker or government securities dealer; (iii) a credit
union; (iv) a national securities exchange, registered securities association or
clearing agency; or (v) a savings association that is a participant in a
Securities Transfer Association recognized program (each of the foregoing being
referred to as an "Eligible Institution"), hereby guarantees to deliver to the
Exchange Agent, at one of its addresses set forth above, either the Original
Capital Securities tendered hereby in proper form for transfer, or confirmation
of the book-entry transfer of such Original Capital Securities to the Exchange
Agent's account at The Depository Trust Company, pursuant to the procedures for
book-entry transfer set forth in the Prospectus, in either case together with
one or more properly completed and duly executed Letter(s) of Transmittal (or
facsimile thereof) and any other required documents within three business days
after the date of execution of this Notice of Guaranteed Delivery.
The undersigned acknowledges that it must deliver the Letter(s) of
Transmittal and the Original Capital Securities tendered hereby to the Exchange
Agent within the time period set forth above and that failure to do so could
result in a financial loss to the undersigned.
- ---------------------------------- ---------------------------------------
Name of Firm Authorized Signature
- ---------------------------------- ---------------------------------------
Address Please Type or Print Name
- ---------------------------------- ---------------------------------------
Zip Code Title
Area Code and Telephone No. Dated:
------------------------ -----------------------
NOTE: DO NOT SEND CERTIFICATES FOR ORIGINAL CAPITAL SECURITIES WITH THIS
FORM. CERTIFICATES FOR ORIGINAL CAPITAL SECURITIES SHOULD ONLY BE SENT WITH
YOUR LETTER OF TRANSMITTAL.
4
<PAGE> 1
EXHIBIT 99.3
BANKERS TRUST COMPANY
EXCHANGE AGENT AGREEMENT
______, 1998
Bankers Trust Company
Corporate Trust and Agency Group
Four Albany Street, 4th Floor
New York, New York 10006
Attention: Corporate Market Services
Ladies and Gentlemen:
BSB Capital Trust I, a trust formed under the laws of the State of
Delaware (the "Trust"), together with BSB Bancorp, Inc., a Delaware corporation
(the "Corporation"), is offering to exchange (the "Exchange Offer") any and all
of its outstanding 8.125% Capital Securities (Liquidation Amount $1,000 per
Capital Security) (the "Original Capital Securities") for its 8.125% Exchange
Capital Securities (Liquidation Amount $1,000 per Capital Security) (the
"Exchange Capital Securities"). All of the beneficial interests represented by
common securities of the Trust are owned by the Corporation. The terms and
conditions of the Exchange Offer as currently contemplated are set forth in a
prospectus, dated _____, 1998 (as the same may be amended or supplemented from
time to time, the "Prospectus"), to be distributed to all record holders of the
Original Capital Securities. A copy of the Prospectus is attached hereto as
Exhibit A. The Original Capital Securities and the Exchange Capital Securities
are collectively referred to herein as the "Securities." Capitalized terms used
but not defined herein shall have the same meaning given them in the Prospectus.
A copy of each of the form of the Letter of Transmittal, the form of
the Notice of Guaranteed Delivery, the form of letter to brokers and the form of
letter to clients are attached hereto as Exhibit B.
The Trust hereby appoints Bankers Trust Company to act as exchange
agent (the "Exchange Agent") in connection with the Exchange Offer. References
hereinafter to "you" shall refer to Bankers Trust Company.
The Exchange Offer is expected to be commenced by the Trust on or
about ________, 1998. The Letter of Transmittal accompanying the Prospectus (or
in the case of book entry securities, the ATOP system) is to be used by the
holders of the Original Capital Securities to accept the Exchange Offer and
contains instructions with respect to (a) the delivery of certificates for
Original Capital
<PAGE> 2
Securities tendered in connection therewith and (b) the book-entry transfer of
Securities to the Exchange Agent's account.
The Exchange Offer shall expire at 5:00 p.m., New York City time, on
____________, 1998 or on such later date or time to which the Corporation or the
Trust may extend the Exchange Offer (the "Expiration Date"). Subject to the
terms and conditions set forth in the Prospectus, the Trust expressly reserves
the right to extend the Exchange Offer from time to time by giving oral (to be
confirmed in writing) or written notice to you before 9:00 a.m., New York City
time, on the Business Day following the previously scheduled Expiration Date.
The Trust expressly reserves the right to amend or terminate the
Exchange Offer, and not to accept for exchange any Original Capital Securities
not theretofore accepted for exchange, upon the occurrence of any of the
conditions of the Exchange Offer specified in the Prospectus under the caption
"The Exchange Offer -- Conditions to the Exchange Offer." The Trust will give
you prompt oral (confirmed in writing) or written notice of any amendment,
termination or nonacceptance of Original Capital Securities.
In carrying out your duties as Exchange Agent, you are to act in
accordance with the following instructions:
1. You will perform such duties and only such duties as are
specifically set forth in the section of the Prospectus captioned "The Exchange
Offer" or as specifically set forth herein; provided, however, that in no way
will your general duty to act in good faith be discharged by the foregoing.
2. You will establish an account with respect to the Original Capital
Securities at The Depository Trust Company (the "Book-Entry Transfer Facility")
for purposes of the Exchange Offer within two Business Days after the date of
the Prospectus, and any financial institution that is a participant in the
Book-Entry Transfer Facility's system may make book-entry delivery of the
Original Capital Securities by causing the Book-Entry Transfer Facility to
transfer such Original Capital Securities into your account in accordance with
the Book-Entry Transfer Facility's procedure for such transfer.
3. You are to examine each of the Letters of Transmittal and
certificates for Original Capital Securities (or confirmation of book-entry
transfer into your account at the Book-Entry Transfer Facility) and any other
documents delivered or mailed to you by or for holders of the Original Capital
Securities to ascertain whether: (a) the Letters of Transmittal and any such
other documents are duly executed and properly completed in accordance with
instructions set forth therein and (b) the Original Capital Securities have
otherwise been properly tendered. In each case where the Letter of Transmittal
or any other document has been improperly completed or executed or any of the
certificates for Original Capital
<PAGE> 3
Securities are not in proper form for transfer or some other irregularity in
connection with the acceptance of the Exchange Offer exists, you will endeavor
to inform such holders of the need for fulfillment of all requirements and to
take any other action as may be necessary or advisable to cause such
irregularity to be corrected.
4. With the approval of any Administrator of the Trust or any person
designated in writing by the Corporation (a "Designated Officer") (such
approval, if given orally, to be confirmed in writing) or any other party
designated by any such Administrator or Designated Officer in writing, you are
authorized to waive any irregularities in connection with any tender of Original
Capital Securities pursuant to the Exchange Offer.
5. Tenders of Original Capital Securities may be made only as set
forth in the Letter of Transmittal and in the section of the Prospectus
captioned "The Exchange Offer -- Procedures for Tendering Original Capital
Securities," and Original Capital Securities shall be considered properly
tendered to you only when tendered in accordance with the procedures set forth
therein.
Notwithstanding the provisions of this paragraph five, Original
Capital Securities that any Administrator of the Trust or Designated Officer of
the Corporation shall approve as having been properly tendered shall be
considered to be properly tendered. Such approval, if given orally, shall be
confirmed in writing.
6. You shall advise the Trust and the Corporation with respect to any
Original Capital Securities received subsequent to the Expiration Date and
accept their instructions with respect to disposition of such Original Capital
Securities.
7. You shall accept tenders:
(a) in cases where the Original Capital Securities are registered in two
or more names only if signed by all named holders;
(b) in cases where the signing person (as indicated on the Letter of
Transmittal) is acting in a fiduciary or a representative capacity only
when proper evidence of such person's authority so to act is submitted;
and
(c) from persons other than the registered holder of Original Capital
Securities provided that customary transfer requirements, including
satisfaction of any applicable transfer taxes, are fulfilled.
You shall accept partial tenders of Original Capital Securities where
so indicated and as permitted in the Letter of Transmittal and deliver
certificates for Original Capital Securities to the transfer agent for division
and return any
<PAGE> 4
untendered Original Capital Securities to the holder (or such other person as
may be designated in the Letter of Transmittal) as promptly as practicable after
expiration or termination of the Exchange Offer.
8. Upon satisfaction or waiver of all of the conditions to the
Exchange Offer, the Trust will notify you (such notice, if given orally, to be
confirmed in writing) of its acceptance, promptly after the Expiration Date, of
all Original Capital Securities properly tendered and you, on behalf of the
Trust, will exchange such Original Capital Securities for Exchange Capital
Securities and cause such Original Capital Securities to be canceled. Delivery
of Exchange Capital Securities will be made on behalf of the Trust by you at the
rate of $1,000 principal amount of Exchange Capital Securities for each $1,000
principal amount of the corresponding series of Original Capital Securities
tendered promptly after notice (such notice, if given orally, to be confirmed in
writing) of acceptance of said Original Capital Securities by the Trust;
provided, however, that in all cases, Original Capital Securities tendered
pursuant to the Exchange Offer will be exchanged only after timely receipt by
you of certificates for such Original Capital Securities (or confirmation of
book-entry transfer into your account at the Book-Entry Transfer Facility), a
properly completed and duly executed Letter of Transmittal (or facsimile
thereof) with any required signature guarantees and any other required
documents. You shall issue Exchange Capital Securities only in denominations of
$1,000 or any integral multiple thereof. Original Capital Securities may be
tendered in whole or in part in denominations of $100,000 and integral multiples
of $1,000 in excess thereof, provided that if any Original Capital Securities
are tendered for exchange in part, the untendered principal amount thereof must
be $100,000 or any integral multiple of $1,000 in excess thereof.
9. Tenders pursuant to the Exchange Offer are irrevocable, except
that, subject to the terms and upon the conditions set forth in the Prospectus
and the Letter of Transmittal, Original Capital Securities tendered pursuant to
the Exchange Offer may be withdrawn at any time on or prior to the Expiration
Date.
10. The Trust shall not be required to exchange any Original Capital
Securities tendered if any of the conditions set forth in the Exchange Offer are
not met. Notice of any decision by the Trust not to exchange any Original
Capital Securities tendered shall be given orally (and confirmed in writing) by
the Trust to you.
11. If, pursuant to the Exchange Offer, the Trust does not accept for
exchange all or part of the Original Capital Securities tendered because of an
invalid tender, the occurrence of certain other events set forth in the
Prospectus under the caption "The Exchange Offer -- Conditions to the Exchange
Offer" or otherwise, you shall promptly after the expiration or termination of
the Exchange Offer return those certificates for unaccepted Original Capital
Securities (or effect appropriate book-entry transfer), together with any
related required documents and
<PAGE> 5
the Letters of Transmittal relating thereto that are in your possession, to the
persons who deposited them.
12. All certificates for reissued Original Capital Securities,
unaccepted Original Capital Securities or for Exchange Capital Securities shall
be forwarded (a) by first-class certified mail, return receipt requested, under
a blanket surety bond protecting you and the Trust from loss or liability
arising out of the non-receipt or non-delivery of such certificates; (b) by
registered mail insured separately for the replacement value of each of such
certificates or (c) by effectuating appropriate book-entry transfer.
13. You are not authorized to pay or offer to pay any concessions,
commissions or solicitation fees to any broker, dealer, bank or other persons or
to engage or utilize any person to solicit tenders.
14. As Exchange Agent hereunder you:
(a) shall have no duties or obligations other than those specifically
set forth in the section of the Prospectus captioned "The Exchange
Offer," the Letter of Transmittal or herein or as may be subsequently
agreed to in writing by you and the Trust;
(b) will be regarded as making no representations and having no
responsibilities as to the validity, sufficiency, value or genuineness
of any of the certificates or the Original Capital Securities
represented thereby deposited with you pursuant to the Exchange Offer,
and will not be required to and will make no representation as to the
validity, value or genuineness of the Exchange Offer or the Letter of
Transmittal or any other disclosure materials delivered in connection
therewith;
(c) shall not be obligated to take any legal action hereunder which
might in your reasonable judgment involve any expense or liability,
unless you shall have been furnished with indemnity reasonably
satisfactory to you;
(d) may reasonably rely on and shall be protected in acting in reliance
upon any certificate, instrument, opinion, notice, letter, telegram or
other document or security delivered to you and reasonably believed by
you to be genuine and to have been signed by the proper party or
parties;
(e) may reasonably act upon any tender, statement, request, agreement or
other instrument whatsoever not only as to its due execution and
validity and effectiveness of its provisions, but also as to the truth
and accuracy of any information contained therein, which you shall in
good faith believe to be genuine or to have been signed or represented
by a proper person or persons;
<PAGE> 6
(f) may rely on and shall be protected in acting upon written or oral
instructions from any Administrator of the Trust or from any Designated
Officer of the Corporation;
(g) may consult with counsel satisfactory to you, including counsel for
the Trust, with respect to any questions relating to your duties and
responsibilities and the advice or opinion of such counsel shall be full
and complete authorization and protection in respect of any action
taken, suffered or omitted to be taken by you hereunder in good faith
and in accordance with the advice or opinion of such counsel, provided
that you shall promptly notify the Corporation of any action taken or
omitted by you in reliance upon such advice or opinion; and
(h) shall not advise any person tendering Original Capital Securities
pursuant to the Exchange Offer as to the wisdom of making such tender or
as to the market value or decline or appreciation in market value of any
Original Capital Securities.
15. You shall take such action as may from time to time be requested
by the Trust or its counsel or any Designated Officer of the Corporation (and
such other action as you may reasonably deem appropriate) to furnish copies of
the Prospectus, Letter of Transmittal and the Notice of Guaranteed Delivery or
such other forms as may be approved from time to time by the Trust or the
Corporation, to all persons requesting such documents and to accept and comply
with telephone requests for information relating to the Exchange Offer, provided
that such information shall relate only to the procedures for accepting (or
withdrawing from) the Exchange Offer. The Trust will furnish you with copies of
such documents at your request. All other requests for information relating to
the Exchange Offer shall be directed to the Trust, Attention: Larry G.
Denniston.
16. You shall advise by facsimile transmission or telephone, and
promptly thereafter confirm in writing to Larry G. Denniston of the Trust, and
such other person or persons as the Trust or the Corporation may request, daily
(and more frequently during the week immediately preceding the Expiration Date
and if otherwise requested) up to and including the Expiration Date, as to the
number of Original Capital Securities which have been tendered pursuant to the
Exchange Offer and the items received by you pursuant to this Agreement,
separately reporting and giving cumulative totals as to items properly received
and items improperly received. In addition, you will also inform, and cooperate
in making available to, the Trust or the Corporation or any such other person or
persons, upon oral request made from time to time on or prior to the Expiration
Date, such other information as it or such person reasonably requests. Such
cooperation shall include, without limitation, the granting by you to the Trust
or the Corporation, and such person as the Trust or the Corporation may request,
of access to those persons on your staff who are responsible for receiving
tenders, in order to ensure
<PAGE> 7
that immediately prior to the Expiration Date the Trust or the Corporation shall
have received information in sufficient detail to enable it to decide whether to
extend the Exchange Offer. You shall prepare a final list of all persons whose
tenders were accepted, the aggregate principal amount of Original Capital
Securities tendered, the aggregate principal amount of Original Capital
Securities accepted and deliver said list to the Trust promptly after the
Expiration Date.
17. Letters of Transmittal and Notices of Guaranteed Delivery shall
be stamped by you as to the date and the time of receipt thereof and shall be
preserved by you for a period of time at least equal to the period of time you
preserve other records pertaining to the transfer of securities.
18. You hereby expressly waive any lien, encumbrance or right of
set-off whatsoever that you may have with respect to funds deposited with you
for the payment of transfer taxes by reasons of amounts, if any, borrowed by the
Trust, or any of its subsidiaries or affiliates pursuant to any loan or credit
agreement with you or for compensation owed to you hereunder.
19. For services rendered as Exchange Agent hereunder, you shall be
entitled to the compensation set forth on Schedule I attached hereto, plus
reasonable out-of-pocket expenses and reasonable attorneys' fees, incurred in
connection with your services hereunder, within 30 days following receipt by the
Corporation of an itemized statement of such expenses and fees in reasonable
detail.
20. (a) The Trust covenants and agrees to indemnify and hold you
(which for purposes of this paragraph shall include your directors, officers and
employees) harmless in your capacity as Exchange Agent hereunder from and
against any and all loss, liability, cost, damage, expense and claim, including
but not limited to reasonable attorneys' fees and expenses, incurred by you as a
result of, arising out of or in connection with the performance by you of your
duties under this Agreement or the compliance by you with the instructions set
forth herein or delivered hereunder; provided, however, that the Trust shall not
be liable for indemnification or otherwise for any loss, liability, cost,
damage, expense or claim arising out of your gross negligence or willful
misconduct. In no case shall the Trust be liable under this indemnity with
respect to any claim against you unless the Trust shall be notified by you, by
letter or by facsimile confirmed by letter, of the written assertion of a claim
against you or of any other action commenced against you, promptly after you
shall have received any such written assertion or notice of commencement of
action. The Trust shall be entitled to participate at its own expense in the
defense of any such claim or other action, and, if the Trust so elects, the
Trust may assume the defense of any suit brought to enforce any such claim;
provided that the Trust shall not be entitled to assume the defense of any such
action if the named parties to such action include both the Trust and you and
representation of both parties by the same legal counsel would, in the written
<PAGE> 8
opinion of counsel to you, be inappropriate due to actual or potential
conflicting interests between them. If the Trust shall assume the defense of any
such suit or threatened action in respect of which indemnification may be sought
hereunder, the Trust shall not be liable for the fees and expenses of any
counsel thereafter retained by you. The Trust shall not be liable under this
paragraph for the fees and expenses of more than one legal counsel for you.
(b) You agree that, without the prior written consent of the Trust
(which consent shall not be unreasonably withheld), you will not settle,
compromise or consent to the entry of any pending or threatened claim, action,
or proceeding in respect of which indemnification could be sought in accordance
with the indemnification provisions of this Agreement (whether or not you or the
Trust or any of its trustees or controlling persons is an actual or potential
party to such claim, action or proceeding), unless such settlement, compromise
or consent includes an unconditional release of the Trust and its trustees and
controlling persons from all liability arising out of such claim, action or
proceeding.
21. You shall arrange to comply with all requirements under the tax
laws of the United States, including those relating to missing Tax
Identification Numbers, and shall file any appropriate reports with the Internal
Revenue Service. The Trust understands that you are required in certain
instances to deduct 31% of the amounts to be paid with respect to interest paid
on the Exchange Capital Securities and proceeds from the sale, exchange,
redemption or retirement of the Exchange Capital Securities from holders who
have not supplied their correct Taxpayer Identification Number or required
certification. Such funds will be turned over to the Internal Revenue Service in
accordance with applicable regulations.
22. You shall notify the Trust of the amount of any transfer taxes
payable in respect of the exchange of Original Capital Securities and, upon
receipt of written approval from the Trust, you shall deliver or cause to be
delivered, in a timely manner to each governmental authority to which any
transfer taxes are payable in respect of the exchange of Original Capital
Securities, your check in the amount of all transfer taxes so payable, and the
Trust shall reimburse you for the amount of any and all transfer taxes payable
in respect of the exchange of Original Capital Securities; provided, however,
that you shall reimburse the Trust for amounts refunded to you in respect of
your payment of any such transfer taxes, at such time as such refund is received
by you.
23. This Agreement and your appointment as Exchange Agent hereunder
shall be construed and enforced in accordance with the laws of the State of New
York applicable to agreements made and to be performed entirely within such
state, and without regard to conflicts of law principles, and shall inure to the
benefit of, and the obligations created hereby shall be binding upon, the
successors
<PAGE> 9
and assigns of each of the parties hereto, and no other person shall have any
rights hereunder.
24. This Agreement may be executed in one or more counterparts, each
of which shall be deemed to be an original and all of which taken together shall
constitute one and the same agreement.
25. In case any provision of this Agreement shall be invalid, illegal
or unenforceable, the validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby.
26. This Agreement shall not be deemed or construed to be modified,
amended, rescinded, canceled or waived, in whole or in part, except by a written
instrument signed by a duly authorized representative of the party to be
charged. This Agreement may not be modified orally.
27. Unless otherwise provided herein, all notices, requests and other
communications to any party hereunder shall be in writing (including facsimile
or similar writing) and shall be given to such party, addressed to it, at its
address or facsimile number set forth below:
If to the Trust:
BSB Capital Trust I
c/o BSB Bancorp, Inc.
58-68 Exchange Street
Binghamton, NY 13902
Facsimile: (607) 779-2492
Attention: Larry G. Denniston
If to the Exchange Agent:
Bankers Trust Company
Corporate Trust & Agency Group
Four Albany Street, 4th Floor
New York, NY 10006
Attention: Irina Golovashchuk
Telephone: (212) 250-4543
Facsimile: (212) 250-6961
28. Unless terminated earlier by the parties hereto, this Agreement
shall terminate 180 days following the Expiration Date. Notwithstanding the
foregoing, Paragraphs 19, 20 and 22 shall survive the termination of this
Agreement. Upon any termination of this Agreement, you shall promptly deliver to
<PAGE> 10
the Trust any certificates for Securities, funds or property then held by you as
Exchange Agent under this Agreement.
29. This Agreement shall be binding and effective as of the date
hereof.
<PAGE> 11
Please acknowledge receipt of this Agreement and confirm the
arrangements herein provided by signing and returning the enclosed copy.
BSB BANCORP, INC.
By:
-----------------------------
Name: Alex S. DePersis
Title: President and Chief Executive Officer
BSB CAPITAL TRUST I
By:
-----------------------------
Name: Larry G. Denniston
Title: Administrator
Accepted as the date first above written:
BANKERS TRUST COMPANY, as Exchange Agent
By:
---------------------------------
Name:
Title:
<PAGE> 12
SCHEDULE I
FEES
BANKERS TRUST COMPANY
CORPORATE TRUST AND AGENCY GROUP
SCHEDULE OF FEES
FOR
BSB CAPITAL TRUST I
8.125% EXCHANGE CAPITAL SECURITIES
<TABLE>
<S> <C>
EXCHANGE AGENT $5,000
--------------
</TABLE>
Covers review of the Letter of Transmittal, the Exchange Agent
Agreement and other related documentation; establishment of accounts
and systems link with depositories; operational and administrative
charges and time spent in connection with the review, receipt and
processing of Letters of Transmittal, Agent's Messages and Notices
of Guaranteed Delivery.
Note: The fees set forth in this schedule are subject to review of documentation
and our internal credit and conflict review. The fees are also subject to change
should circumstances warrant. Out-of-pocket expenses and disbursements,
including counsel fees, incurred in the performance of our duties will be added
to the billed fees. Fees for any services not specifically covered in this or
other related schedules will be based on an appraisal of services rendered.
<PAGE> 1
EXHIBIT 99.4
BSB CAPITAL TRUST I
OFFER FOR ALL OUTSTANDING
8.125% ORIGINAL CAPITAL SECURITIES
IN EXCHANGE FOR
8.125% EXCHANGE CAPITAL SECURITIES
To: Brokers, Dealers, Commercial Banks,
Trust Companies and Other Nominees:
BSB Capital Trust I (the "Trust") is offering, upon and subject to
the terms and conditions set forth in a prospectus dated ________, 1998 (as the
same may be amended or supplemented from time to time, the "Prospectus"), and
the enclosed letter of transmittal (the "Letter of Transmittal"), to exchange
(the "Exchange Offer") its 8.125% Exchange Capital Securities for any and all of
its outstanding 8.125% Original Capital Securities (the "Original Capital
Securities"). The Exchange Offer is being made in order to satisfy certain
obligations of the Trust and BSB Bancorp, Inc. (the "Corporation") contained in
the Registration Rights Agreement, dated July 24, 1998, among the Trust, the
Corporation, and Keefe, Bruyette & Woods, Inc.
We are requesting that you contact your clients for whom you hold
Original Capital Securities regarding the Exchange Offer. For your information
and for forwarding to your clients for whom you hold Original Capital Securities
registered in your name or in the name of your nominee, or who hold Original
Capital Securities registered in their own names, we are enclosing the following
documents:
1. The Prospectus dated ______, 1998;
2. The Letter of Transmittal for your use and for the information (or
the use, where relevant) of your clients;
3. A Notice of Guaranteed Delivery to be used to accept the Exchange
Offer if certificates for Original Capital Securities are not
immediately available or time will not permit all required documents
to reach the Exchange Agent prior to the Expiration Date (as defined
below) or if the procedure for book-entry transfer cannot be
completed on a timely basis;
4. A form of letter which may be sent to your clients for whose
account you hold Original Capital Securities registered in your name
or the name of your nominee, with space provided for obtaining such
clients' instructions with regard to the Exchange Offer; and
5. Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9.
YOUR PROMPT ACTION IS REQUESTED. THE EXCHANGE OFFER WILL EXPIRE AT
5:00 P.M., NEW YORK CITY TIME, ON ____________, 1998, OR ON SUCH LATER DATE OR
TIME TO WHICH THE CORPORATION OR THE TRUST MAY EXTEND THE EXCHANGE OFFER (THE
"EXPIRATION DATE"). THE ORIGINAL CAPITAL SECURITIES TENDERED PURSUANT TO THE
EXCHANGE OFFER MAY BE WITHDRAWN AT ANY TIME BEFORE THE EXPIRATION DATE.
To participate in the Exchange Offer, a duly executed and properly
completed Letter of Transmittal (or facsimile thereof), with any required
signature guarantees and any other required
<PAGE> 2
documents, should be sent to the Exchange Agent and certificates representing
the Original Capital Securities should be delivered to the Exchange Agent, all
in accordance with the instructions set forth in the Letter of Transmittal and
the Prospectus.
If holders of Original Capital Securities wish to tender, but it is
impracticable for them to forward their certificates for Original Capital
Securities prior to the expiration of the Exchange Offer or to comply with the
book-entry transfer procedures on a timely basis, a tender may be effected by
following the guaranteed delivery procedures described in the Prospectus under
"The Exchange Offer --Procedures for Tendering Original Capital Securities --
Guaranteed Delivery."
The Trust will, upon request, reimburse brokers, dealers, commercial
banks and trust companies for reasonable and necessary costs and expenses
incurred by them in forwarding the Prospectus and the related documents to the
beneficial owners of Original Capital Securities held by them as nominee or in a
fiduciary capacity. The Trust will pay or cause to be paid all stock transfer
taxes applicable to the exchange of Original Capital Securities pursuant to the
Exchange Offer, except as set forth in Instruction 6 of the Letter of
Transmittal.
Any inquiries you may have with respect to the Exchange Offer, or
requests for additional copies of the enclosed materials, should be directed to
Bankers Trust Company, the Exchange Agent for the Original Capital Securities,
at its address and telephone number set forth on the front of the Letter of
Transmittal.
Very truly yours,
BSB CAPITAL TRUST I
NOTHING HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL CONSTITUTE YOU OR
ANY PERSON AS AN AGENT OF THE TRUST OR THE EXCHANGE AGENT, OR AUTHORIZE YOU OR
ANY OTHER PERSON TO USE ANY DOCUMENT OR MAKE ANY STATEMENTS ON BEHALF OF EITHER
OF THEM WITH RESPECT TO THE EXCHANGE OFFER, EXCEPT FOR STATEMENTS EXPRESSLY MADE
IN THE PROSPECTUS OR THE LETTER OF TRANSMITTAL.
Enclosures
-2-
<PAGE> 1
EXHIBIT 99.5
BSB CAPITAL TRUST I
OFFER FOR ALL OUTSTANDING
8.125% ORIGINAL CAPITAL SECURITIES
IN EXCHANGE FOR
8.125% EXCHANGE CAPITAL SECURITIES
To Our Clients:
Enclosed for you consideration is a prospectus dated ______, 1998 (as
the same may be amended or supplemented from time to time, the "Prospectus"),
and the related letter of transmittal (the "Letter of Transmittal"), relating to
the offer (the "Exchange Offer") of BSB Capital Trust I (the "Trust") and BSB
Bancorp, Inc. (the "Corporation") to exchange the Trust's 8.125% Exchange
Capital Securities for any and all of the Trust's outstanding 8.125% Original
Capital Securities (the "Original Capital Securities"), upon the terms and
subject to the conditions described in the Prospectus. The Exchange Offer is
being made in order to satisfy certain obligations of the Trust and the
Corporation contained in the Registration Rights Agreement, dated July 24, 1998,
among the Trust, the Corporation, and Keefe, Bruyette & Woods, Inc.
This material is being forwarded to you as the beneficial owner of
the Original Capital Securities carried by us in your account but not registered
in your name. A TENDER OF SUCH ORIGINAL CAPITAL SECURITIES MAY ONLY BE MADE BY
US AS THE HOLDER OF RECORD AND PURSUANT TO YOUR INSTRUCTIONS.
Accordingly, we request instructions as to whether you wish us to
tender on your behalf the Original Capital Securities held by us for your
account, pursuant to the terms and conditions set forth in the enclosed
Prospectus and Letter of Transmittal.
Your instructions should be forwarded to us as promptly as possible
in order to permit us to tender the Original Capital Securities on your behalf
in accordance with the provisions of the Exchange Offer. The Exchange Offer
shall expire at 5:00 p.m., New York City time, on __________, 1998, or on such
later date or time to which the Corporation or the Trust may extend the Exchange
Offer. Any Original Capital Securities tendered pursuant to the Exchange Offer
may be withdrawn at any time before the Expiration Date.
Your attention is directed to the following:
1. The Exchange Offer is for any and all Original Capital
Securities.
2. The Exchange Offer is subject to certain conditions set
forth in the Prospectus in the section captioned "The
Exchange Offer--Conditions to the Exchange Offer."
3. Any transfer taxes incident to the transfer of Original
Capital Securities from the holder to the Corporation will
be paid by the Corporation, except as otherwise provided
in the Instructions in the Letter of Transmittal.
4. The Exchange Offer expires at 5:00 p.m., New York City
time, on ____________, 1998, or on such later date or time
to which the Corporation or the Trust may extend the
Exchange Offer.
If you wish to have us tender your Original Capital Securities,
please so instruct us by completing, executing and returning to us the
instruction form on the back of this letter. THE LETTER OF TRANSMITTAL IS
FURNISHED TO YOU FOR INFORMATION ONLY AND MAY NOT BE USED DIRECTLY BY YOU TO
TENDER ORIGINAL CAPITAL SECURITIES.
<PAGE> 2
INSTRUCTIONS WITH RESPECT TO THE EXCHANGE OFFER
The undersigned acknowledge(s) receipt of your letter and the
enclosed material referred to therein relating to the Exchange Offer made by BSB
Capital Trust I with respect to its Original Capital Securities.
This will instruct you to tender the Original Capital Securities held
by you for the account of the undersigned, upon and subject to the terms and
conditions set forth in the Prospectus and the related Letter of Transmittal.
Please tender the Original Capital Securities held by you for my
account as indicated below:
AGGREGATE PRINCIPAL AMOUNT AT MATURITY
OF ORIGINAL CAPITAL SECURITIES TENDERED
---------------------------------------
8.125% Original Capital Securities
------------------------------------------
[ ] Please do not tender any Original Capital Securities held by you for my
account.
Dated: ___________________, 1998
------------------------------------------
------------------------------------------
Signature(s)
------------------------------------------
------------------------------------------
Please print name(s) here
------------------------------------------
------------------------------------------
------------------------------------------
Addresses
------------------------------------------
Area code and telephone number
------------------------------------------
Taxpayer Identification or Social
Security Number(s)
None of the Original Capital Securities held by us for your account
will be tendered unless we receive written instructions from you to do so.
Unless a specific contrary instruction is given in the space provided, your
signature(s) hereon shall constitute an instruction to us to tender all the
Original Capital Securities held by us for your account.
2
