<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON FEBRUARY 9, 1998
REGISTRATION NO. 333-41215
REGISTRATION NO. 333-41215-01
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------------
POST-EFFECTIVE AMENDMENT NO. 1 TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
--------------------------
CAPITOL BANCORP LTD.
CAPITOL TRUST I
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
(EXACT NAME OF CO-REGISTRANT AS SPECIFIED IN ITS CHARTER)
MICHIGAN
DELAWARE
(STATE OR OTHER JURISDICTION OF INCORPORATION OR ORGANIZATION)
(STATE OR OTHER JURISDICTION OF INCORPORATION OR ORGANIZATION)
38-2761672
38-3381371
(I.R.S. EMPLOYER IDENTIFICATION NO.)
(I.R.S. EMPLOYER IDENTIFICATION NO.)
200 WASHINGTON SQUARE NORTH, 4TH FLOOR, LANSING, MICHIGAN 48933
(517) 487-6555
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANT'S AND CO-REGISTRANT'S PRINCIPAL EXECUTIVE OFFICE)
- -------------------------------------------------------------------------------
JOSEPH D. REID
CHAIRMAN OF THE BOARD, PRESIDENT AND CHIEF EXECUTIVE OFFICER
CAPITOL BANCORP LTD.
200 WASHINGTON SQUARE NORTH, FOURTH FLOOR
LANSING, MICHIGAN 48933
(517) 487-6555
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF AGENT FOR SERVICE)
- -------------------------------------------------------------------------------
WITH COPIES TO:
JOHN SHARP, ESQ. DONALD L. JOHNSON,ESQ.
STROBL & BORDA, P.C. VARNUM, RIDDERING, SCHMIDT &
300 E. LONG LAKE ROAD, SUITE 200 HOWLETT LLP
BLOOMFIELD HILLS, MI 48304 333 BRIDGE STREET, N.W.
(248) 540-2300 GRAND RAPIDS, MICHIGAN 49504
(616) 336-6000
<PAGE> 2
Date of commencement of proposed sale to the public: December 19, 1997
If any of the securities being registered on this Form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, check the following box. / /
If the registrant elects to deliver its latest annual report to
security holders, or a complete and legible facsimile thereof, pursuant to Item
11(a)(1)of this Form, check the following box. / /
If this Form is filed to register additional securities for an
offering pursuant to Rule 462(b) under the Securities Act, check the following
box and list the Securities Act registration statement number of earlier
effective registration statement for the same offering. / /
If this Form is a post-effective amendment filed pursuant to Rule
462(c) under the Securities Act, check the following box and list the
Securities Act registration statement number of the earlier effective
registration statement for the same offering. / /
If delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box. / /
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
- ----------------------------------------------------------------------------------------------
PROPOSED
PROPOSED MAXIMUM
AMOUNT MAXIMUM AGGREGATE
TITLE OF EACH CLASS OF TO BE OFFERING PRICE OFFERING AMOUNT OF
SECURITIES TO BE REGISTERED PER UNIT PRICE REGISTRATION
REGISTERED F1 FEE F2
- ----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Preferred Securities of
Capitol Trust I 2,530,000 $10.00 $25,300,000 $7,667.00
- ----------------------------------------------------------------------------------------------
Subordinated Debentures of
Capitol Bancorp Ltd. F3, F4
- ----------------------------------------------------------------------------------------------
Guarantee of
Capitol Bancorp Ltd.
With Respect to
Preferred Securities F4
- ----------------------------------------------------------------------------------------------
</TABLE>
<F1>Includes 330,000 Preferred Securities sold by Capitol Trust I to cover
over-allotments.
<F2>The registration fee was calculated in accordance with Rule 457(n) under
the Securities Act of 1933, as amended, and was previously paid..
<F3>The Subordinated Debentures have been purchased by Capitol Trust I with the
proceeds of the sale of the Preferred Securities. Such securities may later be
distributed for no additional consideration to the holders of the Preferred
Securities of Capitol Trust I upon its dissolution and the distribution of its
assets.
2
<PAGE> 3
<F4>This Registration Statement is deemed to cover the Subordinated Debentures
of Capitol Bancorp Ltd., the rights of holders of Subordinated Debentures of
Capitol Bancorp Ltd., under the Indenture, and the rights of holders of the
Preferred Securities under the Trust Agreement, the Guarantee and the Expense
Agreement entered into by Capitol Bancorp Ltd. No separate consideration will
be received for the Guarantee.
3
<PAGE> 4
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the undersigned
registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-3 and has duly caused this
Post-Effective Amendment No: 1 to Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in Lansing, Michigan on
February 9, 1998.
CAPITOL BANCORP LTD.,
A MICHIGAN CORPORATION
By: /S/ JOSEPH D. REID
------------------
JOSEPH D. REID
Chairman of the Board, President
and Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, the undersigned
registrant certifies that it has reasonable grounds to believe that it meets
all the requirements for filing on Form S-3 and has duly caused this
Post-Effective Amendment No. 1 to Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in Lansing, Michigan on
February 9, 1998.
CAPITOL TRUST I
By: /S/ JOSEPH D. REID
------------------
JOSEPH D. REID
Trustee
By: /S/ ROBERT C. CARR
------------------
ROBERT C. CARR
Trustee
By: /S/ LINDA D. PAVONA
-------------------
LINDA D. PAVONA
Trustee
<PAGE> 5
Signature Date Title
/S/ JOSEPH D. REID Chairman of the Board, President
- ------------------ and Chief Executive Officer,
JOSEPH D. REID Director (Principal Executive
Officer)
/S/ LEE W. HENDRICKSON Chief Financial Officer (Principal
- ---------------------- Financial and Accounting Officer)
LEE W. HENDRICKSON
/S/ ROBERT C. CARR Treasurer, Director
- -------------------
ROBERT C. CARR
/S/ DAVID O'LEARY* Secretary, Director
- ------------------
DAVID O'LEARY*
______________________ Director
LOUIS G. ALLEN
/S/ PAUL R. BALLARD* Director
- --------------------
PAUL R. BALLARD*
/S/ DAVID L. BECKER* Director
- --------------------
DAVID L. BECKER*
/S/ DOUGLAS E. CRIST* Director
- ---------------------
DOUGLAS E. CRIST*
/S/ RICHARD L. DORNER* Director
- ----------------------
RICHARD L. DORNER*
/S/ GARY A. FALKENBERG* Director
- -----------------------
GARY A. FALKENBERG*
/S/ JOEL I. FERGUSON* Director
- ---------------------
JOEL I. FERGUSON*
_______________________ Director
KATHLEEN A. GASKIN
/S/ H. NICHOLS GENOVA* Director
- ----------------------
H. NICHOLS GENOVA*
<PAGE> 6
/S/ L. DOUGLAS JOHNS* Director
- ---------------------
L. DOUGLAS JOHNS*
/S/ JAMES R. KAYE* Director
- ------------------
JAMES R. KAYE*
_____________________ Director
LEONARD MAAS
_____________________ Director
LYLE R. MILLER
*/S/ JOSEPH D. REID
------------------
By: JOSEPH D. REID
Attorney-in-Fact
<PAGE> 7
EXHIBIT INDEX
EXHIBIT DESCRIPTION
NUMBER
- -------
1.1 Underwriting Agreement.
4.1 Indenture.
4.2 Subordinated Debenture (included as an exhibit to Exhibit 4.1).
4.3* Certificate of Trust of CAPITOL TRUST I.
4.4* Trust Agreement of CAPITOL TRUST I.
4.5 Amended and Restated Trust Agreement.
4.6 Preferred Securities Guarantee Agreement.
4.7 Agreement as to Expenses and Liabilities.
4.8 Certificate Evidencing Cumulative Trust Preferred Securities of Capital
Trust I
5.1* Opinion of Strobl & Borda, P.C., as to the validity of the issuance of the
Subordinated Debentures.
5.2* Opinion of Richards, Layton & Finger, special Delaware counsel, as to the
legality of the Preferred Securities.
8.1* Opinion of Strobl & Borda, P.C., as to certain federal income tax matters.
12.1+ Statements Regarding Computation of Ratio of Earnings to Fixed Charges.
23.1* Consent of BDO Seidman, LLP, Independent Accountants.
23.2* Consent of Strobl & Borda, P.C.. (included in their opinions filed
herewith as Exhibits 5.1 and 8.1).
23.3* Consent of Richards, Layton & Finger (included in their opinion filed
herewith as Exhibit 5.2).
24.1* Power of Attorney (included on the signature page).
25.1* Form T-1 Statement of Eligibility of The First National Bank of Chicago
to act as trustee under the Indenture.
25.2* Form T-1 Statement of Eligibility of The First National Bank of Chicago
to act as trustee under the Amended and Restated Trust Agreement.
25.3* Form T-1 Statement of Eligibility of The First National Bank of Chicago
to act as trustee under the Preferred Securities Guarantee Agreement.
*Incorporated by reference to Form S-3, File Nos.: 333-41215 and 333-
41215-01, filed November 26, 1997.
+Incorporated by reference to Pre-Effective Amendment No: 1 to Form S-3, File
Nos: 333-41215 and 333-41215-01, filed December 11, 1997.
INDEX
<PAGE> 1
EXHIBIT 1.1
CAPITOL TRUST I
8.50% CUMULATIVE TRUST PREFERRED SECURITIES
UNDERWRITING AGREEMENT
December 15,1997
ROBERT W. BAIRD & CO. INCORPORATED
STIFEL, NICOLAUS & COMPANY INCORPORATED
HOWE BARNES INVESTMENTS, INC.
c/o Robert W. Baird & Co. Incorporated
777 East Wisconsin Avenue
Milwaukee, Wisconsin 53202
Ladies and Gentlemen:
SECTION 1. Introductory. Capitol Bancorp Ltd., a Michigan
corporation (the "Company"), and its financing subsidiary Capitol Trust I, a
Delaware business trust (the "Trust," and hereinafter together with the Company
the "Offerors"), propose that the Trust issue and sell 2,200,000 of the Trust's
8.50% Cumulative Trust Preferred Securities with a liquidation amount of
$10.00 per preferred security representing undivided beneficial interests in
the assets of the Trust (the "Preferred Securities"), to be issued under the
Trust Agreement (as hereinafter defined), the terms of which are more fully
described in the Prospectus (as hereinafter defined) to Robert W. Baird & Co.
Incorporated, Stifel, Nicolaus & Company Incorporated and Howe Barnes
Investments, Inc. (the "Underwriters"), who are acting severally and not
jointly. The aforementioned Preferred Securities to be sold to the
Underwriters are herein called "Firm Preferred Securities." In addition, the
Offerors have agreed to grant to the Underwriters an option to purchase up to
330,000 additional Preferred Securities (the "Option Preferred Securities") as
provided in section 5(c) hereof. The Firm Preferred Securities and, to the
extent such option is exercised, the Option Preferred Securities are
hereinafter collectively referred to as the "Designated Preferred Securities."
The Offerors propose that the Trust issue the Designated Preferred
Securities pursuant to an Amended and Restated Trust Agreement among The First
National Bank of Chicago, as Property Trustee, First Chicago Delaware, Inc., as
Delaware Trustee, the Administrative Trustee named therein, and the Company in
substantially the form previously delivered to the Underwriters. This trust
agreement is referred to in this Agreement as the "Trust Agreement." The
Company will purchase from the Trust its common securities ("Common
Securities"). In connection with the issuance of the Designated Preferred
Securities, the Company proposes (i) to issue its Subordinated Debentures (the
"Debentures") pursuant to an Indenture, dated as of December 18, 1997, between
the Company and The First National Bank of Chicago as Indenture Trustee
(the "Indenture") and (ii) to guarantee the Designated Preferred Securities
pursuant to a Guarantee Agreement, dated as of December 18, 1997, between
the Company and The First National Bank of Chicago, as Guarantee Trustee (the
<PAGE> 2
Robert W. Baird & Co. Incorporated
December 15, 1997
Page 2
"Guarantee"), to the extent described in the Guarantee. Pursuant to an
Agreement as to Expenses and Liabilities, dated as of December 18, 1997,
between the Company and the Trust ("Expense Agreement"), the Company
has guaranteed payment of all of the Trust's costs, expenses and liabilities
other than obligations of the Trust to pay holders of the Designated Preferred
Securities amounts due such holders pursuant to the terms of the Designated
Preferred Securities. The Trust Agreement, the Indenture, Guarantee, Expense
Agreement and this Agreement are collectively referred to in this Agreement as
the "Operative Documents." Capitalized terms used in this Agreement without
definition have the respective meanings specified in the Prospectus (as
hereinafter defined).
The Underwriters have advised the Offerors that the Underwriters
propose to make a public offering of their respective portion of the Designated
Preferred Securities as soon hereafter as in their judgment is advisable and
that the public offering price of the Designated Preferred Securities initially
will be $10.00 per security.
The Offerors hereby confirm their agreements with the Underwriters as
follows:
SECTION 2. Representations and Warranties of the Offerors. The
Offerors, jointly and severally, represent and warrant to, and agree with, the
several Underwriters, and shall be deemed to represent and warrant to the
several Underwriters on each Closing Date (as hereinafter defined), that:
(a) The Company and each of the subsidiaries of the
Company (both directly and indirectly owned) that are listed in the Company's
Annual Report on Form 10-KSB for the year ended December 31, 1996, and its
Quarterly Report on Form 10Q for the nine months ended September 30, 1997
("Recent SEC Reports") incorporated by reference into the Registration
Statement (as hereinafter defined) (individually, a "Subsidiary" and
collectively, the "Subsidiaries") has been duly incorporated and is validly
existing as a corporation and in good standing under the laws of its
jurisdiction of incorporation, with full corporate power and authority to own,
lease and operate its properties and to conduct its business as presently
conducted and described in the Prospectus (as hereinafter defined) and the
Registration Statement; each of the Company and the Subsidiaries is duly
registered and qualified to do business as a foreign corporation under the laws
of, and is in good standing as such in, each jurisdiction in which such
registration or qualification is required, except where the failure to so
register or qualify would not have a material adverse effect on the condition
(financial or other), business, property, net worth, results of operations or
prospects of the Company and the Subsidiaries, taken as a whole ("Material
Adverse Effect"); and no proceeding has been instituted in any such
jurisdiction revoking, limiting or curtailing, or seeking to revoke, limit or
curtail, such power and authority or qualification. Complete and correct
copies of the Articles of Incorporation and Bylaws, as amended or restated
("Articles of Incorporation" and "Bylaws," respectively), of the Company and
each of the Subsidiaries as in effect on the date hereof have been delivered to
the Underwriters and no changes thereto will be made on or subsequent to the
date hereof and prior to each Closing Date. Each of the Company and Sun
Community Bancorp Limited, a second tier
<PAGE> 3
Robert W. Baird & Co. Incorporated
December 15, 1997
Page 3
bank holding company incorporated under the laws of Arizona, is duly registered
as a bank holding company under the Bank Holding Company Act of 1956, as
amended ("Bank Holding Company Act"). The deposit accounts of each Subsidiary
that is a bank ("Bank Subsidiary") are insured by the Bank Insurance Fund
administered by the Federal Deposit Insurance Corporation (the "FDIC") up to
the maximum amount provided by law, except to the extent the Prospectus
discloses such deposit accounts are insured by the Savings Association
Insurance Fund administered by the FDIC and to such extent the deposit
accounts are so insured up to the maximum amount provided by law; and no
proceedings for the modification, termination or revocation of such insurance
are pending or, to the knowledge of the Company, threatened.
(b) The Trust has been duly created and is validly
existing as a statutory business trust in good standing under the Delaware
Business Trust Act with the power and authority (trust and other) to own its
property and conduct its business as described in the Registration Statement
and Prospectus, to issue and sell its common securities to the Company pursuant
to the Trust Agreement, to issue and sell the Designated Preferred Securities,
to enter into and perform its obligations under the Operative Documents, as
applicable, and the Designated Preferred Securities and to consummate the
transactions herein contemplated; the Trust has no subsidiaries and is duly
qualified to transact business; the Trust has conducted and will conduct no
business other than the transactions contemplated by this Agreement and
described in the Prospectus; the Trust is not a party to or bound by any
agreement or instrument other than the applicable Operative Documents and the
agreements and instruments contemplated by the Trust Agreement and described in
the Prospectus; the Trust has no liabilities or obligations other than those
arising out of the transactions contemplated by this Agreement and the Trust
Agreement and described in the Prospectus; the Trust is not a party to or
subject to any action, suit, or proceeding of any nature; the Trust is not, and
at the Closing Date or any Option Closing Date will not be, to the knowledge of
the Offerors, classified as an association taxable as a corporation for United
States federal income tax purposes; and the Trust is, and as of the Closing
Date or any Option Closing Date will be, treated as a consolidated subsidiary
of the Company pursuant to generally accepted accounting principles.
(c) The capital stock of the Company and the common
securities of the Trust conform to the description thereof contained in the
Prospectus and the Registration Statement and have been duly authorized and are
validly issued, fully paid and nonassessable, and no such shares were issued in
violation of the preemptive or similar rights of a security holder of either
Offeror. Except as described in the Prospectus, there are no outstanding
options, warrants or other rights of any description, contractual or otherwise,
entitling any person to be issued any class of security of the Company, the
Trust, or any Subsidiary.
(d) Except for the Subsidiaries and the Trust, and as
otherwise set forth in the Prospectus, the Offerors have no subsidiaries and do
not own any equity interest in or control, directly or indirectly, any other
corporation, limited liability company, partnership, joint venture,
association, trust or other business organization. Except as stated in the
Company's Recent SEC Reports, the Company owns directly all of the issued and
outstanding capital securities of the
<PAGE> 4
Robert W. Baird & Co. Incorporated
December 15, 1997
Page 4
Trust and each Subsidiary, free and clear of any and all liens, claims,
encumbrances or security interests, and all such capital securities have been
duly authorized and validly issued and is fully paid and nonassessable (except
to the extent provided in 12 U.S.C. Section 55, 12 U.S.C. Section 1831o, or
Section 201 of the Michigan Banking Code of 1969, as amended). There are no
outstanding options, warrants or other rights of any description, contractual
or otherwise, entitling any person to subscribe for or purchase any shares of
capital securities of the Trust or any Subsidiary.
(e) The Company has full corporate power and authority to
enter into and perform this Agreement, and the execution and delivery by the
Company of this Agreement and the performance by the Company of its obligations
under the Operative Documents and the consummation of the transactions
described herein, have been duly authorized with respect to the Company by all
necessary corporate or other action and will not: (i) violate any provisions
of the Articles of Incorporation or Bylaws or governing documents of the
Company or any Subsidiary; (ii) violate any provisions of, or result in the
breach, modification or termination of, or constitute a default under, any
provision of any agreement, lease, franchise, license, indenture, permit,
mortgage, deed of trust, evidence of indebtedness or other instrument to which
the Company or any Subsidiary is a party or by which the Company or any
Subsidiary, or any property owned or leased by the Company or any Subsidiary,
may be bound or affected; (iii) violate any statute, ordinance, rule or
regulation applicable to the Company or any Subsidiary, or order or decree of
any court, regulatory or governmental body, arbitrator, administrative agency
or instrumentality of the United States or other country or jurisdiction having
jurisdiction over the Company or any Subsidiary; or (iv) result in the creation
or imposition of any lien, charge or encumbrance upon any property or assets of
the Company or any Subsidiary. No consent, approval, authorization or other
order of any court, regulatory or governmental body, arbitrator, administrative
agency or instrumentality of the United States or other country or jurisdiction
is required for the execution and delivery of the Operative Documents by the
Company, the performance of its obligations under the Operative Documents or
the consummation of the transactions contemplated hereby, except for compliance
with the Act, the Securities Exchange Act of 1934, as amended, and the
regulations thereunder (together, the "Exchange Act"), the Blue Sky Laws
applicable to the public offering of the Designated Preferred Securities by the
several Underwriters and the clearance of such offering and the underwriting
arrangements evidenced hereby with the National Association of Securities
Dealers, Inc. (the "NASD"). This Agreement has been duly executed and
delivered by and on behalf of the Company and is a valid and binding agreement
of the Company enforceable against the Company in accordance with its terms.
(f) A registration statement on Form S-3 (Reg. Nos.
333-41215 and 333-41215-01) with respect to the Designated Preferred
Securities, the Guarantee, and up to $26,082,474 aggregate principal amount of
Debentures, including a preliminary form of prospectus, has been carefully
prepared by the Offerors in conformity with the requirements of the Act and the
Trust Indenture Act of 1939, as amended (the "Trust Indenture Act"), and has
been filed with the Securities and Exchange Commission (the "Commission"). The
conditions for use of Form S-3, set forth in the
<PAGE> 5
Robert W. Baird & Co. Incorporated
December15, 1997
Page 5
General Instructions thereto, have been satisfied. Such registration
statement, as finally amended and revised at the time such registration
statement was or is declared effective by the Commission (including the
information contained in the form of final prospectus, if any, filed with the
Commission pursuant to Rule 424(b) and Rule 430A under the Act and deemed to be
part of the registration statement if the registration statement has been
declared effective pursuant to Rule 430A(b)) and as thereafter amended by
post-effective amendment, if any, is herein referred to as the "Registration
Statement." The related final prospectus in the form first filed with the
Commission pursuant to Rule 424(b) or, if no such filing is required, as
included in the Registration Statement, or any supplement thereto, is herein
referred to as the "Prospectus." The prospectus subject to completion in the
form included in the Registration Statement at the time of the initial filing
of the Registration Statement with the Commission, and each such prospectus as
amended from time to time until the date of the Prospectus, is referred to
herein as the "Preliminary Prospectus." Reference made herein to each
Preliminary Prospectus or the Prospectus, as amended or supplemented, shall
include all documents and information incorporated by reference therein and
shall be deemed to refer to and include any documents filed after the date of
such Preliminary Prospectus or Prospectus, as the case may be, and so
incorporated by reference, under the Exchange Act. The Offerors have prepared
and filed such amendments to the Registration Statement since its initial
filing with the Commission, if any, as may have been required to the date
hereof, and will file such additional amendments thereto as may hereafter be
required. There have been delivered to the Underwriters signed copies of the
Registration Statement and each amendment thereto, if any, including any
document filed under the Exchange Act and deemed to be incorporated by
reference into the Registration Statement, together with copies of each exhibit
filed therewith or incorporated by reference therein, and such number of
conformed copies for each of the Underwriters of the Registration Statement and
each amendment thereto, if any (but without exhibits), and of each Preliminary
Prospectus and of the Prospectus as the Underwriters have requested. The date
on which the Registration Statement becomes effective is hereinafter referred
to as the Effective Date. Each copy of the Registration Statement and each
Preliminary Prospectus and the Prospectus delivered to the Underwriters for use
in connection with this offering was substantively identical to the
electronically transmitted copies thereof filed with the Commission pursuant to
the Commission's Electronic Data Gathering Analysis and Retrieval system
("EDGAR").
(g) Neither the Commission nor any state securities
commission has issued any order preventing or suspending the use of any
Preliminary Prospectus, nor, to the knowledge of the Offerors, have any
proceedings for that purpose been initiated or threatened, and each Preliminary
Prospectus filed with the Commission as part of the Registration Statement as
originally filed or as part of any amendment or supplement thereto complied
when so filed with the requirements of the Act and, as of its date, did not
include any 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. As of the Effective Date, and at all times subsequent thereto
up to each Closing Date, the Registration Statement and the Prospectus
contained or will contain all statements that are required to be stated therein
in accordance with the Act and conformed or will conform in all respects to the
requirements of the Act, and neither the Registration Statement
<PAGE> 6
Robert W. Baird & Co. Incorporated
December 15, 1997
Page 6
nor the Prospectus included or will include any untrue statement of a material
fact or omitted or will omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading. Neither
the Offerors, nor any person that controls, are controlled by (including the
Subsidiaries) or are under common control with the Offerors, has distributed or
will distribute prior to each Closing Date any offering material in connection
with the offering and sale of the Designated Preferred Securities other than a
Preliminary Prospectus, the Prospectus, the Registration Statement or other
materials permitted by the Act and provided to the Underwriters.
(h) The reports filed with the Commission by the Company
under the Exchange Act at the time they were filed with the Commission,
complied as to form in all material respects with the requirements of the
Exchange Act and did 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 in which they were made, not
misleading.
(i) The documents that are incorporated by reference in
each Preliminary Prospectus, the Prospectus or the Registration Statement or
from which information is so incorporated by reference, when they became
effective or were filed with the Commission, as the case may be, complied with
the requirements of the Act or the Exchange Act, as applicable, and any
document so filed and incorporated by reference subsequent to the effective
date of the Registration Statement shall, when it is filed with the Commission,
comply with the requirements of the Act and the Exchange Act, as applicable,
and when read together with the other information included in such Preliminary
Prospectus, the Prospectus or the Registration Statement, as the case may be,
do 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.
(j) BDO Seidman LLP which has expressed its opinion with
respect to the consolidated financial statements and schedules filed with the
Commission or incorporated by reference and included as a part of each
Preliminary Prospectus, the Prospectus or the Registration Statement are
independent accountants as required by the Act.
(k) The consolidated financial statements and the related
notes thereto included or incorporated by reference in each Preliminary
Prospectus, the Prospectus and the Registration Statement present fairly the
financial position, results of operations and cash flows of the Company and the
Subsidiaries as of their respective dates or for the respective periods covered
thereby, all in conformity with generally accepted accounting principles
consistently applied throughout the periods involved. The financial statement
schedules, if any, included in the Registration Statement present fairly the
information required to be stated therein on a basis consistent with the
consolidated financial statements of the Company and Subsidiaries contained
therein. The Company and Subsidiaries had an outstanding capitalization as set
forth in the Registration Statement and under "Capitalization" in the
Prospectus as of the date indicated therein, and there has been no material
change thereto since such date except as disclosed in the
<PAGE> 7
Robert W. Baird & Co. Incorporated
December 15, 1997
Page 7
Prospectus. The financial and statistical information and data relating to the
Company and Subsidiaries in each Preliminary Prospectus, the Prospectus and the
Registration Statement are accurately presented and prepared on a basis
consistent with the audited consolidated financial statements and books and
records of the Company and Subsidiaries. The consolidated financial statements
and schedules and the related notes thereto included or incorporated by
reference in each Preliminary Prospectus, the Prospectus or the Registration
Statement are the only such financial statements and schedules required under
the Act to be set forth therein.
(l) The Trust is not in violation of the trust
certificate of the Trust filed with the State of Delaware (the "Trust
Certificate") or the Trust Agreement, and neither the Company nor any of its
Subsidiaries is in violation of its Articles of Incorporation or By-laws; none
of the Trust, the Company or any of its Subsidiaries is in default in the
performance or observance of any obligation, agreement, covenant or condition
contained in any contract, indenture, mortgage, deed of trust, loan or credit
agreement, note, lease or other agreement or instrument to which it is a party
or by which it or any of them may be bound, or to which any of its property or
assets is subject (collectively, "Agreements and Instruments") except for such
defaults under Agreements and Instruments that would not result in a Material
Adverse Effect; and (A) the execution, delivery and performance of the
Operative Documents by the Trust or the Company, as the case may be, (B) the
issuance, sale and delivery of the Preferred Securities, the Subordinated
Debentures, and the Guarantee, (C) the consummation of the transactions
contemplated by the Operative Documents, and (D) compliance by the Offerors
with the terms of the Operative Documents to which they are a party have been
duly authorized by all necessary corporate action on the part of the Company
and, with respect to the matters described in sub-clauses (A), (B), (C) and (D)
of this Agreement, at the Closing Time, will have been duly authorized by all
necessary action on the part of the Trust, and none of the actions referred to
in subclause (A) through (C) above violate, conflict with or constitute a
breach of or, default or Repayment Event (as defined below), and will not,
whether with or without the giving of notice or passage of time or both,
violate, conflict with or constitute a breach of, or default or Repayment Event
under, or result in the creation or imposition of any security interest,
mortgage, pledge, lien, charge, encumbrance or equitable right upon any
property or assets of the Trust, the Company, or any of the Company's
Subsidiaries pursuant to, the Agreements and Instruments (except for such
conflicts, violations, breaches or defaults or liens, charges or encumbrances
that would not result in a Material Adverse Effect), nor will such action
result in any violation of the provisions of the Articles of Incorporation or
By-laws of the Company or any of its Subsidiaries or the Trust Agreement or the
Trust Certificate or violation by the Company or any of its Subsidiaries of any
applicable law, statute, rule, regulation, judgment, order, writ or decree of
any government, government authority, agency or instrumentality or court,
domestic or foreign, including, without limitation, the Board of Governors of
the Federal Reserve System, the Office of the Comptroller of the Currency, the
Michigan Financial Institutions Bureau, the Arizona Department of Banking, and
the Federal Deposit Insurance Corporation (each, a "Government Entity"). As
used in this Agreement, a "Repayment Event" means any event or condition which
gives the holder of any note, debenture or other evidence of indebtedness (or
any person acting on such holder's behalf) the right to require the repurchase,
redemption or repayment of all or a portion of such
<PAGE> 8
Robert W. Baird & Co. Incorporated
December 15, 1997
Page 8
indebtedness by the Trust, the Company or any of the Company's Subsidiaries.
Neither of the Offerors nor any Subsidiary has received notice of any violation
of any applicable statute, ordinance, order, rule or regulation applicable to
either of the Offerors or any Subsidiary. The Offerors and each Subsidiary
have obtained and hold, and are in compliance with, all permits, certificates,
licenses, approvals, registrations, franchises, consents and authorizations of
governmental or regulatory authorities required under all laws, rules and
regulations in connection with their businesses (hereinafter "permit" or
"permits"), and all of such permits are in full force and effect; and the
Offerors and each Subsidiary have fulfilled and performed all of their
respective obligations with respect to each such permit and no event has
occurred which would result in, or after notice or lapse of time would result
in, revocation or termination of any such permit or result in any other
impairment of the rights of the holder of such permit. Neither of the Offerors
nor any Subsidiary is or has been (by virtue of any action, omission to act,
contract to which it is a party or other occurrence) in violation of any
applicable foreign, federal, state, municipal or local statutes, laws,
ordinances, rules, regulations or orders (including those relating to
environmental protection, occupational safety and health and equal employment
practices) heretofore or currently in effect.
(m) There are no legal or governmental proceedings or
investigations pending or, to the knowledge of the Offerors, threatened to
which the Offerors or any Subsidiary are or may be a party or to which any
property owned or leased by either of the Offerors or any Subsidiary is or may
be subject, including, without limitation, any such proceedings that are
related to environmental or employment discrimination matters, which are
required to be described in the Registration Statement or the Prospectus which
are not so described, or which question the validity of this Agreement or any
action taken or to be taken pursuant hereto. Except as described in the
Registration Statement or the Prospectus, neither of the Offerors nor any
Subsidiary: (i) is in violation of any statute, ordinance, rule or regulation,
or any decision, order or decree of any court, regulatory body, arbitrator,
administrative agency or other instrumentality of the United States or other
country or jurisdiction having jurisdiction over the Offerors or such
Subsidiary relating to the use, disposal or release of hazardous or toxic
substances or relating to the protection or restoration of the environment or
human exposure to hazardous or toxic substances (collectively, "environmental
laws"); (ii) owns or operates any real property contaminated with any substance
that is subject to any environmental laws; (iii) is liable for any off-site
disposal or contamination pursuant to any environmental laws; or (iv) is
subject to any claim relating to any environmental laws, which violation,
contamination, liability or claim could have a Material Adverse Effect.
(n) There is no transaction, relationship, contract,
instrument, obligation, agreement or other document required to be described in
the Registration Statement or the Prospectus or to be filed or deemed to be
filed as an exhibit to the Registration Statement by the Act, which has not
been described or filed as required. All such contracts or agreements to which
the Offerors or any Subsidiary is a party have been duly authorized, executed
and delivered by the Offerors or such Subsidiary, constitute valid and binding
agreements of the
<PAGE> 9
Robert W. Baird & Co. Incorporated
December 15, 1997
Page 9
Offerors or such Subsidiary, and are enforceable by and against the Offerors or
such Subsidiary, in accordance with the respective terms thereof.
(o) The Company or Subsidiaries have good and valid title
to all property and assets reflected as owned by the Company or such Subsidiary
in the Company's consolidated financial statements included or incorporated by
reference in the Registration Statement (or elsewhere in the Registration
Statement or the Prospectus), free and clear of all liens, claims, mortgages,
security interests or other encumbrance of any kind or nature whatsoever except
those, if any, reflected in such financial statements (or elsewhere in the
Registration Statement or the Prospectus). All property (real and personal)
held or used by the Company or a Subsidiary under leases, licenses, franchises
or other agreements is held by the Company or such Subsidiary under valid,
subsisting, binding and enforceable leases, franchises, licenses or other
agreements.
(p) Neither of the Offerors nor any person that controls,
is controlled by (including the Subsidiaries) or is under common control with
the Offerors has taken or will take, directly or indirectly, any action
designed to cause or result in, or which constituted, or which could cause or
result in, stabilization or manipulation, under the Exchange Act or otherwise,
of the price of any security of either of the Offerors to facilitate the sale
or resale of the Designated Preferred Securities.
(q) Except as described in the Registration Statement or
the Prospectus, since the respective dates as of which information is given in
the Registration Statement or the Prospectus and prior to each Closing Date:
(i) neither of the Offerors nor any Subsidiary has or will have incurred any
liability or obligation, direct or contingent, or entered into any transaction,
that is material to the Offerors, except as in the ordinary course of business;
(ii) neither of the Offerors has and will not have paid or declared any
dividend or other distribution with respect to its capital securities and
neither of the Offerors nor any Subsidiary are or will be delinquent in the
payment of principal or interest on any outstanding debt obligation; (iii)
there has not been and will not have been any change in the capital securities,
any material change in the indebtedness of either of the Offerors or any
Subsidiary, or any change or development involving or which could be expected
to involve, a Material Adverse Effect, whether or not arising from transactions
in the ordinary course of business; and (iv) neither of the Offerors nor any of
the Subsidiaries has sustained any loss or interference with its business from
fire, explosion, flood or other calamity, whether or not covered by insurance,
or from any labor dispute or court or governmental action, order or decree
which is material to the condition (financial or otherwise), earnings,
business, prospects or results of operations of the Offerors and the
Subsidiaries on a consolidated basis.
(r) Neither of the Offerors nor any person that controls,
is controlled by (including the Subsidiaries) or is under common control with
the Offerors has, directly or indirectly: (i) made any unlawful contribution
to any candidate for political office, or failed to disclose fully any
contribution in violation of law; or (ii) made any payment to any federal,
state or foreign governmental officer or official, or other person charged with
similar public or quasi-
<PAGE> 10
Robert W. Baird & Co. Incorporated
December 15, 1997
Page 10
public duties, other than payments required or permitted by the laws of the
United States or any jurisdiction thereof or applicable foreign jurisdictions.
(s) No relationship, direct or indirect, exists between
or among the Offerors or the Subsidiaries, on the one hand, and the directors,
officers, trustees, shareholders, customers or suppliers of the Offerors or the
Subsidiaries, on the other hand, which is required to be described in the
Registration Statement and the Prospectus (or, if the Prospectus is not in
existence, the most recent Preliminary Prospectus) which is not adequately
described therein.
(t) The Offerors or the Subsidiaries own or possess
adequate rights to use all patents, patent applications, trademarks, service
marks, trade names, trademark registrations, service mark registrations,
copyrights and licenses presently used in or necessary for the conduct of its
business or ownership of its properties, and neither of the Offerors nor any
Subsidiary has violated or infringed upon the rights of others, or received any
notice of conflict with the asserted rights of others, in respect thereof.
(u) The Offerors or the Subsidiaries have in place and
effective such policies of insurance, with limits of liability in such amounts,
as are normal and prudent in the ordinary course of the business of the
Offerors and its Subsidiaries.
(v) No labor dispute with the employees of the Offerors
or any Subsidiary exists or is imminent, and neither of the Offerors nor any
Subsidiary is a party to any collective bargaining agreement and, no union
organizational attempts have occurred or are pending. There has been no change
in the relationship of the Offerors or any Subsidiary with any of its principal
suppliers, contractors or customers resulting in or that could result in a
Material Adverse Effect.
(w) Neither the Company, the Trust, nor any Subsidiary is
an "investment company", an "affiliated person" of, or "promoter" or "principal
underwriter" for, an "investment company", as such terms are defined in the
Investment Company Act of 1940, as amended.
(x) All federal, state and local tax returns required to
be filed by or on behalf of each of the Offerors or any Subsidiary have been
filed (or are the subject of valid extension) with the appropriate federal,
state and local authorities, and all such tax returns, as filed, are accurate
in all material respects; all federal, state and local taxes (including
estimated tax payments) required to be shown on all such tax returns or claimed
to be due from or with respect to the business of the Offerors or such
Subsidiary have been paid or reflected as a liability on the financial
statements of the Offerors or such Subsidiary for appropriate periods; all
deficiencies asserted as a result of any federal, state or local tax audits
have been paid or finally settled, and no issue has been raised in any such
audit which, by application of the same or similar principles, reasonably could
be expected to result in a proposed deficiency for any other period not so
audited; no state of facts exist or has existed which would constitute grounds
for the assessment of any tax liability with respect to the periods which have
not been audited by appropriate federal, state or local authorities; there are
no outstanding agreements or waivers extending the
<PAGE> 11
Robert W. Baird & Co. Incorporated
December 15, 1997
Page 11
statutory period of limitation applicable to any federal, state or local tax
return of any period; and neither of the Offerors nor any Subsidiary has ever
been a member of an affiliated group of corporations filing consolidated
federal income tax returns, other than a group of which the Company is and has
been the common parent.
(y) Except for the Company's [NAME EACH GROUP HEALTH,
LIFE, DISABILITY OR OTHER WELFARE PLAN] and its contributory employee
retirement savings 401(k) plan and defined contribution employee stock
ownership plan (collectively, the "Plans"), neither of the Offerors nor any
Subsidiary is a participating employer or plan sponsor with respect to any
employee pension benefit plan as defined in Section 3(2) of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA"), or any employee
welfare benefit plan as defined in Section 3(1) of ERISA, including, without
limitation, any multiemployer welfare or pension plan. The Company has no
defined benefit retirement plans. With respect to the Plans, the Company is in
substantial compliance with all applicable regulations, including ERISA and the
Code. The Company or the administrator of each of the Plans, as the case may
be, has timely filed the reports required to be filed by ERISA and the Code in
connection with the maintenance of the Plans, and no facts, including, without
limitation, any "reportable event" as defined by ERISA and the regulations
thereunder, exist in connection with the Plans which, under applicable law,
would constitute grounds for the termination of any of the Plans by the Pension
Benefit Guaranty Corporation or for the appointment by the appropriate United
States District Court of a trustee to administer any of the Plans.
(z) The Offerors and each Subsidiary maintain a system of
internal accounting controls sufficient to provide reasonable assurances that:
(i) transactions are executed in accordance with management's general or
specific authorizations; (ii) transactions are recorded as necessary to permit
preparation of consolidated financial statements in conformity with generally
accepted accounting principles and to maintain accountability for assets; (iii)
access to assets is permitted only in accordance with management's general or
specific authorizations; and (iv) the recorded accountability for assets is
compared with existing assets at reasonable intervals and appropriate action is
taken with respect to any differences.
(aa) Neither of the Offerors, any Subsidiary, any officer
or director or trustee of the Offerors or any Subsidiary, or any person who
owns, of record or beneficially, any class of securities issued by the Offerors
is: (i) an officer, director or partner of any brokerage firm, broker or
dealer that is a member of the NASD ("NASD Member"); or (ii) directly or
indirectly, a "person associated with" an NASD member or an "affiliate" of an
NASD member, as such terms are used in the NASD Rules of Fair Practice. In
addition, neither of the Offerors nor any Subsidiary has issued or transferred
any common stock, warrants, options or other securities, or any other items of
value, to any of the Underwriters or any "related person" of any Underwriter,
as such term is used in the NASD Rules of Fair Practice, except as provided in
this Agreement.
(bb) The Company has prepared and filed with the
Commission a Registration Statement for the Designated Preferred Securities
pursuant to Section 12(g) of the Exchange Act.
<PAGE> 12
Robert W. Baird & Co. Incorporated
December 15, 1997
Page 12
Such registration statement either has been declared effective by the
Commission under the Exchange Act or will be declared effective by the
Commission prior to or concurrently with the commencement of the public
offering of the Designated Preferred Securities. The Designated Preferred
Securities have been approved for designation upon notice of issuance as a
Nasdaq National Market security on The Nasdaq Stock Market ("Nasdaq")
concurrently with the effectiveness of the Registration Statement.
(cc) Neither of the Offerors, any Subsidiary nor any
affiliate of the Offerors or such Subsidiary does business with the government
of Cuba or with any person or affiliate located in Cuba within the meaning of
Section 517.075 of the Florida Statutes, and the Offerors agrees to comply with
such Section if, prior to the completion of the distribution of the Designated
Preferred Securities, either of the Offerors, any Subsidiary or any affiliate
of the Offerors or such Subsidiary commences doing such business.
(dd) All offers and sales of the securities of the Company
and each Subsidiary prior to the date hereof were made in compliance with the
Act and all other applicable state and federal laws or regulations.
(ee) The Company has obtained for the benefit of the
Underwriters the agreement, enforceable by the Underwriters, of each of the
officers and directors of the Company, that for a period of 180 days after the
date of the Prospectus, such persons will not, without the prior written
consent of the Underwriters, directly or indirectly, offer, sell, transfer, or
pledge, contract to sell, transfer or pledge, or cause or in any way permit to
be sold, transferred, pledged, or otherwise disposed of, any: (i) Designated
Preferred Securities; (ii) rights to purchase Designated Preferred Securities
(including, without limitation, Designated Preferred Securities that may be
deemed to be beneficially owned by any such shareholder in accordance with the
applicable regulations of the Commission and Designated Preferred Securities
that may be issued upon the exercise of any option, warrant or other
convertible security); or (iii) securities that are convertible or exchangeable
into shares of Designated Preferred Securities.
(ff) The Designated Preferred Securities have been duly
authorized by the Trust and, when issued and delivered against payment therefor
as provided herein, will be validly issued and fully paid and non-assessable
undivided beneficial ownership interests in the assets of the Trust, and the
issuance of Designated Preferred Securities will not be subject to preemptive
or other similar rights; the holders of the Designated Preferred Securities
will be entitled to the same limitation of personal liability under Delaware
law as extended to stockholders of private for profit corporations organized
under the General Corporation Law of the State of Delaware; and the Designated
Preferred Securities will conform in all material respects to the descriptions
thereof in the Prospectus. None of the Designated Preferred Securities,
immediately prior to delivery, will be subject to any security interest, lien,
mortgage, pledge, encumbrance, restriction upon voting or transfer, preemptive
rights, claim, equity or other defect.
<PAGE> 13
Robert W. Baird & Co. Incorporated
December 15, 1997
Page 13
(gg) This Agreement has been duly authorized, executed and
delivered by the Offerors.
(hh) The Trust Agreement has been qualified under the
Trust Indenture Act of 1939, as amended (the "1939 Act") and has been duly
authorized by the Company and, at the Closing Time, will have been duly
executed and delivered by the Company and the Trustees, and assuming due
authorization, execution and delivery of the Trust Agreement by the Trustees,
the Trust Agreement will, at the Closing Time, be a valid and binding
obligation of the Company, enforceable against the Company in accordance with
its terms.
(ii) The Guarantee has been qualified under the 1939 Act
and has been duly authorized by the Company. At the Closing Time, the
Guarantee will have been duly executed and delivered by the Company, and will
constitute a valid and binding obligation of the Company, enforceable against
the Company in accordance with its terms, and will conform in all material
respects to the descriptions thereof in the Prospectus.
(jj) The Indenture has been qualified under the 1939 Act
and has been duly authorized by the Company and, at the Closing Time, will have
been duly executed and delivered by the Company and will constitute a valid and
binding agreement of the Company, enforceable against the Company in accordance
with its terms.
(kk) The Debentures have been duly authorized by the
Company. At the Closing Time the Debentures will have been duly executed by
the Company and, when authenticated in the manner provided for in the Indenture
and delivered by the Company to the Trust against payment therefor as described
in the Prospectus, will constitute valid and binding obligations of the
Company, enforceable against the Company in accordance with their terms and
will conform in all material respects to the description thereof in the
Prospectus.
(ll) The Expense Agreement has been duly authorized by the
Company. At the Closing Time, the Expense Agreement will have been duly
executed and delivered by the Company and will constitute a valid and binding
agreement of the Company, enforceable against the Company in accordance with
its terms.
(mm) Each of the Administrative Trustees is an officer or
employee of the Company and has been duly authorized by the Company to execute
and deliver the Trust Agreement.
(nn) The Operative Documents conform in all material
respects to the descriptions thereof in the Prospectus.
SECTION 4. Information Furnished by the Underwriters. The
information set forth in the last paragraph on the outside front cover page of
the Prospectus concerning the terms of the offering by the Underwriters, the
paragraph on the inside front cover page of the Prospectus
<PAGE> 14
Robert W. Baird & Co. Incorporated
December 15, 1997
Page 14
relating to stabilization practices and passive market making, and the
concession and reallowance amounts appearing under the caption "Underwriting"
in the Prospectus constitute all of the information furnished to the Offerors
by and on behalf of the Underwriters for use in connection with the preparation
of the Registration Statement and the Prospectus, as such information is
referred to in this Agreement.
SECTION 5. Purchase, Sale and Delivery of Securities.
(a) On the basis of the representations, warranties and
agreements herein contained, and subject to the terms and conditions herein set
forth, the Offerors hereby agree that the Trust will issue to the Underwriters
the Firm Preferred Securities, and each of the Underwriters agrees, severally
and not jointly, to purchase from the Trust the number of Firm Preferred
Securities set forth opposite the name of such Underwriter on Schedule I
annexed hereto at a purchase price of $10.00 per share. Because the proceeds
from the sale of the Firm Preferred Securities will be used to purchase from
the Company its Debentures, the Company shall pay to the Underwriters a
commission of $.375 (37.5 cents) per Firm Preferred Security (the "Firm
Preferred Securities Commission").
(b) On the First Closing Date (as hereinafter defined),
the Offerors will deliver to the Underwriters, at the offices of Robert W.
Baird & Co. Incorporated ("Baird"), 777 East Wisconsin Avenue, Milwaukee,
Wisconsin 53202, for the accounts of the several Underwriters, certificates
representing the Firm Preferred Securities to be sold by them against payment
in Milwaukee, Wisconsin of the purchase price therefor by certified or official
bank check or checks in New York Clearing House (next day) funds payable to the
order of the Trust with respect to the Preferred Securities being sold by the
Trust. As referred to in this Agreement, the "First Closing Date" shall be on
the third full business day after the date of the Prospectus, at 9:00 a.m.,
Milwaukee, Wisconsin time, or at such other date or time not later than ten
full business days after the date of the Prospectus as the Underwriters and the
Trust may agree. The certificates for the Preferred Securities to be so
delivered will be in denominations and registered in the name of Cede & Co.,
the Nominee of the Depositary (as defined in the Prospectus) as the
Underwriters request by notice to the Trust prior to the First Closing Date,
and such certificates will be made available for checking and packaging at 9:00
a.m., Milwaukee, Wisconsin time on the first full business day preceding the
First Closing Date at a location to be designated by the Underwriters.
(c) In addition, on the basis of the representations,
warranties and agreements herein contained, and subject to the terms and
conditions herein set forth, the Offerors hereby agree to sell to the
Underwriters, and the Underwriters, severally and not jointly, shall have the
right at any time within thirty days after the date of the Prospectus to
purchase up to 330,000 Option Preferred Securities from the Trust at the
purchase price per share to be paid for the Firm Preferred Securities, for use
solely in covering any over-allotments made by the Underwriters in the sale and
distribution of the Firm Preferred Securities. The option granted hereunder
may be exercised upon notice by the Underwriters to the Trust within thirty
days after the date of the Prospectus setting forth the aggregate number of
Option Preferred Securities to be purchased by
<PAGE> 15
Robert W. Baird & Co. Incorporated
December 15, 1997
Page 15
the Underwriters and sold by the Trust, the names and denominations in which
the certificates for such shares are to be registered and the date and place at
which such certificates will be delivered. Such date of delivery (the "Second
Closing Date") shall be determined by the Underwriters, provided that the
Second Closing Date, which may be the same as the First Closing Date, shall not
be earlier than the First Closing Date and, if after the First Closing Date,
shall not be earlier than three nor later than ten full business days after
delivery of such notice to exercise. The number of Option Preferred Securities
to be sold by the Offerors pursuant to such notice shall equal that number of
full Option Preferred Securities which (as nearly as practicable in full shares
as determined by the Underwriters) bears the same proportion to the number of
Option Preferred Securities to be purchased by the Underwriters as the number
of Firm Preferred Securities to be sold by the Offerors under this Agreement
bears to the total number of Firm Preferred Securities. Certificates for the
Option Preferred Securities will be made available for checking and packaging
at 9:00 a.m., Milwaukee, Wisconsin time, on the first full business day
preceding the Second Closing Date at a location to be designated by the
Underwriters. The manner of payment for and delivery of (including the
denominations of and the names in which certificates are to be registered) the
Option Preferred Securities shall be the same as for the Firm Preferred
Securities. The Company shall pay to the Underwriters the commission $.375
(37.5 cents) for each Option Preferred Security purchased.
(d) Each Underwriter is authorized to accept delivery of
the Preferred Securities and to make payment therefor. As referred to in this
Agreement, "Closing Date" shall mean either the First Closing Date or the
Second Closing Date.
SECTION 6. Covenants of the Offerors. The Offerors, jointly and
severally, covenant and agree with the several Underwriters that:
(a) If the effective time of the Registration Statement
is not prior to the execution and delivery of this Agreement, the Offerors will
use its best efforts to cause the Registration Statement to become effective at
the earliest possible time and, upon notification from the Commission that the
Registration Statement has become effective, will so advise the Underwriter's
and counsel to the Underwriters promptly. If the effective time of the
Registration Statement is prior to the execution and delivery of this Agreement
and any information shall have been omitted therefrom in reliance upon Rule
430A, the Offerors, at the earliest possible time, will furnish the
Underwriters with a copy of the Prospectus to be filed by the Offerors with the
Commission to comply with Rule 424(b) and Rule 430A under the Act and, if the
Underwriters do not object to the contents thereof, will comply with such
Rules. Upon compliance with such Rules, the Offerors will so advise the
Underwriters promptly. The Offerors will advise the Underwriters and counsel
to the Underwriters promptly of the issuance by the Commission or any state
securities commission of any stop order suspending the effectiveness of the
Registration Statement or of the institution of any proceedings for that
purpose, or of any notification of the suspension of qualification of the
Designated Preferred Securities for sale in any jurisdiction or the initiation
or threatening of any proceedings for that purpose, and will also advise the
Underwriters and counsel to the Underwriters promptly of any request of the
Commission for
<PAGE> 16
Robert W. Baird & Co. Incorporated
December 15, 1997
Page 16
amendment or supplement of the Registration Statement, of any Preliminary
Prospectus or of the Prospectus, or for additional information, and the
Offerors will not file any amendment or supplement to the Registration
Statement (either before or after it becomes effective), to any Preliminary
Prospectus or to the Prospectus (including a prospectus filed pursuant to Rule
424(b)), or file any document under the Exchange Act before the termination of
the public offering of the Designated Preferred Securities by the Underwriters
if such document would be deemed to be incorporated by reference in the
Registration Statement, if the Underwriters have not been furnished with a copy
prior to such filing (with a reasonable opportunity to review such amendment or
supplement) or if the Underwriters object to such filing.
(b) If, at any time when a prospectus relating to the
Designated Preferred Securities is required by law to be delivered in
connection with sales by an Underwriter or dealer, any event occurs as a result
of which the Prospectus would include an untrue statement of a material fact,
or would omit 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, or if it is necessary at any time
to supplement the Prospectus to comply with the Act or to file under the
Exchange Act any document which would be deemed to be incorporated by reference
in the Registration Statement to comply with the Act or the Exchange Act, the
Offerors promptly will advise the Underwriters and counsel to the Underwriters
and will promptly prepare and file with the Commission, at its expense, an
amendment to the Registration Statement or file such document which will
correct such statement or omission or an amendment which will effect such
compliance; and, if any Underwriter is required to deliver a prospectus after
the effective date of the Registration Statement, the Offerors, upon request of
the Underwriters, will prepare promptly such prospectus or prospectuses as may
be necessary to permit compliance with the requirements of Section 10(a)(3) of
the Act. The Offerors consents to the use, in accordance with the provisions
of the Act and with the Blue Sky Laws of the jurisdictions in which the
Designated Preferred Securities are offered by the several Underwriters and by
dealers, of each Preliminary Prospectus.
(c) Neither of the Offerors nor any Subsidiary will,
prior to the Second Closing Date, if any, incur any liability or obligation,
direct or contingent, or enter into any material transaction, other than in the
ordinary course of business, or enter into any transaction with an "affiliate,"
as defined in Rule 405 under the Act, which is required to be described in the
Prospectus pursuant to Item 404 of Regulation S-K under the Act, except as
described in the Prospectus.
(d) Neither of the Offerors nor any Subsidiary will,
prior to the Second Closing Date, if any, acquire any of the Designated
Preferred Securities nor will the Offerors declare or pay any dividend or make
any other distribution upon its Designated Preferred Securities payable to
shareholders of record on a date prior to such earlier date, except as
described in the Prospectus.
<PAGE> 17
Robert W. Baird & Co. Incorporated
December 15, 1997
Page 17
(e) The Company will make generally available to its and
the Trustee's security holders and the Underwriters an earnings statement as
soon as practicable, but in no event later than sixty days after the end of its
fiscal quarter in which the first anniversary of the effective date of the
Registration Statement occurs, covering a period of twelve consecutive calendar
months beginning after the effective date of the Registration Statement, which
will satisfy the provisions of the last paragraph of Section 11(a) of the Act
and Rule 158 promulgated thereunder.
(f) During such period as a prospectus is required by law
to be delivered in connection with sales by an Underwriter or dealer, the
Offerors will furnish to the Underwriters, at the expense of the Offerors,
copies of the Registration Statement, the Prospectus, any Preliminary
Prospectus and all amendments and supplements to any such documents, including
any document filed under the Exchange Act and deemed to be incorporated by
reference in the Registration Statement, in each case as soon as available and
in such quantities as the Underwriters may reasonably request.
(g) The Offerors will apply the net proceeds from the
sale of the Designated Preferred Securities to be sold by the Trust hereunder
for the purposes set forth in the Prospectus, and will timely file Form SR, and
any amendments thereto, as required by Rule 463 under the Act.
(h) The Offerors will cooperate with the Underwriters and
counsel to the Underwriters in qualifying or registering the Designated
Preferred Securities for sale under the Blue Sky Laws of such jurisdictions as
the Underwriters designate, and will continue such qualifications or
registrations in effect so long as reasonably requested by the Underwriters to
effect the distribution of the Designated Preferred Securities. The Offerors
shall not be required to qualify as foreign corporations or to file a general
consent to service of process in any such jurisdiction where it is not
presently qualified. In each jurisdiction where any of the Designated
Preferred Securities shall have been qualified as provided above, the Offerors
will file such reports and statements as may be required to continue such
qualification for a period of not less than one year from the date of the
Prospectus. The Offerors shall promptly prepare and file with the Commission,
from time to time, such reports as may be required to be filed by the Act and
the Exchange Act, and the Offerors shall comply in all respects with the
undertakings given by the Offerors in connection with the qualification or
registration of the Designated Preferred Securities for offering and sale under
the Blue Sky Laws.
(i) During the period of three years from the date of the
Prospectus, the Offerors will furnish to each of the Underwriters, as soon as
available, each report, statement or other document of the Company or its Board
of Directors mailed to its shareholders or filed with the Commission, and such
other information concerning the Offerors as the Underwriters may reasonably
request.
(j) The Offerors shall deliver the requisite notice of
issuance to Nasdaq and shall take all necessary or appropriate action within
its power to maintain the authorization for
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Robert W. Baird & Co. Incorporated
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Page 18
trading of the Designated Preferred Securities as a Nasdaq National Market
security, or take such action to authorize the Designated Preferred Securities
for listing on the New York Stock Exchange or the American Stock Exchange, for
a period of at least thirty-six months after the date of the Prospectus.
(k) During a period of 180 days from the date of the
Prospectus, neither the Company nor the Trust will, without the prior written
consent of Baird, (i) directly or indirectly, offer, pledge, sell, contract to
sell, sell any option or contract to purchase, purchase any option or contract
to sell, grant any option, right or warrant to purchase or otherwise transfer
or dispose of any Designated Preferred Securities or Debentures (or any equity
or debt securities substantially similar to the Designated Preferred Securities
or Debentures, respectively) or any capital stock of the Company, or any
securities convertible into or exercisable or exchangeable for Designated
Preferred Securities or Debentures (or any equity or debt securities
substantially similar to the Designated Preferred Securities or Debentures,
respectively) or file any registration statement under the 1933 Act with
respect to any of the foregoing or (ii) enter into any swap or any other
agreement or any transaction that transfers, in whole or in part, directly or
indirectly, the economic consequence of ownership of Designated Preferred
Securities or Debentures (or any equity or debt securities substantially
similar to the Designated Preferred Securities or Debentures, respectively) or
any capital stock of the Company, whether any such swap or transaction
described in clause (i) or (ii) above is to be settled by delivery of
Designated Preferred Securities or Debentures (or any equity or debt securities
substantially similar to the Designated Preferred Securities or Debentures,
respectively) or such other securities, in cash or otherwise. The foregoing
sentence shall not apply to the Designated Preferred Securities or Debentures
to be sold pursuant to this Agreement.
(l) The Offerors will maintain a transfer agent and, if
required by law or the rules of The Nasdaq Stock Market or any national
securities exchange on which the Designated Preferred Securities are listed, a
registrar (which, if permitted by applicable laws and rules, may be the same
entity as the transfer agent) for its Designated Preferred Securities. Each
Offeror shall, as soon as practicable after the date hereof, use its best
efforts to obtain listing, if not already so listed, in Standard and Poor's
Stock Guide, or such other recognized securities manuals for which it may
qualify for listing, and each Offeror shall use its best efforts to maintain
such listings for at least five years after the First Closing Date.
(m) If at any time when a prospectus relating to the
Designated Preferred Securities is required to be delivered under the Act, any
rumor, publication or event relating to of affecting either Offeror shall occur
as a result of which, in the opinion of the Underwriters, the market price of
the Designated Preferred Securities have been or is likely to be materially
affected (regardless of whether such rumor, publication or event necessitates a
supplement to the Prospectus), the Offerors will, after written notice from
Baird advising the Offerors of any of the matters set forth above, promptly
consult with Baird concerning the advisability and substance of, and, if the
Offerors and Baird determine that it is appropriate, disseminate, a press
release or other public statement responding to or commenting on, such rumor,
publication or event.
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Robert W. Baird & Co. Incorporated
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(n) If the sale to the Underwriters of the Designated
Preferred Securities is not consummated for any reason other than termination
of this Agreement pursuant to section 12 hereof, without limiting any other
rights the Underwriters may have, the Offerors agrees to reimburse the
Underwriters upon demand for all out-of-pocket expenses (including reasonable
fees and expenses of counsel for the Underwriters), that shall have been
incurred by the Underwriters in connection with the proposed purchase and sale
of the Designated Preferred Securities, and the provisions of sections 8 and 11
hereof shall at all times be effective and apply.
(o) The Offerors will comply or cause to be complied with
the conditions to the obligations of the Underwriters in section 9 hereof.
(p) The Offerors will cooperate with the Underwriters and
use reasonable commercial efforts to permit the Designated Preferred Securities
to be eligible for clearance and settlement through the facilities of The
Depository Trust Company ("DTC").
SECTION 8. Payment of Expenses. Whether or not the transactions
contemplated hereunder are consummated or this Agreement becomes effective, or
if this Agreement is terminated for any reason, the Company will pay the costs,
fees, and expenses incurred in connection with the public offering of the
Designated Preferred Securities. Such costs, fees and expenses to be paid by
the Company include, without limitation:
(a) All costs, fees and expenses (excluding the expenses
incurred by the Underwriters and the legal fees and disbursements of counsel
for the Underwriters, but including such fees and disbursements described in
subsections (b) and (c) of this section 8) incurred in connection with the
performance of the Offerors's obligations hereunder, including without limiting
the generality of the foregoing: the registration fees related to the filing of
the Registration Statement with the Commission; the fees and expenses related
to the quotation or listing of the Designated Preferred Securities and, if
applicable, the Guarantee and Debentures on Nasdaq or other national securities
exchange; the fees and expenses of the Offerors's counsel, accountants,
transfer agent and registrar; the fees and expenses of the Trustees; the costs
and expenses incurred in connection with the preparation, printing, shipping
and delivery of the Registration Statement, each Preliminary Prospectus and the
Prospectus (including all exhibits and financial statements) and all agreements
and supplements provided for herein, this Agreement and the Preliminary and
Supplemental Blue Sky Memoranda, including, without limitation, shipping
expenses via overnight delivery and/or courier service to comply with
applicable prospectus delivery requirements; and the costs and expenses
associated with the production of materials related to, and travel expenses
incurred by the management of the Offerors in connection with, the various
meetings to be held between the Offerors's management and prospective
investors.
(b) All registration fees and expenses, including legal
fees and disbursements of counsel for the Underwriters incurred in connection
with qualifying or registering all or any part of the Designated Preferred
Securities, Debentures, and the Guarantee for offer and sale
<PAGE> 20
Robert W. Baird & Co. Incorporated
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under the Blue Sky Laws and the clearing of the public offering and the
underwriting arrangements evidenced hereby with the NASD.
(c) Up to $25,000 of the Underwriters' disbursements and
out-of-pocket expenses incurred in connection with their preparations for the
offering and the offering of the Designated Preferred Securities, including,
without limitation, the fees and expenses of Underwriters' legal counsel not
included under subsection (b) above, travel expenses for meetings with the
Offerors and meetings with the Offerors' management and prospective investors.
(d) All fees and expenses related to printing of the
certificates for the Designated Preferred Securities, and all transfer taxes,
if any, with respect to the sale and delivery of the Designated Preferred
Securities.
(e) The costs and charges of any transfer agent or
registrar and the fees and disbursement of counsel for any transfer agent or
registrar.
(f) All expenses incident to the preparation, execution
and delivery of the Trust Agreements, the Indenture and the Guarantee.
(g) The cost and charges of qualifying the Designated
Preferred Securities with the DTC.
(h) All other costs and expenses incident to the
performance of the obligations of the Offerors under this Agreement, the Trust
Agreement, the Indenture or the Guarantee that are not otherwise specifically
provided for in this section 8.
SECTION 9.
Conditions to the Obligations of the Underwriters. The
obligations of the several Underwriters under this Agreement shall be subject
to, in the Underwriter's sole discretion, the accuracy of the representations
and warranties on the part of the Offerors herein set forth as of the date
hereof and as of each Closing Date, to the accuracy of the statements of the
Offerors's officers made pursuant to the provisions hereof, to the performance
by each of the Offerors of its obligations hereunder, and to the following
additional conditions, unless waived in writing by the Underwriters:
(a) The Registration Statement shall have been declared
effective by the Commission not later than 9:00 a.m., Washington, D. C. time,
of the day following the date of this Agreement, or such later time as shall
have been consented to by the Underwriters, which consent shall be deemed to
have been given if the Registration Statement shall have been declared
effective on or before the date and time requested in the acceleration request
submitted on behalf of the Underwriters pursuant to Rule 461 under the Act; all
filings required by Rules 424(b) and 430A under the Act shall have been timely
made; no stop order suspending the effectiveness of the Registration Statement
shall have been issued by the Commission or any state securities commission
nor, to the knowledge of the Offerors, shall any
<PAGE> 21
Robert W. Baird & Co. Incorporated
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Page 21
proceedings for that purpose have been initiated or threatened; and any request
of the Commission or any state securities commission for inclusion of
additional information in the Registration Statement, or otherwise, shall have
been complied with to the satisfaction of the Underwriters.
(b) Since the dates as of which information is given in
the Registration Statement:
(i) there shall not have occurred any change or
development involving, or which could be expected to involve, a Material
Adverse Effect, whether or not arising from transactions in the ordinary course
of business; and
(ii) neither of the Offerors shall have sustained
any loss or interference from any labor dispute, strike, fire, flood,
windstorm, accident or other calamity (whether or not insured) or from any
court or governmental action, order or decree,
the effect of which on the Offerors, in any such case described in clause (i)
or (ii) above, is in the opinion of the Underwriters so material and adverse as
to make it impracticable or inadvisable to proceed with the public offering or
the delivery of the Designated Preferred Securities on the terms and in the
manner contemplated in the Registration Statement and the Prospectus.
(c) The Underwriters shall not have advised the Offerors
that the Registration Statement or the Prospectus contains an untrue statement
of fact that, in the opinion of the Underwriters or counsel for the
Underwriters, is material, or omits to state a fact that, in the opinion of the
Underwriters or such counsel, is material and is required to be stated therein
or necessary to make the statements therein not misleading.
(d) The Underwriters shall have received an opinion of
Strobl & Borda, P.C., counsel for the Offerors addressed to the Underwriters,
and dated the First Closing Date or the Second Closing Date, as the case may
be, to the effect that:
(i) The Company has been duly incorporated and is
validly existing as a corporation and in good standing under the laws of
Michigan, and is duly registered as a bank holding company under the Bank
Holding Company Act with full corporate power and authority to own, lease and
operate its properties and conduct its business as presently conducted and as
described in the Prospectus and the Registration Statement; each of the
Offerors is duly registered and qualified to do business as a foreign
corporation under the laws of, and is in good standing as such in, each
jurisdiction in which such registration or qualification is required, except
where the failure to so register or qualify would not have a Material Adverse
Effect;
(ii) The authorized capital stock of the Company
conforms to the description thereof in the Prospectus and the Registration
Statement;
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Robert W. Baird & Co. Incorporated
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(iii) The issued and outstanding shares of capital
stock of the Company immediately prior to the issuance and sale of the
Designated Preferred Securities have been duly authorized and validly issued,
are fully paid and nonassessable, and there are no preemptive, preferential or,
except as described in the Prospectus, other rights to subscribe for or
purchase any shares of capital stock of the Company, and to such counsel's
knowledge, no shares of capital stock of the Company have been issued in
violation of such rights and there are no immediate plans or arrangements to
issue any shares of capital stock of the Company except as described in the
Prospectus;
(iv) Except for the Subsidiaries and the Trust,
the Company has no subsidiaries, and the Company does not own any equity
interest in or control, directly or indirectly, any other corporation, limited
liability company, partnership, joint venture, association, trust or other
business organization except as described in the Prospectus and the
Registration Statement; each Subsidiary has been duly incorporated and is
validly existing as a corporate entity in good standing under the laws of its
jurisdiction of incorporation, with full corporate power and authority to own,
lease and operate its properties and to conduct its business as presently
conducted and as described in the Prospectus and the Registration Statement;
the Company's Subsidiary, Sun Community Bancorp Limited, a second tier bank
holding company incorporated under the laws of Arizona, is duly registered as a
bank holding company under the Bank Holding Company Act; each Subsidiary is
duly registered or qualified to do business as a foreign corporation under the
laws of, and is in good standing as such in, each jurisdiction in which such
registration or qualification is required, except where the failure to so
register or qualify would not have a Material Adverse Effect; the issued and
outstanding shares of the capital stock of each Subsidiary have been duly
authorized and validly issued, are fully paid and nonassessable (except with
respect to Subsidiaries to the extent provided under 12 U.S.C. Section 55, 12
U.S.C. Section 1831o or Section 201 of the Michigan Banking Code) and there are
no preemptive, preferential or, to such counsel's knowledge, other rights to
subscribe for or purchase any shares of capital stock of any Subsidiary, and to
such counsel's knowledge, no shares of capital stock of any Subsidiary have
been issued in violation of such rights; except as stated in the Prospectus,
the Company owns directly and, to such counsel's knowledge, beneficially all of
the issued and outstanding capital stock of each Subsidiary, free and clear of
any and all liens, claims, encumbrances and security interests;
(v) The certificates for the Designated Preferred
Securities to be delivered hereunder are in due and proper form and conform to
the requirements of applicable law; and when duly countersigned by the Trust's
transfer agent, and delivered to the Underwriters or upon the order of the
Underwriters against payment of the agreed consideration therefor in accordance
with the provisions of this Agreement, the Designated Preferred Securities to
be sold by the Trust represented thereby will be duly authorized and validly
issued, fully paid and nonassessable, and free of any preemptive, preferential
or other rights to subscribe for or purchase shares of Designated Preferred
Securities;
<PAGE> 23
Robert W. Baird & Co. Incorporated
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(vi) The Registration Statement has become
effective under the Act, and to such counsel's knowledge, no stop order
suspending the effectiveness of the Registration Statement has been issued and
no proceedings for that purpose have been initiated or are threatened under the
Act or any Blue Sky Laws; the Registration Statement and the Prospectus and any
amendment or supplement thereto, including any document incorporated by
reference in the Registration Statement, (except for the financial statements
and other statistical or financial data included therein as to which such
counsel need express no opinion) comply as to form in all material respects
with the requirements of the Act; the conditions for use of Form S-3, set forth
in the General Instructions thereto have been satisfied; no facts have come to
the attention of such counsel which lead it to believe that either the
Registration Statement or the Prospectus or any amendment or supplement
thereto, including any document incorporated by reference in the Registration
Statement, contains any untrue statement of a material fact or omitted or will
omit to state a material fact required to be stated therein or necessary to
make the statements therein not misleading or that the Prospectus, as of the
First Closing Date or the Second Closing Date, as the case may be, contained
any untrue statement of a material fact or omitted or will omit to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading in light of the circumstances under which they were made
(except for the financial statements and other financial data included therein
as to which such counsel need express no opinion); to such counsel's knowledge,
there are no legal or governmental proceedings pending or threatened,
including, without limitation, any such proceedings that are related to
environmental or employment discrimination matters, required to be described in
the Registration Statement or the Prospectus which are not so described or
which question the validity of this Agreement, the Trust Agreement, the
Guarantee or the Indenture or any action taken or to be taken pursuant to any
such agreement, nor is there any transaction, relationship, agreement, contract
or other document of a character required to be described in the Registration
Statement or the Prospectus, or required to be filed under the Exchange Act if
upon such filing they would be incorporated, in whole or in part, by reference
therein, or to be filed as an exhibit to or incorporated by reference in the
Registration Statement by the Act, which is not described or filed or
incorporated by reference as required;
(vii) The Company has full corporate power and
authority and the Trust has full trust power and authority to enter into and
perform this Agreement; the performance of the Offerors's obligations hereunder
and the consummation of the transactions described herein have been duly
authorized by each of the Offerors by all necessary corporate or trust action
and this Agreement has been duly executed and delivered by and on behalf of
each of the Offerors, and is a legal, valid and binding agreement of each of
the Offerors enforceable against each of the Offerors in accordance with its
terms, except that rights to indemnity or contribution may be limited by
applicable law and except as enforceability of this Agreement may be limited by
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting
creditors' rights generally, and by equitable principles limiting the right to
specific performance or other equitable relief; no consent, approval,
authorization or other order or decree of any court, regulatory or
governmental body, arbitrator, administrative agency or other instrumentality
of the United States or other country or jurisdiction having jurisdiction over
either Offeror is required for the
<PAGE> 24
Robert W. Baird & Co. Incorporated
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execution and delivery of this Agreement or the consummation of the
transactions contemplated by this Agreement (except for compliance with the
Act, the Exchange Act, applicable Blue Sky Laws and the clearance of the
underwriting arrangements by the NASD);
(viii) The execution, delivery and performance of
each of the Operative Documents by the Trust and the Company, as applicable,
the issuance, sale, and delivery of the Defined Preferred Securities, the
Debentures, and the Guarantee and the consummation by the Company and the
Trust, as applicable, of the transactions contemplated by the Operative
Documents will not: (A) violate any provisions of the Articles of
Incorporation, Bylaws, or governing documents (including without limitation the
Trust Agreement) of the Offerors or any Subsidiary; (B) violate any provisions
of, or result in the breach, modification or termination of, or constitute a
default under, any agreement, lease, franchise, license, indenture, permit,
mortgage, deed of trust, other evidence of indebtedness or other instrument to
which either Offeror or any Subsidiary is a party or by which either Offeror or
any such Subsidiary, or any of their respective owned or leased property is
bound, and which is filed or incorporated by reference as an exhibit to the
Registration Statement; or (C) violate any statute, ordinance, order, rule,
decree or regulation of any court, regulatory or governmental body, arbitrator,
administrative agency or other instrumentality of the United States or other
country or jurisdiction having jurisdiction over either Offeror or any
Subsidiary (assuming compliance with all applicable federal and state
securities laws);
(ix) To such counsel's knowledge, except as
described in the Prospectus, there are no holders of securities of either of
the Offerors, or securities that are convertible or exchangeable into
Designated Preferred Securities or other securities of either of the Offerors,
that have rights to the registration of such securities under the Act or any
Blue Sky Laws;
(x) The Designated Preferred Securities have been
designated for inclusion as a National Market security on The Nasdaq Stock
Market and are registered under the Exchange Act;
(xi) Neither of the Offerors nor any Subsidiary
is, nor with the giving of notice or passage of time or both would be, in
violation of its respective Articles of Incorporation, By-laws, or other
governing documents (including without limitation the Trust Agreement) or, to
such counsel's knowledge, in default in any material respect in the performance
of any agreement, lease, franchise, license, permit, mortgage, deed of trust,
evidence of indebtedness or other instrument, or any other document that is
filed as an exhibit to or incorporated by reference in the Registration
Statement, to which either of the Offerors or any Subsidiary is subject or
bound;
(xii) Neither of the Offerors nor any Subsidiary is
an "investment company", an "affiliated person" of, or "promoter" or "principal
underwriter" for, an "investment company", as such terms are defined in the
Investment Company Act of 1940, as amended, and,
<PAGE> 25
Robert W. Baird & Co. Incorporated
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Page 25
upon its receipt of any proceeds from the sale of the Designated Preferred
Securities, no Offeror will become or be deemed to be an "investment company"
thereunder;
(xiii) The description or incorporation by reference
in the Registration Statement and the Prospectus of statutes, law, regulations,
legal and governmental proceedings, and contracts and other legal documents
described or incorporated by reference therein fairly and correctly present, in
all material respects, the information required to be included therein by the
Act; and
(xiv) All offers and sales by the Company of its
capital stock and any offer and sale by the Trust of any securities before the
date hereof were at all relevant times duly registered under or exempt from the
registration requirements of the Act, and were duly registered under or the
subject of an available exemption from the registration requirements of any
applicable Blue Sky Laws.
(xv) The Debentures and Guarantee of the Company
and the equity securities of the Trust conform to the description thereof
contained in the Prospectus in all material respects.
(xvi) The issuance, sale and delivery of the
Designated Preferred Securities and Debentures in accordance with the terms and
conditions of this Agreement, the Trust Agreement and the Indenture have been
duly authorized by all necessary actions of each of the Offerors.
(xvii) Each of the Indenture, the Trust Agreement
and the Guarantee has been duly qualified under the Trust Indenture Act, has
been duly authorized, executed and delivered by the Company, and is a valid and
legally binding obligation of the Company enforceable in accordance with its
terms, subject to the effect of bankruptcy, insolvency, reorganization,
receivership, moratorium and other laws affecting the rights and remedies of
creditors generally and of general principles of equity;
(xviii) The Debentures have been duly authorized,
executed, authenticated and delivered by the Company, are entitled to the
benefits of the Indenture and are legal, valid and binding obligations of the
Company enforceable against the Company in accordance with their terms, subject
to the effect of bankruptcy, insolvency, reorganization, receivership,
moratorium and other laws affecting the rights and remedies of creditors
generally and of general principles of equity;
(xix) The Expense Agreement has been duly
authorized, executed and delivered by the Company, and is a valid and legally
binding obligation of the Company enforceable in accordance with its terms,
subject to the effect of bankruptcy, insolvency, reorganization, receivership,
moratorium and other laws affecting the rights and remedies of creditors
generally and of general principles of equity;
<PAGE> 26
Robert W. Baird & Co. Incorporated
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(xx) The statements under the captions
"Description of the Preferred Securities", "Description of the Subordinated
Debentures", "Description of the Guarantee", "Relationship Among the Preferred
Securities, the Subordinated Debentures and the Guarantee", "Certain Federal
Income Tax Consequences" and "ERISA Considerations" in the Prospectus, insofar
as such statements constitute a summary of legal and regulatory matters,
documents or proceedings referred to therein are accurate in all material
respects and fairly present the information called for with respect to such
legal matters, documents and proceedings, other than financial and statistical
data as to which said counsel expresses no opinion or belief;
(xxi) The Trust will be classified for United
States federal income tax purposes as a grantor trust and not as an association
taxable as a corporation.
In rendering such opinion, counsel for the Offerors may rely, to the extent
counsel deems such reliance proper, as to matters of fact upon certificates of
officers of the Company and of governmental officials, and copies of all such
certificates shall be furnished to the Underwriters and for the Underwriters on
or before each Closing Date.
(e) Richards, Layton & Finger, special Delaware counsel
to the Offerors, shall have furnished to the Underwriters their signed opinion,
dated as of any Closing Date, in form and substance satisfactory to such
counsel, to the effect that:
(i) The Trust has been duly created and is
validly existing in good standing as a business trust under the Delaware
Business Trust Act and, under the Trust Agreement and the Delaware Business
Trust Act, has the trust power and authority to conduct its business as
described in the Prospectus.
(ii) The Trust Agreement is a legal, valid and
binding agreement of the Company and the Trustees, and is enforceable against
the Company and the Trustees, in accordance with its terms.
(iii) Under the Trust Agreement and the Delaware
Business Trust Act, the execution and delivery of the Underwriting Agreement by
the Trust, and the performance by the Trust of its obligations thereunder, have
been authorized by all requisite trust action on the part of the Trust.
(iv) The Designated Preferred Securities have been
duly authorized by the Trust Agreement, and when issued and sold in accordance
with the Trust Agreement, the Designated Preferred Securities will be, subject
to the qualifications set forth in paragraph (v) below, fully paid and
nonassessable beneficial interests in the assets of the Trust and entitled to
the benefits of the Trust Agreement.
(v) Holders of Designated Preferred Securities,
as beneficial owners of the Trust, will be entitled to the same limitation of
personal liability extended to shareholders of
<PAGE> 27
Robert W. Baird & Co. Incorporated
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private, for-profit corporations organized under the General Corporation Law of
the State of Delaware. Such opinion may note that the holders of Designated
Preferred Securities may be obligated to make payments as set forth in the
Trust Agreement.
(vi) Under the Delaware Business Trust Act and the
Trust Agreement, the issuance of the Designated Preferred Securities is not
subject to preemptive rights.
(vii) The issuance and sale by the Trust of the
Designated Preferred Securities and the Common Securities, the execution,
delivery and performance by the Trust of this Agreement, and the consummation
of the transactions contemplated by this Agreement, do not violate (a) the
Trust Agreement, or (b) any applicable Delaware law, rule or, regulation.
(f) The Underwriters shall have received an opinion of
Varnum, Riddering, Schmidt & Howlett LLP, counsel for the Underwriters, dated
the First Closing Date or the Second Closing Date, as the case may be, with
respect to the issuance and sale of the Designated Preferred Securities by the
Offerors, the Registration Statement and other related matters as the
Underwriters may require, and the Offerors shall have furnished to such counsel
such documents and shall have exhibited to them such papers and records as they
request for the purpose of enabling them to pass upon such matters.
(g) The Underwriters shall have received on each Closing
Date, a certificate of Joseph D. Reid, Chairman, President and Chief Executive
Officer, and Lee W. Hendrickson, Vice President and Chief Financial Officer, of
the Company, and a certificate of Joseph D. Reid and Robert C. Carr as
Administrative Trustees of the Trust to the effect that:
(i) The representations and warranties of the
Offerors set forth in section 2 hereof are true and correct as of the date of
this Agreement and as of the date of such certificate, and each of the Offerors
has complied with all the agreements and satisfied all the conditions to be
performed or satisfied by it at or prior to the date of such certificate;
(ii) The Commission has not issued an order
preventing or suspending the use of the Prospectus or any Preliminary
Prospectus or any amendment or supplement thereto; no stop order suspending the
effectiveness of the Registration Statement has been issued; and to the
knowledge of the respective signatories, no proceedings for that purpose have
been initiated or are pending or contemplated under the Act or under the Blue
Sky Laws of any jurisdiction;
(iii) Each of the respective signatories has
carefully examined the Registration Statement and the Prospectus, and any
amendment or supplement thereto, including any documents filed under the
Exchange Act and deemed to be incorporated by reference in the Registration
Statement, and such documents contain all statements required to be stated
therein, and do not include any untrue statement of a material fact or omits to
state any material fact required to be stated therein or necessary to make the
statements therein not misleading, and since the date on which the Registration
Statement was initially filed, no event has occurred that was
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Robert W. Baird & Co. Incorporated
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Page 28
required to be set forth in an amended or supplemented prospectus or in an
amendment to the Registration Statement that has not been so set forth, and
there has been no document required to be filed under the Exchange Act that
upon such filing would be deemed to be incorporated by reference in the
Registration Statement that has not been so filed; and
(iv) Since the date on which the Registration
Statement was initially filed with the Commission, there shall not have
occurred any change or development involving, or which could be expected to
involve, a Material Adverse Effect, whether or not arising from transactions in
the ordinary course of business, except as disclosed in the Prospectus and the
Registration Statement as heretofore amended or (but only if the Underwriters
expressly consent thereto in writing) as disclosed in an amendment or
supplement thereto filed with the Commission and delivered to the Underwriters
after the execution of this Agreement; since such date and except as so
disclosed or in the ordinary course of business, neither of the Offerors has
incurred any liability or obligation, direct or indirect, or entered into any
transaction which is material to the Offerors; since such date and except as so
disclosed, there has not been any change in the outstanding capital securities
of either of the Offerors, or any change that is material to the Offerors in
the short-term debt or long-term debt of the Offerors; since such date and
except as so disclosed, no Offeror has acquired any of the capital securities
of either of the Offerors nor has either of the Offerors declared or paid any
dividend, or made any other distribution, upon its outstanding capital
securities payable to holders of record on a date prior to such Closing Date;
since such date and except as so disclosed, neither Offeror has incurred any
material contingent obligations, and no material litigation is pending or
threatened against either of the Offerors; and, since such date and except as
so disclosed, neither Offeror has 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.
The delivery of the certificate provided for in this subsection (g)
shall be and constitute a representation and warranty of the Offerors as to the
facts required in the immediately foregoing clauses (i), (ii), (iii) and (iv)
to be set forth in said certificate.
(h) At the time this Agreement is executed and also on
each Closing Date, there shall be delivered to the Underwriters a letter
addressed to the Underwriters from BDO Seidman LLP, the Company's independent
accountants, the first letter to be dated the date of this Agreement, the
second letter to be dated the First Closing Date and the third letter (if
applicable) to be dated the Second Closing Date, which shall be in form and
substance satisfactory to the Underwriters and shall contain information as of
a date within five days of the date of such letter. There shall not have been
any change or decrease set forth in any of the letters referred to in this
subsection (h) which makes it impracticable or inadvisable in the judgment of
the Underwriters to proceed with the public offering or purchase of the
Designated Preferred Securities as contemplated hereby.
(i) The Designated Preferred Securities shall have been
qualified or registered for sale under the Blue Sky Laws of such jurisdictions
as shall have been specified by the
<PAGE> 29
Robert W. Baird & Co. Incorporated
December 15, 1997
Page 29
Underwriters, the underwriting terms and arrangements for the offering shall
have been cleared by the NASD, and the Designated Preferred Securities shall
have been designated for inclusion as a Nasdaq National Market security on the
Nasdaq Stock Market and shall have been registered under the Exchange Act.
(j) Such further certificates and documents as the
Underwriters may reasonably request (including certificates of officers of the
Company or of Trustees of the Trust).
(k) On or before the First Closing Date, the Underwriters
shall have received duly executed counterparts of the Trust Agreement, the
Guarantee, the Indenture and the Expense Agreement.
All such opinions, certificates, letters and documents shall be in
compliance with the provisions hereof only if they are satisfactory to the
Underwriters and to Varnum, Riddering, Schmidt & Howlett LLP, counsel for the
Underwriters. The Offerors shall furnish the Underwriters with such manually
signed or conformed copies of such opinions, certificates, letters and
documents as the Underwriters may reasonably request.
If any condition to the Underwriters' obligations hereunder to be
satisfied prior to or at either Closing Date is not so satisfied, this
Agreement at the election of the Underwriters will terminate upon notification
to the Offerors without liability on the part of any Underwriter, the Offerors
except for the provisions of section 7(n) hereof, the expenses to be paid by
the Offerors pursuant to section 8 hereof and except to the extent provided in
section 11 hereof.
SECTION 10. Maintain Effectiveness of Registration Statement. The
Offerors will use their best efforts to prevent the issuance of any stop order
suspending the effectiveness of the Registration Statement, and, if such stop
order is issued, to obtain as soon as possible the lifting thereof.
SECTION 11. Indemnification.
(a) The Offerors agree to jointly and severally indemnify
and hold harmless each Underwriter and each of its directors, officers and
agents and each person, if any, who controls any Underwriter within the meaning
of the Act or the Exchange Act, from and against any losses, claims, damages,
expenses, liabilities or actions in respect thereof ("Claims"), joint or
several, to which such Underwriter or each such controlling person may become
subject under the Act, the Exchange Act, Blue Sky Laws or other federal or
state statutory laws or regulations, at common law or otherwise (including
payments made in settlement of any litigation), insofar as such Claims arise
out of or are based upon any breach of any representation, warranty or covenant
made by either of the Offerors in this Agreement, or any untrue statement or
alleged untrue statement of any material fact contained in the Registration
Statement, any Preliminary Prospectus, the Prospectus or any amendment or
supplement thereto, or in any application filed under any Blue Sky Law or other
document executed by either of the Offerors for that purpose
<PAGE> 30
Robert W. Baird & Co. Incorporated
December 15, 1997
Page 30
or based upon written information furnished by either of the Offerors and filed
in any state or other jurisdiction to qualify any or all of the Designated
Preferred Securities under the securities laws thereof (any such document,
application or information being hereinafter called a "Blue Sky Application")
or arise out of or are based upon the omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading. The Offerors jointly and severally agree to
reimburse each Underwriter and each such controlling person for any legal fees
or other expenses incurred by such Underwriter or any such controlling person
in connection with investigating or defending any such Claim; provided,
however, that the Offerors will not be liable in any such case to the extent
that any such Claim arises out of or is based upon an untrue statement or
alleged untrue statement or omission or alleged omission made in the
Registration Statement, any Preliminary Prospectus, the Prospectus or
supplement thereto or in any Blue Sky Application in reliance upon and in
conformity with the written information furnished to the Offerors pursuant to
section 4 of this Agreement. The indemnification obligations of the Offerors,
as provided above, are in addition to and in no way limit any liabilities the
Offerors may otherwise have.
(b) Each Underwriter, severally and not jointly, will
indemnify and hold harmless the Offerors, each of its directors and each of its
officers who signs the Registration Statement, and each person, if any, who
controls the Offerors within the meaning of the Act or the Exchange Act against
any Claim to which the Offerors, or any such director, officer, or controlling
person may become subject under the Act, the Exchange Act, Blue Sky Laws or
other federal or state statutory laws or regulations, at common law or
otherwise (including payments made in settlement of any litigation, if such
settlement is effected with the written consent of such Underwriter and Baird),
insofar as such Claim arises out of or is based upon any untrue or alleged
untrue statement of any material fact contained in the Registration Statement,
any Preliminary Prospectus, the Prospectus, or any amendment or supplement
thereto, or in any Blue Sky Application, or arises out of or is 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, in
each case to the extent, but only to the extent, that such untrue statement or
alleged untrue statement or omission or alleged omission was made in the
Registration Statement, any Preliminary Prospectus, the Prospectus, or any
amendment or supplement thereto, or in any Blue Sky Application, in reliance
solely upon and in conformity with the written information furnished by the
Underwriters to the Offerors pursuant to section 4 of this Agreement. Each
Underwriter will severally reimburse any legal fees or other expenses incurred
by the Offerors, or any such director, officer, or controlling person in
connection with investigating or defending any such Claim, and from any and all
Claims solely resulting from failure of an Underwriter to deliver a Prospectus,
if the person asserting such Claim purchased Designated Preferred Securities
from such Underwriter and a copy of the Prospectus (as then amended if the
Offerors shall have furnished any amendments thereto) was not sent or given by
or on behalf of such Underwriter to such person, if required by law so to have
been delivered, at or prior to the written confirmation of the sale of the
Designated Preferred Securities to such person, and if the Prospectus (as so
amended) would have cured the defect giving rise to such Claim. The
indemnification obligations of each Underwriter as provided above are in
addition to any
<PAGE> 31
Robert W. Baird & Co. Incorporated
December 15, 1997
Page 31
liabilities any such Underwriter may otherwise have. Notwithstanding the
provisions of this section, no Underwriter shall be required to indemnify or
reimburse the Offerors, or any officer, director, or controlling person in an
aggregate amount in excess of the total price at which the Designated Preferred
Securities purchased by any such Underwriter hereunder were offered to the
public, less the amount of any damages such Underwriter has otherwise been
required to pay by reason of such untrue or alleged untrue statement or
omission or alleged omission.
(c) Promptly after receipt by an indemnified party under
this section of notice of the commencement of any action in respect of a Claim,
such indemnified party will, if a Claim in respect thereof is to be made
against an indemnifying party under this section, notify the indemnifying party
in writing of the commencement thereof, but the omission so to notify the
indemnifying party will not relieve an indemnifying party from any liability it
may have to any indemnified party under this section or otherwise. In case any
such action is brought against any indemnified party, and such indemnified
party notifies an indemnifying party of the commencement thereof, the
indemnifying party will be entitled to participate in and, to the extent that
he, she or it may wish, jointly with all other indemnifying parties, similarly
notified, to assume the defense thereof, with counsel reasonably satisfactory
to such indemnified party; provided, however, if the defendants in any such
action include both the indemnified party and any indemnifying party and the
indemnified party shall have reasonably concluded that there may be legal
defenses available to the indemnified party and/or other indemnified parties
which are different from or additional to those available to any indemnifying
party, the indemnified party or parties shall have the right to select separate
counsel to assume such legal defenses and to otherwise participate in the
defense of such action on behalf of such indemnified party or parties.
(d) Upon receipt of notice from the indemnifying party to
such indemnified party of the indemnifying party's election to assume the
defense of such action and upon approval by the indemnified party of counsel
selected by the indemnifying party, the indemnifying party will not be liable
to such indemnified party under this section for any legal fees or other
expenses subsequently incurred by such indemnified party in connection with the
defense thereof, unless:
(i) the indemnified party shall have employed
separate counsel in connection with the assumption of legal defenses in
accordance with the proviso to the last sentence of subsection (c) of this
section;
(ii) the indemnifying party shall not have
employed counsel reasonably satisfactory to the indemnified party to represent
the indemnified party within a reasonable time after the indemnified party's
notice to the indemnifying party of commencement of the action; or
(iii) the indemnifying party has authorized the
employment of counsel at the expense of the indemnifying party.
<PAGE> 32
Robert W. Baird & Co. Incorporated
December 15, 1997
Page 32
(e) If the indemnification provided for in this section
is unavailable to an indemnified party under subsection (a) or (b) hereof in
respect of any Claim referred to therein, then each indemnifying party, in lieu
of indemnifying such indemnified party, shall, subject to the limitations
hereinafter set forth, contribute to the amount paid or payable by such
indemnified party as a result of such Claim:
(i) in such proportion as is appropriate to
reflect the relative benefits received by the Offerors and the Underwriters
from the offering of the Designated Preferred Securities; or
(ii) if the allocation provided by clause (i)
above is not permitted by applicable law, in such proportion as is appropriate
to reflect not only the relative benefits referred to in clause (i) above, but
also the relative fault of the Offerors and the Underwriters in connection with
the statements or omissions which resulted in such Claim, as well as any other
relevant equitable considerations.
The relative benefits received by each of the Offerors and the
Underwriters shall be deemed to be in such proportion so that the Underwriters
are responsible for that portion represented by the percentage that the amount
of the underwriting compensations per Designated Preferred Securities appearing
on the cover page of the Prospectus bears to the public offering price per
share appearing thereon, and the Offerors (including its officers and directors
and controlling persons), are responsible for the remaining portion. The
relative fault of the Offerors and the Underwriters shall be determined by
reference to, among other things, whether the untrue or alleged untrue
statement of a material fact or the omission or alleged omission to state a
material fact relates to information supplied by the Offerors or the
Underwriters and the parties' relative intent, knowledge, access to information
and opportunity to correct or prevent such statement or omission. The amount
paid or payable by a party as a result of the Claims referred to above shall be
deemed to include, subject to the limitations set forth in subsection (c) of
this section, any legal or other fees or expenses reasonably incurred by such
party in connection with investigating or defending any action or claim.
(f) The Offerors and the Underwriters agree that it would
not be just and equitable if contribution pursuant to this section were
determined by pro rata or per capita allocation (even if the Underwriters were
treated as one entity for such purpose) or by any other method or allocation
which does not take into account the equitable considerations referred to in
subsection (e) of this section 11. Notwithstanding the other provisions of
this section, no Underwriter shall be required to contribute any amount that is
greater than the amount by which the total price at which the Designated
Preferred Securities underwritten by it and distributed to the public were
offered to the public exceeds the amount of any damages which such Underwriter
has otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of section 11(f) of the Act) shall be
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation. The Underwriters' obligations to contribute
<PAGE> 33
Robert W. Baird & Co. Incorporated
December 15, 1997
Page 33
pursuant to this section are several in proportion to their respective
underwriting commitments and not joint.
(g) The Company agrees to indemnify the Trust against any
and all claims, losses, damages, or liabilities that may become due from the
Trust under this section 11.
SECTION 12. Default of Underwriters. It shall be a condition to the
obligations of each Underwriter to purchase the Designated Preferred Securities
in the manner as described herein, that, except as hereinafter provided in this
section, each of the Underwriters shall purchase and pay for all the Designated
Preferred Securities agreed to be purchased by such Underwriter hereunder upon
tender to the Underwriters of all such Designated Preferred Securities in
accordance with the terms hereof. If any Underwriter or Underwriters default
in their obligations to purchase Designated Preferred Securities hereunder on
either the First Closing Date or the Second Closing Date and the aggregate
number of Designated Preferred Securities which such defaulting Underwriter or
Underwriters agreed but failed to purchase does not exceed ten percent (10%) of
the total number of Designated Preferred Securities which the Underwriters are
obligated to purchase on such Closing Date, the Underwriters may make
arrangements for the purchase of such Designated Preferred Securities by other
persons, including any of the Underwriters, but if no such arrangements are
made by such Closing Date the nondefaulting Underwriters shall be obligated
severally, in proportion to their respective commitments hereunder, to purchase
the Designated Preferred Securities which such defaulting Underwriters agreed
but failed to purchase on such Closing Date. If any Underwriter or
Underwriters so default and the aggregate number of Designated Preferred
Securities with respect to which such default or defaults occur is greater than
ten percent (10%) of the total number of Designated Preferred Securities which
the Underwriters are obligated to purchase on such Closing Date, and
arrangements satisfactory to the Underwriters for the purchase of such
Designated Preferred Securities by other persons are not made within thirty-six
hours after such default, this Agreement will terminate without liability on
the part of any nondefaulting Underwriter, except for the expenses to be paid
by the Offerors pursuant to section 8 hereof and except to the extent provided
in section 11 hereof.
In the event that Designated Preferred Securities to which a default
relates are to be purchased by the nondefaulting Underwriters or by another
party or parties, the Underwriters shall have the right to postpone the First
Closing Date or the Second Closing Date, as the case may be, for not more than
seven business days in order that the necessary changes in the Registration
Statement, Prospectus and any other documents, as well as any other
arrangements, may be effected. As used in this Agreement, the term
"Underwriter" includes any person substituted for an Underwriter under this
section. Nothing herein will relieve a defaulting Underwriter from liability
for its default.
SECTION 13. Effective Date. This Agreement shall become effective
upon the execution and delivery of this Agreement by the parties hereto. Such
execution and delivery shall include
<PAGE> 34
Robert W. Baird & Co. Incorporated
December 15, 1997
Page 34
an executed copy of this Agreement sent by telecopier, facsimile transmission
or other means of transmitting written documents.
SECTION 14. Termination. Without limiting the right to terminate
this Agreement pursuant to any other provision hereof, this Agreement may be
terminated by the Underwriters prior to or on the First Closing Date and the
over-allotment option from the Offerors referred to in section 5 hereof, if
exercised, may be canceled by the Underwriters at any time prior to or on the
Second Closing Date, if in the judgment of the Underwriters, payment for and
delivery of the Designated Preferred Securities is rendered impracticable or
inadvisable because:
(a) additional governmental restrictions, not in force
and effect on the date hereof, shall have been imposed upon trading in
securities generally or minimum or maximum prices shall have been generally
established on the New York Stock Exchange or the American Stock Exchange, or
trading in securities generally shall have been suspended or materially limited
on either such exchange or on The Nasdaq Stock Market or a general banking
moratorium shall have been established by either federal or state authorities
in New York, Michigan, Arizona, or Wisconsin;
(b) any event shall have occurred or shall exist which
makes untrue or incorrect in any material respect any statement or information
contained in the Registration Statement or which is not reflected in the
Registration Statement but should be reflected therein to make the statements
or information contained therein not misleading in any material respect; or
(c) an outbreak or escalation of hostilities or other
national or international calamity or any substantial change in political,
financial or economic conditions shall have occurred or shall have accelerated
to such extent, in the judgment of the Underwriters, as to have a material
adverse effect on the financial markets of the United States, or to make it
impracticable or inadvisable to proceed with completion of the sale of and
payment for the Designated Preferred Securities as provided in this Agreement.
Any termination pursuant to this section shall be without liability on
the part of any Underwriter to the Offerors, or on the part of the Offerors to
any Underwriter, except for expenses to be paid by the Offerors pursuant to
section 8 hereof or reimbursed by the Offerors pursuant to section 6(n) hereof
and except as to indemnification to the extent provided in section 11 hereof.
SECTION 15. Representations and Indemnities to Survive Delivery. The
respective indemnities, agreements, representations, warranties, covenants and
other statements of the each of the Offerors, of its officers, directors, or
trustees and of the several Underwriters 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 any Underwriter or Offeror or any of its or their
partners, officers, directors, trustees or any controlling person, as the case
may be, and will survive delivery of and payment for the Designated Preferred
Securities sold hereunder.
<PAGE> 35
Robert W. Baird & Co. Incorporated
December 15, 1997
Page 35
SECTION 16. Notices. All communications hereunder will be in writing
and, if sent to the Underwriters, will be mailed, delivered, telecopied (with
receipt confirmed) or telegraphed and confirmed to Robert W. Baird & Co.
Incorporated at 777 East Wisconsin Avenue, Milwaukee, Wisconsin 53202,
Attention: Steven P. Kent; with a copy to Donald L. Johnson, Esq., Varnum,
Riddering, Schmidt & Howlett LLP, 17th Floor, 333 Bridge Street, N.W., Grand
Rapids, Michigan 49504; and if sent to either Offeror, will be mailed,
delivered, telecopied (with receipt confirmed) or telegraphed and confirmed to
either Offeror at One Business & Trade Center, 200 Washington Square North,
Lansing, Michigan 48933, Attention: Lee W. Hendrickson, with a copy to John
Sharp, Strobl & Borda, P.C., 300 E. Longlake Road, Suite 200, Bloomfield Hills,
Michigan 48304
SECTION 17. Successors. This Agreement will inure to the benefit of
and be binding upon the parties hereto and their respective successors,
personal representatives and assigns, and to the benefit of the officers and
directors and controlling persons referred to in section 11 hereof and no other
person will have any right or obligation hereunder. The term "successors" shall
not include any purchaser of the Designated Preferred Securities as such from
any of the Underwriters merely by reason of such purchase.
SECTION 18. Partial Unenforceability. If any section, paragraph,
clause or provision of this Agreement is for any reason determined to be
invalid or unenforceable, such determination shall not affect the validity or
enforceability of any other section, paragraph clause or provision hereof.
SECTION 19. Applicable Law; Counterparts. This Agreement shall be
governed by and construed in accordance with the internal laws of the State of
Wisconsin without reference to conflict of law principles thereunder. This
Agreement may be signed in various counterparts which together shall constitute
one and the same instrument, and shall be effective when at least one
counterpart hereof shall have been executed by or on behalf of each party
hereto.
If the foregoing is in accordance with your understanding of our
agreement, kindly sign and return to us the enclosed duplicates hereof,
whereupon it will become a binding agreement among the Offerors and the several
Underwriters, all in accordance with its terms.
Very truly yours,
Capitol Bancorp Ltd.
By: /s/ JOSEPH D. REID
------------------------------------
Joseph D. Reid
Its Chairman, President and
Chief Executive Officer
----------------------------
[SIGNATURES CONTINUED ON NEXT PAGE]
<PAGE> 36
Robert W. Baird & Co. Incorporated
December 15, 1997
Page 36
[SIGNATURES CONTINUED FROM PRIOR PAGE]
Capitol Trust I
By: /s/ ROBERT C. CARR
------------------------------------
Robert C. Carr
Its Administrative Trustee
---------------------------------
The foregoing Underwriting Agreement
is hereby confirmed and accepted as
of the date first above written.
ROBERT W. BAIRD & CO. INCORPORATED
By: /s/ STEVEN P. KENT
----------------------------------
Authorized Representative
STIFEL, NICOLAUS & COMPANY INCORPORATED
By: /s/ RICK E. MAPLES
----------------------------------
Authorized Representative
HOWE BARNES INVESTMENTS, INC.
By: /s/ DANIEL E. COUGHLIN
----------------------------------
Authorized Representative
<PAGE> 37
CAPITOL TRUST I
CAPITOL BANCORP LTD.
Schedule I
<TABLE>
<CAPTION>
Number of
Firm Preferred
Underwriter Securities
- ----------- --------------
<S> <C>
Robert W. Baird & Co. Incorporated. . . . . . . . . . . . . . . . . . 1,210,000
Stifel, Nicolous & Company Incorporated . . . . . . . . . . . . . . . 660,000
Howe Barnes Investments, Inc. . . . . . . . . . . . . . . . . . . . . 330,000
---------
Total 2,200,000
=========
</TABLE>
<PAGE> 1
EXHIBIT 4.1
CAPITOL BANCORP LTD.
AND
THE FIRST NATIONAL BANK OF CHICAGO
AS TRUSTEE
INDENTURE
8.50% SUBORDINATED DEBENTURES DUE 2027
DATED AS OF DECEMBER 18, 1997.
<PAGE> 2
TABLE OF CONTENTS
Page
----
ARTICLE I.
DEFINITIONS. . . . . . . . . . . . . . . . . . . . . . . . . .
Section 1.1. Definitions of Terms. . . . . . . . . . . . .
ARTICLE II.
ISSUE, DESCRIPTION, TERMS, CONDITIONS
REGISTRATION AND EXCHANGE OF DEBENTURES. . . . . . . . . . . .
Section 2.1. Designation and Principal Amount. . . . . . .
Section 2.2. Maturity. . . . . . . . . . . . . . . . . . .
Section 2.3. Form and Payment. . . . . . . . . . . . . . .
Section 2.4. [Intentionally Omitted] . . . . . . . . . . .
Section 2.5. Interest. . . . . . . . . . . . . . . . . . .
Section 2.6. Execution and Authentications . . . . . . . .
Section 2.7. Registration of Transfer and Exchange . . . .
Section 2.8. Temporary Debentures. . . . . . . . . . . . .
Section 2.9. Mutilated, Destroyed, Lost or Stolen
Debentures. . . . . . . . . . . . . . . . . .
Section 2.10. Cancellation. . . . . . . . . . . . . . . . .
Section 2.11. Benefit of Indenture. . . . . . . . . . . . .
Section 2.12. Authentication Agent. . . . . . . . . . . . .
ARTICLE III.
REDEMPTION OF DEBENTURES . . . . . . . . . . . . . . . . . . .
Section 3.1. Redemption. . . . . . . . . . . . . . . . . .
Section 3.2. Special Event Redemption. . . . . . . . . . .
Section 3.3. Optional Redemption by Company. . . . . . . .
Section 3.4. Notice of Redemption. . . . . . . . . . . . .
Section 3.5. Payment Upon Redemption . . . . . . . . . . .
Section 3.6. No Sinking Fund . . . . . . . . . . . . . . .
ARTICLE IV.
EXTENSION OF INTEREST PAYMENT PERIOD . . . . . . . . . . . . .
Section 4.1. Extension of Interest Payment Period. . . . .
Section 4.2. Notice of Extension . . . . . . . . . . . . .
Section 4.3. Limitation on Transactions. . . . . . . . . .
ARTICLE V.
PARTICULAR COVENANTS OF COMPANY. . . . . . . . . . . . . . . .
Section 5.1. Payment of Principal and Interest . . . . . .
Section 5.2. Maintenance of Agency . . . . . . . . . . . .
Section 5.3. Paying Agents . . . . . . . . . . . . . . . .
Section 5.4. Appointment to Fill Vacancy in Office of
Trustee . . . . . . . . . . . . . . . . . . .
Section 5.5. Compliance with Consolidation Provisions. . .
Section 5.6. Limitation on Transactions. . . . . . . . . .
Section 5.7. Covenants as to the Trust . . . . . . . . . .
Section 5.8. Covenants as to Purchases . . . . . . . . . .
ARTICLE VI.
DEBENTUREHOLDERS' LISTS AND REPORTS
BY COMPANY AND TRUSTEE . . . . . . . . . . . . . . . . . . . .
<PAGE> 3
Section 6.1. Company to Furnish Trustee Names and
Addresses of Debentureholders . . . . . . . .
Section 6.2. Preservation of Information
Communications with Debentureholders. . . . .
Section 6.3. Reports by Company. . . . . . . . . . . . . .
Section 6.4. Reports by Trustee. . . . . . . . . . . . . .
ARTICLE VII.
REMEDIES OF TRUSTEE AND DEBENTUREHOLDERS
ON EVENT OF DEFAULT. . . . . . . . . . . . . . . . . . . . . .
Section 7.1. Events of Default . . . . . . . . . . . . . .
Section 7.2. Collection of Indebtedness and Suits for
Enforcement by Trustee. . . . . . . . . . . .
Section 7.3. Application of Moneys Collected . . . . . . .
Section 7.4. Limitation on Suits . . . . . . . . . . . . .
Section 7.5. Rights and Remedies Cumulative; Delay or
Omission not Waiver . . . . . . . . . . . . .
Section 7.6. Control by Debentureholders . . . . . . . . .
Section 7.7. Undertaking to Pay Costs. . . . . . . . . . .
ARTICLE VIII.
FORM OF DEBENTURE AND ORIGINAL ISSUE . . . . . . . . . . . . .
Section 8.1. Form of Debenture . . . . . . . . . . . . . .
Section 8.2. Original Issue of Debentures. . . . . . . . .
ARTICLE IX.
CONCERNING TRUSTEE . . . . . . . . . . . . . . . . . . . . . .
Section 9.1. Certain Duties and Responsibilities of
Trustee . . . . . . . . . . . . . . . . . . .
Section 9.2. Notice of Defaults. . . . . . . . . . . . . .
Section 9.3. Certain Rights of Trustee . . . . . . . . . .
Section 9.4. Trustee Not Responsible for Recitals,
etc.. . . . . . . . . . . . . . . . . . . . .
Section 9.5. May Hold Debentures . . . . . . . . . . . . .
Section 9.6. Moneys Held in Trust. . . . . . . . . . . . .
Section 9.7. Compensation and Reimbursement. . . . . . . .
Section 9.8. Reliance on Officers' Certificate . . . . . .
Section 9.9. Disqualification: Conflicting Interests. . .
Section 9.10. Corporate Trustee Required; Eligibility . . .
Section 9.11. Resignation and Removal; Appointment of
Successor . . . . . . . . . . . . . . . . . .
Section 9.12. Acceptance of Appointment by Successor. . . .
Section 9.13. Merger, Conversion, Consolidation or
Succession to Business. . . . . . . . . . . .
Section 9.14. Preferential Collection of Claims
Against the Company . . . . . . . . . . . . .
ARTICLE X.
CONCERNING DEBENTUREHOLDERS. . . . . . . . . . . . . . . . . .
Section 10.1. Evidence of Action by Holders . . . . . . . .
Section 10.2. Proof of Execution by Debentureholders. . . .
Section 10.3. Who May be Deemed Owners. . . . . . . . . . .
Section 10.4. Certain Debentures Owned by Company
Disregarded . . . . . . . . . . . . . . . . .
Section 10.5. Actions Binding on Future
Debentureholders. . . . . . . . . . . . . . .
<PAGE> 4
ARTICLE XI.
SUPPLEMENTAL INDENTURES. . . . . . . . . . . . . . . . . . . .
Section 11.1. Supplemental Indentures Without the
Consent of Debentureholders . . . . . . . . .
Section 11.2. Supplemental Indentures with Consent of
Debentureholders. . . . . . . . . . . . . . .
Section 11.3. Effect of Supplemental Indentures . . . . . .
Section 11.4. Debentures Affected by Supplemental
Indentures. . . . . . . . . . . . . . . . . .
Section 11.5. Execution of Supplemental Indentures. . . . .
ARTICLE XII.
SUCCESSOR CORPORATION. . . . . . . . . . . . . . . . . . . . .
Section 12.1. Company May Consolidate, etc. . . . . . . . .
Section 12.2. Successor Corporation Substituted . . . . . .
Section 12.3. Evidence of Consolidation, etc. to
Trustee . . . . . . . . . . . . . . . . . . .
ARTICLE XIII.
SATISFACTION AND DISCHARGE . . . . . . . . . . . . . . . . . .
Section 13.1. Satisfaction and Discharge of Indenture . . .
Section 13.2. Discharge of Obligations. . . . . . . . . . .
Section 13.3. Deposited Moneys to be Held in Trust. . . . .
Section 13.4. Payment of Monies Held by Paying Agents . . .
Section 13.5. Repayment to Company. . . . . . . . . . . . .
ARTICLE XIV.
IMMUNITY OF INCORPORATORS, STOCKHOLDERS, OFFICERS
AND DIRECTORS. . . . . . . . . . . . . . . . . . . . . . . . .
Section 14.1. No Recourse . . . . . . . . . . . . . . . . .
ARTICLE XV.
MISCELLANEOUS PROVISIONS . . . . . . . . . . . . . . . . . . .
Section 15.1. Effect on Successors and Assigns. . . . . . .
Section 15.2. Actions by Successor. . . . . . . . . . . . .
Section 15.3. Surrender of Company Powers . . . . . . . . .
Section 15.4. Notices . . . . . . . . . . . . . . . . . . .
Section 15.5. Governing Law . . . . . . . . . . . . . . . .
Section 15.6. Treatment of Debentures as Debt . . . . . . .
Section 15.7. Compliance Certificates and Opinions. . . . .
Section 15.8. Payments on Business Days . . . . . . . . . .
Section 15.9. Conflict with Trust Indenture Act . . . . . .
Section 15.10. Counterparts. . . . . . . . . . . . . . . . .
Section 15.11. Separability. . . . . . . . . . . . . . . . .
Section 15.12. Assignment . . . . . . . . . . . . . . . . .
Section 15.13. Acknowledgment of Rights; Right of
Setoff . . . . . . . . . . . . . . . . . . .
ARTICLE XVI.
SUBORDINATION OF DEBENTURES. . . . . . . . . . . . . . . . . .
Section 16.1. Agreement to Subordinate. . . . . . . . . . .
Section 16.2. Default on Senior Debt, Subordinated
Debt or Additional Senior Obligations . . . .
Section 16.3. Liquidation; Dissolution; Bankruptcy. . . . .
Section 16.4. Subrogation . . . . . . . . . . . . . . . . .
Section 16.5. Trustee to Effectuate Subordination . . . . .
Section 16.6. Notice by Company . . . . . . . . . . . . . .
<PAGE> 5
Section 16.7. Rights of Trustee; Holders of Senior
Indebtedness. . . . . . . . . . . . . . . . .
Section 16.8. Subordination may not be Impaired . . . . . .
CROSS REFERENCE TABLE
SECTION OF TRUST
INDENTURE ACT OF SECTION OF
1939, AS AMENDED INDENTURE
---------------- ----------
310(a). . . . . . . . . . . . . . . . . . . . . . . . . .9.10
310(b). . . . . . . . . . . . . . . . . . . . . . . 9.9, 9.11
310(c). . . . . . . . . . . . . . . . . . . . .Not Applicable
311(a). . . . . . . . . . . . . . . . . . . . . . . . . .9.14
311(b). . . . . . . . . . . . . . . . . . . . . . . . . .9.14
311(c). . . . . . . . . . . . . . . . . . . . .Not Applicable
312(a). . . . . . . . . . . . . . . . . . . . . . 6.1, 6.2(a)
312(b). . . . . . . . . . . . . . . . . . . . . . . . .6.2(c)
312(c). . . . . . . . . . . . . . . . . . . . . . . . .6.2(c)
313(a). . . . . . . . . . . . . . . . . . . . . . . . .6.4(a)
313(b). . . . . . . . . . . . . . . . . . . . . . . . .6.4(b)
313(c). . . . . . . . . . . . . . . . . . . . .6.4(a), 6.4(b)
313(d). . . . . . . . . . . . . . . . . . . . . . . . .6.4(c)
314(a). . . . . . . . . . . . . . . . . . . . . . . . .6.3(a)
314(b). . . . . . . . . . . . . . . . . . . . .Not Applicable
314(c). . . . . . . . . . . . . . . . . . . . . . . . . .15.7
314(d). . . . . . . . . . . . . . . . . . . . .Not Applicable
314(e). . . . . . . . . . . . . . . . . . . . . . . . . .15.7
314(f). . . . . . . . . . . . . . . . . . . . .Not Applicable
315(a). . . . . . . . . . . . . . . . . . . . . . 9.1(a), 9.3
315(b). . . . . . . . . . . . . . . . . . . . . . . . . . 9.2
315(c). . . . . . . . . . . . . . . . . . . . . . . . .9.1(a)
315(d). . . . . . . . . . . . . . . . . . . . . . . . .9.1(b)
315(e). . . . . . . . . . . . . . . . . . . . . . . . . . 7.7
316(a). . . . . . . . . . . . . . . . . . . . . . . .1.1, 7.6
316(b). . . . . . . . . . . . . . . . . . . . . . . . .7.4(b)
316(c). . . . . . . . . . . . . . . . . . . . . . . . 10.1(b)
317(a). . . . . . . . . . . . . . . . . . . . . . . . . . 7.2
317(b). . . . . . . . . . . . . . . . . . . . . . . . . . 5.3
318(a). . . . . . . . . . . . . . . . . . . . . . . . . .15.9
Note: This Cross-Reference Table does not constitute
part of this Indenture and shall not affect the interpretation
of any of its terms or provisions.
<PAGE> 6
INDENTURE
INDENTURE, dated as of December 18, 1997, between CAPITOL BANCORP LTD.,
a Michigan corporation (the "Company"), and THE FIRST NATIONAL BANK OF CHICAGO,
a national banking association, as trustee (the "Trustee");
RECITALS
WHEREAS, for its lawful corporate purposes, the Company has duly
authorized the execution and delivery of this Indenture to provide for the
issuance of securities to be known as its 8.50% Subordinated Debentures due
2027 (hereinafter referred to as the "Debentures"), the form and substance of
such Debentures and the terms, provisions and conditions thereof to be set
forth as provided in this Indenture;
WHEREAS, Capital Bancorp Trust I, a Delaware statutory business trust (the
"Trust"), has offered to the public up to $25,300,000 aggregate liquidation
amount of its Preferred Securities (as defined herein) and proposes to invest
the proceeds from such offering, together with the proceeds of the issuance and
sale by the Trust to the Company of up to $782,474 aggregate liquidation amount
of its Common Securities (as defined herein), in up to $26,082,474 aggregate
principal amount of the Debentures; and
WHEREAS, the Company has requested that the Trustee execute and deliver
this Indenture; and
WHEREAS, all requirements necessary to make this Indenture a valid
instrument in accordance with its terms, and to make the Debentures, when
executed by the Company and authenticated and delivered by the Trustee, the
valid obligations of the Company, have been performed, and the execution and
delivery of this Indenture have been duly authorized in all respects; and
WHEREAS, to provide the terms and conditions upon which the Debentures are
to be authenticated, issued and delivered, the Company has duly authorized the
execution of this Indenture; 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, in consideration of the premises and the purchase of the
Debentures by the holders thereof, it is mutually covenanted and agreed as
follows for the equal and ratable benefit of the holders of the Debentures:
ARTICLE I.
DEFINITIONS
SECTION 1.1. DEFINITIONS OF TERMS.
The terms defined in this Section 1.1 (except as in this Indenture
otherwise expressly provided or unless the context otherwise requires) for all
purposes of this Indenture and of any indenture supplemental hereto shall have
the respective meanings specified in this Section 1.1
<PAGE> 7
and shall include the plural as well as the singular. All other terms used
in this Indenture that are defined in the Trust Indenture Act, or that are by
reference in the Trust Indenture Act defined in the Securities Act (except as
herein otherwise expressly provided or unless the context otherwise requires),
shall have the meanings assigned to such terms in the Trust Indenture Act and
in the Securities Act as in force at the date of the execution of this
instrument. All accounting terms used herein and not expressly defined shall
have the meanings assigned to such terms in accordance with Generally Accepted
Accounting Principles.
"Accelerated Maturity Date" means if the Company elects to accelerate the
Maturity Date in accordance with Section 2.2(c), the date selected by the
Company which is prior to the Scheduled Maturity Date, but is after September
30, 2002.
"Additional Payments" shall have the meaning set forth in Section 2.5.
"Additional Senior Obligations" means all indebtedness of the Company
whether incurred on or prior to the date of this Indenture or thereafter
incurred, for claims in respect of derivative products such as interest and
foreign exchange rate contracts, commodity contracts and similar arrangements;
provided, however, that Additional Senior Obligations does not include claims
in respect of Senior Debt or Subordinated Debt or obligations which, by their
terms, are expressly stated to be not superior in right of payment to the
Debentures or to rank pari passu in right of payment with the Debentures. For
purposes of this definition, "claim" shall have the meaning assigned thereto in
Section 101(4) of the United States Bankruptcy Code of 1978, as amended.
"Administrative Trustees" shall have the meaning set forth in the Trust
Agreement.
"Affiliate" means, with respect to a specified Person, (a) any Person
directly or indirectly owning, controlling or holding with power to vote 10% or
more of the outstanding voting securities or other ownership interests of the
specified Person; (b) any Person 10% or more of whose outstanding voting
securities or other ownership interests are directly or indirectly owned,
controlled or held with power to vote by the specified Person; (c) any Person
directly or indirectly controlling, controlled by, or under common control with
the specified Person; (d) a partnership in which the specified Person is a
general partner; (e) any officer or director of the specified Person; and (f)
if the specified Person is an individual, any entity of which the specified
Person is an officer, director or general partner.
"Authenticating Agent" means an authenticating agent with respect to the
Debentures appointed by the Trustee pursuant to Section 2.12.
"Bankruptcy Law" means Title 11, U.S. Code, or any similar federal or
state law for the relief of debtors.
"Board of Directors" means the Board of Directors of the Company or any
duly authorized committee of such Board.
<PAGE> 8
"Board Resolution" means a copy of a resolution certified by the Secretary
or an Assistant Secretary of the Company to have been duly adopted by the Board
of Directors and to be in full force and effect on the date of such
certification.
"Business Day" means, with respect to the Debentures, any day other than a
Saturday or a Sunday or a day on which federal or state banking institutions in
the Borough of Manhattan, The City of New York, are authorized or required by
law, executive order or regulation to close, or a day on which the Corporate
Trust Office of the Trustee or the Property Trustee is closed for business.
"Capital Treatment Event" means the receipt by the Trust of an Opinion of
Counsel, rendered by a law firm having a recognized banking law practice, 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 thereof or therein, or as a
result of any official administrative pronouncement or judicial decision
interpreting or applying such laws or regulations, which amendment or change is
effective or such proposed change, pronouncement or decision is announced on or
after the date of issuance of the Preferred Securities under the Trust
Agreement, there is more than an insubstantial risk of impairment of the
Company's ability to treat the aggregate liquidation amount of the Preferred
Securities (or any substantial portion thereof) as "Tier 1 Capital" or "Tier II
Capital" (or the then equivalent thereof) for purposes of the capital adequacy
guidelines of the Federal Reserve, as then in effect and applicable to the
Company.
"Certificate" means a certificate signed by the principal executive
officer, the principal financial officer, the principal accounting officer, the
treasurer or any vice president of the Company. The Certificate need not
comply with the provisions of Section 15.7.
"Change in 1940 Act Law" shall have the meaning set forth in the
definition of "Investment Company Event."
"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" means undivided beneficial interests in the assets of
the Trust which rank pari passu with the Preferred Securities; provided,
however, that upon the occurrence of an Event of Default, the rights of holders
of Common Securities to payment in respect of (i) distributions, and (ii)
payments upon liquidation, redemption and otherwise, are subordinated to the
rights of holders of Preferred Securities.
"Company" means Capitol Bancorp Ltd., a Michigan corporation, a
corporation duly organized and existing under the laws of the State of
Michigan, and, subject to the provisions of Article XII, shall also include its
successors and assigns.
<PAGE> 9
"Compounded Interest" shall have the meaning set forth in Section 4.1.
"Corporate Trust Office" means the office of the Trustee at which, at any
particular time, its corporate trust business shall be principally
administered, which office at the date hereof is located at One First National
Plaze, Suite 0126, Chicago, IL 60670-0126, Attention: Corporate Trust
Department.
"Coupon Rate" shall have the meaning set forth in Section 2.5.
"Custodian" means any receiver, trustee, assignee, liquidator, or similar
official under any Bankruptcy Law.
"Debentures" shall have the meaning set forth in the Recitals hereto.
"Debentureholder," "holder of Debentures," "registered holder," or other
similar term, means the Person or Persons in whose name or names a particular
Debenture shall be registered on the books of the Company or the Trustee kept
for that purpose in accordance with the terms of this Indenture.
"Debenture Register" shall have the meaning set forth in Section 2.7(b).
"Debenture Registrar" shall have the meaning set forth in Section 2.7(b).
"Debt" means with respect to any Person, whether recourse is to all or a
portion of the assets of such Person and whether or not contingent, (i) every
obligation of such Person for money borrowed; ii) every obligation of such
Person 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 such Person with
respect to letters of credit, bankers' acceptances or similar facilities issued
for the account of such Person; (iv) every obligation of such Person 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 such Person; and (vi) and
every obligation of the type referred to in clauses (i) through (v) of another
Person and all dividends of another Person the payment of which, in either
case, such Person has guaranteed or is responsible or liable, directly or
indirectly, as obligor or otherwise.
"Default" means any event, act or condition that with notice or lapse of
time, or both, would constitute an Event of Default.
"Deferred Payments" shall have the meaning set forth in Section 4.1.
"Dissolution Event" means that as a result of the occurrence and
continuation of a Special Event, the Trust is to be dissolved in accordance
with the Trust Agreement and the Debentures held by the Property Trustee are to
be distributed to the holders of the Trust
<PAGE> 10
Securities issued by the Trust pro rata in accordance with the Trust Agreement.
"Distribution" shall have the meaning set forth in the Trust Agreement.
"Event of Default" means, with respect to the Debentures, any event
specified in Section 7.1, which has continued for the period of time, if any,
and after the giving of the notice, if any, therein designated.
"Exchange Act," means the Securities Exchange Act of 1934, as amended, as
in effect at the date of execution of this instrument.
"Extended Interest Payment Period" shall have the meaning set forth in
Section 4.1.
"Extended Maturity Date" means if the Company elects to extend the
Maturity Date in accordance with Section 2.2(b), the date selected by the
Company which is after the Scheduled Maturity Date but before December 31,
2036.
"Federal Reserve" means the Board of Governors of the Federal Reserve
System.
"Generally Accepted Accounting Principles" means such accounting
principles as are generally accepted at the time of any computation required
hereunder.
"Governmental Obligations" means securities that are (i) direct
obligations of the United States of America for the payment of which its full
faith and credit is pledged; or (ii) obligations of a Person controlled or
supervised by and acting as an agency or instrumentality of the United States
of America, the payment of which is unconditionally guaranteed as a full faith
and credit obligation by the United States of America that, in either case, are
not callable or redeemable at the option of the issuer thereof, and shall also
include a depositary receipt issued by a bank (as defined in Section 3(a)(2) of
the Securities Act) as custodian with respect to any such Governmental
Obligation or a specific payment of principal of or interest on any such
Governmental Obligation held by such custodian for the account of the holder of
such depositary receipt; provided, however, that (except as required by law)
such custodian is not authorized to make any deduction from the amount payable
to the holder of such depositary receipt from any amount received by the
custodian in respect of the Governmental Obligation or the specific payment of
principal of or interest on the Governmental Obligation evidenced by such
depositary receipt.
"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.
"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 in accordance with the terms hereof.
<PAGE> 11
"Interest Payment Date," shall have the meaning set forth in Section 2.5.
"Investment Company Act" means the Investment Company Act of 1940, as
amended, as in effect at the date of execution of this instrument.
"Investment Company Event" means the receipt by the Trust of an Opinion of
Counsel, rendered by a law firm having a recognized tax and securities law
practice, to the effect that, as a result of the occurrence of a change in law
or regulation or a change in interpretation or application of law or regulation
by any legislative body, court, governmental agency or regulatory authority (a
"Change in 1940 Act Law"), the Trust is or shall be considered an "investment
company" that is required to be registered under the Investment Company Act,
which Change in 1940 Act Law becomes effective on or after the date of original
issuance of the Preferred Securities under the Trust Agreement.
"Maturity Date" means the date on which the Debentures mature and on which
the principal shall be due and payable together with all accrued and unpaid
interest thereon including Compounded Interest and Additional Payments, if any.
"Ministerial Action" shall have the meaning set forth in Section 3.2.
"Officers' Certificate" means a certificate signed by the President or a
Vice President and by the Treasurer or an Assistant Treasurer or the Controller
or an Assistant Controller or the Secretary or an Assistant Secretary of the
Company that is delivered to the Trustee in accordance with the terms hereof.
Each such certificate shall include the statements provided for in Section
15.7, if and to the extent required by the provisions thereof.
"Opinion of Counsel" means an opinion in writing of legal counsel, who may
be an employee of or counsel for the Company, that is delivered to the Trustee
in accordance with the terms hereof. Each such opinion shall include the
statements provided for in Section 15.7, if and to the extent required by the
provisions thereof.
"Outstanding," when used with reference to the Debentures, means, subject
to the provisions of Section 10.4, as of any particular time, all Debentures
theretofore authenticated and delivered by the Trustee under this Indenture,
except (a) Debentures theretofore canceled by the Trustee or any paying agent,
or delivered to the Trustee or any paying agent for cancellation or that have
previously been canceled; (b) Debentures or portions thereof for the payment or
redemption of which moneys or Governmental Obligations in the necessary amount
shall have been deposited in trust with the Trustee or with any paying agent
(other than the Company) or shall have been set aside and segregated in trust
by the Company (if the Company shall act as its own paying agent); provided,
however, that if such Debentures or portions of such Debentures are to be
redeemed prior to the maturity thereof, notice of such redemption shall have
been given as in Article III provided, or provision satisfactory to the Trustee
shall have been made for giving such notice; and (c) Debentures in lieu of or
in substitution for which
<PAGE> 12
other Debentures shall have been authenticated and delivered pursuant to the
terms of Section 2.7.
"Paying Agent" means any paying agent or co-paying agent appointed
pursuant to Section 5.3.
"Person" means any individual, corporation, partnership, joint-venture,
joint-stock company, unincorporated organization or government or any agency or
political subdivision thereof.
"Predecessor Debenture" means every previous Debenture evidencing all or a
portion of the same debt as that evidenced by such particular Debenture; and,
for the purposes of this definition, any Debenture authenticated and delivered
under Section 2.9 in lieu of a lost, destroyed or stolen Debenture shall be
deemed to evidence the same debt as the lost, destroyed or stolen Debenture.
"Preferred Securities" means undivided beneficial interests in the assets
of the Trust which rank pari passu with Common Securities issued by the Trust;
provided, however, that upon the occurrence of an Event of Default, the rights
of holders of Common Securities to payment in respect of (i) distributions, and
(ii) payments upon liquidation, redemption and otherwise, are subordinated to
the rights of holders of Preferred Securities.
"Preferred Securities Guarantee" means any guarantee that the Company may
enter into with the Trustee or other Persons that operate directly or
indirectly for the benefit of holders of Preferred Securities.
"Property Trustee" has the meaning set forth in the Trust Agreement.
"Responsible Officer" when used with respect to the Trustee means the
Chairman of the Board of Directors, the President, any Vice President, the
Secretary, the Treasurer, any trust officer, any corporate trust officer or any
other officer or assistant officer of the Trustee customarily performing
functions similar to those performed by the Persons who at the time shall be
such officers, respectively, or to whom any corporate trust matter is referred
because of his or her knowledge of and familiarity with the particular subject.
"Scheduled Maturity Date" means December 31, 2027.
"Securities Act," means the Securities Act of 1933, as amended, as in
effect at the date of execution of this instrument.
"Senior Debt" means the principal of (and premium, if any) and interest,
if any (including interest accruing on or after the filing of any petition in
bankruptcy or for reorganization relating to the Company whether or not such
claim for post-petition interest is allowed in such proceeding), on Debt,
whether incurred on or prior to the date of this Indenture or thereafter
incurred, unless, in the instrument creating or evidencing the same or pursuant
to which the same is outstanding, it is provided that such obligations are not
superior in right of payment to the Debentures or to other Debt which is pari
passu with, or subordinated to, the Debentures; provided, however, that
<PAGE> 13
Senior Debt shall not be deemed to include (i) any Debt 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; (ii) any Debt of the Company to any of its subsidiaries; (iii) Debt to
any employee of the Company; (iv) Debt which by its terms is subordinated to
trade accounts payable or accrued liabilities arising in the ordinary course of
business to the extent that payments made to the holders of such Debt by the
holders of the Debentures as a result of the subordination provisions of this
Indenture would be greater than they otherwise would have been as a result of
any obligation of such holders to pay amounts over to the obligees on such
trade accounts payable or accrued liabilities arising in the ordinary course of
business as a result of subordination provisions to which such Debt is subject;
and (v) Debt which constitutes Subordinated Debt.
"Senior Indebtedness" shall have the meaning set forth in Section 16.1.
"Special Event" means a Tax Event, a Capital Treatment Event or an
Investment Company Event.
"Subordinated Debt" means the principal of (and premium, if any) and
interest, if any (including interest accruing on or after the filing of any
petition in bankruptcy or for reorganization relating to the Company whether or
not such claim for post-petition interest is allowed in such proceeding), on
Debt, whether incurred on or prior to the date of this Indenture or thereafter
incurred, which is by its terms expressly provided to be junior and subordinate
to other Debt of the Company (other than the Debentures).
"Subsidiary" means, with respect to any Person, (i) any corporation at
least a majority of whose outstanding Voting Stock shall at the time be owned,
directly or indirectly, by such Person or by one or more of its Subsidiaries or
by such Person and one or more of its Subsidiaries; (ii) any general
partnership, joint venture, trust or similar entity, at least a majority of
whose outstanding partnership or similar interests shall at the time be owned
by such Person, or by one or more of its Subsidiaries, or by such Person and
one or more of its Subsidiaries; and (iii) any limited partnership of which
such Person or any of its Subsidiaries is a general partner.
"Tax Event" means the receipt by the Trust of an Opinion of Counsel,
rendered by a law firm having a recognized tax and securities practice, 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 administrative pronouncement or
judicial decision interpreting or applying such laws or regulations, which
amendment or change is effective or which pronouncement or decision is
announced on or after the date of issuance of the Preferred Securities under
the Trust Agreement, there is more than an insubstantial risk that (i) the
Trust is, or shall be within 90 days after the date of such Opinion of Counsel,
subject to United States federal incomes tax with respect to income received
or accrued on the Debentures; (ii) interest payable by the Company on the
Debentures is not, or within 90 days after the date
<PAGE> 14
of such Opinion of Counsel, shall not be, deductible by the Company, in
whole or in part, for United States federal income tax purposes; or (iii) the
Trust is, or shall be within 90 days after the date of such Opinion of Counsel,
subject to more than a deminimis amount of other taxes, duties, assessments or
other governmental charges. The Trust or the Company shall request and receive
such Opinion of Counsel with regard to such matters within a reasonable period
of time after the Trust or the Company shall have become aware of any of the
events described in clauses (i) through (iii) above.
"Trust" means Capitol Trust I, a Delaware statutory business trust.
"Trust Agreement" means the Amended and Restated Trust Agreement, dated
December 18, 1997, of the Trust.
"Trustee" means The First National Bank of Chicago, and, subject to the
provisions of Article IX, shall also include its successors and assigns, and,
if at any time there is more than one Person acting in such capacity hereunder,
"Trustee" shall mean each such Person.
"Trust Indenture Act," means the Trust Indenture Act of 1939, as amended,
subject to the provisions of Sections 11.1, 11.2, and 12.1, as in effect at the
date of execution of this instrument.
"Trust Securities" means the Common Securities and Preferred Securities,
collectively.
"Voting Stock," as applied to stock of any Person, means shares,
interests, participations or other equivalents in the equity interest (however
designated) in such Person having ordinary voting power for the election of a
majority of the directors (or the equivalent) of such Person, other than
shares, interests, participations or other equivalents having such power only
by reason of the occurrence of a contingency.
ARTICLE II.
ISSUE, DESCRIPTION, TERMS, CONDITIONS
REGISTRATION AND EXCHANGE OF DEBENTURES
SECTION 2.1. DESIGNATION AND PRINCIPAL AMOUNT.
There is hereby authorized Debentures designated the "8.50% Subordinated
Debentures due 2027," limited in aggregate principal amount to $26,082,474,
which amount shall be as set forth in any written order of the Company for the
authentication and delivery of Debentures pursuant to Section 2.6.
SECTION 2.2. MATURITY.
(a) The Maturity Date shall be either:
(i) the Scheduled Maturity Date; or
(ii) if the Company elects to extend the
Maturity Date beyond the Scheduled
<PAGE> 15
Maturity Date in accordance with Section 2.2(b), the Extended
Maturity Date; or
(iii) if the Company elects to accelerate the Maturity Date to be
a date prior to the Scheduled Maturity Date in accordance
with Section 2.2(c), the Accelerated Maturity Date.
(b) The Company may at any time before the day which is 90 days
before the Scheduled Maturity Date, elect to extend the Maturity
Date to the Extended Maturity Date, provided that the Company has
received the prior approval of the Federal Reserve if then required
under applicable capital guidelines or policies of the Federal
Reserve and further provided that the following conditions in this
Section 2.2(b) are satisfied both at the date the Company gives
notice in accordance with Section 2.2(d) of its election to extend
the Maturity Date and at the Scheduled Maturity Date:
(i) the Company is not in bankruptcy,
otherwise insolvent or in liquidation;
(ii) the Company is not in default in the payment of interest or
principal on the Debentures; and
(iii) the Trust is not in arrears on payments of Distributions on
the Trust Securities issued by it and no deferred
Distributions are accumulated.
(c) The Company may at any time before the day which is 90 days
before the Scheduled Maturity Date and after December 31, 2002, elect
to shorten the Maturity Date only once to the
Accelerated Maturity Date provided that the Company has received
the prior approval of the Federal Reserve if then required under
applicable capital guidelines or policies of the Federal Reserve.
(d) If the Company elects to extend the Maturity Date in accordance
with Section 2.2(b), the Company shall give notice to the registered
holders of the Debentures, the Property Trustee and the Trust of the
extension of the Maturity Date and the Extended Maturity Date at
least 90 days and no more than 180 days before the Scheduled Maturity
Date.
(e) If the Company elects to accelerate the Maturity Date in
accordance with Section 2.2(c), the Company shall give notice to the
registered holders of the Debentures, the Property Trustee and the
Trust of the acceleration of the Maturity Date and the Accelerated
Maturity Date at least 90 days and no more than 180 days before the
Accelerated Maturity Date.
<PAGE> 16
SECTION 2.3. FORM AND PAYMENT.
The Debentures shall be issued in fully registered certificated form
without interest coupons. Principal and interest on the Debentures issued in
certificated form shall be payable, the transfer of such Debentures shall be
registrable and such Debentures shall be exchangeable for Debentures bearing
identical terms and provisions at the office or agency of the Trustee;
provided, however, that payment of interest may be made at the option of the
Company by check mailed to the holder at such address as shall appear in the
Debenture Register or by wire transfer to an account maintained by the holder
as specified in the Debenture Register, provided that the holder provides
proper transfer instructions by the regular record date. Notwithstanding the
foregoing, so long as the holder of any Debentures is the Property Trustee, the
payment of the principal of and interest (including Compounded Interest and
Additional Payments, if any) on such Debentures held by the Property Trustee
shall be made at such place and to such account as may be designated by the
Property Trustee.
SECTION 2.4. [INTENTIONALLY OMITTED].
SECTION 2.5. INTEREST.
(a) Each Debenture shall bear interest at the rate of 8.50% per annum
(the "Coupon Rate") from the original date of issuance until the principal
thereof becomes due and payable, and on any overdue principal and (to the
extent that payment of such interest is enforceable under applicable law) on
any overdue installment of interest at the Coupon Rate, compounded quarterly,
payable (subject to the provisions of Article IV) quarterly in arrears on March
31, June 30, September 30 and December 31 of each year (each, an "Interest
Payment Date," commencing on March 31, 1998, the first such Interest Payment
Date to include all interest accrued from the date of issuance), to the Person
in whose name such Debenture or any Predecessor Debenture is registered, at
the close of business on the regular record date for such interest installment,
which shall be the fifteenth day of the last month of the calendar quarter.
(b) The amount of interest payable for any period shall be computed on
the basis of a 360-day year of twelve 30-day months. The amount of interest
payable for any period shorter than a full quarterly period for which interest
is computed shall be computed on the basis of the number of days elapsed in a
360-day year of twelve 30-day months. In the event that any date on which
interest is payable on the Debentures is not a Business Day, then payment of
interest payable on such date shall be made on the next succeeding day which is
a Business Day (and without any interest or other payment in respect of any
such delay) with the same force and effect as if made on the date such payment
was originally payable.
(c) If, at any time while the Property Trustee is the holder of any
Debentures, the Trust or the Property Trustee is required to pay any taxes,
duties, assessments or governmental charges of whatever nature (other than
withholding taxes) imposed by the United States, or any other taxing authority,
then, in any case, the Company shall pay as additional interest (the
"Additional Payments") on the Debentures held by the Property Trustee, such
additional amounts as shall be required
<PAGE> 17
so that the net amounts received and retained by the Trust and the Property
Trustee after paying such taxes, duties, assessments or other governmental
charges shall be equal to the amounts the Trust and the Property Trustee would
have received had no such taxes, duties, assessments or other government charges
been imposed.
SECTION 2.6. EXECUTION AND AUTHENTICATIONS.
(a) The Debentures shall be signed on behalf of the Company by its Chief
Executive Officer, President or one of its Vice Presidents, under its corporate
seal attested by its Secretary or one of its Assistant Secretaries. Signatures
may be in the form of a manual or facsimile signature. The Company may use the
facsimile signature of any Person who shall have been a Chief Executive
Officer, President or Vice President thereof, or of any Person who shall have
been a Secretary or Assistant Secretary thereof, notwithstanding the fact that
at the time the Debentures shall be authenticated and delivered or disposed of
such Person shall have ceased to be the Chief Executive Officer, President or a
Vice President, or the Secretary or an Assistant Secretary of the Company. The
seal of the Company may be in the form of a facsimile of such seal and may be
impressed, affixed, imprinted or otherwise reproduced on the Debentures. The
Debentures may contain such notations, legends or endorsements required by law,
stock exchange rule or usage. Each Debenture shall be dated the date of its
authentication by the Trustee.
(b) A Debenture shall not be valid until manually authenticated by an
authorized signatory of the Trustee, or by an Authenticating Agent. Such
signature shall be conclusive evidence that the Debenture so authenticated has
been duly authenticated and delivered hereunder and that the holder is
entitled to the benefits of this Indenture.
(c) At any time and from time to time after the execution and delivery of
this Indenture, the Company may deliver Debentures executed by the Company to
the Trustee for authentication, together with a written order of the Company
for the authentication and delivery of such Debentures signed by its Chief
Executive Officer, President or any Vice President and its Treasurer or any
Assistant Treasurer, and the Trustee in accordance with such written order
shall authenticate and deliver such Debentures.
(d) In authenticating such Debentures and accepting the additional
responsibilities under this Indenture in relation to such Debentures, the
Trustee shall be entitled to receive, and (subject to Section 9.1) shall be
fully protected in relying upon, an Opinion of Counsel stating that the form
and terms thereof have been established in conformity with the provisions of
this Indenture.
(e) The Trustee shall not be required to authenticate such Debentures if
the issue of such Debentures pursuant to this Indenture shall affect the
Trustee's own rights, duties or immunities under the Debentures and this
Indenture or otherwise in a manner that is not reasonably acceptable to the
Trustee.
SECTION 2.7. REGISTRATION OF TRANSFER AND EXCHANGE.
<PAGE> 18
(a) Debentures may be exchanged upon presentation thereof at the office
or agency of the Company designated for such purpose, or at the office of the
Debenture Registrar, for other Debentures and for a like aggregate principal
amount, upon payment of a sum sufficient to cover any tax or other governmental
charge in relation thereto, all as provided in this Section 2.7. In respect of
any Debentures so surrendered for exchange, the Company shall execute, the
Trustee shall authenticate and such office or agency shall deliver in exchange
therefor the Debenture or Debentures that the Debentureholder making the
exchange shall be entitled to receive, bearing numbers not contemporaneously
outstanding.
(b) The Company shall keep, or cause to be kept, at its office or agency
designated for such purpose, or at the office of the Debenture Registrar, or
such other location designated by the Company a register or registers (herein
referred to as the "Debenture Register") in which, subject to such reasonable
regulations as it may prescribe, the Company shall register the Debentures and
the transfers of Debentures as in this Article II provided and which at all
reasonable times shall be open for inspection by the Trustee. The registrar
for the purpose of registering Debentures and transfer of Debentures as herein
provided shall initially be the Trustee and thereafter as may be appointed by
the Company as authorized by Board Resolution (the "Debenture Registrar").
Upon surrender for transfer of any Debenture at the office or agency of the
Company designated for such purpose, the Company shall execute, the Trustee
shall authenticate and such office or agency shall deliver in the name of the
transferee or transferees a new Debenture or Debentures for a like aggregate
principal amount. All Debentures presented or surrendered for exchange or
registration of transfer, as provided in this Section 2.7, shall be accompanied
(if so required by the Company or the Debenture Registrar) by a written
instrument or instruments of transfer, in form satisfactory to the Company or
the Debenture Registrar, duly executed by the registered holder or by such
holder's duly authorized attorney in writing.
(c) No service charge shall be made for any exchange or registration of
transfer of Debentures, or issue of new Debentures in case of partial
redemption, but the Company may require payment of a sum sufficient to cover
any tax or other governmental charge in relation thereto, other than exchanges
pursuant to Section 2.8, Section 3.5(b) and Section 11.4 not involving any
transfer.
(d) The Company shall not be required (i) to issue, exchange or register
the transfer of any Debentures during a period beginning at the opening of
business 15 days before the day of the mailing of a notice of redemption of
less than all the Outstanding Debentures and ending at the close of business on
the day of such mailing; nor (ii) to register the transfer of or exchange any
Debentures or portions thereof called for redemption.
SECTION 2.8. TEMPORARY DEBENTURES.
Pending the preparation of definitive Debentures, the Company may execute,
and the Trustee shall authenticate and deliver, temporary Debentures (printed,
lithographed, or typewritten). Such temporary Debentures shall be
substantially in the form of the definitive Debentures in lieu of which they
are issued, but with such omissions,
<PAGE> 19
insertions and variations as may be appropriate for temporary Debentures,
all as may be determined by the Company. Every temporary Debenture shall be
executed by the Company and be authenticated by the Trustee upon the same
conditions and in substantially the same manner, and with like effect, as the
definitive Debentures. Without unnecessary delay the Company shall execute and
shall furnish definitive Debentures and thereupon any or all temporary
Debentures may be surrendered in exchange therefor (without charge to the
holders), at the office or agency of the Company designated for the purpose, and
the Trustee shall authenticate and such office or agency shall deliver in
exchange for such temporary Debentures an equal aggregate principal amount of
definitive Debentures, unless the Company advises the Trustee to the effect that
definitive Debentures need not be executed and furnished until further notice
from the Company. Until so exchanged, the temporary Debentures shall be
entitled to the same benefits under this Indenture as definitive Debentures
authenticated and delivered hereunder.
SECTION 2.9. MUTILATED, DESTROYED, LOST OR STOLEN
DEBENTURES.
(a) In case any temporary or definitive Debenture shall become mutilated
or be destroyed, lost or stolen, the Company (subject to the next succeeding
sentence) shall execute, and upon the Company's request the Trustee (subject as
aforesaid) shall authenticate and deliver, a new Debenture bearing a
number not contemporaneously outstanding, in exchange and substitution for the
mutilated Debenture, or in lieu of and in substitution for the Debenture so
destroyed, lost or stolen. In every case the applicant for a substituted
Debenture shall furnish to the Company and the Trustee such security or
indemnity as may be required by them to save each of them harmless, and, in
every case of destruction, loss or theft, the applicant shall also furnish to
the Company and the Trustee evidence to their satisfaction of the destruction,
loss or theft of the applicant's Debenture and of the ownership thereof. The
Trustee may authenticate any such substituted Debenture and deliver the same
upon the written request or authorization of the Chairman, President or any
Vice-President and the Treasurer or any Assistant Treasurer of the Company.
Upon the issuance of any substituted Debenture, 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. In case any Debenture that
has matured or is about to mature shall become mutilated or be destroyed, lost
or stolen, the Company may, instead of issuing a substitute Debenture, pay or
authorize the payment of the same (without surrender thereof except in the case
of a mutilated Debenture) if the applicant for such payment shall furnish to the
Company and the Trustee such security or indemnity as they may require to save
them harmless, and, in case of destruction, loss or theft, evidence to the
satisfaction of the Company and the Trustee of the destruction, loss or theft of
such Debenture and of the ownership thereof.
(b) Every replacement Debenture issued pursuant to the provisions of this
Section 2.9 shall constitute an additional contractual obligation of the
Company whether or not the mutilated, destroyed, lost or stolen Debenture shall
be found at any time, or be enforceable by anyone, and shall be entitled to all
the benefits of this Indenture
<PAGE> 20
equally and proportionately with any and all other Debentures duly issued
hereunder. All Debentures shall be held and owned upon the express condition
that the foregoing provisions are exclusive with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Debentures, and shall preclude
(to the extent lawful) any and all other rights or remedies, notwithstanding any
law or statute existing or hereafter enacted to the contrary with respect to the
replacement or payment of negotiable instruments or other securities without
their surrender.
SECTION 2.10. CANCELLATION.
All Debentures surrendered for the purpose of payment, redemption,
exchange or registration of transfer shall, if surrendered to the Company or
any paying agent, be delivered to the Trustee for cancellation, or, if
surrendered to the Trustee, shall be canceled by it, and no Debentures shall be
issued in lieu thereof except as expressly required or permitted by any of the
provisions of this Indenture. On request of the Company at the time of such
surrender, the Trustee shall deliver to the Company canceled Debentures held by
the Trustee. In the absence of such request the Trustee may dispose of
canceled Debentures in accordance with its standard procedures and deliver
a certificate of disposition to the Company. If the Company shall otherwise
acquire any of the Debentures, however, such acquisition shall not operate as a
redemption or satisfaction of the indebtedness represented by such Debentures
unless and until the same are delivered to the Trustee for cancellation.
SECTION 2.11. BENEFIT OF INDENTURE.
Nothing in this Indenture or in the Debentures, express or implied, shall
give or be construed to give to any Person, other than the parties hereto and
the holders of the Debentures (and, with respect to the provisions of Article
XVI, the holders of Senior Indebtedness) any legal or equitable right, remedy
or claim under or in respect of this Indenture, or under any covenant,
condition or provision herein contained; all such covenants, conditions and
provisions being for the sole benefit of the parties hereto and of the holders
of the Debentures (and, with respect to the provisions of Article XVI, the
holders of Senior Indebtedness).
SECTION 2.12. AUTHENTICATION AGENT.
(a) So long as any of the Debentures remain Outstanding there may be an
Authenticating Agent for any or all such Debentures, which the Trustee shall
have the right to appoint. Said Authenticating Agent shall be authorized to
act on behalf of the Trustee to authenticate Debentures issued upon exchange,
transfer or partial redemption thereof, and Debentures 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. All references
in this Indenture to the authentication of Debentures by the Trustee shall be
deemed to include authentication by an Authenticating Agent. Each
Authenticating Agent shall be acceptable to the Company and shall be a
corporation that has a combined capital and surplus, as most recently reported
or determined by it, sufficient under the laws of any jurisdiction under which
it is organized or in which it is doing
<PAGE> 21
business to conduct a trust business, and that is otherwise authorized under
such laws to conduct such business and is subject to supervision or examination
by federal or state authorities. If at any time any Authenticating Agent shall
cease to be eligible in accordance with these provisions, it shall resign
immediately.
(b) Any Authenticating Agent may at any time resign by giving written
notice of resignation to the Trustee and to the Company. The Trustee may at
any time (and upon request by the Company shall) terminate the agency of any
Authenticating Agent by giving written notice of termination to such
Authenticating Agent and to the Company. Upon resignation, termination or
cessation of eligibility of any Authenticating Agent, the Trustee may appoint
an eligible successor Authenticating Agent acceptable to the Company. Any
successor Authenticating Agent, upon acceptance of its appointment hereunder,
shall become vested with all the rights, powers and duties of its predecessor
hereunder as if originally named as an Authenticating Agent pursuant hereto.
ARTICLE III.
REDEMPTION OF DEBENTURES
SECTION 3.1. REDEMPTION.
Subject to the Company having received prior approval of the Federal
Reserve, if then required under the applicable capital guidelines or policies
of the Federal Reserve, the Company may redeem the Debentures issued hereunder
on and after the dates set forth in and in accordance with the terms of this
Article III.
SECTION 3.2. SPECIAL EVENT REDEMPTION.
Subject to the Company having received the prior approval of the Federal
Reserve, if then required under the applicable capital guidelines or policies
of the Federal Reserve, if a Special Event has occurred and is continuing,
then, notwithstanding Section 3.3, the Company shall have the right upon not
less than 30 days nor more than 60 days notice to the holders of the Debentures
to redeem the Debentures, in whole but not in part, for cash within 180 days
following the occurrence of such Special Event (the "180-Day Period") at a
redemption price equal to 100% of the principal amount to be redeemed plus any
accrued and unpaid interest thereon to the date of such redemption (the
"Redemption Price"), provided that if at the time there is available to the
Company the opportunity to eliminate, within the 180-Day Period, a Tax Event by
taking some ministerial action (a "Ministerial Action"), such as filing a form
or making an election, or pursuing some other similar reasonable measure which
has no adverse effect on the Company, the Trust or the holders of the Trust
Securities issued by the Trust, the Company shall pursue such Ministerial
Action in lieu of redemption, and, provided further, that the Company shall
have no right to redeem the Debentures while it is pursuing any Ministerial
Action pursuant to its obligations hereunder, and, provided
further, that, if it is determined that the taking of a Ministerial Action
would not eliminate the Tax Event within the 180-Day Period, the Company's
right to redeem the Debentures shall be restored and it shall have no further
obligations to pursue the Ministerial Action. The Redemption Price shall be
paid prior to 12:00 noon, New York time, on
<PAGE> 22
the date of such redemption or such earlier time as the Company determines,
provided that the Company shall deposit with the Trustee an amount sufficient to
pay the Redemption Price by 10:00 a.m., New York time, on the date such
Redemption Price is to be paid.
SECTION 3.3. OPTIONAL REDEMPTION BY COMPANY.
(a) Subject to the provisions of Section 3.3(b), except as otherwise may
be specified in this Indenture, the Company shall have the right to redeem the
Debentures, in whole or in part, from time to time, on or after December 31,
2002, at a Redemption Price equal to 100% of the principal amount to be
redeemed plus any accrued and unpaid interest thereon to the date of such
redemption. Any redemption pursuant to this Section 3.3(a) shall be made upon
not less than 30 days nor more than 60 days notice to the holder of the
Debentures, at the Redemption Price. If the Debentures are only partially
redeemed pursuant to this Section 3.3, the Debentures shall be redeemed
pro rata or by lot or in such other manner as the Trustee shall deem appropriate
and fair in its discretion. The Redemption Price shall be paid prior to 12:00
noon, New York time, on the date of such redemption or at such earlier time as
the Company determines provided that the Company shall deposit with the Trustee
an amount sufficient to pay the Redemption Price by 10:00 a.m., New York time,
on the date such Redemption Price is to be paid.
(b) If a partial redemption of the Debentures would result in the
delisting of the Preferred Securities issued by the Trust from The Nasdaq Stock
Market's National Market or any comparable level or successor listing or any
national securities exchange or other organization on which the Preferred
Securities are then listed or quoted, the Company shall not be permitted to
effect such partial redemption and may only redeem the Debentures in whole.
SECTION 3.4. NOTICE OF REDEMPTION.
(a) In case the Company shall desire to exercise such right to redeem all
or, as the case may be, a portion of the Debentures in accordance with the
right reserved so to do, the Company shall, or shall cause the Trustee to upon
receipt of 45 days' written notice from the Company (which notice shall, in the
event of a partial redemption, include a representation to the effect that such
partial redemption shall not result in the delisting of the Preferred
Securities as described in Section 3.3(b) above), give notice of such
redemption to holders of the Debentures to be redeemed by mailing, first class
postage prepaid, a notice of such redemption not less than 30 days and not more
than 60 days before the date fixed for redemption to such holders at their last
addresses as they shall appear upon the Debenture Register unless a shorter
period is specified in the Debentures to be redeemed. Any notice that is
mailed in the manner herein provided shall be conclusively presumed to have
been duly given, whether or not the registered holder receives the notice. In
any case, failure duly to give such notice to the holder of any Debenture
designated for redemption in whole or in part, or any defect in the notice,
shall not affect the validity of the proceedings for the redemption of any
other Debentures. In the case of any redemption of Debentures prior to the
expiration of any restriction on such redemption provided in the terms of such
Debentures or elsewhere in this Indenture, the Company shall
<PAGE> 23
furnish the Trustee with an Officers' Certificate evidencing compliance with
any such restriction. Each such notice of redemption shall specify the date
fixed for redemption and the Redemption Price and shall state that payment of
the Redemption Price shall be made at the Corporate Trust Office, upon
presentation and surrender of such Debentures, that interest accrued to the date
fixed for redemption shall be paid as specified in said notice and that from and
after said date interest shall cease to accrue. If less than all the Debentures
are to be redeemed, the notice to the holders of the Debentures shall specify
the particular Debentures to be redeemed. If the Debentures are to be redeemed
in part only, the notice shall state the portion of the principal amount thereof
to be redeemed and shall state that on and after the redemption date, upon
surrender of such Debenture, a new Debenture or Debentures in principal amount
equal to the unredeemed portion thereof shall be issued.
(b) If less than all the Debentures are to be redeemed, the Company shall
give the Trustee at least 45 days' notice in advance of the date fixed for
redemption as to the aggregate principal amount of Debentures to be redeemed,
and thereupon the Trustee shall select, by lot or in such other manner as it
shall deem appropriate and fair in its discretion, the portion or portions
(equal to the minimum authorized denomination of the Debentures or any integral
multiple thereof) of the Debentures to be redeemed and shall thereafter
promptly notify the Company in writing of the numbers of the Debentures to be
redeemed, in whole or in part. The Company may, if and whenever it shall so
elect pursuant to the terms hereof, by delivery of instructions signed on its
behalf by its President or any Vice President, instruct the Trustee or any
paying agent to call all or any part of the Debentures for redemption and to
give notice of redemption in the manner set forth in this Section 3.4, such
notice to be in the name of the Company or its own name as the Trustee or such
paying agent may deem advisable. In any case in which notice of redemption is
to be given by the Trustee or any such paying agent, the Company shall deliver
or cause to be delivered to, or permit to remain with, the Trustee or such
paying agent, as the case may be, such Debenture Register, transfer books or
other records, or suitable copies or extracts therefrom, sufficient to enable
the Trustee or such paying agent to give any notice by mail that may be required
under the provisions of this Section 3.4.
SECTION 3.5. PAYMENT UPON REDEMPTION.
(a) If the giving of notice of redemption shall have been completed as
above provided, the Debentures or portions of Debentures to be redeemed
specified in such notice shall become due and payable on the date and at the
place stated in such notice at the applicable Redemption Price, and interest on
such Debentures or portions of Debentures shall cease to accrue on and after
the date fixed for redemption, unless the Company shall default in the payment
of such Redemption Price with respect to any such Debenture or portion thereof.
On presentation and surrender of such Debentures on or after the date fixed
for redemption at the place of payment specified in the notice, said Debentures
shall be paid and redeemed at the Redemption Price (but if the date fixed for
redemption is an interest payment date, the interest installment payable on
such date shall be payable to the
<PAGE> 24
registered holder at the close of business on the applicable record date
pursuant to Section 3.3).
(b) Upon presentation of any Debenture that is to be redeemed in part
only, the Company shall execute and the Trustee shall authenticate and the
office or agency where the Debenture is presented shall deliver to the holder
thereof, at the expense of the Company, a new Debenture of authorized
denomination in principal amount equal to the unredeemed portion of the
Debenture so presented.
SECTION 3.6. NO SINKING FUND.
The Debentures are not entitled to the benefit of any sinking fund.
ARTICLE IV.
EXTENSION OF INTEREST PAYMENT PERIOD
SECTION 4.1. EXTENSION OF INTEREST PAYMENT PERIOD.
So long as no Event of Default has occurred and is continuing, the Company
shall have the right, at any time and from time to time during the term of the
Debentures, to defer payments of interest by extending the interest payment
period of such Debentures for a period not exceeding 20 consecutive quarters
(the "Extended Interest Payment Period"), during which Extended Interest
Payment Period no interest shall be due and payable; provided that no Extended
Interest Payment Period may extend beyond the Maturity Date. Interest, the
payment of which has been deferred because of the extension of the interest
payment period pursuant to this Section 4.1, shall bear interest thereon at the
Coupon Rate compounded quarterly for each quarter of the Extended Interest
Payment Period (the "Compounded Interest"). At the end of the Extended
Interest Payment Period, the Company shall calculate (and deliver such
calculation to the Trustee) and pay all interest accrued and unpaid on the
Debentures, including any Additional Payments and Compounded Interest
(together, the "Deferred Payments") that shall be payable to the holders of the
Debentures in whose names the Debentures are registered in the Debenture
Register on the first record date after the end of the Extended Interest Payment
Period. Before the termination of any Extended Interest Payment Period, the
Company may further extend such period, provided that such period together with
all such further extensions thereof shall not exceed 20 consecutive quarters, or
extend beyond the Maturity Date of the Debentures. Upon the termination of any
Extended Interest Payment Period and upon the payment of all Deferred Payments
then due, the Company may commence a new Extended Interest Payment Period,
subject to the foregoing requirements. No interest shall be due and payable
during an Extended Interest Payment Period, except at the end thereof, but the
Company may prepay at any time all or any portion of the interest accrued during
an Extended Interest Payment Period.
SECTION 4.2. NOTICE OF EXTENSION.
(a) If the Property Trustee is the only registered holder of the
Debentures at the time the Company selects an Extended Interest Payment Period,
the Company shall give written notice to the Administrative Trustees, the
Property Trustee and the Trustee of its selection of such
<PAGE> 25
Extended Interest Payment Period two Business Days before the earlier of
(i) the next succeeding date on which Distributions on the Trust Securities
issued by the Trust are payable; or (ii) the date the Trust is required to give
notice of the record date, or the date such Distributions are payable, to The
Nasdaq Stock Market's National Market or other applicable self-regulatory
organization or to holders of the Preferred Securities issued by the Trust, but
in any event at least one Business Day before such record date.
(b) If the Property Trustee is not the only holder of the Debentures at
the time the Company selects an Extended Interest Payment Period, the Company
shall give the holders of the Debentures and the Trustee written notice
of its selection of such Extended Interest Payment Period at least two Business
Days before the earlier of (i) the next succeeding Interest Payment Date; or
(ii) the date the Company is required to give notice of the record or payment
date of such interest payment to The Nasdaq Stock Market's National Market or
other applicable self-regulatory organization or to holders of the Debentures.
(c) The quarter in which any notice is given pursuant to paragraphs (a)
or (b) of this Section 4.2 shall be counted as one of the 20 quarters permitted
in the maximum Extended Interest Payment Period permitted under Section 4.1.
SECTION 4.3. LIMITATION ON TRANSACTIONS.
If (i) the Company shall exercise its right to defer payment of interest
as provided in Section 4.1; or (ii) there shall have occurred any Event of
Default, then (a) the Company shall not declare or pay any dividend or
distributions on, or redeem, purchase, acquire or make a liquidation payment
with respect to, any of its capital stock (other than (i) dividends or
distributions in common stock of the Company, or any declaration of a non-cash
dividend in connection with the implementation of a shareholders' rights plan,
or the issuance of stock under any such plan in the future, or the redemption
or repurchase of any such rights pursuant thereto, and (ii) purchases of common
stock of the Company related to the rights under any of the Company's benefit
plans for its directors, officers or employees); (b) the Company shall not make
any payment of principal, interest or premium, if any, on or repay, repurchase
or redeem any debt securities issued by the Company which rank pari passu with
or junior in interest to the Debentures; provided, however, that
notwithstanding the foregoing the Company may make payments pursuant to its
obligations under the Preferred Securities Guarantee; and (c) the Company shall
not redeem, purchase or acquire less than all of the outstanding Debentures or
any of the Preferred Securities.
ARTICLE V.
PARTICULAR COVENANTS OF COMPANY
SECTION 5.1. PAYMENT OF PRINCIPAL AND INTEREST.
The Company shall duly and punctually pay or cause to be paid the
principal of and interest on the Debentures at the time and place and in the
manner provided herein. Each such payment of the principal of
<PAGE> 26
or interest on the Debentures shall relate only to the Debentures, shall not be
combined with any other payment of the principal of or interest on any other
obligation of the Company, and shall be clearly and unmistakably identified as
pertaining to the Debentures.
SECTION 5.2. MAINTENANCE OF AGENCY.
So long as any of the Debentures remain Outstanding, the Company shall
maintain an office or agency at such location or locations as may be designated
as provided in this Section 5.2, where (i) Debentures may be presented for
payment; (ii) Debentures may be presented as hereinabove authorized for
registration of transfer and exchange; and (iii) notices and demands to or upon
the Company in respect of the Debentures and this Indenture may be given or
served, such designation to continue with respect to such office or agency until
the Company shall, by written notice signed by its President or a Vice President
and delivered to the Trustee, designate some other office or agency for such
purposes or any of them. If at any time the Company shall fail to maintain any
such required office or agency or shall fail to furnish the Trustee with the
address thereof, such presentations, 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, notices and
demands. The Company shall give the Trustee prompt written notice of any such
designation or rescission thereof.
SECTION 5.3. PAYING AGENTS.
(a) The Trustee shall act as the Paying Agent. If the Company shall
appoint one or more paying agents for the Debentures, other than the Trustee,
the Company shall cause each such paying agent to execute and deliver to the
Trustee an instrument in which such agent shall agree with the Trustee, subject
to the provisions of this Section 5.3:
(i) that it shall hold all sums held by it as
such agent for the payment of the principal of or
interest on the Debentures (whether such sums have been
paid to it by the Company or by any other obligor of
such Debentures) in trust for the benefit of the
Persons entitled thereto;
(ii) that it shall give the Trustee notice of
any failure by the Company (or by any other obligor of
such Debentures) to make any payment of the principal
of or interest on the Debentures when the same shall be
due and payable;
(iii) that it shall, at any time during the
continuance of any failure referred to in the preceding
paragraph (a)(ii) above, upon the written request of
the Trustee, forthwith pay to the Trustee all sums so
held in trust by such Paying Agent; and
(iv) that it shall perform all other duties of
Paying Agent as set forth in this Indenture.
<PAGE> 27
(b) If the Company shall act as its own Paying Agent with respect to the
Debentures, it shall on or before each due date of the principal of or interest
on such Debentures, set aside, segregate and hold in trust for the benefit of
the Persons entitled thereto a sum sufficient to pay such principal or interest
so becoming due on Debentures until such sums shall be paid to such Persons or
otherwise disposed of as herein provided and shall promptly notify the Trustee
of such action, or any failure (by it or any other obligor on such Debentures)
to take such action. Whenever the Company shall have one or more Paying Agents
for the Debentures, it shall, prior to each due date of the principal of or
interest on any Debentures, deposit with the Paying Agent a sum sufficient to
pay the principal or interest so becoming due, such sum to be held in trust for
the benefit of the Persons entitled to such principal or interest, and (unless
such Paying Agent is the Trustee) the Company shall promptly notify the Trustee
of this action or failure so to act.
(c) Notwithstanding anything in this Section 5.3 to the contrary, (i) the
agreement to hold sums in trust as provided in this Section 5.3 is subject to
the provisions of Section 13.3 and 13.4; and (ii) 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 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 and conditions 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.
SECTION 5.4. APPOINTMENT TO FILL VACANCY IN OFFICE OF TRUSTEE.
The Company, whenever necessary to avoid or fill a vacancy in the office
of Trustee, shall appoint, in the manner provided in Section 9.10, a Trustee,
so that there shall at all times be a Trustee hereunder.
SECTION 5.5. COMPLIANCE WITH CONSOLIDATION PROVISIONS.
The Company shall not, while any of the Debentures remain outstanding,
consolidate with, or merge into, or merge into itself, or sell or convey all or
substantially all of its property to any other company unless the provisions of
Article XII hereof are complied with.
SECTION 5.6. LIMITATION ON TRANSACTIONS.
If Debentures are issued to the Trust or a trustee of the Trust in
connection with the issuance of Trust Securities by the Trust and (i) there
shall have occurred any event that would constitute an Event of Default; (ii)
the Company shall be in default with respect to its payment of any obligations
under the Preferred Securities Guarantee relating to the Trust; or (iii) the
Company shall have given notice of its election to defer payments of interest
on such Debentures by extending the interest payment period as provided in this
Indenture and such period, or any extension thereof, shall be continuing, then
(a) the Company shall not declare or pay any dividends or distributions on, or
redeem, purchase, acquire or make a liquidation payment with respect to, any of
its capital stock (other than (i) dividends or distributions
<PAGE> 28
in common stock of the Company, or any declaration of a non-cash dividend
in connection with the implementation of a shareholders' rights plan, or the
issuance of stock under any such plan in the future, or the redemption or
repurchase of any such rights pursuant thereto, and (ii) purchases of
common stock of the Company related to the rights under any of the Company's
benefit plans for its directors, officers or employees); (b) the Company shall
not make any payment of principal, interest or premium, if any, on or repay,
repurchase or redeem any debt securities issued by the Company which rank pari
passu with or junior in interest to the Debentures; provided, however, that the
Company may make payments pursuant to its obligations under the Preferred
Securities Guarantee; and (c) the Company shall not redeem, purchase or acquire
less than all of the outstanding Debentures or any of the Preferred Securities.
SECTION 5.7. COVENANTS AS TO THE TRUST.
For so long as the Trust Securities of the Trust remain outstanding, the
Company shall (i) maintain 100% direct or indirect ownership of the Common
Securities of the Trust; provided, however, that any permitted successor of the
Company under this Indenture may succeed to the Company's ownership of the
Common Securities; (ii) not voluntarily terminate, wind up or liquidate the
Trust, except upon prior approval of the Federal Reserve if then so required
under applicable capital guidelines or policies of the Federal Reserve and use
its reasonable efforts to cause the Trust (a) to remain a business trust,
except in connection with a distribution of Debentures, the redemption of all
of the Trust Securities of the Trust, or certain mergers, consolidations or
amalgamations, each as permitted by the Trust Agreement; and (b) to otherwise
continue not to be treated as an association taxable as a corporation or
partnership for United States federal income tax purposes; and (iii) use its
reasonable efforts to cause each holder of Trust Securities to be treated as
owning an individual beneficial interest in the Debentures. In connection with
the distribution of the Debentures to the holders of the Preferred Securities
issued by the Trust upon a Dissolution Event, the Company shall use its best
efforts to list such Debentures on The Nasdaq Stock Market's National Market or
on such other exchange as the Preferred Securities are then listed.
SECTION 5.8. COVENANTS AS TO PURCHASES.
Except upon the exercise by the Company of its right to redeem the
Debentures pursuant to Section 3.2 upon the occurrence and continuation of a
Special Event, the Company shall not purchase any Debentures, in whole or in
part, from the Trust prior to December 31, 2002.
ARTICLE VI.
DEBENTUREHOLDERS' LISTS AND REPORTS
BY COMPANY AND TRUSTEE
SECTION 6.1. COMPANY TO FURNISH TRUSTEE NAMES AND ADDRESSES OF
DEBENTUREHOLDERS.
The Company shall furnish or cause to be furnished to the Trustee (a) on a
quarterly basis on each regular record date (as described in
<PAGE> 29
Section 2.5) a list, in such form as the Trustee may reasonably require,
of the names and addresses of the holders of the Debentures as of such regular
record date, provided that the Company shall not be obligated to furnish or
cause to furnish such list at any time that the list shall not differ in any
respect from the most recent list furnished to the Trustee by the Company (in
the event the Company fails to provide such list on a quarterly basis, the
Trustee shall be entitled to rely on the most recent list provided by the
Company); and (b) at such other times as the Trustee may request in writing
within 30 days after the receipt by the Company of any such request, a list of
similar form and content as of a date not more than 15 days prior to the time
such list is furnished; provided, however, that, in either case, no such list
need be furnished if the Trustee shall be the Debenture Registrar.
SECTION 6.2. PRESERVATION OF INFORMATION COMMUNICATIONS WITH
DEBENTUREHOLDERS.
(a) The Trustee shall preserve, in as current a form as is reasonably
practicable, all information as to the names and addresses of the holders of
Debentures contained in the most recent list furnished to it as provided in
Section 6.1 and as to the names and addresses of holders of Debentures received
by the Trustee in its capacity as Debenture Registrar for the Debentures (if
acting in such capacity).
(b) The Trustee may destroy any list furnished to it as provided in
Section 6.1 upon receipt of a new list so furnished.
(c) Debentureholders may communicate as provided in Section 312(b) of the
Trust Indenture Act with other Debentureholders with respect to their rights
under this Indenture or under the Debentures.
SECTION 6.3. REPORTS BY COMPANY.
(a) The Company covenants and agrees to file with the Trustee, within 15
days after the Company is required to file the same with the Commission, copies
of the annual reports and of the information, documents and other reports (or
copies of such portions of any of the foregoing as the Commission may from time
to time by rules and regulations prescribe) that the Company may be required to
file with the Commission pursuant to Section 13 or Section 15(d) of the
Exchange Act; or, if the Company is not required to file information, documents
or reports pursuant to either of such sections, then to file with the Trustee
and the Commission, in accordance with the rules and regulations prescribed
from time to time by the Commission, such of the supplementary and periodic
information, documents and reports that may be required pursuant to Section 13
of the Exchange Act in respect of a security listed and registered on a
national securities exchange as may be prescribed from time to time in such
rules and regulations.
(b) The Company covenants and agrees to file with the Trustee and the
Commission, in accordance with the rules and regulations prescribed from time
to time by the Commission, such additional information, documents and reports
with respect to compliance by the Company with the conditions and covenants
provided for in this Indenture as may be required from time to time by such
rules and regulations.
<PAGE> 30
(c) The Company covenants and agrees to transmit by mail, first class
postage prepaid, or reputable over-night delivery service that provides for
evidence of receipt, to the Debentureholders, as their names and addresses
appear upon the Debenture Register, within 30 days after the filing thereof
with the Trustee, such summaries of any information, documents and reports
required to be filed by the Company pursuant to subsections (a) and (b) of this
Section 6.3 as may be required by rules and regulations prescribed from time to
time by the Commission.
SECTION 6.4. REPORTS BY TRUSTEE.
(a) On or before July 15 in each year in which any of the Debentures are
Outstanding, the Trustee shall transmit by mail, first class postage prepaid,
to the Debentureholders, as their names and addresses appear upon the Debenture
Register, a brief report dated as of the preceding May 15, if and to the extent
required under Section 313(a) of the Trust Indenture Act.
(b) The Trustee shall comply with Section 313(b) and 313(c) of the Trust
Indenture Act.
(c) A copy of each such report shall, at the time of such transmission to
Debentureholders, be filed by the Trustee with the Company, with each stock
exchange upon which any Debentures are listed (if so listed) and also with the
Commission. The Company agrees to notify the Trustee when any Debentures
become listed on any stock exchange.
ARTICLE VII.
REMEDIES OF TRUSTEE AND DEBENTUREHOLDERS
ON EVENT OF DEFAULT
SECTION 7.1. EVENTS OF DEFAULT.
(a) Whenever used herein with respect to the Debentures, "Event of
Default" means any one or more of the following events that has occurred and is
continuing:
(i) the Company defaults in the payment of any
installment of interest upon any of the Debentures, as
and when the same shall become due and payable, and
continuance of such default for a period of 30 days;
provided, however, that a valid extension of an
interest payment period by the Company in accordance
with the terms of this Indenture shall not constitute a
default in the payment of interest for this purpose;
(ii) the Company defaults in the payment of the principal on the
Debentures as and when the same shall become due and payable
whether at maturity, upon redemption, by declaration or
otherwise; provided, however, that a valid
<PAGE> 31
extension of the maturity of such Debentures in accordance
with the terms of this Indenture shall not constitute a
default in the payment of principal;
(iii) the Company fails to observe or perform
any other of its covenants or agreements with respect
to the Debentures for a period of 90 days after the
date on which written notice of such failure, requiring
the same to be remedied and stating that such notice is
a "Notice of Default" hereunder, 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 principal amount of the
Debentures at the time Outstanding;
(iv) the Company pursuant to or within the
meaning of any Bankruptcy Law (i) commences a voluntary
case; (ii) consents to the entry of an order for relief
against it in an involuntary case; (iii) consents to the
appointment of a Custodian of it or for all or
substantially all of its property; or (iv) makes a
general assignment for the benefit of its creditors;
(v) a court of competent jurisdiction enters
an order under any Bankruptcy Law that (i) is for
relief against the Company in an involuntary case; (ii)
appoints a Custodian of the Company for all or
substantially all of its property; or iii) orders the
liquidation of the Company, and the order or decree
remains unstayed and in effect for 90 days; or
(vi) the Trust shall have voluntarily or
involuntarily dissolved, wound-up its business or
otherwise terminated its existence except in connection
with (i) the distribution of Debentures to holders of
Trust Securities in liquidation of their interests in
the Trust; (ii) the redemption of all of the
outstanding Trust Securities of the Trust; or (iii)
certain mergers, consolidations or amalgamations, each
as permitted by the Trust Agreement.
(b) In each and every such case referred to in items (i) through (vi) of
Section 7.1(a), unless the principal of all the Debentures shall have already
become due and payable, either the Trustee or the holders of not less than 25%
in aggregate principal amount of the Debentures then Outstanding hereunder, by
notice in writing to the Company (and to the Trustee if given by such
Debentureholders) may declare the principal of all the Debentures to be due and
payable immediately, and upon any such declaration the same shall become and
shall be immediately due and payable, notwithstanding anything contained in this
Indenture or in the Debentures.
<PAGE> 32
(c) At any time after the principal of the Debentures shall have been so
declared due and payable, and before any judgment or decree for the payment of
the moneys due shall have been obtained or entered as hereinafter provided, the
holders of a majority in aggregate principal amount of the Debentures then
Outstanding hereunder, by written notice to the Company and the Trustee, may
rescind and annul such declaration and its consequences if: (i) the Company has
paid or deposited with the Trustee a sum sufficient to pay all matured
installments of interest upon all the Debentures and the principal of any and
all Debentures that shall have become due otherwise than by acceleration (with
interest upon such principal, and upon overdue installments of interest, at the
rate per annum expressed in the Debentures to the date of such payment or
deposit) and the amount payable to the Trustee under Section 9.7; and (ii)
any and all Events of Default under this Indenture, other than the nonpayment of
principal on Debentures that shall not have become due by their terms, shall
have been remedied or waived as provided in Section 7.6. No such rescission and
annulment shall extend to or shall affect any subsequent default or impair any
right consequent thereon.
(d) In case the Trustee shall have proceeded to enforce any right with
respect to Debentures under this Indenture and such proceedings shall have been
discontinued or abandoned because of such rescission or annulment or for any
other reason or shall have been determined adversely to the Trustee, then and
in every such case the Company and the Trustee shall be restored respectively
to their former positions and rights hereunder, and all rights, remedies and
powers of the Company and the Trustee shall continue as though no such
proceedings had been taken.
SECTION 7.2. COLLECTION OF INDEBTEDNESS AND SUITS FOR ENFORCEMENT
BY TRUSTEE.
(a) The Company covenants that (1) in case it shall default in the
payment of any installment of interest on any of the Debentures, and such
default shall have continued for a period of 90 Business Days; or (2) in case
it shall default in the payment of the principal of any of the Debentures when
the same shall have become due and payable, whether upon maturity of the
Debentures or upon redemption or upon declaration or otherwise, then, upon
demand of the Trustee, the Company shall pay to the Trustee, for the benefit of
the holders of the Debentures, the whole amount that then shall have been
become due and payable on all such Debentures for principal or interest, or
both, as the case may be, with interest upon the overdue principal and (if the
Debentures are held by the Trust or a trustee of the Trust, without duplication
of any other amounts paid by the Trust or trustee in respect thereof) upon
overdue installments of interest at the rate per annum expressed in the
Debentures; and, in addition thereto, such further amount as shall be
sufficient to cover the costs and expenses of collection, and the amount
payable to the Trustee under Section 9.7.
(b) If the Company shall fail to pay such amounts set forth in Section
7.2(a) forthwith upon such demand, the Trustee, in its own name and as trustee
of an express trust, shall be entitled and empowered to institute any action or
proceedings at law or in equity for the collection of the sums so due and
unpaid, and may prosecute any such
<PAGE> 33
action or proceeding to judgment or final decree, and may enforce any such
judgment or final decree against the Company or other obligor upon the
Debentures and collect the moneys adjudged or decreed to be payable in the
manner provided by law out of the property of the Company or other obligor upon
the Debentures, wherever situated.
(c) In case of any receivership, insolvency, liquidation, bankruptcy,
reorganization, readjustment, arrangement, composition or judicial proceedings
affecting the Company or the creditors or property thereof, the Trustee shall
have power to intervene in such proceedings and take any action therein that
may be permitted by the court and shall (except as may be otherwise provided by
law) be entitled to file such proofs of claim and other papers and documents as
may be necessary or advisable in order to have the claims of the Trustee and of
the holders of the Debentures allowed for the entire amount due and payable by
the Company under this Indenture at the date of institution of such proceedings
and for any additional amount that may become due and payable by the Company
after such date, and to collect and receive any moneys or other property
payable or deliverable on any such claim, and to distribute the same after the
deduction of the amount payable to the Trustee under Section 9.7; and any
receiver, assignee or trustee in bankruptcy or reorganization is hereby
authorized by each of the holders of the Debentures to make such payments to
the Trustee, and, in the event that the Trustee shall consent to the making of
such payments directly to such Debentureholders, to pay to the Trustee any
amount due it under Section 9.7.
(d) All rights of action and of asserting claims under this Indenture, or
under any of the terms established with respect to Debentures, may be enforced
by the Trustee without the possession of any of such Debentures, or the
production thereof at any trial or other proceeding relative thereto, and any
such suit or proceeding instituted by the Trustee shall be brought in its own
name as trustee of an express trust, and any recovery of judgment shall, after
provision for payment to the Trustee of any amounts due under Section 9.7, be
for the ratable benefit of the holders of the Debentures. In case of an Event
of Default hereunder, the Trustee may in its discretion proceed to protect and
enforce the rights vested in it by this Indenture by such appropriate judicial
proceedings as the Trustee shall deem most effectual to protect and enforce any
of such rights, either at law or in equity or in bankruptcy or otherwise,
whether for the specific enforcement of any covenant or agreement contained in
this Indenture or in aid of the exercise of any power granted in this
Indenture, or to enforce any other legal or equitable right vested in the
Trustee by this Indenture or by law. Nothing contained herein shall be deemed
to authorize the Trustee to authorize or consent to or accept or adopt on
behalf of any Debentureholder any plan of reorganization, arrangement,
adjustment or composition affecting the Debentures or the rights of any holder
thereof or to authorize the Trustee to vote in respect of the claim of any
Debentureholder in any such proceeding.
SECTION 7.3. APPLICATION OF MONEYS COLLECTED.
Any moneys collected by the Trustee pursuant to this Article VII with
respect to the Debentures shall be applied in the following order, at the date
or dates fixed by the Trustee and, in case of the distribution of such moneys
on account of principal or interest, upon
<PAGE> 34
presentation of the Debentures, and notation thereon of the payment, if only
partially paid, and upon surrender thereof if fully paid:
FIRST: To the payment of costs and expenses of collection and of all
amounts payable to the Trustee under Section 9.7;
SECOND: To the payment of all Senior Indebtedness of the Company if and to
the extent required by Article XVI; and
THIRD: To the payment of the amounts then due and unpaid upon the
Debentures for principal and 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 Debentures for principal and
interest, respectively.
SECTION 7.4. LIMITATION ON SUITS.
(a) Except as provided in section 15.13 hereof, no holder of any
Debenture shall have any right by virtue or by availing of any provision of
this Indenture to institute any suit, action or proceeding in equity or at law
upon or under or with respect to this Indenture or for the appointment of a
receiver or trustee, or for any other remedy hereunder, unless (i) such holder
previously shall have given to the Trustee written notice of an Event of
Default and of the continuance thereof with respect to the Debentures
specifying such Event of Default, as hereinbefore provided; (ii) the holders of
not less than 25% in aggregate principal amount of the Debentures then
Outstanding shall have made written request upon the Trustee to institute such
action, suit or proceeding in its own name as trustee hereunder; (iii) such
holder or holders shall have offered to the Trustee such reasonable indemnity
as it may require against the costs, expenses and liabilities to be incurred
therein or thereby; and (iv) the Trustee for 60 days after its receipt of such
notice, request and offer of indemnity, shall have failed to institute any such
action, suit or proceeding; and (v) during such 60 day period, the holders of a
majority in principal amount of the Debentures do not give the Trustee a
direction inconsistent with the request.
(b) Notwithstanding anything contained herein to the contrary or
any other provisions of this Indenture, the right of any holder of the
Debentures to receive payment of the principal of and interest on the
Debentures, as therein provided, on or after the respective due dates expressed
in such Debenture (or in the case of redemption, on the redemption date), or to
institute suit for the enforcement of any such payment on or after such
respective dates or redemption date, shall not be impaired or affected without
the consent of such holder and by accepting a Debenture hereunder it is
expressly understood, intended and covenanted by the taker and holder of every
Debenture with every other such taker and holder and the Trustee, that no one
or more holders of Debentures shall have any right in any manner whatsoever by
virtue or by availing of any provision of this Indenture to affect, disturb or
prejudice the rights of the holders of any other of such
<PAGE> 35
Debentures, or to obtain or seek to obtain priority over or preference to
any other such holder, or to enforce any right under this Indenture, except in
the manner herein provided and for the equal, ratable and common benefit of all
holders of Debentures. For the protection and enforcement of the provisions of
this Section 7.4, each and every Debentureholder and the Trustee shall be
entitled to such relief as can be given either at law or in equity.
SECTION 7.5. RIGHTS AND REMEDIES CUMULATIVE; DELAY OR OMISSION
NOT WAIVER.
(a) Except as otherwise provided in Section 2.9, all powers and remedies
given by this Article VII to the Trustee or to the Debentureholders shall, to
the extent permitted by law, be deemed cumulative and not exclusive of any
other powers and remedies available to the Trustee or the holders of the
Debentures, by judicial proceedings or otherwise, to enforce the performance or
observance of the covenants and agreements contained in this Indenture or
otherwise established with respect to such Debentures.
(b) No delay or omission of the Trustee or of any holder of any of the
Debentures to exercise any right or power accruing upon any Event of Default
occurring and continuing as aforesaid shall impair any such right or power, or
shall be construed to be a waiver of any such default or an acquiescence
therein; and, subject to the provisions of Section 7.4, every power and remedy
given by this Article VII or by law to the Trustee or the Debentureholders may
be exercised from time to time, and as often as shall be deemed expedient, by
the Trustee or by the Debentureholders.
SECTION 7.6. CONTROL BY DEBENTUREHOLDERS.
The holders of a majority in aggregate principal amount of the Debentures
at the time Outstanding, determined in accordance with Section 10.4, shall have
the right to direct the time, method and place of conducting any proceeding
for any remedy available to the Trustee, or exercising any trust or power
conferred on the Trustee; provided, however, that such direction shall not be
in conflict with any rule of law or with this Indenture. Subject to the
provisions of Section 9.1, the Trustee shall have the right to decline to
follow any such direction if the Trustee in good faith shall, by a Responsible
Officer or Officersof the Trustee, determine that the proceeding so
directed would involve the Trustee in personal liability. The holders of a
majority in aggregate principal amount of the Debentures at the time Outstanding
affected thereby, determined in accordance with Section 10.4, may on behalf of
the holders of all of the Debentures waive any past default in the performance
of any of the covenants contained herein and its consequences, except (i) a
default in the payment of the principal of or interest on any of the Debentures
as and when the same shall become due by the terms of such Debentures otherwise
than by acceleration (unless such default has been cured and a sum sufficient to
pay all matured installments of interest and principal has been deposited with
the Trustee (in accordance with Section 7.1(c)); (ii) a default in the covenants
contained in Section 5.6; or (iii) in respect of a covenant or provision hereof
which cannot be modified or amended without the consent of the holder of each
Outstanding Debenture affected; provided, however, that if the
<PAGE> 36
Debentures are held by the Trust or a trustee of the Trust, such waiver or
modification to such waiver shall not be effective until the holders of a
majority in liquidation preference of Trust Securities of the Trust shall have
consented to such waiver or modification to such waiver; provided further, that
if the consent of the holder of each Outstanding Debenture is required, such
waiver shall not be effective until each holder of the Trust Securities of the
Trust shall have consented to such waiver. Upon any such waiver, the default
covered thereby shall be deemed to be cured for all purposes of this Indenture
and the Company, the Trustee and the holders of the Debentures shall be restored
to their former positions and rights hereunder, respectively; but no such waiver
shall extend to any subsequent or other default or impair any right consequent
thereon.
SECTION 7.7. UNDERTAKING TO PAY COSTS.
All parties to this Indenture agree, and each holder of any Debentures by
such holder's acceptance thereof shall be deemed to have agreed, that any court
may in its discretion require, in any suit for the enforcement of any right or
remedy under this Indenture, or in any suit against the Trustee for any action
taken or omitted by it as Trustee, the filing by any party litigant in such
suit of an undertaking to pay the costs of such suit, and that such court may
in its discretion assess reasonable costs, including reasonable attorneys'
fees, against any party litigant in such suit, having due regard to the merits
and good faith of the claims or defenses made by such party litigant; but the
provisions of this Section 7.7 shall not apply to any suit instituted by the
Trustee, to any suit instituted by any Debentureholder, or group of
Debentureholders holding more than 10% in aggregate principal amount of the
Outstanding Debentures, or to any suit instituted by any Debentureholder for
the enforcement of the payment of the principal of or interest on the
Debentures, on or after the respective due dates expressed in such Debenture or
established pursuant to this Indenture.
ARTICLE VIII.
FORM OF DEBENTURE AND ORIGINAL ISSUE
SECTION 8.1. FORM OF DEBENTURE.
The Debenture and the Trustee's Certificate of Authentication to be
endorsed thereon are to be substantially in the forms contained as Exhibit A
attached hereto and incorporated herein by reference.
SECTION 8.2. ORIGINAL ISSUE OF DEBENTURES.
Debentures in the aggregate principal amount of $26,082,474 may, upon
execution of this Indenture, be executed by the Company and delivered to the
Trustee for authentication. If the Underwriters exercise their Option and
there is an Option Closing Date (as such terms are defined in the Underwriting
Agreement, dated December 15, 1997, by and among the Company, the Trust, Robert
W. Baird & Company, Incorporated, Stifel Nicolaus & Company, Incorporated and
Howe Barnes Investments, Inc.) then, on such Option Closing Date, Debentures in
any amount up to the aggregate principal amount stated above be executed by the
Company and delivered to the Trustee for authentication. In either
<PAGE> 37
such event, the Trustee shall thereupon authenticate and deliver said
Debentures to or upon the written order of the Company, signed by its Chairman,
its Vice Chairman, its President, or any Vice President and its Treasurer or an
Assistant Treasurer, without any further action by the Company.
ARTICLE IX.
CONCERNING TRUSTEE
SECTION 9.1. CERTAIN DUTIES AND RESPONSIBILITIES OF TRUSTEE.
(a) The Trustee, prior to the occurrence of an Event of Default and after
the curing of all Events of Default that may have occurred, shall undertake to
perform with respect to the Debentures such duties and only such duties as are
specifically set forth in this Indenture, and no implied covenants shall be
read into this Indenture against the Trustee. In case an Event of Default has
occurred that has not been cured or waived, 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 man would exercise or use
under the circumstances in the conduct of his own affairs.
(b) No provision of this Indenture shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent failure
to act, or its own willful misconduct, except that:
(1) prior to the occurrence of an Event of Default and after the curing or
waiving of all such Events of Default that may have occurred:
(i) the duties and obligations of the Trustee shall with
respect to the Debentures be determined solely by the
express provisions of this Indenture, and the Trustee
shall not be liable with respect to the Debentures
except for the performance of such duties and
obligations as are specifically set forth in this
Indenture, and no implied covenants or obligations
shall be read into this Indenture against the Trustee;
and
(ii) in the absence of bad faith on
the part of the Trustee, the Trustee may with
respect to the Debentures 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 Trustee and conforming to the requirements of
this Indenture; but in the case of any such
certificates or opinions that by any provision
hereof are specifically required to be furnished
to the Trustee, the Trustee shall be under a duty
to
<PAGE> 38
examine the same to determine whether or not they
conform to the requirements of this Indenture;
(2) the Trustee shall not be liable for any error of judgment made in good
faith by a Responsible Officer or Responsible Officers of the Trustee,
unless it shall be proved that the Trustee was negligent in ascertaining the
pertinent facts;
(3) the Trustee shall not be liable with respect to any action taken
or omitted to be taken by it in good faith in accordance with the
direction of the holders of not less than a majority in principal amount of the
Debentures at the time Outstanding 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 Debentures; and
(4) none of the provisions contained in this Indenture shall require the
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 there is reasonable ground for believing that the
repayment of such funds or liability is not reasonably assured to it under the
terms of this Indenture or adequate indemnity against such risk is not
reasonably assured to it.
SECTION 9.2. 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
Debentures, the Trustee shall transmit by mail to all holders of the
Debentures, as their names and addresses appear in the Debenture 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 or interest (including any Additional Payments) on any
Debenture, 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
the directors and/or Responsible Officers of the Trustee determines in good
faith that the withholding of such notice is in the interests of the holders of
such Debentures; and provided, further, that in the case of any default of the
character specified in section 7.1(a)(iii), no such notice to holders of
Debentures need be sent until at least 30 days after the occurrence thereof.
For the purposes of this Section 9.2, the term "default" means any event which
is, or after notice or lapse of time or both, would become, an Event of Default
with respect to the Debentures.
SECTION 9.3. CERTAIN RIGHTS OF TRUSTEE.
Except as otherwise provided in Section 9.1:
(a) The Trustee may rely and shall be protected in acting or refraining
from acting upon any resolution, certificate, statement, instrument, opinion,
report, notice, request, consent, order, approval,
<PAGE> 39
bond, security or other paper or document believed by it to be genuine and to
have been signed or presented by the proper party or parties;
(b) Any request, direction, order or demand of the Company mentioned
herein shall be sufficiently evidenced by a Board Resolution or an instrument
signed in the name of the Company by the President or any Vice President and by
the Secretary or an Assistant Secretary or the Treasurer or an Assistant
Treasurer thereof (unless other evidence in respect thereof is specifically
prescribed herein);
(c) The Trustee shall not be deemed to have knowledge of a default or an
Event of Default, other than an Event of Default specified in Section 7.1(a)(i)
or (ii), unless and until it receives written notification of such Event of
Default from the Company or by holders of at least 25% of the aggregate
principal amount of the Debentures at the time Outstanding;
(d) The Trustee may consult with counsel and the written advice of such
counsel or any Opinion of Counsel shall be full and complete authorization and
protection in respect of any action taken or suffered or omitted hereunder in
good faith and in reliance thereon;
(e) The Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request, order or
direction of any of the Debentureholders, pursuant to the provisions of this
Indenture, unless such Debentureholders shall have offered to the Trustee
reasonable security or indemnity against the costs, expenses and liabilities
that may be incurred therein or thereby; nothing contained herein shall,
however, relieve the Trustee of the obligation, upon the occurrence of an Event
of Default (that has not been cured or waived) to exercise with respect to the
Debentures such of the rights and powers vested in it by this Indenture, and to
use the same degree of care and skill in their exercise, as a prudent man would
exercise or use under the circumstances in the conduct of his
own affairs;
(f) The Trustee shall not be liable for any action taken or omitted to be
taken by it in good faith and believed by it to be authorized or within the
discretion or rights or powers conferred upon it by this Indenture;
(g) 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, consent, order, approval, bond, security, or
other papers or documents, unless requested in writing so to do by the holders
of not less than a majority in principal amount of the Outstanding Debentures
(determined as provided in Section 10.4); provided, however, that if the
payment within a reasonable time to the Trustee of the costs, expenses or
liabilities likely to be incurred by it in the making of such investigation is,
in the opinion of the Trustee, not reasonably assured to the Trustee by the
security afforded to it by the terms of this Indenture, the Trustee may require
reasonable indemnity against such costs, expenses or liabilities as a condition
to so proceeding. The reasonable expense of every such examination shall be
paid by the Company or, if paid by the Trustee, shall be repaid by the Company
upon demand; and
<PAGE> 40
(h) The Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys and the Trustee shall not be responsible for any misconduct or
negligence on the part of any agent or attorney appointed with due care by it
hereunder.
SECTION 9.4. TRUSTEE NOT RESPONSIBLE FOR RECITALS, ETC.
(a) The Recitals contained herein and in the Debentures shall be taken as
the statements of the Company, and the Trustee assumes no responsibility for
the correctness of the same.
(b) The Trustee makes no representations as to the validity or
sufficiency of this Indenture or of the Debentures.
(c) The Trustee shall not be accountable for the use or application by
the Company of any of the Debentures or of the proceeds of such Debentures, or
for the use or application of any moneys paid over by the Trustee in accordance
with any provision of this Indenture, or for the use or application of any
moneys received by any paying agent other than the Trustee.
SECTION 9.5. MAY HOLD DEBENTURES.
The Trustee or any Paying Agent or Debenture Registrar for the Debentures,
in its individual or any other capacity, may become the owner or pledgee of
Debentures with the same rights it would have if it were not Trustee, Paying
Agent or Debenture Registrar.
SECTION 9.6. MONEYS HELD IN TRUST.
Subject to the provisions of Section 13.5, all moneys received by the
Trustee shall, until used or applied as herein provided, be held in trust for
the purposes for which they were received, but 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 moneys received by it hereunder except such as
it may agree with the Company to pay thereon.
SECTION 9.7. COMPENSATION AND REIMBURSEMENT.
(a) The Company covenants and agrees to pay to the Trustee, and the
Trustee shall be entitled to, such reasonable compensation (which shall not be
limited by any provision of law in regard to the compensation of a trustee of
an express trust), as the Company and the Trustee may from time to time agree
in writing, for all services rendered by it in the execution of the trusts
hereby created and in the exercise and performance of any of the powers and
duties hereunder of the Trustee, and, except as otherwise expressly provided
herein, the Company shall pay or reimburse the Trustee upon its request for all
reasonable expenses, disbursements and advances incurred or made by the Trustee
in accordance with any of the provisions of this Indenture (including the
reasonable compensation and the expenses and disbursements of its counsel and
of all Persons not regularly in its employ) except any such expense,
disbursement or advance as may arise from its negligence or bad faith. The
Company also covenants to indemnify the Trustee (and its officers, agents,
directors and
<PAGE> 41
employees) for, and to hold it harmless against, any loss, liability or
expense incurred without negligence or bad faith on the part of the Trustee and
arising out of or in connection with the acceptance or administration of this
trust, including the costs and expenses of defending itself against any claim of
liability in the premises.
(b) The obligations of the Company under this Section 9.7 to compensate
and indemnify the Trustee and to pay or reimburse the Trustee for expenses,
disbursements and advances shall constitute additional indebtedness hereunder.
Such additional indebtedness shall be secured by a lien prior to that of the
Debentures upon all property and funds held or collected by the Trustee as
such, except funds held in trust for the benefit of the holders of particular
Debentures.
SECTION 9.8. RELIANCE ON OFFICERS' CERTIFICATE.
Except as otherwise provided in Section 9.1, whenever in the
administration of the provisions of this Indenture the Trustee shall deem it
necessary or desirable that a matter be proved or established prior to taking
or suffering or omitting to take any action hereunder, such matter (unless
other evidence in respect thereof be herein specifically prescribed) may, in
the absence of negligence or bad faith on the part of the Trustee, be deemed to
be conclusively proved and established by an Officers' Certificate delivered to
the Trustee and such certificate, in the absence of negligence or bad faith on
the part of the Trustee, shall be full warrant to the Trustee for any action
taken, suffered or omitted to be taken by it under the provisions of this
Indenture upon the faith thereof.
SECTION 9.9. DISQUALIFICATION: CONFLICTING INTERESTS.
If the Trustee has or shall acquire any "conflicting interest" within the
meaning of Section 310(b) of the Trust Indenture Act, the Trustee and the
Company shall in all respects comply with the provisions of Section 310(b) of
the Trust Indenture Act.
SECTION 9.10. CORPORATE TRUSTEE REQUIRED; ELIGIBILITY.
There shall at all times be a Trustee with respect to the Debentures
issued hereunder which shall at all times be a corporation organized and doing
business under the laws of the United States of America or any State or
Territory thereof or of the District of Columbia, or a corporation or other
Person permitted to act as trustee by the Commission, authorized under such
laws to exercise corporate trust powers, having a combined capital and surplus
of at least $50,000,000, and subject to supervision or examination by federal,
state, territorial, or District of Columbia authority. If such corporation
publishes reports of condition at least annually, pursuant to law or to the
requirements of the aforesaid supervising or examining authority, then for the
purposes of this Section 9.10, 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. The Company may not, nor
may any Person directly or indirectly controlling, controlled by, or under
common control with the Company, serve as Trustee. In case at any time the
Trustee shall cease to be eligible in accordance with the provisions of
<PAGE> 42
this Section 9.10, the Trustee shall resign immediately in the manner and
with the effect specified in Section 9.11.
SECTION 9.11. RESIGNATION AND REMOVAL; APPOINTMENT OF SUCCESSOR.
(a) The Trustee or any successor hereafter appointed, may at any time
resign by giving written notice thereof to the Company and by transmitting
notice of resignation by mail, first class postage prepaid, to the
Debentureholders, as their names and addresses appear upon the Debenture
Register. Upon receiving such notice of resignation, the Company shall
promptly appoint a successor trustee with respect to Debentures by written
instrument, in duplicate, executed by order of the Board of Directors, one copy
of which instrument shall be delivered to the resigning Trustee and one copy to
the successor trustee. If no successor trustee shall have been so appointed and
have accepted appointment within 30 days after the mailing 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
Debentures, or any Debentureholder who has been a bona fide holder of a
Debenture or Debentures for at least six months may, subject to the provisions
of Section 9.11, on behalf of himself and all others similarly situated,
petition any such court for the appointment of a successor trustee. Such court
may thereupon after such notice, if any, as it may deem proper and prescribe,
appoint a successor trustee.
(b) In case at any time any one of the following shall occur
(i) the Trustee shall fail to comply with
the provisions of Section 9.9 after written request
therefor by the Company or by any Debentureholder who
has been a bona fide holder of a Debenture or
Debentures for at least six months; or
(ii) the Trustee shall cease to be eligible
in accordance with the provisions of Section 9.10 and
shall fail to resign after written request therefor by
the Company or by any such Debentureholder; or
(iii) the Trustee shall become incapable of
acting, or shall be adjudged a bankrupt or insolvent,
or commence a voluntary bankruptcy proceeding, or a
receiver of the Trustee or of its property shall be
appointed or consented to, 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,
the Company may remove the Trustee with respect to all
Debentures and appoint a successor trustee by written
instrument, in duplicate, executed by order of the
Board of Directors, one copy of which instrument shall
be delivered to the Trustee so removed and one copy to
the successor trustee, or, subject to the
<PAGE> 43
provisions of Section 9.9, unless the Trustee's duty to
resign is stayed as provided herein, any Debentureholder who
has been a bona fide holder of a Debenture or Debentures for
at least six months may, on behalf of that holder and all
others similarly situated, petition any court of competent
jurisdiction for the removal of the Trustee and the
appointment of a successor trustee. Such court may thereupon
after such notice, if any, as it may deem proper and
prescribe, remove the Trustee and appoint a successor
trustee.
(c) The holders of a majority in aggregate principal amount of the
Debentures at the time Outstanding may at any time remove the Trustee by so
notifying the Trustee and the Company and may appoint a successor Trustee with
the consent of the Company.
(d) Any resignation or removal of the Trustee and appointment of a
successor trustee with respect to the Debentures pursuant to any of the
provisions of this Section 9.11 shall become effective upon acceptance of
appointment by the successor trustee as provided in Section 9.12.
(e) Any successor trustee appointed pursuant to this Section 9.11
may be appointed with respect to the Debentures, and at any time there shall be
only one Trustee with respect to the Debentures.
SECTION 9.12. ACCEPTANCE OF APPOINTMENT BY SUCCESSOR.
(a) In case of the appointment hereunder of a successor trustee with
respect to the Debentures, every successor trustee so appointed shall execute,
acknowledge and deliver to the Company and to the retiring Trustee an
instrument accepting such appointment, and thereupon the resignation or removal
of the retiring Trustee shall become effective and such successor trustee,
without any further act, deed or conveyance, shall become vested with all the
rights, powers, trusts and duties of the retiring Trustee; but, on the request
of the Company or the successor trustee, such retiring Trustee shall, upon
payment of its charges, execute and deliver an instrument transferring to such
successor trustee all the rights, powers, and trusts of the retiring Trustee
and shall duly assign, transfer and deliver to such successor trustee all
property and money held by such retiring Trustee hereunder.
(b) Upon request of any successor trustee, the Company shall execute any
and all instruments for more fully and certainly vesting in and confirming to
such successor trustee all such rights, powers and trusts referred to in
Section 9.12(a).
(c) No successor trustee shall accept its appointment unless at the time
of such acceptance such successor trustee shall be qualified and eligible under
this Article IX.
(d) Upon acceptance of appointment by a successor trustee as provided in
this Section 9.12, the Company shall transmit notice of the succession of such
trustee hereunder by mail, first class postage
<PAGE> 44
prepaid, to the Debentureholders, as their names and addresses appear upon the
Debenture Register. If the Company fails to transmit such notice within ten
days after acceptance of appointment by the successor trustee, the successor
trustee shall cause such notice to be transmitted at the expense of the Company.
SECTION 9.13. MERGER, CONVERSION, CONSOLIDATION OR SUCCESSION TO
BUSINESS.
Any corporation into which the Trustee may be merged or converted or with
which it may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any
corporation succeeding to the corporate trust business of the Trustee, shall be
the successor of the Trustee hereunder, provided that such corporation shall be
qualified under the provisions of Section 9.9 and eligible under the provisions
of Section 9.10, without the execution or filing of any paper or any further
act on the part of any of the parties hereto, anything herein to the contrary
notwithstanding. In case any Debentures 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 Debentures so authenticated with the same effect as if such
successor Trustee had itself authenticated such Debentures.
SECTION 9.14. PREFERENTIAL COLLECTION OF CLAIMS AGAINST THE
COMPANY.
The Trustee shall comply with Section 311(a) of the Trust Indenture Act,
excluding any creditor relationship described in Section 311(b) of the Trust
Indenture Act. A Trustee who has resigned or been removed shall be subject to
Section 311(a) of the Trust Indenture Act to the extent included therein.
ARTICLE X.
CONCERNING DEBENTUREHOLDERS
SECTION 10.1. EVIDENCE OF ACTION BY HOLDERS.
(a) Whenever in this Indenture it is provided that the holders of a
majority or specified percentage in aggregate principal amount of the
Debentures may take any action (including the making of any demand or request,
the giving of any notice, consent or waiver or the taking of any other action),
the fact that at the time of taking any such action the holders of such
majority or specified percentage have joined therein may be evidenced by any
instrument or any number of instruments of similar tenor executed by such
holders of Debentures in Person or by agent or proxy appointed in writing.
(b) If the Company shall solicit from the Debentureholders any request,
demand, authorization, direction, notice, consent, waiver or other action, the
Company may, at its option, as evidenced by an Officers' Certificate, fix in
advance a record date for the determination of Debentureholders entitled to
give such request, demand, authorization, direction, notice, consent, waiver or
other action, but the Company shall have no obligation to do so. If such a
<PAGE> 45
record date is fixed, such request, demand, authorization, direction, notice,
consent, waiver or other action may be given before or after the record date,
but only the Debentureholders of record at the close of business on the record
date shall be deemed to be Debentureholders for the purposes of determining
whether Debentureholders of the requisite proportion of Outstanding Debentures
have authorized or agreed or consented to such request, demand, authorization,
direction, notice, consent, waiver or other action, and for that purpose the
Outstanding Debentures shall be computed as of the record date; provided,
however, that no such authorization, agreement or consent by such
Debentureholders on the record date shall be deemed effective unless it shall
become effective pursuant to the provisions of this Indenture not later than
six months after the record date.
SECTION 10.2. PROOF OF EXECUTION BY DEBENTUREHOLDERS.
Subject to the provisions of Section 9.1, proof of the execution of any
instrument by a Debentureholder (such proof shall not require notarization) or
his agent or proxy and proof of the holding by any Person of any of the
Debentures shall be sufficient if made in the following manner:
(a) The fact and date of the execution by any such Person of any
instrument may be proved in any reasonable manner acceptable to the Trustee.
(b) The ownership of Debentures shall be proved by the Debenture Register
of such Debentures or by a certificate of the Debenture Registrar thereof.
(c) The Trustee may require such additional proof of any matter referred
to in this Section 10.2 as it shall deem necessary.
SECTION 10.3. WHO MAY BE DEEMED OWNERS.
Prior to the due presentment for registration of transfer of any
Debenture, the Company, the Trustee, any Paying Agent, any Authenticating Agent
and any Debenture Registrar may deem and treat the Person in whose name such
Debenture shall be registered upon the books of the Company as the absolute
owner of such Debenture (whether or not such Debenture shall be overdue and
notwithstanding any notice of ownership or writing thereon made by anyone other
than the Debenture Registrar) for the purpose of receiving payment of or on
account of the principal of and interest on such Debenture (subject to Section
2.3) and for all other purposes; and neither the Company nor the Trustee nor
any Paying Agent nor any Authenticating Agent nor any Debenture Registrar shall
be affected by any notice to the contrary.
SECTION 10.4. CERTAIN DEBENTURES OWNED BY COMPANY DISREGARDED.
In determining whether the holders of the requisite aggregate principal
amount of Debentures have concurred in any direction, consent or waiver under
this Indenture, the Debentures that are owned by the Company or any other
obligor on the Debentures or by any Person directly or indirectly controlling
or controlled by or under common control with the Company or any other obligor
on the Debentures shall be disregarded and deemed not to be Outstanding for the
purpose of any
<PAGE> 46
such determination, except that for the purpose of determining whether the
Trustee shall be protected in relying on any such direction, consent or waiver,
only Debentures that the Trustee actually knows are so owned shall be so
disregarded. The Debentures so owned that have been pledged in good faith may
be regarded as Outstanding for the purposes of this Section 10.4, if the
pledgee shall establish to the satisfaction of the Trustee the pledgee's right
so to act with respect to such Debentures and that the pledgee is not a Person
directly or indirectly controlling or controlled by or under direct or indirect
common control with the Company or any such other obligor. In case of a dispute
as to such right, any decision by the Trustee taken upon the advice of counsel
shall be full protection to the Trustee.
SECTION 10.5. ACTIONS BINDING ON FUTURE DEBENTUREHOLDERS.
At any time prior to (but not after) the evidencing to the Trustee, as
provided in Section 10.1, of the taking of any action by the holders
of the majority or percentage in aggregate principal amount of the Debentures
specified in this Indenture in connection with such action, any holder of a
Debenture that is shown by the evidence to be included in the Debentures the
holders of which have consented to such action may, by filing written notice
with the Trustee, and upon proof of holding as provided in Section 10.2, revoke
such action so far as concerns such Debenture. Except as aforesaid any such
action taken by the holder of any Debenture shall be conclusive and binding
upon such holder and upon all future holders and owners of such Debenture, and
of any Debenture issued in exchange therefor, on registration of transfer
thereof or in place thereof, irrespective of whether or not any notation in
regard thereto is made upon such Debenture. Any action taken by the holders of
the majority or percentage in aggregate principal amount of the Debentures
specified in this Indenture in connection with such action shall be
conclusively binding upon the Company, the Trustee and the holders of all the
Debentures.
ARTICLE XI.
SUPPLEMENTAL INDENTURES
SECTION 11.1. SUPPLEMENTAL INDENTURES WITHOUT THE CONSENT OF
DEBENTUREHOLDERS.
In addition to any supplemental indenture otherwise authorized by this
Indenture, the Company and the Trustee may from time to time and at any time
enter into an indenture or indentures supplemental hereto (which shall conform
to the provisions of the Trust Indenture Act as then in effect), without the
consent of the Debentureholders, for one or more of the following purposes:
(a) to cure any ambiguity, defect, or inconsistency herein or in the
Debentures;
(b) to comply with Article X;
(c) to provide for uncertificated Debentures in addition to or in place
of certificated Debentures;
<PAGE> 47
(d) to add to the covenants of the Company for the benefit of the holders
of all or any of the Debentures or to surrender any right or power herein
conferred upon the Company;
(e) to add to, delete from, or revise the conditions, limitations, and
restrictions on the authorized amount, terms, or purposes of issue,
authentication, and delivery of Debentures, as herein set forth;
(f) to make any change that does not adversely affect the rights of any
Debentureholder in any material respect;
(g) to provide for the issuance of and establish the form and terms and
conditions of the Debentures, to establish the form of any certifications
required to be furnished pursuant to the terms of this Indenture or of the
Debentures, or to add to the rights of the holders of the Debentures;
(h) qualify or maintain the qualification of this Indenture under the
Trust Indenture Act; or
(i) to evidence a consolidation or merger involving the Company as
permitted under Section 21.1.
The Trustee is hereby authorized to join with the Company in the execution of
any such supplemental indenture, and to make any further appropriate agreements
and stipulations that may be therein contained, but the Trustee 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.
Any supplemental indenture authorized by the provisions of this Section 11.1
may be executed by the Company and the Trustee without the consent of the
holders of any of the Debentures at the time Outstanding, notwithstanding any
of the provisions of Section 11.2.
SECTION 11.2. SUPPLEMENTAL INDENTURES WITH CONSENT OF
DEBENTUREHOLDERS.
With the consent (evidenced as provided in Section 10.1) of the holders of
not less than a majority in aggregate principal amount of the Debentures at the
time Outstanding, the Company, when authorized by Board Resolutions, and the
Trustee may from time to time and at any time enter into an indenture or
indentures supplemental hereto (which shall conform to the provisions of the
Trust Indenture Act as then in effect) for the purpose of adding any provisions
to or changing in any manner or eliminating any of the provisions of this
Indenture or of any supplemental indenture or of modifying in any manner not
covered by Section 11.1 the rights of the holders of the Debentures under this
Indenture; provided, however, that no such supplemental indenture shall without
the consent of the holders of each Debenture then Outstanding and affected
thereby, (i) extend the fixed maturity of any Debentures, reduce the principal
amount thereof, or reduce the rate or extend the time of payment of interest
thereon, without the consent of the holder of each Debenture so affected; or
(ii) reduce the aforesaid percentage of Debentures, the holders of which are
required to consent to any such supplemental indenture; provided further, that
if the Debentures are held by the Trust or a trustee of the Trust, such
supplemental
<PAGE> 48
indenture shall not be effective until the holders of a majority in
liquidation preference of Trust Securities of the Trust shall have consented to
such supplemental indenture; provided further, that if the consent of the
holder of each Outstanding Debenture is required, such supplemental indenture
shall not be effective until each holder of the Trust Securities of the Trust
shall have consented to such supplemental indenture. It shall not be necessary
for the consent of the Debentureholders affected thereby under this Section
11.2 to approve the particular form of any proposed supplemental indenture, but
it shall be sufficient if such consent shall approve the substance thereof.
SECTION 11.3. EFFECT OF SUPPLEMENTAL INDENTURES.
Upon the execution of any supplemental indenture pursuant to the
provisions of this Article XI, this Indenture shall be and be deemed to be
modified and amended in accordance therewith and the respective rights,
limitations of rights, obligations, duties and immunities under this Indenture
of the Trustee, the Company and the holders of Debentures shall thereafter be
determined, exercised and enforced hereunder subject in all respects to such
modifications and amendments, and all the terms and conditions of any such
supplemental indenture shall be and be deemed to be part of the terms and
conditions of this Indenture for any and all purposes.
SECTION 11.4. DEBENTURES AFFECTED BY SUPPLEMENTAL INDENTURES.
Debentures affected by a supplemental indenture, authenticated and
delivered after the execution of such supplemental indenture pursuant to the
provisions of this Article XI, may bear a notation in form approved by the
Company, provided such form meets the requirements of any exchange upon which
the Debentures may be listed, as to any matter provided for in such
supplemental indenture. If the Company shall so determine, new Debentures so
modified as to conform, in the opinion of the Board of Directors of the
Company, to any modification of this Indenture contained in any such
supplemental indenture may be prepared by the Company, authenticated by the
Trustee and delivered in exchange for the Debentures then Outstanding.
SECTION 11.5. EXECUTION OF SUPPLEMENTAL INDENTURES.
(a) Upon the request of the Company, accompanied by its Board Resolutions
authorizing the execution of any such supplemental indenture, and upon the
filing with the Trustee of evidence of the consent of Debentureholders required
to consent thereto as aforesaid, the Trustee shall join with the Company in the
execution of such supplemental indenture unless such supplemental indenture
affects the Trustee's own rights, duties or immunities under this Indenture or
otherwise, in which case the Trustee may in its discretion but shall not be
obligated to enter into such supplemental indenture. The Trustee, subject to
the provisions of Sections 9.1, may receive an Opinion of Counsel as conclusive
evidence that any supplemental indenture executed pursuant to this Article XI
is authorized or permitted by, and conforms to, the terms of this Article XI
and that it is proper for the Trustee under the provisions of this Article XI
to join in the execution thereof.
<PAGE> 49
(b) Promptly after the execution by the Company and the Trustee of any
supplemental indenture pursuant to the provisions of this Section 11.5, the
Trustee shall transmit by mail, first class postage prepaid, a notice, setting
forth in general terms the substance of such supplemental indenture, to the
Debentureholders as their names and addresses appear upon the Debenture
Register. Any failure of the Trustee to mail such notice, or any defect
therein, shall not, however, in any way impair or affect the validity of any
such supplemental indenture.
ARTICLE XII.
SUCCESSOR CORPORATION
SECTION 12.1. COMPANY MAY CONSOLIDATE, ETC.
Nothing contained in this Indenture or in any of the Debentures shall
prevent any consolidation or merger of the Company with or into any other
corporation or corporations (whether or not affiliated with the Company, as the
case may be), or successive consolidations or mergers in which the Company, as
the case may be, or its successor or successors shall be a party or parties, or
shall prevent any sale, conveyance, transfer or other disposition of the
property of the Company, as the case may be, or its successor or successors as
an entirety, or substantially as an entirety, to any other corporation (whether
or not affiliated with the Company, as the case may be, or its successor or
successors) authorized to acquire and operate the same; provided, however, that
the Company hereby covenants and agrees that, (i) upon any such consolidation,
merger, sale, conveyance, transfer or other disposition, the due and punctual
payment, in the case of the Company, of the principal of and interest on all of
the Debentures, according to their tenor and the due and punctual performance
and observance of all the covenants and conditions of this Indenture to be kept
or performed by the Company as the case may be, shall be expressly assumed, by
supplemental indenture (which shall conform to the provisions of the Trust
Indenture Act, as then in effect) satisfactory in form to the Trustee executed
and delivered to the Trustee by the entity formed by such consolidation, or
into which the Company, as the case may be, shall have been merged, or by the
entity which shall have acquired such property; (ii) in case 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 (iii) immediately after giving effect thereto, no
Event of Default, and no event which, after notice or lapse of time or both,
would become an Event of Default, shall have occurred and be continuing.
SECTION 12.2. SUCCESSOR CORPORATION SUBSTITUTED.
(a) In case of any such consolidation, merger, sale, conveyance, transfer
or other disposition and upon the assumption by the successor corporation, by
supplemental indenture, executed and delivered to the Trustee and satisfactory
in form to the Trustee, of the due and punctual payment of the principal of and
interest on all of the Debentures Outstanding and the due and punctual
performance of all of the covenants and conditions of this Indenture to be
performed by the
<PAGE> 50
Company such successor corporation shall succeed to and be substituted for
the Company, with the same effect as if it had been named as the Company
herein, and thereupon the predecessor corporation shall be relieved of all
obligations and covenants under this Indenture and the Debentures.
(b) In case of any such consolidation, merger, sale, conveyance, transfer
or other disposition such changes in phraseology and form (but not in
substance) may be made in the Debentures thereafter to be issued as may be
appropriate.
(c) Nothing contained in this Indenture or in any of the Debentures shall
prevent the Company from merging into itself or acquiring by purchase or
otherwise all or any part of the property of any other Person (whether or not
affiliated with the Company).
SECTION 12.3. EVIDENCE OF CONSOLIDATION, ETC. TO TRUSTEE.
The Trustee, subject to the provisions of Section 9.1, may receive an
Opinion of Counsel as conclusive evidence that any such consolidation, merger,
sale, conveyance, transfer or other disposition, and any such assumption,
comply with the provisions of this Article XII.
ARTICLE XIII.
SATISFACTION AND DISCHARGE
SECTION 13.1. SATISFACTION AND DISCHARGE OF INDENTURE.
If at any time: (a) the Company shall have delivered to the Trustee for
cancellation all Debentures theretofore authenticated (other than any
Debentures that shall have been destroyed, lost or stolen and that shall have
been replaced or paid as provided in Section 2.9) and Debentures for whose
payment money or Governmental Obligations have theretofore been deposited in
trust or segregated and held in trust by the Company (and thereupon repaid to
the Company or discharged from such trust, as provided in Section 13.5); or (b)
all such Debentures not theretofore delivered to the Trustee for cancellation
shall have become due and payable, or are by their terms to become due and
payable within one year or are to be called for redemption within one year
under arrangements satisfactory to the Trustee for the giving of notice of
redemption, and the Company shall deposit or cause to be deposited with the
Trustee as trust funds the entire amount in moneys or Governmental Obligations
sufficient, or a combination thereof, sufficient in the opinion of a nationally
recognized firm of independent public accountants expressed in a written
certification thereof delivered to the Trustee, to pay at maturity or upon
redemption all Debentures not theretofore delivered to the Trustee for
cancellation, including principal and interest due or to become due to such
date of maturity or date fixed for redemption, as the case may be, and if the
Company shall also pay or cause to be paid all other sums payable hereunder by
the Company; then this Indenture shall thereupon cease to be of further effect
except for the provisions of Sections 2.3, 2.7, 2.9, 5.1, 5.2, 5.3 and 9.10,
that shall survive until the date of maturity or redemption date, as the case
may be, and Sections 9.6 and 13.5, that shall survive to such date and
thereafter, and the
<PAGE> 51
Trustee, on demand of the Company and at the cost and expense of the Company,
shall execute proper instruments acknowledging satisfaction of and discharging
this Indenture.
SECTION 13.2. DISCHARGE OF OBLIGATIONS.
If at any time all Debentures not heretofore delivered to the Trustee for
cancellation or that have not become due and payable as described in Section
13.1 shall have been paid by the Company by depositing irrevocably with the
Trustee as trust funds moneys or an amount of Governmental Obligations
sufficient in the opinion of a nationally recognized certified public
accounting firm to pay at maturity or upon redemption all Debentures not
theretofore delivered to the Trustee for cancellation, including principal and
interest due or to become due to such date of maturity or date fixed for
redemption, as the case may be, and if the Company shall also pay or cause to
be paid all other sums payable hereunder by the Company, then after the date
such moneys or Governmental Obligations, as the case may be, are deposited with
the Trustee, the obligations of the Company under this Indenture shall cease to
be of further effect except for the provisions of Sections 2.3, 2.7, 2.9, 5.1,
5.2, 5.3, 9.6, 9.10 and 13.5 hereof that shall survive until such Debentures
shall mature and be paid. Thereafter, Sections 9.6 and 13.5 shall survive.
SECTION 13.3. DEPOSITED MONEYS TO BE HELD IN TRUST.
All monies or Governmental Obligations deposited with the Trustee pursuant
to Sections 13.1 or 13.2 shall be held in trust and shall be available for
payment as due, either directly or through any Paying Agent (including the
Company acting as its own Paying Agent), to the holders of the Debentures for
the payment or redemption of which such moneys or Governmental Obligations have
been deposited with the Trustee.
SECTION 13.4. PAYMENT OF MONIES HELD BY PAYING AGENTS.
In connection with the satisfaction and discharge of this Indenture, all
moneys or Governmental Obligations then held by any Paying Agent under the
provisions of this Indenture shall, upon demand of the Company, be paid to the
Trustee and thereupon such Paying Agent shall be released from all further
liability with respect to such moneys or Governmental Obligations.
SECTION 13.5. REPAYMENT TO COMPANY.
Any monies or Governmental Obligations deposited with any Paying Agent or
the Trustee, or then held by the Company in trust, for payment of principal of
or interest on the Debentures that are not applied but remain unclaimed by the
holders of such Debentures for at least two years after the date upon which the
principal of or interest on such Debentures shall have respectively become due
and payable, shall be repaid to the Company, as the case may be, on May 31 of
each year or (if then held by the Company) shall be discharged from such trust;
and thereupon the Paying Agent and the Trustee shall be released from all
further liability with respect to such moneys or Governmental Obligations, and
the holder of any of the Debentures entitled to
<PAGE> 52
receive such payment shall thereafter, as an unsecured general creditor,
look only to the Company for the payment thereof.
ARTICLE XIV.
IMMUNITY OF INCORPORATORS, STOCKHOLDERS, OFFICERS
AND DIRECTORS
SECTION 14.1. NO RECOURSE.
No recourse under or upon any obligation, covenant or agreement of this
Indenture, or of the Debentures, or for any claim based thereon or otherwise in
respect thereof, shall be had against any incorporator, stockholder, officer or
director, past, present or future as such, of the Company or of any predecessor
or successor corporation, either directly or through the Company or any such
predecessor or successor corporation, whether by virtue of any constitution,
statute or rule of law, or by the enforcement of any assessment or penalty or
otherwise; it being expressly understood that this Indenture and the
obligations issued hereunder are solely corporate obligations, and that no such
personal liability whatever shall attach to, or is or shall be incurred by, the
incorporators, stockholders, officers or directors as such, of the Company or
of any predecessor or successor corporation, or any of them, because of the
creation of the indebtedness hereby authorized, or under or by reason of the
obligations, covenants or agreements contained in this Indenture or in any of
the Debentures or implied therefrom; and that any and all such personal
liability of every name and nature, either at common law or in equity or by
constitution or statute, and any and all such rights and claims against, every
such incorporator, stockholder, officer or director as such, because of the
creation of the indebtedness hereby authorized, or under or by reason of the
obligations, covenants or agreements contained in this Indenture or in any of
the Debentures or implied therefrom, are hereby expressly waived and released
as a condition of, and as a consideration for, the execution of this Indenture
and the issuance of such Debentures.
ARTICLE XV.
MISCELLANEOUS PROVISIONS
SECTION 15.1. EFFECT ON SUCCESSORS AND ASSIGNS.
All the covenants, stipulations, promises and agreements in this Indenture
contained by or on behalf of the Company shall bind their respective successors
and assigns, whether so expressed or not.
SECTION 15.2. ACTIONS BY SUCCESSOR.
Any act or proceeding by any provision of this Indenture authorized or
required to be done or performed by any board, committee or officer of the
Company shall and may be done and performed with like force and effect by the
corresponding board, committee or officer of any corporation that shall at the
time be the lawful sole successor of the Company.
SECTION 15.3. SURRENDER OF COMPANY POWERS.
<PAGE> 53
The Company by instrument in writing executed by appropriate authority of
its Board of Directors and delivered to the Trustee may surrender any of the
powers reserved to the Company, and thereupon such power so surrendered
shall terminate both as to the Company, as the case may be, and as to any
successor corporation.
SECTION 15.4. NOTICES.
Except as otherwise expressly provided herein any notice or demand that by
any provision of this Indenture is required or permitted to be given or served
by the Trustee or by the holders of Debentures to or on the Company may be
given or served by being deposited first class postage prepaid in a post-office
letterbox addressed (until another address is filed in writing by the Company
with the Trustee), as follows: c/o Capitol Bancorp Ltd., 200 Washington Square
North, Fourth Floor, Lansing, Michigan 48933, Attention: Chief Executive
Officer. Any notice, election, request or demand by the Company or any
Debentureholder to or upon the Trustee shall be deemed to have been
sufficiently given or made, for all purposes, if given or made in writing at
the Corporate Trust Office of the Trustee.
SECTION 15.5. GOVERNING LAW.
This Indenture and each Debenture shall be deemed to be a contract made
under the internal laws of the State of Michigan and for all purposes shall be
construed in accordance with the laws of said State.
SECTION 15.6. TREATMENT OF DEBENTURES AS DEBT.
It is intended that the Debentures shall be treated as indebtedness and
not as equity for federal income tax purposes. The provisions of this
Indenture shall be interpreted to further this intention.
SECTION 15.7. COMPLIANCE CERTIFICATES AND OPINIONS.
(a) Upon any application or demand by the Company to the Trustee to take
any action under any of the provisions of this Indenture, the Company shall
furnish to the Trustee an Officers' Certificate stating that all conditions
precedent 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 have been complied with, except that
in the case of any such application or demand as to which the furnishing of
such documents is specifically required by any provision of this Indenture
relating to such particular application or demand, no additional certificate or
opinion need be furnished.
(b) Each certificate or opinion of the Company provided for in this
Indenture and delivered to the Trustee with respect to compliance with a
condition or covenant in this Indenture shall include (1) a statement that the
Person making such certificate or opinion has read such covenant or condition;
(2) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such
certificate or opinion are based; (3) a statement that, in the opinion of such
Person, he has made such examination or investigation as, in the opinion of
such Person, is
<PAGE> 54
necessary to enable him to express an informed opinion as to whether or
not such covenant or condition has been complied with; and (4) a statement as
to whether or not, in the opinion of such Person, such condition or covenant
has been complied with.
SECTION 15.8. PAYMENTS ON BUSINESS DAYS.
In any case where the date of maturity of interest or principal of any
Debenture or the date of redemption of any Debenture shall not be a Business
Day, then payment of interest or principal may be made on the next succeeding
Business Day with the same force and effect as if made on the nominal date of
maturity or redemption, and no interest shall accrue for the period after such
nominal date.
SECTION 15.9. CONFLICT WITH TRUST INDENTURE ACT.
If and to the extent that any provision of this Indenture limits,
qualifies or conflicts with the duties imposed by Sections 310 to 317,
inclusive, of the Trust Indenture Act, such imposed duties shall control.
SECTION 15.10. COUNTERPARTS.
This Indenture may be executed in any number of counterparts, each of
which shall be an original, but such counterparts shall together constitute but
one and the same instrument.
SECTION 15.11. SEPARABILITY.
In case any one or more of the provisions contained in this Indenture or
in the Debentures shall for any reason be held to be invalid, illegal or
unenforceable in any respect, such invalidity, illegality or unenforceability
shall not affect any other provisions of this Indenture or of the Debentures,
but this Indenture and the Debentures shall be construed as if such invalid or
illegal or unenforceable provision had never been contained herein or therein.
SECTION 15.12. ASSIGNMENT.
The Company shall have the right at all times to assign any of its
respective rights or obligations under this Indenture to a direct or indirect
wholly owned Subsidiary of the Company, provided that, in the event of any such
assignment, the Company shall remain liable for all such obligations. Subject
to the foregoing, this Indenture is binding upon and inures to the benefit of
the parties thereto and their respective successors and assigns. This
Indenture may not otherwise be assigned by the parties thereto.
SECTION 15.13. ACKNOWLEDGMENT OF RIGHTS; RIGHT OF SETOFF.
(a) The Company acknowledges that, with respect to any Debentures held by
the Trust or a trustee of the Trust, if the Property Trustee fails to enforce
its rights under this Indenture as the holder of the Debentures held as the
assets of the Trust, any holder of Preferred Securities may institute legal
proceedings directly against the Company
<PAGE> 55
to enforce such Property Trustee's rights under this Indenture without first
instituting any legal proceedings against such Property Trustee or any other
person or entity. Notwithstanding the foregoing, and notwithstanding the
provisions of Section 7.4(a) hereof, if an Event of Default has occurred and is
continuing and such event is attributable to the failure of the Company to pay
interest or principal on the Debentures on the date such interest or principal
is otherwise payable (or in the case of redemption, on the redemption date),
the Company acknowledges that a holder of Preferred Securities may directly
institute a proceeding for enforcement of payment to such holder of the
principal of or interest on the Debentures having a principal amount equal to
the aggregate liquidation amount of the Preferred Securities of such holder on
or after the respective due date specified in the Debentures.
(b) Notwithstanding anything to the contrary contained in this Indenture,
the Company shall have the right of setoff any payment it is otherwise required
to make hereunder in respect of any Trust Securities to the extent that the
Company has previously made, or is concurrently making, a payment to the holder
of such Trust Securities under the Guarantee or in connection with a proceeding
for enforcement of payment of the principal of or interest on the Debentures
directly brought by holders of any Trust Securities.
ARTICLE XVI.
SUBORDINATION OF DEBENTURES
SECTION 16.1. AGREEMENT TO SUBORDINATE.
The Company covenants and agrees, and each holder of Debentures issued
hereunder by such holder's acceptance thereof likewise covenants and agrees,
that all Debentures shall be issued subject to the provisions of this Article
XVI; and each holder of a Debenture, whether upon original issue or upon
transfer or assignment thereof, accepts and agrees to be bound by such
provisions. The payment by the Company of the principal of and interest on all
Debentures issued hereunder shall, to the extent and in the manner hereinafter
set forth, be subordinated and junior in right of payment to the prior payment
in full of all Senior Debt, Subordinated Debt and Additional Senior Obligations
(collectively, "Senior Indebtedness") to the extent provided herein, whether
outstanding at the date of this Indenture or thereafter incurred. No provision
of this Article XVI shall prevent the occurrence of any default or Event of
Default hereunder.
SECTION 16.2. DEFAULT ON SENIOR DEBT, SUBORDINATED DEBT OR
ADDITIONAL SENIOR OBLIGATIONS.
In the event and during the continuation of any default by the Company in
the payment of principal, premium, interest or any other payment due on any
Senior Indebtedness of the Company, or in the event that the maturity of any
Senior Indebtedness of the Company has been accelerated because of a default,
then, in either case, no payment shall be made by the Company with respect to
the principal (including redemption payments) of or interest on the Debentures.
In the event that, notwithstanding the foregoing, any payment shall be received
by the Trustee when such payment is prohibited by the preceding sentence of
this Section 16.2, such payment shall be held in trust for the
<PAGE> 56
benefit of, and shall be paid over or delivered to, the holders of Senior
Indebtedness or their respective representatives, or to the trustee or trustees
under any indenture pursuant to which any of such Senior Indebtedness may have
been issued, as their respective interests may appear, but only to the extent
that the holders of the Senior Indebtedness (or their representative or
representatives or a trustee) notify the Trustee in writing within 90 days of
such payment of the amounts then due and owing on the Senior Indebtedness and
only the amounts specified in such notice to the Trustee shall be paid to the
holders of Senior Indebtedness.
SECTION 16.3. LIQUIDATION; DISSOLUTION; BANKRUPTCY.
(a) Upon any payment by the Company or distribution of assets of the
Company of any kind or character, whether in cash, property or securities, to
creditors upon any dissolution or winding-up or liquidation or reorganization
of the Company, whether voluntary or involuntary or in bankruptcy, insolvency,
receivership or other proceedings, all amounts due upon all Senior Indebtedness
of the Company shall first be paid in full, or payment thereof provided for in
money in accordance with its terms, before any payment is made by the Company
on account of the principal or interest on the Debentures; and upon any such
dissolution or winding-up or liquidation or reorganization, any payment by the
Company, or distribution of assets of the Company of any kind or character,
whether in cash, property or securities, to which the holders of the Debentures
or the Trustee would be entitled to receive from the Company, except for the
provisions of this Article XVI, shall be paid by the Company or by any
receiver, trustee in bankruptcy, liquidating trustee, agent or other Person
making such payment or distribution, or by the holders of the Debentures or by
the Trustee under this Indenture if received by them or it, directly to the
holders of Senior Indebtedness of the Company (pro rata to such holders on the
basis of the respective amounts of Senior Indebtedness held by such holders, as
calculated by the Company) or their representative or representatives, or to
the trustee or trustees under any indenture pursuant to which any instruments
evidencing such Senior Indebtedness may have been issued, as their respective
interests may appear, to the extent necessary to pay such Senior Indebtedness
in full, in money or money's worth, after giving effect to any concurrent
payment or distribution to or for the holders of such Senior Indebtedness,
before any payment or distribution is made to the holders of Debentures or to
the Trustee.
(b) In the event that, notwithstanding the foregoing, any payment or
distribution of assets of the Company of any kind or character, whether in
cash, property or securities, prohibited by the foregoing, shall be received by
the Trustee before all Senior Indebtedness of the Company is paid in full, or
provision is made for such payment in money in accordance with its terms, such
payment or distribution shall be held in trust for the benefit of and shall
be paid over or delivered to the holders of such Senior Indebtedness or their
representative or representatives, or to the trustee or trustees under any
indenture pursuant to which any instruments evidencing such Senior Indebtedness
may have been issued, as their respective interests may appear, as calculated
by the Company, for application to the payment of all Senior Indebtedness of
the Company, as the case may be, remaining unpaid to the extent necessary to
pay such Senior Indebtedness in full in money
<PAGE> 57
in accordance with its terms, rafter giving effect to any concurrent payment
or distribution to or for the benefit of the holders of such Senior
Indebtedness.
(c) For purposes of this Article XVI, the words "cash, property or
securities" shall not be deemed to include shares of stock of the Company as
reorganized or readjusted, or securities of the Company or any other
corporation provided for by a plan of reorganization or readjustment, the
payment of which is subordinated at least to the extent provided in this
Article XVI with respect to the Debentures to the payment of all Senior
Indebtedness of the Company, as the case may be, that may at the time be
outstanding, provided that (i) such Senior Indebtedness is assumed by the new
corporation, if any, resulting from any such reorganization or readjustment;
and (ii) the rights of the holders of such Senior Indebtedness are not, without
the consent of such holders, altered by such reorganization or readjustment.
The consolidation of the Company with, or the merger of the Company into,
another corporation or the liquidation or dissolution of the Company following
the conveyance or transfer of its property as an entirety, or substantially as
an entirety, to another corporation upon the terms and conditions provided for
in Article XII shall not be deemed a dissolution, winding-up, liquidation or
reorganization for the purposes of this Section 16.3 if such other corporation
shall, as a part of such consolidation, merger, conveyance or transfer, comply
with the conditions stated in Article XII. Nothing in Section 16.2 or in this
Section 16.3 shall apply to claims of, or payments to, the Trustee under or
pursuant to Section 9.7.
SECTION 16.4. SUBROGATION.
(a) Subject to the payment in full of all Senior Indebtedness of the
Company, the rights of the holders of the Debentures shall be subrogated to the
rights of the holders of such Senior Indebtedness to receive payments or
distributions of cash, property or securities of the Company, as the case may
be, applicable to such Senior Indebtedness until the principal of and interest
on the Debentures shall be paid in full; and, for the purposes of such
subrogation, no payments or distributions to the holders of such Senior
Indebtedness of any cash, property or securities to which the holders of the
Debentures or the Trustee would be entitled except for the provisions of this
Article XVI, and no payment over pursuant to the provisions of this Article XVI
to or for the benefit of the holders of such Senior Indebtedness by holders of
the Debentures or the Trustee, shall, as between the Company, its creditors
other than holders of Senior Indebtedness of the Company, and the holders of
the Debentures, be deemed to be a payment by the Company to or on account of
such Senior Indebtedness. It is understood that the provisions of this
Article XVI are and are intended solely for the purposes of defining the
relative rights of the holders of the Debentures, on the one hand, and the
holders of such Senior Indebtedness on the other hand.
(b) Nothing contained in this Article XVI or elsewhere in this Indenture
or in the Debentures is intended to or shall impair, as between the Company,
its creditors (other than the holders of Senior Indebtedness of the Company),
and the holders of the Debentures, the obligation of the Company, which is
absolute and unconditional, to pay to the holders of the Debentures the
principal of and interest on the
<PAGE> 58
Debentures as and when the same shall become due and payable in accordance
with their terms, or is intended to or shall affect the relative rights of the
holders of the Debentures and creditors of the Company, as the case may be,
other than the holders of Senior Indebtedness of the Company, as the case may
be, nor shall anything herein or therein prevent the Trustee or the holder of
any Debenture from exercising all remedies otherwise permitted by applicable
law upon default under this Indenture, subject to the rights, if any, under
this Article XVI of the holders of such Senior Indebtedness in respect of cash,
property or securities of the Company, as the case may be, received upon the
exercise of any such remedy.
(c) Upon any payment or distribution of assets of the Company referred to
in this Article XVI, the Trustee, subject to the provisions of Article IX, and
the holders of the Debentures shall be entitled to conclusively rely upon any
order or decree made by any court of competent jurisdiction in which such
dissolution, winding-up, liquidation or reorganization proceedings are pending,
or a certificate of the receiver, trustee in bankruptcy, liquidation trustee,
agent or other Person making such payment or distribution, delivered to the
Trustee or to the holders of the Debentures, for the purposes of ascertaining
the Persons entitled to participate in such distribution, the holders of Senior
Indebtedness and other indebtedness of the Company, as the case may be, the
amount thereof or payable thereon, the amount or amounts paid or distributed
thereon and all other facts pertinent thereto or to this Article XVI.
SECTION 16.5. TRUSTEE TO EFFECTUATE SUBORDINATION.
Each holder of Debentures by such holder's acceptance thereof authorizes
and directs the Trustee on such holder's behalf to take such action as may be
necessary or appropriate to effectuate the subordination provided in this
Article XVI and appoints the Trustee such holder's attorney-in-fact for any and
all such purposes.
SECTION 16.6. NOTICE BY COMPANY.
(a) The Company shall give prompt written notice to a Responsible Officer
of the Trustee of any fact known to the Company that would prohibit the making
of any payment of monies to or by the Trustee in respect of the Debentures
pursuant to the provisions of this Article XVI. Notwithstanding the provisions
of this Article XVI or any other provision of this Indenture, the Trustee shall
not be charged with knowledge of the existence of any facts that would
prohibit the making of any payment of monies to or by the Trustee in respect of
the Debentures pursuant to the provisions of this Article XVI, unless and until
a Responsible Officer of the Trustee shall have received written notice thereof
from the Company or a holder or holders of Senior Indebtedness or from any
trustee therefor; and before the receipt of any such written notice, the
Trustee, subject to the provisions of Section 9.1, shall be entitled in all
respects to assume that no such facts exist; provided, however, that if the
Trustee shall not have received the notice provided for in this Section 16.6 at
least two Business Days prior to the date upon which by the terms hereof any
money may become payable for any purpose (including, without limitation, the
payment of the principal of or interest on any Debenture), then, anything
herein contained to the contrary
<PAGE> 59
notwithstanding, the Trustee shall have full power and authority to receive
such money and to apply the same to the purposes for which they were received,
and shall not be affected by any notice to the contrary that may be received by
it within two Business Days prior to such date.
(b) The Trustee, subject to the provisions of Section 9.1, shall be
entitled to conclusively rely on the delivery to it of a written notice by a
Person representing himself to be a holder of Senior Indebtedness of the
Company (or a trustee on behalf of such holder) to establish that such notice
has been given by a holder of such Senior Indebtedness or a trustee on behalf
of any such holder or holders. In the event that the Trustee determines in
good faith that further evidence is required with respect to the right of any
Person as a holder of such Senior Indebtedness to participate in any payment or
distribution pursuant to this Article XVI, the Trustee may request such Person
to furnish evidence to the reasonable satisfaction of the Trustee as to the
amount of such 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 XVI, 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 16.7. RIGHTS OF TRUSTEE; HOLDERS OF SENIOR INDEBTEDNESS.
(a) The Trustee in its individual capacity shall be entitled to all the
rights set forth in this Article XVI in respect of any Senior Indebtedness at
any time held by it, to the same extent as any other holder of Senior
Indebtedness, and nothing in this Indenture shall deprive the Trustee of any of
its rights as such holder. The Trustee's right to compensation and
reimbursement of expenses as set forth in Section 9.7 shall not be subject to
the subordination provisions of this Article XVI.
(b) With respect to the holders of Senior Indebtedness of the Company,
the Trustee undertakes to perform or to observe only such of its covenants and
obligations as are specifically set forth in this Article XVI, and no implied
covenants or obligations with respect to the holders of such Senior
Indebtedness shall be read into this Indenture against the Trustee. The
Trustee shall not be deemed to owe any fiduciary duty to the holders of such
Senior Indebtedness and, subject to the provisions of Section 9.1, the Trustee
shall not be liable to any holder of such Senior Indebtedness if it shall pay
over or deliver to holders of Debentures, the Company or any other Person money
or assets to which any holder of such Senior Indebtedness shall be entitled by
virtue of this Article XVI or otherwise.
SECTION 16.8. SUBORDINATION MAY NOT BE IMPAIRED.
(a) No right of any present or future holder of any Senior Indebtedness
of the Company 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,
<PAGE> 60
regardless of any knowledge thereof that any such holder may have or otherwise
be charged with.
(b) Without in any way limiting the generality of Section 16.8(a), the
holders of Senior Indebtedness of the Company may, at any time and from time to
time, without the consent of or notice to the Trustee or the holders of the
Debentures, without incurring responsibility to the holders of the Debentures
and without impairing or releasing the subordination provided in this Article
XVI or the obligations hereunder of the holders of the Debentures to the
holders of such Senior Indebtedness, do any one or more of the following: (i)
change the manner, place or terms of payment or extend the time of payment of,
or renew or alter, such Senior Indebtedness, or otherwise amend or supplement
in any manner such Senior Indebtedness or any instrument evidencing the same or
any agreement under which such Senior Indebtedness is outstanding; (ii) sell,
exchange, release or otherwise deal with any property pledged, mortgaged or
otherwise securing such Senior Indebtedness; (iii) release any Person liable in
any manner for the collection of such Senior Indebtedness; and (iv) exercise or
refrain from exercising any rights against the Company and any other Person.
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed, and their respective corporate seals to be hereunto affixed and
attested, all as of the day and year first above written.
CAPITOL BANCORP LTD., a Michigan
corporation
By: /s/ ROBERT C. CARR
-----------------------------
Name: Robert C. Carr
-----------------------------
Title: Executive Vice President
-----------------------------
Attest:
/s/ LEE W. HENDRICKSON
- -----------------------------------
Name: Lee W. Hendrickson
------------------------------ THE FIRST NATIONAL BANK OF CHICAGO,
as trustee
Title: Chief Financial Officer
----------------------------
By: /s/ JOHN PRENDIVILLE
-----------------------------
Name: John Prendiville
-----------------------------
Title: Vice-President
-----------------------------
Attest:
D. FANNING
- -----------------------------
Name: D. Fanning
------------------------
<PAGE> 61
STATE OF MICHIGAN )
) ss:
COUNTY OF INGHAM )
On this 18th day of December, 1997, before me appeared Robert C. Carr, to
me personally known, who, being by me duly sworn, did say that he is
the Executive Vice President of CAPITOL BANCORP LTD., A MICHIGAN CORPORATION,
and that the seal affixed to said instrument is the corporate seal of said
corporation, and that said instrument was signed and sealed in behalf of said
corporation by authority of its board of directors and said Robert C. Carr,
acknowledged said instrument to be the free act and deed of said corporation.
In testimony whereof I have hereunto set my hand and affixed my official
seal at my office in said county and state the day and year last above written.
ANTOINETTE C. RALEIGH
-----------------------------
Antoinette C. Raleigh
Notary Public
Clinton County, Michigan
acting in Ingham, County
My term expires: June 18, 1999
<PAGE> 62
8.50% SUBORDINATED DEBENTURE
DUE DECEMBER 31, 2027
Capitol Bancorp Ltd., a Michigan corporation, (the "Company," which term
includes any successor corporation under the Indenture hereinafter referred
to), for value received, hereby promises to pay to The First National Bank of
Chicago, as Trustee, or registered assigns, the principal sum of Twenty Six
Million Eighty Two Thousand Four Hundred Eighty dollars ($26,082,480.00) on
December 31, 2027 (the "Stated Maturity"), and to pay interest on said
principal sum from December 19, 1997, or from the most recent interest payment
date (each such date, an "Interest Payment Date") to which interest has been
paid or duly provided for, quarterly (subject to deferral as set forth herein)
in arrears on March 31, June 30, September 30 and December 31 of each year
commencing March 31, 1998 at the rate of 8.50% per annum until the principal
hereof shall have become due and payable, and on any overdue principal and
(without duplication) on any overdue installment of interest at the same rate
per annum compounded quarterly. The amount of interest payable on any Interest
Payment Date shall be computed on the basis of a 360-day year of twelve 30-day
months. The amount of interest for any partial period shall be computed on the
basis of the number of days elapsed in a 360-day year of twelve 30-day months.
In the event that any date on which interest is payable on this Debenture is
not a business day, then payment of interest payable on such date shall be made
on the next succeeding day that is a Business Day (as defined in the Indenture)
(and without any interest or other payment in respect of any such delay) with
the same force and effect as if made on such date. The interest installment so
payable, and punctually paid or duly provided for, on any Interest Payment Date
shall, as provided in the Indenture, be paid to the person in whose name this
Debenture (or one or more Predecessor Debentures, as defined in the Indenture)
is registered at the close of business on the regular record date for such
interest installment, which shall be the fifteenth day of the last month of the
calendar quarter in which such Interest Payment Date occurs unless otherwise
provided in the Indenture. The principal of and the interest on this Debenture
shall be payable at the office or agency of the Trustee maintained for that
purpose in any coin or currency of the United States of America that at the
time of payment is legal tender for payment of public and private debts;
provided, however, that payment of interest may be made at the option of the
Company by check mailed to the registered holder at such address as shall
appear in the Debenture Register. Notwithstanding the foregoing, so long as
the holder of this Debenture is the Trustee, the payment of the principal of
and interest on this Debenture shall be made at such place and to such account
as may be designated by the Trustee.
The Stated Maturity may be shortened at any time by the Company to any
date not earlier than December 31, 2002, subject to the Company having received
prior approval of the Federal Reserve if then required under applicable capital
guidelines or policies of the Federal Reserve. Such date may also be extended
at any time at the election of the Company for one or more periods, but in no
event to a date later than December 31, 2036, subject to certain limitations
described in the Indenture.
<PAGE> 63
The indebtedness evidenced by this Debenture is, to the extent provided in
the Indenture, subordinate and junior in right of payment to the prior payment
in full of all Senior Indebtedness. This Debenture is issued subject to the
provisions of the Indenture with respect thereto. Each holder of this
Debenture, 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 action as may be necessary or appropriate to acknowledge or 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, hereby 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.
This Debenture shall not be entitled to any benefit under the Indenture,
be valid or become obligatory for any purpose until the Certificate of
Authentication hereon shall have been signed by or on behalf of the Trustee.
The provisions of this Debenture are continued on the reverse side hereof
and such continued provisions shall for all purposes have the same effect as
though fully set forth at this place.
IN WITNESS WHEREOF, the Company has caused this instrument to be executed.
Dated December 18, 1997
CAPITOL BANCORP LTD.
By: /s/ ROBERT C. CARR
------------------------------
Name: Robert C. Carr
----------------------------
Title: Executive Vice President
---------------------------
Attest:
/s/ LEE W. HENDRICKSON
- --------------------------------
Name: Lee W. Hendrickson
---------------------------
Title: Chief Financial Officer
--------------------------
[FORM OF CERTIFICATE OF AUTHENTICATION]
CERTIFICATE OF AUTHENTICATION
This is one of the Debentures described in the within-mentioned Indenture.
Dated:
THE FIRST NATIONAL BANK OF CHICAGO, ---------------------------------
as Trustee or Authentication Agent
By John Prendiville By
-------------------------- ------------------------------
Authorized Signatory
Exhibit A-3
8.50% SUBORDINATED DEBENTURE
(CONTINUED)
This Debenture is one of the subordinated debentures of the Company (the
"Debentures"), all issued or to be issued under and pursuant to an Indenture
dated as of December 18, 1997 (the "Indenture"), duly executed and delivered
between the Company and The First National Bank of Chicago, as Trustee (the
"Trustee"), to which Indenture reference is hereby made for a description of
the rights, limitations of rights, obligations, duties and immunities
thereunder of the Trustee, the Company and the holders of the Debentures. The
Debentures are limited in aggregate principal amount as specified in the
Indenture.
Company shall have the right, as set forth in the Indenture, to redeem
this Debenture at the option of the Company, without premium or penalty, in
whole or in part at any time on or after December 31, 2002 (an "Optional
Redemption"), or at any time in certain circumstances upon the occurrence of a
Special Event (as defined in the Indenture), at a redemption price (the
"Redemption Price") equal to 100% of the principal amount hereof plus any
accrued but unpaid interest hereon, to the date of such redemption. Any
redemption pursuant to this paragraph shall be made upon not less than 30 days
nor more than 60 days notice, at the Redemption Price. The Redemption Price
shall be paid at the time and in the manner provided therefor in the Indenture.
If the Debentures are only partially redeemed by the Company pursuant to an
Optional Redemption, the Debentures shall be redeemed pro rata or by lot or by
any other method utilized by the Trustee as described in the Indenture. In the
event of an Optional Redemption of this Debenture in part only, a new Debenture
or Debentures for the unredeemed portion hereof shall be issued in the name of
the holder hereof upon the cancellation hereof.
<PAGE> 64
In case an Event of Default (as defined in the Indenture), shall have
occurred and be continuing, the principal of all of the Debentures may be
declared, and upon such declaration shall become, due and payable, in the
manner, with the effect and subject to the conditions provided in the
Indenture.
The Indenture contains provisions permitting the Company and the Trustee,
with the consent of the holders of not less than a majority in aggregate
principal amount of the Debentures at the time Outstanding (as defined in the
Indenture), to execute supplemental indentures for the purpose of adding any
provisions to or changing in any manner or eliminating any of the provisions of
the Indenture or of any supplemental indenture or of modifying in any manner
the rights of the holders of the Debentures; provided, however, that no such
supplemental indenture shall (i) extend the fixed maturity of the Debentures
except as provided in the Indenture, or reduce the principal amount thereof, or
reduce the rate or extend the time of payment of interest thereon, without the
consent of the holder of each Debenture so affected; or (ii) reduce the
aforesaid percentage of Debentures, the holders of which are required to
consent to any such supplemental indenture, without the consent of the holders
of each Debenture then outstanding and affected thereby. The Indenture also
contains provisions permitting the holders of a majority in aggregate principal
amount of the Debentures at the time outstanding, on behalf of all of the
holders of the Debentures, to waive any past default in the performance of any
of the covenants contained in the Indenture, or established pursuant to the
Indenture, and its consequences, except a default in the payment of the
principal of or interest on any of the Debentures. Any such consent or waiver
by the registered holder of this Debenture (unless revoked as provided in the
Indenture) shall be conclusive and binding upon such holder and upon all future
holders and owners of this Debenture and of any Debenture issued in exchange
herefor or in place hereof (whether by registration of transfer or otherwise),
irrespective of whether or not any notation of such consent or waiver is made
upon this Debenture.
No reference herein to the Indenture and no provision of this Debenture or
of the Indenture shall alter or impair the obligation of the Company, which is
absolute and unconditional, to pay the principal and interest on this Debenture
at the time and place and at the rate and in the money herein prescribed.
The Company, as further described in the Indenture, shall have the right
at any time during the term of the Debentures and from time to time to extend
the interest payment period of such Debentures for up to 20 consecutive
quarters (each, an "Extended Interest Payment Period"), at the end of which
period the Company shall pay all interest then accrued and unpaid (together
with interest thereon at the rate specified for the Debentures to the extent
that payment of such interest is enforceable under applicable law). Before the
termination of any such Extended Interest Payment Period, the Company may
further extend such
<PAGE> 65
Extended Interest Payment Period, provided that such Extended Interest Payment
Period together with all such further extensions thereof shall not exceed 20
consecutive quarters. At the termination of any such Extended Interest Payment
Period and upon the payment of all accrued and unpaid interest and any
additional amounts then due, the Company may commence a new Extended Interest
Payment Period.
As provided in the Indenture, and subject to certain limitations therein
set forth, this Debenture is transferable by the registered holder hereof on
the Debenture Register (as defined in the Indenture) of the Company, upon
surrender of this Debenture for registration of transfer at the office or
agency of the Trustee accompanied by a written instrument or instruments of
transfer in form satisfactory to the Company or the Trustee duly executed by
the registered holder hereof or his attorney duly authorized in writing, and
thereupon one or more new Debentures of authorized denominations and for the
same aggregate principal amount shall be issued to the designated transferee or
transferees. No service charge shall be made for any such transfer, but the
Company may require payment of a sum sufficient to cover any tax or other
governmental charge payable in relation thereto.
Prior to due presentment for registration of transfer of this Debenture,
the Company, the Trustee, any Paying Agent (as defined in the Indenture) and
the Debenture Registrar may deem and treat the registered holder hereof as the
absolute owner hereof (whether or not this Debenture shall be overdue and
notwithstanding any notice of ownership or writing hereon made by anyone other
than the Debenture Registrar) for the purpose of receiving payment of or on
account of the principal hereof and interest due hereon and for all other
purposes, and neither the Company nor the Trustee nor any Paying Agent nor any
Debentures Registrar shall be affected by any notice to the contrary.
No recourse shall be had for the payment of the principal of or the
interest on this Debenture, or for any claim based hereon, or otherwise in
respect hereof, or based on or in respect of the Indenture, against any
incorporator, stockholder, officer or director, past, present or future, as
such, of the Company or of any predecessor or successor corporation, whether by
virtue of any constitution, statute or rule of law, or by the enforcement of
any assessment or penalty or otherwise, all such liability being, by the
acceptance hereof and as part of the consideration for the issuance hereof,
expressly waived and released.
The Debentures are issuable only in registered form without coupons in
denominations of $10 and any integral multiple thereof (or such lesser
denomination and any integral multiple thereof as may be deemed necessary by
the Company for the purpose of maintaining the eligibility of the Debentures
for quotation on the Nasdaq Stock Market's National Market or any successor
thereto).
All terms used in this Debenture that are defined in the Indenture shall
have the meanings assigned to them in the Indenture.
<PAGE> 1
EXHIBIT 4.5
CAPITOL TRUST I
AMENDED AND RESTATED
TRUST AGREEMENT
AMONG
CAPITOL BANCORP LTD., A MICHIGAN CORPORATION, AS DEPOSITOR
THE FIRST NATIONAL BANK OF CHICAGO, AS PROPERTY TRUSTEE
FIRST CHICAGO DELAWARE, INC., AS DELAWARE TRUSTEE,
AND
THE ADMINISTRATIVE TRUSTEES NAMED HEREIN
DATED AS OF DECEMBER 18, 1997
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
<S> <C>
ARTICLE I
DEFINED TERMS
Section 101. Definitions
ARTICLE II
ESTABLISHMENT OF TRUST 9
Section 201 Names
Section 202 Office of Delaware Trustee; Principal Place of Business
Section 203 Initial Contribution of Trust Property; Organizational Expenses
Section 204 Issuance of Preferred Securities
Section 205. Issuance of the Common Securities; Subscription and
Purchase of Debentures
Section 206. Declaration of Trust
Section 207. Authorization to Enter into Certain Transactions
Section 208. Assets of Trust
Section 209. Title to Trust Property
ARTICLE III
PAYMENT ACCOUNT
Section 301. Payment Account
ARTICLE IV
DISTRIBUTIONS; REDEMPTION
Section 401. Distributions
Section 402. Redemption
Section 403. Subordination of Common Securities
Section 404. Payment Procedures
Section 405. Tax Returns and Reports
Section 406. Payment of Taxes, Duties, etc. of Trust
Section 407. Payments Under Indenture
ARTICLE V
TRUST SECURITIES CERTIFICATES
Section 501. Initial Ownership
Section 502. Trust Securities Certificates
Section 503. Execution, Authentication and Delivery of Trust Securities Certificates
Section 504. Registration of Transfer and Exchange of Preferred Securities
Certificates
Section 505. Mutilated, Destroyed, Lost or Stolen Trust Securities Certificates
Section 506. Persons Deemed Securityholders
Section 507. Access to List of Securityholders' Names and
Addresses
</TABLE>
2
<PAGE> 3
<TABLE>
<S> <C> <C>
Section 508. Maintenance of Office or Agency
Section 509. Appointment of Paying Agent
Section 510. Ownership of Common Securities by Depositor
Section 511. Preferred Securities Certificates
Section 512. [Intentionally Omitted]
Section 513. [Intentionally Omitted]
Section 514. Rights of Securityholders
ARTICLE VI
ACTS OF SECURITYHOLDERS; MEETINGS; VOTING
Section 601. Limitations on Voting Rights
Section 602. Notice of Meetings
Section 603. Meetings of Preferred Securityholders
Section 604. Voting Rights
Section 605. Proxies, etc
Section 606. Securityholder Action by Written Consent
Section 607. Record Date for Voting and Other Purposes
Section 608. Acts of Securityholders
Section 609. Inspection of Records
ARTICLE VII
REPRESENTATIONS AND WARRANTIES
Section 701. Representations and Warranties of Bank and
Property Trustee
Section 702. Representations and Warranties of Delaware Person
and Delaware Trustee
Section 703. Representations and Warranties of Depositor
ARTICLE VIII
TRUSTEES 29
Section 801. Certain Duties and Responsibilities
Section 802. Certain Notices
Section 803. Certain Rights of Property Trustee
Section 804. Not Responsible for Recitals or Issuance
of Securities
Section 805. May Hold Securities
Section 806. Compensation; Indemnity; Fees
Section 807. Corporate Property Trustee Required; Eligibility
of Trustees
Section 808. Conflicting Interests
Section 809. Co-Trustees and Separate Trustee
Section 810. Resignation and Removal; Appointment of Successor
Section 811. Acceptance of Appointment by Successor
Section 812. Merger, Conversion, Consolidation or Succession
to Business
Section 813. Preferential Collection of Claims Against Depositor
or Trust
Section 814. Reports by Property Trustee
Section 815. Reports to Property Trustee
Section 816. Evidence of Compliance with Conditions Precedent
Section 817. Number of Trustees
</TABLE>
3
<PAGE> 4
<TABLE>
<S> <C> <C>
Section 818. Delegation of Power
Section 819. Voting
ARTICLE IX
TERMINATION, LIQUIDATION AND MERGER
Section 901. Termination Upon Expiration Date
Section 902. Early Termination
Section 903. Termination
Section 904. Liquidation
Section 905. Mergers, Consolidations, Amalgamations or
Replacements of Trust
ARTICLE X
MISCELLANEOUS PROVISIONS
Section 1001. Limitation of Rights of Securityholders
Section 1002. Amendment
Section 1003. Separability
Section 1004. Governing law
Section 1005. Payments Due on Non-Business Day
Section 1006. Successors
Section 1007. Headings
Section 1008. Reports, Notices and Demands
Section 1009. Agreement Not to Petition
Section 1010. Trust Indenture Act; Conflict with Trust Indenture Act
Section 1011. Acceptance of Terms of Trust Agreement, Guarantee and Indenture
Exhibit A Certificate of Trust
Exhibit B [Intentionally Omitted]
Exhibit C Form of Common Securities Certificate
Exhibit D Form of Expense Agreement
Exhibit E Form of Preferred Securities Certificate
</TABLE>
4
<PAGE> 5
CROSS-REFERENCE TABLE
<TABLE>
< Caption>
Section of Section of
Trust Indenture Act Amended and Restated
of 1939, as amended Trust Agreement
- -----------------------------------------------------------------------------------------------------------------------
<S> <C>
310(a)(1) 807
318(a) 1010
310(a)(2) 807
310(a)(3) 807
310(a)(4) 207(a)(ii)
310(b) 808
311(a) 813
311(b) 813
312(a) 507
312(b) 507
312(c) 507
313(a) 814(a)
313(a)(4) 814(b)
313(b) 814(b)
313(c) 1008
313(d) 814(c)
314(a) 815
314(b) Not Applicable
314(c)(1) 816
314(c)(2) 816
314(c)(3) Not Applicable
314(d) Not Applicable
314(e) 101, 816
315(a) 801(a), 803(a)
315(b) 802, 1008
315(c) 801(a)
315(d) 801, 803
316(a)(2) Not Applicable
316(b) Not Applicable
316(c) 607
317(a)(1) Not Applicable
317(a)(2) Not Applicable
317(b) 509
</TABLE>
Note: This Cross-Reference Table does not constitute part of this Agreement and
should not affect the interpretation of any of its terms or provisions.
5
<PAGE> 6
AMENDED AND RESTATED TRUST AGREEMENT
AMENDED AND RESTATED TRUST AGREEMENT, dated as of December 18, 1997
among (i) CAPITOL BANCORP LTD., A MICHIGAN CORPORATION, an Michigan
corporation (including any successors or assigns, the "Depositor"), (ii) THE
FIRST NATIONAL BANK OF CHICAGO, a national banking association, as trustee (the
"Property Trustee" and, in its separate corporate capacity and not in its
capacity as Property Trustee, the "Bank"), (iii) FIRST CHICAGO DELAWARE, INC.,
a Delaware corporation duly organized and existing under the laws of the State
of Delaware, as trustee (the "Delaware Trustee," and, in its separate corporate
capacity and not in its capacity as Delaware Trustee, the "Delaware") (iv)
Joseph D. Reid, an individual, Robert C. Carr, an individual, and Linda D.
Pavona, an individual, each of whose address is c/o Capitol Bancorp Ltd., 200
Washington Square North, Fourth Floor, Lansing, Michigan 48933 (each an
"Administrative Trustee" and, collectively, the "Administrative Trustees") (the
Property Trustee, the Delaware Trustee and the Administrative Trustees are
referred to collectively as the "Trustees"), and (v) the several Holders (as
hereinafter defined).
RECITALS
WHEREAS, the Depositor, the Delaware Trustee, and Joseph D. Reid, Robert
C. Carr, and Linda D. Pavona, each as an Administrative Trustee, have
heretofore duly declared and established a business trust pursuant to the
Delaware Business Trust Act (as hereinafter defined) by the entering into of
that certain Trust Agreement, dated as of November 25, 1997 (the "Original
Trust Agreement"), and by the execution and filing by the Delaware Trustee, the
Depositor and the Administrative Trustees with the Secretary of State of the
State of Delaware of the Certificate of Trust, filed on November 25, 1997, the
form of which is attached as Exhibit A; and
WHEREAS, the Depositor, the Delaware Trustee, the Property Trustee and the
Administrative Trustees 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 (as defined herein) by the
Trust (as defined herein) to the Depositor; (ii) the issuance and sale of the
Preferred Securities (as defined herein) by the Trust pursuant to the
Underwriting Agreement (as defined herein); (iii) the acquisition by the Trust
from the Depositor of all of the right, title and interest in the Debentures
(as defined herein); and (iv) the appointment of the Trustees.
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 Securityholders (as defined
herein), hereby amends and restates the Original Trust Agreement in its
entirety and agrees as follows:
ARTICLE I
DEFINED TERMS
SECTION 101. DEFINITIONS.
For all purposes of this Trust Agreement, except as otherwise expressly
provided or unless the context otherwise requires:
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(a) the terms defined in this Article I have the meanings assigned to them
in this Article I and include the plural as well as the singular;
(b) all other terms used herein that are defined in the Trust Indenture
Act, either directly or by reference therein, have the meanings assigned to
them therein;
(c) unless the context otherwise requires, any reference to an "Article"
or a "Section" refers to an Article or a Section, as the case may be, of this
Trust Agreement; and
(d) 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.
"Act" has the meaning specified in Section 608.
"Additional Amount" means, with respect to Trust Securities of a given
Liquidation Amount and/or a given period, the amount of additional interest
accrued on interest in arrears and paid by the Depositor on a Like Amount of
Debentures for such period.
"Additional Payments" has the meaning specified in Section 1.1 of the
Indenture.
"Administrative Trustee" means each of Joseph D. Reid, Robert C. Carr, and
Linda D. Pamone, solely in the capacity as Administrative Trustee of the Trust
formed and continued hereunder and not in the individual capacity, or such
Administrative Trustee's successor in interest in such capacity, or any
successor trustee appointed as herein provided.
"Affiliate" means, with respect to a specified Person, (a) any Person
directly or indirectly owning, controlling or holding with power to vote 10% or
more of the outstanding voting securities or other ownership interests of the
specified Person, any Person 10% or more of whose outstanding voting securities
or other ownership interests are directly or indirectly owned, controlled or
held with power to vote by the specified Person; (c) any Person directly or
indirectly controlling, controlled by, or under common control with the
specified Person; (d) a partnership in which the specified Person is a general
partner; (e) any officer or director of the specified Person; and (f) if the
specified Person is an individual, any entity of which the specified Person is
an officer, director or general partner.
"Authenticating Agent" means an authenticating agent with respect to the
Preferred Securities appointed by the Property Trustee pursuant to Section 503.
"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 adjudging such Person a bankrupt or insolvent, or approving as
properly filed a petition seeking liquidation or reorganization of or in
respect of such Person under the United States Bankruptcy Code of 1978, as
amended, or any other similar applicable federal or state law, and the
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continuance of any such decree or order unvacated and unstayed for a period of
90 days; or the commencement of an involuntary case under the United States
Bankruptcy Code of 1978, as amended, in respect of such Person, which shall
continue undismissed for a period of 90 days or entry of an order for relief in
such case; or the entry of a decree or order of a court having jurisdiction in
the premises for the appointment on the ground of insolvency or bankruptcy of a
receiver, custodian, liquidator, trustee or assignee in bankruptcy or
insolvency of such Person or of its property, or for the winding up or
liquidation of its affairs, and such decree or order shall have remained in
force unvacated and unstayed for a period of 90 days; or
(b) the institution by such Person of proceedings to be adjudicated a
voluntary bankrupt, or the consent by such Person to the filing of a bankruptcy
proceeding against it, or the filing by such Person of a petition or answer or
consent seeking liquidation or reorganization under the United States
Bankruptcy Code of 1978, as amended, or other similar applicable Federal or
State law, or the consent by such Person to the filing of any such petition or
to the appointment on the ground of insolvency or bankruptcy of a receiver or
custodian or liquidator or trustee or assignee in bankruptcy or insolvency of
such Person or of its property, or shall make a general assignment for the
benefit of creditors.
"Bankruptcy Laws" has the meaning specified in Section 1009.
"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 appropriate Trustee.
"Business Day" means a day other than a Saturday or Sunday, a day on which
banking institutions in The City of New York are authorized or required by law,
executive order or regulation to remain closed, or a day on which the property
Trustee's Corporate Trust Office or the Corporate Trust Office of the Debenture
Trustee is closed for business.
"Certificate of Trust" means the certificate of trust filed with the
Secretary of State of the State of Delaware with respect to the Trust, as
amended or restated from time to time.
"Closing Date" means the date of execution and delivery of this Trust
Agreement.
"Code" means the Internal Revenue Code of 1986, as amended.
"Commission" means the Securities and Exchange Commission, as from time to
time constituted, created under the Exchange Act, 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 Security" means an undivided beneficial interest in the assets of
the Trust, having a Liquidation Amount of $10 and having the rights provided
therefor in this Trust Agreement, including the right to receive Distributions
and a Liquidation Distribution as provided herein.
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"Common Securities Certificate" means a certificate evidencing ownership
of Common Securities, substantially in the form attached as Exhibit C.
"Corporate Trust Office" means the office at which, at any particular
time, the corporate trust business of the Property Trustee or the Debenture
Trustee, as the case may be, shall be principally administered, which office at
the date hereof, in each such case, is located at One First National Plaza,
Suite 0126, Chicago, IL 60670-0126, Attention: Corporate Trust Department.
"Debenture Event of Default" means an "Event of Default" as defined in
Section 7.1 of the Indenture.
"Debenture Redemption Date" means, with respect to any Debentures to be
redeemed under the Indenture, the date fixed for redemption under the
Indenture.
"Debenture Trustee" means The First National Bank of Chicago, a national
banking association organized under the laws of the United States of America
and any successor thereto, as trustee under the Indenture.
"Debentures" means the $22,680,412 aggregate principal amount (or up to
$26,082,474 aggregate principal amount if the underwriters exercise their
Option and there is an Option Closing Date, as such terms are defined in the
Underwriting Agreement) of the Depositor's 8.50% Subordinated Debentures due
2027, issued pursuant to the Indenture.
"Delaware Person" has the meaning specified in the Preamble to this Trust
Agreement.
"Delaware Business Trust Act" means Chapter 38 of Title 12 of the Delaware
Code, 12 Del. C. Sections 3801 et seq. as it may be amended from time to
time.
"Delaware Trustee" means the person identified as the "Delaware Trustee"
in the Preamble to this Trust Agreement solely in its capacity as Delaware
Trustee of the Trust formed and continued hereunder and not in its individual
capacity, or its successor in interest in such capacity, or any successor
trustee appointed as herein provided.
"Depositor" has the meaning specified in the Preamble to this Trust
Agreement.
"Distribution Date" has the meaning specified in Section 401(a).
"Distributions" means amounts payable in respect of the Trust Securities
as provided in Section 401.
"Early Termination Event" has the meaning specified in Section 902.
"Event of Default" means any one of the following events (whatever the
reason for such Event of Default and whether it shall be voluntary or
involuntary or be effected by operation of law or pursuant to any judgment,
decree or order of any court or any order, rule or regulation of any
administrative or governmental body):
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(a) the occurrence of a Debenture Event of Default; or
(b) default by the Trust or the Property Trustee in the payment of any
Distribution when it becomes due and payable, and continuation of such default
for a period of 30 days; or
(c) default by the Trust or the Property Trustee in the payment of any
Redemption Price of any Trust Security when it becomes due and payable; or
(d) default in the performance, or breach, in any material respect, of any
covenant or warranty of the Trustees in this Trust Agreement (other than a
covenant or warranty a default in the performance of which or the breach of
which is dealt with in clause (b) or (c), above) and continuation of such
default or breach for a period of 60 days after there has been given, by
registered or certified mail, to the defaulting Trustee or Trustees by the
Holders of at least 25% in aggregate Liquidation Amount of the Outstanding
Preferred Securities a written notice specifying such default or breach and
requiring it to be remedied and stating that such notice is a "Notice of
Default" hereunder; or
(e) the occurrence of a Bankruptcy Event with respect to the Property
Trustee and the failure by the Depositor to appoint a successor Property
Trustee within 60 days thereof.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Expense Agreement" means the Agreement as to Expenses and Liabilities
between the Depositor and the Trust, substantially in the form attached as
Exhibit D, as amended from time to time.
"Expiration Date" has the meaning specified in Section 901.
"Extended Interest Payment Period" has the meaning specified in Section
4.1 of the Indenture.
"Federal Reserve" means the Board of Governors of the Federal Reserve
System.
"Guarantee" means the Preferred Securities Guarantee Agreement executed
and delivered by the Depositor and The First National Bank of Chicago, as
trustee, contemporaneously with the execution and delivery of this Trust
Agreement, for the benefit of the holders of the Preferred Securities, as
amended from time to time.
"Indenture" means the Indenture, dated as of December 18, 1997, between
the Depositor and the Debenture Trustee, as trustee, as amended or supplemented
from time to time pertaining to the Debentures of the Depositor.
"Investment Company Act," means the Investment Company Act of 1940, as
amended, as in effect at the date of execution of this instrument.
"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.
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"Like Amount" means (a) with respect to a redemption of Trust Securities,
Trust Securities having a Liquidation Amount equal to the principal amount of
Debentures to be contemporaneously redeemed in accordance with the Indenture
and the proceeds of which shall be used to pay the Redemption Price of such
Trust Securities; and (b) with respect to a distribution of Debentures to
Holders of Trust Securities in connection with a termination or liquidation of
the Trust, Debentures having a principal amount equal to the Liquidation Amount
of the Trust Securities of the Holder to whom such Debentures are distributed.
Each Debenture distributed pursuant to clause (b) above shall carry with it
accumulated interest in an amount equal to the accumulated and unpaid interest
then due on such Debenture.
"Liquidation Amount" means the stated amount of $10 per Trust Security.
"Liquidation Date" means the date on which Debentures are to be
distributed to Holders of Trust Securities in connection with a termination and
liquidation of the Trust pursuant to Section 904(a).
"Liquidation Distribution" has the meaning specified in Section 904(d).
"Officer's Certificate" means a certificate signed by the President or a
Vice President, the Treasurer or an Assistant Treasurer or the Controller
or an Assistant Controller or the Secretary or an Assistant Secretary, of the
Depositor, and delivered to the appropriate Trustee. The officer
signing an Officer's Certificate given pursuant to Section 816 shall be the
principal executive, financial or accounting officer of the Depositor. Any
Officer's Certificate delivered with respect to compliance with a condition or
covenant provided for in this Trust Agreement shall include:
(a) a statement that each officer signing the Officer's Certificate has
read the covenant or condition and the definitions relating thereto;
(b) a brief statement of the nature and scope of the examination or
investigation undertaken by each officer in rendering the Officer's
Certificate;
(c) a statement that each such officer has made such examination or
investigation as, in such officer's opinion, is necessary to enable such
officer to express an informed opinion as to whether or not such covenant or
condition has been complied with; and
(d) a statement as to whether, in the opinion of each such officer, such
condition or covenant has been complied with.
"Opinion of Counsel" means an opinion in writing of legal counsel, who may
be an employee of or counsel for the Trust, the Property Trustee, the Delaware
Trustee or the Depositor, and who shall be reasonably acceptable to the
Property Trustee.
"Original Trust Agreement" has the meaning specified in the Recitals to
this Trust Agreement.
"Outstanding", when used with respect to Preferred Securities, means, as
of the date of determination, all Preferred Securities theretofore executed and
delivered under this Trust Agreement, except:
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(a) Preferred Securities theretofore canceled by the Property Trustee
or delivered to the Property Trustee for cancellation;
(b) Preferred Securities for whose payment or redemption money in the
necessary amount has been theretofore deposited with the Property Trustee or
any Paying Agent for the Holders of such Preferred Securities; provided that,
if such Preferred Securities are to be redeemed, notice of such redemption has
been duly given pursuant to this Trust Agreement; and
(c) Preferred Securities which have been paid or in exchange for or in
lieu of which other Preferred Securities have been executed and delivered
pursuant to Sections 504, 505 and 511; provided, however, that in determining
whether the Holders of the requisite Liquidation Amount of the Outstanding
Preferred Securities have given any request, demand, authorization, direction,
notice, consent or waiver hereunder, Preferred Securities owned by the
Depositor, any Trustee or any Affiliate of the Depositor or any Trustee shall
be disregarded and deemed not to be Outstanding, except that (a) in determining
whether any Trustee shall be protected in relying upon any such request,
demand, authorization, direction, notice, consent or waiver, only Preferred
Securities that such Trustee knows to be so owned shall be so disregarded; and
(b) the foregoing shall not apply at any time when all of the outstanding
Preferred Securities are owned by the Depositor, one or more of the Trustees
and/or any such Affiliate. Preferred Securities so owned which have been
pledged in good faith may be regarded as Outstanding if the pledgee establishes
to the satisfaction of the Administrative Trustees the pledgee's right so to
act with respect to such Preferred Securities and that the Pledgee is not the
Depositor or any other Obligor upon the Preferred Securities or a Person
directly or indirectly controlling or controlled by or under direct or indirect
common control with the Depositor or any Affiliate of the Depositor.
"Paying Agent" means any paying agent or co-paying agent appointed
pursuant to Section 509 and shall initially be the Bank.
"Payment Account" means a segregated non-interest-bearing corporate trust
account maintained by the Property Trustee with the Bank in its trust
department for the benefit of the Securityholders in which all amounts paid in
respect of the Debentures shall be held and from which the Property Trustee
shall make payments to the Securityholders in accordance with Sections 401 and
402.
"Person" means any individual, corporation, partnership, joint venture,
trust, limited liability company or corporation, unincorporated organization or
government or any agency or political subdivision thereof.
"Preferred Security" means an undivided beneficial interest in the assets
of the Trust, having a Liquidation Amount of $10 and having the rights provided
therefor in this Trust Agreement, including the right to receive Distributions
and a Liquidation Distribution as provided herein.
"Preferred Securities Certificate", means a certificate evidencing
ownership of Preferred Securities, substantially in the form attached as
Exhibit E.
"Property Trustee" means the commercial bank or trust company identified
as the "Property Trustee," in the Preamble to this Trust Agreement
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solely in its capacity as Property Trustee of the Trust heretofore 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.
"Redemption Date" means, with respect to any Trust Security to be
redeemed, the date fixed for such redemption by or pursuant to this Trust
Agreement; provided that each Debenture Redemption Date and the stated maturity
of the Debentures shall be a Redemption Date for a Like Amount of Trust
Securities.
"Redemption Price" means, with respect to any Trust Security, the
Liquidation Amount of such Trust Security, plus accumulated and unpaid
Distributions to the Redemption Date, paid by the Depositor upon the concurrent
redemption of a Like Amount of Debentures, allocated on a pro rata basis (based
on Liquidation Amounts) among the Trust Securities.
"Relevant Trustee" shall have the meaning specified in Section 810.
"Securities Register" and "Securities Registrar" have the respective
meanings specified in Section 504.
"Securityholder" or "Holder" means a Person in whose name a Trust Security
or Securities is registered in the Securities Register; any such Person is a
beneficial owner within the meaning of the Delaware Business Trust Act.
"Trust" means the Delaware business trust created and continued hereby and
identified on the cover page to this Trust Agreement.
"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 all exhibits hereto, including, for all purposes
of this Trust Agreement and any such modification, amendment or supplement, the
provisions of the Trust Indenture Act that are deemed to be a part of and
govern this Trust Agreement and any such modification, amendment or supplement,
respectively.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as amended,
as in force at the date as of which this instrument was executed; provided,
however, that in the event the Trust Indenture Act of 1939, as amended, is
amended after such date, "Trust Indenture Act" means, to the extent required by
any such amendment, the Trust Indenture Act of 1939 as so amended.
"Trust Property" means (a) the Debentures; (b) the rights of the Property
Trustee under the Guarantee; (c) any cash on deposit in, or owing to, the
Payment Account; and (d) all proceeds and rights in respect of the foregoing
and any other property and assets for the time being held or deemed to be held
by the Property Trustee pursuant to the trusts of this Trust Agreement.
"Trust Security" means any one of the Common Securities or the Preferred
Securities.
"Trust Securities Certificate" means any one of the Common Securities
Certificates or the Preferred Securities Certificates.
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"Trustees" means, collectively, the Property Trustee, the Delaware Trustee
and the Administrative Trustees.
"Underwriting Agreement" means the Underwriting Agreement, dated as of -
December 15, 1997 among the Trust, the Depositor and the Underwriters named
therein.
ARTICLE II
ESTABLISHMENT OF TRUST
SECTION 201. NAME.
The Trust created and continued hereby shall be known as "CAPITOL
TRUST I," as such name may be modified from time to time by the Administrative
Trustees following written notice to the Holders of Trust Securities and the
other Trustees, in which name the Trustees may engage in the transactions
contemplated hereby, make and execute contracts and other instruments on behalf
of the Trust and sue and be sued.
SECTION 202. OFFICE OF DELAWARE TRUSTEE; PRINCIPAL PLACE OF BUSINESS.
The address of the Delaware Trustee in the State of Delaware is FIRST
CHICAGO DELAWARE, INC., 300 King Street, Wilmington, Delaware 19801, or such
other address in the State of Delaware as the Delaware Trustee may designate by
written notice to the Securityholders and the Depositor. The principal
executive office of the Trust is c/o CAPITOL BANCORP LTD., 200 Washington
Square North, Fourth Floor, Lansing, Michigan 48933.
SECTION 203. INITIAL CONTRIBUTION OF TRUST PROPERTY; ORGANIZATIONAL
EXPENSES
The Trustees acknowledge receipt in trust from the Depositor in connection
with the Original Trust Agreement of the sum of $10, which constituted the
initial Trust Property. The Depositor shall pay organizational expenses of the
Trust as they arise or shall, upon request of any Trustee, promptly reimburse
such Trustee for any such expenses paid by such Trustee. The Depositor shall
make no claim upon the Trust Property for the payment of such expenses.
SECTION 204. ISSUANCE OF PREFERRED SECURITIES
On December 15, 1997, the Depositor and an Administrative Trustee, on
behalf of the Trust and pursuant to the Original Trust Agreement, executed and
delivered the Underwriting Agreement. Contemporaneously with the execution and
delivery of this Trust Agreement, an Administrative Trustee, on behalf of the
Trust, shall execute in accordance with Section 502 and deliver in accordance
with the Underwriting Agreement, Preferred Securities Certificates, registered
in the name of the Persons entitled thereto, in an aggregate amount of
2,200,000 Preferred Securities having an aggregate Liquidation Amount of
$22,000,000 against receipt of the aggregate purchase price of such Preferred
Securities of $22,000,000, which amount such Administrative Trustee shall
promptly deliver to the Property Trustee. If the underwriters exercise their
Option and there is an Option Closing Date (as such terms are defined in the
Underwriting Agreement), then an Administrative Trustee, on behalf of the
Trust, shall execute in accordance with Section 502 and deliver in accordance
with the Underwriting Agreement,
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additional Preferred Securities Certificates, registered in the name of the
Persons entitled thereto, in an aggregate amount of up to 330,000 Preferred
Securities having an aggregate Liquidation Amount of up to $3,300,000 against
receipt of the aggregate purchase price of such Preferred Securities equal to
the product of $10 multiplied by the number of Preferred Securities purchased
pursuant to the Option which amount such Administrative Trustee shall promptly
deliver to the Property Trustee.
SECTION 205. ISSUANCE OF THE COMMON SECURITIES; SUBSCRIPTION AND PURCHASE
OF DEBENTURES
(a) Contemporaneously with the execution and delivery of this Trust
Agreement, an Administrative Trustee, on behalf of the Trust, shall execute in
accordance with Section 502 and deliver to the Depositor, Common Securities
Certificates, registered in the name of the Depositor, in an aggregate amount
of 68,041.20 Common Securities having an aggregate Liquidation Amount of
$680,412 against payment by the Depositor of such amount. Contemporaneously
therewith, an Administrative Trustee, on behalf of the Trust, shall subscribe
to and purchase from the Depositor Debentures, registered in the name of the
Property Trustee on behalf of the Trust and having an aggregate principal
amount equal to $22,680,412, and, in satisfaction of the purchase price for
such Debentures, the Property Trustee, on behalf of the Trust, shall deliver to
the Depositor the sum of $22,680,412.
(b) If the underwriters exercise the Option and there is an Option Closing
Date, then an Administrative Trustee, on behalf of the Trust, shall execute in
accordance with Section 502 and deliver to the Depositor, additional Common
Securities Certificates, registered in the name of the Depositor, in an
aggregate amount of up to 10,206.2 Common Securities having an aggregate
Liquidation Amount of up to $102,062 against payment by the Depositor of an
amount equal to the product of $10 multiplied by the number of additional
Common Securities purchased by the Depositor. Contemporaneously therewith, an
Administrative Trustee, on behalf of the Trust, shall subscribe to and purchase
from the Depositor, Debentures, registered in the name of the Property Trustee
on behalf of the Trust and having an aggregate principal amount of up to
$3,402,062, and, in satisfaction of the purchase price of such Debentures, the
Property Trustee, on behalf of the Trust, shall deliver to the Depositor an
amount equal to the sum of the amounts received from one of the Administrative
Trustees pursuant to the first sentence of this Section 205(b) and the last
sentence of Section 204.
SECTION 206. DECLARATION OF TRUST.
The exclusive purposes and functions of the Trust are (a) to issue and sell
Trust Securities and use the proceeds from such sale to acquire the Debentures;
and (b) to engage in those activities necessary, convenient or incidental
thereto. The Depositor hereby appoints the Trustees as trustees of the Trust,
to have all the rights, powers and duties to the extent set forth herein, and
the Trustees hereby accept such appointment. The Property Trustee acting
in such capacity hereby declares that it shall hold the Trust Property in trust
upon and subject to the conditions set forth herein for the benefit of the
Securityholders. The Administrative Trustees shall have all rights, powers
and duties set forth herein and in accordance with applicable law with respect
to accomplishing the purposes of the Trust. The Delaware Trustee shall not be
entitled to exercise any powers, nor shall the Delaware Trustee have any of the
duties and responsibilities, of the Trustees
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set forth herein. The Delaware Trustee shall be one of the Trustees of
the Trust for the sole and limited purpose of fulfilling the requirements of
Section 3807 of the Delaware Business Trust Act.
SECTION 207. AUTHORIZATION TO ENTER INTO CERTAIN TRANSACTIONS.
(a) The Trustees shall conduct the affairs of the Trust in accordance with
the terms of this Trust Agreement. Subject to the limitations set forth in
paragraph (b) of this Section 207 and Article VIII, and in accordance with the
following provisions (i) and (ii), the Administrative Trustees shall have the
authority to enter into all transactions and agreements determined by the
Administrative Trustees to be appropriate in exercising the authority, express
or implied, otherwise granted to the Administrative Trustees under this Trust
Agreement, and to perform all acts in furtherance thereof, including without
limitation, the following:
(i) As among the Trustees, each Administrative Trustee,
acting singly or jointly, shall have the power and authority to
act on behalf of the Trust with respect to the following
matters:
(A) the issuance and sale of the Trust Securities;
(B) to cause the Trust to enter into, and to
execute, deliver and perform on behalf of the Trust, the
Expense Agreement and such other agreements or documents
as may be necessary or desirable in connection with the
purposes and function of the Trust;
(C) assisting in the registration of the
Preferred Securities under the Securities Act of 1933, as
amended, and under state securities or blue sky laws, and
the qualification of this Trust Agreement as a trust
indenture under the Trust Indenture Act;
(D) assisting in the listing of the Preferred
Securities upon The Nasdaq Stock Market's National Market
or such securities exchange or exchanges as shall be
determined by the Depositor and the registration of the
Preferred Securities under the Exchange Act, and the
preparation and filing of all periodic and other reports
and other documents pursuant to the foregoing;
(E) the sending of notices (other than
notices of default) and other information regarding the
Trust Securities and the Debentures to the Securityholders
in accordance with this Trust Agreement;
(F) the appointment of a Paying Agent,
Authenticating Agent and Securities Registrar in
accordance with this Trust Agreement;
(G) to the extent provided in this Trust
Agreement, the winding up of the affairs of and
liquidation of the Trust and the preparation, execution
and filing of
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the certificate of cancellation with the Secretary of
State of the State of Delaware;
(H) to take all action that may be necessary
or appropriate for the preservation and the continuation
of the Trust's valid existence, rights, franchises and
privileges as a statutory business trust under the laws of
the State of Delaware and of each other jurisdiction in
which such existence is necessary to protect the limited
liability of the Holders of the Preferred Securities or to
enable the Trust to effect the purposes for which the
Trust was created; and
(I) the taking of any action incidental to
the foregoing as the Administrative Trustees may from time
to time determine is necessary or advisable to give effect
to the terms of this Trust Agreement for the benefit of
the Securityholders (without consideration of the effect
of any such action on any particular Securityholder).
(ii) As among the Trustees, the Property Trustee shall
have the power, duty and authority to act on behalf of the Trust
with respect to the following matters:
(A) the establishment of the Payment Account;
(B) the receipt of the Debentures;
(C) the collection of interest, principal and
any other payments made in respect of the Debentures in
the Payment Account;
(D) the distribution of amounts owed to the
Securityholders in respect of the Trust Securities in
accordance with the terms of this Trust Agreement;
(E) the exercise of all of the rights, powers
and privileges of a holder of the Debentures;
(F) the sending of notices of default and
other information regarding the Trust Securities and the
Debentures to the Securityholders in accordance with this
Trust Agreement;
(G) the distribution of the Trust Property in
accordance with the terms of this Trust Agreement;
(H) to the extent provided in this Trust
Agreement, the winding up of the affairs of and
liquidation of the Trust;
(I) after an Event of Default, the taking of
any action incidental to the foregoing as the Property
Trustee may from time to time determine is necessary or
advisable to give effect to the terms of this Trust
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Agreement and protect and conserve the Trust Property for
the benefit of the Securityholders (without consideration
of the effect of any such action on any particular
Securityholder);
(J) registering transfers of the Trust
Securities in accordance with this Trust Agreement; and
(K) except as otherwise provided in this
Section 207(a)(ii), the Property Trustee shall have none
of the duties, liabilities, powers or the authority of the
Administrative Trustees set forth in Section 207(a)(i).
(b) So long as this Trust Agreement remains in effect, the Trust (or the
Trustees acting on behalf of the Trust) shall not undertake any business,
activities or transaction except as expressly provided herein or contemplated
hereby. In particular, the Trustees shall cause the trust not to (i) acquire
any investments or engage in any activities not authorized by this Trust
Agreement; (ii) sell, assign, transfer, exchange, mortgage, pledge, set-off or
otherwise dispose of any of the Trust Property or interests therein, including
to Securityholders, except as expressly provided herein; (iii) take any action
that would cause the Trust to fail or cease to qualify as a "grantor trust" for
United States federal income tax purposes; (iv) incur any indebtedness for
borrowed money or issue any other debt; or (v) take or consent to any action
that would result in the placement of a Lien on any of the Trust Property. The
Administrative Trustees shall defend all claims and demands of all Persons at
any time claiming any Lien on any of the Trust Property adverse to the interest
of the Trust or the Securityholders in their capacity as Securityholders.
(c) In connection with the issue and sale of the Preferred Securities, the
Depositor shall have the right and responsibility to assist the Trust with
respect to, or effect on behalf of the Trust, the following (and any actions
taken by the Depositor in furtherance of the following prior to the date of
this Trust Agreement are hereby ratified and confirmed in all respects):
(i) the preparation and filing by the Trust with the
Commission and the execution on behalf of the Trust of a
registration statement on the appropriate form in relation to
the Preferred Securities and the Debentures, including any
amendments thereto;
(ii) the determination of the States in which to take
appropriate action to qualify or register for sale all or part
of the Preferred Securities and to do any and all such acts,
other than actions which must be taken by or on behalf of the
Trust, and advise the Trustees of actions they must take on
behalf of the Trust, and prepare for execution and filing any
documents to be executed and filed by the Trust or on behalf of
the Trust, as the Depositor deems necessary or advisable in
order to comply with the applicable laws of any such States;
(iii)the preparation for filing by the Trust and
execution on behalf of the Trust of an application to The Nasdaq
Stock
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Market's National Market or a national stock exchange or other
organizations for listing upon notice of issuance of any
Preferred Securities and to file or cause an Administrative
Trustee to file thereafter with such exchange or organization
such notifications and documents as may be necessary from time
to time;
(iv) the preparation for filing by the Trust with the
Commission and the execution on behalf of the Trust of a
registration statement on Form 8-A relating to the registration
of the Preferred Securities under Section 12(b) or 12(g) of the
Exchange Act, including any amendments thereto;
(v) the negotiation of the terms of, and the execution
and delivery of, the Underwriting Agreement providing for the
sale of the Preferred Securities; and
(vi) the taking of any other actions necessary or
desirable to carry out any of the foregoing activities.
(d) Notwithstanding anything herein to the contrary, the Administrative
Trustees are authorized and directed to conduct the affairs of the Trust and to
operate the Trust so that the Trust shall not be deemed to be an "investment
company" required to be registered under the Investment Company Act, shall be
classified as a "grantor trust" and not as an association taxable as a
corporation for United States federal income tax purposes and so that the
Debentures shall be treated as indebtedness of the Depositor for United States
federal income tax purposes. In this connection, subject to Section 1002, the
Depositor and the Administrative Trustees are authorized to take any action,
not inconsistent with applicable law or this Trust Agreement, that each of the
Depositor and the Administrative Trustees determines in their discretion to be
necessary or desirable for such purposes.
SECTION 208. ASSETS OF TRUST.
The assets of the Trust shall consist of the Trust Property.
SECTION 209. TITLE TO TRUST PROPERTY.
Legal title to all Trust Property shall be vested at all times in the
Property Trustee (in its capacity as such) and shall be held and administered
by the Property Trustee for the benefit of the Securityholders in accordance
with this Trust Agreement.
ARTICLE III
PAYMENT ACCOUNT
SECTION 301. PAYMENT ACCOUNT.
(a) On or prior to the Closing Date, the Property Trustee shall establish
the Payment Account. The Property Trustee and any agent of the Property
Trustee shall have exclusive control and sole right of withdrawal with respect
to the Payment Account for the purpose of making deposits 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
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for the exclusive benefit of the Securityholders and for distribution as herein
provided, including (and subject to) any priority of payments provided for
herein.
(b) The Property Trustee shall deposit in the Payment Account, promptly
upon receipt, all payments of principal of or interest on, and any other
payments or proceeds with respect to, the Debentures. Amounts held in the
Payment Account shall not be invested by the Property Trustee pending
distribution thereof.
ARTICLE IV
DISTRIBUTIONS; REDEMPTION
SECTION 401. DISTRIBUTIONS.
(a) Distributions on the Trust Securities shall be cumulative, and shall
accumulate whether or not there are funds of the Trust available for the
payment of Distributions. Distributions shall accumulate from - -------------,
1997, and, except during any Extended Interest Payment Period with respect to
the Debentures, shall be payable quarterly in arrears on March 31, June 30,
September 30 and December 31 of each year, commencing on September 30, 1997.
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 (and without any
interest or other payment in respect of any such delay) with the same force and
effect as if made on such date (each date on which distributions are payable in
accordance with this Section 401(a), a "Distribution Date").
(b) The Trust Securities represent undivided beneficial interests in the
Trust Property. The Distributions on the Trust Securities shall be at a rate
of ------% per annum of the Liquidation Amount of the Trust Securities. The
amount of Distributions payable for any full period shall be computed on the
basis of a 360-day year of twelve 30-day months. The amount of Distributions
for any partial period shall be computed on the basis of the number of days
elapsed in a 360-day year of twelve 30 day months. During any Extended
Interest Payment Period with respect to the Debentures, Distributions on the
Preferred Securities shall be deferred for a period equal to the Extended
Interest Payment Period. The amount of Distributions payable for any period
shall include the Additional Amounts, if any
(c) Distributions on the Trust Securities shall be made by the Property
Trustee solely from the Payment Account and shall be payable on each
Distribution Date only to the extent that the Trust has funds then on hand and
immediately available by 12:30 p.m. on each Distribution Date in the Payment
Account for the payment of such Distributions.
(d) 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 on the relevant record date, which shall be
the 15th day of the month in which the Distribution is payable.
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SECTION 402. REDEMPTION.
(a) On each Debenture Redemption Date and on the stated maturity of the
Debentures, the Trust shall 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 Securities Register. The
Property Trustee shall have no responsibility for the accuracy of any CUSIP
number contained in such notice. All notices of redemption shall state:
(i) the Redemption Date;
(ii) the Redemption Price;
(iii) the CUSIP number;
(iv) if less than all the Outstanding Trust Securities are
to be redeemed, the identification and the aggregate Liquidation
Amount of the particular Trust Securities to be redeemed; and
(v) that, on the Redemption Date, the Redemption Price
shall become due and payable upon each such Trust Security to be
redeemed and that Distributions thereon shall cease to
accumulate on and after said date
(c) The Trust Securities redeemed on each Redemption Date shall be
redeemed at the Redemption Price with the proceeds from the contemporaneous
redemption of 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 Trust has immediately available funds then on hand and
available in the Payment Account for the payment of such Redemption Price.
(d) If the Property Trustee gives a notice of redemption in respect of any
Preferred Securities, then, by 12:00 noon, New York City time, on the
Redemption Date, subject to Section 402(c), the Property Trustee shall deposit
with the Paying Agent funds sufficient to pay the applicable Redemption Price
and shall give the Paying Agent irrevocable instructions and authority to pay
the Redemption Price to the Holders thereof. 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 Securityholders holding Trust Securities so
called for redemption shall cease, except the right of such Securityholders to
receive the Redemption Price and any Distribution payable on or prior to the
Redemption Date, but without interest, and such Trust Securities shall cease to
be Outstanding. In the event that any date on which any Redemption Price is
payable is not a Business Day, then payment of the Redemption Price payable on
such date shall be made on the next succeeding day that is a Business Day (and
without any interest or other payment in respect of any such delay) with the
same force and effect as if made on such date. In the event that payment
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of the Redemption Price in respect of any Trust Securities called for
redemption is improperly withheld or refused and not paid either by the Trust
or by the Depositor pursuant to the Guarantee, Distributions on such Trust
Securities shall continue to accumulate, at the then applicable rate, from the
Redemption Date originally established by the Trust for such Trust Securities
to the date such Redemption Price is actually paid, in which case the actual
payment date shall be the date fixed for redemption for purposes of calculating
the Redemption Price.
(e) Payment of the Redemption Price on the Trust Securities shall be made
to the record holders thereof as they appear on the Securities Register for the
Trust Securities on the relevant record date, which shall be the date 15 days
prior to the relevant Redemption Date.
(f) Subject to Section 403(a), if less than all the Outstanding Trust
Securities are to be redeemed on a Redemption Date, then the aggregate
Liquidation Amount of Trust Securities to be redeemed shall be allocated on a
pro rata basis (based on Liquidation Amounts) among the Common Securities and
the Preferred Securities. The particular Preferred Securities to be redeemed
shall be selected not more than 60 days prior to the Redemption Date by the
Property Trustee from the Outstanding Preferred Securities not previously
called for redemption, by such method (including, without limitation, by lot)
as the Property Trustee shall deem fair and appropriate and which may provide
for the selection for redemption of portions (equal to the Liquidation Amount
or an integral multiple thereof) of the Liquidation Amount of Preferred
Securities of a denomination larger than such Liquidation Amount. The Property
Trustee shall promptly notify the Securities Registrar in writing of the
Preferred Securities selected for redemption and, in the case of any Preferred
Securities selected for partial redemption, the Liquidation Amount thereof to
be redeemed. For all purposes of this Trust Agreement, unless the context
otherwise requires, all provisions relating to the redemption of Preferred
Securities shall relate, in the case of any Preferred Securities redeemed or to
be redeemed only in part, to the portion of the Liquidation Amount of Preferred
Securities which has been or is to be redeemed.
SECTION 403. SUBORDINATION OF COMMON SECURITIES.
(a) Payment of Distributions (including Additional Amounts, if applicable)
on, and the Redemption Price of, the Trust Securities, as applicable, shall be
made, subject to Section 402(f), pro rata among the Common Securities and the
Preferred Securities based on the Liquidation Amount of the Trust Securities;
provided, however, that if on any Distribution Date or Redemption Date any
Event of Default resulting from a Debenture Event of Default shall have
occurred and be continuing, no payment of any Distribution (including
Additional Amounts, if applicable) on, or Redemption Price of, any Common
Security, and no other payment on account of the redemption, liquidation or
other acquisition of Common Securities, shall be made unless payment in full in
cash of all accumulated and unpaid Distributions (including Additional Amounts,
if applicable) on all Outstanding Preferred Securities for all Distribution
periods terminating on or prior thereto, or in the case of payment of the
Redemption Price the full amount of such Redemption Price on all Outstanding
Preferred Securities then called for redemption, 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, Preferred
Securities then due and payable.
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(b) In the case of the occurrence of any Event of Default resulting from a
Debenture Event of Default, the Holder of Common Securities shall be deemed to
have waived any right to act with respect to any such Event of Default under
this Trust Agreement until the effect of all such Events of Default with
respect to the Preferred Securities shall have been cured, waived or otherwise
eliminated. Until any such Event of Default under this Trust Agreement with
respect to the Preferred Securities shall have been so cured, waived or
otherwise eliminated, the Property Trustee shall act solely on behalf of the
Holders of the Preferred Securities and not the Holder of the Common
Securities, and only the Holders of the Preferred Securities shall have the
right to direct the Property Trustee to act on their behalf.
SECTION 404. PAYMENT PROCEDURES.
Payments of Distributions (including Additional Amounts, if applicable) in
respect of the Preferred Securities shall be made by check mailed to the
address of the Person entitled thereto as such address shall appear on the
Securities Register. Payments in respect of the Common Securities shall be
made in such manner as shall be mutually agreed between the Property Trustee
and the Common Securityholder.
SECTION 405. TAX RETURNS AND REPORTS.
The Administrative Trustees shall prepare (or cause to be prepared), at
the Depositor's expense, and file all United States federal, state and local
tax and information returns and reports required to be filed by or in respect
of the Trust. In this regard, the Administrative Trustees shall (a) prepare
and file (or cause to be prepared and filed) the appropriate Internal Revenue
Service form required to be filed in respect of the Trust in each taxable year
of the Trust; and (b) prepare and furnish (or cause to be prepared and
furnished) to each Securityholder the appropriate Internal Revenue Service form
required to be furnished to such Securityholder or the information required to
be provided on such form. The Administrative Trustees shall provide the
Depositor with a copy of all such returns and reports promptly after such
filing or furnishing. The Property Trustee shall comply with United States
federal withholding and backup withholding tax laws and information reporting
requirements with respect to any payments to Securityholders under the Trust
Securities.
SECTION 406. PAYMENT OF TAXES, DUTIES, ETC. OF TRUST.
Upon receipt under the Debentures of Additional Payments, the Property
Trustee, at the direction of an Administrative Trustee or the Depositor, shall
promptly pay any taxes, duties or governmental charges of whatsoever nature
(other than withholding taxes) imposed on the Trust by the United States or any
other taxing authority.
SECTION 407. PAYMENTS UNDER INDENTURE.
Any amount payable hereunder to any Holder of Preferred Securities shall
be reduced by the amount of any corresponding payment such Holder has directly
received under the Indenture pursuant to Section 514(b) or (c) hereof.
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ARTICLE V
TRUST SECURITIES
SECTION 501. INITIAL OWNERSHIP.
Upon the creation of the Trust and the contribution by the Depositor
pursuant to Section 203 and until the issuance of the Trust Securities, and at
any time during which no Trust Securities are outstanding, the Depositor shall
be the sole beneficial owner of the Trust.
SECTION 502. TRUST SECURITIES
The Preferred Securities shall be issued in minimum denominations of the
Liquidation Amount and integral multiples of such Liquidation Amount in excess
thereof, and the Common Securities Certificates shall be issued in
denominations of the Liquidation Amount and integral multiples thereof.
The Trust Securities Certificates shall be executed on behalf of the
Trust by manual signature of at least one Administrative Trustee. Trust
Securities Certificates bearing the manual signatures of individuals who were,
at the time when such signatures shall have been affixed, authorized to sign on
behalf of the Trust, shall be validly issued and entitled to the benefits of
this 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 Securityholder, and shall be entitled to the rights
and subject to the obligations of a Securityholder hereunder, upon due
registration of such Trust Securities Certificate in such transferee's name
pursuant to Sections 504, 511 and 513.
SECTION 503. EXECUTION, AUTHENTICATION AND DELIVERY OF TRUST SECURITIES
(a) On the Closing Date and on the date on which the Underwriter exercises
the Option, as applicable (the "Option Closing Date"), the Administrative
Trustees shall cause Trust Securities, in an aggregate Liquidation Amount as
provided in Sections 204 and 205, to be executed on behalf of the Trust by at
least one of the Administrative Trustees and delivered to or upon the written
order of the Depositor, signed by its Chief Executive Officer, President, any
Vice President, the Treasurer or any Assistant Treasurer without further
corporate action by the Depositor, in authorized denominations.
(b) A Preferred Securities Certificate shall not be valid until
authenticated by the manual signature of an authorized signatory of the
Property Trustee. The signature shall be conclusive evidence that the
Preferred Securities Certificate has been authenticated under this Trust
Agreement. Each Preferred Security Certificate shall be dated the date of its
authentication.
(c) Upon the written order of the Trust signed by the Administrative
Trustee, the Property Trustee shall authenticate and make available for
delivery the Preferred Securities Certificates.
(d) The Property Trustee may appoint an Authenticating Agent acceptable to
the Trust to authenticate the Preferred Securities. An Authenticating Agent
may authenticate the Preferred Securities whenever the Property Trustee may do
so. Each reference in this Trust Agreement to authentication by the Property
Trustee includes authentication by such agent.
An Authenticating Agent has the same rights as the Property Trustee to deal
with the Depositor or the Trust.
SECTION 504. REGISTRATION OF TRANSFER AND EXCHANGE OF PREFERRED
SECURITIES CERTIFICATES
(a) The Depositor shall keep or cause to be kept, at the office or agency
maintained pursuant to Section 508, a register or registers for the purpose of
registering Trust Securities Certificates and transfers and exchanges of
Preferred Securities Certificates (herein referred to as the "Securities
Register") in which the registrar designated by the Depositor
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(the "Securities Registrar"), subject to such reasonable regulations as it may
prescribe, shall provide for the registration of Preferred Securities
Certificates and Common Securities Certificates (subject to Section 510 in the
case of the Common Securities Certificates) and registration of transfers and
exchanges of Preferred Securities Certificates as herein provided. The
Property Trustee shall be the initial Securities Registrar.
(b) Upon surrender for registration of transfer of any Preferred
Securities Certificate at the office or agency maintained pursuant to Section
508, the Administrative Trustees or any one of them shall execute and deliver,
in the name of the designated transferee or transferees, one or more new
Preferred Securities Certificates in authorized denominations of a like
aggregate Liquidation Amount dated the date of execution by such Administrative
Trustee or Trustees. The Securities Registrar shall not be required to
register the transfer of any Preferred Securities that have been called for
redemption. At the option of a Holder, Preferred Securities Certificates may
be exchanged for other Preferred Securities Certificates in authorized
denominations of the same class and of a like aggregate Liquidation Amount upon
surrender of the Preferred Securities Certificates to be exchanged at the
office or agency maintained pursuant to Section 508.
(c) Every Preferred Securities Certificate presented or surrendered for
registration of transfer or exchange shall be accompanied by a written
instrument of transfer in form satisfactory to the Property Trustee and the
Securities Registrar duly executed by the Holder or his attorney duly
authorized in writing. Each Preferred Securities Certificate surrendered for
registration of transfer or exchange shall be canceled and subsequently
disposed of by the Property Trustee in accordance with its customary practice.
The Trust shall not be required to (i) issue, register the transfer of, or
exchange any Preferred Securities during a period beginning at the opening of
business 15 calendar days before the date of mailing of a notice of redemption
of any Preferred Securities called for redemption and ending at the close of
business on the day of such mailing; or (ii) register the transfer of or
exchange any Preferred Securities so selected for redemption, in whole or in
part, except the unredeemed portion of any such Preferred Securities being
redeemed in part.
(d) No service charge shall be made for any registration of transfer or
exchange of Preferred Securities Certificates, but the Securities Registrar may
require payment of a sum sufficient to cover any tax or governmental charge
that may be imposed in connection with any transfer or exchange of Preferred
Securities Certificates.
The Depositor shall keep or cause to be kept, at the office or agency
maintained pursuant to Section 508, a register or registers for the purpose of
registering Trust Securities Certificates and transfers and exchanges of
Preferred Securities Certificates (herein referred to as the "Securities
Register") in which the registrar designated by the Depositor (the "Securities
Registrar"), subject to such reasonable regulations as it may prescribe, shall
provide for the registration of Preferred Securities Certificates and Common
Securities Certificates (subject to Section 510 in the case of the Common
Securities Certificates) and registration of transfers and exchanges of
Preferred Securities Certificates as herein provided. The Property Trustee shall
be the initial Securities Registrar.
Upon surrender for registration of transfer of any Preferred Securities
Certificate at the office or agency maintained pursuant to Section 508, the
Administrative Trustees or any one of them shall execute and deliver, in the
name of the designated transferee or transferees, one or more new Preferred
Securities Certificates in authorized denominations of a like aggregate
Liquidation Amount dated the date of execution by such Administrative Trustee or
Trustees. The Securities Registrar shall not be required to register the
transfer of any Preferred Securities that have been called for redemption. At
the option of a Holder, Preferred Securities Certificates may be exchanged for
other Preferred Securities Certificates in authorized denominations of the same
class and of a like aggregate Liquidation Amount upon surrender of the Preferred
Securities Certificates to be exchanged at the office or agency maintained
pursuant to Section 508.
Every Preferred Securities Certificate presented or surrendered for
registration of transfer or exchange shall be accompanied by a written
instrument of transfer in form satisfactory to the Property Trustee and the
Securities Registrar duly executed by the Holder or his attorney duly authorized
in writing. Each Preferred Securities Certificate surrendered for registration
of transfer or exchange shall be canceled and subsequently disposed of by the
Property Trustee in accordance with its customary practice. The Trust shall not
be required to (i) issue, register the transfer of, or exchange any Preferred
Securities during a period beginning at the opening of business 15 calendar days
before the date of mailing of a notice of redemption of any Preferred Securities
called for redemption and ending at the close of business on the day of such
mailing or (ii) register the transfer of or exchange any Preferred Securities so
selected for redemption, in whole or in part, except the unredeemed portion of
any such Preferred Securities being redeemed in part.
No service charge shall be made for any registration of transfer or
exchange of Preferred Securities Certificates, but the Securities Registrar may
require payment of a sum sufficient to cover any tax or governmental charge that
may be imposed in connection with any transfer or exchange of Preferred
Securities Certificates.
SECTION 505. MUTILATED, DESTROYED, LOST OR STOLEN TRUST SECURITIES
CERTIFICATES.
If (a) any mutilated Trust Securities certificate shall be surrendered
to the Securities Registrar, or if the Securities Registrar shall receive
evidence to its satisfaction of the destruction, loss or theft of any Trust
Securities Certificate and (b) there shall be delivered to the Securities
Registrar and the Administrative Trustees such security or indemnity as may be
required by them to save each of them harmless, then in the absence of notice
that such Trust Securities Certificate shall have been acquired by a bona fide
purchaser, the Administrative Trustees, or any one of them, on behalf of the
Trust shall execute and make available for delivery, in exchange for or in lieu
of any such mutilated, destroyed, lost or stolen Trust Securities Certificate, a
new Trust Securities Certificate of like class, tenor and denomination. In
connection with the issuance of any new Trust Securities Certificate under this
Section, the Administrative Trustees or the Securities Registrar may require the
payment of a sum sufficient to cover any tax or other governmental charge that
may be imposed in connection therewith. Any duplicate Trust Securities
Certificate issued pursuant to this Section shall constitute conclusive evidence
of an undivided beneficial interest in the assets of the Trust, as if originally
issued, whether or not the lost, stolen or destroyed Trust Securities
Certificate shall be found at any time.
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SECTION 506. PERSONS DEEMED SECURITYHOLDERS.
The Trustees, the Paying Agent and the Securities Registrar shall treat
the Person in whose name any Trust Securities Certificate shall be registered
in the Securities Register as the owner of such Trust Securities Certificate
for the purpose of receiving Distributions and for all other purposes
whatsoever, and neither the Trustees nor the Securities Registrar shall be
bound by any notice to the contrary.
SECTION 507. ACCESS TO LIST OF SECURITYHOLDERS' NAMES AND
ADDRESSES.
At any time when the Property Trustee is not also acting as the Securities
Registrar, the Administrative Trustees or the Depositor shall furnish or cause
to be furnished to the Property Trustee (a) semi-annually on or before January
15 and July 15 in each year, a list, in such form as the Property Trustee may
reasonably require, of the names and addresses of the Securityholders as of the
most recent record date; and (b) promptly after receipt by any Administrative
Trustee or the Depositor of a request therefor from the Property Trustee in
order to enable the Property Trustee to discharge its obligations under this
Trust Agreement, in each case to the extent such information is in the
possession or control of the Administrative Trustees or the Depositor and is
not identical to a previously supplied list or has not otherwise been received
by the Property Trustee in its capacity as Securities Registrar. The rights of
Securityholders to communicate with other Securityholders with respect to their
rights under this Trust Agreement or under the Trust Securities, and the
corresponding rights of the Trustee shall be as provided in the Trust Indenture
Act. Each Holder, by receiving and holding a Trust Securities Certificate, and
each owner shall be deemed to have agreed not to hold the Depositor, the
Property Trustee or the Administrative Trustees accountable by reason of the
disclosure of its name and address, regardless of the source from which such
information was derived.
SECTION 508. MAINTENANCE OF OFFICE OR AGENCY.
The Administrative Trustees shall maintain in a location or locations
designated by the Administrative Trustees, an office or offices or agency or
agencies where Preferred Securities Certificates may be surrendered for
registration of transfer or exchange and where notices and demands to or upon
the Trustees in respect of the Trust Securities Certificates may be served. The
Administrative Trustees initially designate the Corporate Trust Office of the
Property Trustee, Two International Place, 4th Floor, Boston, Massachusetts
02110, as the principal corporate trust office for such purposes. The
Administrative Trustees shall give prompt written notice to the Depositor and
to the Securityholders of any change in the location of the Securities Register
or any such office or agency.
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SECTION 509. APPOINTMENT OF PAYING AGENT.
The Paying Agent shall initially be the Property Trustee, and any
co-paying agent chosen by the Property Trustee, and acceptable to the
Administrative Trustees and the Depositor. The Paying Agent shall make
Distributions to Securityholders from the Payment Account and shall report the
amounts of such Distributions to the Property Trustee and the Administrative
Trustees. Any Paying Agent shall have the revocable power to withdraw funds
from the Payment Account for the purpose of making the Distributions referred
to above. The Administrative Trustees may revoke such power and remove the
Paying Agent if such Trustees determine in their sole discretion that the
Paying Agent shall have failed to perform its obligations under this Trust
Agreement in any material respect. Any Person acting as Paying Agent shall be
permitted to resign as Paying Agent upon 30 days' written notice to the
Administrative Trustees, the Property Trustee and the Depositor. In the event
that the Property Trustee shall no longer be the Paying Agent or a successor
Paying Agent shall resign or its authority to act be revoked, the
Administrative Trustees shall appoint a successor that is acceptable to the
Property Trustee and the Depositor to act as Paying Agent (which shall be a
bank or trust company). The Administrative Trustees shall cause such successor
Paying Agent or any additional Paying Agent appointed by the Administrative
Trustees to execute and deliver to the Trustees an instrument in which such
successor Paying Agent or additional Paying Agent shall agree with the Trustees
that as Paying Agent, such successor Paying Agent or additional Paying Agent
shall hold all sums, if any, held by it for payment to the Securityholders in
trust for the benefit of the Securityholders entitled thereto until such sums
shall be paid to such Securityholders. The Paying Agent shall return all
unclaimed funds to the Property Trustee and, upon removal of a Paying Agent,
such Paying Agent shall also return all funds in its possession to the Property
Trustee. The provisions of Sections 801, 803 and 806 shall apply to the
Property Trustee also in its role as Paying Agent, for so long as the Property
Trustee shall act as Paying Agent and, to the extent applicable, to any other
paying agent appointed hereunder. Any reference in this Trust Agreement to the
Paying Agent shall include any co-paying agent unless the context requires
otherwise.
SECTION 510. OWNERSHIP OF COMMON SECURITIES BY DEPOSITOR.
On the Closing Date, the Depositor shall acquire and retain beneficial and
record ownership of the Common Securities. To the fullest extent permitted by
law, any attempted transfer of the Common Securities (other than a transfer in
connection with a merger or consolidation of the Depositor into another
corporation pursuant to Section 12.1 of the Indenture) shall be void. The
Administrative Trustees shall cause each Common Securities Certificate issued
to the Depositor to contain a legend stating "THIS CERTIFICATE IS NOT
TRANSFERABLE"
SECTION 511. BOOK-ENTRY PREFERRED SECURITIES CERTIFICATES; COMMON
SECURITIES CERTIFICATE.
(a) The Preferred Securities Certificates, upon original
issuance, will be issued in the form of a typewritten Preferred Securities
Certificate or Certificates representing Book-Entry Preferred Securities
Certificates, to be delivered to or held on behalf of the Depositary Trust
Company, the initial Clearing Agency, by, or on behalf of, the Trust. Such
Book-Entry Preferred Securities Certificate or Certificates shall initially be
registered on the Securities Register in the name of Cede & Co., the nominee of
the initial Clearing Agency, and no beneficial owner will receive a Definitive
Preferred Securities Certificate representing such beneficial owner's interest
in such Preferred Securities, except as provided in Section 513, unless and
until Definitive Preferred Securities Certificates have been issued to
beneficial owners pursuant to Section 513:
(i) the provisions of this Section 511(a) shall be in
full force and effect;
(ii) the Securities Registrar, the Paying Agent and
the Trustees shall be entitled to deal with the Clearing Agency for all purposes
of this Trust Agreement relating to the Book Entry Preferred Securities
Certificates (including the payment of the Liquidation Amount of and
Distributions on the Book-Entry Preferred Securities) as the sole Holder of
Book-Entry Preferred Securities and shall have no obligations to the Owners
thereof;
(iii) to the extent that the provisions of this
Section 511 conflict with any other provisions of this Trust Agreement, the
provisions of this Section 511 shall control; and
(iv) the rights of the Owners of the Book-Entry
Preferred Securities Certificates 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 and/or the Clearing Agency Participants.
Pursuant to the Certificate Depository Agreement, unless and until Definitive
Preferred Securities Certificates are issued pursuant to Section 513, the
initial Clearing Agency will make book-entry transfers among the Clearing Agency
Participants and receive and transmit payments on the Preferred Securities to
such Clearing Agency Participants. Any Clearing Agency designated pursuant
hereto will not be deemed an agent of the Trustees for any purpose.
(b) A single Common Securities Certificate representing the
Common Securities shall be issued to the Depositor in the form of a definitive
Common Securities Certificate.
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SECTION 512. NOTICES TO CLEARING AGENCY.
To the extent that a notice or other communication to the Owners is
required under this Trust Agreement, unless and until Definitive Preferred
Securities Certificates shall have been issued to Owners pursuant to Section
513, the Trustees shall give all such notices and communications specified
herein to be given to Owners to the Clearing Agency, and shall have no
obligations to the Owners.
SECTION 513. DEFINITIVE PREFERRED SECURITIES CERTIFICATES.
If (a) the Depositor advises the Trustees in writing that the Clearing
Agency is no longer willing or able to properly discharge its responsibilities
with respect to the Preferred Securities Certificates, and the Depositor is
unable to locate a qualified successor, or if at any time the Depositary ceases
to be a clearing agency registered under the Securities Exchange Act of 1934, as
amended, at a time when the Depositary is required to be so registered to act as
such depositary, (b) the Depositor at its option advises the Trustees in writing
that it elects to terminate the book-entry system through the Clearing Agency,
or (c) after the occurrence of a Debenture Event of Default, owners of Preferred
Securities Certificates representing beneficial interests aggregating at least a
majority of the Liquidation Amount advise the Property Trustee in writing that
the continuation of a book-entry system through the Clearing Agency is no longer
in the best interests of the owners of Preferred Securities Certificates, then
the Property Trustee shall notify the Clearing Agency, and the Clearing Agency
shall notify all Owners of Preferred Securities Certificates, of the occurrence
of any such event and of the availability of the Definitive Preferred Securities
Certificates to owners of such class or classes, as applicable, requesting the
same. Upon surrender to the Property Trustee of the typewritten Preferred
Securities Certificate or Certificates representing the Book-Entry Preferred
Securities Certificates by the Clearing Agency, accompanied by registration
instructions, the Administrative Trustees, or any one of them, shall execute the
Definitive Preferred Securities Certificates in accordance with the instructions
of the Clearing Agency. Neither the Securities Registrar nor the Trustees shall
be liable for any delay in delivery of such instructions and may conclusively
rely on, and shall be protected in relying on, such instructions. Upon the
issuance of Definitive Preferred Securities Certificates, the Trustees shall
recognize the Holders of the Definitive Preferred Securities Certificates as
Securityholders. The Definitive Preferred Securities Certificates shall be
printed, lithographed or engraved or may be produced in any other manner as is
reasonably acceptable to the Administrative Trustees, as evidenced by the
execution thereof by the Administrative Trustees or any one of them.
SECTION 514. RIGHTS OF SECURITYHOLDERS.
(a) The legal title to the Trust Property is vested exclusively in the
Property Trustee (in its capacity as such) in accordance with Section 209, and
the Securityholders shall not have any right or title therein other than the
undivided beneficial interest in the assets of the Trust conferred by their
Trust Securities and they shall have no right to call for any partition or
division of property, profits or rights of the Trust except as described below.
The Trust Securities shall be personal property giving only the rights
specifically set forth therein and in this Trust Agreement. The Trust
Securities shall have no preemptive or similar rights. When issued and
delivered to Holders of the Preferred Securities against payment of the
purchase price therefor, the Preferred Securities shall be fully paid and
nonassessable interests in the Trust. The Holders of the Preferred 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 Preferred Securities remain Outstanding, if, upon a
Debenture Event of Default, the Debenture Trustee fails or the holders of not
less than 25% in principal amount of the outstanding Debentures fail to declare
the principal of all of the Debentures to be immediately due and payable, the
Holders of at least 25% in Liquidation Amount of the Preferred Securities then
Outstanding shall have such right by a notice in writing to the Depositor and
the Debenture Trustee; and upon any such declaration such principal amount of
and the accrued interest on all of the Debentures shall become immediately due
and payable, provided that the payment of principal and interest on such
Debentures shall remain subordinated to the extent provided in the Indenture.
(c) For so long as any Preferred Securities remain outstanding, if, upon a
Debenture Event of Default arising from the failure to pay interest or
principal on the Debentures, the Holders of any Preferred Securities then
Outstanding shall, to the fullest extent permitted by law, have the right to
directly institute proceedings for enforcement of payment to such Holders of
principal of or interest on the Debentures having a principal amount equal to
the Liquidation Amount of the Preferred Securities of such Holders.
ARTICLE VI
ACTS OF SECURITYHOLDERS; MEETINGS; VOTING
SECTION 601. LIMITATIONS ON VOTING RIGHTS.
(a) Except as provided in this Section 601, in Sections 514, 810 and 1002
and in the Indenture and as otherwise required by law, no Holder of
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Preferred Securities shall have any right to vote or in any manner otherwise
control the administration, operation and management of the Trust or the
obligations of the parties hereto, nor shall anything herein set forth, or
contained in the terms of the Trust Securities Certificates, be construed so as
to constitute the Securityholders from time to time as partners or members of
an association.
(b) So long as any Debentures are held by the Property Trustee, the
Trustees shall not (i) direct the time, method and place of conducting any
proceeding for any remedy available to the Debenture Trustee, or executing any
trust or power conferred on the Debenture Trustee with respect to such
Debentures; (ii) waive any past default which is waivable under Article VII of
the Indenture; (iii) exercise any right to rescind or annul a declaration that
the principal of all the Debentures shall be due and payable; or (iv) consent
to any amendment, modification or termination of the Indenture or the
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 all Outstanding Preferred Securities; provided, however,
that where a consent under the Indenture would require the consent of each
Holder of outstanding Debentures affected thereby, no such consent shall be
given by the Property Trustee without the prior written consent of each holder
of Preferred Securities. The Trustees shall not revoke any action previously
authorized or approved by a vote of the Holders of the Outstanding Preferred
Securities, except by a subsequent vote of the Holders of the Outstanding
Preferred Securities. The Property Trustee shall notify each Holder of the
Outstanding Preferred Securities of any notice of default received from the
Debenture Trustee with respect to the Debentures. In addition to obtaining the
foregoing approvals of the Holders of the Preferred Securities, prior to taking
any of the foregoing actions, the Trustees shall, at the expense of the
Depositor, obtain an Opinion of Counsel experienced in such matters to the
effect that the Trust shall continue to be classified as a grantor trust and
not as an association taxable as a corporation for United States federal income
tax purposes on account of such action.
(c) If any proposed amendment to the Trust Agreement provides for, or the
Trustees otherwise propose to effect, (i) any action that would adversely
affect in any material respect the powers, preferences or special rights of the
Preferred Securities, whether by way of amendment to the Trust Agreement or
otherwise; or (ii) the dissolution, winding-up or termination of the Trust,
other than pursuant to the terms of this Trust Agreement, then the Holders of
Outstanding Preferred Securities as a class shall be entitled to vote on such
amendment or proposal and such amendment or proposal shall not be effective
except with the approval of the Holders of at least a majority in Liquidation
Amount of the Outstanding Preferred Securities. No amendment to this Trust
Agreement may be made if, as a result of such amendment, the Trust would cease
to be classified as a grantor trust or would be classified as an association
taxable as a corporation for United States federal income tax purposes.
SECTION 602. NOTICE OF MEETINGS.
Notice of all meetings of the Preferred Securityholders, stating the time,
place and purpose of the meeting, shall be given by the Property Trustee
pursuant to Section 1008 to each Preferred Securityholder of record, at his
registered address, at least 15 days and not more than 90 days before the
meeting. At any such meeting, any business properly before the meeting
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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 603. MEETINGS OF PREFERRED SECURITYHOLDERS.
(a) No annual meeting of Securityholders is required to be held. The
Administrative Trustees, however, shall call a meeting of Securityholders to
vote on any matter in respect of which Preferred Securityholders are entitled
to vote upon the written request of the Preferred Securityholders of 25% of the
Outstanding Preferred Securities (based upon their aggregate Liquidation
Amount) and the Administrative Trustees or the Property Trustee may, at any
time in their discretion, call a meeting of Preferred Securityholders to vote
on any matters as to which the Preferred Securityholders are entitled to vote.
(b) Preferred Securityholders of record of 50% of the Outstanding
Preferred Securities (based upon their aggregate Liquidation Amount), present
in person or by proxy, shall constitute a quorum at any meeting of
Securityholders.
(c) If a quorum is present at a meeting, an affirmative vote by the
Preferred Securityholders of record present, in person or by proxy, holding
more than a majority of the Preferred Securities (based upon their aggregate
Liquidation Amount) held by the Preferred Securityholders of record present,
either in person or by proxy, at such meeting shall constitute the action of
the Securityholders, unless this Trust Agreement requires a greater number of
affirmative votes.
SECTION 604. VOTING RIGHTS.
Securityholders shall be entitled to one vote for each dollar value of
Liquidation Amount represented by their Trust Securities in respect of any
matter as to which such Securityholders are entitled to vote (and such dollar
value shall be $10 per Preferred Security until such time, if any, as the
Liquidation Amount is changed as provided herein).
SECTION 605. PROXIES, ETC.
At any meeting of Securityholders, any Securityholder entitled to vote
thereat may vote by proxy, provided that no proxy shall be voted at any meeting
unless it shall have been placed on file with the Administrative Trustees, or
with such other officer or agent of the Trust as the Administrative Trustees
may direct, for verification prior to the time at which such vote shall be
taken. 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
Securityholder shall be deemed valid unless challenged at or prior to its
exercise, and the burden of proving invalidity shall rest on the challenger. No
proxy shall be valid more than three years after its date of execution.
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SECTION 606. SECURITYHOLDER ACTION BY WRITTEN CONSENT.
Any action which may be taken by Securityholders at a meeting may be taken
without a meeting if Securityholders holding more than a majority of all
Outstanding Trust Securities (based upon their aggregate Liquidation Amount)
entitled to vote in respect of such action (or such larger proportion thereof
as shall be required by any express provision of this Trust Agreement) shall
consent to the action in writing (based upon their aggregate Liquidation
Amount).
SECTION 607. RECORD DATE FOR VOTING AND OTHER PURPOSES.
For the purposes of determining the Securityholders who are entitled to
notice of and to vote at any meeting or by written consent, or to participate
in any Distribution 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 Administrative Trustees may from time to time fix a date,
not more than 90 days prior to the date of any meeting of Securityholders or
the payment of Distribution or other action, as the case may be, as a record
date for the determination of the identity of the Securityholders of record for
such purposes.
SECTION 608. ACTS OF SECURITYHOLDERS.
(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 Securityholders may be embodied in and evidenced by one or more
instruments of substantially similar tenor signed by such Securityholders in
person or by an agent duly appointed in writing; and, except as otherwise
expressly provided herein, such action shall become effective when such
instrument or instruments are delivered to an Administrative Trustee. Such
instrument or instruments (and the action embodied therein and evidenced
thereby) are herein sometimes referred to as the "Act" of the Securityholders
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 801) conclusive in
favor of the Trustees, if made in the manner provided in this Section 608.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness of such
execution or by a certificate of a notary public or other officer authorized by
law to take acknowledgments of deeds, certifying that the individual signing
such instrument or writing acknowledged to him the execution thereof. Where
such execution is by a signer acting in a capacity other than his individual
capacity, such certificate or affidavit shall also constitute sufficient proof
of his authority. The fact and date of the execution of any such instrument or
writing, or the authority of the Person executing the same, may also be proved
in any other manner which any Trustee receiving the same deems sufficient.
(c) The ownership of Preferred Securities shall be proved by the
Securities Register.
(d) Any request, demand, authorization, direction, notice, consent, waiver
or other Act of the Securityholder of any Trust Security shall bind every
future Securityholder of the same Trust Security and the Securityholder
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of every Trust Security issued upon the registration of transfer thereof or in
exchange therefor or in lieu thereof in respect of anything done, omitted or
suffered to be done by the Trustees or the Trust in reliance thereon, whether
or not notation of such action is made upon such Trust Security.
(e) Without limiting the foregoing, a Securityholder entitled hereunder to
take any action hereunder with regard to any particular Trust Security may do
so with regard to all or any part of the Liquidation Amount of such Trust
Security or by one or more duly appointed agents each of which may do so
pursuant to such appointment with regard to all or any part of such Liquidation
Amount.
(f) A Securityholder may institute a legal proceeding directly against the
Depositor under the Guarantee to enforce its rights under the Guarantee without
first instituting a legal proceeding against the Guarantee Trustee (as defined
in the Guarantee), the Trust or any Person.
SECTION 609. INSPECTION OF RECORDS.
Upon reasonable notice to the Administrative Trustees and the Property
Trustee, the records of the Trust shall be open to inspection and copying by
Securityholders and their authorized representatives during normal business
hours for any purpose reasonably related to such Securityholder's interest as a
Securityholder.
ARTICLE VII
REPRESENTATIONS AND WARRANTIES
SECTION 701. REPRESENTATIONS AND WARRANTIES OF BANK AND PROPERTY TRUSTEE.
The Bank and the Property Trustee, each severally on behalf of and as to
itself, as of the date hereof, and each successor Property Trustee at the time
of the successor Property Trustee's acceptance of its appointment as Property
Trustee hereunder (the term "Bank" being used to refer to such successor
Property Trustee in its separate corporate capacity) hereby represents and
warrants (as applicable) for the benefit of the Depositor and the
Securityholders that:
(a) the Bank is a national banking association duly organized, validly
existing and in good standing under the laws of the United States of America.
(b) the Bank has full corporate power, authority and legal right to
execute, deliver and perform its obligations under this Trust Agreement and has
taken all necessary action to authorize the execution, delivery and performance
by it of this Trust Agreement;
(c) this Trust Agreement has been duly authorized, executed and delivered
by the Property Trustee and constitutes the valid and legally binding agreement
of the Property Trustee enforceable against it in accordance with its 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;
(d) the execution, delivery and performance by the Property Trustee of
this Trust Agreement has been duly authorized by all necessary corporate
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or other action on the part of the Property Trustee and does not require any
approval of stockholders of the Bank and such execution, delivery and
performance shall not (i) violate the Bank's charter or by-laws; (ii) violate
any provision of, or constitute, with or without notice or lapse of time, a
default under, or result in the creation or imposition of, any Lien on any
properties included in the Trust Property pursuant to the provisions of, any
indenture, mortgage, credit agreement, license or other agreement or instrument
to which the Property Trustee or the Bank is a party or by which it is bound;
or (iii) violate any law, governmental rule or regulation of the United States
governing the banking or trust powers of the Bank or the Property Trustee (as
appropriate in context) or any order, judgment or decree applicable to the
Property Trustee or the Bank;
(e) neither the authorization, execution or delivery by the Property
Trustee of this Trust Agreement nor the consummation of any of the transactions
by the Property Trustee contemplated herein or therein requires the consent or
approval of, the giving of notice to, the registration with or the taking of
any other action with respect to any governmental authority or agency under any
existing federal law governing the banking or trust powers of the Bank or the
Property Trustee, as the case may be, under the laws of the United States;
and
(f) there are no proceedings pending or, to the best of the Property
Trustee's knowledge, threatened against or affecting the Bank or the Property
Trustee in any court or before any governmental authority, agency or
arbitration board or tribunal which, individually or in the aggregate, would
materially and adversely affect the Trust or would question the right, power
and authority of the Property Trustee to enter into or perform its obligations
as one of the Trustees under this Trust Agreement.
SECTION 702. REPRESENTATIONS AND WARRANTIES OF DELAWARE PERSON AND
DELAWARE TRUSTEE.
The Delaware Person and the Delaware Trustee, each severally on behalf of
and as to itself, as of the date hereof, and each successor Delaware Trustee at
the time of the successor Delaware Trustee's acceptance of appointment as
Delaware Trustee hereunder (the term "Delaware Person" being used to refer to
such successor Delaware Trustee in its separate corporate capacity), hereby
represents and warrants (as applicable) for the benefit of the Depositor and
the Securityholders that:
(a) the Delaware Person is a Delaware corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware;
(b) the Delaware Person has full corporate power, authority and legal
right to execute, deliver and perform its obligations under this Trust
Agreement and has taken all necessary action to authorize the execution,
delivery and performance by it of this Trust Agreement;
(c) this Trust Agreement has been duly authorized, executed and delivered
by the Delaware Trustee and constitutes the valid and legally binding agreement
of the Delaware Trustee enforceable against it in accordance with its terms,
subject to bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and similar laws of general
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applicability relating to or affecting creditors, rights and to general equity
principles;
(d) the execution, delivery and performance by the Delaware Trustee of
this Trust Agreement has been duly authorized by all necessary corporate or
other action on the part of the Delaware Trustee and does not require any
approval of stockholders of the Delaware Person and such execution, delivery
and performance shall not (i) violate the Delaware Person's charter or by-laws;
(ii) violate any provision of, or constitute, with or without notice or lapse
of time, a default under, or result in the creation or imposition of, any Lien
on any properties included in the Trust Property pursuant to the provisions of,
any indenture, mortgage, credit agreement, license or other agreement or
instrument to which the Delaware Person or the Delaware Trustee is a party or
by which it is bound; or (iii) violate any law, governmental rule or regulation
of the United States or the State of Delaware, as the case may be, governing
the corporate powers of the Delaware Person or the Delaware Trustee (as
appropriate in context) or any order, judgment or decree applicable to the
Delaware Person or the Delaware Trustee;
(e) neither the authorization, execution or delivery by the Delaware
Trustee of this Trust Agreement nor the consummation of any of the transactions
by the Delaware Trustee contemplated herein or therein requires the consent or
approval of, the giving of notice to, the registration with or the taking of
any other action with respect to any governmental authority or agency under any
existing federal law governing the corporate powers of the Delaware
Person or the Delaware Trustee, as the case may be, under the laws of the
United States or the State of Delaware; and
(f) there are no proceedings pending or, to the best of the Delaware
Trustee's knowledge, threatened against or affecting the Delaware Person or the
Delaware Trustee in any court or before any governmental authority, agency or
arbitration board or tribunal which, individually or in the aggregate, would
materially and adversely affect the Trust or would question the right, power
and authority of the Delaware Trustee to enter into or perform its obligations
as one of the Trustees under this Trust Agreement.
SECTION 703. REPRESENTATIONS AND WARRANTIES OF DEPOSITOR.
The Depositor hereby represents and warrants for the benefit of the
Securityholders that:
(a) the Trust Securities Certificates issued on the Closing Date or the
Option Closing Date, if applicable, on behalf of the Trust have been duly
authorized and shall be, as of such date or dates, if applicable, duly and
validly executed, issued and delivered by the Administrative Trustees pursuant
to the terms and provisions of, and in accordance with the requirements of,
this Trust Agreement and the Securityholders shall be, as of such date or
dates, if applicable, entitled to the benefits of this Trust Agreement; and
(b) there are no taxes, fees or other governmental charges payable by the
Trust (or the Trustees on behalf of the Trust) under the laws of the State of
Delaware Person or any political subdivision thereof in connection with the
execution, delivery and performance by the Bank, the Property Trustee or the
Delaware Trustee, as the case may be, of this Trust Agreement.
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ARTICLE VIII
TRUSTEES
SECTION 801. CERTAIN DUTIES AND RESPONSIBILITIES.
(a) The duties and responsibilities of the Trustees shall be as provided
by this Trust Agreement and, in the case of the Property Trustee, subject to
the Trust Indenture Act. Notwithstanding the foregoing, no provision of this
Trust Agreement shall require the Trustees to expend or risk their own funds or
otherwise incur any financial liability in the performance of any of their
duties hereunder, or in the exercise of any of their rights or powers, if they
shall have reasonable grounds for believing that repayment of such funds or
adequate indemnity against such risk or liability is not reasonably assured to
it. No Administrative Trustee nor the Delaware Trustee shall be liable for its
act or omissions hereunder except as a result of its own gross negligence or
willful misconduct. The Property Trustee's liability shall be determined under
the Trust Indenture Act. 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 Trustees shall be subject to the
provisions of this Section 801. To the extent that, at law or in equity, the
Delaware Trustee or an Administrative Trustee has duties (including fiduciary
duties) and liabilities relating thereto to the Trust or to the
Securityholders, the Delaware Trustee or such Administrative Trustee shall not
be liable to the Trust or to any Securityholder for such Trustee's good faith
reliance on the provisions of this Trust Agreement. The provisions of this
Trust Agreement, to the extent that they restrict the duties and liabilities of
the Delaware Trustee or the Administrative Trustees otherwise existing at law
or in equity, are agreed by the Depositor and the Securityholders to replace
such other duties and liabilities of the Delaware Trustee and the
Administrative Trustees, as the case may be.
(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. With
respect to the relationship of each Securityholder and the Trustee, each
Securityholder, by its acceptance of a Trust Security, agrees that it shall
look solely to the revenue and proceeds from the Trust Property to the extent
legally available for distribution to it as herein provided and that the
Trustees are not personally liable to it for any amount distributable in
respect of any Trust Security or for any other liability in respect of any
Trust Security. This Section 801(b) does not limit the liability of the
Trustees expressly set forth elsewhere in this Trust Agreement or, in the case
of the Property Trustee, in the Trust Indenture Act.
(c) 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) 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;
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(ii) the Property Trustee shall not be liable with respect
to any action taken or omitted to be taken by it in good faith
in accordance with the direction of the Holders of not less than
a majority in Liquidation Amount of the Trust Securities
relating to the time, method and place of conducting any
proceeding for any remedy available to the Property Trustee, or
exercising any trust or power conferred upon the Property
Trustee under this Trust Agreement;
(iii) the Property Trustee's sole duty with respect to the
custody, safe keeping and physical preservation of the
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;
(iv) 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 301 and except to the extent
otherwise required by law; and
(v) the Property Trustee shall not be responsible for
monitoring the compliance by the Administrative Trustees or the
Depositor with their respective duties under this Trust
Agreement, nor shall the Property Trustee be liable for the
negligence, default or misconduct of the Administrative Trustees
or the Depositor.
SECTION 802. CERTAIN NOTICES.
(a) Within 5 Business Days after the occurrence of any Event of Default
actually known to the Property Trustee, the Property Trustee shall transmit, in
the manner and to the extent provided in Section 1008, notice of such Event of
Default to the Securityholders, the Administrative Trustees and the Depositor,
unless such Event of Default shall have been cured or waived. For purposes of
this Section 802 the term "Event of Default" means any event that is, or after
notice or lapse of time or both would become, an Event of Default.
(b) The Administrative Trustees shall transmit to the Securityholders, in
the manner and to the extent provided in Section 1008, notice of the
Depositor's election to begin or further extend an Extended Interest Payment
Period on the Debentures (unless such election shall have been revoked) within
the time specified for transmitting such notice to the holders of the
Debentures pursuant to the Indenture as originally executed.
SECTION 803. CERTAIN RIGHTS OF PROPERTY TRUSTEE.
Subject to the provisions of Section 801:
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(a) the Property Trustee may rely and shall be protected in acting or
refraining from acting in good faith upon any resolution, Opinion of Counsel,
certificate, written representation of a Holder or transferee, certificate of
auditors or any other certificate, statement, instrument, opinion, report,
notice, request, consent, order, appraisal, bond, debenture, note, other
evidence of indebtedness or other paper or document believed by it to be
genuine and to have been signed or presented by the proper party or parties;
(b) if (i) in performing its duties under this Trust Agreement the
Property Trustee is required to decide between alternative courses of action;
or (ii) in construing any of the provisions of this Trust Agreement the
Property Trustee finds the same ambiguous or inconsistent with other provisions
contained herein; or (iii) the Property Trustee is unsure of the application of
any provision of this Trust Agreement, then, except as to any matter as to
which the Preferred Securityholders are entitled to vote under the terms of
this Trust Agreement, the Property Trustee shall deliver a notice to the
Depositor requesting written instructions of the Depositor as to the course of
action to be taken and the Property Trustee shall take such action, or refrain
from taking such action, as the Property Trustee shall be instructed in writing
to take, or to refrain from taking, by the Depositor and shall be
fully protected in acting in accordance with such instructions; provided,
however, that if the Property Trustee does not receive such instructions of the
Depositor within 10 Business Days after it has delivered such notice, or such
reasonably shorter period of time set forth in such notice (which to the extent
practicable shall not be less than 2 Business Days), it may, but shall be under
no duty to, take or refrain from taking such action not inconsistent with this
Trust Agreement as it shall deem advisable and in the best interests of the
Securityholders, in which event the Property Trustee shall have no liability
except for its own bad faith, negligence or willful misconduct;
(c) any direction or act of the Depositor or the Administrative Trustees
contemplated by this Trust Agreement shall be sufficiently evidenced by an
Officers' Certificate;
(d) whenever in the administration of this Trust Agreement, the Property
Trustee shall deem it desirable that a matter be established before
undertaking, suffering or omitting any action hereunder, the Property Trustee
(unless other evidence is herein specifically prescribed) may, in the absence
of bad faith on its part, request and conclusively rely upon an Officer's
Certificate which, upon receipt of such request, shall be promptly delivered by
the Depositor or the Administrative Trustees;
(e) the Property Trustee shall have no duty to see to any recording,
filing or registration of any instrument (including any financing or
continuation statement, any filing under tax or securities laws or any filing
under tax or securities laws) or any rerecording, refiling or reregistration
thereof;
(f) the Property Trustee may consult with counsel of its choice (which
counsel may be counsel to the Depositor or any of its Affiliates) 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, such counsel
may be counsel to the Depositor or any of its Affiliates, and may include any
of its employees; the Property Trustee shall have the right at any time to seek
instructions concerning the administration of this Trust Agreement from any
court of competent jurisdiction;
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(g) 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 Securityholders pursuant to this Trust Agreement,
unless such Securityholders shall have offered to the Property Trustee
reasonable security or indemnity against the costs, expenses and liabilities
which might be incurred by it in compliance with such request or direction;
(h) the Property Trustee shall not be bound to make any investigation into
the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, consent, order, approval, bond,
debenture, note or other evidence of indebtedness or other paper or document,
unless requested in writing to do so by one or more Securityholders, but the
Property Trustee may make such further inquiry or investigation into such facts
or matters as it may see fit;
(i) the Property Trustee may execute any of the trusts or powers hereunder
or perform any duties hereunder either directly or by or through its agents or
attorneys, provided that the Property Trustee shall be responsible for its own
negligence or recklessness with respect to selection of any agent or attorney
appointed by it hereunder;
(j) 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 of the Trust Securities
which instructions may only be given by the Holders of the same proportion in
Liquidation Amount of the Trust Securities as would be entitled to direct the
Property Trustee under the terms of the Trust Securities in respect of such
remedy, right or action; (ii) may refrain from enforcing such remedy or right
or taking such other action until such instructions are received; and (iii)
shall be protected in acting in accordance with such instructions; and
(k) 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 the
Property Trustee to perform any act or acts or exercise any right, power, duty
or obligation conferred or imposed on it, in any jurisdiction in which it shall
be illegal, or in which the Property Trustee shall be unqualified or
incompetent in accordance with applicable law, to perform any such act or acts,
or to exercise any such right, power, duty or obligation. No permissive power
or authority available to the Property Trustee shall be construed to be a duty.
SECTION 804. 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 Trust, and the Trustees do not assume
any responsibility for their correctness. The Trustees shall not be
accountable for the use or application by the Depositor of the proceeds of the
Debentures.
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SECTION 805. MAY HOLD SECURITIES.
Any Trustee or any other agent of any Trustee or the Trust, in its
individual or any other capacity, may become the owner or pledgee of Trust
Securities and, subject to Sections 808 and 813 and except as provided in the
definition of the term "Outstanding" in Article I, may otherwise deal with the
Trust with the same rights it would have if it were not a Trustee or such other
agent.
SECTION 806. COMPENSATION; INDEMNITY; FEES.
The Depositor agrees:
(a) to pay to the Trustees from time to time reasonable compensation for
all services rendered by them hereunder (which compensation shall not be
limited by any provision of law in regard to the compensation of a trustee of
an express trust);
(b) except as otherwise expressly provided herein, to reimburse the
Trustees upon request for all reasonable expenses, disbursements and advances
incurred or made by the Trustees in accordance with any provision of this Trust
Agreement (including the reasonable compensation and the expenses and
disbursements of its agents and counsel), except any such expense,
disbursements of its agents and counsel), except any such expense, negligence,
bad faith or willful misconduct (or, in the case of the Administrative Trustees
or the Delaware Trustee, any such expense, disbursement or advance as may be
attributable to its, his or her gross negligence, bad faith or willful
misconduct); and
(c) to indemnify each of the Trustees or any predecessor Trustee for, and
to hold the Trustees harmless against, any loss, damage, claims, liability,
penalty or expense incurred without negligence or bad faith on its part,
arising out of or in connection with the acceptance or administration of this
Trust Agreement, including the costs and expenses of defending itself against
any claim or liability in connection with the exercise or performance of any of
its powers or duties hereunder, except any such expense, disbursement or
advance as may be attributable to such Trustee's negligence, bad faith or
willful misconduct (or, in the case of the Administrative Trustees or the
Delaware Trustee, any such expense, disbursement or advance as may be
attributable to its, his or her gross negligence, bad faith or willful
misconduct).
No Trustee may claim any Lien or charge on Trust Property as a result of
any amount due pursuant to this Section 806.
The provisions of this Section 806 shall survive termination of this
Trust Agreement or the resignation or removal of any Trustee.
SECTION 807. CORPORATE PROPERTY TRUSTEE REQUIRED; ELIGIBILITY OF
TRUSTEES.
(a) There shall at all times be a Property Trustee hereunder with respect
to the Trust Securities. The Property Trustee shall be a Person that is
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 807, 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
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respect to the Trust Securities shall cease to be eligible in accordance with
the provisions of this Section 807, it shall resign immediately in the manner
and with the effect hereinafter specified in this Article VIII.
(b) There shall at all times be one or more Administrative Trustees
hereunder with respect to the Trust Securities. Each Administrative Trustee
shall be either a natural person who is at least 21 years of age or a legal
entity that shall act through one or more persons authorized to bind that
entity.
(c) There shall at all times be a Delaware Trustee with respect to the
Trust Securities. The Delaware Trustee shall either be (i) a natural person
who is at least 21 years of age and a resident of the State of Delaware; or
(ii) a legal entity with its principal place of business in the State of
Delaware and that otherwise meets the requirements of applicable
Delaware law that shall act through one or more persons authorized to bind such
entity.
SECTION 808. CONFLICTING INTERESTS.
If the Property Trustee has or shall acquire a conflicting interest within
the meaning of the Trust Indenture Act, the Property Trustee shall either
eliminate such interest or resign, to the extent and in the manner provided by,
and subject to the provisions of, the Trust Indenture Act and this Trust
Agreement.
Subject to the foregoing, the Depositor and any 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
Trust, and the Trust and the Securityholders 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 Trust, shall not be deemed wrongful or
improper. Neither the Depositor, nor any Trustee, shall be obligated to
present any particular investment or other opportunity to the Trust even if
such opportunity is of a character that, if presented to the Trust, could be
taken by the Trust, and the Depositor or any Trustee shall have the right to
take for its own account (individually or as a partner or fiduciary) or to
recommend to others any such particular investment or other opportunity. Any
Trustee may engage or be interested in any financial or other transaction with
the Depositor or any Affiliate of the Depositor, or may act as depository for,
trustee or agent for, or act on any committee or body of holders of, securities
or other obligations of the Depositor or its Affiliates.
SECTION 809. 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 Depositor shall have power to appoint,
and upon the written request of the Property Trustee, the Depositor 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 809. If the
Depositor does not join in such appointment within 15 days after the receipt by
it of a request so to do, or in case a Debenture Event of Default has occurred
and is continuing, the Property Trustee alone shall have power to make such
appointment. Any co-trustee or separate trustee appointed pursuant to this
Section 809 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.
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(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 and delivered
and all rights, powers, duties and obligations hereunder in
respect of the custody of securities, cash and other personal
property held by, or required to be deposited or pledged with,
the Trustees specified hereunder, shall be exercised, solely by
such Trustees and not by such co-trustee or separate trustee.
(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
or by the Property Trustee and such co-trustee or separate
trustee jointly, as shall be provided in the instrument
appointing such co-trustee or separate trustee, except to the
extent that under any law of any jurisdiction in which any
articular 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 809,
and, in case a Debenture Event of Default has occurred and is
continuing, the Property Trustee shall have the 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 809.
(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 810. RESIGNATION AND REMOVAL; APPOINTMENT OF SUCCESSOR.
(a) No resignation or removal of any Trustee (the "Relevant Trustee") and
no appointment of a successor Trustee pursuant to this Article VIII shall
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become effective until the acceptance of appointment by the successor Trustee
in accordance with the applicable requirements of Section 811.
(b) Subject to the immediately preceding paragraph, the Relevant Trustee
may resign at any time with respect to the Trust Securities by giving written
notice thereof to the Securityholders. If the instrument of acceptance by the
successor Trustee required by Section 811 shall not have been delivered to the
Relevant Trustee within 30 days after the giving of such notice of resignation,
the Relevant Trustee may petition, at the expense of the Depositor, any court
of competent jurisdiction for the appointment of a successor Relevant Trustee
with respect to the Trust Securities.
(c) Unless a Debenture Event of Default shall have occurred and be
continuing, any Trustee may be removed at any time by Act of the Common
Securityholder. If a Debenture Event of Default shall have occurred and be
continuing, the Property Trustee or the Delaware Trustee, or both of them, may
be removed at such time by Act of the Holders of a majority in Liquidation
Amount of the Preferred Securities, delivered to the Relevant Trustee (in its
individual capacity and on behalf of the Trust). An Administrative Trustee may
be removed by the Common Securityholder at any time.
(d) If any Trustee shall resign, be removed or become incapable of acting
as Trustee, or if a vacancy shall occur in the office of any Trustee for any
cause, at a time when no Debenture Event of Default shall have occurred and be
continuing, the Common Securityholder, by Act of the Common Securityholder
delivered to the retiring Trustee, shall promptly appoint a successor Trustee
or Trustees with respect to the Trust Securities and the Trust, and the
successor Trustee shall comply with the applicable requirements of Section 811.
If the Property Trustee or the Delaware Trustee shall resign, be removed or
become incapable of continuing to act as the Property Trustee or the Delaware
Trustee, as the case may be, at a time when a Debenture Event of Default shall
have occurred and is continuing, the Preferred Securityholders, by Act of the
Securityholders of a majority in Liquidation Amount of the Preferred Securities
then Outstanding delivered to the retiring Relevant Trustee, shall promptly
appoint a successor Relevant Trustee or Trustees with respect to the Trust
Securities and the Trust, and such successor Trustee shall comply with the
applicable requirements of Section 811. If an Administrative Trustee shall
resign, be removed or become incapable of acting as Administrative Trustee, at
a time when a Debenture Event of Default shall have occurred and be continuing,
the Common Securityholder, by Act of the Common Securityholder delivered to an
Administrative Trustee, shall promptly appoint a successor Administrative
Trustee or Administrative Trustees with respect to the Trust Securities and the
Trust, and such successor Administrative Trustee or Administrative Trustees
shall comply with the applicable requirements of Section 811. If no successor
Relevant Trustee with respect to the Trust Securities shall have been so
appointed by the Common Securityholder or the Preferred Securityholders and
accepted appointment in the manner required by Section 811, any Securityholder
who has been a Securityholder of Trust Securities on behalf of himself and all
others similarly situated may petition a court of competent jurisdiction for
the appointment of a successor Relevant Trustee with respect to the Trust
Securities.
(e) The Property Trustee shall give notice of each resignation and each
removal of a Trustee and each appointment of a successor Trustee to all
Securityholders in the manner provided in Section 1008 and shall give notice
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to the Depositor. Each notice shall include the name of the successor Relevant
Trustee and the address of its Corporate Trust Office if it is the Property
Trustee.
(f) Notwithstanding the foregoing or any other provision of this trust
Agreement, in the event any Administrative Trustee or a Delaware Trustee who is
a natural person dies or becomes, in the opinion of the Depositor, incompetent
or incapacitated, the vacancy created by such death, incompetence or incapacity
may be filled by (a) the unanimous act of remaining Administrative Trustees if
there are at least two of them; or (b) otherwise by the Depositor (with the
successor in each case being a Person who satisfies the eligibility requirement
for Administrative Trustees set forth in Section 807)
SECTION 811. ACCEPTANCE OF APPOINTMENT BY SUCCESSOR.
(a) In case of the appointment hereunder of a successor Relevant Trustee
with respect to the Trust Securities and the Trust, the retiring Relevant
Trustee and each successor Relevant Trustee with respect to the Trust
Securities shall execute and deliver an instrument hereto wherein each
successor Relevant 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 Relevant Trustee all the rights,
powers, trusts and duties of the retiring Relevant Trustee with respect to the
Trust Securities and the Trust and upon the execution and delivery of such
instrument the resignation or removal of the retiring Relevant Trustee shall
become effective to the extent provided therein and each such successor
Relevant Trustee, without any further act, deed or conveyance, shall become
vested with all the rights, powers, trusts and duties of the retiring Relevant
Trustee with respect to the Trust Securities and the Trust; but, on request of
the Trust or any successor Relevant Trustee such retiring Relevant Trustee
shall duly assign, transfer and deliver to such successor Relevant Trustee all
Trust Property, all proceeds thereof and money held by such retiring Relevant
Trustee hereunder with respect to the Trust Securities and the Trust.
(b) Upon request of any such successor Relevant Trustee, the Trust shall
execute any and all instruments for more fully and certainly vesting in and
confirming to such successor Relevant Trustee all such rights, powers and
trusts referred to in the immediately preceding paragraph, as the case may be.
(c) No successor Relevant Trustee shall accept its appointment unless at
the time of such acceptance such successor Relevant Trustee shall be qualified
and eligible under this Article VIII.
SECTION 812. MERGER, CONVERSION, CONSOLIDATION OR SUCCESSION TO BUSINESS.
Any Person into which the Property Trustee, the Delaware Trustee or any
Administrative 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
corporation succeeding to all or substantially all the corporate trust business
of such Relevant Trustee, shall be the successor of such Relevant Trustee
hereunder, provided such Person shall be otherwise qualified and
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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 813. PREFERENTIAL COLLECTION OF CLAIMS AGAINST DEPOSITOR OR
TRUST.
If and when the Property Trustee or the Delaware Trustee shall be or
become a creditor of the Depositor or the Trust (or any other obligor upon the
Debentures or the Trust Securities), the Property Trustee or the Delaware
Trustee, as the case may be, shall be subject to and shall take all actions
necessary in order to comply with the provisions of the Trust Indenture Act
regarding the collection of claims against the Depositor or Trust (or any such
other obligor)
SECTION 814. REPORTS BY PROPERTY TRUSTEE.
(a) The Property Trustee shall transmit to Securityholders such reports
concerning the Property Trustee, its actions under this Trust Agreement and the
property and funds in its possession as Property Trustee as may be required
pursuant to the Trust Indenture Act at the times and in the manner provided
pursuant thereto.
(b) A copy of each such report shall, at the time of such transmission to
Holders, be filed by the Property Trustee with The Nasdaq Stock Market's
National Market, and each national securities exchange or other organization
upon which the Trust Securities are listed, and also with the Commission and
the Depositor.
SECTION 815. REPORTS TO PROPERTY TRUSTEE.
The Depositor and the Administrative Trustees on behalf of the Trust shall
provide to the Property Trustee such documents, reports and information as
required by Section 314 of the Trust Indenture Act (if any) and the compliance
certificate required by Section 314(a) of the Trust Indenture Act in the form,
in the manner and at the times required by Section 314 of the Trust Indenture
Act.
SECTION 816. EVIDENCE OF COMPLIANCE WITH CONDITIONS PRECEDENT.
Each of the Depositor and the Administrative Trustees on behalf of the
Trust shall provide to the Property Trustee such evidence of compliance with
any conditions precedent, if any, provided for in this Trust Agreement that
relate to any of the matters set forth in Section 314(c) of the Trust Indenture
Act. Any certificate or opinion required to be given by an officer pursuant to
Section 314(c)(1) of the Trust Indenture Act shall be given in the form of an
Officers' Certificate.
SECTION 817. NUMBER OF TRUSTEES.
(a) The number of Trustees shall be five, provided that the Holder of all
of the Common Securities by written instrument may increase or decrease
the number of Administrative Trustees. The Property Trustee may also act as
the Delaware Trustee if the Property Trustee meets the applicable
requirements of the Delaware Trustee.
(b) If a Trustee ceases to hold office for any reason and the number of
Administrative Trustees is not reduced pursuant to Section 817(a), or if the
number of Trustees is increased pursuant to Section 817(a), a vacancy
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shall occur. The vacancy shall be filled with a Trustee appointed in
accordance with Section 810.
(c) The death, resignation, retirement, removal, bankruptcy, incompetence
or incapacity to perform the duties of a Trustee shall not operate to annul the
Trust. Whenever a vacancy in the number of Administrative Trustees shall
occur, until such vacancy is filled by the appointment of an Administrative
Trustee in accordance with Section 810, the Administrative Trustees in office,
regardless of their number (and notwithstanding any other provision of this
Agreement), shall have all the powers granted to the Administrative Trustees
and shall discharge all the duties imposed upon the Administrative Trustees by
this Trust Agreement.
SECTION 818. DELEGATION OF POWER.
(a) Any Administrative Trustee may, by power of attorney consistent with
applicable law, delegate to any other natural person over the age of 21 his or
her power for the purpose of executing any documents contemplated in Section
207(a); and
(b) The Administrative Trustees shall have power to delegate from time to
time to such of their number or to the Depositor the doing of such things and
the execution of such instruments either in the name of the Trust or the names
of the Administrative Trustees or otherwise as the Administrative Trustees may
deem expedient, to the extent such delegation is not prohibited by applicable
law or contrary to the provisions of the Trust, as set forth herein.
SECTION 819. VOTING.
Except as otherwise provided in this Trust Agreement, the consent or
approval of the Administrative Trustees shall require consent or approval by
not less than a majority of the Administrative Trustees, unless there are
only two, in which case both must consent.
ARTICLE IX
TERMINATION, LIQUIDATION AND MERGER
SECTION 901. TERMINATION UPON EXPIRATION DATE.
Unless earlier dissolved, the Trust shall automatically dissolve on -
December 31, 2040 (the "Expiration Date") subject to distribution of the Trust
Property in accordance with Section 904.
SECTION 902. EARLY TERMINATION.
The first to occur of any of the following events is an "Early Termination
Event:"
(a) the occurrence of a Bankruptcy Event in respect of, or the dissolution
or liquidation of, the Depositor;
(b) delivery of written direction to the Property Trustee by the Depositor
at any time (which direction is wholly optional and within the discretion of
the Depositor) to dissolve the Trust and distribute the Debentures to
Securityholders in exchange for the Preferred Securities in accordance with
Section 904;
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(c) the redemption of all of the Preferred Securities in connection with
the redemption of all of the Debentures; and
(d) the entrance of an order for dissolution of the Trust by a court of
competent jurisdiction.
SECTION 903. TERMINATION.
The respective obligations and responsibilities of the Trustees and the
Trust created and continued hereby shall terminate upon the latest to occur of
the following: (a) the distribution by the Property Trustee to Securityholders
upon the liquidation of the Trust pursuant to Section 904, or upon the
redemption of all of the Trust Securities pursuant to Section 402, of all
amounts required to be distributed hereunder upon the final payment of the
Trust Securities; (b) the payment of any expenses owed by the Trust; (c) the
discharge of all administrative duties of the Administrative Trustees,
including the performance of any tax reporting obligations with respect to the
Trust or the Securityholders; and (d) the filing of a Certificate of
Cancellation by the Administrative Trustee under the Delaware Business Trust
Act.
SECTION 904. LIQUIDATION.
(a) If an Early Termination Event specified in clause (a), (b), or (d) of
Section 902 occurs or upon the Expiration Date, the Trust shall be liquidated
by the Trustees as expeditiously as the Trustees determine to be possible by
distributing, after satisfaction of liabilities to creditors of the Trust as
provided by applicable law, to each Securityholder a Like Amount of Debentures,
subject to Section 904(d). Notice of liquidation shall be given by the
Property Trustee by first-class mail, postage prepaid, mailed not later than 30
nor more than 60 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 shall no longer be deemed to be Outstanding and
any Trust Securities Certificates not surrendered for exchange
shall be deemed to represent a Like Amount of Debentures; and
(iii) provide such information with respect to the
mechanics by which Holders may exchange Trust Securities
Certificates for Debentures, or, if Section 904(d) applies,
receive a Liquidation Distribution, as the Administrative
Trustees or the Property Trustee shall deem appropriate.
(b) Except where Section 902(c) or 904(d) applies, in order to effect the
liquidation of the Trust and distribution of the Debentures to Securityholders,
the Property Trustee shall establish a record date for such distribution (which
shall be not more than 45 days prior to the Liquidation Date) and, either
itself acting as exchange agent or through the appointment of a separate
exchange agent, shall establish such procedures as it shall deem appropriate to
effect the distribution of Debentures in exchange for the Outstanding Trust
Securities Certificates.
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(c) Except where Section 902(c) or 904(d) applies, after the Liquidation
Date, (i) the Trust Securities shall no longer be deemed to be outstanding;
(ii) certificates representing a Like Amount of Debentures shall be issued to
holders of Trust Securities Certificates upon surrender of such certificates to
the Administrative Trustees or their agent for exchange; (iii) the Depositor
shall use its reasonable efforts to have the Debentures listed on The Nasdaq
Stock Market's National Market or on such other securities exchange or other
organization as the Preferred Securities are then listed or traded; (iv) any
Trust Securities Certificates not so surrendered for exchange shall be deemed
to represent a Like Amount of Debentures, accruing interest at the rate
provided for in the Debentures from the last Distribution Date on which a
Distribution was made on such Trust Securities Certificates until such
certificates are so surrendered (and until such certificates are so
surrendered, no payments of interest or principal shall be made to holders of
Trust Securities Certificates with respect to such Debentures); and (v) all
rights of Securityholders holding Trust Securities shall cease, except the
right of such Securityholders to receive Debentures upon surrender of Trust
Securities Certificates.
(d) In the event that, notwithstanding the other provisions of this
Section 904, whether because of an order for dissolution entered by a court of
competent jurisdiction or otherwise, distribution of the Debentures in the
manner provided herein is determined by the Property Trustee not to be
practical, the Trust Property shall be liquidated, and the Trust shall be
dissolved, wound-up or terminated, by the Property Trustee in such manner as
the Property Trustee determines. In such event, on the date of the
dissolution, winding-up or other termination of the Trust, Securityholders
shall be entitled to receive out of the assets of the Trust available for
distribution to Securityholders, after satisfaction of liabilities to creditors
of the Trust as provided by applicable law, an amount equal to the 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, winding-up or termination, the Liquidation
Distribution can be paid only in part because the Trust has insufficient assets
available to pay in full the aggregate Liquidation Distribution, then, subject
to the next succeeding sentence, the amounts payable by the Trust on the Trust
Securities shall be paid on a pro rata basis (based upon Liquidation Amounts).
The holder of the Common Securities shall be entitled to receive Liquidation
Distributions upon any such dissolution, winding-up or termination pro rata
(determined as aforesaid) with Holders of Preferred Securities, except that, if
a Debenture Event of Default has occurred and is continuing, the Preferred
Securities shall have a priority over the Common Securities.
SECTION 905. MERGERS, CONSOLIDATIONS, AMALGAMATIONS OR REPLACEMENTS OF
TRUST.
The Trust may not merge with or into, consolidate, amalgamate, or be
replaced by, or convey, transfer or lease its properties and assets
substantially as an entirety to any corporation or other Person, except
pursuant to this Section 905. At the request of the Depositor, with the
consent of the Administrative Trustees and without the consent of the holders
of the Preferred Securities, the Property Trustee or the Delaware Trustee, the
Trust may merge with or into, consolidate, amalgamate, 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,
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<PAGE> 48
that (i) such successor entity either (a) expressly assumes all of the
obligations of the Trust with respect to the Preferred Securities; or (b)
substitutes for the Preferred Securities other securities having substantially
the same terms as the Preferred Securities (the "Successor Securities") so long
as the Successor Securities rank the same as the Preferred Securities rank in
priority with respect to distributions and payments upon liquidation,
redemption and otherwise; (ii) the Depositor expressly appoints a trustee of
such successor entity possessing substantially the same powers and duties as
the Property Trustee as the holder of the Debentures; (iii) the Successor
Securities are listed or traded, or any Successor Securities shall be listed or
traded upon notification of issuance, on any national securities exchange or
other organization on which the Preferred Securities are then listed, if any;
(iv) such merger, consolidation, amalgamation, replacement, conveyance,
transfer or lease does not adversely affect the rights, preferences and
privileges of the holders of the Preferred Securities (including any Successor
Securities) in any material respect; (v) prior to such merger, consolidation,
amalgamation, replacement, conveyance, transfer or lease, the Depositor has
received an Opinion of Counsel to the effect that (a) such merger,
consolidation, amalgamation, replacement, conveyance, transfer or lease does
not adversely affect the rights, preferences and privileges of the holders of
the Preferred 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 shall be required to register as an "investment company" under
the Investment Company Act; and (vi) the Depositor owns all of the Common
Securities of such successor entity and guarantees the obligations of such
successor entity under the Successor Securities at least to the extent provided
by the Guarantee. Notwithstanding the foregoing, the Trust shall not, except
with the consent of holders of 100% in Liquidation Amount of the Preferred
Securities, consolidate, amalgamate, merge with or into, or be replaced by or
convey, transfer or lease its properties and assets substantially as an
entirety to any other Person or permit any other Person to consolidate,
amalgamate, merge with or into, or replace it if such consolidation,
amalgamation, merger or replacement would cause the Trust or the successor
entity to be classified as other than a grantor trust for United States federal
income tax purposes.
ARTICLE X
MISCELLANEOUS PROVISIONS
SECTION 1001. LIMITATION OF RIGHTS OF SECURITYHOLDERS.
The death or incapacity of any Person having an interest, beneficial or
otherwise, in Trust Securities shall not operate to terminate this Trust
Agreement, nor entitle the legal representatives or heirs of such Person or any
Securityholder for such Person to claim an accounting, take any action or bring
any proceeding in any court for a partition or winding-up of the arrangements
contemplated hereby, nor otherwise affect the rights, obligations and
liabilities of the parties hereto or any of them.
SECTION 1002. AMENDMENT.
(a) This Trust Agreement may be amended from time to time by the Trustees
and the Depositor, without the consent of any Securityholders, (i) as provided
in Section 811 with respect to acceptance of appointment by a successor
Trustee; (ii) to cure any ambiguity, correct or supplement any
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<PAGE> 49
provision herein or therein which may be inconsistent with any other provision
herein or therein, or to make any other provisions with respect to matters or
questions arising under this Trust Agreement, that shall not be inconsistent
with the other provisions of this Trust Agreement; (iii) to modify, eliminate
or add to any provisions of this Trust Agreement to such extent as shall be
necessary to ensure that the Trust shall be classified for United States
federal income tax purposes as a grantor trust at all times that any Trust
Securities are outstanding or to ensure that the Trust shall not be required to
register as an "investment company" under the Investment Company Act or (iv) to
reduce or increase the Liquidation Amount per Trust Security and simultaneously
to correspondingly increase or decrease the number of Trust Securities issued
and outstanding solely for the purpose of maintaining the eligibility of the
Preferred Securities for quotation or listing on any national securities
exchange or other organization on which the Preferred Securities are then
quoted or listed (including, if applicable, The Nasdaq Stock Market's National
Market); provided, however, that in the case of clause (ii), such action shall
not adversely affect in any material respect the interests of any
Securityholder and provided further, that in the case of clause (iv), the
aggregate Liquidation Amount of the Trust Securities outstanding upon
completion of any such reduction must be the same as the aggregate Liquidation
Amount of the Trust Securities outstanding immediately prior to such reduction,
and any amendments of this Trust Agreement shall become effective when notice
thereof is given to the Securityholders (or, in the case of an amendment
pursuant to clause (iv), as of the date specified in the notice)
(b) Except as provided in Section 601(c) or Section 1002(c) hereof, any
provision of this Trust Agreement may be amended by the Trustees and the
Depositor (i) with the consent of Trust Securityholders representing not less
than a majority (based upon Liquidation Amounts) of the Trust Securities then
Outstanding; and (ii) upon receipt by the Trustees of an Opinion of Counsel to
the effect that such amendment or the exercise of any power granted to the
Trustees in accordance with such amendment shall not affect the Trust's status
as a grantor trust for United States federal income tax purposes or the Trust's
exemption from status of an "investment company" under the Investment Company
Act.
(c) In addition to and notwithstanding any other provision in this Trust
Agreement, without the consent of each affected Securityholder (such consent
being obtained in accordance with Section 603 or 606 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 Securityholder to
institute suit for the enforcement of any such payment on or after such date;
notwithstanding any other provision herein, without the unanimous consent of
the Securityholders (such consent being obtained in accordance with Section 603
or 606 hereof), this paragraph (c) of this Section 1002 may not be amended.
(d) Notwithstanding any other provisions of this Trust Agreement, no
Trustee shall enter into or consent to any amendment to this Trust Agreement
which would cause the Trust to fail or cease to qualify for the exemption from
status of an "investment company" under the Investment Company Act or to fail
or cease to be classified as a grantor trust for United States federal income
tax purposes
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<PAGE> 50
(e) Notwithstanding anything in this Trust Agreement to the contrary,
without the consent of the Depositor, this Trust Agreement may not be amended
in a manner which imposes any additional obligation on the Depositor.
(f) In the event that any amendment to this Trust Agreement is made, the
Administrative Trustees 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.
SECTION 1003. 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 1004. GOVERNING LAW.
THIS TRUST AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF EACH OF THE
SECURITYHOLDERS, THE TRUST AND THE TRUSTEES WITH RESPECT TO THIS TRUST
AGREEMENT AND THE TRUST SECURITIES SHALL BE CONSTRUED IN ACCORDANCE WITH AND
GOVERNED BY THE LAWS OF THE STATE OF DELAWARE (WITHOUT REGARD TO CONFLICT OF
LAWS PRINCIPLES).
SECTION 1005. 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 which is a Business Day, with the same
force and effect as though made on the date fixed for such payment, and no
distribution shall accumulate thereon for the period after such date.
SECTION 1006. SUCCESSORS.
This Trust Agreement shall be binding upon and shall inure to the benefit
of any successor to the Depositor, the Trust or the Relevant Trustee(s),
including any successor by operation of law. Except in connection with a
consolidation, merger or sale involving the Depositor that is permitted under
Article XII 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 1007. HEADINGS.
The Article and Section headings are for convenience only and shall not
affect the construction of this Trust Agreement.
SECTION 1008. REPORTS, NOTICES AND DEMANDS.
(a) Any report, notice, demand or other communication which by any
provision of this Trust Agreement is required or permitted to be given or
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served to or upon any Securityholder or the Depositor may be given or served in
writing by deposit thereof, first-class postage prepaid, in the United States
mail, hand delivery or facsimile transmission, in each case, addressed, (i) in
the case of a Preferred Securityholder, to such Preferred Securityholder as
such Securityholder's name and address may appear on the Securities Register;
and (ii) in the case of the Common Securityholder or the Depositor, to Capitol
Bancorp Ltd., a Michigan corporation, 200 Washington Square North, Lansing, MI
48933, Attention: Chief Executive Officer, facsimile no.: (517) 374-2576. Any
notice to Preferred Securityholders shall also be given to such owners as have,
within two years preceding the giving of such notice, filed their names and
addresses with the Property Trustee for that purpose. Such notice, demand or
other communication to or upon a Securityholder shall be deemed to have been
sufficiently given or made, for all purposes, upon hand delivery, mailing or
transmission.
(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 Trust, the Property Trustee or the Administrative Trustees shall be given
in writing addressed (until another address is published by the Trust) as
follows: (i) with respect to the Property Trustee to First National Bank of
Chicago, One First National Plaza, Suite 0126, Chicago, IL 60670-0126,
Attention: Corporate Trust Department; (ii) with respect to the Delaware
Trustee, to FIRST CHICAGO DELAWARE, INC., 300 King Street, Wilmington, Delaware
19801, and (iii) with respect to the Administrative Trustees, to them at the
address above for notices to the Depositor, marked "Attention: Administrative
Trustees of CAPITOL TRUST I, c/o Chief Executive Officer, Capitol Bancorp Ltd.,
a Michigan corporation." Such notice, demand or other communication to or upon
the Trust or the Property Trustee shall be deemed to have been sufficiently
given or made only upon actual receipt of the writing by the Trust or the
Property Trustee.
SECTION 1009. AGREEMENT NOT TO PETITION.
Each of the Trustees and the Depositor agree for the benefit of the
Securityholders that, until at least one year and 1 day after the Trust has
been terminated in accordance with Article IX, they shall not file, or join in
the filing of, a petition against the Trust under any bankruptcy, insolvency,
reorganization or other similar law (including, without limitation, the United
States Bankruptcy Code of 1978, as amended) (collectively, "Bankruptcy Laws")
or otherwise join in the commencement of any proceeding against the Trust under
any Bankruptcy Law. In the event the Depositor takes action in violation of
this Section 1009, the Property Trustee agrees, for the benefit of
Securityholders, that at the expense of the Depositor (which expense shall be
paid prior to the filing), it shall file an answer with the bankruptcy court or
otherwise properly contest the filing of such petition by the Depositor against
the Trust or the commencement of such action and raise the defense that the
Depositor has agreed in writing not to take such action and should be stopped
and precluded therefrom. The provisions of this Section 1009 shall survive the
termination of this Trust Agreement.
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SECTION 1010. TRUST INDENTURE ACT; CONFLICT WITH TRUST INDENTURE ACT.
(a) This Trust Agreement is subject to the provisions of the Trust
Indenture Act that are required to be part of this Trust Agreement and shall,
to the extent applicable, be governed by such provisions.
(b) The Property Trustee shall be the only Trustee which is a trustee for
the purposes of the Trust Indenture Act.
(c) If any provision hereof limits, qualifies or conflicts with another
provision hereof which is required to be included in this Trust Agreement by
any of the provisions of the Trust Indenture Act, such required provision shall
control. If any provision of this Trust Agreement modifies or excludes any
provision of the Trust Indenture Act which may be so modified or excluded, the
latter provision shall be deemed to apply to this Trust Agreement as so
modified or to be excluded, as the case may be.
(d) The application of the Trust Indenture Act to this Trust Agreement
shall not affect the nature of the Trust Securities as equity securities
representing undivided beneficial interests in the assets of the Trust.
SECTION 1011. 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 SECURITYHOLDER OR ANY BENEFICIAL OWNER, WITHOUT ANY SIGNATURE
OR FURTHER MANIFESTATION OF ASSENT, SHALL CONSTITUTE THE UNCONDITIONAL
ACCEPTANCE BY THE SECURITYHOLDER AND ALL OTHERS HAVING A BENEFICIAL INTEREST IN
SUCH TRUST SECURITY OF ALL THE TERMS AND PROVISIONS OF THIS TRUST AGREEMENT AND
AGREEMENT TO THE SUBORDINATION PROVISIONS AND OTHER TERMS OF THE GUARANTEE AND
THE INDENTURE, AND SHALL CONSTITUTE THE AGREEMENT OF THE TRUST, SUCH
SECURITYHOLDER AND SUCH OTHERS THAT THE TERMS AND PROVISIONS OF THIS TRUST
AGREEMENT SHALL BE BINDING, OPERATIVE AND EFFECTIVE AS BETWEEN THE TRUST AND
SUCH SECURITYHOLDER AND SUCH OTHERS.
CAPITOL BANCORP LTD., A MICHIGAN CORPORATION
as Depositor
By: /s/ ROBERT C. CARR
----------------------------------------
Name: Robert C. Carr
--------------------------------------
Title: Executive Vice President
-------------------------------------
THE FIRST NATIONAL BANK OF CHICAGO,
as Property Trustee
By: /s/ JOHN PRENDIVILLE
----------------------------------------
Name: John Prendiville
--------------------------------------
Title: Vice President
-------------------------------------
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FIRST CHICAGO DELAWARE, INC.
As Delaware Trustee
By: /s/ JOHN PRENDIVILLE
----------------------------------------
Name: John Prendiville
--------------------------------------
Title: Vice President
-------------------------------------
/s/ JOSEPH D. REID
--------------------------------------------
Joseph D. Reid, as Administrative Trustee
/s/ ROBERT C. CARR
--------------------------------------------
Robert C. Carr, as Administrative Trustee
/s/ LINDA D. PAVONA
--------------------------------------------
Linda D. Pavona, as Administrative Trustee
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<PAGE> 1
EXHIBIT 4.6
PREFERRED SECURITIES GUARANTEE AGREEMENT
BY AND BETWEEN
CAPITOL BANCORP LTD., A MICHIGAN CORPORATION
AND
THE FIRST NATIONAL BANK OF CHICAGO
DATED AS OF December 18, 1997
_____________________________________________________________________________
TABLE OF CONTENTS
ARTICLE I
DEFINITIONS AND INTERPRETATION
Section 1.1. Definitions and Interpretation
ARTICLE II
TRUST INDENTURE ACT
Section 2.1. Trust Indenture Act; Application
Section 2.2. Lists of Holders of Securities
Section 2.3. Reports by Preferred Guarantee Trustee
Section 2.4. Periodic Reports to Preferred Guarantee Trustee
Section 2.5. Evidence of Compliance with Conditions Precedent
Section 2.6. Events of Default; Waiver
Section 2.7. Event of Default; Notice
Section 2.8. Conflicting Interests
<PAGE> 2
ARTICLE III
POWERS, DUTIES AND RIGHTS OF PREFERRED GUARANTEE TRUSTEE
Section 3.1. Powers and Duties of Preferred Guarantee Trustee
Section 3.2. Certain Rights of Preferred Guarantee Trustee
Section 3.3. Not Responsible for Recitals or Issuance of Guarantee
ARTICLE IV
PREFERRED GUARANTEE TRUSTEE
Section 4.1. Preferred Guarantee Trustee; Eligibility
Section 4.2. Appointment, Removal and Resignation of Preferred
Guarantee Trustee
ARTICLE V
GUARANTEE
Section 5.1. Guarantee
Section 5.2. Waiver of Notice and Demand
Section 5.3. Obligations not Affected
Section 5.4. Rights of Holders
Section 5.5. Guarantee of Payment.
Section 5.6. Subrogation.
Section 5.7. Independent Obligations
ARTICLE VI
LIMITATION OF TRANSACTIONS; SUBORDINATION
Section 6.1. Limitation of Transactions
Section 6.2. Ranking
ARTICLE VII
TERMINATION
Section 7.1. Termination
ARTICLE VIII
INDEMNIFICATION
Section 8.1. Exculpation
Section 8.2. Indemnification
ARTICLE IX
MISCELLANEOUS
Section 9.1. Successors and Assigns
Section 9.2. Amendments
Section 9.3. Notices
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Section 9.4. Benefit
Section 9.5. Governing Law
CROSS REFERENCE TABLE
Section of Trust Section of
Indenture Act of Guarantee
1939 as amended Agreement
---------------- ----------
310(a) 4.1(a)
310(b) 4.1(c), 2.8
310(c) Not Applicable
311(a) 2.2(b)
311(b) 2.2(b)
311(c) Not Applicable
312(a) 2.2(a)
312(b) 2.2(b)
313 2.3
314(a) 2.4
314(b) Not Applicable
314(c) 2.5
314(d) Not Applicable
314(e) 1.1, 2.5, 3.2
314(f) 2.1, 3.2
315(a) 3.1(d)
315(b) 2.7
315(c) 3.1
315(d) 3.1(d)
316(a) 1.1, 2.6, 5.4
316(b) 5.3
317(a) 3.1
317(b) Not Applicable
318(a) 2.1(a)
318(b) 2.1
318(c) 2.1(b)
Note: This Cross-Reference Table does not constitute part of this
Agreement and shall not affect the interpretation of any of its
terms or provisions.
3
<PAGE> 4
PREFERRED SECURITIES GUARANTEE AGREEMENT
THIS PREFERRED SECURITIES GUARANTEE AGREEMENT (this "Preferred Securities
Guarantee"), dated as of December 18, 1997 is executed and delivered by
CAPITOL BANCORP LTD., a Michigan corporation, (the "Guarantor"), and THE FIRST
NATIONAL BANK OF CHICAGO, a national banking association, as trustee (the
"Preferred Guarantee Trustee"), for the benefit of the Holders (as defined
herein) from time to time of the Preferred Securities (as defined herein) of
CAPITOL TRUST I, a Delaware statutory business trust (the "Trust").
RECITALS
WHEREAS, pursuant to an Amended and Restated Trust Agreement (the "Trust
Agreement"), dated as of December 18, 1997, among the trustees of the Trust
named therein, the Guarantor, as depositor, and the holders from time to time
of undivided beneficial interests in the assets of the Trust, the Trust is
issuing on the date hereof up to 2,530,000 preferred securities, having an
aggregate liquidation amount of $25,300,000, designated the 8.50% Cumulative
Trust Preferred Securities (the "Preferred Securities");
WHEREAS, as an incentive for the Holders to purchase the Preferred
Securities, the Guarantor desires irrevocably and unconditionally to agree, to
the extent set forth in this Preferred Securities Guarantee, to pay to the
Holders of the Preferred Securities the Guarantee Payments (as defined herein)
and to make certain other payments on the terms and conditions set forth
herein.
NOW, THEREFORE, in consideration of the purchase by each Holder of
Preferred Securities, which purchase the Guarantor hereby agrees shall benefit
the Guarantor, the Guarantor executes and delivers this Preferred Securities
Guarantee for the benefit of the Holders.
ARTICLE I
DEFINITIONS AND INTERPRETATION
SECTION 1.1. DEFINITIONS AND INTERPRETATION.
In this Preferred Securities Guarantee, unless the context otherwise
requires:
(a) capitalized terms used in this Preferred Securities Guarantee but not
defined in the preamble above have the respective meanings assigned to them in
this Section 1.1;
(b) terms defined in the Trust Agreement as at the date of execution of
this Preferred Securities Guarantee have the same meaning when used in this
Preferred Securities Guarantee;
(c) a term defined anywhere in this Preferred Securities Guarantee has the
same meaning throughout;
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<PAGE> 5
(d) all references to "the Preferred Securities Guarantee" or "this
Preferred Securities Guarantee" are to this Preferred Securities Guarantee as
modified, supplemented or amended from time to time;
(e) all references in this Preferred Securities Guarantee to Articles and
Sections are to Articles and Sections of this Preferred Securities Guarantee,
unless otherwise specified;
(f) a term defined in the Trust Indenture Act has the same meaning when
used in this Preferred Securities Guarantee, unless otherwise defined in this
Preferred Securities Guarantee or unless the context otherwise requires; and
(g) a reference to the singular includes the plural and vice versa.
"Affiliate" has the same meaning as given to that term in Rule 405 of the
Securities Act of 1933, as amended, or any successor rule thereunder.
"Business Day" means any day other than a day on which federal or state
banking institutions in New York, New York are authorized or required by law,
executive order or regulation to close or a day on which the Corporate Trust
Office of the Preferred Guarantee Trustee is closed for business.
"Corporate Trust Office" means the office of the Preferred Guarantee
Trustee at which the corporate trust business of the Preferred Guarantee
Trustee shall, at any particular time, be principally administered, which
office at the date of execution of this Preferred Securities Guarantee is
located at One First National Plaza, Ste. 0126, Chicago, Illinois, 60670-0126.
"Covered Person" means any Holder or beneficial owner of
Preferred Securities.
"Debentures" means the 8.50% Subordinated Debentures due December 31,
2027, of the Debenture Issuer held by the Property Trustee of the Trust.
"Debenture Issuer" means the Guarantor.
"Event of Default" means a default by the Guarantor on any of its payment
or other obligations under this Preferred Securities Guarantee.
"Guarantor" means Capitol Bancorp Ltd., a Michigan corporation
"Guarantee Payments" means the following payments or distributions,
without duplication, with respect to the Preferred Securities, to the extent
not paid or made by the Trust: (i) any accrued and unpaid Distributions that
are required to be paid on such Preferred Securities, to the extent the Trust
shall have funds available therefor, (ii) the redemption price, including all
accrued and unpaid Distributions to the date of redemption (the "Redemption
Price"), to the extent the Trust has funds available therefor, with respect to
any Preferred Securities called for redemption by the Trust, and (iii) upon a
voluntary or involuntary dissolution, winding-up or termination of the Trust
(other than in connection with the distribution of Debentures to the Holders in
exchange for Preferred Securities as provided in the Trust Agreement), the
lesser of (a) the aggregate of the Liquidation Amount and all accrued and
unpaid Distributions on the Preferred Securities to the date of payment, to the
extent the Trust shall have funds available therefor (the
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"Liquidation Distribution"), and (b) the amount of assets of the Trust
remaining available for distribution to Holders in liquidation of the Trust.
"Holder" shall mean any holder, as registered on the books and records of
the Trust, of any Preferred Securities; provided, however, that, in determining
whether the holders of the requisite percentage of Preferred Securities have
given any request, notice, consent or waiver hereunder,"Holder" shall not
include the Guarantor or any Affiliate of the Guarantor. "Indemnified Person"
means the Preferred Guarantee Trustee, any Affiliate of the Preferred Guarantee
Trustee, or any officers, directors, shareholders, members, partners,
employees, representatives, nominees, custodians or agents of the Preferred
Guarantee Trustee.
"Indemnified Person" means the Preferred Guarantee Trustee (as hereafter
defined) and its offers, employees, successor and assigns.
"Indenture" means the Indenture dated as of December 18, 1997 among the
Debenture Issuer and The First National Bank of Chicago, as trustee, and any
indenture supplemental thereto pursuant to, which ----% Subordinated Debentures
of the Debenture Issuer are to be issued to the Property Trustee of the Trust.
"Liquidation Distribution" has the meaning provided therefor in the
definition of Guarantee Payments.
"List of Holders" has the meaning set forth in Section 2.2 of this
Preferred Securities Guarantee.
"Majority in Liquidation Amount of the Preferred Securities" means the
holders of more than 50% of the Liquidation Amount (including the stated amount
that would be paid on redemption, liquidation or otherwise, plus accrued and
unpaid Distributions to the date upon which the voting percentages are
determined) of all of the Preferred Securities.
"Officer's Certificate" means, with respect to any Person, a certificate
signed by an authorized officer of such Person. Any Officer's Certificate
delivered with respect to compliance with a condition or covenant provided for
in this Preferred Securities Guarantee shall include:
(a) a statement that each officer signing the Officer's Certificate has
read the covenant or condition and the definition relating thereto;
(b) a brief statement of the nature and scope of the examination or
investigation undertaken by each officer in rendering the Officer's Certificate;
(c) a statement that each such officer has made such examination or
investigation as, in such officer's opinion, is necessary to enable such
officer to express an informed opinion as to whether or not such covenant or
condition has been complied with; and
(d) a statement as to whether, in the opinion of each such officer, such
condition or covenant has been complied with.
"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.
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"Preferred Guarantee Trustee" means The First National Bank of Chicago
Company, until a Successor Preferred Guarantee Trustee has been appointed and
has accepted such appointment pursuant to the terms of this Preferred
Securities Guarantee and thereafter means each such Successor
Preferred Guarantee Trustee.
"Redemption Price" has the meaning provided therefor in the definition of
Guarantee Payments.
"Responsible Officer" means, with respect to the Preferred Guarantee
Trustee, any officer within the Corporate Trust Office of the Preferred
Guarantee Trustee, including any vice-president, any assistant vice-president,
any assistant secretary, the treasurer, any assistant treasurer or other
officer of the Corporate Trust Office of the Preferred Guarantee Trustee
customarily performing functions similar to those performed by any of the above
designated officers and also means, with respect to a particular corporate
trust matter, any other officer to whom such matter is referred because of that
officer's knowledge of and familiarity with the particular subject.
"Successor Preferred Guarantee Trustee" means a successor Preferred
Guarantee Trustee possessing the qualifications to act as Preferred Guarantee
Trustee under Section 4.1.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as amended,
as in force at the date as of which this instrument was executed; provided,
however, that in the event the Trust Indenture Act of 1939, as amended, is
amended after such date, "Trust Indenture Act" means, to the extent required by
any such amendment, the Trust Indenture Act of 1939 as so amended.
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1. TRUST INDENTURE ACT; APPLICATION.
(a) This Preferred Securities Guarantee is subject to the provisions of the
Trust Indenture Act that are required to be part of this Preferred Securities
Guarantee and shall, to the extent applicable, be governed by such provisions.
(b) If and to the extent that any provision of this Preferred Securities
Guarantee limits, qualifies or conflicts with the duties imposed by Section 310
to 317, inclusive, of the Trust Indenture Act, such imposed duties shall
control.
SECTION 2.2. LISTS OF HOLDERS OF SECURITIES.
(a) In the event the Preferred Guarantee Trustee is not also the
Securities Registrar, the Guarantor shall provide the Preferred Guarantee
Trustee with a list, in such form as the Preferred Guarantee Trustee may
reasonably require, of the names and addresses of the Holders of the Preferred
Securities (the "List of Holders") as of such date, (i) within 1 Business Day
after January 1 and June 30 of each year, and (ii) at any other time within 30
days of receipt by the Guarantor of a written request for a List of Holders as
of a date no more than 15 days before such List of Holders is given to the
Preferred Guarantee Trustee; provided, that the Guarantor
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<PAGE> 8
shall not be obligated to provide such List of Holders at any time the List of
Holders does not differ from the most recent List of Holders given to the
Preferred Guarantee Trustee by the Guarantor. The Preferred Guarantee Trustee
may destroy any List of Holders previously given to it on receipt of a new List
of Holders.
(b) The Preferred Guarantee Trustee shall comply with its obligations under
Sections 311(a), 311(b) and Section 312(b) of the Trust Indenture Act.
SECTION 2.3. REPORTS BY PREFERRED GUARANTEE TRUSTEE.
On or before July 15 of each year, the Preferred Guarantee Trustee shall
provide to the Holders of the Preferred Securities such reports as are required
by Section 313 of the Trust Indenture Act, if any, in the form and in the
manner provided by Section 313 of the Trust Indenture Act. The Preferred
Guarantee Trustee shall also comply with the requirements of Section 313(d) of
the Trust Indenture Act.
SECTION 2.4. PERIODIC REPORTS TO PREFERRED GUARANTEE TRUSTEE.
The Guarantor shall provide to the Preferred Guarantee Trustee such
documents, reports and information as required by Section 314 (if any) and the
compliance certificate required by Section 314 of the Trust Indenture Act in
the form, in the manner and at the times required by Section 314 of the Trust
Indenture Act.
SECTION 2.5. EVIDENCE OF COMPLIANCE WITH CONDITIONS PRECEDENT.
The Guarantor shall provide to the Preferred Guarantee Trustee such evidence of
compliance with any conditions precedent, if any, provided for in this
Preferred Securities 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 Preferred Securities
may, by vote, on behalf of the Holders of all of the Preferred Securities,
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
Preferred Securities Guarantee, but no such waiver shall extend to any
subsequent or other default or Event of Default or impair any right consequent
thereon.
SECTION 2.7. EVENT OF DEFAULT; NOTICE.
(a) The Preferred Guarantee Trustee shall, within 90 days after the
occurrence of an Event of Default actually known to a Responsible Officer of
the Preferred Guarantee Trustee, transmit by mail, first class postage
prepaid, to the Holders of the Preferred Securities, notices of all such Events
of Default unless such defaults have been cured before the giving of such
notice; provided, that the Preferred Guarantee Trustee shall be protected in
withholding such notice if and so long as a Responsible Officer of the
Preferred Guarantee Trustee in good faith determines that the withholding of
such notice is in the interests of the Holders of the Preferred Securities.
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(b) The Preferred Guarantee Trustee shall not be deemed to have knowledge
of any Event of Default unless the Preferred Guarantee Trustee shall have
received written notice, or of which a Responsible Officer of the Preferred
Guarantee Trustee charged with the administration of the Trust Agreement shall
have obtained actual knowledge.
SECTION 2.8. CONFLICTING INTERESTS.
The Trust Agreement shall be deemed to be specifically described in this
Preferred Securities 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 PREFERRED GUARANTEE TRUSTEE
SECTION 3.1. POWERS AND DUTIES OF PREFERRED GUARANTEE TRUSTEE.
(a) This Preferred Securities Guarantee shall be held by the Preferred
Guarantee Trustee for the benefit of the Holders of the Preferred Securities,
and the Preferred Guarantee Trustee shall not transfer this Preferred
Securities Guarantee to any Person except a Holder of Preferred Securities
exercising his or her rights pursuant to Section 5.4(b) or to a Successor
Preferred Guarantee Trustee on acceptance by such Successor Preferred Guarantee
Trustee of its appointment to act as Successor Preferred Guarantee Trustee.
The right, title and interest of the Preferred Guarantee Trustee shall
automatically vest in any Successor Preferred Guarantee Trustee, 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 Preferred Guarantee Trustee.
(b) If an Event of Default actually known to a Responsible Officer of the
Preferred Guarantee Trustee has occurred and is continuing, the Preferred
Guarantee Trustee shall enforce this Preferred Securities Guarantee for the
benefit of the Holders of the Preferred Securities.
(c) The Preferred Guarantee Trustee, before the occurrence of any Event of
Default and after the curing of all Events of Default that may have occurred,
shall undertake to perform only such duties as are specifically set forth in
this Preferred Securities Guarantee, and no implied covenants shall be read
into this Preferred Securities Guarantee against the Preferred Guarantee
Trustee. In case an Event of Default has occurred (that has not been cured or
waived pursuant to Section 2.6) and is actually known to a Responsible Officer
of the Preferred Guarantee Trustee, the Preferred Guarantee Trustee shall
exercise such of the rights and powers vested in it by this Preferred
Securities 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 Preferred Securities Guarantee shall be construed
to relieve the Preferred Guarantee Trustee from liability for its own negligent
action, its own negligent failure to act, or its own willful misconduct, except
that:
(i) prior to the occurrence of any Event of Default and after the
curing or waiving of all such Events of Default that may have occurred:
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(A) the duties and obligations of the Preferred Guarantee
Trustee shall be determined solely by the express provisions of this Preferred
Securities Guarantee, and the Preferred Guarantee Trustee shall not be liable
except for the performance of such duties and obligations as are specifically
set forth in this Preferred Securities Guarantee, and no implied covenants or
obligations shall be read into this Preferred Securities Guarantee against the
Preferred Guarantee Trustee; and
(B) in the absence of bad faith on the part of the Preferred
Guarantee Trustee, the Preferred 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 Preferred Guarantee
Trustee and conforming to the requirements of this Preferred Securities
Guarantee; but in the case of any such certificates or opinions that by any
provision hereof are specifically required to be furnished to the Preferred
Guarantee Trustee, the Preferred Guarantee Trustee shall be under a duty to
examine the same to determine whether or not they conform to the requirements
of this Preferred Securities Guarantee;
(ii) the Preferred Guarantee Trustee shall not be liable for any error
of judgment made in good faith by a Responsible Officer of the Preferred
Guarantee Trustee, unless it shall be proved that the Preferred Guarantee
Trustee was negligent in ascertaining the pertinent facts upon which such
judgment was made;
(iii) the Preferred Guarantee Trustee shall not be liable with respect
to any action taken or omitted to be taken by it in good faith in accordance
with the direction of the Holders of not less than a Majority in liquidation
amount of the Preferred Securities relating to the time, method and place of
conducting any proceeding for any remedy available to the Preferred Guarantee
Trustee, or exercising any trust or power conferred upon the Preferred
Guarantee Trustee under this Preferred Securities Guarantee; and
(iv) no provision of this Preferred Securities Guarantee shall require
the Preferred 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 Preferred Guarantee
Trustee shall have reasonable grounds for believing that the repayment of such
funds or liability is not reasonably assured to it under the terms of this
Preferred Securities Guarantee or indemnity, reasonably satisfactory to the
Preferred Guarantee Trustee, against such risk or liability is not reasonably
assured to it.
SECTION 3.2. CERTAIN RIGHTS OF PREFERRED GUARANTEE TRUSTEE.
(a) Subject to the provisions of Section 3.1:
(i) the Preferred 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 believed by it to be genuine and to
have been signed, sent or presented by the proper party or parties;
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(ii) any direction or act of the Guarantor contemplated by this
Preferred Securities Guarantee shall be sufficiently evidenced by an Officers'
Certificate;
(iii) whenever, in the administration of this Preferred Securities
Guarantee, the Preferred Guarantee Trustee shall deem it desirable that a
matter be proved or established before taking, suffering or omitting any action
hereunder, the Preferred Guarantee Trustee (unless other evidence is herein
specifically prescribed) may, in the absence of bad faith on its part, request
and conclusively rely upon an Officers' Certificate which, upon receipt of such
request, shall be promptly delivered by the Guarantor;
(iv) the Preferred Guarantee Trustee shall have no duty to see
to any recording, filing or registration of any instrument (or any rerecording,
refiling or registration thereof);
(v) the Preferred Guarantee Trustee may consult with counsel,
and the written advice or opinion of such counsel with respect to legal
matters shall be full and complete authorization and protection in respect of
any action taken, suffered or omitted by it hereunder in good faith and in
accordance with such advice or opinion. Such counsel may be counsel to the
Guarantor or any of its Affiliates and may include any of its employees. The
Preferred Guarantee Trustee shall have the right at any time to seek
instructions concerning the administration of this Preferred Securities
Guarantee from any court of competent jurisdiction;
(vi) the Preferred Guarantee Trustee shall be under no obligation
to exercise any of the rights or powers vested in it by this Preferred
Securities Guarantee at the request or direction of any Holder, unless such
Holder shall have provided to the Preferred Guarantee Trustee such security and
indemnity, reasonably satisfactory to the Preferred Guarantee Trustee, against
the costs, expenses (including attorneys' fees and expenses and the expenses of
the Preferred Guarantee Trustee's agents, nominees or custodians) and
liabilities that might be incurred by it in complying with such request or
direction, including such reasonable advances as may be requested by the
Preferred Guarantee Trustee; provided that, nothing contained in this Section
3.2(a)(vi) shall be taken to relieve the Preferred Guarantee Trustee, upon the
occurrence of an Event of Default, of its obligation to exercise the rights and
powers vested in it by this Preferred Securities Guarantee;
(vii) the Preferred 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 Preferred Guarantee Trustee,
in its discretion, may make such further inquiry or investigation into such
facts or matters as it may see fit;
(viii) the Preferred Guarantee Trustee may execute any of the
trusts or powers hereunder or perform any duties hereunder either directly or
by or through agents, nominees, custodians or attorneys, and the Preferred
Guarantee Trustee shall not be responsible for any misconduct or negligence on
the part of any agent or attorney appointed with due care by it hereunder;
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(ix) any action taken by the Preferred Guarantee Trustee or its
agents hereunder shall bind the Holders of the Preferred Securities, and the
signature of the Preferred Guarantee Trustee or its agents alone shall be
sufficient and effective to perform any such action. No third party shall be
required to inquire as to the authority of the Preferred Guarantee Trustee to
so act or as to its compliance with any of the terms and provisions of this
Preferred Securities Guarantee, both of which shall be conclusively evidenced
by the Preferred Guarantee Trustee's or its agent's taking such action;
(x) whenever in the administration of this Preferred
Securities Guarantee the Preferred Guarantee Trustee shall deem it desirable to
receive instructions with respect to enforcing any remedy or right or taking
any other action hereunder, the Preferred Guarantee Trustee (i) may request
instructions from the Holders of a Majority in liquidation amount of the
Preferred Securities, (ii) may refrain from enforcing such remedy or right or
taking such other action until such instructions are received, and (iii) shall
be protected in conclusively relying on or acting in accordance with such
instructions.
(b) No provision of this Preferred Securities Guarantee shall be
deemed to impose any duty or obligation on the Preferred 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 Preferred 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 Preferred
Guarantee Trustee shall be construed to be a duty.
SECTION 3.3. NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF GUARANTEE.
The Recitals contained in this Guarantee shall be taken as the statements
of the Guarantor, and the Preferred Guarantee Trustee does not assume any
responsibility for their correctness. The Preferred Guarantee Trustee makes no
representation as to the validity or sufficiency of this Preferred Securities
Guarantee.
ARTICLE IV
PREFERRED GUARANTEE TRUSTEE
SECTION 4.1. PREFERRED GUARANTEE TRUSTEE; ELIGIBILITY.
(a) There shall at all times be a Preferred Guarantee Trustee which
shall:
(i) not be an Affiliate of the Guarantor; and
(ii) be a corporation organized and doing business under the
laws of the United States of America or any State or Territory thereof or of
the District of Columbia, or a corporation or Person permitted by the
Securities and Exchange Commission to act as an institutional trustee under the
Trust Indenture Act, authorized under such laws to exercise corporate trust
powers, having a combined capital and surplus of at least $50,000,000, and
subject to supervision or examination by Federal, State, Territorial or
District of Columbia authority. If such corporation publishes reports of
condition at least annually, pursuant to law or to the requirements of the
supervising or examining authority referred to above, then, for the purposes
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of this Section 4.1(a)(ii), the combined capital and surplus of such
corporation shall be deemed to be its combined capital and surplus as set forth
in its most recent report of condition so published.
(b) If at any time the Preferred Guarantee Trustee shall cease to be
eligible to so act under Section 4.1(a), the Preferred Guarantee Trustee shall
immediately resign in the manner and with the effect set out in Section 4.2(c).
(c) If the Preferred Guarantee Trustee has or shall acquire any
"conflicting interest" within the meaning of Section 310(b) of the Trust
Indenture Act, the Preferred 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 PREFERRED GUARANTEE
TRUSTEE.
(a) Subject to Section 4.2 (b), the Preferred Guarantee Trustee may be
appointed or removed without cause at any time by the Guarantor.
(b) The Preferred Guarantee Trustee shall not be removed in accordance
with Section 4.2(a) until a Successor Preferred Guarantee Trustee has been
appointed and has accepted such appointment by written instrument executed by
such Successor Preferred Guarantee Trustee and delivered to the Guarantor.
(c) The Preferred Guarantee Trustee appointed to office shall hold
office until a Successor Preferred Guarantee Trustee shall have been appointed
or until its removal or resignation. The Preferred Guarantee Trustee may
resign from office (without need for prior or subsequent accounting) by an
instrument in writing executed by the Preferred Guarantee Trustee and delivered
to the Guarantor, which resignation shall not take effect until a Successor
Preferred Guarantee Trustee has been appointed and has accepted such
appointment by instrument in writing executed by such Successor Preferred
Guarantee Trustee and delivered to the Guarantor and the resigning Preferred
Guarantee Trustee.
(d) If no Successor Preferred Guarantee Trustee shall have been
appointed and accepted appointment as provided in this Section 4.2 within 60
days after delivery to the Guarantor of an instrument of resignation, the
resigning Preferred Guarantee Trustee may petition any court of competent
jurisdiction for appointment of a Successor Preferred Guarantee Trustee. Such
court may thereupon, after prescribing such notice, if any, as it may deem
proper, appoint a Successor Preferred Guarantee Trustee.
(e) No Preferred Guarantee Trustee shall be liable for the acts
or omissions to act of any Successor Preferred Guarantee Trustee.
(f) Upon termination of this Preferred Securities Guarantee or
removal or resignation of the Preferred Guarantee Trustee pursuant to this
Section 4.2, the Guarantor shall pay to the Preferred Guarantee Trustee all
amounts accrued to the date of such termination, removal or resignation.
ARTICLE V
GUARANTEE
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SECTION 5.1. GUARANTEE.
The Guarantor irrevocably and unconditionally agrees to pay in full to the
Holders the Guarantee Payments (without duplication of amounts theretofore paid
by the Trust), as and when due, regardless of any defense, right of set-off or
counterclaim that the Trust may have or assert. The Guarantor's obligation to
make a Guarantee Payment may be satisfied by direct payment of the required
amounts by the Guarantor to the Holders or by causing the Trust to pay such
amounts to the Holders.
SECTION 5.2. WAIVER OF NOTICE AND DEMAND.
The Guarantor hereby waives notice of acceptance of this Preferred
Securities Guarantee and of any liability to which it applies or may apply,
presentment, demand for payment, any right to require a proceeding first
against the Trust or any other Person before proceeding against the Guarantor,
protest, notice of nonpayment, notice of dishonor, notice of redemption and all
other notices and demands.
SECTION 5.3. OBLIGATIONS NOT AFFECTED.
The obligations, covenants, agreements and duties of the Guarantor under
this Preferred Securities 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 Trust of any express or implied agreement,
covenant, term or condition relating to the Preferred Securities to be
performed or observed by the Trust;
(b) the extension of time for the payment by the Trust of all or any
portion of the Distributions, Redemption Price, Liquidation Distribution or any
other sums payable under the terms of the Preferred Securities or the extension
of time for the performance of any other obligation under, arising out of, or
in connection with, the Preferred Securities (other than an extension of time
for payment of Distributions, Redemption Price, Liquidation Distribution or
other sum payable that results from the extension of any interest payment
period on the Debentures or any extension of the maturity date of the
Debentures permitted by the Indenture);
(c) any failure, omission, delay or lack of diligence on the part of the
Holders to enforce, assert or exercise any right, privilege, power or remedy
conferred on the Holders pursuant to the terms of the Preferred Securities, or
any action on the part of the Trust granting indulgence or extension of any
kind;
(d) the voluntary or involuntary liquidation, dissolution, sale of any
collateral, receivership, insolvency, bankruptcy, assignment for the benefit of
creditors, reorganization, arrangement, composition or readjustment of debt of,
or other similar proceedings affecting, the Trust or any of the assets of the
Trust;
(e) any invalidity of, or defect or deficiency in, the Preferred
Securities;
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(f) any failure or omission to receive any regulatory approval or consent
required in connection with the Preferred Securities (or the common equity
securities issued by the Trust), including the failure to receive any approval
of the Board of Governors of the Federal Reserve System required for the
redemption of the Preferred Securities;
(g) the settlement or compromise of any obligation guaranteed hereby or
hereby incurred; or
(h) any other circumstance whatsoever that might otherwise constitute a
legal or equitable discharge or defense of a guarantor, it being the intent of
this Section 5.3 that the obligations of the Guarantor hereunder shall be
absolute and unconditional under any and all circumstances.
There shall be no obligation of the Holders to give notice to, or obtain
consent of, the Guarantor with respect to the happening of any of the
foregoing.
SECTION 5.4. RIGHTS OF HOLDERS.
(a) The Holders of a Majority in liquidation amount of the Preferred
Securities have the right to direct the time, method and place of conducting of
any proceeding for any remedy available to the Preferred Guarantee Trustee in
respect of this Preferred Securities Guarantee or exercising any trust or power
conferred upon the Preferred Guarantee Trustee under this Preferred Securities
Guarantee.
(b) Any Holder of Preferred Securities may institute a legal proceeding
directly against the Guarantor to enforce its rights under this Preferred
Securities Guarantee, without first instituting a legal proceeding against the
Trust, the Preferred Guarantee Trustee or any other Person.
SECTION 5.5. GUARANTEE OF PAYMENT.
This Preferred Securities Guarantee creates a guarantee of payment and not
of collection.
SECTION 5.6. SUBROGATION.
The Guarantor shall be subrogated to all (if any) rights of the Holders of
Preferred Securities against the Trust in respect of any amounts paid to such
Holders by the Guarantor under this Preferred Securities Guarantee; provided,
however, that the Guarantor shall not (except to the extent required by
mandatory provisions of law) be entitled to enforce or exercise any right that
it may acquire by way of subrogation or any indemnity, reimbursement or other
agreement, in all cases as a result of payment under this Preferred Securities
Guarantee, if, at the time of any such payment, any amounts are due and unpaid
under this Preferred Securities Guarantee. If any amount shall be paid to the
Guarantor in violation of the preceding sentence, the Guarantor agrees to hold
such amount in trust for the Holders and to pay over such amount to the
Holders.
SECTION 5.7. INDEPENDENT OBLIGATIONS.
The Guarantor acknowledges that its obligations hereunder are independent
of the obligations of the Trust with respect to the Preferred
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Securities, and that the Guarantor shall be liable as principal and as debtor
hereunder to make Guarantee Payments pursuant to the terms of this Preferred
Securities Guarantee notwithstanding the occurrence of any event referred to in
subsections (a) through (h), inclusive, of Section 5.3 hereof.
ARTICLE VI
LIMITATION OF TRANSACTIONS; SUBORDINATION
SECTION 6.1. LIMITATION OF TRANSACTIONS.
So long as any Preferred Securities remain outstanding, if there shall
have occurred an Event of Default under this Preferred Securities Guarantee, an
Event of Default under the Trust Agreement or during an Extended Interest
Payment Period (as defined in the Indenture), then (a) the Guarantor shall not
declare or pay any dividends or distributions on, or redeem, purchase, acquire
or make a liquidation payment with respect to, any of its capital stock (other
than (i) dividends or distributions in common stock of the Guarantor or any
declaration of a non-cash dividend in connection with the implementation of a
shareholders' rights plan, or the issuance of stock under any such plan in the
future, or the redemption or repurchase of any such rights pursuant thereto,
and (ii) purchases of common stock of the Guarantor related to the rights under
any of the Guarantor's benefit plans for its directors, officers or employees),
(b) the Guarantor shall not make any payment of principal or interest on or
repay, repurchase or redeem any debt securities issued by the Guarantor which
rank pari passu with or junior to the Debentures and (c) the Guarantor shall
not redeem, purchase or acquire less than all of the Outstanding Debentures or
any of the Preferred Securities.
SECTION 6.2 RANKING.
This Preferred Securities Guarantee will constitute an unsecured
obligation of the Guarantor and will rank (i) subordinate and junior in right
of payment to all other liabilities of the Guarantor, (ii) pari passu with the
most senior preferred securities or preference stock now or hereafter issued by
the Guarantor and with any guarantee now or hereafter entered into by the
Guarantor in respect of any preferred securities or preference stock of any
Affiliate of the Guarantor, and (iii) senior to the Guarantor's common stock.
ARTICLE VII
TERMINATION
SECTION 7.1. TERMINATION.
This Preferred Securities Guarantee shall terminate upon (i) full payment
of the Redemption Price of all Preferred Securities, (ii) full payment of the
amounts payable in accordance with the Trust Agreement upon liquidation of the
Trust, or (iii) distribution of the Debentures to the Holders of the Preferred
Securities. Notwithstanding the foregoing, this Preferred Securities Guarantee
shall continue to be effective or shall be reinstated, as the case may be, if
at any time any Holder of Preferred Securities must restore payment of any sums
paid under the Preferred Securities or under this Preferred Securities
Guarantee.
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ARTICLE VIII
INDEMNIFICATION
SECTION 8.1. EXCULPATION.
(a) No Indemnified Person shall be liable, responsible or accountable in
damages or otherwise to the Guarantor or any Covered Person for any loss,
damage or claim incurred by reason of any act or omission performed or omitted
by such Indemnified Person in good faith in accordance with this Preferred
Securities Guarantee and in a manner that such Indemnified Person reasonably
believed to be within the scope of the authority conferred on such Indemnified
Person by this Preferred Securities Guarantee or by law, except that an
Indemnified Person shall be liable for any such loss, damage or claim incurred
by reason of such Indemnified Person's negligence or willful misconduct with
respect to such acts or omissions.
(b) An Indemnified Person shall be fully protected in relying in good
faith upon the records of the Guarantor and upon such information, opinions,
reports or statements presented to the Guarantor by any Person as to matters
the Indemnified Person reasonably believes are within such other Person's
professional or expert competence and who has been selected with reasonable
care by or on behalf of the Guarantor, including information, opinions, reports
or statements as to the value and amount of the assets, liabilities, profits,
losses, or any other facts pertinent to the existence and amount of assets from
which Distributions to Holders of Preferred Securities might properly be paid.
SECTION 8.2. INDEMNIFICATION.
The Guarantor agrees to indemnify each Indemnified Person for, and to hold
each Indemnified Person harmless against, any loss, liability or expense
incurred without negligence or bad faith on its part, arising out of or in
connection with the acceptance or administration of the trust or trusts
hereunder, including the costs and expenses (including reasonable legal fees
and expenses) of defending itself against, or investigating, any claim or
liability in connection with the exercise or performance of any of its powers
or duties hereunder. The provisions of this Section 8.2 shall survive the
termination of this Preferred Securities Guarantee or the resignation or
removal of the Preferred Guarantee Trustee.
ARTICLE IX
MISCELLANEOUS
SECTION 9.1. SUCCESSORS AND ASSIGNS.
All guarantees and agreements contained in this Preferred Securities
Guarantee shall bind the successors, assigns, receivers, trustees and
representatives of the Guarantor and shall inure to the benefit of the Holders
of the Preferred Securities then outstanding.
SECTION 9.2. AMENDMENTS.
Except with respect to any changes that do not materially adversely affect
the rights of Holders (in which case no consent of Holders will be required),
this Preferred Securities Guarantee may only be amended with the
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prior approval of the Holders of at least a Majority in liquidation amount of
the Preferred Securities. The provisions of Article VI of the Trust Agreement
with respect to meetings of Holders of the Preferred Securities apply to the
giving of such approval.
SECTION 9.3. NOTICES.
All notices provided for in this Preferred Securities Guarantee shall be
in writing, duly signed by the party giving such notice, and shall be
delivered, telecopied or mailed by registered or certified mail, as follows:
(a) If given to the Preferred Guarantee Trustee, at the Preferred
Guarantee Trustee's mailing address set forth below (or such other address as
the Preferred Guarantee Trustee may give notice of to the Holders of the
Preferred Securities):
The First National Bank of Chicago
One First National Plaza
Suite 0126
Chicago, Illinois 60670-0126
Attention Corporate Trust Dept.
(b) If given to the Guarantor, at the Guarantor's mailing address set
forth below (or such other address as the Guarantor may give notice of to the
Holders of the Preferred Securities):
Capitol Bancorp Ltd.,
200 Washington Square North
Fourth Floor
Lansing, Michigan 48933
Attention: Chief Executive Officer
(c) If given to any Holder of Preferred Securities, at the address set
forth on the books and records of the Trust.
All such notices shall be deemed to have been given when received in
person, telecopied with receipt confirmed, or mailed by first class mail,
postage prepaid except that if a notice or other document is refused delivery
or cannot be delivered because of a changed address of which no notice was
given, such notice or other document shall be deemed to have been delivered on
the date of such refusal or inability to deliver.
SECTION 9.4. BENEFIT.
This Preferred Securities Guarantee is solely for the benefit of the
Holders of the Preferred Securities and, subject to Section 3.1(a), is not
separately transferable from the Preferred Securities.
SECTION 9.5. GOVERNING LAW.
THIS PREFERRED SECURITIES GUARANTEE SHALL BE GOVERNED BY, AND CONSTRUED
AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF MICHIGAN.
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This Preferred Securities Guarantee is executed as of the day and year first
above written.
CAPITOL BANCORP LTD.
as Guarantor
By: /s/ ROBERT C. CARR
------------------------------
Name: Robert C. Carr
----------------------------
Title: Executive Vice President
--------------------------
THE FIRST NATIONAL BANK OF CHICAGO
As Preferred Guarantee Trustee
By: /s/ JOHN PRENDIVILLE
-----------------------------
Name: John Prendiville
----------------------------
Title: Vice President
---------------------------
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EXHIBIT 4.7
AGREEMENT AS TO EXPENSES AND LIABILITIES
AGREEMENT dated as of December 18, 1997, between Capitol Bancorp Ltd.,
a Michigan corporation (the Company), and Capitol Trust I, a Delaware business
trust (the "Trust").
WHEREAS, the Trust intends to issue its common securities (the "Common
Securities") to, and receive Debentures from, the Company and to issue and sell
8.50% Cumulative Trust Preferred Securities (the "Preferred Securities") with
such powers, preferences and special rights and restrictions as are set forth
in the Amended and Restated Trust Agreement of the Trust dated as of
December 18, 1997, as the same may be amended from time to time (the "Trust
Agreement");
WHEREAS, the Company will directly or indirectly own all of the Common
Securities of the Trust and will issue the Debentures;
NOW, THEREFORE, in consideration of the purchase by each holder of the
Preferred Securities, which purchase the Company hereby agrees shall benefit
the Company and which purchase the Company acknowledges will be made in
reliance upon the execution and delivery of this Agreement, the Company,
including in its capacity as holder of the Common Securities, and the Trust
hereby agree as follows:
ARTICLE I
SECTION 1.1. GUARANTEE BY THE COMPANY.
Subject to the terms and conditions hereof, the Company, including in its
capacity as holder of the Common Securities, hereby irrevocably and
unconditionally guarantees to each person or entity to whom the Trust is now or
hereafter becomes indebted or liable (the "Beneficiaries") the full payment
when and as due, of any and all Obligations (as hereinafter defined) to such
Beneficiaries. As used herein, "Obligations" means any costs, expenses or
liabilities of the Trust other than obligations of the Trust to pay to holders
of any Preferred Securities or other similar interests in the Trust the amounts
due such holders pursuant to the terms of the Preferred Securities or such
other similar interests, as the case may be. This Agreement is intended to be
for the benefit of, and to be enforceable by, all such Beneficiaries, whether
or not such Beneficiaries have received notice hereof.
SECTION 1.2. TERM OF AGREEMENT.
This Agreement shall terminate and be of no further force and effect upon
the later of (a) the date on which full payment has been made of all amounts
payable to all holders of all the Preferred Securities (whether upon
redemption, liquidation, exchange or otherwise) and (b) the date on which there
are no Beneficiaries remaining; provided, however, that this Agreement shall
continue to be effective or shall be reinstated, as the case may be, if at any
<PAGE> 2
time any holder of Preferred Securities or any Beneficiary must restore payment
of any sums paid under the Preferred Securities, under any obligation, under
the Guarantee Agreement dated the date hereof by the Company and The First
National Bank of Chicago as guarantee trustee or under this Agreement for any
reason whatsoever. This Agreement is continuing, irrevocable, unconditional
and absolute.
SECTION 1.3. WAIVER OF NOTICE.
The Company hereby waives notice of acceptance of this Agreement and of
any obligation to which it applies or may apply, and the Company hereby waives
presentment, demand for payment, protest, notice of nonpayment, notice of
dishonor, notice of redemption and all other notices and demands.
SECTION 1.4. NO IMPAIRMENT.
The obligations, covenants, agreements and duties of the Company under
this 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 extension of time for the payment by the Trust of all or any
portion of the obligations or for the performance of any other obligation
under, arising out of, or in connection with, the obligations;
(b) any failure, omission, delay or lack of diligence on the part of the
Beneficiaries to enforce, assert or exercise any right, privilege, power or
remedy conferred on the Beneficiaries with respect to the obligations or any
action on the part of the Trust granting indulgence or extension of any kind;
or
(c) the voluntary or involuntary liquidation, dissolution, sale of any
collateral, receivership, insolvency, bankruptcy, assignment for the benefit of
creditors, reorganization, arrangement composition or readjustment of debt of,
or other similar proceedings affecting, the Trust or any of the assets of the
Trust.
There shall be no obligation of the Beneficiaries to give notice to, or obtain
the consent of, the Company with respect to the happening of any of the
foregoing.
SECTION 1.5. ENFORCEMENT.
A Beneficiary may enforce this Agreement directly against the Company, and
the Company waives any right or remedy to require that any action be brought
against the Trust or any other person or entity before proceeding against the
Company.
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<PAGE> 3
ARTICLE II
SECTION 2.1. BINDING EFFECT.
All guarantees and agreements contained in this Agreement shall bind the
successors, assigns, receivers, trustees and representatives of the Company and
shall inure to the benefit of the Beneficiaries.
SECTION 2.2. AMENDMENT.
So long as there remains any Beneficiary or any Preferred Securities of
any series are outstanding, this Agreement shall not be modified or amended in
any manner adverse to such Beneficiary or to the holders of the Preferred
Securities.
SECTION 2.3. NOTICES.
Any notice, request or other communication required or permitted to be
given hereunder shall be given in writing by delivering the same by facsimile
transmission (confirmed by mail), telex, or by registered or certified mail,
addressed as follows (and if so given, shall be deemed given when mailed or
upon receipt of an answer back, if sent by telex):
To the Trust:
C/o The First National Bank of Chicago
One First National Plaza, Ste. 0126
Chicago, Illinois 60670-0126
Facsimile No.: 312-407-2747
Attention: Corporate Trust Department
To the Company:
Capitol Bancorp Ltd.
200 Washington Square North
Fourth Floor
Lansing, Michigan 48933
Facsimile No.: 517-374-2576
Attention: Chief Executive Officer
Section 2.4. This agreement shall be governed by and construed and
interpreted in accordance with the laws of the State of Michigan (without
regard to conflict of laws principles).
[SIGNATURES ARE ON THE FOLLOWING PAGE]
-3-
<PAGE> 4
THIS AGREEMENT is executed as of the day and year first above written.
CAPITOL BANCORP LTD.
By: /s/ JOSEPH D. REID
--------------------------------
Name:Joseph D. Reid
Title: Chief Executive Officer
CAPITOL TRUST I
By: /s/ ROBERT C. CARR
---------------------------------
Name: Robert C. Carr
Title: Administrative Trustee
-4-
<PAGE> 1
EXHIBIT 4.8
This Preferred Security is a Global Certificate within the meaning of
the Trust Agreement hereinafter referred to and is registered in the name of
The Depository Trust Company, a New York Corporation ("DEPOSITORY TRUST
COMPANY") or a nominee of DEPOSITORY TRUST COMPANY. This Preferred Security is
exchangeable for Preferred Securities registered in the name of a person other
than DEPOSITORY TRUST COMPANY or its nominee only in the limited circumstances
described in the Trust Agreement (as defined below) and no transfer of this
Preferred Security (other than a transfer of this Preferred Security as a whole
by DEPOSITORY TRUST COMPANY to a nominee of DEPOSITORY TRUST COMPANY or by a
nominee of the DEPOSITORY TRUST COMPANY to DEPOSITORY TRUST COMPANY or another
nominee of DEPOSITORY TRUST COMPANY) may be registered except in limited
circumstances.
Unless this Preferred Security is presented by an authorized
representative of DEPOSITORY TRUST COMPANY to Capitol Trust I or its agent for
registration of transfer, exchange or payment, and any certificate issued is
registered in the name of Cede & Co., or such other name as is requested by an
authorized representative of DEPOSITORY TRUST COMPANY (and any payment hereon
is made to Cede & Co. or to such other entity as is requested by an authorized
representative of DEPOSITORY TRUST COMPANY, ANY TRANSFER, PLEDGE, OR OTHER USE
HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the
registered owner hereof, Cede & Co., has an interest herein.
Certificate Number Number of Preferred Securities
P-1
CUSIP NO. 14064B208
Certificate Evidencing Cumulative Trust Preferred Securities
of
Capitol Trust I
8.50% Cumulative Trust Preferred Securities
(liquidation amount $10 per Preferred Security)
Capitol Trust I, a statutory business trust created under the laws
of the State of Delaware (the "Trust"), hereby certifies that CEDE & CO. (the
"Holder") is the registered owner of two million five hundred and thirty
thousand (2,530,000) preferred securities of the Trust representing undivided
beneficial interests in the assets of the Trust and designated the 8.50%
Cumulative Trust Preferred Securities (liquidation amount $10 per Preferred
Security) (the "Preferred Securities"). The Preferred Securities are
transferable on the books and records of the Trust, in person or by a duly
authorized attorney, upon surrender of this certificate duly endorsed and in
proper form for transfer as provided in Section 504 of the Trust Agreement (as
defined below). The designations, rights, privileges, restrictions,
preferences, and other terms and provisions of the Preferred Securities are set
forth in, and this certificate and the Preferred Securities represented hereby
are issued and
<PAGE> 2
shall in all respects be subject to the terms and provisions of, the Amended
and Restated Trust Agreement of the Trust dated as of December 18, 1997, as the
same may be amended from time to time (the "Trust Agreement"), including the
designation of the terms of Preferred Securities as set forth therein. The
Holder is entitled to the benefits of the Preferred Securities Guarantee
Agreement entered into by Capitol Bancorp Ltd., a Michigan corporation, and The
First National Bank of Chicago, as guarantee trustee, dated as of December 18,
1997 (the "Guarantee"), to the extent provided therein. The Trust will furnish
a copy of the Trust Agreement and the Guarantee to the Holder without charge
upon written request to the Trust at its principal place of business or
registered office.
Upon receipt of this certificate, the Holder is bound by the Trust
Agreement and is entitled to the benefits thereunder.
IN WITNESS WHEREOF, one of the Administrative Trustees of the Trust
has executed this certificate this 18th day of December, 1997.
CAPITOL TRUST I
By /s/ Robert C. Carr
------------------------------
Name: Robert C. Carr
Title: Administrative Trustee
2
