<PAGE>
As filed with the Securities and Exchange Commission on January 15, 1998
Registration No. 333-_____
Registration No. 333-_____-01
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-4
Registration Statement under the Securities Act of 1933
------------------------
<TABLE>
<S> <C>
FIRST KEYSTONE FINANCIAL, INC. FIRST KEYSTONE CAPITAL TRUST I
(EXACT NAME OF REGISTRANT AS SPECIFIED IN (EXACT NAME OF REGISTRANT AS SPECIFIED
ITS CHARTER) IN ITS TRUST AGREEMENT)
PENNSYLVANIA DELAWARE
(STATE OR OTHER JURISDICTION OF (STATE OR OTHER JURISDICTION OF
INCORPORATION OR ORGANIZATION) INCORPORATION OR ORGANIZATION)
------ ------
6712 6719
(PRIMARY STANDARD INDUSTRIAL (PRIMARY STANDARD INDUSTRIAL
CLASSIFICATION CODE NUMBER) CLASSIFICATION CODE NUMBER)
23-0469351 23-2576479
(I.R.S. EMPLOYER (I.R.S. EMPLOYER
IDENTIFICATION NO.) IDENTIFICATION NO.)
</TABLE>
------------------------
22 WEST STATE STREET
MEDIA, PENNSYLVANIA 19063
(610) 565-6210
(Address, including zip code, and telephone number, including area code, of
Registrants' principal executive offices)
------------------------
DONALD S. GUTHRIE
PRESIDENT AND CHIEF EXECUTIVE OFFICER
FIRST KEYSTONE FINANCIAL, INC.
22 WEST STATE STREET
MEDIA, PENNSYLVANIA 19063
(610) 565-6210
(Name, address, including zip code, and telephone number, including area code,
of agents for service)
------------------------
COPIES TO:
RAYMOND A. TIERNAN, ESQ.
PHILIP ROSS BEVAN, ESQ.
ELIAS, MATZ, TIERNAN & HERRICK L.L.P.
734 15TH STREET, N.W.
WASHINGTON, D.C. 20005
------------------------
Approximate Date of Commencement of Proposed Sale to the Public: As soon as
practicable after this Registration Statement becomes effective.
If any of the securities being registered on this Form are to be offered in
connection with the formation of a holding company and there is compliance with
General Instruction G, check the following box. / /
CALCULATION OF REGISTRATION FEE
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<TABLE>
<CAPTION>
AMOUNT PROPOSED MAXIMUM PROPOSED MAXIMUM AMOUNT OF
TITLE OF EACH CLASS OF SECURITIES TO BE OFFERING PRICE AGGREGATE REGISTRATION
TO BE REGISTERED REGISTERED PER UNIT(1) OFFERING PRICE(1) FEE
<S> <C> <C> <C> <C>
Series B Capital Securities of First Keystone
Capital Trust I................................ $16,200,000 100% $16,200,000 $4,779
Series B Junior Subordinated Deferrable Interest
Debentures of First Keystone Financial, Inc. $16,200,000 100% $16,200,000 N/A
First Keystone Financial, Inc. Series B Guarantee
with respect to Series B Capital Securities(3) N/A N/A N/A
Total............................................ $16,200,000(4) 100% $16,200,000(4) $4,779
</TABLE>
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(1) Estimated solely for the purpose of computing the registration fee.
(2) No separate consideration will be received for the Series B Junior
Subordinated Deferrable Interest Debentures of First Keystone Financial,
Inc. (the "Junior Subordinated Debentures") distributed upon any liquidation
of First Keystone Capital Trust I.
(3) No separate consideration will be received for the First Keystone Financial,
Inc. Series B Guarantee.
(4) Such amount represents the liquidation amount of the First Keystone Capital
Trust I Series B Capital Securities to be exchanged hereunder and the
principal amount of Junior Subordinated Debentures that may be distributed
to holders of such Capital Securities upon a liquidation of First Keystone
Capital Trust I.
------------------------
The Registrants hereby amend this registration statement on such date or
dates as may be necessary to delay its effective date until the Registrants
shall file a further amendment which specifically states that this registration
statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until this registration statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
<PAGE>
Information contained herein is subject to completion or amendment. A
Registration Statement relating to these Securities has been filed with the
Securities and Exchange Commission. These Securities may not be sold nor may
offers to buy be accepted prior to the time the Registration Statement becomes
effective. This prospectus shall not constitute an offer to sell or the
solicitation of an offer to buy nor shall there by any sale of these Securities
in any State in which such offer, solicitation or sale would be unlawful prior
to registration or qualification under the securities laws of any such State.
<PAGE>
SUBJECT TO COMPLETION DATED JANUARY 15, 1998
PROSPECTUS
FIRST KEYSTONE CAPITAL TRUST I
OFFER TO EXCHANGE ITS
9.70% SERIES B CAPITAL SECURITIES
(LIQUIDATION AMOUNT $1,000 PER CAPITAL SECURITY)
WHICH HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933
FOR ANY AND ALL OF ITS OUTSTANDING
9.70% SERIES A CAPITAL SECURITIES
(LIQUIDATION AMOUNT $1,000 PER CAPITAL SECURITY)
UNCONDITIONALLY GUARANTEED, AS DESCRIBED HEREIN, BY
FIRST KEYSTONE FINANCIAL, INC.
THE EXCHANGE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M., NEW YORK
CITY TIME, ON MARCH , 1998, UNLESS EXTENDED
--------------------
First Keystone Capital Trust I, a statutory business trust created under the
laws of the State of Delaware (the "Trust"), hereby offers, upon the terms and
subject to the conditions set forth in this Prospectus (as the same may be
amended or supplemented from time to time, the "Prospectus") and in the
accompanying Letter of Transmittal (which together constitute the "Exchange
Offer"), to exchange up to $16,200,000 aggregate Liquidation Amount of its 9.70%
Series B Capital Securities (the "New Capital Securities") which have been
registered under the Securities Act of 1933, as amended (the "Securities Act"),
pursuant to a Registration Statement (as defined herein) of which this
Prospectus constitutes a part, for a like Liquidation Amount of its outstanding
9.70% Series A Capital Securities (the "Old Capital Securities"), of which
$16,200,000 aggregate Liquidation Amount is outstanding. Pursuant to the
Exchange Offer, First Keystone Financial, Inc., a Pennsylvania corporation
("First Keystone" or the "Corporation"), also is offering to exchange (i) its
guarantee of payments of cash distributions and payments on liquidation of the
Trust or redemption of the Old Capital Securities (the "Old Guarantee") for a
like guarantee in respect of the New Capital Securities (the "New Guarantee")
and (ii) all of its outstanding 9.70% Series A Junior Subordinated Deferrable
Interest Debentures due August 15, 2027 (the "Old Junior Subordinated
Debentures") for a like aggregate principal amount of its 9.70% Series B Junior
Subordinated Deferrable Interest Debentures due August 15, 2027 (the "New Junior
Subordinated Debentures"), which New Guarantee and New Junior Subordinated
Debentures also have been registered under the Securities Act. The Old Capital
Securities, the Old Guarantee and the Old Junior Subordinated Debentures are
collectively referred to herein as the "Old Securities" and the New Capital
Securities, the New Guarantee and the New Junior Subordinated Debentures are
collectively referred to herein as the "New Securities."
The terms of the New Securities are identical in all material respects to
the respective terms of the Old Securities, except that (i) the New Securities
have been registered under the Securities Act and therefore will not be subject
to certain restrictions on transfer under federal and state securities laws
applicable to the Old Securities, (ii) the New Capital Securities will not
provide for any increase in the Distribution rate thereon and (iii) the New
Junior Subordinated Debentures will not provide for any increase in the interest
rate thereon. See "Description of New Securities" and "Description of Old
Securities." The New Capital Securities are being offered for exchange in order
to satisfy certain obligations of the Corporation and the Trust under a
Registration Rights Agreement, dated as of August 26, 1997 (the "Registration
Rights Agreement"), among the Corporation, the Trust and the Initial Purchaser
(as defined herein). In the event that the Exchange Offer is consummated, any
Old Capital Securities which remain outstanding after consummation of the
Exchange Offer and the New Capital Securities issued in the Exchange Offer will
vote together as a single class for purposes of determining whether holders of
the requisite percentage in outstanding Liquidation Amount thereof have taken
certain actions or exercised certain rights under the Trust Agreement (as
defined herein).
(Continued on the following page)
This Prospectus and the Letter of Transmittal are first being mailed to all
registered holders of Old Capital Securities as of February , 1998.
See "Risk Factors" commencing on page 18 for certain information that should
be considered by holders in deciding whether to tender Old Capital Securities in
the Exchange Offer.
THESE SECURITIES ARE NOT DEPOSITS OR OTHER OBLIGATIONS OF A BANK AND ARE NOT
INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION
OR ANY OTHER GOVERNMENTAL AGENCY.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR
HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE
SECURITIES COMMISSION PASSED UPON THE ACCURACY OR AD-
EQUACY OF THIS PROSPECTUS. ANY REPRESENTATION
TO THE CONTRARY IS A CRIMINAL OFFENSE.
The date of this Prospectus is , 1998.
<PAGE>
(Continued from the previous page)
The New Capital Securities and the Old Capital Securities represent
undivided beneficial interests in the assets of the Trust. The Corporation is
the owner of all of the beneficial interests represented by common securities of
the Trust (the "Common Securities"). The Trust exists for the sole purpose of
issuing the Capital Securities and the Common Securities and investing the
proceeds thereof in the Junior Subordinated Debentures (as defined herein). The
Junior Subordinated Debentures will mature on August 15, 2027 (the "Stated
Maturity Date"). The Capital Securities will have a preference over the Common
Securities under certain circumstances with respect to cash distributions and
amounts payable on liquidation, redemption or otherwise. See "Description of New
Securities--Description of Capital Securities--Subordination of Common
Securities."
As used herein, (i) the "Indenture" means the Indenture, dated as of August
26, 1997, between the Corporation and The Bank of New York, as Debenture Trustee
(the "Debenture Trustee"), as amended and supplemented from time to time, and
(ii) the "Trust Agreement" means the Amended and Restated Declaration of Trust
relating to the Trust among the Corporation, as Sponsor, The Bank of New York,
as Property Trustee (the "Property Trustee"), The Bank of New York (Delaware),
as the Delaware Trustee (the "Delaware Trustee"), the Administrative Trustees
named therein (collectively, with the Property Trustee and the Delaware Trustee,
the "Issuer Trustees"), and the holders, from time to time, of undivided
beneficial interests in the assets of the Trust, as amended and supplemented
from time to time. In addition, as the context may require, unless otherwise
expressly stated, (i) the term "Capital Securities" means the Old Capital
Securities and the New Capital Securities, (ii) the term "Trust Securities"
means the Capital Securities and the Common Securities, (iii) the term "Junior
Subordinated Debentures" means the Old Junior Subordinated Debentures and the
New Junior Subordinated Debentures and (iv) the term "Guarantee" means the Old
Guarantee and the New Guarantee.
Except as provided below, the Capital Securities will be represented by a
global Capital Security in fully registered form, deposited with a custodian
for and registered in the name of a nominee of The Depository Trust Company
("DTC"). Beneficial interests in the Capital Securities will be shown on, and
transfers thereof will be effected through, records maintained by DTC and its
participants. Beneficial interests in the Capital Securities will trade in
DTC's Same-Day Funds Settlement system and secondary market trading activity
in such interests will therefore settle in immediately available funds. The
Capital Securities will be issued, and may be transferred, only in blocks
having a Liquidation Amount of not less than $100,000 (100 Capital
Securities). See "Description of New Securities -- Description of Capital
Securities -- Form, Denomination, Book-Entry Procedures and Transfer."
Holders of the Capital Securities will be entitled to receive cumulative
cash distributions arising from the payment of interest on the Junior
Subordinated Debentures, accruing from August 26, 1997, and payable
semi-annually in arrears on February 15th and August 15th of each year,
commencing February 15, 1998 at the annual rate of 9.70% of the Liquidation
Amount of $1,000 per Capital Security ("Distributions"). So long as no Debenture
Event of Default (as defined herein) has occurred and is continuing, the
Corporation has the right to defer payments of interest on the Junior
Subordinated Debentures at any time and from time to time for a period not
exceeding 10 consecutive semi-annual periods with respect to each deferral
period (each, an "Extension Period"), provided that no Extension Period may end
on a date other than an Interest Payment Date (as defined herein) or extend
beyond the Stated Maturity Date. Upon the termination of any such Extension
Period and the payment of all amounts then due, the Corporation may elect to
begin a new Extension Period, subject to the requirements set forth in the
Indenture. If and for so long as interest payments on the Junior Subordinated
Debentures are so deferred, Distributions on the Trust Securities also will be
deferred and the Corporation will not be permitted, subject to certain
exceptions described herein, to declare or pay any cash distributions with
respect to the Corporation's capital stock (which includes common and preferred
stock) or to make any payment with respect to debt securities of the Corporation
that rank pari passu with or junior to the Junior Subordinated Debentures.
During an Extension Period, interest on the Junior Subordinated Debentures will
continue to accrue (and the amount of Distributions to which holders of the
Trust Securities are entitled will accumulate) at the rate of 9.70% per annum,
compounded semi-annually, and holders of Trust Securities will be required to
accrue interest income for United States federal income tax purposes. See
"Description of New
2
<PAGE>
Securities--Description of Junior Subordinated Debentures--Option to Extend
Interest Payment Date" and "Certain Federal Income Tax
Considerations--Interest Income and Original Issue Discount."
The Corporation has, through the Guarantee, the guarantee agreement of the
Corporation relating to the Common Securities (the "Common Guarantee"), the
Trust Agreement, the Junior Subordinated Debentures and the Indenture, taken
together, fully, irrevocably and unconditionally guaranteed all of the Trust's
obligations under the Trust Securities. See "Relationship Among the Capital
Securities, the Junior Subordinated Debentures and the Guarantee--Full and
Unconditional Guarantee." The Guarantee and the Common Guarantee guarantee
payments of Distributions and payments on liquidation or redemption of the Trust
Securities, but in each case only to the extent that the Trust holds funds on
hand legally available therefor and has failed to make such payments, as
described herein. See "Description of New Securities--Description of Guarantee."
If the Corporation fails to make a required payment on the Junior Subordinated
Debentures, the Trust will not have sufficient funds to make the related
payments, including Distributions, on the Trust Securities. The Guarantee and
the Common Guarantee do not cover any such payment when the Trust does not have
sufficient funds on hand legally available therefor. In such event, under the
Indenture a holder of Capital Securities may institute a legal proceeding
directly against the Corporation to enforce its rights in respect of such
payment. See "Description of New Securities--Description of Junior Subordinated
Debentures--Enforcement of Certain Rights By Holders of Capital Securities." The
obligations of the Corporation under the Guarantee, the Common Guarantee and the
Junior Subordinated Debentures are unsecured and rank subordinate and junior in
right of payment to all Senior Indebtedness of the Corporation to the extent and
in the manner set forth in the Indenture. See "Description of New
Securities--Description of Junior Subordinated Debentures--Subordination." In
addition, because the Corporation is a holding company, the Junior Subordinated
Debentures and the Guarantee effectively are subordinated to all existing and
future liabilities, including deposits, of the Corporation's subsidiaries.
The Trust Securities are subject to mandatory redemption in a Like Amount
(as defined herein), (i) in whole but not in part, on the Stated Maturity Date
upon repayment of the Junior Subordinated Debentures at a redemption price equal
to the principal amount of, plus accrued interest on, the Junior Subordinated
Debentures (the "Maturity Redemption Price"), (ii) in whole but not in part, at
any time before August 15, 2007 (the "Initial Optional Prepayment Date"),
contemporaneously with the optional redemption of the Junior Subordinated
Debentures, upon the occurrence and continuation of a Special Event (as defined
herein) at a redemption price equal to the Special Event Prepayment Price (as
defined below) (the "Special Event Redemption Price") and (iii) in whole or in
part, on or after the Initial Optional Prepayment Date, contemporaneously with
the optional redemption by the Corporation of the Junior Subordinated
Debentures, at a redemption price equal to the Optional Prepayment Price (as
defined below) (the "Optional Redemption Price"). Any of the Maturity Redemption
Price, the Special Event Redemption Price and the Optional Redemption Price may
be referred to herein as the "Redemption Price." See "Description of New
Securities--Description of Capital Securities--Redemption."
Subject to the Corporation having received any required regulatory approval,
the Junior Subordinated Debentures are prepayable prior to the Stated Maturity
Date at the option of the Corporation (i) on or after the Initial Optional
Prepayment Date, in whole or in part, at a price (the "Optional Prepayment
Price") equal to 104.850% of the principal amount thereof on the Initial
Optional Prepayment Date, declining ratably on each August 15th thereafter to
100% on or after August 15, 2017, plus, in each case, accrued and unpaid
interest thereon to the date of prepayment, or (ii) at any time prior to the
Initial Optional Prepayment Date, in whole but not in part, upon the occurrence
and continuation of a Special Event, at a prepayment price (the "Special Event
Prepayment Price") equal to the Make-Whole Amount (as defined below). The
"Make-Whole Amount" shall be equal to the greater of (a) 100% of the principal
amount of the Junior Subordinated Debentures or (b) the sum, as determined by a
Quotation Agent (as defined herein), of the present values of the remaining
scheduled payments of principal and interest on the Junior Subordinated
Debentures, discounted to the prepayment date on a semi-annual basis (assuming a
360-day year consisting of twelve 30-day months) at the Adjusted Treasury Rate
(as defined herein) plus, in the case of each of clauses (a) and (b), accrued
and unpaid interest thereon to the date of prepayment. Either of the Optional
Prepayment Price or the Special Event
3
<PAGE>
Prepayment Price may be referred to herein as the "Prepayment Price." See
"Description of New Securities -- Description of Junior Subordinated
Debentures -- Optional Prepayment" and "-- Special Event Prepayment."
The Corporation has the right at any time (including without limitation upon
the occurrence of a Tax Event (as defined herein)) to dissolve the Trust and,
after satisfaction of liabilities of creditors of the Trust as required by
applicable law, to cause a Like Amount of the Junior Subordinated Debentures to
be distributed to the holders of the Trust Securities in liquidation of the
Trust, subject to (i) the Corporation having received an opinion of counsel to
the effect that such distribution will not be a taxable event to holders of
Capital Securities and (ii) the receipt of any required regulatory approval.
Unless the Junior Subordinated Debentures are distributed to the holders of the
Trust Securities, in the event of a liquidation of the Trust as described
herein, after satisfaction of liabilities to creditors of the Trust as required
by applicable law, the holders of the Trust Securities generally will be
entitled to receive a Liquidation Amount of $1,000 per Trust Security plus
accumulated and unpaid Distributions thereon to the date of payment. See
"Description of New Securities Description of Capital Securities -- Liquidation
of the Trust and Distribution of Junior Subordinated Debentures."
------------------------
The Trust is making the Exchange Offer of the New Capital Securities in
reliance on the position of the staff of the Division of Corporation Finance
of the Securities and Exchange Commission (the "Commission") as set forth in
certain interpretive letters addressed to third parties in other
transactions. However, neither the Corporation nor the Trust has sought its
own interpretive letter and there can be no assurance that the staff of the
Division of Corporation Finance of the Commission would make a similar
determination with respect to the Exchange Offer as it has in such
interpretive letters to third parties. Based on these interpretations by the
staff of the Division of Corporation Finance of the Commission, and subject
to the two immediately following sentences, the Corporation and the Trust
believe that New Capital Securities issued pursuant to this Exchange Offer in
exchange for Old Capital Securities may be offered for resale, resold and
otherwise transferred by a holder thereof (other than a holder who is a
broker-dealer) without further compliance with the registration and
prospectus delivery requirements of the Securities Act, provided that such
New Capital Securities are acquired in the ordinary course of such holder's
business and that such holder is not participating, and has no arrangement or
understanding with any person to participate, in a distribution (within the
meaning of the Securities Act) of such New Capital Securities. However, any
holder of Old Capital Securities who is an "affiliate" of the Corporation or
the Trust within the meaning of Rule 405 under the Securities Act (an
"Affiliate") or who intends to participate in the Exchange Offer for the
purpose of distributing New Capital Securities, or any broker-dealer who
purchased Old Capital Securities from the Trust to resell pursuant to Rule
144A under the Securities Act ("Rule 144A") or any other available exemption
under the Securities Act, (i) will not be able to rely on the interpretations
of the staff of the Division of Corporation Finance of the Commission set
forth in the above-mentioned interpretive letters, (ii) will not be entitled
to tender such Old Capital Securities in the Exchange Offer and (iii) must
comply with the registration and prospectus delivery requirements of the
Securities Act in connection with any sale or other transfer of such Old
Capital Securities (other than pursuant to the Exchange Offer) unless such
sale is made pursuant to an exemption from such requirements. In addition, as
described below, if any broker-dealer (a "Participating Broker-Dealer") holds
Old Capital Securities acquired for its own account as a result of
market-making or other trading activities and exchanges such Old Capital
Securities for New Capital Securities, then such Participating Broker-Dealer
must deliver a prospectus meeting the requirements of the Securities Act in
connection with any resales of such New Capital Securities.
Each holder of Old Capital Securities who wishes to exchange Old Capital
Securities for New Capital Securities in the Exchange Offer will be required to
represent that (i) it is not an Affiliate of the Corporation or the Trust, (ii)
any New Capital Securities to be received by it are being acquired in the
ordinary course of its business, (iii) it has no arrangement or understanding
with any person to participate in a distribution (within the meaning of the
Securities Act) of such New Capital Securities, and (iv) if such holder is not a
broker-dealer, such holder is not engaged in, and does not intend to engage in,
a distribution (within the meaning of the Securities Act) of such New Capital
Securities. The Letter of Transmittal contains the foregoing representations. In
addition, the Corporation and the Trust may require such holder, as a condition
to such holder's eligibility
4
<PAGE>
to participate in the Exchange Offer, to furnish to the Corporation and the
Trust (or an agent thereof) in writing information as to the number of
"beneficial owners" (within the meaning of Rule 13d-3 under the Securities
Exchange Act of 1934, as amended (the "Exchange Act")) on behalf of whom such
holder holds Old Capital Securities to be exchanged in the Exchange Offer.
Each Participating Broker-Dealer that receives New Capital Securities for its
own account pursuant to the Exchange Offer will be deemed to have
acknowledged by execution of the Letter of Transmittal or delivery of an
Agent's Message (as defined herein) that it acquired the Old Capital
Securities for its own account as the result of market-making activities or
other trading activities and must agree that it will deliver a prospectus
meeting the requirements of the Securities Act in connection with any resale
of such New Capital Securities. The Letter of Transmittal states that by so
acknowledging and by delivering a prospectus, a Participating Broker-Dealer
will not be deemed to admit that it is an "underwriter" within the meaning of
the Securities Act. Based on the position taken by the staff of the Division
of Corporation Finance of the Commission in the interpretive letters referred
to above, the Corporation and the Trust believe that Participating
Broker-Dealers may fulfill their prospectus delivery requirements with
respect to the New Capital Securities received upon exchange of such Old
Capital Securities (other than Old Capital Securities which represent an
unsold allotment from the original sale of the Old Capital Securities) with a
prospectus meeting the requirements of the Securities Act, which may be the
prospectus prepared for an exchange offer so long as it contains a
description of the plan of distribution with respect to the resale of such
New Capital Securities. Accordingly, this Prospectus, as it may be amended or
supplemented from time to time, may be used by a Participating Broker-Dealer
during the period referred to below in connection with resales of New Capital
Securities received in exchange for Old Capital Securities where such Old
Capital Securities were acquired by such Participating Broker-Dealer for its
own account as a result of market-making or other trading activities. Subject
to certain provisions set forth in the Registration Rights Agreement, the
Corporation and the Trust have agreed that this Prospectus, as it may be
amended or supplemented from time to time, may be used by a Participating
Broker-Dealer in connection with resales of such New Capital Securities for a
period ending 90-days after the Expiration Date (as defined herein) (subject
to extension under certain limited circumstances described below) or, if
earlier, when all such New Capital Securities have been disposed of by such
Participating Broker-Dealer. See "Plan of Distribution." However, a
Participating Broker-Dealer who intends to use this Prospectus in connection
with the resale of New Capital Securities received in exchange for Old
Capital Securities pursuant to the Exchange Offer must notify the Corporation
or the Trust, or cause the Corporation or the Trust to be notified, on or
prior to the Expiration Date, that it is a Participating Broker-Dealer. Such
notice may be given in the space provided for that purpose in the Letter of
Transmittal or may be delivered to the Exchange Agent at one of the addresses
set forth herein under "The Exchange Offer--Exchange Agent." Any person,
including any Participating Broker-Dealer, who is an Affiliate of the
Corporation or the Trust may not rely on such interpretive letters and must
comply with the registration and prospectus delivery requirements of the
Securities Act in connection with any resale transaction. See "The Exchange
Offer--Resales of New Capital Securities."
In that regard, each Participating Broker-Dealer who surrenders Old Capital
Securities pursuant to the Exchange Offer will be deemed to have agreed, by
execution of the Letter of Transmittal or delivery of an Agent's Message, that,
upon receipt of notice from the Corporation or the Trust of the occurrence of
any event or the discovery of any fact which makes any statement contained or
incorporated by reference in this Prospectus untrue in any material respect or
which causes this Prospectus to omit to state a material fact necessary in order
to make the statements contained or incorporated by reference herein, in light
of the circumstances under which they were made, not misleading or of the
occurrence of certain other events specified in the Registration Rights
Agreement, such Participating Broker-Dealer will suspend the sale of New Capital
Securities (or the New Guarantee or the New Junior Subordinated Debentures, as
applicable) pursuant to this Prospectus until the Corporation or the Trust has
amended or supplemented this Prospectus to correct such misstatement or omission
and has furnished copies of the amended or supplemented Prospectus to such
Participating Broker-Dealer or the Corporation or the Trust has given notice
that the sale of the New Capital Securities (or the New Guarantee or the New
Junior Subordinated Debentures, as applicable) may be resumed, as the case may
be. If the Corporation or the Trust gives such notice to suspend the sale of the
New Capital Securities (or the New Guarantee or the New Junior Subordinated
Debentures, as applicable), it shall extend the 90-day period referred to above
during which Participating Broker-Dealers are entitled to use this Prospectus in
connection with the resale of New Capital Securities by the number of days
during the period from and including the date of the
5
<PAGE>
giving of such notice to and including the date when Participating
Broker-Dealers shall have received copies of the amended or supplemented
Prospectus necessary to permit resales of the New Capital Securities or to
and including the date on which the Corporation or the Trust has given notice
that the sale of New Capital Securities (or the New Guarantee or the New
Junior Subordinated Debentures, as applicable) may be resumed, as the case
may be.
Prior to the Exchange Offer, there has been only a limited secondary market
and no public market for the Old Capital Securities. The New Capital Securities
will be a new issue of securities for which there currently is no market. There
can be no assurance as to the development or liquidity of any market for the New
Capital Securities. The Corporation and the Trust currently do not intend to
apply for listing of the New Capital Securities on any securities exchange or
for quotation through the National Association of Securities Dealers Automated
Quotation System.
Any Old Capital Securities not tendered and accepted in the Exchange
Offer will remain outstanding and will be entitled to all the same rights and
will be subject to the same limitations applicable thereto under the Trust
Agreement (except for those rights which terminate upon consummation of the
Exchange Offer). Following consummation of the Exchange Offer, the holders of
Old Capital Securities will continue to be subject to all of the existing
restrictions upon transfer thereof and neither the Corporation nor the Trust
will have any further obligation to such holders (other than under certain
limited circumstances) to provide for registration under the Securities Act
of the Old Capital Securities held by them. To the extent that Old Capital
Securities are tendered and accepted in the Exchange Offer, a holder's
ability to sell untendered Old Capital Securities could be adversely
affected. See "Risk Factors--Consequences of a Failure to Exchange Old
Capital Securities."
THIS PROSPECTUS AND THE RELATED LETTER OF TRANSMITTAL CONTAIN IMPORTANT
INFORMATION. HOLDERS OF OLD CAPITAL SECURITIES ARE URGED TO READ THIS PROSPECTUS
AND THE RELATED LETTER OF TRANSMITTAL CAREFULLY BEFORE DECIDING WHETHER TO
TENDER THEIR OLD CAPITAL SECURITIES PURSUANT TO THE EXCHANGE OFFER.
Old Capital Securities may be tendered for exchange on or prior to 5:00
p.m., New York City time, on March , 1998 (such time on such date being
hereinafter called the "Expiration Date"), unless the Exchange Offer is
extended by the Corporation or the Trust (in which case the term "Expiration
Date" shall mean the latest date and time to which the Exchange Offer is
extended). Tenders of Old Capital Securities may be withdrawn at any time on
or prior to the Expiration Date. The Exchange Offer is not conditioned upon
any minimum Liquidation Amount of Old Capital Securities being tendered for
exchange. However, the Exchange Offer is subject to certain events and
conditions which may be waived by the Corporation or the Trust and to the
provisions of the Registration Rights Agreement. Old Capital Securities may
be tendered in whole or in part having an aggregate Liquidation Amount of not
less than $100,000 (100 Capital Securities) and/or any integral multiple of
$1,000 Liquidation Amount (one Capital Security) in excess thereof. The
Corporation has agreed to pay all expenses of the Exchange Offer. See "The
Exchange Offer--Fees and Expenses."
Holders of Old Capital Securities as of the February 1, 1998 record date
for the initial Distribution on February 15, 1998, including such holders who
tender their Old Capital Securities pursuant to the Exchange Offer, will be
entitled to receive such Distribution. See "The Exchange Offer--Distributions
on New Capital Securities."
Neither the Corporation nor the Trust will receive any cash proceeds from
the issuance of the New Capital Securities offered hereby. No dealer-manager
is being used in connection with this Exchange Offer. See "Use of Proceeds"
and "Plan of Distribution."
THE NEW CAPITAL SECURITIES WILL BE ISSUED, AND CAPITAL SECURITIES MAY BE
TRANSFERRED, ONLY IN BLOCKS HAVING A LIQUIDATION AMOUNT OF NOT LESS THAN
$100,000. ANY TRANSFER, SALE OR OTHER DISPOSITION OF CAPITAL SECURITIES IN A
6
<PAGE>
BLOCK HAVING A LIQUIDATION AMOUNT OF LESS THAN $100,000 SHALL BE DEEMED TO BE
VOID AND OF NO LEGAL EFFECT WHATSOEVER. ANY SUCH TRANSFEREE SHALL BE DEEMED NOT
TO BE ENTITLED TO THE RECEIPT OF DISTRIBUTIONS ON SUCH CAPITAL SECURITIES, AND
SUCH TRANSFEREE SHALL BE DEEMED TO HAVE NO INTEREST WHATSOEVER IN SUCH CAPITAL
SECURITIES.
NO EMPLOYEE BENEFIT OR OTHER PLAN SUBJECT TO TITLE I OF THE EMPLOYEE
RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR SECTION 4975
OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE") (EACH, A
"PLAN"), NO ENTITY WHOSE UNDERLYING ASSETS INCLUDE "PLAN ASSETS" BY REASON OF
ANY PLAN'S INVESTMENT IN THE ENTITY (A "PLAN ASSET ENTITY"), AND NO PERSON
INVESTING "PLAN ASSETS" OF ANY PLAN, MAY ACQUIRE OR HOLD THE CAPITAL
SECURITIES OR ANY INTEREST THEREIN, UNLESS SUCH PURCHASER OR HOLDER IS
ELIGIBLE FOR THE EXEMPTIVE RELIEF AVAILABLE UNDER U.S. DEPARTMENT OF LABOR
PROHIBITED TRANSACTION CLASS EXEMPTION ("PTCE") 96-23, 95-60, 91-38, 90-1 OR
84-14 WITH RESPECT TO SUCH PURCHASE OR HOLDING. ANY PURCHASER OR HOLDER OF
THE CAPITAL SECURITIES OR ANY INTEREST THEREIN WILL BE DEEMED TO HAVE
REPRESENTED BY ITS PURCHASE AND HOLDING THEREOF THAT IT EITHER (I) IS NOT A
PLAN OR A PLAN ASSET ENTITY AND IS NOT PURCHASING SUCH SECURITIES ON BEHALF
OF OR WITH "PLAN ASSETS" OF ANY PLAN, OR (II) IS ELIGIBLE FOR THE EXEMPTIVE
RELIEF AVAILABLE UNDER PTCE 96-23, 95-60, 91-38, 90-1 OR 84-14 WITH RESPECT
TO SUCH PURCHASE OR HOLDING.
------------------------
NO DEALER, SALESPERSON OR OTHER INDIVIDUAL HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED OR
INCORPORATED BY REFERENCE IN THIS PROSPECTUS IN CONNECTION WITH THIS EXCHANGE
OFFER AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE
RELIED UPON AS HAVING BEEN AUTHORIZED BY THE CORPORATION OR THE TRUST. NEITHER
THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL UNDER ANY
CIRCUMSTANCE CREATE AN IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS
OF THE CORPORATION OR THE TRUST SINCE THE DATE HEREOF. THIS PROSPECTUS DOES NOT
CONSTITUTE AN OFFER OR A SOLICITATION BY ANYONE IN ANY JURISDICTION IN WHICH
SUCH OFFER OR SOLICITATION IS NOT AUTHORIZED OR IN WHICH THE PERSON MAKING SUCH
OFFER OR SOLICITATION IS NOT QUALIFIED TO DO SO OR ANYONE TO WHOM IT IS UNLAWFUL
TO MAKE SUCH OFFER OR SOLICITATION.
------------------------
7
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TABLE OF CONTENTS
PAGE
----
Available Information...................................................... 9
Incorporation of Certain Documents by Reference............................ 9
Summary.................................................................... 11
Risk Factors............................................................... 18
The Trust.................................................................. 24
The Corporation............................................................ 24
Selected Consolidated Financial Data of
the Corporation........................................................... 26
Use of Proceeds............................................................ 28
Ratio of Earnings to Fixed Charges......................................... 28
Accounting Treatment....................................................... 28
Capitalization............................................................. 29
The Exchange Offer......................................................... 30
Description of New Securities.............................................. 39
Description of Old Securities.............................................. 60
Relationship Among the Capital Securities, the
Junior Subordinated Debentures and the Guarantee.......................... 60
Certain Federal Income Tax Considerations.................................. 62
ERISA Considerations....................................................... 65
Plan of Distribution....................................................... 66
Validity of New Securities................................................. 67
Experts.................................................................... 67
8
<PAGE>
AVAILABLE INFORMATION
The Corporation is subject to the informational requirements of the
Exchange Act, and in accordance therewith files reports, proxy statements and
other information with the Commission. Such reports, proxy statements and
other information can be inspected and copied at the public reference
facilities of the Commission at Room 1024, 450 Fifth Street, N.W.,
Washington, D.C. 20549 and at the regional offices of the Commission located
at 7 World Trade Center, 13th Floor, Suite 1300, New York, New York 10048 and
Citicorp Center, 14th Floor, Suite 1400, 500 West Madison Street, Chicago,
Illinois 60661. Copies of such material also can be obtained at prescribed
rates by writing to the Public Reference Section of the Commission at 450
Fifth Street, N.W., Washington, D.C. 20549. Such information also may be
accessed through the Commission's electronic data gathering, analysis and
retrieval system ("EDGAR") via electronic means, including the Commission's
web site on the Internet (http://www.sec.gov). Such reports, proxy statements
and other information concerning the Corporation also can be inspected at the
National Association of Securities Dealers, Inc., 1735 K Street, N.W.,
Washington, D.C. 20006.
No separate financial statements of the Trust have been included herein.
The Corporation and the Trust do not consider that such financial statements
would be material to holders of the Capital Securities because the Trust is a
newly-formed special purpose entity, has no operating history or independent
operations and is not engaged in and does not propose to engage in any
activity other than holding as trust assets the Junior Subordinated
Debentures and issuing the Trust Securities. See "The Trust" and "Description
of New Securities." In addition, the Corporation does not expect that the
Trust will file reports, proxy statements and other information under the
Exchange Act with the Commission.
This Prospectus constitutes a part of a registration statement on Form
S-4 (the "Registration Statement") filed by the Corporation and the Trust
with the Commission under the Securities Act. This Prospectus does not
contain all the information set forth in the Registration Statement, certain
parts of which are omitted in accordance with the rules and regulations of
the Commission, and reference is hereby made to the Registration Statement
and to the exhibits relating thereto for further information with respect to
the Corporation, the Trust and the New Securities. Any statements contained
herein concerning the provisions of any document are not necessarily
complete, and, in each instance, reference is made to the copy of such
document filed as an exhibit to the Registration Statement or otherwise filed
with the Commission. Each such statement is qualified in its entirety by such
reference.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by the Corporation with the Commission are
incorporated by reference in this Prospectus:
1. The Corporation's Annual Report on Form 10-KSB for the year ended
September 30, 1997; and
2. The following portions of the Corporation's Annual Report to
Stockholders for the year ended September 30, 1997: selected
consolidated financial and other data (pages 2 to 3); management's
discussion and analysis of financial condition and results of
operations (pages 9 to 17); and audited consolidated financial
statements and notes thereto (pages 18 to 39).
All documents subsequently filed by the Corporation pursuant to Section
13(a), 13(c), 14 or 15(d) of the Exchange Act after the date hereof and prior
to the termination of the offering of the New Securities offered hereby shall
be deemed to be incorporated by reference in this Prospectus and to be a part
of this Prospectus from the date of filing of such documents. Any statement
contained herein or in a document incorporated or deemed to be incorporated
by reference herein shall be deemed to be modified or superseded for purposes
of this Prospectus to the extent that a statement contained herein (or in any
other subsequently filed document
9
<PAGE>
which also is or is deemed to be incorporated by reference herein) modifies
or supersedes such statement. Any statement so modified or superseded shall
not be deemed, except as so modified or superseded, to constitute a part of
this Prospectus.
As used herein, the terms "Prospectus" and "herein" mean this Prospectus,
including the documents incorporated or deemed to be incorporated herein by
reference, as the same may be amended, supplemented or otherwise modified
from time to time. Statements contained in this Prospectus as to the contents
of any contract or other document referred to herein do not purport to be
complete, and where reference is made to the particular provisions of such
contract or other document, such provisions are qualified in all respects by
reference to all of the provisions of such contract or other document.
This Prospectus is accompanied by the Corporation's 1997 Annual Report to
Stockholders. Copies of the other documents incorporated by reference herein
are available from the Corporation without charge (other than exhibits to
such documents, unless such exhibits are specifically incorporated by
reference into the information that this Prospectus incorporates) to any
person to whom this Prospectus is delivered, upon written request of such
person. Requests for such copies should be directed to Thomas M. Kelly, Chief
Financial Officer of the Corporation, at the principal executive offices
located at 22 West State Street, Media, Pennsylvania 19063. The Corporation's
telephone number is (610) 565-6210.
10
<PAGE>
SUMMARY
The following is a summary of certain information contained elsewhere in
this Prospectus. Reference is made to, and this summary is qualified in its
entirety by, the more detailed information and financial statements,
including the notes thereto, contained elsewhere in this Prospectus.
FIRST KEYSTONE FINANCIAL, INC.
The Corporation is a Pennsylvania-chartered, registered thrift holding
company headquartered in Media, Pennsylvania. The Corporation is the sole
stockholder of First Keystone Federal Savings Bank (the "Bank"), a federally
chartered savings bank, which has been engaged in the thrift business since
1934. The Corporation became the parent holding company of the Bank in
connection with the Bank's conversion from mutual to stock form in January
1995. The Bank conducts its business through five full-service offices
located in Delaware County. At September 30, 1997, the Corporation had total
consolidated assets of $373.4 million, total consolidated liabilities of
$332.5 million, including total consolidated deposits of $227.9 million, and
total consolidated stockholders' equity of $24.8 million.
FIRST KEYSTONE CAPITAL TRUST I
The Trust is a statutory business trust created under Delaware law
pursuant to the filing of a certificate of trust with the Secretary of State
of the State of Delaware. The Trust's affairs are conducted by the Issuer
Trustees: The Bank of New York as Property Trustee, The Bank of New York
(Delaware) as Delaware Trustee and three individual Administrative Trustees
who are employees or officers of or affiliated with the Corporation. The
Trust exists for the exclusive purposes of (i) issuing and selling the Trust
Securities, (ii) using the proceeds from the sale of the Trust Securities to
acquire the Junior Subordinated Debentures issued by the Corporation and
(iii) engaging in only those other activities necessary, advisable or
incidental thereto. Accordingly, the Junior Subordinated Debentures are the
sole assets of the Trust, and payments under the Junior Subordinated
Debentures are the sole revenue of the Trust. All of the Common Securities
are owned by the Corporation.
THE EXCHANGE OFFER
The Exchange Offer................... Up to $16,200,000 aggregate Liquidation
Amount of New Capital Securities are
being offered in exchange for a like
aggregate Liquidation Amount of Old
Capital Securities. Old Capital
Securities may be tendered for exchange
in whole or in part in a Liquidation
Amount of $100,000 (100 Capital
Securities) or any integral multiple of
$1,000 (one Capital Security) in excess
thereof. The Corporation and the Trust
are making the Exchange Offer in order
to satisfy their obligations under the
Registration Rights Agreement relating
to the Old Capital Securities. For a
description of the procedures for
tendering Old Capital Securities, see
"The Exchange Offer--Procedures for
Tendering Old Capital Securities."
Expiration Date...................... 5:00 p.m., New York City time, on March
, 1998, unless the Exchange Offer
is extended by the Corporation or the
Trust (in which case the Expiration
Date will be the latest date and time
to which the Exchange Offer is
extended). See "The Exchange
Offer--Terms of the Exchange Offer."
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<PAGE>
Conditions to the Exchange Offer..... The Exchange Offer is subject to
certain conditions, which may be waived
by the Corporation and the Trust in
their sole discretion. The Exchange
Offer is not conditioned upon any
minimum Liquidation Amount of Old
Capital Securities being tendered. See
"The Exchange Offer--Conditions to the
Exchange Offer."
Terms of the Exchange Offer.......... The Corporation and the Trust reserve
the right in their sole and absolute
discretion, subject to applicable law,
at any time and from time to time, (i)
to delay the acceptance of the Old
Capital Securities for exchange, (ii)
to terminate the Exchange Offer if
certain specified conditions have not
been satisfied, (iii) to extend the
Expiration Date of the Exchange Offer
and retain all Old Capital Securities
tendered pursuant to the Exchange
Offer, subject, however, to the right
of holders of Old Capital Securities to
withdraw their tendered Old Capital
Securities or (iv) to waive any
condition or otherwise amend the terms
of the Exchange Offer in any respect.
See "The Exchange Offer--Terms of the
Exchange Offer."
Withdrawal Rights.................... Tenders of Old Capital Securities may
be withdrawn at any time on or prior to
the Expiration Date by delivering a
written notice of such withdrawal to
the Exchange Agent in conformity with
certain procedures set forth below
under "The Exchange Offer --Withdrawal
Rights."
Procedures for Tendering Old
Capital Securities................. Tendering holders of Old Capital
Securities must complete and sign a
Letter of Transmittal in accordance
with the instructions contained therein
and forward the same by mail, facsimile
or hand delivery, together with any
other required documents, to the
Exchange Agent, either with the Old
Capital Securities to be tendered or in
compliance with the specified
procedures for guaranteed delivery of
Old Capital Securities. Certain
brokers, dealers, commercial banks,
trust companies and other nominees also
may effect tenders by book-entry
transfer, including an Agent's Message
in lieu of a Letter of Transmittal.
Holders of Old Capital Securities
registered in the name of a broker,
dealer, commercial bank, trust company
or other nominee are urged to contact
such person promptly if they wish to
tender Old Capital Securities pursuant
to the Exchange Offer. See "The
Exchange Offer--Procedures for
Tendering Old Capital Securities."
Letters of Transmittal and certificates
representing Old Capital Securities
should not be sent to the Corporation
or the Trust. Such documents should
only be sent to the Exchange Agent. See
"The Exchange Offer--Exchange Agent."
12
<PAGE>
Resales of New Capital Securities.... The Corporation and the Trust are
making the Exchange Offer in reliance
on the position of the staff of the
Division of Corporation Finance of the
Commission as set forth in certain
interpretive letters addressed to third
parties in other transactions. However,
neither the Corporation nor the Trust
has sought its own interpretive letter
and there can be no assurance that the
staff of the Division of Corporation
Finance of the Commission would make a
similar determination with respect to
the Exchange Offer as it has in such
interpretive letters to third parties.
Based on these interpretations by the
staff of the Division of Corporation
Finance of the Commission, and subject
to the two immediately following
sentences, the Corporation and the
Trust believe that New Capital
Securities issued pursuant to this
Exchange Offer in exchange for Old
Capital Securities may be offered for
resale, resold and otherwise
transferred by a holder thereof (other
than a holder who is a broker-dealer)
without further compliance with the
registration and prospectus delivery
requirements of the Securities Act,
provided that such New Capital
Securities are acquired in the ordinary
course of such holder's business and
that such holder is not participating,
and has no arrangement or understanding
with any person to participate, in a
distribution (within the meaning of the
Securities Act) of such New Capital
Securities. However, any holder of Old
Capital Securities who is an Affiliate
of the Corporation or the Trust or who
intends to participate in the Exchange
Offer for the purpose of distributing
the New Capital Securities, or any
broker-dealer who purchased the Old
Capital Securities from the Trust to
resell pursuant to Rule 144A or any
other available exemption under the
Securities Act, (i) will not be able to
rely on the interpretations of the
staff of the Division of Corporation
Finance of the Commission set forth in
the above-mentioned interpretive
letters, (ii) will not be permitted or
entitled to tender such Old Capital
Securities in the Exchange Offer and
(iii) must comply with the registration
and prospectus delivery requirements of
the Securities Act in connection with
any sale or other transfer of such Old
Capital Securities unless such sale is
made pursuant to an exemption from such
requirements. In addition, as described
below, if any broker-dealer holds Old
Capital Securities acquired for its own
account as a result of market-making or
other trading activities and exchanges
such Old Capital Securities for New
Capital Securities, then such
broker-dealer must deliver a prospectus
meeting the requirements of the
Securities Act in connection with any
resales of such New Capital Securities.
13
<PAGE>
Each holder of Old Capital Securities
who wishes to exchange Old Capital
Securities for New Capital Securities
in the Exchange Offer will be required
to represent in the Letter of
Transmittal or by transmission of an
Agent's Message that (i) it is not an
"affiliate" of the Corporation or the
Trust, (ii) any New Capital Securities
to be received by it are being acquired
in the ordinary course of its business,
(iii) it has no arrangement or
understanding with any person to
participate in a distribution (within
the meaning of the Securities Act) of
such New Capital Securities and (iv) if
such holder is not a broker-dealer,
such holder is not engaged in, and does
not intend to engage in, a distribution
(within the meaning of the Securities
Act) of such New Capital Securities.
The Letter of Transmittal contains the
foregoing representations. Each
Participating Broker-Dealer that
receives New Capital Securities for its
own account pursuant to the Exchange
Offer will be deemed to have
acknowledged by execution of the Letter
of Transmittal or delivery of an
Agent's Message (as defined herein)
that it acquired the Old Capital
Securities for its own account as the
result of market-making activities or
other trading activities and must agree
that it will deliver a prospectus
meeting the requirements of the
Securities Act in connection with any
resale of such New Capital Securities.
The Letter of Transmittal states that,
by so acknowledging and by delivering a
prospectus, a Participating
Broker-Dealer will not be deemed to
admit that it is an "underwriter"
within the meaning of the Securities
Act. Based on the position taken by the
staff of the Division of Corporation
Finance of the Commission in the
interpretive letters referred to above,
the Corporation and the Trust believe
that Participating Broker-Dealers who
acquired Old Capital Securities for
their own accounts as a result of
market-making activities or other
trading activities may fulfill their
prospectus delivery requirements with
respect to the New Capital Securities
received upon exchange of such Old
Capital Securities (other than Old
Capital Securities which represent an
unsold allotment from the original sale
of the Old Capital Securities) with a
prospectus meeting the requirements of
the Securities Act, which may be the
prospectus prepared for an exchange
offer so long as it contains a
description of the plan of distribution
with respect to the resale of such New
Capital Securities. Accordingly, this
Prospectus, as it may be amended or
supplemented from time to time, may be
used by a Participating Broker-Dealer
in connection with resales of New
Capital Securities received in exchange
for Old Capital Securities where such
Old Capital Securities were acquired by
such Participating Broker-Dealer for
its own account as a result of
market-making or other trading
activities.
14
<PAGE>
Subject to certain provisions set forth
in the Registration Rights Agreement
and to the limitations described below
under "The Exchange Offer--Resales of
New Capital Securities," the
Corporation and the Trust have agreed
that this Prospectus, as it may be
amended or supplemented from time to
time, may be used by a Participating
Broker-Dealer in connection with
resales of such New Capital Securities
for a period ending 90 days after the
Expiration Date (subject to extension
under certain limited circumstances)
or, if earlier, when all such New
Capital Securities have been disposed
of by such Participating Broker-Dealer.
See "Plan of Distribution." Any person,
including any Participating
Broker-Dealer, who is an Affiliate of
the Corporation or the Trust may not
rely on such interpretive letters and
must comply with the registration and
prospectus delivery requirements of the
Securities Act in connection with any
resale transaction. See "The Exchange
Offer--Resales of New Capital
Securities."
Exchange Agent......................... The exchange agent with respect to the
Exchange Offer is The Bank of New York
(the "Exchange Agent"). The addresses,
and telephone and facsimile numbers, of
the Exchange Agent are set forth in
"The Exchange Offer--Exchange Agent"
and in the Letter of Transmittal.
Use of Proceeds........................ Neither the Corporation nor the Trust
will receive any cash proceeds from the
issuance of the New Capital Securities
offered hereby. See "Use of Proceeds."
Certain Federal Income Tax
Considerations; ERISA Considerations. Holders of Old Capital Securities should
review the information set forth under
"Certain Federal Income Tax
Considerations" and "ERISA
Considerations" prior to tendering Old
Capital Securities in the Exchange
Offer.
THE NEW CAPITAL SECURITIES
Securities Offered..................... Up to $16,200,000 aggregate Liquidation
Amount of the Trust's New Capital
Securities which have been registered
under the Securities Act (Liquidation
Amount $1,000 per New Capital
Security). The New Capital Securities
will be issued and the Old Capital
Securities were issued under the Trust
Agreement. The New Capital Securities
and any Old Capital Securities which
remain outstanding after consummation
of the Exchange Offer will vote
together as a single class for purposes
of determining whether holders of the
requisite percentage in outstanding
Liquidation Amount thereof have taken
certain actions or exercised certain
rights under the
15
<PAGE>
Trust Agreement. See "Description of
New Securities-- Description of Capital
Securities--Voting Rights; Amendment of
the Trust Agreement." The terms of the
New Capital Securities are identical in
all material respects to the terms of
the Old Capital Securities, except that
the New Capital Securities have been
registered under the Securities Act and
therefore will not be subject to
certain restrictions on transfer under
federal and state securities laws and
will not provide for any increase in
the Distribution rate thereon. See "The
Exchange Offer--Purpose of the Exchange
Offer," "Description of New Securities"
and "Description of Old Securities."
Distribution Dates................... February 15th and August 15th of each
year.
Extension Periods.................... Distributions on the Capital Securities
will be deferred for the duration of
any Extension Period elected by the
Corporation with respect to the payment
of interest on the Junior Subordinated
Debentures. No Extension Period will
exceed 10 consecutive semi-annual
periods, end on a date other than an
Interest Payment Date or extend beyond
the Stated Maturity Date. See
"Description of New
Securities--Description of Junior
Subordinated Debentures--Option to
Extend Interest Payment Date" and
"Certain Federal Income Tax
Considerations --Interest Income and
Original Issue Discount."
Ranking............................. The New Capital Securities will rank
PARI PASSU, and payments thereon will
be made pro rata, with the Old Capital
Securities and the Common Securities
except as described under "Description
of New Securities --Description of
Capital Securities --Subordination of
Common Securities." The New Junior
Subordinated Debentures will rank PARI
PASSU with the Old Junior Subordinated
Debentures, and all other junior
subordinated debentures issued by the
Corporation (the "Other Debentures")
and sold to other trusts established or
to be established by the Corporation,
in each case similar to the Trust (the
"Other Trusts"), and will be unsecured
and subordinate and junior in right of
payment to all Senior Indebtedness of
the Corporation to the extent
and in the manner set forth in the
Indenture. See "Description of New
Securities-- Description of Junior
Subordinated Debentures." The New
Guarantee will rank PARI PASSU with the
Old Guarantee, and all other guarantees
issued by the Corporation with respect
to capital securities issued or to be
issued by Other Trusts (the "Other
Guarantees") and will constitute an
unsecured obligation of the Corporation
and will rank subordinate and junior in
right of payment to all Senior
Indebtedness of the Corporation to the
extent
16
<PAGE>
and in the manner set forth in
the Guarantee Agreement. See
"Description of New
Securities--Description of Guarantee."
Redemption.......................... The Trust Securities are subject to
mandatory redemption in a Like Amount,
(i) in whole but not in part, on the
Stated Maturity Date upon repayment of
the Junior Subordinated Debentures, in
whole but not in part, at any time
before the Initial Optional Prepayment
Date contemporaneously with the
optional redemption of the Junior
Subordinated Debentures by the
Corporation upon the occurrence and
continuation of a Special Event (as
defined herein) and in whole or in
part, at any time on or after the
Initial Optional Prepayment Date
contemporaneously with the optional
redemption by the Corporation of the
Junior Subordinated Debentures, in each
case at the applicable Redemption
Price. See "Description of New
Securities--Description of Capital
Securities -- Redemption."
Transfer............................ The New Capital Securities will be
issued, and may be transferred, only in
blocks having a Liquidation Amount of
not less than $100,000 (100 New Capital
Securities). Any transfer, sale or
other disposition of New Capital
Securities resulting in a block having
a Liquidation Amount of less than
$100,000 shall be deemed to be void and
of no legal effect whatsoever.
Absence of Market for the
New Capital Securities............. The New Capital Securities will be a new
issue of securities for which there
currently is no market. Sandler O'Neill &
Partners, L.P. the initial purchaser of
the Old Capital Securities (the
"Initial Purchaser"), has informed the
Corporation and the Trust that it
intends to make a market in the New
Capital Securities. However, the
Initial Purchaser is not obligated to
make a market in the Old Capital
Securities or the New Capital
Securities, and any such market making
may be discontinued at any time without
notice. Accordingly, there can be no
assurance as to the development or
liquidity of any market for the New
Capital Securities. The Trust and the
Corporation do not intend to apply for
listing of the New Capital Securities
on any securities exchange or for
quotation through the National
Association of Securities Dealers
Automated Quotation System. The New
Capital Securities are expected to be
eligible for quotation on PORTAL. See
"Plan of Distribution."
17
<PAGE>
RISK FACTORS
Prospective investors should consider carefully, in addition to the other
information contained in this Prospectus, the following factors in connection
with the Exchange Offer and the New Capital Securities offered hereby.
Information contained in this Prospectus contains "forward-looking
statements" which can be identified by the use of forward-looking terminology
such as "believes," "expects," "may," "will," "should," "projected,"
"contemplates" or "anticipates" or the negative thereof or other variations
thereon or comparable terminology. No assurance can be given that the future
results covered by the forward-looking statements will be achieved. The
following matters constitute cautionary statements identifying important
factors with respect to such forward-looking statements, including certain
risks and uncertainties, that could cause actual results to vary materially
from the future results covered in such forward-looking statements. Other
factors, such as the general state of the economy, could also cause actual
results to vary materially from the future results covered in such
forward-looking statements.
Ranking of Subordinated Obligations under the Guarantee and the Junior
Subordinated Debentures; Limitations on Sources of Funds
The obligations of the Corporation under the Guarantee issued by it for
the benefit of holders of Capital Securities, as well as under the Junior
Subordinated Debentures are unsecured and rank subordinate and junior in
right of payment to all present and future Senior Indebtedness of the
Corporation to the extent and in the manner set forth in the Indenture and
the Guarantee, respectively. No payment may be made of the principal of, or
premium, if any, or interest on the Junior Subordinated Debentures, or in
respect of any redemption, retirement, purchase or other acquisition of any
of the Junior Subordinated Debentures, at any time when (i) there shall have
occurred and be continuing a default, in any payment in respect of any Senior
Indebtedness, or there has been an acceleration of the maturity thereof
because of a default, or (ii) in the event of the acceleration of the
maturity of the Junior Subordinated Debentures until payment has been made on
all Senior Indebtedness. At September 30, 1997, the Corporation had
outstanding Senior Indebtedness. Because the Corporation is a holding
company, the right of the Corporation to participate in any distribution of
assets of any subsidiary upon such subsidiary's liquidation or reorganization
or otherwise (and thus the ability of holders of the Capital Securities to
benefit indirectly from such distribution) is subject to the prior claims of
creditors of that subsidiary, except to the extent that the Corporation may
itself be recognized as a creditor of such subsidiary. At September 30, 1997,
the subsidiaries of the Corporation had total liabilities (excluding
liabilities owed to the Corporation) of approximately $332.5 million.
Accordingly, the Junior Subordinated Debentures effectively will be
subordinated to all existing and future liabilities of the Corporation's
subsidiaries (including the Bank's deposit liabilities, which aggregated
$227.9 million at September 30, 1997), and holders of Junior Subordinated
Debentures should look only to the assets of the Corporation for payments on
the Junior Subordinated Debentures. The Guarantee constitutes an unsecured
obligation of the Corporation and ranks subordinate and junior in right of
payment to all Senior Indebtedness of the Corporation in the same manner as
the Junior Subordinated Debentures. None of the Indenture, the Guarantee or
the Trust Agreement places any limitation on the amount of secured or
unsecured debt, including Senior Indebtedness, that may be incurred by the
Corporation or any of its subsidiaries. See "Description of New Securities
- --Description of Guarantee -- Status of Guarantee" and "-- Description of
Junior Subordinated Debentures -- Subordination."
The ability of the Trust to pay amounts due on the Capital Securities is
solely dependent upon the Corporation making payments on the Junior
Subordinated Debentures as and when required.
The Corporation is a holding company and almost all of the operating
assets of the Corporation are owned by the Corporation's subsidiaries. The
Corporation relies primarily on dividends from the Bank to meet its
obligations for payment of principal and interest on its outstanding debt
obligations and corporate expenses. There are regulatory limitations on the
payment of dividends directly or indirectly to the Corporation from the Bank.
As of September 30, 1997, under regulations of the Office of Thrift
Supervision ("OTS"), the total capital available for payment of dividends by
the Bank to the Corporation was approximately $5.6 million. However, the
18
<PAGE>
OTS has the power to prohibit any act, including the payment of dividends, if
such act would reduce the Bank's capital to a point that, in its opinion,
would render the Bank undercapitalized and thus constitute an unsafe or
unsound banking practice. In addition to restrictions on the payment of
dividends, the Bank is subject to certain restrictions imposed by federal law
on any extensions of credit to, and certain other transactions with, the
Corporation and certain other affiliates, and on investments in stock or
other securities thereof. Such restrictions prevent the Corporation and such
other affiliates from borrowing from the Bank unless the loans are secured by
various types of collateral. Further, such secured loans, other transactions
and investments by the Bank are generally limited in amount as to the
Corporation and as to each of such other affiliates to 10% of the Bank's
capital and surplus and as to the Corporation and all of such other
affiliates to an aggregate of 20% of the Bank's capital and surplus.
Option to Extend Interest Payment Period; Tax Consequences; Market Price
Consequences
So long as no Debenture Event of Default (as defined herein) shall have
occurred and be continuing, the Corporation has the right under the Indenture
to defer payments of interest on the Junior Subordinated Debentures at any
time or from time to time for a period not exceeding 10 consecutive
semi-annual periods with respect to each Extension Period, provided that no
Extension Period shall end on a date other than an Interest Payment Date or
extend beyond the Stated Maturity Date. As a consequence of any such
deferral, semi-annual Distributions on the Trust Securities by the Trust will
be deferred (and the amount of Distributions to which holders of the Trust
Securities are entitled will accumulate additional Distributions thereon at
the rate of 9.70% per annum, compounded semi-annually, but not exceeding the
interest rate then accruing on the Junior Subordinated Debentures) from the
relevant payment date for such Distributions during any such Extension
Period. During the pendency of any Extension Period, the Corporation
generally will be prohibited from declaring or paying dividends on the
Corporation's capital stock. See "Description of New Securities --
Description of Capital Securities -- Distributions."
Prior to the termination of any Extension Period, the Corporation may
further extend such Extension Period, provided that such extension does not
cause such Extension Period to exceed 10 consecutive semi-annual periods to
end on a date other than an Interest Payment Date or to extend beyond the
Stated Maturity Date. Upon the termination of any Extension Period and the
payment of all interest then accrued and unpaid on the Junior Subordinated
Debentures (together with interest thereon at the annual rate of 9.70%,
compounded semi-annually, to the extent permitted by applicable law), the
Corporation may elect to begin a new Extension Period, subject to the above
requirements. There is no limitation on the number of times that the
Corporation may elect to begin an Extension Period. See "Description of New
Securities -- Description of Capital Securities -- Distributions" and "--
Description of Junior Subordinated Debentures -- Option to Extend Interest
Payment Date."
The Corporation has no current plan to exercise its right to defer
payments of interest on the Junior Subordinated Debentures. However, should
the Corporation exercise its right to defer payments of interest on the
Junior Subordinated Debentures, each holder of Trust Securities will be
required to accrue income (as original issue discount ("OID")) in respect of
the deferred stated interest allocable to its Trust Securities for United
States federal income tax purposes, which will be allocated but not
distributed to holders of Trust Securities. As a result, each holder of
Capital Securities will recognize income for United States federal income tax
purposes in advance of the receipt of cash and will not receive the cash
related to such income from the Trust if the holder disposes of the Capital
Securities prior to the record date for the payment of Distributions
thereafter. See "Certain Federal Income Tax Considerations -- Interest
Income and Original Issue Discount" and "-- Sales of Capital Securities."
Should the Corporation elect to exercise its right to defer payments of
interest on the Junior Subordinated Debentures in the future, the market
price of the Capital Securities is likely to be affected. A holder that
disposes of its Capital Securities during an Extension Period, therefore,
might not receive the same
19
<PAGE>
return on its investment as a holder that continues to hold its Capital
Securities. In addition, the mere existence of the Corporation's right to
defer interest payments on the Junior Subordinated Debentures may cause the
market price of the Capital Securities to be more volatile than the market
prices of other securities on which OID accrues and that are not subject to
such deferrals.
Special Event Redemption
Upon the occurrence and continuation of a Special Event (including a Tax
Event or a Regulatory Capital Event (in each case as defined under
"Description of New Securities -- Description of Junior Subordinated
Debentures -- Special Event Prepayment")) prior to the Initial Optional
Prepayment Date, the Corporation will have the right to prepay the Junior
Subordinated Debentures in whole (but not in part) at the Special Event
Prepayment Price within 90 days following the occurrence of such Special
Event and therefore cause a mandatory redemption of the Trust Securities at
the Special Event Redemption Price. The exercise of such right is subject to
the Corporation having received any required regulatory approval. See
"Description of New Securities -- Description of Capital Securities --
Redemption."
Liquidation Distribution of Junior Subordinated Debentures
The Corporation has the right at any time to dissolve the Trust and,
after satisfaction of liabilities to creditors of the Trust as required by
applicable law, to cause the Junior Subordinated Debentures to be distributed
to the holders of the Trust Securities in liquidation of the Trust. Such
right is subject to (i) the Corporation having received an opinion of counsel
to the effect that such distribution will not be a taxable event to the
holders of Capital Securities and (ii) receipt of any required regulatory
approval. Under current United States federal income tax law, a distribution
of Junior Subordinated Debentures upon the dissolution of the Trust would not
be a taxable event to holders of the Capital Securities. Upon the occurrence
of a Special Event, a dissolution of the Trust in which holders of the
Capital Securities receive cash would be a taxable event to such holders. See
"Certain Federal Income Tax Considerations -- Receipt of Junior Subordinated
Debentures or Cash Upon Liquidation of the Trust."
Possible Adverse Effect on Market Prices
There can be no assurance as to the market prices for Capital Securities
or Junior Subordinated Debentures that may be distributed in exchange for
Capital Securities if a dissolution of the Trust were to occur. Accordingly,
the Capital Securities or the Junior Subordinated Debentures may trade at a
discount from the price that the investor paid to purchase the New Capital
Securities offered hereby. Because holders of Capital Securities may receive
Junior Subordinated Debentures in liquidation of the Trust and because
Distributions are otherwise limited to payments on the Junior Subordinated
Debentures, prospective purchasers of New Capital Securities are also making
an investment decision with regard to the Junior Subordinated Debentures and
should carefully review all the information regarding the New Junior
Subordinated Debentures contained herein. See "Description of New Securities
- -- Description of Junior Subordinated Debentures."
Rights Under the Guarantee
The Guarantee guarantees to the holders of the Capital Securities the
following payments, to the extent not paid by or on behalf of the Trust: (i)
any accumulated and unpaid Distributions required to be paid on the Capital
Securities, to the extent that the Trust has funds on hand legally available
therefor at such time, (ii) the applicable Redemption Price with respect to
the Capital Securities called for redemption, to the extent that the Trust
has funds on hand legally available therefor at such time, and (iii) upon a
voluntary or involuntary dissolution, winding up or liquidation of the Trust
(unless the Junior Subordinated Debentures are distributed to holders of the
Capital Securities), the lesser of (a) the aggregate of the Liquidation
Amount and all accumulated and unpaid Distributions to the date of payment,
to the extent that the Trust has funds on hand
20
<PAGE>
legally available therefor at such time, and (b) the amount of assets of the
Trust remaining available for distribution to holders of the Capital
Securities at such time, after the satisfaction of liabilities to creditors
of the Trust as provided by applicable law.
The holders of a majority in Liquidation Amount of the Capital Securities
have the right to direct the time, method and place of conducting any
proceeding for any remedy available to the Guarantee Trustee in respect of
the Guarantee or to direct the exercise of any trust power conferred upon the
Guarantee Trustee under the Guarantee. Any holder of the Capital Securities
may institute a legal proceeding directly against the Corporation to enforce
its rights under the Guarantee without first instituting a legal proceeding
against the Trust, the Guarantee Trustee or any other person or entity. If
the Corporation defaults on its obligation to pay amounts payable under the
Junior Subordinated Debentures, the Trust will not have sufficient funds for
the payment of Distributions or amounts payable on redemption of the Capital
Securities or otherwise, and, in such event, holders of the Capital
Securities will not be able to rely upon the Guarantee for payment of such
amounts. Instead, in the event a Debenture Event of Default shall have
occurred and be continuing and such event is attributable to the failure of
the Corporation to pay the principal of (or premium, if any) or interest
(including Additional Sums (as defined below) and Compounded Interest (as
defined below), if any) on the Junior Subordinated Debentures on the payment
date on which such payment is due and payable, then a holder of Capital
Securities may institute a legal proceeding directly against the Corporation
for enforcement of payment to such holder of the principal of (or premium, if
any) or interest (including Additional Sums and Compounded Interest, if any)
on such Junior Subordinated Debentures having a principal amount equal to the
Liquidation Amount of the Capital Securities of such holder (a "Direct
Action"). Notwithstanding any payments made to a holder of Capital Securities
by the Corporation in connection with a Direct Action, the Corporation shall
remain obligated to pay the principal of (and premium, if any) and interest
(including Additional Sums and Compounded Interest, if any) on the Junior
Subordinated Debentures, and the Corporation shall be subrogated to the
rights of the holder of such Capital Securities with respect to payments on
the Capital Securities to the extent of any payments made by the Corporation
to such holder in any Direct Action. Except as described herein, holders of
Capital Securities will not be able to exercise directly any other remedy
available to the holders of the Junior Subordinated Debentures or to assert
directly any other rights in respect of the Junior Subordinated Debentures.
See "Description of New Securities -- Description of Junior Subordinated
Debentures -- Enforcement of Certain Rights by Holders of Capital Securities,"
"-- Debenture Events of Default" and "-- Description of Guarantee." The Trust
Agreement provides that each holder of Capital Securities by acceptance
thereof agrees to the provisions of the Indenture. The Bank of New York acts
as Guarantee Trustee and holds the Guarantee for the benefit of the holders
of the Capital Securities. The Bank of New York also acts as Property Trustee
and as Debenture Trustee under the Indenture. The Bank of New York (Delaware)
acts as Delaware Trustee under the Trust Agreement.
Limited Voting Rights
Holders of Capital Securities generally have limited voting rights
relating only to the modification of the Capital Securities and the exercise
of the Trust's rights as holder of Junior Subordinated Debentures. Holders of
Capital Securities will not be entitled to vote to appoint, remove or
replace, or to increase or decrease the number of, the Issuer Trustees, which
voting rights are vested exclusively in the holder of the Common Securities
except upon the occurrence of certain events described herein. The Property
Trustee, the Administrative Trustees and the Corporation may amend the Trust
Agreement without the consent of holders of Capital Securities to ensure that
the Trust will be classified for United States federal income tax purposes as
a grantor trust, even if such action adversely affects the interests of such
holders. Holders of Capital Securities have no voting rights with respect to
any matters submitted to a vote of the Corporation's stockholders. See
"Description of New Securities -- Description of Capital Securities -- Voting
Rights; Amendment of the Trust Agreement" and "-- Removal of Issuer Trustees."
21
<PAGE>
Consequences of a Failure to Exchange Old Capital Securities
The Old Capital Securities have not been registered under the Securities
Act or any state securities laws and therefore may not be offered, sold or
otherwise transferred except in compliance with the registration requirements
of the Securities Act and any other applicable securities laws, or pursuant
to an exemption therefrom or in a transaction not subject thereto, and in
each case in compliance with certain other conditions and restrictions. Old
Capital Securities which remain outstanding after consummation of the
Exchange Offer will continue to bear a legend reflecting such restrictions on
transfer. In addition, upon consummation of the Exchange Offer, holders of
Old Capital Securities which remain outstanding will not be entitled to any
rights to have such Old Capital Securities registered under the Securities
Act or to any similar rights under the Registration Rights Agreement. The
Corporation and the Trust do not intend to register under the Securities Act
any Old Capital Securities which remain outstanding after consummation of the
Exchange Offer.
To the extent that Old Capital Securities are tendered and accepted in
the Exchange Offer, a holder's ability to sell untendered Old Capital
Securities could be adversely affected. In addition, although the Old Capital
Securities have been designated for trading in the Private Offerings, Resale
and Trading through Automated Linkages ("PORTAL") market, to the extent that
Old Capital Securities are tendered and accepted in connection with the
Exchange Offer, any trading market for Old Capital Securities which remain
outstanding after the Exchange Offer could be adversely affected.
The New Capital Securities and any Old Capital Securities which remain
outstanding after consummation of the Exchange Offer will vote together as a
single class for purposes of determining whether holders of the requisite
percentage in outstanding Liquidation Amount thereof have taken certain
actions or exercised certain rights under the Trust Agreement. See
"Description of New Securities--Description of Capital Securities--Voting
Rights; Amendment of the Trust Agreement."
The Old Capital Securities provide, among other things, that, if a
registration statement relating to the Exchange Offer has not been filed by
January 23, 1998 and declared effective by February 22, 1998, the
Distribution rate borne by the Old Capital Securities commencing on August
26, 1997 will increase by 0.25% per annum until the Exchange Offer is
consummated. Upon consummation of the Exchange Offer, holders of Old Capital
Securities will not be entitled to any increase in the Distribution rate
thereon or any further registration rights under the Registration Rights
Agreement. The New Capital Securities will not be entitled to any such
increase in the Distribution rate thereon. See "Description of Old Capital
Securities."
Trading Characteristics of the Capital Securities
The Capital Securities may trade at a price that does not fully reflect
the value of accrued but unpaid interest with respect to the underlying
Junior Subordinated Debentures. A holder who uses the accrual method of
accounting for tax purposes (and a cash method holder, if the Junior
Subordinated Debentures are deemed to have been issued with OID) and who
disposes of its Capital Securities between record dates for payments of
distributions thereon will be required to include accrued but unpaid interest
on the Junior Subordinated Debentures through the date of disposition in
income as ordinary income (i.e., interest or, possibly, OID), and to add such
amount to its adjusted tax basis in its share of the underlying Junior
Subordinated Debentures deemed disposed of. To the extent the selling price
is less than the holder's adjusted tax basis (which will include all accrued
but unpaid interest), a holder will recognize a capital loss. Subject to
certain limited exceptions, capital losses cannot be applied to offset
ordinary income for United States federal income tax purposes. See "Certain
Federal Income Tax Considerations -- Interest Income and Original Issue
Discount" and "-- Sales of Capital Securities."
22
<PAGE>
Absence of Public Market
The Old Capital Securities have not been registered under the Securities
Act and will continue to be subject to restrictions on transferability under
the Securities Act and applicable state securities laws if they are not
exchanged for New Capital Securities. Although the New Capital Securities
generally may be resold or otherwise transferred by the holders (who are not
Affiliates of the Corporation or the Trust) without compliance with the
registration requirements under the Securities Act, they will constitute a
new issue of securities with no established trading market. Capital
Securities may be transferred by the holders thereof only in blocks having a
Liquidation Amount of not less than $100,000 (100 Capital Securities). The
Corporation and the Trust were advised by the Initial Purchaser in connection
with the offering of the Old Capital Securities that the Initial Purchaser
intends to make a market in the Capital Securities. However, the Initial
Purchaser is not obligated to do so and any market-making activity with
respect to the New Capital Securities may be discontinued at any time without
notice. In addition, such market-making activity will be subject to the
limits imposed by the Securities Act and the Exchange Act and may be limited
during the Exchange Offer. Accordingly, no assurance can be given that an
active public or other market will develop for the New Capital Securities or
the Old Capital Securities or as to the liquidity of or the trading market
for the New Capital Securities or the Old Capital Securities. If an active
public market does not develop, the market price and liquidity of the New
Capital Securities may be adversely affected.
If a public trading market develops for the New Capital Securities,
future trading prices will depend on many factors, including, among other
things, prevailing interest rates, the Corporation's results of operations
and the market for similar securities. Depending on prevailing interest
rates, the market for similar securities and other factors, including the
financial condition of the Corporation, the New Capital Securities may trade
at a discount.
Notwithstanding the registration of the New Capital Securities in the
Exchange Offer, holders who are Affiliates of the Corporation or the Trust
may publicly offer for sale or resell the New Capital Securities only in
compliance with the provisions of Rule 144 under the Securities Act.
Each Participating Broker-Dealer that receives New Capital Securities for
its own account in exchange for Old Capital Securities must acknowledge that
it will deliver a prospectus in connection with any resale of such New
Capital Securities. See "Plan of Distribution."
Exchange Offer Procedures
Issuance of the New Capital Securities in exchange for Old Capital
Securities pursuant to the Exchange Offer will be made only after a timely
receipt by the Trust of such Old Capital Securities, a properly completed and
duly executed Letter of Transmittal or Agent's Message in lieu thereof and
all other required documents. Therefore, holders of the Old Capital
Securities desiring to tender such Old Capital Securities in exchange for New
Capital Securities should allow sufficient time to ensure timely delivery.
None of the Corporation, the Trust or the Exchange Agent is under any duty to
give notification of defects or irregularities with respect to the tenders of
Old Capital Securities for exchange.
23
<PAGE>
THE TRUST
The Trust is a statutory business trust created under Delaware law upon
the filing of a certificate of trust with the Secretary of State of the State
of Delaware. The Trust exists for the exclusive purposes of (i) issuing and
selling the Trust Securities, which represent undivided beneficial interests
in the assets of the Trust, (ii) investing the gross proceeds from the sale
of the Trust Securities in the Junior Subordinated Debentures and (iii)
engaging in only those other activities necessary, advisable or incidental
thereto. Accordingly, the Junior Subordinated Debentures are the sole assets
of the Trust and payments under the Junior Subordinated Debentures are the
sole revenues of the Trust. All of the Common Securities are owned directly
by the Corporation. The Common Securities rank pari passu, and payments will
be made thereon pro rata, with the Capital Securities, except that upon the
occurrence and during the continuance of an Event of Default, the rights of
the Corporation as holder of the Common Securities to payments in respect of
Distributions and payments upon liquidation, redemption or otherwise will be
subordinated and rank junior to the rights of the holders of the Capital
Securities. See "Description of New Securities -- Description of Capital
Securities -- Subordination of Common Securities." The Corporation acquired
Common Securities in a Liquidation Amount equal to 3% of the total capital of
the Trust. The Trust has a term of 31 years, but may dissolve earlier as
provided in the Trust Agreement. The Trust's business and affairs are
conducted by trustees (the "Issuer Trustees") appointed by the Corporation as
the direct holder of the Common Securities. The Issuer Trustees are The Bank
of New York as the Property Trustee (the "Property Trustee"), The Bank of New
York (Delaware) as the Delaware Trustee (the "Delaware Trustee") and three
individual trustees (the "Administrative Trustees"). The Bank of New York, as
Property Trustee, acts as sole indenture trustee under the Trust Agreement.
The Bank of New York also acts as indenture trustee under the Guarantee and
the Indenture. See "Description of New Securities -- Description of
Guarantee" and "-- Description of Junior Subordinated Debentures." The holder
of the Common Securities or, if an Event of Default under the Trust Agreement
has occurred and is continuing, the holders of not less than a majority in
Liquidation Amount of the Capital Securities, will be entitled to appoint,
remove or replace the Property Trustee and/or the Delaware Trustee. In no
event will the holders of the Capital Securities have the right to vote to
appoint, remove or replace the Administrative Trustees; such voting rights
will be vested exclusively in the holder of the Common Securities. The duties
and obligations of each Issuer Trustee are governed by the Trust Agreement.
The Corporation will pay directly all fees, expenses, debts and obligations
(other than the Trust Securities) related to the Exchange Offer, except as
provided herein, and will pay, directly or indirectly, all ongoing costs,
expenses and liabilities of the Trust. The principal executives office of the
Trust is c/o First Keystone Financial, Inc., 22 West State Street, Media,
Pennsylvania 19063.
THE CORPORATION
The Corporation is a Pennsylvania-chartered, registered thrift holding
company headquartered in Media, Pennsylvania. The Corporation is the sole
stockholder of the Bank, a federally chartered savings bank, which has been
engaged in the thrift business since 1934. The Corporation became the parent
holding company of the Bank in connection with the Bank's conversion from the
mutual to stock form in January 1995. The Bank conducts its business through
five full-service offices located in Delaware County. At September 30, 1997,
the Corporation had total consolidated assets of $373.4 million, total
consolidated liabilities of $332.5 million, including total consolidated
deposits of $227.9 million and total consolidated stockholders' equity of
$24.8 million.
The Bank is a traditional, community oriented federal savings bank
emphasizing customer service and convenience. The Bank's primary business is
attracting deposits from the general public and using these funds together
with other available sources of funds, such as borrowings, to originate
loans. A substantial portion of the Bank's deposits are comprised of core
deposits which amounted to $88.4 million or 38.8% of the Bank's total
deposits at September 30, 1997.
24
<PAGE>
The Bank's primary lending emphasis has been, and continues to be,
originating loans secured by first and second liens on single-family
(one-to-four units) residences located in Delaware and Chester Counties,
Pennsylvania and to a lesser degree, Montgomery County, Pennsylvania and New
Castle County, Delaware. Such loans totalled $135.2 million or 68.5% of total
loans at September 30, 1997. To a lesser extent, the Bank also originates
consumer loans (consisting almost entirely of home equity loans and lines of
credit), loans secured by commercial real estate and multi-family (over four
units) residential properties, construction and land loans, commercial
business and other mortgage loans secured by properties located in the Bank's
market area. These other types of loans generally have shorter terms,
adjustable or variable interest rates and higher yields and are attractive to
the Bank in light of the Bank's analysis that the markets have become more
stable. Multi-family and commercial real estate loans and commercial business
loans totalled $18.3 million and $2.0 million, respectively, or 9.3% and
1.0%, respectively, of total loans at September 30, 1997. The Bank's
origination of consumer loans has continued to increase as a direct result of
the Bank's emphasis on developing home equity type loan products. Consumer
loans amounted to $25.4 million or 12.9% of the total loan portfolio at
September 30, 1997.
Certain of the Bank's originations of fixed-rate mortgage loans are sold
into the secondary market while adjustable-rate mortgage loans and some
fixed-rate loans that complement the Bank's asset/liability strategies are
retained for portfolio. The Bank also sells, servicing released, origination
of non-conforming jumbo residential loans and loans to credit impaired
borrowers. Although the Bank has not purchased either whole loans or loan
participation interests in the past, depending on market conditions and
portfolio needs, the Bank may consider purchasing loans and participation
interests in the future.
In addition to its deposit gathering and lending activities, the Bank
invests in mortgage-backed and mortgage-related securities, substantially all
of which are issued or guaranteed by U.S. Government agencies and government
sponsored enterprises, as well as U.S. Treasury and federal government agency
obligations and other investment securities. At September 30, 1997, the
Bank's mortgage-related securities (including mortgage-related securities
available for sale) amounted to $125.2 million, or 33.5% of the Corporation's
total assets, and investment securities (including investment securities
available for sale) amounted to $20.2 million, or 5.4% of total assets.
The Corporation, as a registered thrift holding company, is subject to
examination and regulation by the Office of Thrift Supervision ("OTS") and is
subject to various reporting and other requirements of the Commission. The
Bank, as a federally chartered savings bank, is subject to comprehensive
regulation and examination by the OTS, as its chartering authority and
primary regulator, and by the Federal Deposit Insurance Corporation, which
administers the Savings Association Insurance Fund, which insures the Bank's
deposits to the maximum extent permitted by law. The Bank is a member of the
Federal Home Loan Bank ("FHLB") of Pittsburgh, which is one of the 12
regional banks which comprise the FHLB System. The Bank is further subject to
regulations of the Board of Governors of the Federal Reserve System governing
reserves required to be maintained against deposits and certain other matters.
The Corporation's principal executive offices are located at 22 West
State Street, Media, Pennsylvania 19063, and its telephone number is (610)
565-6210.
25
<PAGE>
SELECTED CONSOLIDATED FINANCIAL DATA OF THE CORPORATION
(Dollars in Thousands, Except Per Share Data)
The selected consolidated financial data below should be read in
connection with the financial information included in the Corporation's
Annual Report on Form 10-KSB for the year ended September 30, 1997. See
"Available Information" and "Incorporation of Certain Documents by Reference."
<TABLE>
<CAPTION>
AT OR FOR THE YEAR ENDED SEPTEMBER 30,
----------------------------------------------------------
1997 1996 1995 1994 1993
---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Financial Condition Data:
Total assets....................................... $ 373,430 $ 294,241 $ 280,879 $ 237,749 $ 233,516
Loans receivable, net.............................. 188,289 167,530 158,002 142,226 137,186
Mortgage-related securities, net................... 20,707 23,221 60,294 68,369 64,213
Investment securities.............................. 10,000 -- 10,710 12,145 11,238
Assets held for sale:
Mortgage-related and equity securities........... 104,472 60,211 19,538 251 946
Investment securities............................ 10,211 16,532 -- -- --
Loans............................................ 4,577 2,447 57 168 1,245
Real estate owned.................................. 1,672 1,557 465 503 971
Deposit accounts................................... 227,918 219,205 223,753 216,065 218,361
FHLB advances and other borrowings................. 99,987 46,740 28,411 5,267 343
Stockholders' equity............................... 24,752 23,084 24,463 11,622 11,206
Non-performing assets.............................. 3,749 6,909 3,621 5,879 6,455
</TABLE>
<TABLE>
<CAPTION>
AT OR FOR THE YEAR ENDED SEPTEMBER 30,
-----------------------------------------------------
1997 1996 1995 1994 1993
--------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
Operations Data:
Interest income.......................................... $ 22,750 $ 19,837 $ 18,295 $ 15,547 $ 16,573
Interest expense......................................... 12,639 10,932 10,767 9,153 10,048
--------- --------- --------- --------- ---------
Net interest income...................................... 10,111 8,905 7,528 6,394 6,525
Provision for loan losses................................ 239 1,250 52 416 390
Net interest income after provision for loan losses...... 9,872 7,655 7,476 5,978 6,135
Other income (expense):
Service charges and other fees......................... 972 1,047 1,029 1,010 962
Net gain on sales of interest-earning assets........... 285 203 113 350 778
Net gain on sale of other assets....................... 46 -- -- -- --
Net gain (loss) on real estate activities.............. 7 2 (44) (47) 17
Other.................................................. 40 56 89 158 119
Operating expenses....................................... 6,921 8,645(1) 7,036 7,728 6,918
--------- --------- --------- --------- ---------
Income (loss) before income taxes,
extraordinary item and cumulative effect
of change in accounting principle...................... 4,301 318 1,627 (279) 1,093
Income tax expense (benefit)............................. 1,644 (567) 504 (95) 127
Extraordinary item, utilization of state tax
carryforward........................................... -- -- -- -- 79
Cumulative effect of change in accounting for income
taxes.................................................. -- -- -- 600 --
--------- --------- --------- --------- ---------
Net income............................................... $ 2,637 $ 885(1) $ 1,123 $ 416 $ 1,045
--------- --------- --------- --------- ---------
--------- --------- --------- --------- ---------
Primary earnings per common share........................ $ 2.27 $ 0.74(1) $ 0.74 N/A N/A
--------- --------- ---------
--------- --------- ---------
Fully diluted earnings per share......................... $ 2.27 $ 0.74(1) $ 0.74 N/A N/A
--------- --------- ---------
--------- --------- ---------
</TABLE>
(footnotes on following page)
26
<PAGE>
<TABLE>
<CAPTION>
AT OR FOR THE YEAR ENDED SEPTEMBER 30,
-----------------------------------------------------
1997 1996 1995 1994 1993
--------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
Operating Ratios:
Average yield earned on interest-earning assets............... 7.54% 7.45% 7.37% 6.84% 7.31%
Average rate paid on interest-bearing liabilities............. 4.48 4.42 4.62 4.18 4.58
Average interest rate spread.................................. 3.07 3.03 2.75 2.66 2.73
Net interest margin........................................... 3.35 3.34 3.03 2.81 2.88
Ratio of interest-earning assets to interest-bearing
liabilities................................................. 106.82 107.65 106.55 103.77 103.33
Net interest income after provision for
loan losses to operating expenses........................... 142.64 88.55(3) 106.25 77.36 88.68
Operating expenses as a percent of average assets............. 2.21 3.14(3) 2.73 3.29 2.95
Return on average assets...................................... 0.84 0.32(3) 0.44 0.18 0.45
Return on average equity...................................... 11.46 3.92(3) 5.59 3.60 10.07
Ratio of average equity to average assets..................... 7.36 8.20 7.80 4.91 4.42
Asset Quality Ratios:(4)
Non-performing loans as a percent of gross loans receivable... 1.09% 3.15% 1.98% 3.74% 3.92%
Non-performing assets as a percent of total assets............ 1.00 2.35 1.29 2.47 2.76
Allowance for loan losses as a percent of gross loans
receivable.................................................. 0.86 1.54 0.93 1.07 0.91
Allowance for loan losses as a percent of non-performing
loans....................................................... 78.38 49.03 47.12 28.65 23.07
Net loans charged-off to average interest-earning loans
receivable.................................................. 0.68 0.07 0.07 0.10 0.89
Other Data:
Capital Ratios:(4)
Tangible capital ratio...................................... 8.12% 7.67% 8.23% 4.88% 4.80%
Core capital ratio.......................................... 8.12 7.67 8.23 4.88 4.80
Risk-based capital.......................................... 19.91 17.24 17.82 10.13 10.77
Full-service offices at end of period......................... 5 5 5 5 5
</TABLE>
- ------------------------
(1) Includes the effects of the one-time SAIF special assessment. The effects of
the assessment increased operating expenses and decreased income before
income taxes by $1.4 million. The effects of the assessment also decreased
net income and earnings per share by $876,000 and $0.74, respectively.
(2) Annualized where appropriate.
(3) Includes the effects of the one-time SAIF special assessment of $1.4
million. Excluding the one-time effects, the ratio of net interest income
after provision for loan losses to operating expenses and operating expenses
as a percent of average assets were 106.04% and 2.62%, respectively. In
addition, return on average assets and return on average equity were 0.64%
and 7.79%, respectively, excluding the assessment.
(4) Asset Quality Ratios and Capital Ratios are end of period ratios, except for
charge-offs to average loans. With the exception of end of period ratios,
all ratios are based on average daily balances during the indicated periods.
27
<PAGE>
USE OF PROCEEDS
Neither the Corporation nor the Trust will receive any cash proceeds
from the issuance of the New Capital Securities offered hereby. The Old
Capital Securities surrendered in exchange for the New Capital Securities
will be retired and cancelled.
The proceeds to the Trust from the offering of the Old Capital
Securities was $16,200,000 (before giving effect to approximately $670,500 of
commissions and expenses of the offering payable by the Corporation). All of
the proceeds from the sale of Old Capital Securities were invested by the
Trust in the Junior Subordinated Debentures. The Corporation invested
approximately $6.0 million of the net proceeds in equity of the Bank. The
Bank intends to use such additional capital to increase its regulatory
capital ratios, seek to enhance core earnings and support the growth of its
business. Net proceeds retained by the Corporation will be used by the
Corporation for general corporate purposes, including the investment of funds
in the Corporation's subsidiaries and potential future acquisitions. There
currently are no agreements, arrangements or understandings with respect to
any potential acquisitions.
RATIOS OF EARNINGS TO FIXED CHARGES
The following table sets forth the ratios of earnings to fixed charges
of the Corporation on a consolidated basis for the respective periods
indicated.
<TABLE>
<CAPTION>
YEAR ENDED SEPTEMBER 30,
-----------------------------------------------------
1997 1996 1995 1994 1993
--------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
Ratios of Earnings to Fixed Charges:
Including interest on deposits.......... 1.34x 1.03x 1.15x 0.97x 1.11x
Excluding interest on deposits.......... 4.90x 7.17x 11.97x 216.44x 742.73x
</TABLE>
For purposes of computing the ratios of earnings to fixed charges,
earnings represent net income (loss) before extraordinary items and
cumulative effect of changes in accounting principles plus applicable income
taxes and fixed charges. Fixed charges, excluding interest on deposits,
include gross interest expense and the portion deemed representative of the
interest factor of rent expense, net of income from subleases. Fixed charges,
including gross interest on deposits, include all interest expense and the
portion deemed representative of the interest factor of rent expense, net of
income from subleases.
ACCOUNTING TREATMENT
For financial reporting purposes, the Trust is treated as a subsidiary of
the Corporation and, accordingly, the accounts of the Trust are included in the
consolidated financial statements of the Corporation. The Capital Securities
will be presented either as a separate line item in the consolidated statements
of financial condition of the Corporation, entitled "Corporation-Obligated
Mandatorily Redeemable Capital Securities of Subsidiary Trust Holding Solely
Junior Subordinated Debentures of the Corporation", or as a liability in the
consolidated statements of financial condition, and in either case appropriate
disclosures about the Capital Securities, the Guarantee and the Junior
Subordinated Debentures will be included in the notes to the consolidated
financial statements of the Corporation. For financial reporting purposes, the
Corporation will record Distributions payable on the Capital Securities as
minority interest expense in its consolidated statements of income.
<PAGE>
CAPITALIZATION
The following table sets forth the consolidated capitalization of the
Corporation as of September 30, 1997, which reflects the consummation of the
offering of the Capital Securities. The following data should be read in
conjunction with the financial information included in documents incorporated
herein by reference or included herein. See "Incorporation of Certain
Documents by Reference."
<TABLE>
<CAPTION>
SEPTEMBER 30, 1997
----------------------
(DOLLARS IN THOUSANDS)
<S> <C>
Deposits.............................................. $227,918
Advances from the FHLB of Pittsburgh and reverse
repurchase agreements............................... 99,987
--------
Total deposits and borrowed funds..................... 327,905
--------
Corporation-obligated mandatorily redeemable capital
securities of subsidiary trust holding solely
junior subordinated debentures of the
Corporation(1)...................................... 16,200
--------
Stockholders' equity:
Serial preferred stock, par value $0.01 per share,
10,000,000 shares authorized, none issued......... --
Common stock, par value $0.01 per share,
20,000,000 shares authorized,
1,228,419 shares issued........................... 14
Additional paid in capital.......................... 12,896
Common stock acquired by stock benefit plans........ (2,038)
Treasury stock at cost; 132,125 shares.............. (2,545)
Unrealized loss on available for sale securities net
of tax............................................ 408
Retain earnings (partially restricted).............. 16,017
--------
Total stockholders' equity............................ 24,752
--------
Total deposits and borrowed funds, minority interest
in subsidiaries and stockholders' equity............ $368,857
--------
--------
</TABLE>
- ------------------------
(1) Reflects the Capital Securities at their issue price. As described herein,
the sole assets of the Trust, which is a subsidiary of the Corporation, are
$16,702,000 aggregate principal amount of the Junior Subordinated Debentures
(including the amounts attributable to the issuance of the Common Securities
of the Trust), which will mature on August 15, 2027. The Corporation owns
all of the Common Securities issued by the Trust. The Corporation may in its
discretion determine to treat the Capital Securities as liabilities in its
consolidated statements of financial condition.
<PAGE>
THE EXCHANGE OFFER
Purpose and Effect of the Exchange Offer
In connection with the sale of the Old Capital Securities, the
Corporation and the Trust entered into the Registration Rights Agreement with
the Initial Purchaser, pursuant to which the Corporation and the Trust agreed
to file and to use their reasonable best efforts to cause to be declared
effective by the Commission a registration statement with respect to the
exchange of the Old Capital Securities for capital securities with terms
identical in all material respects to the terms of the Old Capital
Securities. A copy of the Registration Rights Agreement has been filed as an
Exhibit to the Registration Statement of which this Prospectus is a part.
The Exchange Offer is being made to satisfy the contractual obligations
of the Corporation and the Trust under the Registration Rights Agreement.
The form and terms of the New Capital Securities are the same as the form and
terms of the Old Capital Securities except that the New Capital Securities
(i) have been registered under the Securities Act and therefore will not be
subject to certain restrictions on transfer under federal and state
securities laws and (ii) will not provide for any increase in the
Distribution rate thereon. In that regard, the Old Capital Securities
provide, among other things, that, if a registration statement relating to
the Exchange Offer has not been filed by January 23, 1998 and declared
effective by February 22, 1998, the Distribution rate borne by the Old
Capital Securities, commencing on August 26, 1997 will increase by 0.25% per
annum until the Exchange Offer is consummated. Upon consummation of the
Exchange Offer, holders of Old Capital Securities will not be entitled to any
increase in the Distribution rate thereon or any further registration rights
under the Registration Rights Agreement. See "Risk Factors--Consequences of a
Failure to Exchange Old Capital Securities" and "Description of Old Capital
Securities."
The Exchange Offer is not being made to, nor will the Trust accept
tenders for exchange from, holders of Old Capital Securities in any
jurisdiction in which the Exchange Offer or the acceptance thereof would not
be in compliance with the securities or blue sky laws of such jurisdiction.
Unless the context requires otherwise, the term "holder" with respect to
the Exchange Offer means any person in whose name the Old Capital Securities
are registered on the books of the Trust or any other person who has obtained
a properly completed bond power from the registered holder, or any
participant in the DTC system whose name appears on a security position
listing as the holder of such Old Capital Securities and who desires to
deliver such Old Capital Securities by book-entry transfer at DTC.
Pursuant to the Exchange Offer, the Corporation will exchange as soon as
practicable after the date hereof, the Old Guarantee for the New Guarantee
and the Old Junior Subordinated Debentures, in an amount corresponding to the
Old Capital Securities accepted for exchange, for a like aggregate principal
amount of the New Junior Subordinated Debentures. The New Guarantee and the
New Junior Subordinated Debentures have been registered under the Securities
Act.
Terms of the Exchange Offer
The Trust hereby offers, upon the terms and subject to the conditions
set forth in this Prospectus and in the accompanying Letter of Transmittal,
to exchange up to $16,200,000 aggregate Liquidation Amount of New Capital
Securities for a like aggregate Liquidation Amount of Old Capital Securities
properly tendered on or prior to the Expiration Date and not properly
withdrawn in accordance with the procedures described below. The Trust will
issue, promptly after the Expiration Date, an aggregate Liquidation Amount of
up to $16,200,000 of New Capital Securities in exchange for a like aggregate
Liquidation Amount of outstanding Old Capital Securities tendered and
accepted in connection with the Exchange Offer. Holders may tender their Old
Capital Securities in whole or in part in a Liquidation Amount of not less
than $100,000 (100 Capital Securities) or any integral multiple of $1,000
Liquidation Amount (one Capital Security) in excess thereof, provided that if
any Old Capital Securities are tendered in exchange for part, the untendered
Liquidation Amount must be $100,000 or any integral multiple of $1,000 in
excess thereof.
The Exchange Offer is not conditioned upon any minimum Liquidation
Amount of Old Capital Securities being tendered. As of the date of this
Prospectus, $16,200,000 aggregate Liquidation Amount of the Old Capital
Securities is outstanding.
Holders of Old Capital Securities do not have any appraisal or
dissenters' rights in connection with the Exchange Offer. Old Capital
Securities which are not tendered for or are tendered but not accepted in
30
<PAGE>
connection with the Exchange Offer will remain outstanding and be entitled to
the benefits of the Trust Agreement, but will not be entitled to any further
registration rights under the Registration Rights Agreement. See "Risk
Factors--Consequences of a Failure to Exchange Old Capital Securities" and
"Description of Old Securities."
If any tendered Old Capital Securities are not accepted for exchange
because of an invalid tender, the occurrence of certain other events set
forth herein or otherwise, certificates for any such unaccepted Old Capital
Securities will be returned, without expense, to the tendering holder thereof
promptly after the Expiration Date.
Holders who tender Old Capital Securities in connection with the
Exchange Offer will not be required to pay brokerage commissions or fees or,
subject to the instructions in the Letter of Transmittal, transfer taxes with
respect to the exchange of Old Capital Securities in connection with the
Exchange Offer. The Corporation will pay all charges and expenses, other
than certain applicable taxes described below, in connection with the
Exchange Offer. See "--Fees and Expenses."
NEITHER THE BOARD OF DIRECTORS OF THE CORPORATION NOR ANY ISSUER TRUSTEE
OF THE TRUST MAKES ANY RECOMMENDATION TO HOLDERS OF OLD CAPITAL SECURITIES AS
TO WHETHER TO TENDER OR REFRAIN FROM TENDERING ALL OR ANY PORTION OF THEIR
OLD CAPITAL SECURITIES PURSUANT TO THE EXCHANGE OFFER. IN ADDITION, NO ONE
HAS BEEN AUTHORIZED TO MAKE ANY SUCH RECOMMENDATION. HOLDERS OF OLD CAPITAL
SECURITIES MUST MAKE THEIR OWN DECISION WHETHER TO TENDER PURSUANT TO THE
EXCHANGE OFFER AND, IF SO, THE AGGREGATE AMOUNT OF OLD CAPITAL SECURITIES TO
TENDER BASED ON SUCH HOLDERS OWN FINANCIAL POSITION AND REQUIREMENTS.
Expiration Date; Extensions; Amendments
The term "Expiration Date" means 5:00 p.m., New York City time, on March
__ 1998 unless the Exchange Offer is extended by the Corporation or the Trust
(in which case the term "Expiration Date" shall mean the latest date and time
to which the Exchange Offer is extended).
The Corporation and the Trust expressly reserve the right in their sole
and absolute discretion, subject to applicable law, at any time and from time
to time, (i) to delay the acceptance of the Old Capital Securities for
exchange, (ii) to terminate the Exchange Offer (whether or not any Old
Capital Securities have theretofore been accepted for exchange) if the
Corporation and the Trust determine, in their sole and absolute discretion,
that any of the events or conditions referred to under "--Conditions to the
Exchange Offer" have occurred or exist or have not been satisfied, (iii) to
extend the Expiration Date of the Exchange Offer and retain all Old Capital
Securities tendered pursuant to the Exchange Offer, subject, however, to the
right of holders of Old Capital Securities to withdraw their tendered Old
Capital Securities as described under "--Withdrawal Rights," and (iv) to
waive any condition or otherwise amend the terms of the Exchange Offer in any
respect. If the Exchange Offer is amended in a manner determined by the
Corporation and the Trust to constitute a material change, or if the
Corporation and the Trust waive a material condition of the Exchange Offer,
the Corporation and the Trust will promptly disclose such amendment by means
of a Prospectus supplement that will be distributed to the registered holders
of the Old Capital Securities, and the Corporation and the Trust will extend
the Exchange Offer to the extent required by Rule 14e-1 under the Exchange
Act.
Any such delay in acceptance, extension, termination or amendment will
be followed promptly by oral or written notice thereof to the Exchange Agent
and by making a public announcement thereof, and such announcement in the
case of an extension will be made no later than 9:00 a.m., New York City
time, on the next business day after the previously scheduled Expiration
Date. Without limiting the manner in which the Corporation and the Trust may
choose to make any public announcement and subject to applicable law, the
Corporation and the Trust shall have no obligation to publish, advertise or
otherwise communicate any such public announcement other than by issuing a
release to an appropriate news agency.
Acceptance for Exchange and Issuance of New Capital Securities
Upon the terms and subject to the conditions of the Exchange Offer, the
Trust will exchange, and will issue to the Exchange Agent, New Capital
Securities for Old Capital Securities validly tendered and not withdrawn
promptly after the Expiration Date.
31
<PAGE>
In all cases, delivery of New Capital Securities in exchange for Old
Capital Securities tendered and accepted for exchange pursuant to the
Exchange Offer will be made only after timely receipt by the Exchange Agent
of (i) Old Capital Securities or a book-entry confirmation of a book-entry
transfer of Old Capital Securities into the Exchange Agent's account at DTC,
including an Agent's Message if the tendering holder has not delivered a
Letter of Transmittal, (ii) the Letter of Transmittal (or facsimile thereof),
properly completed and duly executed, with any required signature guarantees,
or (in the case of a book-entry transfer) an Agent's Message in lieu of the
Letter of Transmittal, and (iii) any other documents required by the Letter
of Transmittal.
The term "book-entry confirmation" means a timely confirmation of a
book-entry transfer of Old Capital Securities into the Exchange Agent's
account at DTC. The term "Agent's Message" means a message, transmitted by
DTC to and received by the Exchange Agent and forming a part of a book-entry
confirmation, which states that DTC has received an express acknowledgement
from the tendering participant, which acknowledgment states that such
participant has received and agrees to be bound by the Letter of Transmittal
and that the Trust and the Corporation may enforce such Letter of Transmittal
against such participant.
Subject to the terms and conditions of the Exchange Offer, the
Corporation and the Trust will be deemed to have accepted for exchange, and
thereby exchanged, Old Capital Securities validly tendered and not withdrawn
as, if and when the Trust gives oral or written notice to the Exchange Agent
of the Corporation's and the Trust's acceptance of such Old Capital
Securities for exchange pursuant to the Exchange Offer. The Exchange Agent
will act as agent for the Trust for the purpose of receiving tenders of Old
Capital Securities, Letters of Transmittal and related documents, and as
agent for tendering holders for the purpose of receiving Old Capital
Securities, Letters of Transmittal and related documents and transmitting New
Capital Securities to validly tendering holders. Such exchange will be made
promptly after the Expiration Date. If, for any reason whatsoever,
acceptance for exchange or the exchange of any Old Capital Securities
tendered pursuant to the Exchange Offer is delayed (whether before or after
the Trust's acceptance for exchange of Old Capital Securities) or the
Corporation and the Trust extend the Exchange Offer or are unable to accept
for exchange or exchange Old Capital Securities tendered pursuant to the
Exchange Offer, then, without prejudice to the Corporation's and the Trust's
rights set forth herein, the Exchange Agent may, nevertheless, on behalf of
the Corporation and the Trust and subject to Rule 14e-1(c) under the Exchange
Act, retain tendered Old Capital Securities and such Old Capital Securities
may not be withdrawn except to the extent tendering holders are entitled to
withdrawal rights as described under "--Withdrawal Rights."
Pursuant to the Letter of Transmittal or Agent's Message in lieu
thereof, a holder of Old Capital Securities will warrant and agree in the
Letter of Transmittal that it has full power and authority to tender,
exchange, sell, assign and transfer Old Capital Securities, that the Trust
will acquire good, marketable and unencumbered title to the tendered Old
Capital Securities, free and clear of all liens, restrictions, charges and
encumbrances, and the Old Capital Securities tendered for exchange are not
subject to any adverse claims or proxies. The holder also will warrant and
agree that it will, upon request, execute and deliver any additional
documents deemed by the Corporation, the Trust or the Exchange Agent to be
necessary or desirable to complete the exchange, sale, assignment and
transfer of the Old Capital Securities tendered pursuant to the Exchange
Offer.
Procedures for Tendering Old Capital Securities
Valid Tender. Except as set forth below, in order for Old Capital
Securities to be validly tendered pursuant to the Exchange Offer, a properly
completed and duly executed Letter of Transmittal (or facsimile thereof),
with any required signature guarantees, or (in the case of a book-entry
transfer) an Agent's Message in lieu of a Letter of Transmittal, and any
other required documents, must be received by the Exchange Agent at one of
its addresses set forth under "--Exchange Agent," and (i) tendered Old
Capital Securities must be received by the Exchange Agent, or (ii) such Old
Capital Securities must be tendered pursuant to the procedures for book-entry
transfer set forth below and a book-entry confirmation, including an Agent's
Message if the tendering holder has not delivered a Letter of Transmittal,
must be received by the Exchange Agent, in each case on or prior to the
Expiration Date, or (iii) the guaranteed delivery procedures set forth below
must be complied with.
If less than all of the Old Capital Securities are tendered, a tendering
holder should fill in the amount of Old Capital Securities being tendered in
the appropriate box on the Letter of Transmittal or so indicate in an Agent's
Message in lieu of the Letter of Transmittal and the untendered Liquidation
Amount must be $100,000 or any integral multiple of $1,000 in excess thereof.
The entire amount of Old Capital Securities delivered to the Exchange Agent
will be deemed to have been tendered unless otherwise indicated.
32
<PAGE>
THE METHOD OF DELIVERY OF CERTIFICATES, THE LETTER OF TRANSMITTAL AND
ALL OTHER REQUIRED DOCUMENTS IS AT THE OPTION AND SOLE RISK OF THE TENDERING
HOLDER, AND DELIVERY WILL BE DEEMED MADE ONLY WHEN ACTUALLY RECEIVED BY THE
EXCHANGE AGENT. IF DELIVERY IS BY MAIL, REGISTERED MAIL, RETURN-RECEIPT
REQUESTED, PROPERLY INSURED, OR AN OVERNIGHT DELIVERY SERVICE IS RECOMMENDED.
IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO ENSURE TIMELY DELIVERY.
Book-Entry Transfer. The Exchange Agent will establish an account with
respect to the Old Capital Securities at DTC for purposes of the Exchange
Offer within two business days after the date of this Prospectus. Any
financial institution that is a participant in DTC's book-entry transfer
facility system may make a book-entry delivery of the Old Capital Securities
by causing DTC to transfer such Old Capital Securities into the Exchange
Agent's account at DTC in accordance with DTC's procedures for transfers.
However, although delivery of Old Capital Securities may be effected through
book-entry transfer into the Exchange Agent's account at DTC, the Letter of
Transmittal (or facsimile thereof), properly completed and duly executed,
with any required signature guarantees, or an Agent's Message in lieu of the
Letter of Transmittal, and any other required documents, must in any case be
delivered to and received by the Exchange Agent at its address set forth
under "--Exchange Agent" on or prior to the Expiration Date, or the
guaranteed delivery procedure set forth below must be complied with.
DELIVERY OF DOCUMENTS TO DTC IN ACCORDANCE WITH DTC'S PROCEDURES DOES
NOT CONSTITUTE DELIVERY TO THE EXCHANGE AGENT.
Signature Guarantees. Certificates for the Old Capital Securities need
not be endorsed and signature guarantees on the Letter of Transmittal are
unnecessary unless (i) a certificate for the Old Capital Securities is
registered in a name other than that of the person surrendering the
certificate or (ii) such holder completes the box entitled "Special Issuance
Instructions" or "Special Delivery Instructions" in the Letter of
Transmittal. In the case of (i) or (ii) above, such certificates for Old
Capital Securities must be duly endorsed or accompanied by a properly
executed bond power, with the endorsement or signature on the bond power and
on the Letter of Transmittal guaranteed by a firm or other entity identified
in Rule 17Ad-15 under the Exchange Act as an "eligible guarantor
institution," including (as such terms are defined therein): (i) a bank; (ii)
a broker, dealer, municipal securities broker or dealer or government
securities broker or dealer; (iii) a credit union; (iv) a national securities
exchange, registered securities association or clearing agency; or (v) a
savings association that is a participant in a Securities Transfer
Association (an "Eligible Institution"), unless surrendered on behalf of such
Eligible Institution. See Instruction 1 to the Letter of Transmittal.
Guaranteed Delivery. If a holder desires to tender Old Capital
Securities pursuant to the Exchange Offer and the certificates for such Old
Capital Securities are not immediately available or time will not permit all
required documents to reach the Exchange Agent on or prior to the Expiration
Date, or the procedure for book-entry transfer cannot be completed on a
timely basis, such Old Capital Securities may nevertheless be tendered,
provided that all of the following guaranteed delivery procedures are
complied with:
(i) such tenders are made by or through an Eligible Institution;
(ii) a properly completed and duly executed Notice of Guaranteed
Delivery, substantially in the form accompanying the Letter of Transmittal,
is received by the Exchange Agent, as provided below, on or prior to the
Expiration Date; and
(iii) the certificates (or a book-entry confirmation) representing all
tendered Old Capital Securities, in proper form for transfer, together with a
properly completed and duly executed Letter of Transmittal (or facsimile
thereof), or Agent's Message in lieu thereof, with any required signature
guarantees and any other documents required by the Letter of Transmittal, are
received by the Exchange Agent within three New York Stock Exchange trading
days after the date of execution of such Notice of Guaranteed Delivery.
The Notice of Guaranteed Delivery may be delivered by hand, or
transmitted by facsimile or mail to the Exchange Agent and must include a
guarantee by an Eligible Institution in the form set forth in such notice.
Notwithstanding any other provision hereof, the delivery of New Capital
Securities in exchange for Old Capital Securities tendered and accepted for
exchange pursuant to the Exchange Offer will in all cases be made only after
timely receipt by the Exchange Agent of Old Capital Securities, or of a
book-entry confirmation with respect to such Old Capital Securities, and a
properly completed and duly executed Letter of Transmittal (or facsimile
thereof), or Agent's Message in lieu thereof, together with any required
signature guarantees and any other documents required by the Letter of
Transmittal. Accordingly, the delivery of New Capital Securities might
33
<PAGE>
not be made to all tendering holders at the same time, and will depend upon
when Old Capital Securities, book-entry confirmations with respect to Old
Capital Securities and other required documents are received by the Exchange
Agent.
The Corporation's and the Trust's acceptance for exchange of Old Capital
Securities tendered pursuant to any of the procedures described above will
constitute a binding agreement between the tendering holder, the Corporation
and the Trust upon the terms and subject to the conditions of the Exchange
Offer.
Determination of Validity. All questions as to the form of documents,
validity, eligibility (including time of receipt) and acceptance for exchange
of any tendered Old Capital Securities will be determined by the Corporation
and the Trust, in their sole discretion, whose determination shall be final
and binding on all parties. The Corporation and the Trust reserve the
absolute right, in their sole and absolute discretion, to reject any and all
tenders determined by them not to be in proper form or the acceptance of
which, or exchange for, may, in the opinion of counsel to the Corporation and
the Trust, be unlawful. The Corporation and the Trust also reserve the
absolute right, subject to applicable law, to waive any of the conditions of
the Exchange Offer as set forth under "--Conditions to the Exchange Offer" or
any condition or irregularity in any tender of Old Capital Securities of any
particular holder whether or not similar conditions or irregularities are
waived in the case of other holders.
The interpretation by the Corporation and the Trust of the terms and
conditions of the Exchange Offer (including the Letter of Transmittal and the
instructions thereto) will be final and binding. No tender of Old Capital
Securities will be deemed to have been validly made until all irregularities
with respect to such tender have been cured or waived. None of the
Corporation, the Trust, any affiliates or assigns of the Corporation or the
Trust, the Exchange Agent or any other person shall be under any duty to give
any notification of any irregularities in tenders or incur any liability for
failure to give any such notification.
If any Letter of Transmittal, endorsement, bond power, power of attorney
or any other document required by the Letter of Transmittal is signed by a
trustee, executor, administrator, guardian, attorney-in-fact, officer of a
corporation or other person acting in a fiduciary or representative capacity,
such person should so indicate when signing, and unless waived by the
Corporation and the Trust, proper evidence satisfactory to the Corporation
and the Trust, in their sole discretion, of such person's authority to so act
must be submitted.
A beneficial owner of Old Capital Securities that are held by or
registered in the name of a broker, dealer, commercial bank, trust company or
other nominee or custodian is urged to contact such entity promptly if such
beneficial holder wishes to participate in the Exchange Offer.
Resales of New Capital Securities
The Trust is making the Exchange Offer for the New Capital Securities in
reliance on the position of the staff of the Division of Corporation Finance
of the Commission as set forth in certain interpretive letters addressed to
third parties in other transactions. However, neither the Corporation nor
the Trust sought its own interpretive letter and there can be no assurance
that the staff of the Division of Corporation Finance of the Commission would
make a similar determination with respect to the Exchange Offer as it has in
such interpretive letters to third parties. Based on these interpretations
by the staff of the Division of Corporation Finance of the Commission, and
subject to the two immediately following sentences, the Corporation and the
Trust believe that New Capital Securities issued pursuant to this Exchange
Offer in exchange for Old Capital Securities may be offered for resale,
resold and otherwise transferred by a holder thereof (other than a holder who
is a broker-dealer) without further compliance with the registration and
prospectus delivery requirements of the Securities Act, provided that such
New Capital Securities are acquired in the ordinary course of such holder's
business and that such holder is not participating, and has no arrangement or
understanding with any person to participate, in a distribution (within the
meaning of the Securities Act) of such New Capital Securities. However, any
holder of Old Capital Securities who is an Affiliate of the Corporation or
the Trust or who intends to participate in the Exchange Offer for the purpose
of distributing New Capital Securities, or any broker-dealer who purchased
Old Capital Securities from the Trust to resell pursuant to Rule 144A or any
other available exemption under the Securities Act (i) will not be able to
rely on the interpretations of the staff of the Division of Corporation
Finance of the Commission set forth in the above-mentioned interpretive
letters, (ii) will not be permitted or entitled to tender such Old Capital
Securities in the Exchange Offer and (iii) must comply with the registration
and prospectus delivery requirements of the Securities Act in connection with
any sale or other transfer of such Old Capital Securities, unless such sale
is made pursuant to an exemption from such requirements. In addition, as
described below, Participating Broker-Dealers must deliver a prospectus
meeting the requirements of the Securities Act in connection with any resales
of New Capital Securities.
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Each holder of Old Capital Securities who wishes to exchange Old Capital
Securities for New Capital Securities in the Exchange Offer will be required
to represent that (i) it is not an Affiliate of the Corporation or the Trust,
(ii) any New Capital Securities to be received by it are being acquired in
the ordinary course of its business, (iii) it has no arrangement or
understanding with any person to participate in a distribution (within the
meaning of the Securities Act) of such New Capital Securities and (iv) if
such holder is not a broker-dealer, such holder is not engaged in, and does
not intend to engage in, a distribution (within the meaning of the Securities
Act) of such New Capital Securities. The Letter of Transmittal contains the
foregoing representations. In addition, the Corporation and the Trust may
require such holder, as a condition to such holder's eligibility to
participate in the Exchange Offer, to furnish to the Corporation and the
Trust (or an agent thereof) in writing information as to the number of
"beneficial owners" (within the meaning of Rule 13d-3 under the Exchange Act)
on behalf of whom such holder holds the Capital Securities to be exchanged in
the Exchange Offer. Each Participating Broker-Dealer will be deemed to have
acknowledged by execution of the Letter of Transmittal or delivery of an
Agent's Message that it acquired the Old Capital Securities for its own
account as the result of market-making activities or other trading activities
and must agree that it will deliver a prospectus meeting the requirements of
the Securities Act in connection with any resale of such New Capital
Securities. The Letter of Transmittal states that by so acknowledging and by
delivering a prospectus, a Participating Broker-Dealer will not be deemed to
admit that it is an "underwriter" within the meaning of the Securities Act.
Based on the position taken by the staff of the Division of Corporation
Finance of the Commission in the interpretive letters referred to above, the
Corporation and the Trust believe that Participating Broker-Dealers who
acquired Old Capital Securities for their own accounts as a result of
market-making activities or other trading activities may fulfill their
prospectus delivery requirements with respect to the New Capital Securities
received upon exchange of such Old Capital Securities (other than Old Capital
Securities which represent an unsold allotment from the original sale of the
Old Capital Securities) with a prospectus meeting the requirements of the
Securities Act, which may be the prospectus prepared for an exchange offer so
long as it contains a description of the plan of distribution with respect to
the resale of such New Capital Securities. Accordingly, this Prospectus, as
it may be amended or supplemented from time to time, may be used by a
Participating Broker-Dealer during the period referred to below in connection
with resales of New Capital Securities received in exchange for Old Capital
Securities where such Old Capital Securities were acquired by such
Participating Broker-Dealer for its own account as a result of market-making
or other trading activities. Subject to certain provisions set forth in the
Registration Rights Agreement, the Corporation and the Trust have agreed that
this Prospectus, as it may be amended or supplemented from time to time, may
be used by a Participating Broker-Dealer in connection with resales of such
New Capital Securities for a period ending 90-days after the Expiration Date
(subject to extension under certain limited circumstances described below)
or, if earlier, when all such New Capital Securities have been disposed of by
such Participating Broker-Dealer. See "Plan of Distribution." However, a
Participating Broker-Dealer who intends to use this Prospectus in connection
with the resale of New Capital Securities received in exchange for Old
Capital Securities pursuant to the Exchange Offer must notify the Corporation
or the Trust, or cause the Corporation or the Trust to be notified, on or
prior to the Expiration Date, that it is a Participating Broker-Dealer. Such
notice may be given in the space provided for that purpose in the Letter of
Transmittal or may be delivered to the Exchange Agent at one of the addresses
set forth herein under "--Exchange Agent." Any person, including any
Participating Broker-Dealer, who is an Affiliate of the Corporation or the
Trust may not rely on such interpretive letters and must comply with the
registration and prospectus delivery requirements of the Securities Act in
connection with any resale transaction.
In that regard, each Participating Broker-Dealer who surrenders Old
Capital Securities pursuant to the Exchange Offer will be deemed to have
agreed, by execution of the Letter of Transmittal or delivery of an Agent's
Message in lieu thereof, that, upon receipt of notice from the Corporation or
the Trust of the occurrence of any event or the discovery of any fact which
makes any statement contained or incorporated by reference in this Prospectus
untrue in any material respect or which causes this Prospectus to omit to
state a material fact necessary in order to make the statements contained or
incorporated by reference herein, in light of the circumstances under which
they were made, not misleading or of the occurrence of certain other events
specified in the Registration Rights Agreement, such Participating
Broker-Dealer will suspend the sale of New Capital Securities (or the New
Guarantee or the New Junior Subordinated Debentures, as applicable) pursuant
to this Prospectus until the Corporation or the Trust has amended or
supplemented this Prospectus to correct such misstatement or omission and has
furnished copies of the amended or supplemented Prospectus to such
Participating Broker-Dealer or the Corporation or the Trust has given notice
that the sale of the New Capital Securities (or the New Guarantee or the New
Junior Subordinated Debentures, as applicable) may be resumed, as the case
may be. If the Corporation or the Trust gives such notice to suspend the
sale of the New Capital Securities (or the New Guarantee or the New Junior
Subordinated Debentures, as applicable), it shall extend the 90-day period
referred to above during which Participating Broker-Dealers are entitled to
use this Prospectus in connection with the resale of New Capital Securities
by the number of days during the period from and including the date of the
giving of such notice to and including the date when Participating
Broker-Dealers shall
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have received copies of the amended or supplemented Prospectus necessary to
permit resales of the New Capital Securities or to and including the date on
which the Corporation or the Trust has given notice that the sale of New
Capital Securities (or the New Guarantee or the New Junior Subordinated
Debentures, as applicable) may be resumed, as the case may be.
Withdrawal Rights
Except as otherwise provided herein, tenders of Old Capital Securities
may be withdrawn at any time on or prior to the Expiration Date.
In order for a withdrawal to be effective a written or facsimile
transmission of such notice of withdrawal must be timely received by the
Exchange Agent at one of its addresses set forth under "--Exchange Agent" on
or prior to the Expiration Date. Any such notice of withdrawal must specify
the name of the person who tendered the Old Capital Securities to be
withdrawn, the aggregate principal amount of Old Capital Securities to be
withdrawn, and (if certificates for such Old Capital Securities have been
tendered) the name of the registered holder of the Old Capital Securities as
set forth on the Old Capital Securities, if different from that of the person
who tendered such Old Capital Securities. If Old Capital Securities have
been delivered or otherwise identified to the Exchange Agent, then prior to
the physical release of such Old Capital Securities, the tendering holder
must submit the certificate numbers shown on the particular Old Capital
Securities to be withdrawn and the signature on the notice of withdrawal must
be guaranteed by an Eligible Institution, except in the case of Old Capital
Securities tendered for the account of an Eligible Institution. If Old
Capital Securities have been tendered pursuant to the procedures for
book-entry transfer set forth in "--Procedures for Tendering Old Capital
Securities," the notice of withdrawal must specify the name and number of the
account at DTC to be credited with the withdrawal of Old Capital Securities,
in which case a notice of withdrawal will be effective if delivered to the
Exchange Agent by written or facsimile transmission. Withdrawals of tenders
of Old Capital Securities may not be rescinded. Old Capital Securities
properly withdrawn will not be deemed validly tendered for purposes of the
Exchange Offer, but may be retendered at any subsequent time on or prior to
the Expiration Date by following any of the procedures described above under
"--Procedures for Tendering Old Capital Securities."
All questions as to the validity, form and eligibility (including time
of receipt) of such withdrawal notices will be determined by the Corporation
and the Trust, in their sole discretion, whose determination shall be final
and binding on all parties. None of the Corporation, the Trust, any
affiliates or assigns of the Corporation or the Trust, the Exchange Agent or
any other person shall be under any duty to give any notification of any
irregularities in any notice of withdrawal or incur any liability for failure
to give any such notification. Any Old Capital Securities which have been
tendered but which are withdrawn will be returned to the holder thereof
promptly after withdrawal.
Distributions on New Capital Securities
Holders of Old Capital Securities as of February 1, 1998, the record
date for the initial Distribution on February 15, 1998, including such
holders who tender their Old Capital Securities pursuant to the Exchange
Offer, will be entitled to receive such Distribution. Distributions on the
New Capital Securities are payable semi-annually in arrears on February 15th
and August 15th of each year, commencing August 15, 1998, at the annual rate
of 9.70% of the Liquidation Amount to the holders of the New Capital
Securities on the relevant record dates. Distributions on the New Capital
Securities will accumulate from February 15, 1998, the date of the initial
Distribution on the Old Capital Securities.
Conditions to the Exchange Offer
Notwithstanding any other provisions of the Exchange Offer, or any
extension of the Exchange Offer, the Corporation and the Trust will not be
required to accept for exchange, or to exchange, any Old Capital Securities
for any New Capital Securities, and, as described below, may terminate the
Exchange Offer (whether or not any Old Capital Securities have theretofore
been accepted for exchange) or may waive any conditions to or amend the
Exchange Offer, if any of the following conditions have occurred or exists or
have not been satisfied:
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(a) there shall occur a change in the current interpretation by the
staff of the Commission which permits the New Capital Securities issued
pursuant to the Exchange Offer in exchange for Old Capital Securities to be
offered for resale, resold and otherwise transferred by holders thereof
(other than broker-dealers and any such holder which is an Affiliate of the
Corporation or the Trust) without compliance with the registration and
prospectus delivery provisions of the Securities Act, provided that such New
Capital Securities are acquired in the ordinary course of such holders'
business and such holders have no arrangement or understanding with any
person to participate in the distribution of such New Capital Securities; or
(b) any law, statute, rule or regulation shall have been adopted or
enacted which, in the judgment of the Corporation or the Trust, would
reasonably be expected to impair its ability to proceed with the Exchange
Offer;
(c) any action or proceeding shall have been instituted or threatened in
any court or by or before any governmental agency or body with respect to the
Exchange Offer which, in the Corporation's and the Trust's judgment, would
reasonably be expected to impair the ability of the Trust or the Corporation
to proceed with the Exchange Offer;
(d) a banking moratorium shall have been declared by United States
federal or Pennsylvania or New York state authorities which, in the
Corporation's and the Trust's judgment, would reasonably be expected to
impair the ability of the Trust or the Corporation to proceed with the
Exchange Offer;
(e) trading on the New York Stock Exchange or generally in the United
States over-the-counter market shall have been suspended by order of the
Commission or any other governmental authority which, in the Corporation's
and the Trust's judgment, would reasonably be expected to impair the ability
of the Issuer or the Corporation to proceed with the Exchange Offer; or
(f) a stop order shall have been issued by the Commission or any state
securities authority suspending the effectiveness of the Registration
Statement or proceedings shall have been initiated or, to the knowledge of
the Corporation or the Trust, threatened for that purpose, or any
governmental approval which either the Corporation or the Trust shall, in its
sole discretion, deem necessary for the consummation of the Exchange Offer as
contemplated hereby has not been obtained.
If the Corporation and the Trust determine in their sole and absolute
discretion that any of the foregoing events or conditions has occurred or
exists or has not been satisfied, the Corporation and the Trust may, subject
to applicable law, terminate the Exchange Offer (whether or not any Old
Capital Securities have theretofore been accepted for exchange) or may waive
any such condition or otherwise amend the terms of the Exchange Offer in any
respect. If such waiver or amendment constitutes a material change to the
Exchange Offer, the Corporation and the Trust will promptly disclose such
waiver or amendment by means of a Prospectus supplement that will be
distributed to the registered holders of the Old Capital Securities and will
extend the Exchange Offer to the extent required by Rule 14e-1 under the
Exchange Act.
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Exchange Agent
The Bank of New York has been appointed as Exchange Agent for the
Exchange Offer. Delivery of the Letters of Transmittal and any other
required documents, questions, requests for assistance, and requests for
additional copies of this Prospectus or of the Letter of Transmittal should
be directed to the Exchange Agent as follows:
By Registered or Certified Mail: By Hand or Overnight Delivery:
The Bank of New York The Bank of New York
101 Barclay Street - 7E 101 Barclay Street
New York, New York 10286 Corporate Trust Services Window
Attention: Reorganization Section Ground Level
Diana Torrez New York, New York 10286
Attention: Reorganization Section
Diana Torrez
Confirm by Telephone
or for Information call:
(212) 815-5942
Facsimile Transmission:
(Eligible Institutions Only)
(212) 815-6339
Delivery to other than the above addresses or facsimile number will not
constitute a valid delivery.
Fees and Expenses
The Corporation has agreed to pay the Exchange Agent reasonable and
customary fees for its services and will reimburse it for its reasonable
out-of-pocket expenses in connection therewith. The Corporation will also
pay brokerage houses and other custodians, nominees and fiduciaries the
reasonable out-of-pocket expenses incurred by them in forwarding copies of
this Prospectus and related documents to the beneficial owners of Old Capital
Securities, and in handling or tendering for their customers.
Holders who tender their Old Capital Securities for exchange will not be
obligated to pay any transfer taxes in connection therewith. If, however,
New Capital Securities are to be delivered to, or are to be issued in the
name of, any person other than the registered holder of the Old Capital
Securities tendered, or if a transfer tax is imposed for any reason other
than the exchange of Old Capital Securities in connection with the Exchange
Offer, then the amount of any such transfer taxes (whether imposed on the
registered holder or any other persons) will be payable by the tendering
holder. If satisfactory evidence of payment of such taxes or exemption
therefrom is not submitted with the Letter of Transmittal, the amount of such
transfer taxes will be billed directly to such tendering holder.
Neither the Corporation nor the Trust will make any payment to brokers,
dealers or other nominees soliciting acceptances of the Exchange Offer.
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DESCRIPTION OF NEW SECURITIES
Description of Capital Securities
Pursuant to the terms of the Trust Agreement, the Trust has issued the
Old Capital Securities and the Common Securities and will issue the New
Capital Securities. The New Capital Securities will represent undivided
beneficial interests in the assets of the Trust and the holders of the New
Capital Securities and the Old Capital Securities will be entitled to a
preference over the Common Securities in certain circumstances with respect
to Distributions and amounts payable on redemption of the Trust Securities or
liquidation of the Trust. See "--Subordination of Common Securities." The
Trust Agreement has been qualified under the Trust Indenture Act of 1939, as
amended (the "Trust Indenture Act"). This summary of certain provisions of
the Capital Securities, the Common Securities and the Trust Agreement
describes the material terms of the Capital Securities but does not purport
to be complete and is subject to, and is qualified in its entirety by
reference to, all the provisions of the Trust Agreement, including the
definitions therein of certain terms.
General. The Capital Securities (including the Old Capital Securities
and the New Capital Securities) are limited to $16,200,000 aggregate
Liquidation Amount at any one time outstanding. The Capital Securities rank
pari passu, and payments thereon will be made pro rata, with the Common
Securities except as described under "--Subordination of Common Securities."
Legal title to the Junior Subordinated Debentures is held by the Property
Trustee in trust for the benefit of the holders of the Capital Securities and
the holder of the Common Securities. The Guarantee is a guarantee on a
subordinated and junior basis with respect to the Capital Securities, but
does not guarantee payment of Distributions or amounts payable on redemption
of the Capital Securities or on liquidation of the Trust when the Trust does
not have funds on hand legally available for such payments. See "--Description
of Guarantee."
Distributions. Distributions on the New Capital Securities are payable
semi-annually in arrears on February 15th and August 15th of each year,
commencing August 15, 1998, at the annual rate of 9.70% of the Liquidation
Amount to the holders of the New Capital Securities on the relevant record
dates. Distributions on the New Capital Securities will accumulate from
February 15, 1998, the date of the initial Distribution on the Old Capital
Securities. The record dates are the first day of the month in which the
relevant Distribution Date (as defined below) falls. The amount of
Distributions payable for any period will be computed on the basis of a
360-day year of twelve 30-day months and, for any period of less than one
calendar month, the number of days elapsed in such month. In the event that
any date on which Distributions are payable on the Capital Securities is not
a Business Day (as defined below), payment of the Distribution payable on
such date will be made on the next succeeding day that is a Business Day (and
without any interest or other payment in respect to any such delay), with the
same force and effect as if made on the date such payment was originally
payable (each date on which Distributions are payable in accordance with the
foregoing, a "Distribution Date"). A "Business Day" shall mean any day other
than a Saturday or a Sunday, or a day on which banking institutions in New
York, New York or Media, Pennsylvania are authorized or required by law or
executive order to remain closed.
So long as no Event of Default (as defined in the Indenture) with
respect to the Junior Subordinated Debentures (a "Debenture Event of
Default") shall have occurred and be continuing, the Corporation has the
right under the Indenture to elect to defer the payment of interest on the
Junior Subordinated Debentures at any time or from time to time for a period
not exceeding 10 consecutive semi-annual periods with respect to each
Extension Period, provided that no Extension Period may extend beyond the
Stated Maturity Date. Upon any such election, semi-annual Distributions on
the Capital Securities will be deferred by the Trust during any such
Extension Period. Distributions to which holders of the Capital Securities
are entitled during any such Extension Period will accumulate additional
Distributions thereon at the rate per annum of 9.70% thereof, compounded
semi-annually from the relevant Distribution Date. The term "Distributions,"
as used herein, shall include any such additional Distributions.
Prior to the termination of any such Extension Period, the Corporation
may further extend such Extension Period, provided that such extension does
not cause such Extension Period to exceed 10 consecutive semi-annual periods,
to end on a date other than an Interest Payment Date or to extend beyond the
Stated
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Maturity Date. Upon the termination of any such Extension Period and the
payment of all amounts then due on any Interest Payment Date, the Corporation
may elect to begin a new Extension Period, subject to the above requirements.
No interest shall be due and payable during an Extension Period, except at
the end thereof. The Corporation must give the Property Trustee, the
Administrative Trustees and the Debenture Trustee notice of its election of
any such Extension Period (or an extension thereof) at least five Business
Days prior to the earlier of (i) the date the Distributions on the Capital
Securities would have been payable except for the election to begin such
Extension Period and (ii) the date the Administrative Trustees are required
to give notice to any securities exchange or automated quotation system or to
holders of the Capital Securities of the record date or the date such
Distributions are payable, but in any event not less than five Business Days
prior to such record date. There is no limitation on the number of times that
the Corporation may elect to begin an Extension Period. See "--Description of
Junior Subordinated Debentures--Option to Extend Interest Payment Date" and
"Certain Federal Income Tax Considerations--Interest Income and Original
Issue Discount."
During any such Extension Period, the Corporation may not (i) declare or
pay any dividends or distributions on, or redeem, purchase, acquire, or make
a liquidation payment with respect to, any of the Corporation's capital
stock, (ii) make any payment of principal of or premium, if any, or interest
on or repay, repurchase or redeem any debt securities of the Corporation
(including any Other Debentures) that rank pari passu with or junior in right
of payment to the Junior Subordinated Debentures or (iii) make any guarantee
payments with respect to any guarantee by the Corporation of the debt
securities of any subsidiary of the Corporation (including Other Guarantees)
if such guarantee ranks pari passu with or junior in right of payment to the
Junior Subordinated Debentures (other than (a) dividends or distributions in
shares of, or options, warrants or rights to subscribe for or purchase shares
of, common stock of the Corporation, (b) any declaration of a dividend in
connection with the implementation of a stockholders' 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, (c) payments under the
Guarantee, (d) as a result of a reclassification of the Corporation's capital
stock or the exchange or conversion of one class or series of the
Corporation's capital stock for another class or series of the Corporation's
capital stock, (e) the purchase of fractional interests in shares of the
Corporation's capital stock pursuant to the conversion or exchange provisions
of such capital stock or the security being converted or exchanged and
(f) purchases of common stock related to the issuance of common stock or rights
under any of the Corporation's benefit plans for its directors, officers or
employees or any of the Corporation's dividend reinvestment plans). The
Corporation has no current intention to exercise its option to defer payments
of interest on the Junior Subordinated Debentures by extending the interest
payment period on the Junior Subordinated Debentures.
The revenue of the Trust available for distribution to holders of
Capital Securities will be limited to payments under the Junior Subordinated
Debentures in which the Trust has invested the proceeds from the issuance and
sale of the Trust Securities. See "--Description of Junior Subordinated
Debentures--General." If the Corporation does not make interest payments on
the Junior Subordinated Debentures, the Property Trustee will not have funds
available to pay Distributions on the Capital Securities. The payment of
Distributions (if and to the extent the Trust has funds on hand legally
available for the payment of such Distributions) is guaranteed by the
Corporation on a limited basis as set forth herein under "--Description of
Guarantee."
Redemption. Upon repayment on the Stated Maturity Date or prepayment
in whole or in part prior to the Stated Maturity Date of the Junior
Subordinated Debentures (other than following the distribution of the Junior
Subordinated Debentures to the holders of the Trust Securities), the proceeds
from such repayment or prepayment shall be applied by the Property Trustee to
redeem a Like Amount (as defined below) of the Trust Securities, upon not
less than 30 nor more than 60 days' notice of a date of redemption (the
"Redemption Date"), at the applicable Redemption Price, which shall be equal
to (i) in the case of the repayment of the Junior Subordinated Debentures on
the Stated Maturity Date, the Maturity Redemption Price (equal to the
principal of, and interest on, the Junior Subordinated Debentures), (ii) in
the case of the optional redemption of the Junior Subordinated Debentures
before the Initial Optional Prepayment Date upon the occurrence and
continuation of a Special Event, the Special Event Redemption Price (equal to
the Special Event Prepayment Price in respect of the Junior Subordinated
Debentures) and (iii) in the case of the optional prepayment of the Junior
Subordinated Debentures on or after the Initial Optional Prepayment Date, the
Optional Redemption
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Price (equal to the Optional Prepayment Price in respect of the Junior
Subordinated Debentures). See "--Description of Junior Subordinated
Debentures--Optional Prepayment" and "--Special Event Prepayment." If less
than all of the Junior Subordinated Debentures are to be prepaid on a
Redemption Date, then the proceeds of such redemption shall be allocated to
the redemption pro rata of the Capital Securities and the Common Securities.
"Like Amount" means (i) with respect to a redemption of the Trust
Securities, Trust Securities having a Liquidation Amount equal to the
principal amount of Junior Subordinated Debentures to be paid in accordance
with their terms and (ii) with respect to a distribution of Junior
Subordinated Debentures upon the liquidation of the Trust, Junior
Subordinated Debentures having a principal amount equal to the Liquidation
Amount of the Trust Securities of the holder to whom such Junior Subordinated
Debentures are distributed.
The Corporation has the option to prepay the Junior Subordinated
Debentures, (i) in whole or in part, on or after the Initial Optional
Prepayment Date, at the applicable Optional Prepayment Price and (ii) in
whole but not in part, at any time before the Initial Optional Prepayment
Date, upon the occurrence of a Special Event, at the Special Event Prepayment
Price, in each case subject to the receipt of any required regulatory
approval. See "Description of Junior Subordinated Debentures--Optional
Prepayment" and "--Special Event Prepayment."
Liquidation of the Trust and Distribution of Junior Subordinated
Debentures. The Corporation has the right at any time to dissolve the Trust
and, after satisfaction of liabilities to creditors of the Trust as required
by applicable law, to cause the Junior Subordinated Debentures to be
distributed to the holders of the Trust Securities in liquidation of the
Trust. Such right is subject to (i) the Corporation having received an
opinion of counsel to the effect that such distribution will not be a taxable
event to holders of Capital Securities and (ii) the receipt of any required
regulatory approval.
The Trust shall automatically dissolve upon the first to occur of: (i)
certain events of bankruptcy, dissolution or liquidation of the Corporation;
(ii) the distribution of a Like Amount of the Junior Subordinated Debentures
to the holders of the Trust Securities, if the Corporation, as Sponsor, has
given written direction to the Property Trustee to dissolve the Trust (which
direction is optional and, except as described above, wholly within the
discretion of the Corporation, as Sponsor); (iii) redemption of all of the
Trust Securities as described under "--Redemption;" (iv) expiration of the
term of the Trust; and (v) the entry of an order for the dissolution of the
Trust by a court of competent jurisdiction.
If a dissolution occurs as described in clause (i), (ii), (iv), or (v)
above, the Trust shall be liquidated by the Issuer Trustees as expeditiously
as the Issuer Trustees determine to be possible by distributing, after
satisfaction of liabilities to creditors of the Trust as provided by
applicable law, to the holders of the Trust Securities a Like Amount of the
Junior Subordinated Debentures, unless such distribution is determined by the
Property Trustee not to be practicable, in which event such holders will be
entitled to receive out of the assets of the Trust legally available for
distribution to holders, after satisfaction of liabilities to creditors of
the Trust as provided by applicable law, an amount equal to the aggregate of
the Liquidation Amount plus accumulated and unpaid Distributions thereon to
the date of payment (such amount being the "Liquidation Distribution"). If
such Liquidation Distribution can be paid only in part because the Trust has
insufficient assets on hand legally available to pay in full the aggregate
Liquidation Distribution, then the amounts payable directly by the Trust on
the Trust Securities shall be paid on a pro rata basis, except that if a
Debenture Event of Default has occurred and is continuing, the Capital
Securities shall have a priority over the Common Securities. See
"--Subordination of Common Securities."
If the Corporation elects not to prepay the Junior Subordinated
Debentures prior to maturity in accordance with their terms and either elects
not to or is unable to liquidate the Trust and distribute the Junior
Subordinated Debentures to holders of the Trust Securities, the Trust
Securities will remain outstanding until the repayment of the Junior
Subordinated Debentures on the Stated Maturity Date.
After the liquidation date is fixed for any distribution of Junior
Subordinated Debentures to holders of the Trust Securities, (i) the Trust
Securities will no longer be deemed to be outstanding, (ii) DTC or its
nominee
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will receive, in respect of each registered global certificate, if any,
representing Trust Securities and held by it, a registered global certificate
or certificates representing the Junior Subordinated Debentures to be
delivered upon such distribution and (iii) any certificates representing
Trust Securities not held by DTC or its nominee will be deemed to represent
Junior Subordinated Debentures having a principal amount equal to the
Liquidation Amount of such Trust Securities, and bearing accrued and unpaid
interest in an amount equal to the accumulated and unpaid Distributions on
such Trust Securities until such certificates are presented to the
Administrative Trustees or their agent for cancellation, whereupon the
Corporation will issue to such holder, and the Debenture Trustee will
authenticate, a certificate representing such Junior Subordinated Debentures.
There can be no assurance as to the market prices for the Capital
Securities or the Junior Subordinated Debentures that may be distributed in
exchange for the Trust Securities if a dissolution and liquidation of the
Trust were to occur. Accordingly, the Capital Securities that an investor may
purchase, or the Junior Subordinated Debentures that the investor may receive
on dissolution and liquidation of the Trust, may trade at a discount to the
price that the investor paid to purchase the Capital Securities offered
hereby.
Redemption Procedures. If applicable, Trust Securities shall be
redeemed at the applicable Redemption Price with the proceeds from the
contemporaneous repayment or prepayment of the Junior Subordinated
Debentures. Any redemption of Trust Securities shall be made and the
applicable Redemption Price shall be payable on the Redemption Date only to
the extent that the Trust has funds legally available for the payment of such
applicable Redemption Price. See also "--Subordination of Common Securities."
If the Trust gives a notice of redemption in respect of the Capital
Securities, then, by 12:00 noon, New York City time, on the Redemption Date,
to the extent funds are legally available, with respect to the Capital
Securities held by DTC or its nominees, the Property Trustee will deposit or
cause the paying agent (as defined herein) to deposit irrevocably with DTC
funds sufficient to pay the applicable Redemption Price. See "--Form,
Denomination, Book-Entry Procedures and Transfer." With respect to the
Capital Securities held in certificated form, the Property Trustee, to the
extent funds are legally available, will irrevocably deposit with the paying
agent for the Capital Securities funds sufficient to pay the applicable
Redemption Price and will give such paying agent irrevocable instructions and
authority to pay the applicable Redemption Price to the holders thereof upon
surrender of their certificates evidencing the Capital Securities. See
"--Payment and Paying Agency." Notwithstanding the foregoing, Distributions
payable on or prior to the Redemption Date shall be payable to the holders of
such Capital Securities on the relevant record dates for the related
Distribution Dates. If notice of redemption shall have been given and funds
deposited as required, then upon the date of such deposit, all rights of the
holders of the Capital Securities called for redemption will cease, except
the right of the holders of such Capital Securities to receive the applicable
Redemption Price, but without interest on such Redemption Price, and such
Capital Securities will cease to be outstanding. In the event that any
Redemption Date of Capital Securities is not a Business Day, then the
applicable Redemption Price payable on such date will be paid on the next
succeeding day that is a Business Day (and without any interest or other
payment in respect of any such delay), except that, if such next succeeding
Business Day falls in the next calendar year, such payment shall be made on
the immediately preceding Business Day. In the event that payment of the
applicable Redemption Price is improperly withheld or refused and not paid
either by the Trust or by the Corporation pursuant to the Guarantee as
described under "Description of Guarantee," (i) Distributions on Capital
Securities will continue to accumulate at the then applicable rate, from the
Redemption Date originally established by the Trust to the date such
applicable Redemption Price is actually paid and (ii) the actual payment date
will be the Redemption Date for purposes of calculating the applicable
Redemption Price.
Subject to applicable law (including, without limitation, United States
federal securities law), the Corporation or its subsidiaries may at any time
and from time to time purchase outstanding Capital Securities by tender, in
the open market or by private agreement.
Notice of any redemption will be mailed at least 30 days but not more
than 60 days prior to the Redemption Date to each holder of Trust Securities
at its registered address. Unless the Corporation defaults in payment of the
applicable Redemption Price on, or in the repayment of, the Junior
Subordinated Debentures,
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on and after the Redemption Date Distributions will cease to accrue on the
Trust Securities called for redemption.
Subordination of Common Securities. Payment of Distributions on, and
the Redemption Price of, the Trust Securities, as applicable, shall be made
pro rata based on the Liquidation Amount of the Trust Securities; provided,
however, that if on any Distribution Date or Redemption Date a Debenture
Event of Default shall have occurred and be continuing, no payment of any
Distribution on, or applicable Redemption Price of, any of the Common
Securities, and no other payment on account of the redemption, liquidation or
other acquisition of the Common Securities, shall be made unless payment in
full in cash of all accumulated and unpaid Distributions on all of the
outstanding Capital Securities for all Distribution periods terminating on or
prior thereto, or in the case of payment of the applicable Redemption Price
the full amount of such Redemption Price, shall have been made or provided
for, and all funds available to the Property Trustee shall first be applied
to the payment in full in cash of all Distributions on, or Redemption Price
of, the Capital Securities then due and payable.
In the case of any Event of Default, the Corporation as holder of the
Common Securities will be deemed to have waived any right to act with respect
to such Event of Default until the effect of such Event of Default shall have
been cured, waived or otherwise eliminated. Until any such Event of Default
has been so cured, waived or otherwise eliminated, the Property Trustee shall
act solely on behalf of the holders of the Capital Securities and not on
behalf of the Corporation as holder of the Common Securities, and only the
holders of the Capital Securities will have the right to direct the Property
Trustee to act on their behalf.
Events of Default; Notice. The occurrence of a Debenture Event of
Default (see "Description of Junior Subordinated Debentures--Debenture Events
of Default") constitutes an "Event of Default" under the Trust Agreement.
Within ten Business Days after the occurrence of any Event of Default
actually known to the Property Trustee, the Property Trustee shall transmit
notice of such Event of Default to the holders of the Capital Securities, the
Administrative Trustees and the Corporation, as Sponsor, unless such Event of
Default shall have been cured or waived. The Corporation, as Sponsor, and the
Administrative Trustees are required to file annually with the Property
Trustee a certificate as to whether or not they are in compliance with all
the conditions and covenants applicable to them under the Trust Agreement.
If a Debenture Event of Default has occurred and is continuing, the
Capital Securities shall have a preference over the Common Securities as
described under "--Liquidation of the Trust and Distribution of Junior
Subordinated Debentures" and "--Subordination of Common Securities."
Removal of Issuer Trustees. Unless a Debenture Event of Default shall
have occurred and be continuing, any Issuer Trustee may be removed at any
time by the holder of the Common Securities. If a Debenture Event of Default
has occurred and is continuing, the Property Trustee and the Delaware Trustee
may be removed at such time by the holders of a majority in Liquidation
Amount of the outstanding Capital Securities. In no event will the holders of
the Capital Securities have the right to vote to appoint, remove or replace
the Administrative Trustees, which voting rights are vested exclusively in
the Corporation as the holder of the Common Securities. No resignation or
removal of an Issuer Trustee and no appointment of a successor trustee shall
be effective until the acceptance of appointment by the successor trustee in
accordance with the provisions of the Trust Agreement.
Merger or Consolidation of Issuer Trustees. Any Person into which the
Property Trustee, the Delaware Trustee or any Administrative Trustee that is
not a natural person 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 Issuer Trustee shall be a party, or any Person
succeeding to all or substantially all the corporate trust business of such
Issuer Trustee, shall be the successor of such Issuer Trustee under the Trust
Agreement, provided such Person shall be otherwise qualified and eligible.
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Mergers, Consolidations, Amalgamations or Replacements of the Trust.
The Trust may not merge with or into, consolidate, amalgamate, or be replaced
by, or convey, transfer or lease its properties and assets as an entirety or
substantially as an entirety to any corporation or other Person, except as
described below or as otherwise described under "--Liquidation of the Trust
and Distribution of Junior Subordinated Debentures." The Trust may, at the
request of the Corporation, as Sponsor, with the consent of the
Administrative Trustees but without the consent of the holders of the Capital
Securities, merge with or into, consolidate, amalgamate, or be replaced by or
convey, transfer or lease its properties and assets as an entirety or
substantially as an entirety to a trust organized as such under the laws of
any State; provided, that (i) such successor entity either (a) expressly
assumes all of the obligations of the Trust with respect to the Trust
Securities or (b) substitutes for the Trust Securities other securities
having substantially the same terms as the Trust Securities (the "Successor
Securities") so long as the Successor Securities rank the same as the Trust
Securities rank in priority with respect to distributions and payments upon
liquidation, redemption and otherwise, (ii) the Corporation expressly
appoints a trustee of such successor entity possessing the same powers and
duties as the Property Trustee with respect to the Junior Subordinated
Debentures, (iii) the Successor Securities are listed, or any Successor
Securities will be listed upon notification of issuance, on any national
securities exchange or other organization on which the Trust Securities are
then listed or quoted, if any, (iv) if the Capital Securities (including any
Successor Securities) are rated by any nationally recognized statistical
rating organization prior to such transaction, such merger, consolidation,
amalgamation, replacement, conveyance, transfer or lease does not cause the
Capital Securities (including any Successor Securities) or, if the Junior
Subordinated Debentures are so rated, the Junior Subordinated Debentures, to
be downgraded by any such nationally recognized statistical rating
organization, (v) such merger, consolidation, amalgamation, replacement,
conveyance, transfer or lease does not adversely affect the rights,
preferences and privileges of the holders of the Trust Securities (including
any Successor Securities) in any material respect, (vi) such successor entity
has a purpose substantially identical to that of the Trust, (vii) prior to
such merger, consolidation, amalgamation, replacement, conveyance, transfer
or lease, the Corporation has received an opinion from independent counsel to
the Trust experienced in such matters to the effect that (a) such merger,
consolidation, amalgamation, replacement, conveyance, transfer or lease does
not adversely affect the rights, preferences and privileges of the holders of
the Trust Securities (including any Successor Securities) in any material
respect (other than any dilution of such holders' interests in the new
entity), and (b) following such merger, consolidation, amalgamation,
replacement, conveyance, transfer or lease, neither the Trust nor such
successor entity will be required to register as an investment company under
the Investment Company Act of 1940, as amended (the "Investment Company
Act"), and (viii) the Corporation or any permitted successor or assignee 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 and the Common Guarantee.
Notwithstanding the foregoing, the Trust shall not, except with the consent
of holders of 100% in Liquidation Amount of the Trust Securities,
consolidate, amalgamate, merge with or into, or be replaced by or convey,
transfer or lease its properties and assets as an entirety or substantially
as an entirety to, any other entity or permit any other entity to
consolidate, amalgamate, merge with or into, or replace it if such
consolidation, amalgamation, merger, replacement, conveyance, transfer or
lease would cause the Trust or the successor entity not to be classified as a
grantor trust for United States federal income tax purposes. In addition, the
Property Trustee will be required pursuant to the Indenture to exchange, as
part of the Exchange Offer, the Junior Subordinated Debentures for the
Exchange Debentures, which will have terms substantially identical to the
Junior Subordinated Debentures. See "Exchange Offer; Registration Rights."
Voting Rights; Amendment of the Trust Agreement. Except as provided
below and under "--Mergers, Consolidations, Amalgamations or Replacements of
the Trust" and "--Description of Guarantee--Amendments and Assignment" and as
otherwise required by law and the Trust Agreement, the holders of the Capital
Securities have no voting rights.
The Trust Agreement may be amended from time to time by the Corporation,
the Property Trustee and the Administrative Trustees, without the consent of
the holders of the Trust Securities (i) to cure any ambiguity, correct or
supplement any provisions in the Trust Agreement that may be inconsistent
with any other provision, or to make any other provisions with respect to
matters or questions arising under the Trust Agreement, which shall not be
inconsistent with the other provisions of the Trust Agreement, (ii) to
modify, eliminate or add to any provisions of the Trust Agreement to such
extent as shall be necessary to ensure that the Trust will be
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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 will not be required to register as an "investment company" under the
Investment Company Act or (iii) to modify, eliminate or add any provisions of
the Trust Agreement to such extent as shall be necessary to enable the Trust
or the Corporation to conduct an Exchange Offer in the manner contemplated by
the Registration Rights Agreement; provided, however, that in each such case
such action shall not adversely affect in any material respect the interests
of the holders of the Trust Securities. Any amendments of the Trust Agreement
pursuant to the foregoing shall become effective when notice thereof is given
to the holders of the Trust Securities. The Trust Agreement may be amended by
the Issuer Trustees and the Corporation (i) with the consent of holders
representing a majority (based upon Liquidation Amount) of the outstanding
Trust Securities and (ii) upon receipt by the Issuer Trustees of an opinion
of counsel experienced in such matters to the effect that such amendment or
the exercise of any power granted to the Issuer Trustees in accordance with
such amendment will not affect the Trust's status as a grantor trust for
United States federal income tax purposes or the Trust's exemption from
status as an "investment company" under the Investment Company Act, provided
that, without the consent of each holder of Trust Securities, the Trust
Agreement may not be amended to (i) change the amount or timing of any
Distribution on the Trust Securities or otherwise adversely affect the amount
of any Distribution required to be made in respect of the Trust Securities as
of a specified date or (ii) restrict the right of a holder of Trust
Securities to institute suit for the enforcement of any such payment on or
after such date.
So long as any Junior Subordinated Debentures are held by the Property
Trustee, the Issuer Trustees shall not (i) direct the time, method and place
of conducting any proceeding for any remedy available to the Debenture
Trustee, or execute any trust or power conferred on the Debenture Trustee
with respect to the Junior Subordinated Debentures, (ii) waive certain past
defaults under the Indenture, (iii) exercise any right to rescind or annul a
declaration of acceleration of the maturity of the principal of the Junior
Subordinated Debentures or (iv) consent to any amendment, modification or
termination of the Indenture or the Junior Subordinated Debentures, where
such consent shall be required, without, in each case, obtaining the prior
approval of the holders of a majority in Liquidation Amount of all
outstanding Capital Securities; provided, however, that where a consent under
the Indenture would require the consent of each holder of Junior Subordinated
Debentures affected thereby, no such consent shall be given by the Property
Trustee without the prior approval of each holder of the Capital Securities.
The Issuer Trustees shall not revoke any action previously authorized or
approved by a vote of the holders of the Capital Securities except by
subsequent vote of such holders. The Property Trustee shall notify each
holder of Capital Securities of any notice of default with respect to the
Junior Subordinated Debentures. In addition to obtaining the foregoing
approvals of such holders of the Capital Securities, prior to taking any of
the foregoing actions, the Issuer Trustees shall obtain an opinion of counsel
experienced in such matters to the effect that the Trust will not be
classified as an association taxable as a corporation for United States
federal income tax purposes on account of such action.
Any required approval of holders of Capital Securities may be given at a
meeting of such holders convened for such purpose or pursuant to written
consent. The Property Trustee will cause a notice of any meeting at which
holders of Capital Securities are entitled to vote, or of any matter upon
which action by written consent of such holders is to be taken, to be given
to each holder of record of Capital Securities in the manner set forth in the
Trust Agreement.
No vote or consent of the holders of Capital Securities will be required
for the Trust to redeem and cancel the Capital Securities in accordance with
the Trust Agreement.
Notwithstanding that holders of the Capital Securities are entitled to
vote or consent under any of the circumstances described above, any of the
Capital Securities that are owned by the Corporation, the Issuer Trustees or
any affiliate of the Corporation or any Issuer Trustees, shall, for purposes
of such vote or consent, be treated as if they were not outstanding.
Form, Denomination, Book-Entry Procedures and Transfer. New Capital
Securities initially will be represented by one or more Capital Securities in
registered, global form (collectively, the "Global Capital Securities"). The
Global Capital Securities will be deposited upon issuance with the Property
Trustee as
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custodian for DTC, in New York, New York, and registered in the name of DTC
or its nominee, in each case for credit to an account of a direct or indirect
participant in DTC as described below.
Except as set forth below, the Global Capital Securities may be
transferred, in whole and not in part, only to another nominee of DTC or to a
successor of DTC or its nominee and only in amounts that would not cause a
holder to own less than 100 Capital Securities. Beneficial interests in the
Global Capital Securities may not be exchanged for Capital Securities in
certificated form except in the limited circumstances described below.
DTC has advised the Trust and the Corporation that DTC is a limited
purpose trust company organized under the laws of the State of New York, a
member of the Federal Reserve System, a "clearing corporation" within the
meaning of the Uniform Commercial Code and a "clearing agency" registered
pursuant to the provisions of Section 17A of the Exchange Act. DTC was
created to hold securities for its participating organizations (collectively,
the "Participants") and to facilitate the clearance and settlement of
transactions in those securities between Participants through electronic
book-entry changes in accounts of its Participants, thereby eliminating the
need for physical movement of certificates. Participants include securities
brokers and dealers (including the Initial Purchaser), banks, trust
companies, clearing corporations and certain other organizations. Indirect
access to DTC's system also is available to other entities such as banks,
brokers, dealers and trust companies that clear through or maintain a
custodial relationship with a Participant, either directly or indirectly
(collectively, the "Indirect Participants"). Persons who are not Participants
may beneficially own securities held by or on behalf of DTC only through the
Participants or the Indirect Participants. The ownership interest and
transfer of ownership interest of each actual purchaser of each security held
by or on behalf of DTC are recorded on the records of the Participants and
Indirect Participants.
DTC also has advised the Trust and the Corporation that, pursuant to
procedures established by it, (i) upon deposit of the Global Capital
Securities, DTC will credit the accounts of Participants designated by the
Initial Purchaser with portions of the Liquidation Amount of the Global
Capital Securities and (ii) ownership of such interests in the Global Capital
Securities will be shown on, and the transfer of ownership thereof will be
effected only through, records maintained by DTC (with respect to the
Participants) or by the Participants and the Indirect Participants (with
respect to other owners of beneficial interests in the Global Capital
Securities).
Except as described below, owners of beneficial interests in the Global
Capital Securities will not have Capital Securities registered in their name,
will not receive physical delivery of Capital Securities in certificated form
and will not be considered the registered owners or holders thereof under the
Trust Agreement for any purpose.
Payments in respect of the Global Capital Security registered in the
name of DTC or its nominee will be payable by the Property Trustee to DTC in
its capacity as the registered holder under the Trust Agreement. Under the
terms of the Trust Agreement, the Property Trustee will treat the persons in
whose names the Capital Securities, including the Global Capital Securities,
are registered as the owners thereof for the purpose of receiving such
payments and for any and all other purposes whatsoever. Consequently, neither
the Property Trustee nor any agent thereof has or will have any
responsibility or liability for (i) any aspect of DTC's records or any
Participant's or Indirect Participant's records relating to or payments made
on account of beneficial ownership interests in the Global Capital
Securities, or for maintaining, supervising or reviewing any of DTC's records
or any Participant's or Indirect Participant's records relating to the
beneficial interests in the Global Capital Securities, or (ii) any other
matter relating to the actions and practices of DTC or any of its
Participants or Indirect Participants. DTC has advised the Trust and the
Corporation that its current practice, upon receipt of any payment in respect
of securities such as the Capital Securities, is to credit the accounts of
the relevant Participants with the payment on the payment date, in amounts
proportionate to their respective holdings in Liquidation Amount of
beneficial interests in the relevant security as shown on the records of DTC
unless DTC has reason to believe it will not receive payment on such payment
date. Payments by the Participants and the Indirect Participants to the
beneficial owners of New Capital Securities will be governed by standing
instructions and customary practices and will be the responsibility of the
Participants or the Indirect Participants and will not be the responsibility
of DTC, the Property Trustee, the Trust or the Corporation. None of the
Trust, the
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Corporation or the Property Trustee will be liable for any delay by DTC or
any of its Participants in identifying the beneficial owners of the Capital
Securities, and the Trust, the Corporation and the Property Trustee may
conclusively rely on and will be protected in relying on instructions from
DTC or its nominee for all purposes.
Beneficial interests in the Global Capital Securities will trade in
DTC's Same-Day Funds Settlement System and secondary market trading activity
in such interests will therefore settle in immediately available funds,
subject in all cases to the rules and procedures of DTC and its participants.
DTC has advised the Trust and the Corporation that it will take any
action permitted to be taken by a holder of Capital Securities (including,
without limitation, the presentation of Old Capital Securities for exchange
pursuant to the Exchange Offer) only at the direction of one or more
Participants to whose account with DTC interests in the Global Capital
Securities are credited and only in respect of such portion of the
Liquidation Amount of the Capital Securities as to which such Participant or
Participants has or have given such direction. However, if there is an Event
of Default under the Trust Agreement, DTC reserves the right to exchange the
Global Capital Securities for Capital Securities in certificated form and to
distribute such Capital Securities to its Participants.
So long as DTC or its nominee is the registered owner of the Global
Capital Securities, DTC or such nominee, as the case may be, will be
considered the sole owner or holder of the Capital Securities represented by
the Global Capital Securities for all purposes under the Trust Agreement.
The information in this section concerning DTC and its book-entry system
has been obtained from sources that the Trust and the Corporation believe to
be reliable, but neither the Trust nor the Corporation takes responsibility
for the accuracy thereof.
A Global Capital Security is exchangeable for Capital Securities in
registered certificated form if (i) DTC (x) notifies the Trust that it is
unwilling or unable to continue as Depositary for the Global Capital Security
and the Trust thereupon fails to appoint a successor Depositary within 90
days or (y) has ceased to be a clearing agency registered under the Exchange
Act, (ii) the Corporation in its sole discretion elects to cause the issuance
of the Capital Securities in certificated form or (iii) there shall have
occurred and be continuing an Event of Default or any event which after
notice or lapse of time or both would be an Event of Default under the Trust
Agreement.
Payment and Paying Agency. Payments in respect of the Capital
Securities held in global form shall be made to the Depositary, which shall
credit the relevant accounts at the Depositary on the applicable Distribution
Dates. Payments in respect of Capital Securities that are not held by the
Depositary shall be made by check mailed to the address of the holder
entitled thereto as such address shall appear on the register maintained by
the Securities Registrar appointed under the Trust Agreement. The 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 Corporation. The Paying Agent shall be
permitted to resign as Paying Agent upon 30 days' written notice to the
Property Trustee, the Administrative Trustees and the Corporation. In the
event that the Property Trustee shall no longer be the Paying Agent, the
Administrative Trustees shall appoint a successor (which shall be a bank or
trust company acceptable to the Administrative Trustees and the Corporation)
to act as Paying Agent.
Restrictions on Transfer. The Capital Securities will be issued and may
be transferred only in blocks having a Liquidation Amount of not less than
$100,000 (100 Capital Securities) and multiples of $1,000 in excess thereof.
Any attempted sale, transfer or other disposition of Capital Securities in a
block having a Liquidation Amount of less than $100,000 shall be deemed to be
void and of no legal effect whatsoever. Any such transferee shall be deemed
not to be the holder of such Capital Securities for any purpose, including
but not limited to the receipt of Distributions on such Capital Securities,
and such transferee shall be deemed to have no interest whatsoever in such
Capital Securities.
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REGISTRAR AND TRANSFER AGENT. The Property Trustee acts as registrar
and transfer agent for the Capital Securities. Registration of transfers of
Capital Securities will be effected without charge by or on behalf of the
Trust, but upon payment of any tax or other governmental charges that may be
imposed in connection with any transfer or exchange. The Trust will not be
required to register or cause to be registered the transfer of the Capital
Securities after they have been called for redemption.
INFORMATION CONCERNING THE PROPERTY TRUSTEE. The Property Trustee,
other than during the occurrence and continuance of an Event of Default,
undertakes to perform only such duties as are specifically set forth in the
Trust Agreement and, during the existence of an Event of Default, must
exercise the same degree of care and skill as a prudent person would exercise
or use in the conduct of his or her own affairs. Subject to this provision,
the Property Trustee is under no obligation to exercise any of the powers
vested in it by the Trust Agreement at the request of any holder of Trust
Securities unless it is offered reasonable indemnity against the costs,
expenses and liabilities that might be incurred thereby. If no Event of
Default has occurred and is continuing and the Property Trustee is required
to decide between alternative courses of action, construe ambiguous
provisions in the Trust Agreement or is unsure of the application of any
provision of the Trust Agreement, and the matter is not one on which holders
of the Capital Securities or the Common Securities are entitled under the
Trust Agreement to vote, then the Property Trustee shall take such action as
is directed by the Corporation and, if not so directed, shall take such
action as it deems advisable and in the best interests of the holders of the
Trust Securities and will have no liability except for its own bad faith,
negligence or willful misconduct.
MISCELLANEOUS. The Administrative Trustees are authorized and directed
to conduct the affairs of and to operate the Trust in such a way that the
Trust will not be deemed to be an "investment company" required to be
registered under the Investment Company Act or classified as an association
or publicly-traded partnership taxable as a corporation for United States
federal income tax purposes and so that the Junior Subordinated Debentures
will be treated as indebtedness of the Corporation for United States federal
income tax purposes. In this connection, the Corporation and the
Administrative Trustees are authorized to take any action, not inconsistent
with applicable law, the certificate of trust of the Trust or the Trust
Agreement, that the Corporation and the Administrative Trustees determine in
their discretion to be necessary or desirable for such purposes, as long as
such action does not materially adversely affect the interests of the holders
of the Trust Securities.
Holders of the Trust Securities have no preemptive or similar rights.
The Trust may not borrow money, issue debt, execute mortgages or pledge
any of its assets.
DESCRIPTION OF JUNIOR SUBORDINATED DEBENTURES
The Old Junior Subordinated Debentures were issued and the New Junior
Subordinated Debentures will be issued as a separate issue under the
Indenture. The Indenture has been qualified under the Trust Indenture Act.
This summary of certain terms and provisions of the Junior Subordinated
Debentures and the Indenture describes the material terms thereof, but does
not purport to be complete, and where reference is made to particular
provisions of the Indenture, such provisions, including the definitions of
certain terms, some of which are not otherwise defined herein, are qualified
in their entirety by reference to all of the provisions of the Indenture and
those terms made a part of the Indenture by the Trust Indenture Act.
GENERAL. Concurrently with the issuance of the Old Capital Securities,
the Trust invested the proceeds thereof, together with the consideration paid
by the Corporation for the Common Securities, in Old Junior Subordinated
Debentures issued by the Corporation. Pursuant to the Exchange Offer, the
Corporation will exchange the Old Junior Subordinated Debentures, in an
amount corresponding to the Old Capital Securities accepted for exchange, for
a like aggregate principal amount of New Junior Subordinated Debentures as
soon as practicable after the date hereof.
The Junior Subordinated Debentures bear interest from August 26, 1997 at
the annual rate of 9.70% of the principal amount thereof, payable
semi-annually in arrears on February 15th and August 15th of each year
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(each, an "Interest Payment Date"), commencing February 15, 1998, to the
person in whose name each Junior Subordinated Debenture is registered,
subject to certain exceptions, at the close of business on the first day of
the month in which the relevant payment date falls. The Junior Subordinated
Debentures will mature on August 15, 2027. It is anticipated that, until the
liquidation, if any, of the Trust, each Junior Subordinated Debenture will be
held in the name of the Property Trustee in trust for the benefit of the
holders of the Trust Securities. The amount of interest payable for any
period will be computed on the basis of a 360-day year of twelve 30-day
months and, for any period of less than a full calendar month, the number of
days elapsed in such month. In the event that any date on which interest is
payable on the Junior Subordinated Debentures is not a Business Day, then
payment of the interest payable on such date will be made on the next
succeeding day that is a Business Day (and without any interest or other
payment in respect of any such delay), except that if such next succeeding
Business Day falls in the next succeeding calendar year, then such payment
shall be made on the immediately preceding Business Day, in each case with
the same force and effect as if made on such date. Accrued interest that is
not paid on the applicable Interest Payment Date will bear additional
interest on the amount thereof (to the extent permitted by law) at the rate
per annum of 9.70% thereof, compounded semi-annually. The term "interest," as
used herein, shall include semi-annual interest payments, interest on
semi-annual interest payments not paid on the applicable Interest Payment
Date and Additional Sums (as defined below), as applicable.
The New Junior Subordinated Debentures will rank pari passu with the Old
Junior Subordinated Debentures and with all Other Debentures and are
unsecured and are subordinate and junior in right of payment to all Senior
Indebtedness to the extent and in the manner set forth in the Indenture. See
"--Subordination."
The Corporation is a holding company and almost all of the operating
assets of the Corporation are owned by the Corporation's subsidiaries. The
Corporation is a legal entity separate and distinct from its subsidiaries.
Holders of Junior Subordinated Debentures should look only to the Corporation
for payments on the Junior Subordinated Debentures. The principal sources of
the Corporation's income are dividends, interest and fees from its
subsidiaries. The Corporation relies primarily on dividends from the Bank to
meet its obligations for payment of principal and interest on its outstanding
debt obligations and corporate expenses. There are regulatory limitations on
the payment of dividends directly or indirectly to the Corporation from the
Bank. As of September 30, 1997, under OTS regulations, the total capital
available for payment of dividends by the Bank to the Corporation was
approximately $5.6 million. However, the OTS has the power to prohibit any
act, including the payment of dividends, if such act would reduce bank
capital to a point that, in its opinion, would render the Bank
undercapitalized and thus constitute an unsafe or unsound banking practice.
In addition, the Bank is subject to certain restrictions imposed by federal
law on any extensions of credit to, and certain other transactions with, the
Corporation and certain other affiliates, and on investments in stock or
other securities thereof. Such restrictions prevent the Corporation and such
other affiliates from borrowing from the Bank unless the loans are secured by
various types of collateral. Further, such secured loans, other transactions
and investments by the Bank are generally limited in amount as to the
Corporation and as to each of such other affiliates to 10% of the Bank's
capital and surplus and as to the Corporation and all of such other
affiliates to an aggregate of 20% of the Bank's capital and surplus.
Because the Corporation is a holding company, the right of the
Corporation to participate in any distribution of assets of any subsidiary
upon such subsidiary's liquidation or reorganization or otherwise (and thus
the ability of holders of the Capital Securities to benefit indirectly from
such distribution), is subject to the prior claims of creditors of that
subsidiary (including depositors, in the case of the Bank), except to the
extent the Corporation may itself be recognized as a creditor of that
subsidiary. At September 30, 1997, the subsidiaries of the Corporation had
total liabilities (excluding liabilities owed to the Corporation) of $332.5
million. Accordingly, the Junior Subordinated Debentures will be effectively
subordinated to all existing and future liabilities of the Corporation's
subsidiaries (including the Bank's deposit liabilities) and all liabilities
of any future subsidiaries of the Corporation. The Indenture does not limit
the incurrence or issuance of other secured or unsecured debt of the
Corporation or any subsidiary, including Senior Indebtedness. See
"--Subordination."
FORM, REGISTRATION AND TRANSFER. If the Junior Subordinated Debentures
are distributed to the holders of the Trust Securities, the Junior
Subordinated Debentures may be represented by one or more global certificates
registered in the name of Cede & Co. as the nominee of DTC. The depositary
arrangements for such
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Junior Subordinated Debentures are expected to be substantially similar to
those in effect for the Capital Securities. For a description of DTC and the
terms of the depositary arrangements relating to payments, transfers, voting
rights, redemptions and other notices and other matters, see "Description of
Capital Securities--Form, Denomination, Book-Entry Procedures and Transfer."
The Junior Subordinated Debentures will be issuable only in registered
form without coupons in minimum denominations of $100,000 (100 Junior
Subordinated Debentures) and integral multiples of $1,000 in excess thereof.
PAYMENT AND PAYING AGENTS. Payment of principal of (and premium, if
any) and interest on Junior Subordinated Debentures will be made at the
office of the Debenture Trustee in the City of New York or at the office of
such Paying Agent or Paying Agents as the Corporation may designate from time
to time, except that at the option of the Corporation payment of any interest
may be made, except in the case of Junior Subordinated Debentures in global
form, (i) by check mailed to the address of the Person entitled thereto as
such address shall appear in the register for Junior Subordinated Debentures
or (ii) by transfer to an account maintained by the Person entitled thereto
as specified in such register, provided that proper transfer instructions
have been received by the relevant Record Date. Payment of any interest on
any Junior Subordinated Debenture will be made to the Person in whose name
such Junior Subordinated Debenture is registered at the close of business on
the Record Date for such interest, except in the case of defaulted interest.
The Corporation may at any time designate additional Paying Agents or rescind
the designation of any Paying Agent; however the Corporation will at all
times be required to maintain a Paying Agent in each place of payment for the
Junior Subordinated Debentures.
Any moneys deposited with the Debenture Trustee or any Paying Agent, or
then held by the Corporation in trust, for the payment of the principal of
(and premium, if any) or interest on any Junior Subordinated Debenture and
remaining unclaimed for two years after such principal (and premium, if any)
or interest has become due and payable shall, at the request of the
Corporation, be repaid to the Corporation and the holder of such Junior
Subordinated Debenture shall thereafter look, as a general unsecured
creditor, only to the Corporation for payment thereof.
OPTION TO EXTEND INTEREST PAYMENT DATE. So long as no Debenture Event
of Default has occurred and is continuing, the Corporation will have the
right under the Indenture to defer the payment of interest on the Junior
Subordinated Debentures at any time and from time to time for a period not
exceeding 10 consecutive semi-annual periods with respect to each Extension
Period, provided that no Extension Period shall end on a date other than an
Interest Payment Date or extend beyond the Stated Maturity Date. At the end
of such Extension Period, the Corporation must pay all interest then accrued
and unpaid (together with interest thereon at the annual rate of 9.70%,
compounded semi-annually, to the extent permitted by applicable law
("Compounded Interest")). During an Extension Period, interest will continue
to accrue and, if the Junior Subordinated Debentures have been distributed to
holders of the Trust Securities, holders of Junior Subordinated Debentures
(or holders of the Trust Securities while Trust Securities are outstanding)
will be required to accrue such deferred interest income for United States
federal income tax purposes prior to the receipt of cash attributable to such
income. See "Certain Federal Income Tax Considerations--Interest Income and
Original Issue Discount."
During any such Extension Period, the Corporation may not (i) declare or
pay any dividends or distributions on, or redeem, purchase, acquire, or make
a liquidation payment with respect to, any of the Corporation's capital
stock, (ii) make any payment of principal, interest or premium, if any, on or
repay, repurchase or redeem any debt securities of the Corporation (including
any Other Debentures) that rank pari passu with or junior in right of payment
to the Junior Subordinated Debentures or (iii) make any guarantee payments
with respect to any guarantee by the Corporation of the debt securities of
any subsidiary of the Corporation (including any Other Guarantees) if such
guarantee ranks pari passu with or junior in right of payment to the Junior
Subordinated Debentures (other than (a) dividends or distributions in shares
of, or options, warrants or rights to subscribe for or purchase shares of,
common stock of the Corporation, (b) any declaration of a dividend in
connection with the implementation of a stockholders' 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,
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(c) payments under the Guarantee, (d) as a result of a reclassification of
the Corporation's capital stock or the exchange or conversion of one class or
series of the Corporation's capital stock for another class or series of the
Corporation's capital stock, (e) the purchase of fractional interests in
shares of the Corporation's capital stock pursuant to the conversion or
exchange provisions of such capital stock or the security being converted or
exchanged, and (f) purchases of common stock related to the issuance of
common stock or rights under any of the Corporation's benefit plans for its
directors, officers or employees or any of the Corporation's dividend
reinvestment plans).
Prior to the termination of any such Extension Period, the Corporation
may further extend such Extension Period, provided that such extension does
not cause such Extension Period to exceed 10 consecutive semi-annual periods,
end on a date other than an Interest Payment Date or extend beyond the Stated
Maturity Date. Upon the termination of any such Extension Period and the
payment of all amounts then due on any Interest Payment Date, the Corporation
may elect to begin a new Extension Period, subject to the above requirements.
No interest shall be due and payable during an Extension Period, except at
the end thereof. The Corporation must give the Property Trustee, the
Administrative Trustees and the Debenture Trustee notice of its election of
any Extension Period (or an extension thereof) at least five Business Days
prior to the earlier of (i) the date the Distributions on the Trust
Securities would have been payable except for the election to begin or extend
such Extension Period or (ii) the date the Administrative Trustees are
required to give notice to any securities exchange or to holders of Capital
Securities of the record date or the date such Distributions are payable, but
in any event not less than five Business Days prior to such record date. The
Debenture Trustee shall give notice of the Corporation's election to begin or
extend a new Extension Period to the holders of the Capital Securities. There
is no limitation on the number of times that the Corporation may elect to
begin an Extension Period.
OPTIONAL PREPAYMENT. The Junior Subordinated Debentures will be
prepayable, in whole or in part, at the option of the Corporation on or after
the Initial Optional Prepayment Date, subject to the Corporation having
received any required regulatory approval, at a prepayment price (the
"Optional Prepayment Price") equal to the percentage of the outstanding
principal amount of the Junior Subordinated Debentures specified below, plus,
in each case, accrued and unpaid interest thereon to the date of prepayment
if prepaid during the 12-month period beginning August 15th of the years
indicated below:
Year Percentage
---- ----------
2007 .......................................................... 104.850%
2008 .......................................................... 104.365%
2009 .......................................................... 103.880%
2010 .......................................................... 103.395%
2011 .......................................................... 102.910%
2012 .......................................................... 102.425%
2013 .......................................................... 101.940%
2014 .......................................................... 101.455%
2015 .......................................................... 100.970%
2016 .......................................................... 100.485%
2017 and thereafter ........................................... 100.000%
SPECIAL EVENT PREPAYMENT. If a Special Event shall occur and be
continuing prior to the Initial Prepayment Date, the Corporation may, at its
option and subject to receipt of any required regulatory approval, prepay the
Junior Subordinated Debentures in whole (but not in part) at any time (i)
within 90 days of the occurrence of such Special Event and (ii) prior to
August 15, 2007, at a prepayment price (the "Special Event Prepayment Price")
equal to the Make-Whole Amount (as defined below). The "Make-Whole Amount"
shall be equal to the greater of (x) 100% of the principal amount of the
Junior Subordinated Debentures to be prepaid or (y) the sum, as determined by
a Quotation Agent (as defined herein), of the present values of the scheduled
payments of principal and interest on the Junior Subordinated Debentures from
the prepayment date to the Maturity Date discounted to the prepayment date on
a semi-annual basis (assuming a 360-day year consisting of twelve 30-day
months) at the Adjusted Treasury Rate, plus, in the case of each of clauses
(x) and (y), accrued and unpaid interest thereon to the date of prepayment.
If, following the occurrence of a Special Event, the
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Corporation exercises its option to prepay the Junior Subordinated
Debentures, then the proceeds of that prepayment must be applied to redeem a
Like Amount of Trust Securities at the Special Event Redemption Price (equal
to the Special Event Prepayment Price in respect of the Junior Subordinated
Debentures). See "Description of Capital Securities - Redemption."
A "Special Event" means a Tax Event or a Regulatory Capital Event, as
the case may be.
A "Tax Event" means the receipt by the Corporation and the Trust of an
opinion of counsel experienced in such matters to the effect that, as a
result of any amendment to, or change (including any announced prospective
change) in, the laws or any regulations thereunder of the United States or
any political subdivision or taxing authority thereof or therein, or as a
result of any official administrative pronouncement or judicial decision
interpreting or applying such laws or regulations, which amendment or change
is effective or such pronouncement or decision is announced on or after the
Issue Date, there is more than an insubstantial risk that (i) the Trust is,
or will be within 90 days of the date of such opinion, subject to United
States federal income tax with respect to income received or accrued on the
Junior Subordinated Debentures, (ii) interest payable by the Corporation on
the Junior Subordinated Debentures is not, or within 90 days of the date of
such opinion will not be, deductible by the Corporation, in whole or in part,
for United States federal income tax purposes or (iii) the Trust is, or will
be within 90 days of the date of such opinion, subject to more than a de
minimis amount of other taxes, duties or other governmental charges.
A "Regulatory Capital Event" means that the Corporation shall have
become, or pursuant to law or regulation will become within 180 days, subject
to capital requirements under which, in the written opinion of independent
bank regulatory counsel experienced in such matters, the Capital Securities
would not constitute Tier 1 Capital (as that concept is used in the
guidelines or regulations issued by the Board of Governors of the Federal
Reserve System) applied as if the Corporation (or its successor) were a bank
holding company, or the then-equivalent of such Tier 1 Capital.
"Adjusted Treasury Rate" means, with respect to any prepayment date, the
rate per annum equal to the semi-annual equivalent yield to maturity of the
Comparable Treasury Issue, assuming a price for the Comparable Treasury Issue
(expressed as a percentage of its principal amount) equal to the Comparable
Treasury Price for such prepayment date plus (i) 3.04% if such prepayment
date occurs prior to August 15, 1998 and (ii) 2.49% in all other cases.
"Comparable Treasury Issue" means the United States Treasury security
selected by the Quotation Agent as having a maturity comparable to the
remaining term to maturity of the Junior Subordinated Debentures (the
"Remaining Life") to be prepaid that would be utilized, at the time of
selection and in accordance with customary financial practice, in pricing new
issues of corporate debt securities of comparable maturity to the Remaining
Life. If no United States Treasury security has a maturity which is within a
period from three months before to three months after the Remaining Life, the
two most closely corresponding United States Treasury securities as selected
by the Quotation Agent shall be used as the Comparable Treasury Issue, and
the Treasury Rate shall be interpolated or extrapolated on a straight-line
basis, rounding to the nearest month.
"Treasury Rate" means (i) the yield, under the heading which represents
the average for the immediately prior week, appearing in the most recently
published statistical release designated "H.15(519)" or any successor
publication which is published weekly by the Federal Reserve and which
establishes yields on actively traded United States Treasury securities
adjusted to constant maturity under the caption "Treasury Constant
Maturities" for the maturity corresponding to the Remaining Life (if no
maturity is within three months before or after the Remaining Life, yields
for the two published maturities most closely corresponding to the Remaining
Life shall be determined and the Treasury Rate shall be interpolated or
extrapolated from such yields on a straight-line basis, rounding to the
nearest month), or (ii) if such release (or any successor release) is not
published during the week preceding the calculation date or does not contain
such yields, the rate per annum equal to the semi-annual equivalent yield to
maturity of the Comparable Treasury Issue, calculated equal to the Comparable
Treasury Price for such prepayment date. The Treasury Rate shall be
calculated on the third Business Day preceding the prepayment date.
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"Quotation Agent" means the Reference Treasury Dealer appointed by the
Corporation. "Reference Treasury Dealer" means a nationally-recognized U.S.
Government securities dealer in New York City selected by the Corporation.
"Comparable Treasury Price" means, with respect to any prepayment date,
(i) the average of the bid and asked prices for the Comparable Treasury Issue
(expressed in each case as a percentage of its principal amount) on the third
Business Day preceding such prepayment date, as set forth in the daily
statistical release (or any successor release) published by the Federal
Reserve Bank of New York and designated "Composite 3:30 p.m. Quotations for
U.S. Government Securities" or (ii) if such release (or any successor
release) is not published or does not contain such prices on such Business
Day, (A) the average of the Reference Treasury Dealer Quotations for such
prepayment date, after excluding the highest and lowest such Reference
Treasury Dealer Quotations, or (B) if the Debenture Trustee obtains fewer
than three such Reference Treasury Dealer Quotations, the average of all such
Quotations.
"Reference Treasury Dealer Quotations" means, with respect to each
Reference Treasury Dealer and any prepayment date, the average, as determined
by the Debenture Trustee, of the bid and asked prices for the Comparable
Treasury Issue (expressed in each case as a percentage of its principal
amount) quoted in writing to the Debenture Trustee by such Reference Treasury
Dealer at 5:00 p.m., New York City time, on the third Business Day preceding
such prepayment date.
Notice of any prepayment will be mailed at least 30 days but not more
than 60 days before the redemption date to each holder of Junior Subordinated
Debentures to be prepaid at its registered address. Unless the Corporation
defaults in payment of the prepayment price, on and after the prepayment date
interest ceases to accrue on such Junior Subordinated Debentures called for
prepayment.
If the Trust is required to pay any additional taxes, duties or other
governmental charges as a result of a Tax Event, the Corporation will pay as
additional amounts on the Junior Subordinated Debentures such amounts as
shall be necessary in order that the amount of Distributions then due and
payable by the Trust on the outstanding Trust Securities shall not be reduced
as a result of any additional taxes, duties and other governmental charges to
which the Trust has become subject as a result of a Tax Event ("Additional
Sums").
CERTAIN COVENANTS OF THE CORPORATION. The Corporation has agreed that
it will not, (i) declare or pay any dividends or distributions on, or redeem,
purchase, acquire or make a liquidation payment with respect to, any of the
Corporation's capital stock, (ii) make any payment of principal, interest or
premium, if any, on or repay or repurchase or redeem any debt securities of
the Corporation (including Other Debentures) that rank pari passu with or
junior in right of payment to the Junior Subordinated Debentures or (iii)
make any guarantee payments with respect to any guarantee by the Corporation
of the debt securities of any subsidiary of the Corporation (including under
Other Guarantees) if such guarantee ranks pari passu or junior in right of
payment to the Junior Subordinated Debentures (other than (a) dividends or
distributions in shares of, or options, warrants or rights to subscribe for
or purchase shares of, common stock of the Corporation, (b) any declaration
of a dividend in connection with the implementation of a stockholders' 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, (c) payments
under the Guarantee, (d) as a result of a reclassification of the
Corporation's capital stock or the exchange or conversion of one class or
series of the Corporation's capital stock for another class or series of the
Corporation's capital stock, (e) the purchase of fractional interests in
shares of the Corporation's capital stock pursuant to the conversion or
exchange provisions of such capital stock or the security being converted or
exchanged, and (f) purchases of common stock related to the issuance of
common stock or rights under any of the Corporation's benefit plans for its
directors, officers or employees or any of the Corporation's dividend
reinvestment plans) if at such time (1) there shall have occurred any event
of which the Corporation has actual knowledge that (a) is, or with the giving
of notice or the lapse of time, or both, would be, a Debenture Event of
Default and (b) in respect of which the Corporation shall not have taken
reasonable steps to cure, (2) the Corporation shall be in default with
respect to its payment of any obligations under the Guarantee or (3) the
Corporation shall have given notice of its election of an Extension Period as
provided in the Indenture and shall
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not have rescinded such notice, and such Extension Period, or any extension
thereof, shall have commenced and be continuing.
So long as the Trust Securities remain outstanding, the Corporation also
has agreed (i) to directly or indirectly maintain 100% direct or indirect
ownership of the Common Securities, provided, however, that any permitted
successor of the Corporation under the Indenture may succeed to the
Corporation's ownership of such Common Securities, (ii) to use its reasonable
efforts to cause the Trust (a) to remain a business trust, except in
connection with the distribution of Junior Subordinated Debentures to the
holders of Trust Securities in liquidation of the Trust, 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 to be classified as a grantor trust for United States
federal income tax purposes and (iii) to use its reasonable efforts to cause
each holder of Trust Securities to be treated as owning an undivided
beneficial interest in the Junior Subordinated Debentures.
MODIFICATION OF INDENTURE. From time to time the Corporation and the
Debenture Trustee may, without the consent of the holders of Junior
Subordinated Debentures, amend, waive or supplement the Indenture for
specified purposes, including, among other things, curing ambiguities,
defects or inconsistencies or enabling the Corporation and the Trust to
conduct an Exchange Offer as contemplated by the Registration Rights
Agreement, provided that any such action does not materially adversely affect
the interest of the holders of Junior Subordinated Debentures), and
qualifying, or maintaining the qualification of, the Indenture under the
Trust Indenture Act. The Indenture contains provisions permitting the
Corporation and the Debenture Trustee, with the consent of the holders of a
majority in principal amount of Junior Subordinated Debentures, to modify the
Indenture in a manner affecting the rights of the holders of Junior
Subordinated Debentures; provided that no such modification may, without the
consent of the holders of each outstanding Junior Subordinated Debenture so
affected, (i) change the Stated Maturity Date, or reduce the principal amount
of the Junior Subordinated Debentures or reduce the amount payable on
redemption thereof or reduce the rate or extend the time of payment of
interest thereon except pursuant to the Corporation's right under the
Indenture to defer the payment of interest as provided therein (see "--Option
to Extend Interest Payment Date") or make the principal of, or interest or
premium on, the Junior Subordinated Debentures payable in any coin or
currency other than that provided in the Junior Subordinated Debentures, or
impair or affect the right of any holder of Junior Subordinated Debentures to
institute suit for the payment thereof, or (ii) reduce the percentage of
principal amount of Junior Subordinated Debentures, the holders of which are
required to consent to any such modification of the Indenture.
DEBENTURE EVENTS OF DEFAULT. The Indenture provides that any one or
more of the following described events with respect to the Junior
Subordinated Debentures constitutes a "Debenture Event of Default" (whatever
the reason for such Debenture 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): (i) failure for 30 days to pay
any interest (including Compounded Interest and Additional Sums, if any) on
the Junior Subordinated Debentures or any Other Debentures, when due (subject
to the deferral of any due date in the case of an Extension Period); (ii)
failure to pay any principal or premium, if any, on the Junior Subordinated
Debentures or any Other Debentures when due whether at maturity, upon
redemption, by declaration of acceleration of maturity or otherwise; (iii)
failure to observe or perform in any material respect certain other covenants
contained in the Indenture for 90 days after written notice to the
Corporation from the Debenture Trustee or the holders of at least 25% in
aggregate outstanding principal amount of Junior Subordinated Debentures; or
(iv) certain events in bankruptcy, insolvency or reorganization of the
Corporation.
The holders of a majority in aggregate outstanding principal amount of
the Junior Subordinated Debentures have, subject to certain exceptions, the
right to direct the time, method and place of conducting any proceeding for
any remedy available to the Debenture Trustee. The Debenture Trustee or the
holders of not less than 25% in aggregate outstanding principal amount of the
Junior Subordinated Debentures may declare the principal due and payable
immediately upon a Debenture Event of Default. The holders of a majority in
aggregate outstanding principal amount of the Junior Subordinated Debentures
may annul such declaration and
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waive the default if the default (other than the non-payment of the principal
of the Junior Subordinated Debentures which has become due solely by such
acceleration) has been cured and a sum sufficient to pay all matured
installments of interest and principal due otherwise than by acceleration has
been deposited with the Debenture Trustee.
The holders of a majority in aggregate outstanding principal amount of
the Junior Subordinated Debentures affected thereby may, on behalf of the
holders of all the Junior Subordinated Debentures, waive any past default,
except a default in the payment of principal (or premium, if any) on or
interest (unless such default has been cured and a sum sufficient to pay all
matured installments of interest (and premium, if any) and principal due
otherwise than by acceleration has been deposited with the Debenture Trustee)
or a default in respect of a covenant or provision which under the Indenture
cannot be modified or amended without the consent of the holder of each
outstanding Junior Subordinated Debenture.
The Indenture requires the annual filing by the Corporation with the
Debenture Trustee of a certificate as to the absence of certain defaults
under the Indenture.
The Indenture provides that the Debenture Trustee may withhold notice of
a Debenture Event of Default from the holders of the Junior Subordinated
Debentures if the Debenture Trustee considers it in the interest of such
holders to do so.
ENFORCEMENT OF CERTAIN RIGHTS BY HOLDERS OF CAPITAL SECURITIES. If a
Debenture Event of Default shall have occurred and be continuing and shall be
attributable to the failure of the Corporation to pay the principal of (or
premium, if any), or interest (including Compounded Interest and Additional
Sums, if any) on the Junior Subordinated Debentures on the due date, a holder
of Capital Securities may institute a Direct Action. The Corporation may not
amend the Indenture to remove the foregoing right to bring a Direct Action
without the prior written consent of the holders of all of the Capital
Securities. Notwithstanding any payments made to a holder of Capital
Securities by the Corporation in connection with a Direct Action, the
Corporation shall remain obligated to pay the principal of (or premium, if
any) or interest (including Compounded Interest and Additional Sums, if any)
on the Junior Subordinated Debentures, and the Corporation shall be
subrogated to the rights of the holder of such Capital Securities with
respect to payments on the Capital Securities to the extent of any payments
made by the Corporation to such holder in any Direct Action.
The holders of the Capital Securities will not be able to exercise
directly any remedies, other than those set forth in the preceding paragraph,
available to the holders of the Junior Subordinated Debentures unless there
shall have been an Event of Default under the Trust Agreement. See
"Description of Capital Securities--Events of Default; Notice."
CONSOLIDATION, MERGER, SALE OF ASSETS AND OTHER TRANSACTIONS. The
Indenture provides that the Corporation shall not consolidate with or merge
into any other Person or convey, transfer or lease its properties as an
entirety or substantially as an entirety to any Person, and no Person shall
consolidate with or merge into the Corporation or convey, transfer or lease
its properties as an entirety or substantially as an entirety to the
Corporation, unless: (i) in case the Corporation consolidates with or merges
into another Person or conveys or transfers its properties substantially as
an entirety to any Person, the successor Person is organized under the laws
of the United States or any State or the District of Columbia, and such
successor Person expressly assumes the Corporation's obligations on the
Junior Subordinated Debentures; (ii) immediately after giving effect thereto,
no Debenture Event of Default, and no event which, after notice or lapse of
time or both, would become a Debenture Event of Default, shall have occurred
and be continuing; and (iii) certain other conditions as prescribed in the
Indenture are met.
The general provisions of the Indenture do not afford holders of the
Junior Subordinated Debentures protection in the event of a highly leveraged
or other transaction involving the Corporation that may adversely affect
holders of the Junior Subordinated Debentures.
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SATISFACTION AND DISCHARGE. The Indenture provides that when, among
other things, all Junior Subordinated Debentures not previously delivered to
the Debenture Trustee for cancellation (i) have become due and payable or
(ii) will become due and payable at maturity or called for redemption within
one year, and the Corporation deposits or causes to be deposited with the
Debenture Trustee funds, in trust, for the purpose and in an amount
sufficient to pay and discharge the entire indebtedness on the Junior
Subordinated Debentures not previously delivered to the Debenture Trustee for
cancellation, for the principal (and premium, if any) and interest to the
date of the deposit or to the Stated Maturity Date, as the case may be, then
the Indenture will cease to be of further effect (except as to the
Corporation's obligations to pay all other sums due pursuant to the Indenture
and to provide the officers' certificates and opinions of counsel described
therein), and the Corporation will be deemed to have satisfied and discharged
the Indenture.
SUBORDINATION. In the Indenture, the Corporation has covenanted and
agreed that any Junior Subordinated Debentures issued thereunder will be
subordinate and junior in right of payment to all Senior Indebtedness to the
extent provided in the Indenture. Upon any payment or distribution of assets
to creditors upon any liquidation, dissolution, winding up, reorganization,
assignment for the benefit of creditors, marshaling of assets or any
bankruptcy, insolvency, debt restructuring or similar proceedings in
connection with any insolvency or bankruptcy proceeding of the Corporation,
all Senior Indebtedness must be paid in full before the holders of Junior
Subordinated Debentures will be entitled to receive or retain any payment in
respect thereof.
In the event of the acceleration of the maturity of Junior Subordinated
Debentures, the holders of all Senior Indebtedness outstanding at the time of
such acceleration will first be entitled to receive payment in full of such
Senior Indebtedness before the holders of Junior Subordinated Debentures will
be entitled to receive or retain any payment in respect of the Junior
Subordinated Debentures.
No payments on account of principal, or premium, if any, or interest, if
any, in respect of the Junior Subordinated Debentures may be made if there
shall have occurred and be continuing a default in any payment with respect
to Senior Indebtedness, or an event of default with respect to any Senior
Indebtedness resulting in the acceleration of the maturity thereof, or if any
judicial proceeding shall be pending with respect to any such default.
"Indebtedness" means (i) every obligation of the Corporation for money
borrowed; (ii) every obligation of the Corporation evidenced by bonds,
debentures, notes or other similar instruments, including obligations
incurred in connection with the acquisition of property, assets or
businesses; (iii) every reimbursement obligation of the Corporation with
respect to letters of credit, banker's acceptances or similar facilities
issued for the account of the Corporation; (iv) every obligation of the
Corporation issued or assumed as the deferred purchase price of property or
services (but excluding trade accounts payable or accrued liabilities arising
in the ordinary course of business); (v) every capital lease obligation of
the Corporation; (vi) all indebtedness of the Corporation whether incurred on
or prior to the date of the Indenture or thereafter incurred, for claims in
respect of derivative products, including interest rate, foreign exchange
rate and commodity forward contracts, options and swaps and similar
arrangements; and (vii) every obligation of the type referred to in clauses
(i) through (vi) of another Person and all dividends of another Person the
payment of which, in either case, the Corporation has guaranteed or is
responsible or liable, directly or indirectly, as obligor or otherwise.
"Indebtedness Ranking on a Parity with the Junior Subordinated
Debentures" means (i) Indebtedness, whether outstanding on the date of
execution of the Indenture or thereafter created, assumed or incurred, to the
extent such indebtedness by its terms ranks equally with and not prior to the
Junior Subordinated Debentures in the right of payment upon the happening of
the dissolution or winding-up or liquidation or reorganization of the
Corporation and (ii) all other debt securities, and guarantees in respect of
those debt securities, issued to any other trust, or a trustee of such trust,
partnership or other entity affiliated with the Corporation that is a
financing vehicle of the Corporation (a "financing entity") in connection
with the issuance by such financing entity of equity securities or other
securities guaranteed by the Corporation pursuant to an instrument that ranks
pari passu with or junior in right of payment to the Guarantee. The securing
of any Indebtedness, otherwise constituting Indebtedness Ranking on a Parity
with the Junior Subordinated Debentures, shall not be deemed to prevent such
Indebtedness from constituting Indebtedness Ranking on a Parity with the
Junior Subordinated Debentures.
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"Indebtedness Ranking Junior to the Junior Subordinated Debentures" means
any Indebtedness, whether outstanding on the date of execution of the Indenture
or thereafter created, assumed or incurred, to the extent such indebtedness by
its terms ranks junior to and not equally with or prior to the Junior
Subordinated Debentures (and any other Indebtedness Ranking on a Parity with the
Junior Subordinated Debentures) in right of payment upon the happening of the
dissolution or winding-up or liquidation or reorganization of the Corporation.
The securing of any Indebtedness, otherwise constituting Indebtedness Ranking
Junior to the Junior Subordinated Debentures, shall not be deemed to prevent
such Indebtedness from constituting Indebtedness Ranking Junior to the Junior
Subordinated Debentures.
"Senior Indebtedness" means all Indebtedness, whether outstanding on the
date of execution of the Indenture or thereafter created, assumed or incurred,
except Indebtedness Ranking on a Parity with the Junior Subordinated Debentures
or Indebtedness Ranking Junior to the Junior Subordinated Debentures, and any
deferrals, renewals or extensions of such Senior Indebtedness.
The Corporation is a holding company and almost all of the operating assets
of the Corporation are owned by the Corporation's subsidiaries. The Corporation
relies primarily on dividends from the Bank to meet its obligations for payment
of principal and interest on its outstanding debt obligations and corporate
expenses. The Corporation is a legal entity separate and distinct from its
subsidiaries. Holders of Junior Subordinated Debentures should look only to the
Corporation for payments on the Junior Subordinated Debentures. There are
regulatory limitations on the payment of dividends directly or indirectly to the
Corporation from the Bank. See "--General." In addition, the Bank is subject to
certain restrictions imposed by federal law on any extensions of credit to, and
certain other transactions with, the Corporation and certain other affiliates,
and on investments in stock or other securities thereof. Such restrictions
prevent the Corporation and such other affiliates from borrowing from the Bank
unless the loans are secured by various types of collateral. Further, such
secured loans, other transactions and investments by the Bank are generally
limited in amount as to the Corporation and as to each of such other affiliates
to 10% of the Bank's capital and surplus and as to the Corporation and all of
such other affiliates to an aggregate of 20% of the Bank's capital and surplus.
Accordingly, the Junior Subordinated Debentures will be effectively subordinated
to all existing and future liabilities of the Corporation's subsidiaries.
Because the Corporation is a holding company, the right of the Corporation
to participate in any distribution of assets of any subsidiary upon such
subsidiary's liquidation or reorganization or otherwise (and thus the ability of
holders of the Capital Securities to benefit indirectly from such distribution),
is subject to the prior claims of creditors of that subsidiary (including
depositors, in the case of the Bank), except to the extent the Corporation may
itself be recognized as a creditor of that subsidiary. At September 30, 1997,
the subsidiaries of the Corporation had total liabilities (excluding liabilities
owed to the Corporation) of $332.5 million. Accordingly, the Junior
Subordinated Debentures will be effectively subordinated to all existing and
future liabilities of the Corporation's subsidiaries (including the
subsidiaries' deposit liabilities) and all liabilities of any future
subsidiaries of the Corporation. The Indenture does not limit the incurrence or
issuance of other secured or unsecured debt of the Corporation or any
subsidiary, including Senior Indebtedness. See "--Subordination."
Restrictions on Transfer. The Junior Subordinated Debentures will be
issued, and may be transferred, only in blocks having an aggregate principal
amount of not less than $100,000 (100 Junior Subordinated Debentures) and
multiples of $1,000 in excess thereof. Any such transfer of Junior Subordinated
Debentures in a block having an aggregate principal amount of less than $100,000
shall be deemed to be void and of no legal effect whatsoever. Any such
transferee shall be deemed not to be the holder of such Junior Subordinated
Debentures for any purpose, including but not limited to the receipt of payments
on such Junior Subordinated Debentures, and such transferee shall be deemed to
have no interest whatsoever in such Junior Subordinated Debentures.
Governing Law. The Indenture and the Junior Subordinated Debentures are
governed by and will be construed in accordance with the laws of the State of
New York.
Information Concerning the Debenture Trustee. Following the Exchange Offer
and the qualification of the Indenture under the Trust Indenture Act, the
Debenture Trustee shall have and be subject to all the duties
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and responsibilities specified with respect to an indenture trustee under the
Trust Indenture Act. Subject to such provisions, the Debenture Trustee is under
no obligation to exercise any of the powers vested in it by the Indenture at the
request of any holder of Junior Subordinated Debentures, unless offered
reasonable indemnity by such holder against the costs, expenses and liabilities
which might be incurred thereby. The Debenture Trustee is not required to expend
or risk its own funds or otherwise incur personal financial liability in the
performance of its duties if the Debenture Trustee reasonably believes that
repayment or adequate indemnity is not reasonably assured to it.
Description of Guarantee
The Old Guarantee was executed and delivered by the Corporation
concurrently with the issuance by the Trust of the Old Capital Securities for
the benefit of the holders from time to time of the Old Capital Securities. As
soon as practicable after the date hereof, the Old Guarantee will be exchanged
by the Corporation for the New Guarantee for the benefit of the holders from
time to time of the New Capital Securities. The Guarantee Agreement has been
qualified under the Trust Indenture Act. This summary of certain provisions of
the Guarantee Agreement describes the material terms of the Guarantee, but does
not purport to be complete and is subject to, and qualified in its entirety by
reference to, all of the provisions of the Guarantee Agreement, including the
definitions therein of certain terms, and the Trust Indenture Act. The
Guarantee Trustee will hold the Guarantee for the benefit of the holders of the
Capital Securities.
General. The Corporation has agreed to pay in full on a subordinated
basis, to the extent set forth herein, the Guarantee Payments (as defined below)
to the holders of the Capital Securities, as and when due, regardless of any
defense, right of set-off or counterclaim that the Trust may have or assert
other than the defense of payment. The following payments with respect to the
Capital Securities, to the extent not paid by or on behalf of the Trust (the
"Guarantee Payments"), are subject to the Guarantee: (i) any accumulated and
unpaid Distributions required to be paid on the Capital Securities, to the
extent that the Trust has funds on hand legally available therefor at such time,
(ii) the Redemption Price with respect to any Capital Securities called for
redemption, to the extent that the Trust has funds on hand legally available
therefor at such time, or (iii) upon a voluntary or involuntary dissolution,
winding-up or liquidation of the Trust (other than in connection with the
distribution of the Junior Subordinated Debentures to holders of the Capital
Securities or the redemption of all Capital Securities), the lesser of (a) the
Liquidation Distribution, to the extent the Trust has funds legally available
therefor at the time, and (b) the amount of assets of the Trust remaining
available for distribution to holders of Capital Securities upon liquidation of
the Trust after satisfaction of liabilities to creditors of the Trust as
required by applicable law. The Corporation's obligation to make a Guarantee
Payment may be satisfied by direct payment of the required amounts by the
Corporation to the holders of the Capital Securities or by causing the Trust to
pay such amounts to such holders.
The Guarantee ranks subordinate and junior in right of payment to all
Senior Indebtedness to the extent provided therein. See "--Status of the
Guarantee." Because the Corporation is a holding company, the right of the
Corporation to participate in any distribution of assets of any subsidiary upon
such subsidiary's liquidation or reorganization or otherwise is subject to the
prior claims of creditors of that subsidiary, except to the extent the
Corporation may itself be recognized as a creditor of that subsidiary.
Accordingly, the Corporation's obligations under the Guarantee effectively are
subordinated to all existing and future liabilities, including deposits, of the
Corporation's subsidiaries, and claimants should look only to the assets of the
Corporation for payments thereunder. See "--Description of Junior Subordinated
Debentures--General." The Guarantee does not limit the incurrence or issuance
of other secured or unsecured debt of the Corporation, including Senior
Indebtedness, whether under the Indenture, any other indenture that the
Corporation may enter into in the future or otherwise.
The Corporation has, through the Guarantee, the Trust Agreement, the Junior
Subordinated Debentures and the Indenture, taken together, fully, irrevocably
and unconditionally guaranteed all of the Trust's obligations under the Capital
Securities. No single document standing alone or operating in conjunction with
fewer than all of the other documents constitutes such guarantee. It is only the
combined operation of these documents that has the effect of providing a full,
irrevocable and unconditional guarantee of the Trust's obligations under the
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Capital Securities. See "Relationship Among the Capital Securities, the Junior
Subordinated Debentures and the Guarantee."
Status of Guarantee. The Guarantee constitutes an unsecured obligation of
the Corporation and ranks subordinate and junior in right of payment to all
Senior Indebtedness in the same manner as Junior Subordinated Debentures.
The New Guarantee ranks pari passu with the Old Guarantee and with all
Other Guarantees issued by the Corporation. The Guarantee constitutes a
guarantee of payment and not of collection (i.e., the guaranteed party may
institute a legal proceeding directly against the Corporation to enforce its
rights under the Guarantee without first instituting a legal proceeding against
any other person or entity). The Guarantee will be held for the benefit of the
holders of the Capital Securities. The Guarantee will not be discharged except
by payment of the Guarantee Payments in full to the extent not paid by the Trust
or upon distribution to the holders of the Capital Securities of the Junior
Subordinated Debentures. The Guarantee does not place a limitation on the amount
of additional Senior Indebtedness that may be incurred by the Corporation.
Events of Default. An event of default under the Guarantee will occur upon
the failure of the Corporation to perform any of its payment or other
obligations thereunder, provided, however, that except with respect to a default
in payment of any Guarantee Payment, the Corporation shall have received notice
of default and shall not have cured such default within 60 days after receipt of
such notice. The holders of not less than a majority in Liquidation Amount of
the Capital Securities will have the right to direct the time, method and place
of conducting any proceeding for any remedy available to the Guarantee Trustee
in respect of the Guarantee or to direct the exercise of any trust or power
conferred upon the Guarantee Trustee under the Guarantee.
Any holder of the Capital Securities may institute a legal proceeding
directly against the Corporation to enforce its rights under the Guarantee
without first instituting a legal proceeding against the Trust, the Guarantee
Trustee or any other person or entity.
The Corporation, as guarantor, will be required to file annually with the
Guarantee Trustee a certificate as to whether or not the Corporation is in
compliance with all the conditions and covenants applicable to it under the
Guarantee.
Amendments and Assignment. Except with respect to any changes that do not
materially adversely affect the rights of holders of the Capital Securities (in
which case no vote will be required), the Guarantee may not be amended without
the prior approval of the holders of a majority of the Liquidation Amount of
outstanding Capital Securities. The manner of obtaining any such approval is as
set forth under "--Description of Capital Securities--Voting Rights; Amendment
of the Trust Agreement." All guarantees and agreements contained in the
Guarantee Agreement shall bind the successors, assigns, receivers, trustees and
representatives of the Corporation and shall inure to the benefit of the holders
of the Capital Securities then outstanding.
Termination. The Guarantee will terminate and be of no further force and
effect upon full payment of the applicable Redemption Price of the Capital
Securities, upon full payment of the Liquidation Amount payable upon liquidation
of the Trust or upon distribution of Junior Subordinated Debentures to the
holders of the Capital Securities. The Guarantee will continue to be effective
or will be reinstated, as the case may be, if at any time any holder of the
Capital Securities must restore payment of any sums paid under the Capital
Securities or the Guarantee.
Information Concerning the Guarantee Trustee. The Guarantee Trustee, other
than during the occurrence and continuance of a default by the Corporation in
performance of the Guarantee, will undertake to perform only such duties as are
specifically set forth in the Guarantee and, after default with respect to the
Guarantee, must exercise the same degree of care and skill as a prudent person
would exercise or use in the conduct of his or her own affairs. Subject to this
provision, the Guarantee Trustee will be under no obligation to exercise any of
the powers vested in it by the Guarantee at the request of any holder of the
Capital Securities
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unless it is offered reasonable indemnity against the costs, expenses and
liabilities that might be incurred thereby.
Governing Law. The Guarantee is governed by and will be construed in
accordance with the laws of the State of New York.
DESCRIPTION OF OLD SECURITIES
The terms of the Old Securities are identical in all materials respects to
the New Securities, except that (i) the Old Securities have not been registered
under the Securities Act, are subject to restrictions on transfer under federal
and state securities laws and are entitled to certain rights under the
Registration Rights Agreement (which rights will terminate upon consummation of
the Exchange Offer), (ii) the New Capital Securities will not provide for any
increase in the Distribution rate thereon and (iii) the New Junior Subordinated
Debentures will not provide for any increase in the interest rate thereon. The
Old Securities provide that, in the event that a registration statement relating
to the Exchange Offer has not been filed by January 23, 1998 and declared
effective by February 22, 1998, or, in certain limited circumstances, in the
event a shelf registration statement (the "Shelf Registration Statement") with
respect to the resale of the Old Capital Securities is not declared effective by
February 22, 1998, then interest will accrue (in addition to the stated interest
rate on the Old Junior Subordinated Debentures) at the rate of 0.25% per annum
on the principal amount of the Old Junior Subordinated Debentures and
Distributions will accrue (in addition to the stated Distribution rate on the
Old Capital Securities) at the rate of 0.25% per annum on the Liquidation Amount
of the Old Capital Securities, for the period from the occurrence of such event
until such time as such required Exchange Offer is consummated or any required
Shelf Registration Statement is effective. The New Securities are not, and upon
consummation of the Exchange Offer the Old Securities will not be, entitled to
any such additional interest or Distributions. Accordingly, holders of Old
Capital Securities should review the information set forth under "Risk Factors
- --Consequences of a Failure to Exchange Old Capital Securities" and "Description
of New Securities."
RELATIONSHIP AMONG THE CAPITAL SECURITIES, THE
JUNIOR SUBORDINATED DEBENTURES AND THE GUARANTEE
Full and Unconditional Guarantee
Payments of Distributions and other amounts due on the Capital Securities
(to the extent the Trust has funds on hand legally available for the payment of
such Distributions) are irrevocably guaranteed by the Corporation as and to the
extent set forth under "Description of New Securities--Description of
Guarantee." Taken together, the Corporation's obligations under the Junior
Subordinated Debentures, the Indenture, the Trust Agreement and the Guarantee
provide, in the aggregate, a full, irrevocable and unconditional guarantee of
payments of Distributions and other amounts due on the Capital Securities. No
single document standing alone or operating in conjunction with fewer than all
of the other documents constitutes such guarantee. It is only the combined
operation of these documents that has the effect of providing a full,
irrevocable and unconditional guarantee of the Trust's obligations under the
Capital Securities. If and to the extent that the Corporation does not make the
required payments on the Junior Subordinated Debentures, the Trust will not have
sufficient funds to make the related payments, including Distributions, on the
Capital Securities. The Guarantee does not cover any such payment when the
Trust does not have sufficient funds on hand legally available therefor. In
such event, the remedy of a holder of Capital Securities is to institute a
Direct Action. The obligations of the Corporation under the Guarantee are
subordinate and junior in right of payment to all Senior Indebtedness.
Sufficiency of Payments
As long as payments of interest and other payments are made when due on the
Junior Subordinated Debentures, such payments will be sufficient to cover
Distributions and other payments due on the Capital Securities, primarily
because: (i) the aggregate principal amount or Prepayment Price of the Junior
Subordinated
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Debentures will be equal to the sum of the Liquidation Amount or Redemption
Price, as applicable, of the Trust Securities, (ii) the interest rate and
interest and other payment dates on the Junior Subordinated Debentures will
match the Distribution rate and Distribution and other payment dates for the
Trust Securities; (iii) the Corporation, as Sponsor, shall pay for all and any
costs, expenses and liabilities of the Trust except the Trust's obligations to
holders of Trust Securities under such Trust Securities; and (iv) the Trust
Agreement provides that the Trust is not authorized to engage in any activity
that is not consistent with the limited purposes thereof.
Enforcement Rights of Holders of Capital Securities
A holder of any Capital Security may institute a legal proceeding directly
against the Corporation to enforce its rights under the Guarantee without first
instituting a legal proceeding against the Guarantee Trustee, the Trust or any
other person or entity.
A default or event of default under any Senior Indebtedness would not
constitute a default or an Event of Default under the Trust Agreement. However,
in the event of payment defaults under, or acceleration of, Senior Indebtedness,
the subordination provisions of the Indenture provide that no payments may be
made in respect of the Junior Subordinated Debentures until such Senior
Indebtedness has been paid in full or any payment default thereunder has been
cured or waived. Failure to make required payments on Junior Subordinated
Debentures would constitute an Event of Default under the Trust Agreement.
Limited Purpose of the Trust
The Trust exists for the sole purpose of issuing and selling the Trust
Securities, using the proceeds from the sale of the Trust Securities to acquire
the Junior Subordinated Debentures and engaging in only those other activities
necessary, advisable or incidental thereto. The Capital Securities represent
beneficial ownership interests in the Trust. A principal difference between the
rights of a holder of Capital Securities and a holder of Junior Subordinated
Debentures is that a holder of Junior Subordinated Debentures is entitled to
receive from the Corporation the principal amount of (and premium, if any) and
interest on Junior Subordinated Debentures held, while a holder of Capital
Securities is entitled to receive Distributions from the Trust (or, in certain
circumstances, from the Corporation under the Guarantee) if and to the extent
the Trust has funds on hand legally available for the payment of such
Distributions.
Rights Upon Termination
Unless the Junior Subordinated Debentures are distributed to holders of the
Trust Securities, upon any voluntary or involuntary dissolution, winding-up or
liquidation of the Trust, after satisfaction of the liabilities of creditors of
the Trust as required by applicable law, the holders of the Trust Securities
will be entitled to receive, out of assets held by the Trust, the Liquidation
Distribution in cash. See "Description of New Securities--Description of
Capital Securities--Liquidation of the Trust and Distribution of Junior
Subordinated Debentures." Upon any voluntary or involuntary liquidation or
bankruptcy of the Corporation, the Property Trustee, as holder of the Junior
Subordinated Debentures, would be a subordinated creditor of the Corporation,
subordinated in right of payment to all Senior Indebtedness as set forth in the
Indenture, but entitled to receive payment in full of principal (and premium, if
any) and interest, before any stockholders of the Corporation receive payments
or distributions. Since the Corporation is the guarantor under the Guarantee
and has agreed to pay for all costs, expenses and liabilities of the Trust
(other than the Trust's obligations to the holders of its Trust Securities), the
positions of a holder of Capital Securities and a holder of Junior Subordinated
Debentures relative to other creditors and to stockholders of the Corporation in
the event of liquidation or bankruptcy of the Corporation are expected to be
substantially the same.
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CERTAIN FEDERAL INCOME TAX CONSIDERATIONS
General
In the opinion of Elias, Matz, Tiernan & Herrick L.L.P., special federal
income tax counsel to the Corporation and the Trust ("Tax Counsel"), the
following is a summary of certain of the material United States federal income
tax consequences of the purchase, ownership and disposition of Capital
Securities held as capital assets by a holder. This summary does not deal with
special classes of holders such as banks, thrifts, real estate investment
trusts, regulated investment companies, insurance companies, dealers in
securities or currencies, tax-exempt investors, or persons that will hold the
Capital Securities as a position in a "straddle," as part of a "synthetic
security" or "hedge," as part of a "conversion transaction" or other integrated
investment, or as other than a capital asset. This summary also does not
address the tax consequences to persons that have a functional currency other
than the U.S. dollar or the tax consequences to shareholders, partners or
beneficiaries of a holder of Capital Securities. Further, it does not include
any description of any alternative minimum tax consequences or the tax laws of
any state or local government or of any foreign government that may be
applicable to the Capital Securities. This summary is based on the Internal
Revenue Code of 1986, as amended (the "Code"), Treasury regulations thereunder,
the administrative and judicial interpretations thereof, as of the date hereof,
all of which are subject to change, possibly on a retroactive basis. An opinion
of Tax Counsel is not binding on the Internal Revenue Service (the "IRS") or the
courts. No rulings have been or are expected to be sought from the IRS with
respect to any of the transactions described herein and no assurance can be
given that the IRS will not take contrary positions. Moreover, no assurance can
be given that any of the opinions expressed herein will not be challenged by the
IRS or, if challenged, that such a challenge would not be successful.
Exchange of Capital Securities
The exchange of Old Capital Securities for New Capital Securities should
not be a taxable event to holders for United States federal income tax purposes.
The exchange of Old Capital Securities for New Capital Securities pursuant to
the Exchange Offer should not be treated as an "exchange" for United States
federal income tax purposes because the New Capital Securities should not be
considered to differ materially in kind or extent from the Old Capital
Securities and because the exchange will occur by operation of the terms of the
Old Capital Securities. If, however, the exchange of the Old Capital Securities
for the New Capital Securities were treated as an exchange for United States
federal income tax purposes, such exchange should constitute a recapitalization
for federal income tax purposes. Accordingly, the New Capital Securities should
have the same issue price as the Old Capital Securities, and a holder should
have the same adjusted tax basis and holding period in the New Capital
Securities as the holder had in the Old Capital Securities immediately before
the exchange.
Classification of the Junior Subordinated Debentures
In connection with the issuance of the Old Junior Subordinated Debentures,
Tax Counsel has rendered its opinion generally to the effect that, under then
current law and assuming full compliance with the terms of the Indenture (and
certain other documents), and based on certain facts and assumptions contained
in such opinion, the Old Junior Subordinated Debentures will be classified for
United States federal income tax purposes as indebtedness of the Corporation.
The Corporation, the Trust and the holders of the Capital Securities (by
acceptance of a beneficial interest in a Capital Security) will agree to treat
the Junior Subordinated Debentures as indebtedness for all United States federal
income tax purposes.
Classification of the Trust
In connection with the issuance of the Old Capital Securities, Tax Counsel
has rendered its opinion generally to the effect that, under then current law
and assuming full compliance with the terms of the Trust Agreement and the
Indenture (and certain other documents), and based on certain facts and
assumptions contained in such opinion, the Trust will be classified for United
States federal income tax purposes as a grantor trust and not as an association
taxable as a corporation. Accordingly, for United States federal income tax
purposes, each holder of Capital Securities generally will be considered the
owner of an undivided interest in
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the Junior Subordinated Debentures, and each holder will be required to include
in its gross income any interest (or OID accrued) with respect to its allocable
share of those Junior Subordinated Debentures.
Interest Income and Original Issue Discount
Under recently issued Treasury regulations (the "Regulations") applicable
to debt instruments issued on or after August 13, 1996, a "remote" contingency
that stated interest will not be timely paid will be ignored in determining
whether a debt instrument is issued with OID. The Corporation believes that the
likelihood of its exercising its option to defer payments of interest is
"remote" since exercising that option would prevent the Corporation from
declaring dividends on any class of its equity securities. Accordingly, the
Corporation intends to take the position, based on the advice of Tax Counsel,
that the Junior Subordinated Debentures will not be considered to be issued with
OID and, accordingly, stated interest on the Junior Subordinated Debentures
generally will be taxable to a holder as ordinary income at the time it is paid
or accrued in accordance with such holder's method of accounting.
Under the Regulations, if the Corporation were to exercise its option to
defer payments of interest, the Junior Subordinated Debentures would at that
time be treated as issued with OID, and all stated interest on the Junior
Subordinated Debentures would thereafter be treated as OID as long as the Junior
Subordinated Debentures remain outstanding. In such event, all of a holder's
taxable interest income with respect to the Junior Subordinated Debentures would
thereafter be accounted for on an economic accrual basis regardless of such
holder's method of tax accounting, and actual distributions of stated interest
would not be reported as taxable income. Consequently, a holder of Capital
Securities would be required to include in gross income OID even though the
Corporation would not make actual cash payments during an Extension Period.
Moreover, under the Regulations, if the option to defer the payment of interest
was determined not to be "remote," the Junior Subordinated Debentures would be
treated as having been originally issued with OID. In such event, all of a
holder's taxable interest income with respect to the Junior Subordinated
Debentures would be accounted for on an economic accrual basis regardless of
such holder's method of tax accounting, and actual distributions of stated
interest would not be reported as taxable income.
The Regulations have not yet been addressed in any rulings or other
interpretations by the IRS, and it is possible that the IRS could take a
position contrary to Tax Counsel's interpretation herein.
Because income on the Capital Securities will constitute interest or OID,
corporate holders of the Capital Securities will not be entitled to a
dividends-received deduction with respect to any income recognized with respect
to the Capital Securities.
Receipt of Junior Subordinated Debentures or Cash Upon Liquidation of the Trust
The Corporation will have the right at any time to dissolve the Trust and,
after satisfaction of liabilities to creditors of the Trust as required by law,
cause the Junior Subordinated Debentures to be distributed to the holders of the
Trust Securities. Under current law, such a distribution, for United States
federal income tax purposes, would be treated as a nontaxable event to each
holder, and each holder would receive an aggregate tax basis in the Junior
Subordinated Debentures equal to such holder's aggregate tax basis in its
Capital Securities. A holder's holding period in the Junior Subordinated
Debentures so received in liquidation of the Trust would include the period
during which the Capital Securities were held by such holder. If, however, the
Trust is characterized for United States federal income tax purposes as an
association taxable as a corporation at the time of its dissolution, the
distribution of the Junior Subordinated Debentures may constitute a taxable
event to holders of Capital Securities and a holder's holding period in Junior
Subordinated Debentures would begin on the date such Junior Subordinated
Debentures were received.
Under certain circumstances described herein (see "Description of New
Securities -- Description of New Capital Securities"), the Junior Subordinated
Debentures may be redeemed for cash and the proceeds of such redemption
distributed to holders in redemption of their Capital Securities. Under current
law, such a redemption would, for United States federal income tax purposes,
constitute a taxable disposition of the
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redeemed Capital Securities, and a holder could recognize gain or loss as if it
sold such redeemed Capital Securities for cash. See "--Sales of Capital
Securities."
Sales of Capital Securities
A holder that sells Capital Securities (including a redemption of the
Capital Securities either on the Stated Maturity Date or upon an optional
redemption of the Junior Subordinated Debentures by the Corporation) will
recognize gain or loss equal to the difference between its adjusted tax basis in
the Capital Securities and the amount realized on the sale of such Capital
Securities (other than with respect to accrued and unpaid interest which has not
yet been included in income, which will be treated as ordinary income). A
holder's adjusted tax basis in the Capital Securities generally will be its
initial purchase price increased by OID (if any) previously includable in such
holder's gross income to the date of disposition and decreased by payments (if
any) received on the Capital Securities in respect of OID. Such gain or loss
generally will be a capital gain or loss and generally will be a long-term
capital gain or loss if the Capital Securities have been held for more than one
year.
The Capital Securities may trade at a price that does not accurately
reflect the value of accrued but unpaid interest with respect to the underlying
Junior Subordinated Debentures. A holder who uses the accrual method of
accounting for tax purposes (and a cash method holder, if the Junior
Subordinated Debentures are deemed to have been issued with OID) who disposes of
his Capital Securities between record dates for payments of distributions
thereon will be required to include accrued but unpaid interest on the Junior
Subordinated Debentures through the date of disposition in income as ordinary
income (i.e., interest or, possibly, OID), and to add such amount to his
adjusted tax basis in his pro rata share of the underlying Junior Subordinated
Debentures deemed disposed of. To the extent the selling price is less than the
holder's adjusted tax basis (which will include all accrued but unpaid
interest), a holder will recognize a capital loss. Subject to certain limited
exceptions, capital losses cannot be applied to offset ordinary income for
United States federal income tax purposes.
United States Alien Holders
For purposes of this discussion, a "United States Alien Holder" is any
corporation, individual, partnership, estate or trust that is not a U.S. Holder
for United States federal income tax purposes.
A "U.S. Holder" is a holder of Capital Securities who or which is a citizen
or individual resident (or is treated as a citizen or individual resident) of
the United States for federal income tax purposes, a corporation or partnership
created or organized (or treated as created or organized for federal income tax
purposes) in or under the laws of the United States or any political subdivision
thereof, or a trust or estate the income of which is includible in its gross
income for federal income tax purposes without regard to its source. (For
taxable years beginning after December 31, 1996 (or for the immediately
preceding taxable year, if the trustee of a trust so elects), a trust is a U.S.
Holder for federal income tax purposes if, and only if, (i) a court within the
United States is able to exercise primary supervision over the administration of
the trust and (ii) one or more United States trustees have the authority to
control all substantial decisions of the trust.)
Under present United States federal income tax laws: (i) payments by the
Trust or any of its paying agents to any holder of a Capital Security who or
which is a United States Alien Holder will not be subject to United States
federal withholding tax; provided that, (a) the beneficial owner of the Capital
Security does not actually or constructively own 10 percent or more of the total
combined voting power of all classes of stock of the Corporation entitled to
vote, (b) the beneficial owner of the Capital Security is not a controlled
foreign corporation that is related to the Corporation through stock ownership,
and (c) either (A) the beneficial owner of the Capital Security certifies to the
Trust or its agent, under penalties of perjury, that it is not a United States
holder and provides its name and address or (B) a securities clearing
organization, bank or other financial institution that holds customers'
securities in the ordinary course of its trade or business (a "Financial
Institution"), and holds the Capital Security in such capacity, certifies to the
Trust or its agent, under penalties of perjury, that such statement has been
received from the beneficial owner by it or by a Financial Institution
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between it and the beneficial owner and furnishes the Trust or its agent with a
copy thereof; and (ii) a United States Alien Holder of a Capital Security will
not be subject to United States federal withholding tax on any gain realized
upon the sale or other disposition of a Capital Security.
As discussed above, changes in legislation affecting the United States
federal income tax treatment of the Junior Subordinated Debentures are possible,
and could adversely affect the ability of the Corporation to deduct the interest
payable on the Junior Subordinated Debentures. Moreover, any such legislation
could, as the Proposed Legislation would have, adversely affect United States
Alien Holders by characterizing income derived from the Junior Subordinated
Debentures as dividends, generally subject to a 30% income tax (on a withholding
basis) when paid to a United States Alien Holder, rather than as interest which,
as discussed above, is generally exempt from income tax in the hands of a United
States Alien Holder.
A United States Alien Holder that holds Capital Securities in connection
with the active conduct of a United States trade or business will be subject to
income tax on all income and gains recognized with respect to its proportionate
share of the Junior Subordinated Debentures.
Information Reporting to Holders
Generally, income on the Capital Securities will be reported to holders on
Forms 1099, which forms should be mailed to holders of Capital Securities by
January 31 following each calendar year.
Backup Withholding
Payments made on, and proceeds from the sale of, the Capital Securities may
be subject to a "backup" withholding tax of 31 percent unless the holder
complies with certain identification requirements. Any withheld amounts will be
allowed as a credit against the holder's United States federal income tax,
provided the required information is provided to the IRS.
THE UNITED STATES FEDERAL INCOME TAX DISCUSSION SET FORTH ABOVE IS INCLUDED
FOR GENERAL INFORMATION ONLY AND MAY NOT BE APPLICABLE DEPENDING UPON A HOLDER'S
PARTICULAR SITUATION. HOLDERS SHOULD CONSULT THEIR TAX ADVISORS WITH RESPECT TO
THE TAX CONSEQUENCES TO THEM OF THE ACQUISITION, OWNERSHIP AND DISPOSITION OF
THE CAPITAL SECURITIES, INCLUDING THE TAX CONSEQUENCES UNDER STATE, LOCAL,
FOREIGN AND OTHER TAX LAWS AND THE POSSIBLE EFFECTS OF CHANGES IN UNITED STATES
FEDERAL OR OTHER TAX LAWS.
ERISA CONSIDERATIONS
The Corporation, the obligor with respect to the Junior Subordinated
Debentures held by the Trust, and its affiliates and the Property Trustee may be
considered a "party in interest" (within the meaning of the Employee Retirement
Income Security Act of 1974, as amended ("ERISA")) or a "disqualified person"
(within the meaning of Section 4975 of the Code) with respect to many employee
benefit plans ("Plans") that are subject to ERISA. Any purchaser proposing to
acquire Capital Securities with assets of any Plan should consult with its
counsel. The purchase and/or holding of Capital Securities by a Plan that is
subject to the fiduciary responsibility provisions of ERISA or the prohibited
transaction provisions of Section 4975 of the Code (including individual
retirement arrangements and other plans described in Section 4975(e)(1) of the
Code) and with respect to which the Corporation, the Property Trustee or any
affiliate is a service provider (or otherwise is a party in interest or a
disqualified person) may constitute or result in a prohibited transaction under
ERISA or Section 4975 of the Code, unless such Capital Securities are acquired
pursuant to and in accordance with an applicable exemption, such as Prohibited
Transaction Class Exemption ("PTCE") 84-14 (an exemption for certain
transactions determined by an independent qualified professional asset manager),
PTCE 91-38 (an exemption for certain transactions involving bank collective
investment funds), PTCE 90-1 (an exemption for certain transactions involving
insurance company pooled separate accounts), PTCE 95-60 (an exemption for
transactions
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involving certain insurance company general accounts) or PTCE 95-23 (an
exemption for certain transactions determined by an in-house manager). In
addition, as described below, a Plan fiduciary considering the acquisition of
Capital Securities should be aware that the assets of the Trust may be
considered "plan assets" for ERISA purposes. In such event, service providers
with respect to the assets of the Trust may become parties in interest or
disqualified persons with respect to investing Plans, and any discretionary
authority exercised with respect to the Junior Subordinated Debentures by such
persons could be deemed to constitute a prohibited transaction under ERISA or
the Code. In order to avoid such prohibited transactions, each investing Plan,
by acquiring the Capital Securities, will be deemed to have directed the Trust
to invest in the Junior Subordinated Debentures and to have consented to the
appointment of the Property Trustee. In this regard, it should be noted that,
in an Event of Default, the Corporation may not remove the Property Trustee
without the approval of a majority of the holders of the Capital Securities.
A Plan fiduciary should consider whether the acquisition of Capital
Securities could result in a delegation of fiduciary authority to the Property
Trustee, and, if so, whether such a delegation of authority is permissible under
the Plan's governing instrument or any investment management agreement with the
Plan. In making such determination, a Plan fiduciary should note that the
Property Trustee is a U.S. bank qualified to be an investment manager (within
the meaning of section 3(38) of ERISA) to which such a delegation of authority
generally would be permissible under ERISA. Further, prior to an Event of
Default with respect to the Junior Subordinated Debentures, the Property Trustee
will have only limited custodial and ministerial authority with respect to Trust
assets.
Under the U.S. Department of Labor regulations defining "plan assets" for
ERISA purposes (the "Plan Assets Regulations"), the assets of the Trust will be
considered plan assets of Plans owning Capital Securities unless the aggregate
investment in Capital Securities by "benefit plan investors" is not deemed
"significant" or another exception in the Plan Assets Regulations was
applicable. For this purpose, equity participation by benefit plan investors
will not be considered "significant" on any date only if, immediately after the
most recent acquisition of Capital Securities, the aggregate interest in the
Capital Securities held by benefit plan investors will be less than 25% of the
value of the Capital Securities. Although it is possible that the equity
participation by benefit plan investors in Capital Securities on any date will
not be "significant" for purposes of the Plan Assets Regulations, such result
cannot be assured.
PLAN OF DISTRIBUTION
Each broker-dealer that receives New Capital Securities for its own account
in connection with the Exchange Offer must acknowledge that it will deliver a
prospectus in connection with any resale of such New Capital Securities. This
Prospectus, as it may be amended or supplemented from time to time, may be used
by Participating Broker-Dealers during the period referred to below in
connection with resales of New Capital Securities received in exchange for Old
Capital Securities if such Old Capital Securities were acquired by such
Participating Broker-Dealers for their own accounts as a result of market-making
activities or other trading activities. The Corporation and the Trust have
agreed that this Prospectus, as it may be amended or supplemented from time to
time, may be used by a Participating Broker-Dealer in connection with resales of
such New Capital Securities for a period ending 90 days after the Expiration
Date (subject to extension under certain limited circumstances described herein)
or, if earlier, when all such New Capital Securities have been disposed of by
such Participating Broker-Dealer. However, a Participating Broker-Dealer who
intends to use this Prospectus in connection with the resale of New Capital
Securities received in exchange for Old Capital Securities pursuant to the
Exchange Offer must notify the Corporation or the Trust, or cause the
Corporation or the Trust to be notified, on or prior to the Expiration Date,
that it is a Participating Broker-Dealer. Such notice may be given in the space
provided for that purpose in the Letter of Transmittal or may be delivered to
the Exchange Agent at one of the addresses set forth herein under "The Exchange
Offer--Exchange Agent." See "The Exchange Offer--Resales of New Capital
Securities."
The Corporation or the Trust will not receive any cash proceeds from the
issuance of the New Capital Securities offered hereby. New Capital Securities
received by broker-dealers for their own accounts in
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connection with the Exchange Offer may be sold from time to time in one or more
transactions in the over-the-counter market, in negotiated transactions, through
the writing of options on the New Capital Securities or a combination of such
methods of resale, at market prices prevailing at the time of resale, at prices
related to such prevailing market prices or at negotiated prices. Any such
resale may be made directly to purchasers or to or through brokers or dealers
who may receive compensation in the form of commissions or concessions from any
such broker-dealer and/or the purchasers of any such New Capital Securities.
Any broker-dealer that resells New Capital Securities that were received by
it for its own account in connection with the Exchange Offer and any broker or
dealer that participates in a distribution of such New Capital Securities may be
deemed to be an "underwriter" within the meaning of the Securities Act, and any
profit on any such resale of New Capital Securities and any commissions or
concessions received by any such persons may be deemed to be underwriting
compensation under the Securities Act. The Letter of Transmittal states that by
acknowledging that it will deliver and by delivering a prospectus, a
broker-dealer will not be deemed to admit that it is an "underwriter" within the
meaning of the Securities Act.
VALIDITY OF NEW SECURITIES
Certain matters of Delaware law relating to the validity of the New Capital
Securities will be passed upon on behalf of the Trust by Richards, Layton &
Finger, P.A., special Delaware counsel to the Trust and the Corporation. The
validity of the New Guarantee and the New Junior Subordinated Debentures will be
passed upon for the Corporation by Elias, Matz, Tiernan & Herrick L.L.P.,
Washington, D.C. Certain matters relating to United States federal income tax
considerations will be passed upon for the Corporation by Elias, Matz, Tiernan &
Herrick L.L.P., Washington, D.C.
EXPERTS
The consolidated financial statements of the Corporation incorporated by
reference from the Corporation's Annual Report on Form 10-KSB for the fiscal
year ended September 30, 1997 has been audited by Deloitte & Touche LLP,
independent auditors as stated in their report, which is incorporated herein
by reference, and has been so incorporated in reliance upon the report of
such firm given their authority as experts in accounting and auditing.
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PART II
INFORMATION NOT REQUIRED IN THE PROSPECTUS
Item 20. Indemnification of Directors and Officers.
In accordance with the Business Corporation Law of the Commonwealth of
Pennsylvania, Article 8 of the Corporation's Amended and Restated Articles of
Incorporation provide as follows:
Article 8. Indemnification, etc. of Officers, Directors, Employees
and Agents.
A. Personal Liability of Directors. A director of the Corporation
shall not be personally liable for monetary damages for any action taken,
or any failure to take any action, as a director except to the extent that
by law a director's liability for monetary damages may not be limited.
B. Indemnification. The Corporation shall indemnify any person who
was or is a party or is threatened to be made a party to any threatened,
pending or completed action, suit or proceeding, including actions by or in
the right of the Corporation, whether civil, criminal, administrative or
investigative, by reason of the fact that such person is or was a director,
officer, employee or agent of the Corporation, or is or was serving at the
request of the Corporation as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust or other enterprise,
against expenses (including attorneys' fees), judgments, fines and amounts
paid in settlement actually and reasonably incurred by such person in
connection with such action, suit or proceeding to the full extent
permissible under Pennsylvania law.
C. Advancement of Expenses. Reasonable expenses incurred by an
officer, director, employee or agent of the Corporation in defending a
civil or criminal action, suit or proceeding described in Section B of this
Article 8 may be paid by the Corporation in advance of the final
disposition of such action, suit or proceeding upon receipt of an
undertaking by or on behalf of such person to repay such amount if it shall
ultimately be determined that the person is not entitled to be indemnified
by the Corporation.
D. Other Rights. The indemnification and advancement of expenses
provided by or pursuant to this Article 8 shall not be deemed exclusive of
any other rights to which those seeking indemnification or advancement of
expenses may be entitled under any insurance or other agreement, vote of
stockholders or directors or otherwise, both as to actions in their
official capacity and as to actions in another capacity while holding an
office, and shall continue as to a person who has ceased to be a director,
officer, employee or agent and shall inure to the benefit of the heirs,
executors and administrators of such person.
E. Insurance. The Corporation shall have the power to purchase and
maintain insurance on behalf of any person who is or was a director,
officer, employee or agent of the Corporation, or is or was serving at the
request of the Corporation as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust or other enterprise,
against any liability asserted against him and incurred by him in any such
capacity, or arising out of his status as such, whether or not the
Corporation would have the power to indemnify him against such liability
under the provisions of this Article 8.
F. Security Fund; Indemnity Agreements. By action of the Board of
Directors (notwithstanding their interest in the transaction), the
Corporation may create and fund a trust fund or fund of any nature, and may
enter into agreements with its officers, directors, employees and agents
for
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the purpose of securing or insuring in any manner its obligation to
indemnify or advance expenses provided for in this Article 8.
G. Modification. The duties of the Corporation to indemnify and to
advance expenses to any person as provided in this Article 8 shall be in
the nature of a contract between the Corporation and each such person, and
no amendment or repeal of any provision of this Article 8, and no amendment
or termination of any trust or other fund created pursuant to Section F of
this Article 8, shall alter to the detriment of such person the right of
such person to the advance of expenses or indemnification related to a
claim based on an act or failure to act which took place prior to such
amendment, repeal or termination.
H. Proceedings Initiated by Indemnified Persons. Notwithstanding
any other provision of this Article 8, the Corporation shall not indemnify
a director, officer, employee or agent for any liability incurred in an
action, suit or proceeding initiated (which shall not be deemed to include
counter-claims or affirmative defenses) or participated in as an intervenor
or amicus curiae by the person seeking indemnification unless such
initiation of or participation in the action, suit or proceeding is
authorized, either before or after its commencement, by the affirmative
vote of a majority of the directors in office.
The Corporation carries a liability insurance policy for its officers and
directors.
Under the Amended and Restated Declaration of Trust of First Keystone
Capital Trust I, the Corporation has agreed to indemnify each of the Issuer
Trustees of the Trust, and to hold each Trustee harmless against any loss,
damage, claim, liability or expense incurred without negligence or bad faith on
its part, arising out of, or in connection with, the acceptance or
administration of the Amended and Restated Declaration of Trust, including the
costs and expenses of defending itself against any claim or liability in
connection with the exercise or performance of any of its powers or duties under
the Trust.
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Item 21. Exhibits and Financial Statement Schedules
Exhibit No. Description
- ----------- -----------
4.1 Indenture of the Corporation relating to the Junior Subordinated
Debentures*
4.2 Form of Certificate of New Junior Subordinated Debenture
4.3 Certificate of Trust of First Keystone Capital Trust I
4.4 Amended and Restated Declaration of Trust of First Keystone Capital
Trust I*
4.5 Form of New Capital Security Certificate for First Keystone Capital
Trust I
4.6 Form of New Guarantee of the Corporation relating to the New Capital
Securities
4.7 Registration Rights Agreement
5.1 Opinion and consent of Elias, Matz, Tiernan & Herrick L.L.P. as to
validity of the New Junior Subordinated Debentures and the New
Guarantee to be issued by the Corporation
5.2 Opinion and consent of Richards, Layton & Finger, P.A. as to the
validity of the New Capital Securities to be issued by First
Keystone Capital Trust I
8 Opinion of Elias, Matz, Tiernan & Herrick L.L.P. as to certain federal
income tax matters
12.1 Computation of ratio of earnings to fixed charges (excluding interest
on deposits)
12.2 Computation of ratio of earnings to fixed charges (including interest
on deposits)
23.1 Consent of Deloitte & Touche LLP
23.2 Consent of Elias, Matz, Tiernan & Herrick L.L.P. (included in Exhibit
5.1)
23.2 Consent of Richards, Layton & Finger, P.A. (included in Exhibit 5.2)
24 Power of Attorney of certain officers and directors of the Corporation
(located on the signature page hereto)
25.1 Form T-1 Statement of Eligibility of The Bank of New York to act as
trustee under the Indenture
25.2 Form T-1 Statement of Eligibility of The Bank of New York to act as
trustee under the Declaration of Trust of First Keystone Capital
Trust I
25.3 Form T-1 Statement of Eligibility of The Bank of New York under the
New Guarantee for the benefit of the holders of New Capital
Securities of First Keystone Capital Trust I
99.1 Form of Letter of Transmittal
99.2 Form of Notice of Guaranteed Delivery
________
* Incorporated by reference from the Corporation's Annual Report on Form 10-KSB
for the year ended September 30, 1997 filed with the Commission.
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Item 22. Undertakings
Each of the undersigned Registrants hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, as amended, each
filing of a Registrant's annual report pursuant to Section 13(a) or Section
15(d) of the Securities Exchange Act of 1934 (and, where applicable, each filing
of an employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in this
Registration Statement shall be deemed to be a new registration statement
relating to the securities offered herein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
Each of the undersigned Registrants hereby also undertakes:
(1) to file, during any period in which offers or sales are being made, a
post-effective amendment to this Registration Statement:
(i) to include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) to reflect in the prospectus any facts or events arising after
the effective date of this Registration Statement (or the most recent
post-effective amendment thereto) which, individually or in the aggregate,
represent a fundamental change in the information set forth in this
Registration Statement. Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered) and any
deviation from the low or high end of the estimated maximum offering range
may be reflected in the form of prospectus filed with the Commission
pursuant to Rule 424(b) if, in the aggregate, the changes in volume and
price represent no more than a 20 percent change in the maximum aggregate
offering price set forth in the "Calculation of Registration Fee" table in
the effective Registration Statement; and
(iii) to include any material information with respect to the plan of
distribution not previously disclosed in this Registration Statement or any
material change to such information in this Registration Statement;
provided, however, that paragraphs (1)(i) and (1)(ii) do not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed by a Registrant pursuant
to Section 13 or Section 15(d) of the Securities Exchange Act of 1934 that
are incorporated by reference in this Registration Statement.
(2) that, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to be
a new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) to remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination of the
offering.
(4) to deliver or cause to be delivered with the prospectus, to each
person to whom the prospectus is sent or given, the latest annual report to
security holders that is incorporated by reference in the prospectus and
furnished pursuant to and meeting the requirements of Rule 14a-3 or Rule 14c-3
under the Securities Exchange Act of 1934; and, where interim financial
information required to be presented by Article 3 of Regulation S-X are not set
forth in the prospectus, to deliver, or cause to be delivered to each person to
whom the prospectus is sent or given, the latest quarterly report that is
specifically incorporated by reference in the prospectus to provide such interim
financial information.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of each
undersigned Registrant pursuant to the provisions, or otherwise, each Registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by each undersigned Registrant
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of expenses incurred or paid by a director, officer of controlling person of
each Registrant in the successful defense of any action, suit or proceeding) is
asserted by such director, officer or controlling person in connection with the
securities being registered, each Registrant will, unless in the opinion of its
counsel the matter has been settled by the controlling precedent, submit to a
court of appropriate jurisdiction the question whether such indemnification by
it is against public policy as expressed in the Act and will be governed by the
final adjudication of such issue.
Each of the undersigned Registrants hereby undertakes to respond to
requests for information that is incorporated by reference into the Prospectus
pursuant to Item 4, 10(b), 11 or 13 of this Form within one business day of
receipt of such request, and to send the incorporated documents by first class
mail or other equally prompt means. This includes information contained in
documents filed subsequent to the effective date of the registration statement
through the date of responding to the request.
Each of the undersigned Registrants hereby undertakes to supply by means of
a post-effective amendment all information concerning a transaction, and the
company being acquired or involved therein, that was not the subject of and
included in the registration statement when it became effective.
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, First Keystone
Financial, Inc. certifies that it has reasonable grounds that it meets all of
the requirements for filing on Form S-4 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Media, Commonwealth of Pennsylvania on the 14th day
of January 1998.
FIRST KEYSTONE FINANCIAL, INC.
By: /s/ Donald S. Guthrie
---------------------
Donald S. Guthrie
President and Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated. Each of the directors and/or officers of
First Keystone Financial, Inc. whose signature appears below hereby appoints
Donald S. Guthrie, as his or her attorney-in-fact to sign in his or her name and
behalf, in any and all capacities stated below and to file with the Securities
and Exchange Commission any and all amendments, including post-effective
amendments, to this Registration Statement on Form S-4, making such changes in
the Registration Statement as appropriate, and generally to do all such things
in their behalf in their capacities as directors and/or officers to enable First
Keystone Financial, Inc. to comply with the provisions of the Securities Act of
1933, and all requirements of the Securities and Exchange Commission.
/s/ Donald S. Guthrie Date: January 14, 1998
- ------------------------------
Donald S. Guthrie
President and Chief Executive
Officer (principal executive
officer)
/s/ Thomas M. Kelly Date: January 14, 1998
- ------------------------------
Thomas M. Kelly
Senior Vice President and
Chief Financial Officer
(principal financial and
accounting officer)
/s/ Donald A. Purdy Date: January 14, 1998
- ------------------------------
Donald A. Purdy
Chairman of the Board
- ------------------------------ Date: January __, 1998
William K. Betts
Director
/s/ Edward Calderoni Date: January 14, 1998
- ------------------------------
Edward Calderoni
Director
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/s/ Silvio F. D'Ignazio Date: January 14, 1998
- ------------------------------
Silvo F. D'Ignazio
Director
/s/ Olive J. Faulkner Date: January 14, 1998
- ------------------------------
Olive J. Faulkner
Director
/s/ Edmund Jones Date: January 14, 1998
- ------------------------------
Edmund Jones
Director
/s/ Williard F. Letts Date: January 14, 1998
- ------------------------------
Williard F. Letts
Director
/s/ Walter J. Lewicki Date: January 14, 1998
- ------------------------------
Walter J. Lewicki
Director
/s/ Joan G. Taylor Date: January 14, 1998
- ------------------------------
Joan G. Taylor
Director
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Pursuant to the requirements of the Securities Act of 1933, First Keystone
Capital Trust I certifies that it has reasonable grounds to believe that it
meets all the requirements for filing on Form S-4 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Media, Commonwealth of Pennsylvania, on the 14th
day of January 1998.
FIRST KEYSTONE CAPITAL TRUST I
By: /s/ Donald A. Purdy
-------------------------------
Donald A. Purdy
Administrative Trustee
By: /s/ Donald S. Guthrie
-------------------------------
Donald S. Guthrie
Administrative Trustee
By: /s/ Thomas M. Kelly
-------------------------------
Thomas M. Kelly
Administrative Trustee
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EXHIBIT INDEX
Exhibit No. Description
- ----------- -----------
4.1 Indenture of the Corporation relating to the Junior Subordinated
Debentures*
4.2 Form of Certificate of New Junior Subordinated Debenture
4.3 Certificate of Trust of First Keystone Capital Trust I
4.4 Amended and Restated Declaration of Trust of First Keystone Capital
Trust I*
4.5 Form of New Capital Security Certificate for First Keystone Capital
Trust I
4.6 Form of New Guarantee of the Corporation relating to the New Capital
Securities
4.7 Registration Rights Agreement
5.1 Opinion and consent of Elias, Matz, Tiernan & Herrick L.L.P. as to
validity of the New Junior Subordinated Debentures and the New
Guarantee to be issued by the Corporation
5.2 Opinion and consent of Richards, Layton & Finger, P.A. as to validity
of the New Capital
Securities to be issued by First Keystone Capital Trust I
8 Opinion of Elias, Matz, Tiernan & Herrick L.L.P. as to certain federal
income tax matters
12.1 Computation of ratio of earnings to fixed charges (excluding interest
on deposits)
12.2 Computation of ratio of earnings to fixed charges (including interest
on deposits)
23.1 Consent of Deloitte & Touche LLP
23.2 Consent of Elias, Matz, Tiernan & Herrick L.L.P. (included in Exhibit
5.1)
23.3 Consent of Richards, Layton & Finger, P.A. (included in Exhibit 5.2)
24 Power of Attorney of certain officers and directors of the Corporation
(located on the signature page hereto)
25.1 Form T-1 Statement of Eligibility of The Bank of New York to act as
trustee under the Indenture
25.2 Form T-1 Statement of Eligibility of The Bank of New York to act as
trustee under the Declaration of Trust of First Keystone Capital Trust
I
25.3 Form T-1 Statement of Eligibility of The Bank of New York under the
New Guarantee for the benefit of the holders of New Capital
Securities of First Keystone Capital Trust I
99.1 Form of Letter of Transmittal
99.2 Form of Notice of Guaranteed Delivery
________
* Incorporated by reference from the Corporation's Annual Report on Form 10-KSB
for the year ended September 30, 1997 filed with the Commission.
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Exhibit 4.2
(FACE OF SECURITY)
THE SECURITIES WILL BE ISSUED AND MAY BE TRANSFERRED ONLY IN BLOCKS
HAVING AN AGGREGATE PRINCIPAL AMOUNT OF NOT LESS THAN $100,000 (100
SECURITIES). ANY SUCH TRANSFER OF SECURITIES IN A BLOCK HAVING AN AGGREGATE
PRINCIPAL AMOUNT OF LESS THAN $100,000 SHALL BE DEEMED TO BE VOID AND OF NO
LEGAL EFFECT WHATSOEVER. ANY SUCH TRANSFEREE SHALL BE DEEMED NOT TO BE THE
HOLDER OF SUCH SECURITIES FOR ANY PURPOSE, INCLUDING BUT NOT LIMITED TO THE
RECEIPT OF PRINCIPAL, PREMIUM (IF ANY) OR INTEREST OF SUCH SECURITIES, AND
SUCH TRANSFEREE SHALL BE DEEMED TO HAVE NO INTEREST WHATSOEVER IN SUCH
SECURITIES.
THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE
HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A
NOMINEE OF A DEPOSITARY. THIS SECURITY IS EXCHANGEABLE FOR SECURITIES
REGISTERED IN THE NAME OF A PERSON OTHER THAN THE DEPOSITARY OR ITS NOMINEE
ONLY IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE AND MAY NOT BE
TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE
DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER
NOMINEE OF THE DEPOSITARY.
<PAGE>
No. 1 CUSIP No.
FIRST KEYSTONE FINANCIAL, INC.
9.70% SERIES B JUNIOR SUBORDINATED DEFERRABLE INTEREST
DEBENTURE DUE AUGUST 15, 2027
First Keystone Financial, Inc., a Pennsylvania corporation (the
"Company", which term includes any successor Person under the Indenture
hereinafter referred to), for value received, hereby promises to pay to The
Bank of New York, as Property Trustee for First Keystone Capital Trust I or
registered assigns, the principal sum of $16,702,000 on August 15, 2027 (the
"Maturity Date"), unless previously redeemed, and to pay interest on the
outstanding principal amount hereof from August 26, 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, semi-annually (subject to
deferral as set forth herein) in arrears on February 15 and August 15 of each
year, commencing February 15, 1998, at the rate of 9.70% per annum until the
principal hereof shall have become due and payable, and on any overdue
principal and premium, if any, and (without duplication and to the extent
that payment of such interest is enforceable under applicable law) on any
overdue installment of interest at the same rate per annum compounded
semi-annually. 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 and,
for any period less than a full calendar month, the number of days elapsed in
such month based on a 30-day month. In the event that any date on which the
principal of (or premium, if any) or interest on this Security is payable is
not a Business Day, then the payment payable on such date will be made on the
next succeeding day that is a Business Day (and without any interest or other
payment in respect of any such delay), except that if such next succeeding
Business Day falls in the next calendar year, then such payment shall be made
on the immediately preceding Business Day, in each case with the same force
and effect as if made on such date. Pursuant to the Indenture, in certain
circumstances the Company will be required to pay Additional Sums and
Compounded Interest (each as defined in the Indenture) with respect to this
Security. Pursuant to the Registration Rights Agreement, in certain limited
circumstances the Company will be required to pay Liquidated Damages (as
defined in the Registration Rights Agreement) with respect to this Security.
The interest installment so payable, and punctually paid or duly
provided for, on any Interest Payment Date will, as provided in the
Indenture, be paid to the Person in whose name this Security (or one or more
Predecessor Securities, as defined in said Indenture) is registered at the
close of business on the regular record date for such interest installment,
which shall be at the close of business on the first day of the month in
which the relevant interest payment date falls. Any such interest
installment not punctually paid or duly provided for shall forthwith cease to
be payable to the holders on such regular record date and may be paid to the
Person in whose name this Security (or one or more Prede-
2
<PAGE>
cessor Securities) is registered at the close of business on a special record
date to be fixed by the Trustee for the payment of such defaulted interest,
notice whereof shall be given to the holders of Securities not less than 10
days prior to such special record date, or may be paid at any time in any
other lawful manner not inconsistent with the requirements of any securities
exchange on which the Securities may be listed, and upon such notice as may
be required by such exchange, all as more fully provided in the Indenture.
The principal of (and premium, if any) and interest (including
Compounded Interest and Additional Sums, if any) and Liquidated Damages, if
any, on this Security 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 (i) check mailed to the holder at such address
as shall appear in the Security Register or (ii) by transfer to an account
maintained by the Person entitled thereto, provided that proper written
transfer instructions have been received by the relevant record date.
Notwithstanding the foregoing, so long as the Holder of this Security is the
Property Trustee, the payment of the principal of (and premium, if any) and
interest (including Compounded Interest and Additional Sums, if any) and
Liquidated Damages, if any, on this Security will be made at such place and
to such account as may be designated by the Property Trustee.
The indebtedness evidenced by this Security 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, and this Security is issued
subject to the provisions of the Indenture with respect thereto. Each holder
of this Security, by accepting the same, (a) agrees to and shall be bound by
such provisions, (b) authorizes and directs the Trustee on his or her behalf
to take such 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 Security shall not be entitled to any benefit under the
Indenture hereinafter referred to, 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 Security are continued on the reverse side
hereof and such provisions shall for all purposes have the same effect as
though fully set forth at this place.
3
<PAGE>
IN WITNESS WHEREOF, the Company has caused this instrument to
be duly executed and sealed.
Dated: , 1998
FIRST KEYSTONE FINANCIAL, INC.
By:
-----------------------------
Name: Thomas M. Kelly
Title: Executive Vice President and
Chief Financial Officer
Attest:
By:
---------------------
Name: Carol Walsh
Title: Secretary
(FORM OF CERTIFICATE OF AUTHENTICATION)
CERTIFICATE OF AUTHENTICATION
This is one of the Securities referred to in the within-mentioned
Indenture.
THE BANK OF NEW YORK, Dated: , 1998
as Trustee -----------------
By
--------------------------------
Authorized Signatory
4
<PAGE>
(REVERSE OF SECURITY)
This Security is one of the Securities of the Company (herein
sometimes referred to as the "Securities"), specified in the Indenture, all
issued or to be issued under and pursuant to an Indenture, dated as of August
26, 1997 (the "Indenture"), duly executed and delivered between the Company
and The Bank of New York, 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 Securities.
Upon the occurrence and continuation of a Special Event prior to
August 15, 2007 (the "Initial Optional Redemption Date"), the Company shall
have the right, at any time within 90 days following the occurrence of such
Special Event, to redeem this Security in whole (but not in part) at the
Special Event Redemption Price. "Special Event Redemption Price" shall mean,
with respect to any redemption of the Securities following a Special Event,
an amount in cash equal to the Make Whole Amount. The "Make Whole Amount"
shall mean an amount equal to the greater of (i) 100% of the principal amount
to be redeemed or (ii) the sum, as determined by a Quotation Agent, of the
present values of remaining scheduled payments of principal and interest,
discounted to the prepayment date on a semi-annual basis (assuming a 360-day
year consisting of twelve 30-day months) at the Adjusted Treasury Rate, plus,
in the case of each of clauses (i) and (ii), any accrued and unpaid interest
thereon (including Compounded Interest and Additional Sums, if any) and
Liquidated Damages, if any, to the date of such redemption.
In addition, the Company shall have the right to redeem this
Security, in whole or in part, at any time on or after the Initial Optional
Redemption Date (an "Optional Redemption"), at the redemption prices set
forth below (expressed as percentages of principal to be redeemed) plus, in
each case, accrued and unpaid interest thereon (including Additional Sums and
Compounded Interest, if any) and Liquidated Damages, if any, to the
applicable date of redemption (the "Optional Redemption Price") if redeemed
during the 12-month period beginning August 15 of the years indicated below.
5
<PAGE>
Year Percentage
---- ----------
2007 104.850%
2008 104.365%
2009 103.880%
2010 103.395%
2011 102.910%
2012 102.425%
2013 101.940%
2014 101.455%
2015 100.970%
2016 100.485%
2017 and thereafter 100.000%
The Optional Redemption Price or the Special Event Redemption
Price, as the case requires, 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 applicable Redemption Price by 10:00 a.m., New
York City, on the date such Redemption Price is to be paid. Any redemption
pursuant to this paragraph will be made upon not less than 30 days nor more
than 60 days notice. If the Securities are only partially redeemed by the
Company pursuant to an Optional Redemption, the particular Securities to be
redeemed shall be selected on a pro rata basis, by lot or such other method
that the Trustee shall utilize, not more than 60 days prior to the date fixed
for redemption from the outstanding Securities not previously called for
redemption, provided, however, that with respect to Securityholders that
would be required to hold Securities with an aggregate principal amount of
less than $100,000 but more than an aggregate principal amount of zero as a
result of such pro rata redemption, the Company shall redeem Securities of
each such Securityholder so that after such redemption such Securityholder
shall hold Securities either with an aggregate principal amount of at least
$100,000 or such Securityholder no longer holds any Securities and shall use
such method (including, without limitation, by lot) as the Company shall deem
fair and appropriate, provided, further, that any such method of selection
may be made on the basis of the aggregate principal amount of Securities held
by each Securityholder thereof and may be made by making such adjustments as
the Company deems fair and appropriate in order that only Securities in
denominations of $1,000 or integral multiples thereof shall be redeemed.
6
<PAGE>
In the event of redemption of this Security in part only, a new
Security or Securities for the unredeemed portion hereof will be issued in
the name of the holder hereof upon the cancellation hereof.
Notwithstanding the foregoing, any redemption of Securities by the
Company shall be subject to the receipt of any required regulatory approval.
In case an Event of Default, as defined in the Indenture, shall
have occurred and be continuing, the principal of all of the Securities 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 a majority in aggregate principal
amount of the Securities 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 modifying in any manner the rights of the holders of
the Securities; provided, however, that no such supplemental indenture shall,
without the consent of each holder of Securities then outstanding and
affected thereby, (i) change the Maturity Date of any Securities, or reduce
the principal amount thereof, or reduce any amount payable on redemption
thereof, or reduce the rate or extend the time of payment of interest thereon
(subject to Article XVI of the Indenture), or make the principal of, or
interest or premium on, the Securities payable in any coin or currency other
than U.S. dollars, or impair or affect the right of any holder of Securities
to institute suit for the payment thereof, or (ii) reduce the aforesaid
percentage of Securities, the holders of which are required to consent to any
such supplemental indenture. The Indenture also contains provisions
permitting the holders of a majority in aggregate principal amount of the
Securities at the time outstanding affected thereby, on behalf of all of the
holders of the Securities, 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 premium, if any, or interest on any of the Securities or a
default in respect of any covenant or provision under which the Indenture
cannot be modified or amended without the consent of each holder of
Securities then outstanding. Any such consent or waiver by the holder of
this Security (unless revoked as provided in the Indenture) shall be
conclusive and binding upon such Holder and upon all future holders and
owners of this Security and of any Security 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
Security.
No reference herein to the Indenture and no provision of this
Security or of the Indenture shall alter or impair the obligation of the
Company, which is absolute and unconditional, to pay the principal of and
premium, if any, and interest (including Compounded Interest and Additional
Sums, if any) and Liquidated Damages, if any, on this Security at the time
and place and at the rate and in the money herein prescribed.
7
<PAGE>
So long as no Event of Default shall have occurred and be
continuing, the Company shall have the right, at any time and from time to
time during the term of the Securities, to defer payments of interest by
extending the interest payment period of such Securities for a period not
exceeding 10 consecutive semi-annual periods, including the first such
semi-annual period during such extension period, and not extending beyond the
Maturity Date of the Securities (an "Extended Interest Payment Period") or
ending on a date other than an Interest Payment Date, 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 Securities 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 defer payments of interest by further extending such Extended
Interest Payment Period, provided that such Extended Interest Payment Period,
together with all such previous and further extensions within such Extended
Interest Payment Period, (i) shall not exceed 10 consecutive semi-annual
periods, including the first semi-annual period during such Extended Interest
Payment Period, (ii) shall not end on any date other than an Interest Payment
Date, and (iii) shall not extend beyond the Maturity Date of the Securities.
Upon the termination of any such Extended Interest Payment Period and the
payment of all accrued and unpaid interest and any additional amounts then
due, the Company may commence a new Extended Interest Payment Period, subject
to the foregoing requirements.
The Company has agreed that it will not (i) declare or pay any
dividends or distributions on, or redeem, purchase, acquire, or make a
liquidation payment with respect to, any of the Company's capital stock
(which includes common and preferred stock), (ii) make any payment of
principal, interest or premium, if any, on or repay or repurchase or redeem
any debt securities of the Company that rank pari passu with or junior in
right of payment to the Securities or (iii) make any guarantee payments with
respect to any guarantee by the Company of the debt securities of any
Subsidiary of the Company if such guarantee ranks pari passu or junior in
right of payment to the Securities (other than (a) dividends or distributions
in shares of, or options, warrants or rights to subscribe for or purchase
shares of, Common Stock of the Company, (b) any declaration of a dividend in
connection with the implementation of a stockholder's 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, (c) payments under the
Capital Securities Guarantee, (d) as a result of a reclassification of the
Company's capital stock or the exchange or the conversion of one class or
series of the Company's capital stock, for another class or series of the
Company's capital stock, (e) the purchase of fractional interests in shares
of the Company's capital stock pursuant to the exchange or conversion of such
capital stock or the security being exchanged or converted and (f) purchases
of Common Stock related to the issuance of Common Stock or rights under any
of the Company's benefit plans for its directors, officers or employees or
any of the Company's dividend reinvestment plans) if at such time (1) there
shall have occurred any event of which the Company has actual knowledge that
(a) is or, with the giving of notice or the lapse of time, or both, would be,
an Event of Default and (b) in respect of which the Company shall not have
taken reasonable steps to cure, (2) if the Securities are held by First
Keystone Capital Trust, the Company shall be in default with
8
<PAGE>
respect to its payment obligations under the Capital Securities Guarantee or
(3) the Company shall have given notice of its election of the exercise of
its right to extend the interest payment period and any such extension shall
be continuing.
Subject to (i) the receipt of any required regulatory approval and
(ii) the receipt by the Company of an opinion of counsel to the effect that
such distribution will not be a taxable event to holders of Capital
Securities, the Company will have the right at any time to liquidate First
Keystone Capital Trust and cause the Securities to be distributed to the
holders of the Trust Securities in liquidation of the Trust.
The Securities are issuable only in registered form without coupons
in denominations of $1,000.00 and any integral multiple thereof. As provided
in the Indenture and subject to the transfer restrictions limitations as may
be contained herein and therein from time to time, this Security is
transferable by the holder hereof on the Security Register of the Company,
upon surrender of this Security for registration of transfer at the office or
agency of the Company in the City and State of New York accompanied by a
written instrument or instruments of transfer in form satisfactory to the
Company or the Trustee duly executed by the holder hereof or his attorney
duly authorized in writing, and thereupon one or more new Securities of
authorized denominations and for the same aggregate principal amount and
series will be issued to the designated transferee or transferees. No service
charge will be made for any such registration of 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
Security, the Company, the Trustee, any authenticating agent, any paying
agent, any transfer agent and the registrar may deem and treat the holder
hereof as the absolute owner hereof (whether or not this Security shall be
overdue and notwithstanding any notice of ownership or writing hereon made by
anyone other than the Security Registrar) for the purpose of receiving
payment of or on account of the principal hereof and premium, if any, and
(subject to the Indenture) interest due hereon and for all other purposes,
and neither the Company nor the Trustee nor any authenticating agent nor any
paying agent nor any transfer agent nor any registrar shall be affected by
any notice to the contrary.
No recourse shall be had for the payment of the principal of or
premium, if any, or interest on this Security, 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 Person,
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.
9
<PAGE>
All terms used in this Security that are defined in the Indenture
shall have the meanings assigned to them in the Indenture.
THE INDENTURE AND THE SECURITIES SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO
CONFLICT OF LAW PROVISIONS THEREOF.
10
<PAGE>
EXHIBIT 4.3
CERTIFICATE OF TRUST
OF
FIRST KEYSTONE CAPITAL TRUST I
THIS Certificate of Trust of First Keystone Capital Trust I (the
"Trust"), dated as of August 20, 1997, is being executed and filed by the
undersigned, as trustees, to form a business trust under the Delaware
Business Trust Act (12 Del.C. Section 3801 et seq.).
1. Name. The name of the business trust formed hereby is First Keystone
Capital Trust I.
2. Delaware Trustee. The name and business address of the trustee of
the Trust with a principal place of business in the State of Delaware are The
Bank of New York (Delaware), White Clay Center, Route 273, Newark, Delaware
19711.
3. Effective Date. This Certificate of Trust shall be effective upon
filing.
IN WITNESS WHEREOF, the undersigned, being the trustees of the Trust,
have executed this Certificate of Trust as of the date first-above written.
THE BANK OF NEW YORK (DELAWARE), not in
its individual capacity but solely as
trustee of the Trust
By: /s/ Walter N. Gitlin
---------------------------------
Name: Walter N. Gitlin
Authorized Signatory
THOMAS M. KELLY, not in his individual
capacity but solely as trustee of the
Trust
By: /s/ Thomas M. Kelly
---------------------------------
<PAGE>
Exhibit 4.5
SERIES B CAPITAL SECURITY CERTIFICATE
[FACE OF SECURITY]
THIS CAPITAL SECURITY IS A GLOBAL CAPITAL SECURITY WITHIN THE MEANING
OF THE DECLARATION HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF THE
DEPOSITORY TRUST COMPANY (THE "CLEARING AGENCY") OR A NOMINEE OF THE CLEARING
AGENCY. THIS CAPITAL SECURITY IS EXCHANGEABLE FOR CAPITAL SECURITIES REGISTERED
IN THE NAME OF A PERSON OTHER THAN THE CLEARING AGENCY OR ITS NOMINEE ONLY IN
THE LIMITED CIRCUMSTANCES DESCRIBED IN THE DECLARATION AND NO TRANSFER OF THIS
CAPITAL SECURITY (OTHER THAN A TRANSFER OF THIS CAPITAL SECURITY AS A WHOLE BY
THE CLEARING AGENCY TO A NOMINEE OF THE CLEARING AGENCY OR BY A NOMINEE OF THE
CLEARING AGENCY TO THE CLEARING AGENCY OR ANOTHER NOMINEE OF THE CLEARING
AGENCY) MAY BE REGISTERED EXCEPT IN LIMITED CIRCUMSTANCES.
UNLESS THIS CAPITAL SECURITY IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (55 WATER STREET, NEW YORK, NEW
YORK) TO THE TRUST OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR
PAYMENT, AND ANY CAPITAL SECURITY ISSUED IS REGISTERED IN THE NAME OF CEDE & CO.
OR SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY AND ANY PAYMENT HEREON IS MADE TO CEDE & CO., ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY A PERSON IS
WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
THE CAPITAL SECURITIES WILL BE ISSUED AND MAY BE TRANSFERRED ONLY IN
BLOCKS HAVING A LIQUIDATION AMOUNT OF NOT LESS THAN $100,000 (100 CAPITAL
SECURITIES). ANY SUCH TRANSFER OF CAPITAL SECURITIES IN A BLOCK HAVING A
LIQUIDATION AMOUNT OF LESS THAN $100,000 SHALL BE DEEMED TO BE VOID AND OF NO
LEGAL EFFECT WHATSOEVER. ANY SUCH TRANSFEREE SHALL BE DEEMED NOT TO BE THE
HOLDER OF SUCH CAPITAL SECURITIES FOR ANY PURPOSE, INCLUDING BUT NOT LIMITED TO
THE RECEIPT OF DISTRIBUTIONS OF SUCH CAPITAL SECURITIES, AND SUCH TRANSFEREE
SHALL BE DEEMED TO HAVE NO INTEREST WHATSOEVER IN SUCH CAPITAL SECURITIES.
1
<PAGE>
Number of Series B Capital Aggregate Liquidation
Securities: 16,200 Amount: $16,200,000
Certificate No. 1 CUSIP NO.
Certificate Evidencing Series B Capital Securities
of
First Keystone Capital Trust I
Series B 9.70% Capital Securities
(liquidation amount $1,000 per Capital Security)
First Keystone Capital 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 $16,200,000 in aggregate
liquidation amount of Capital Securities of the Trust representing undivided
beneficial interests in the assets of the Trust designated the Series B 9.70%
Capital Securities (liquidation amount $1,000 per Capital Security) (the
"Capital Securities"). Subject to the Declaration (as defined below), the
Capital Securities are transferable on the books and records of the Trust, in
person or by a duly authorized attorney, upon surrender of this certificate duly
endorsed and in proper form for transfer. The designation, rights, privileges,
restrictions, preferences and other terms and provisions of the Capital
Securities represented hereby are issued and shall in all respects be subject to
the provisions of the Amended and Restated Declaration of Trust of the Trust
dated as of August 26, 1997, as the same may be amended from time to time (the
"Declaration"), including the designation of the terms of the Capital Securities
as set forth in Annex I to the Declaration. Capitalized terms used but not
defined herein shall have the meaning given them in the Declaration. The
Sponsor will provide a copy of the Declaration, the Capital Securities
Guarantee, the Common Securities Guarantee (as may be appropriate), and the
Indenture (including any supplemental indenture) to a Holder without charge upon
written request to the Trust at its principal place of business.
Upon receipt of this certificate, the Holder is bound by the
Declaration and is entitled to the benefits thereunder and to the benefits of
the Capital Securities Guarantee to the extent provided therein.
By acceptance, the Holder agrees to treat, for United States federal
income tax purposes, the Debentures as indebtedness and the Capital Securities
as evidence of indirect beneficial ownership in the Debentures.
2
<PAGE>
IN WITNESS WHEREOF, the Trust has duly executed this certificate.
Dated: , 1998
FIRST KEYSTONE CAPITAL TRUST I
By:
--------------------------------
Name: Thomas M. Kelly
Administrative Trustee
PROPERTY TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Capital Securities referred to in the
within-mentioned Declaration.
THE BANK OF NEW YORK,
as Property Trustee
Dated: By:
--------------------------------
Authorized Signatory
3
<PAGE>
[REVERSE OF SECURITY]
Distributions payable on each Capital Security will be fixed at a rate
per annum of 9.70% (the "Coupon Rate") of the liquidation amount of $1,000 per
Capital Security, such rate being the rate of interest payable on the Debentures
to be held by the Property Trustee. Distributions in arrears for more than one
semi-annual period will bear interest thereon compounded semi-annually at the
Coupon Rate (to the extent permitted by applicable law). Pursuant to the
Registration Rights Agreement, in certain limited circumstances the Debenture
Issuer will be required to pay Liquidated Damages (as defined in the
Registration Rights Agreement) with respect to the Debentures. The term
"Distributions," as used herein, includes such cash distributions and any such
interest and such Liquidated Damages payable unless otherwise stated. A
Distribution is payable only to the extent that payments are made in respect of
the Debentures held by the Property Trustee and to the extent the Property
Trustee has funds on hand legally available therefor.
Distributions on the Capital Securities will be cumulative, will
accumulate from the most recent date to which Distributions have been paid or
duly provided for, if no Distributions have been paid or duly provided for, from
August 26, 1997 and will be payable semi-annually in arrears, on February 15 and
August 15 of each year, commencing on February 15, 1998, except as otherwise
described below. Distributions will be computed on the basis of a 360-day year
consisting of twelve 30-day months and, for any period less than a full calendar
month, the number of days elapsed in such month. As long as no Event of Default
has occurred and is continuing under the Indenture, the Debenture Issuer has the
right under the Indenture to defer payments of interest by extending the
interest payment period at any time and from time to time on the Debentures for
a period not exceeding 10 consecutive calendar semi-annual periods, including
the first such semi-annual period during such extension period (each an
"Extension Period"), provided that no Extension Period shall end on a date other
than an Interest Payment Date for the Debentures or extend beyond the Maturity
Date of the Debentures. As a consequence of such deferral, Distributions also
will be deferred. Despite such deferral, semi-annual Distributions will
continue to accumulate with interest thereon (to the extent permitted by
applicable law, but not at a rate exceeding the rate of interest then accruing
on the Debentures) at the Coupon Rate compounded semi-annually during any such
Extension Period. Prior to the termination of any such Extension Period, the
Debenture Issuer may further defer payments of interest by further extending
such Extension Period; provided that such Extension Period, together with all
such previous and further extensions within such Extension Period, may not
exceed 10 consecutive semi-annual periods, including the first semi-annual
period during such Extension Period, end on a date other than an Interest
Payment Date for the Debentures or extend beyond the Maturity Date of the
Debentures. Payments of accumulated Distributions will be payable to Holders as
they appear on the books and records of the Trust on the first record date after
the end of the Extension Period. Upon the termination of any Extension Period
and the payment of all amounts then due, the Debenture Issuer may commence a new
Extension Period, subject to the above requirements.
4
<PAGE>
Subject to the receipt of any required regulatory approval and to
certain other conditions set forth in the Declaration and the Indenture, the
Property Trustee may, at the direction of the Sponsor, at any time dissolve the
Trust and, after satisfaction of liabilities to creditors of the Trust, cause
the Debentures to be distributed to the holders of the Securities in liquidation
of the Trust or, simultaneous with any redemption of the Debentures, cause a
Like Amount of the Securities to be redeemed by the Trust.
The Capital Securities shall be redeemable as provided in the
Declaration.
5
<PAGE>
---------------------
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this Capital Security
Certificate to:
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
(Insert assignee's social security or tax identification number)
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
(Insert address and zip code of assignee)
and irrevocably appoints
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- --------------------------------------------------------------agent to transfer
this Capital Security Certificate on the books of the Trust. The agent may
substitute another to act for him or her.
Date:
--------------------------
Signature:
--------------------
(Sign exactly as your name appears on the other side of this Capital Security
Certificate)
Signature Guarantee *:
-------------------------------------------------
* Signature must be guaranteed by an "eligible guarantor institution"
that is a bank, stockbroker, savings and loan association or credit
union meeting the requirements of the Registrar, which requirements
include membership or participation in the Securities Transfer Agents
Medallion Program ("STAMP") or such other "signature guarantee program"
as may be determined by the Registrar in addition to, or in substitution
for, STAMP, all in accordance with the Securities and Exchange Act of
1934, as amended.
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7
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Exhibit 4.6
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SERIES B CAPITAL SECURITIES GUARANTEE AGREEMENT
First Keystone Financial, Inc.
Dated as of March __, 1998
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-------------------------------------
<PAGE>
TABLE OF CONTENTS
Page
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ARTICLE I
DEFINITIONS AND INTERPRETATION
SECTION 1.1 Definitions and Interpretation. . . . . . . . . . . . . . . 2
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act; Application. . . . . . . . . . . . . . 5
SECTION 2.2 Lists of Holders of Securities. . . . . . . . . . . . . . . 6
SECTION 2.3 Reports by the Capital Securities Guarantee Trustee . . . . 6
SECTION 2.4 Periodic Reports to Capital Securities Guarantee Trustee. . 6
SECTION 2.5 Evidence of Compliance with Conditions Precedent. . . . . . 7
SECTION 2.6 Events of Default; Waiver . . . . . . . . . . . . . . . . . 7
SECTION 2.7 Event of Default; Notice. . . . . . . . . . . . . . . . . . 7
SECTION 2.8 Conflicting Interests . . . . . . . . . . . . . . . . . . . 7
ARTICLE III
POWERS, DUTIES AND RIGHTS OF
CAPITAL SECURITIES GUARANTEE TRUSTEE
SECTION 3.1 Powers and Duties of the Capital Securities Guarantee
Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . 8
SECTION 3.2 Certain Rights of Capital Securities Guarantee Trustee. . . 9
SECTION 3.3. Not Responsible for Recitals or Issuance of Series B Capital
Securities Guarantee. . . . . . . . . . . . . . . . . . . . 11
ARTICLE IV
CAPITAL SECURITIES GUARANTEE TRUSTEE
SECTION 4.1 Capital Securities Guarantee Trustee; Eligibility . . . . . 12
SECTION 4.2 Appointment, Removal and Resignation of Capital Securities
Guarantee Trustee . . . . . . . . . . . . . . . . . . . . . 12
ARTICLE V
GUARANTEE
SECTION 5.1 Guarantee . . . . . . . . . . . . . . . . . . . . . . . . . 13
SECTION 5.2 Waiver of Notice and Demand . . . . . . . . . . . . . . . . 13
SECTION 5.3 Obligations Not Affected. . . . . . . . . . . . . . . . . . 14
SECTION 5.4 Rights of Holders . . . . . . . . . . . . . . . . . . . . . 15
<PAGE>
Page
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SECTION 5.5 Guarantee of Payment. . . . . . . . . . . . . . . . . . . . 15
SECTION 5.6 Subrogation . . . . . . . . . . . . . . . . . . . . . . . . 15
SECTION 5.7 Independent Obligations . . . . . . . . . . . . . . . . . . 15
ARTICLE VI
LIMITATION OF TRANSACTIONS; SUBORDINATION
SECTION 6.1 Limitation of Transactions. . . . . . . . . . . . . . . . . 16
SECTION 6.2 Ranking . . . . . . . . . . . . . . . . . . . . . . . . . . 16
ARTICLE VII
TERMINATION
SECTION 7.1 Termination . . . . . . . . . . . . . . . . . . . . . . . . 17
ARTICLE VIII
INDEMNIFICATION
SECTION 8.1 Exculpation . . . . . . . . . . . . . . . . . . . . . . . . 17
SECTION 8.2 Indemnification . . . . . . . . . . . . . . . . . . . . . . 17
ARTICLE IX
MISCELLANEOUS
SECTION 9.1 Successors and Assigns. . . . . . . . . . . . . . . . . . . 18
SECTION 9.2 Amendments. . . . . . . . . . . . . . . . . . . . . . . . . 18
SECTION 9.3 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . 18
SECTION 9.4 Benefit . . . . . . . . . . . . . . . . . . . . . . . . . . 20
SECTION 9.5 Governing Law . . . . . . . . . . . . . . . . . . . . . . . 20
ii
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SERIES B CAPITAL SECURITIES GUARANTEE AGREEMENT
This GUARANTEE AGREEMENT (the "Series B Capital Securities
Guarantee"), dated as of March __, 1998, is executed and delivered by First
Keystone Financial, Inc., a Pennsylvania corporation (the "Guarantor"), and The
Bank of New York, a New York banking corporation, as trustee (the "Capital
Securities Guarantee Trustee"), for the benefit of the Holders (as defined
herein) from time to time of the Series B Capital Securities (as defined herein)
of First Keystone Capital Trust I, a Delaware statutory business trust (the
"Issuer").
WHEREAS, pursuant to an Amended and Restated Declaration of Trust (the
"Declaration"), dated as of August 26, 1997, among the trustees of the Issuer,
the Guarantor, as sponsor, and the holders from time to time of undivided
beneficial interests in the assets of the Issuer, the Issuer intends to issue
capital securities designated the 9.70% Series B capital securities
(collectively, the "Series B Capital Securities") in exchange for its
outstanding Series A 9.70% Capital Securities (collectively, the "Series A
Capital Securities") upon consummation of the Exchange Offer (as defined in the
Declaration) such Series B Capital Securities to be issued in a number, up to
16,200, and with an aggregate liquidation amount, up to $16,200,000, equal to
the number and aggregate liquidation amount of the Series A Capital Securities
exchanged for Series B Capital Securities pursuant to the Exchange Offer; and
WHEREAS, as incentive for the Holders of Series B Capital Securities
to exchange the Series A Capital Securities for the Series B Capital Securities
in the Exchange Offer, the Guarantor desires irrevocably and unconditionally to
agree, to the extent set forth in this Series B Capital Securities Guarantee, to
pay to the Holders of the Series B Capital Securities the Guarantee Payments (as
defined below) and to make certain other payments on the terms and conditions
set forth herein; and
WHEREAS, the Guarantor has executed and delivered (i) a Common
Securities Guarantee Agreement, dated as of August 26, 1997 (the "Common
Securities Guarantee"), and (ii) a Series A Capital Securities Guarantee
Agreement, dated as of August 26, 1997, between the Guarantor and the Capital
Securities Guarantee Trustee (the "Series A Capital Securities Guarantee"), in
each case with terms substantially identical to this Series B Capital Securities
Guarantee and for the benefit of the holder(s) of the Common Securities (as
defined herein) and the Series A Capital Securities, respectively, except that
if an Event of Default (as defined in the Declaration) has occurred and is
continuing, the rights of holder(s) of the Common Securities to receive
Guarantee Payments under the Common Securities Guarantee are subordinated, to
the extent and in the manner set forth in the Common Securities Guarantee, to
the rights of holders of the Series B Capital Securities and the Series A
Capital Securities to receive Guarantee Payments under this Series B Capital
Securities Guarantee and the Series A Capital Securities Guarantee,
respectively.
NOW, THEREFORE, in consideration of the purchase by each Holder, which
purchase the Guarantor hereby acknowledges shall benefit the Guarantor, the
Guarantor executes and delivers this Series B Capital Securities Guarantee for
the benefit of the Holders of the Series B Capital Securities.
<PAGE>
ARTICLE I
DEFINITIONS AND INTERPRETATION
SECTION 1.1 Definitions and Interpretation
In this Series B Capital Securities Guarantee, unless the context otherwise
requires:
(a) Capitalized terms used in this Series B Capital 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 Declaration as at the date of execution of this
Series B Capital Securities Guarantee have the same meaning when used
in this Series B Capital Securities Guarantee unless otherwise defined
in this Series B Capital Securities Guarantee;
(c) a term defined anywhere in this Series B Capital Securities Guarantee
has the same meaning throughout;
(d) all references to "the Series B Capital Securities Guarantee" or "this
Series B Capital Securities Guarantee" are to this Series B Capital
Securities Guarantee as modified, supplemented or amended from time to
time;
(e) all references in this Series B Capital Securities Guarantee to
Articles and Sections are to Articles and Sections of this Series B
Capital Securities Guarantee, unless otherwise specified;
(f) a term defined in the Trust Indenture Act has the same meaning when
used in this Series B Capital Securities Guarantee, unless otherwise
defined in this Series B Capital 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
under the Securities Act of 1933, as amended, or any successor rule thereunder.
"Business Day" means any day other than a Saturday or a Sunday, or a
day on which banking institutions in The City of New York or Media, Pennsylvania
are authorized or required by law or executive order to close.
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"Capital Securities Guarantee Trustee" means The Bank of New York, a
New York banking corporation, until a Successor Capital Securities Guarantee
Trustee has been appointed and has accepted such appointment pursuant to the
terms of this Series B Capital Securities Guarantee and thereafter means each
such Successor Capital Securities Guarantee Trustee.
"Common Securities" means the securities representing common undivided
beneficial interests in the assets of the Issuer.
"Corporate Trust Office" means the office of the Capital Securities
Guarantee Trustee at which the corporate trust business of the Capital
Securities Guarantee Trustee shall, at any particular time, be principally
administered, which office at the date of execution of this Agreement is located
at 101 Barclay Street, New York, New York 10286.
"Covered Person" means any Holder of Series B Capital Securities.
"Debentures" means the series of subordinated debt securities of the
Guarantor designated the Series B 9.70% Junior Subordinated Deferrable Interest
Debentures due August 15, 2027 held by the Property Trustee (as defined in the
Declaration) of the Issuer.
"Event of Default" means a default by the Guarantor on any of its
payment or other obligations under this Series B Capital Securities Guarantee,
provided, however, that except with respect to a default in payment of any
Guarantee Payment, the Guarantor shall have received notice of default and shall
not have cured such default within 60 days after receipt of such notice.
"Guarantee Payments" means the following payments or distributions,
without duplication, with respect to the Series B Capital Securities, to the
extent not paid or made by the Issuer: (i) any accumulated and unpaid
Distributions (as defined in the Declaration) that are required to be paid on
such Series B Capital Securities to the extent the Issuer has funds on hand
legally available therefor at such time, (ii) the redemption price, including
all accumulated and unpaid Distributions to the date of redemption (the
"Redemption Price") to the extent the Issuer has funds on hand legally available
therefor at such time, with respect to any Series B Capital Securities called
for redemption by the Issuer and (iii) upon a voluntary or involuntary
termination and liquidation of the Issuer (other than in connection with the
distribution of Debentures to the Holders in exchange for Series B Capital
Securities as provided in the Declaration), the lesser of (a) the aggregate of
the liquidation amount and all accumulated and unpaid Distributions on the
Series B Capital Securities to the date of payment, to the extent the Issuer has
funds on hand legally available therefor, and (b) the amount of assets of the
Issuer remaining available for distribution to Holders in liquidation of the
Issuer. If an Event of Default has occurred and is continuing, no Guarantee
Payments under the Common Securities Guarantee with respect to the Common
Securities or any guarantee payment under any Other Common Securities Guarantees
shall be made until the Holders shall be paid in full the Guarantee Payments to
which they are entitled under this Series B Capital Securities Guarantee.
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"Holder" shall mean any holder, as registered on the books and records
of the Issuer, of any Series B Capital Securities; provided, however, that, in
determining whether the holders of the requisite percentage of Series B Capital
Securities have given any request, notice, consent or waiver hereunder, "Holder"
shall not include the Guarantor or any Person known to a Responsible Officer of
the Capital Securities Guarantee Trustee to be an Affiliate of the Guarantor.
"Indemnified Person" means the Capital Securities Guarantee Trustee,
any Affiliate of the Capital Securities Guarantee Trustee, or any officers,
directors, shareholders, members, partners, employees, representatives,
nominees, custodians or agents of the Capital Securities Guarantee Trustee.
"Indenture" means the Indenture dated as of August 26, 1997, among the
Guarantor (the "Debenture Issuer") and The Bank of New York, as trustee (the
"Indenture Trustee"), pursuant to which the Debentures are to be issued to the
Property Trustee of the Issuer.
"Indenture Event of Default" shall mean any event specified in Section
5.01 of the Indenture.
"Majority in liquidation amount of the Series B Capital Securities"
means, except as provided by the Declaration or by the Trust Indenture Act, a
vote by Holder(s) of more than 50% of the aggregate liquidation amount of all
Series B Capital Securities.
"Officers' Certificate" means, with respect to the Guarantor, a
certificate signed by any of the Chairman, a Vice Chairman, the Chief Executive
Officer, the President, a Vice President, the Comptroller, the Secretary or an
Assistant Secretary of the Guarantor. Any Officers' Certificate delivered with
respect to compliance with a condition or covenant provided for in this Series B
Capital Securities Guarantee (other than pursuant to Section 314(d)(4) of the
Trust Indenture Act) shall include:
(a) a statement that each officer signing the Officers' Certificate
has read the covenant or condition and the definitions relating thereto;
(b) a statement that each such officer has made such examination or
investigation as, in such officer's opinion, is necessary to enable such
officer to express an informed opinion as to whether or not such covenant
or condition has been complied with; and
(c) a statement as to whether, in the opinion of each such officer,
such condition or covenant has been complied with.
"Other Common Securities Guarantees" shall have the same meaning as
"Other Guarantees" as defined in the Common Securities Guarantee.
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"Other Debentures" means all junior subordinated debentures issued by
the Guarantor from time to time and sold to trusts to be established by the
Guarantor (if any), in each case similar to the Issuer.
"Other Guarantees" means all guarantees to be issued by the Guarantor
with respect to capital securities (if any) similar to the Series B Capital
Securities issued by other trusts to be established by the Guarantor (if any),
in each case similar to the Issuer.
"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.
"Registration Rights Agreement" means the Registration Rights
Agreement, dated as of August 26, 1997, by and among the Guarantor, the Issuer
and the initial purchasers named therein as such agreement may be amended,
modified or supplemented from time to time.
"Responsible Officer" means, with respect to the Capital Securities
Guarantee Trustee, any officer within the Corporate Trust Office of the Capital
Securities Guarantee Trustee with direct responsibility for the administration
of this Series B Capital Securities Guarantee 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 Capital Securities Guarantee Trustee" means a successor
Capital Securities Guarantee Trustee possessing the qualifications to act as
Capital Securities Guarantee Trustee under Section 4.1.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as
amended.
"Trust Securities" means the Common Securities, the Series A Capital
Securities and the Series B Capital Securities, collectively.
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act; Application
(a) This Series B Capital Securities Guarantee is subject to the
provisions of the Trust Indenture Act that are required to be part of this
Series B Capital Securities Guarantee and shall, to the extent applicable, be
governed by such provisions; and
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(b) if and to the extent that any provision of this Series B Capital
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) The Guarantor shall provide the Capital Securities Guarantee Trustee
(unless the Capital Securities Guarantee Trustee is otherwise the registrar of
the Capital Securities) with a list, in such form as the Capital Securities
Guarantee Trustee may reasonably require, of the names and addresses of the
Holders ("List of Holders") as of such date, (i) within 14 days after each
Record Date, 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
14 days before such List of Holders is given to the Capital Securities Guarantee
Trustee, provided, that the Guarantor 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 Capital Securities Guarantee Trustee by the
Guarantor. The Capital Securities Guarantee Trustee may destroy any List of
Holders previously given to it on receipt of a new List of Holders.
(b) The Capital Securities 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 the Capital Securities Guarantee Trustee
Within 60 days after May 15 of each year, commencing May 15, 1998, the
Capital Securities Guarantee Trustee shall provide to the Holders 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
Capital Securities Guarantee Trustee shall also comply with the other
requirements of Section 313 of the Trust Indenture Act.
SECTION 2.4 Periodic Reports to Capital Securities Guarantee Trustee
The Guarantor shall provide to the Capital Securities 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, provided that such compliance certificate shall
be delivered on or before 120 days after the end of each fiscal year of the
Guarantor. Delivery of such reports, information and documents to the Capital
Securities Guarantee Trustee is for informational purposes only and the Capital
Securities Guarantee Trustee's receipt of such shall not constitute constructive
notice of any information contained therein or determinable from information
contained therein, including the Guarantor's compliance with any of its
covenants hereunder (as to which the Capital Securities Guarantee Trustee is
entitled to rely exclusively on Officers' Certificates).
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SECTION 2.5 Evidence of Compliance with Conditions Precedent
The Guarantor shall provide to the Capital Securities Guarantee
Trustee such evidence of compliance with any conditions precedent, if any,
provided for in this Series B Capital 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 Series B Capital
Securities may, by vote, on behalf of all Holders, waive any past Event of
Default and its consequences. Upon such waiver, any such Event of Default shall
cease to exist, and any Event of Default arising therefrom shall be deemed to
have been cured, for every purpose of this Series B Capital 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 Capital Securities Guarantee Trustee shall, within 90 days after
the occurrence of a default with respect to this Capital Securities Guarantee,
mail by first class postage prepaid, to all Holders, notices of all defaults
actually known to a Responsible Officer, unless such defaults have been cured
before the giving of such notice, provided, that, except in the case of default
in the payment of any Guarantee Payment, the Capital Securities Guarantee
Trustee shall be protected in withholding such notice if and so long as the
board of directors, the executive committee, or a trust committee of directors
and/or a Responsible Officer in good faith determines that the withholding of
such notice is in the interests of the holders of the Series B Capital
Securities.
(b) The Capital Securities Guarantee Trustee shall not be deemed to have
knowledge of any Event of Default unless the Capital Securities Guarantee
Trustee shall have received written notice from the Guarantor, or a Responsible
Officer charged with the administration of this Series B Capital Securities
Guarantee shall have obtained actual knowledge, of such Event of Default.
SECTION 2.8 Conflicting Interests
The Declaration shall be deemed to be specifically described in this
Series B Capital Securities Guarantee for the purposes of clause (i) of the
first proviso contained in Section 310(b) of the Trust Indenture Act.
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ARTICLE III
POWERS, DUTIES AND RIGHTS OF
CAPITAL SECURITIES GUARANTEE TRUSTEE
SECTION 3.1 Powers and Duties of the Capital Securities Guarantee Trustee
(a) This Series B Capital Securities Guarantee shall be held by the
Capital Securities Guarantee Trustee for the benefit of the Holders, and the
Capital Securities Guarantee Trustee shall not transfer this Series B Capital
Securities Guarantee to any Person except a Holder exercising his or her rights
pursuant to Section 5.4(b) or to a Successor Capital Securities Guarantee
Trustee on acceptance by such Successor Capital Securities Guarantee Trustee of
its appointment to act as Successor Capital Securities Guarantee Trustee. The
right, title and interest of the Capital Securities Guarantee Trustee shall
automatically vest in any Successor Capital Securities Guarantee Trustee, and
such vesting and succession of title shall be effective whether or not
conveyancing documents have been executed and delivered pursuant to the
appointment of such Successor Capital Securities Guarantee Trustee.
(b) If an Event of Default actually known to a Responsible Officer has
occurred and is continuing, the Capital Securities Guarantee Trustee shall
enforce this Series B Capital Securities Guarantee for the benefit of the
Holders.
(c) The Capital Securities 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 Series B Capital Securities Guarantee, and no implied covenants
shall be read into this Series B Capital Securities Guarantee against the Series
B Capital Securities 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, the Capital Securities Guarantee
Trustee shall exercise such of the rights and powers vested in it by this Series
B Capital 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 Series B Capital Securities Guarantee shall be
construed to relieve the Capital Securities 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:
(A) the duties and obligations of the Capital Securities
Guarantee Trustee shall be determined solely by the express provisions
of this Series B Capital Securities Guarantee, and the Capital
Securities Guarantee Trustee shall not be liable except for the
performance of such duties and obligations as are specifically set
forth in this Series B Capital Securities Guarantee, and no implied
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covenants or obligations shall be read into this Series B Capital
Securities Guarantee against the Capital Securities Guarantee Trustee;
and
(B) in the absence of bad faith on the part of the Capital
Securities Guarantee Trustee, the Capital Securities 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 Capital Securities Guarantee Trustee and
conforming to the requirements of this Series B Capital 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 Capital Securities Guarantee Trustee, the Capital Securities
Guarantee Trustee shall be under a duty to examine the same to
determine whether or not they conform to the requirements of this
Series B Capital Securities Guarantee;
(ii) the Capital Securities Guarantee Trustee shall not be liable
for any error of judgment made in good faith by a Responsible Officer,
unless it shall be proved that the Capital Securities Guarantee Trustee was
negligent in ascertaining the pertinent facts upon which such judgment was
made;
(iii) the Capital Securities 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 a Majority in
liquidation amount of the Series B Capital Securities relating to the time,
method and place of conducting any proceeding for any remedy available to
the Capital Securities Guarantee Trustee, or exercising any trust or power
conferred upon the Capital Securities Guarantee Trustee under this Series B
Capital Securities Guarantee; and
(iv) no provision of this Series B Capital Securities Guarantee
shall require the Capital Securities 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 Capital Securities 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 Series B Capital
Securities Guarantee or indemnity, reasonably satisfactory to the Capital
Securities Guarantee Trustee, against such risk or liability is not
reasonably assured to it.
SECTION 3.2 Certain Rights of Capital Securities Guarantee Trustee
(a) Subject to the provisions of Section 3.1:
(i) The Capital Securities 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,
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debenture, note, other evidence of indebtedness or other paper or document
believed by it to be genuine and to have been signed, sent or presented by
the proper party or parties.
(ii) Any direction or act of the Guarantor contemplated by this
Series B Capital Securities Guarantee may be sufficiently evidenced by an
Officers' Certificate.
(iii) Whenever, in the administration of this Series B Capital
Securities Guarantee, the Capital Securities Guarantee Trustee shall deem
it desirable that a matter be proved or established before taking,
suffering or omitting any action hereunder, the Capital Securities
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 Capital Securities 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 Capital Securities Guarantee Trustee may consult with
counsel of its selection, and the advice or opinion of such counsel with
respect to legal matters shall be full and complete authorization and
protection in respect of any action taken, suffered or omitted by it
hereunder in good faith and in accordance with such advice or opinion.
Such counsel may be counsel to the Guarantor or any of its Affiliates and
may include any of its employees. The Capital Securities Guarantee Trustee
shall have the right at any time to seek instructions concerning the
administration of this Series B Capital Securities Guarantee from any court
of competent jurisdiction.
(vi) The Capital Securities Guarantee Trustee shall be under no
obligation to exercise any of the rights or powers vested in it by this
Series B Capital Securities Guarantee at the request or direction of any
Holder, unless such Holder shall have provided to the Capital Securities
Guarantee Trustee such security and indemnity, reasonably satisfactory to
the Capital Securities Guarantee Trustee, against the costs, expenses
(including attorneys' fees and expenses and the expenses of the Capital
Securities 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
Capital Securities Guarantee Trustee; provided that, nothing contained in
this Section 3.2(a)(vi) shall be taken to relieve the Capital Securities
Guarantee Trustee, upon the occurrence of an Event of Default, of its
obligation to exercise the rights and powers vested in it by this Series B
Capital Securities Guarantee.
(vii) The Capital Securities 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 Capital Securities
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Guarantee Trustee, in its discretion, may make such further inquiry or
investigation into such facts or matters as it may see fit.
(viii) The Capital Securities 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 Capital
Securities Guarantee Trustee shall not be responsible for any misconduct or
negligence on the part of any agent or attorney appointed with due care by
it hereunder.
(ix) Any action taken by the Capital Securities Guarantee Trustee or
its agents hereunder shall bind the Holders, and the signature of the
Capital Securities 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 Capital Securities
Guarantee Trustee to so act or as to its compliance with any of the terms
and provisions of this Series B Capital Securities Guarantee, both of which
shall be conclusively evidenced by the Capital Securities Guarantee
Trustee's or its agent's taking such action.
(x) Whenever in the administration of this Series B Capital
Securities Guarantee the Capital Securities Guarantee Trustee shall deem it
desirable to receive instructions with respect to enforcing any remedy or
right or taking any other action hereunder, the Capital Securities
Guarantee Trustee (i) may request instructions from the Holders of a
Majority in liquidation amount of the Series B Capital 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.
(xi) The Capital Securities Guarantee Trustee shall not be liable
for any action taken, suffered, or omitted to be taken by it in good faith,
without negligence, and reasonably believed by it to be authorized or
within the discretion or rights or powers conferred upon it by this Series
B Capital Securities Guarantee.
(b) No provision of this Series B Capital Securities Guarantee shall be
deemed to impose any duty or obligation on the Capital Securities 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 Capital Securities 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 Capital Securities Guarantee
Trustee shall be construed to be a duty.
SECTION 3.3. Not Responsible for Recitals or Issuance of Series B Capital
Securities Guarantee
The recitals contained in this Series B Capital Securities Guarantee
shall be taken as the statements of the Guarantor, and the Capital Securities
Guarantee Trustee does not assume
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any responsibility for their correctness. The Capital Securities Guarantee
Trustee makes no representation as to the validity or sufficiency of this Series
B Capital Securities Guarantee.
ARTICLE IV
CAPITAL SECURITIES GUARANTEE TRUSTEE
SECTION 4.1 Capital Securities Guarantee Trustee; Eligibility
(a) There shall at all times be a Capital Securities Guarantee Trustee
which shall:
(i) not be an Affiliate of the Guarantor; and
(ii) be a corporation organized and doing business under the laws of
the United States of America or any State or Territory thereof or of the
District of Columbia, or a corporation or Person permitted by the
Securities and Exchange Commission to act as an institutional trustee under
the Trust Indenture Act, authorized under such laws to exercise corporate
trust powers, having a combined capital and surplus of at least 50 million
U.S. dollars ($50,000,000), and subject to supervision or examination by
Federal, State, Territorial or District of Columbia authority. If such
corporation publishes reports of condition at least annually, pursuant to
law or to the requirements of the supervising or examining authority
referred to above, then, for the purposes of this Section 4.1(a)(ii), the
combined capital and surplus of such corporation shall be deemed to be its
combined capital and surplus as set forth in its most recent report of
condition so published.
(b) If at any time the Capital Securities Guarantee Trustee shall cease to
be eligible to so act under Section 4.1(a), the Capital Securities Guarantee
Trustee shall immediately resign in the manner and with the effect set out in
Section 4.2(c).
(c) If the Capital Securities Guarantee Trustee has or shall acquire any
"conflicting interest" within the meaning of Section 310(b) of the Trust
Indenture Act, the Capital Securities Guarantee Trustee and Guarantor shall in
all respects comply with the provisions of Section 310(b) of the Trust Indenture
Act, subject to the penultimate paragraph thereof.
SECTION 4.2 Appointment, Removal and Resignation of Capital Securities
Guarantee Trustee
(a) Subject to Section 4.2(b), the Capital Securities Guarantee Trustee
may be appointed or removed without cause at any time by the Guarantor except
during an Event of Default.
(b) The Capital Securities Guarantee Trustee shall not be removed in
accordance with Section 4.2(a) until a Successor Capital Securities Guarantee
Trustee has been
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appointed and has accepted such appointment by written instrument executed by
such Successor Capital Securities Guarantee Trustee and delivered to the
Guarantor.
(c) The Capital Securities Guarantee Trustee shall hold office until a
Successor Capital Securities Guarantee Trustee shall have been appointed or
until its removal or resignation. The Capital Securities Guarantee Trustee may
resign from office (without need for prior or subsequent accounting) by an
instrument in writing executed by the Capital Securities Guarantee Trustee and
delivered to the Guarantor, which resignation shall not take effect until a
Successor Capital Securities Guarantee Trustee has been appointed and has
accepted such appointment by instrument in writing executed by such Successor
Capital Securities Guarantee Trustee and delivered to the Guarantor and the
resigning Capital Securities Guarantee Trustee.
(d) If no Successor Capital Securities Guarantee Trustee shall have been
appointed and accepted appointment as provided in this Section 4.2 within 60
days after delivery of an instrument of removal or resignation, the Capital
Securities Guarantee Trustee resigning or being removed may petition any court
of competent jurisdiction for appointment of a Successor Capital Securities
Guarantee Trustee. Such court may thereupon, after prescribing such notice, if
any, as it may deem proper, appoint a Successor Capital Securities Guarantee
Trustee.
(e) No Capital Securities Guarantee Trustee shall be liable for the acts
or omissions to act of any Successor Capital Securities Guarantee Trustee.
(f) Upon termination of this Series B Capital Securities Guarantee or
removal or resignation of the Capital Securities Guarantee Trustee pursuant to
this Section 4.2, the Guarantor shall pay to the Capital Securities Guarantee
Trustee all amounts due to the Capital Securities Guarantee Trustee accrued to
the date of such termination, removal or resignation.
ARTICLE V
GUARANTEE
SECTION 5.1 Guarantee
The Guarantor irrevocably and unconditionally agrees to pay in full to
the Holders the Guarantee Payments (without duplication of amounts theretofore
paid by the Issuer), as and when due, regardless of any defense, right of
set-off or counterclaim that the Issuer 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 Issuer to pay
such amounts to the Holders.
SECTION 5.2 Waiver of Notice and Demand
The Guarantor hereby waives notice of acceptance of this Series B
Capital Securities Guarantee and of any liability to which it applies or may
apply, presentment, demand
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for payment, any right to require a proceeding first against the Issuer 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 Series B Capital 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 Issuer of any express or implied agreement,
covenant, term or condition relating to the Series B Capital Securities to be
performed or observed by the Issuer;
(b) the extension of time for the payment by the Issuer of all or any
portion of the Distributions, Redemption Price, Liquidation Distribution or any
other sums payable under the terms of the Series B Capital Securities or the
extension of time for the performance of any other obligation under, arising out
of, or in connection with, the Series B Capital 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 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 Series B Capital
Securities, or any action on the part of the Issuer granting indulgence or
extension of any kind;
(d) the voluntary or involuntary liquidation, dissolution, sale of any
collateral, receivership, insolvency, bankruptcy, assignment for the benefit of
creditors, reorganization, arrangement, composition or readjustment of debt of,
or other similar proceedings affecting, the Issuer or any of the assets of the
Issuer;
(e) any invalidity of, or defect or deficiency in, the Series B Capital
Securities;
(f) the settlement or compromise of any obligation guaranteed hereby or
hereby incurred;
(g) the consummation of the Exchange Offer; 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 with respect to the
Guarantee Payments shall be absolute and unconditional under any and all
circumstances.
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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 Series B
Capital Securities have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Capital Securities
Guarantee Trustee in respect of this Series B Capital Securities Guarantee or
exercising any trust or power conferred upon the Capital Securities Guarantee
Trustee under this Series B Capital Securities Guarantee.
(b) If the Capital Securities Guarantee Trustee fails to enforce such
Series B Capital Securities Guarantee, any Holder may institute a legal
proceeding directly against the Guarantor to enforce the Capital Securities
Guarantee Trustee's rights under this Series B Capital Securities Guarantee,
without first instituting a legal proceeding against the Issuer, the Capital
Securities Guarantee Trustee or any other person or entity. The Guarantor
waives any right or remedy to require that any action be brought first against
the Issuer or any other person or entity before proceeding directly against the
Guarantor.
SECTION 5.5 Guarantee of Payment
This Series B Capital 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 against the Issuer in respect of any amounts paid to such Holders by the
Guarantor under this Series B Capital 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 Series B Capital
Securities Guarantee, if, at the time of any such payment, any amounts are due
and unpaid under this Series B Capital 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 Issuer with respect to the Series B
Capital Securities, and that the Guarantor shall be liable as principal and as
debtor hereunder to make Guarantee Payments pursuant to the terms of this Series
B Capital Securities Guarantee notwithstanding the occurrence of any event
referred to in subsections (a) through (h), inclusive, of Section 5.3 hereof.
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ARTICLE VI
LIMITATION OF TRANSACTIONS; SUBORDINATION
SECTION 6.1 Limitation of Transactions
So long as any Series B Capital Securities remain outstanding, the
Guarantor shall not (i) declare or pay any dividends or distributions on, or
redeem, purchase, acquire, or make a liquidation payment with respect to, any of
the Guarantor's capital stock (which includes common and preferred stock), (ii)
make any payment of principal of, or premium, if any, or interest on or repay,
repurchase or redeem any debt securities of the Guarantor (including any Other
Debentures) that rank pari passu with or junior in right of payment to the
Debentures or (iii) make any guarantee payments with respect to any guarantee by
the Guarantor of the debt securities of any subsidiary of the Guarantor
(including Other Guarantees) if such guarantee ranks pari passu with or junior
in right of payment to the Debentures (other than (a) dividends or distributions
in shares of, or options, warrants, rights to subscribe for or purchase shares
of, common stock of the Guarantor, (b) any declaration of a dividend in
connection with the implementation of a stockholders' 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, (c) payments under the Series A
Capital Securities Guarantee and the Series B Capital Securities Guarantee, (d)
as a result of a reclassification of the Guarantor's capital stock or the
exchange or the conversion of one class or series of the Guarantor's capital
stock for another class or series of the Guarantor's capital stock, (e) the
purchase of fractional interests in shares of the Guarantor's capital stock
pursuant to the conversion or exchange provisions of such capital stock or the
security being converted or exchanged and (f) purchases of common stock related
to the issuance of common stock or rights under any of the Guarantor's benefit
plans for its directors, officers or employees or any of the Guarantor's
dividend reinvestment plans) if at such time (i) there shall have occurred any
event of which the Guarantor has actual knowledge that (a) is, or with the
giving of notice or the lapse of time, or both, would be an Indenture Event of
Default and (b) in respect of which the Guarantor shall not have taken
reasonable steps to cure, (ii) if such Debentures are held by the Property
Trustee, the Guarantor shall be in default with respect to its payment of any
obligations under this Series B Capital Securities Guarantee or (iii) the
Guarantor shall have given notice of its election of the exercise of its right
to extend the interest payment period pursuant to Section 16.01 of the Indenture
and any such extension shall be continuing.
SECTION 6.2 Ranking
This Series B Capital Securities Guarantee will constitute an
unsecured obligation of the Guarantor and will rank (i) subordinate and junior
in right of payment to Senior Indebtedness (as defined in the Indenture), to the
same extent and in the same manner that the Debentures are subordinated to
Senior Indebtedness pursuant to the Indenture, (ii) pari passu with the
Debentures, the Other Debentures, the Series A Capital Securities Guarantee, the
Common Securities Guarantee and any Other Guarantee and any Other Common
Securities Guarantee, and (iii) senior to the Guarantor's capital stock.
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ARTICLE VII
TERMINATION
SECTION 7.1 Termination
This Series B Capital Securities Guarantee shall terminate (i) upon
full payment of the Redemption Price (as defined in the Declaration) of all
Series B Capital Securities, or (ii) upon liquidation of the Issuer, the full
payment of the amounts payable in accordance with the Declaration or the
distribution of the Debentures to the Holders and the holders of Common
Securities. Notwithstanding the foregoing, this Series B Capital Securities
Guarantee will continue to be effective or will be reinstated, as the case may
be, if at any time any Holder must restore payment of any sums paid under the
Series B Capital Securities or under this Series B Capital Securities Guarantee.
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 Series B Capital
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 Series B Capital 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 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 and all loss, liability,
damage, claim 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
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claim or liability in connection with the exercise or performance of any of its
powers or duties hereunder. The obligation to indemnify as set forth in this
Section 8.2 shall survive the termination of this Series B Capital Securities
Guarantee.
ARTICLE IX
MISCELLANEOUS
SECTION 9.1 Successors and Assigns
All guarantees and agreements contained in this Series A Capital
Securities Guarantee shall bind the successors, assigns, receivers, trustees and
representatives of the Guarantor and shall inure to the benefit of the Holders
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 Series B Capital Securities Guarantee may only be amended with
the prior approval of the Holders of a Majority in liquidation amount of the
Series B Capital Securities (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). The provisions of
the Declaration with respect to consents to amendments thereof (whether at a
meeting or otherwise) shall apply to the giving of such approval.
SECTION 9.3 Notices
All notices provided for in this Series B Capital Securities Guarantee
shall be in writing, duly signed by the party giving such notice, and shall be
delivered, telecopied or mailed by first class mail, as follows:
(a) If given to the Issuer, in care of the Administrative Trustee at the
Issuer's mailing address set forth below (or such other address as the Issuer
may give notice of to the Holders and the Capital Securities Guarantee Trustee):
First Keystone Capital Trust I
c/o First Keystone Financial, Inc.
22 West State Street
Media, Pennsylvania 19063
Attention: Thomas M. Kelly
Administrative Trustee
Telecopy: (610) 892-5108
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(b) If given to the Capital Securities Guarantee Trustee, at the Capital
Securities Guarantee Trustee's mailing address set forth below (or such other
address as the Capital Securities Guarantee Trustee may give notice of to the
Holders and the Issuer):
The Bank of New York
101 Barclay Street
21st Floor West
New York, New York 10286
Attention: Corporate Trust Trustee Administration
Telecopy: (212) 815-5917
(c) 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 and the Capital Securities Guarantee Trustee):
First Keystone Financial, Inc.
22 West State Street
Media, Pennsylvania 19063
Attention: Thomas M. Kelly
Executive Vice President and Chief Financial
Officer
Telecopy: (610) 892-5108
(d) If given to any Holder of Series B Capital Securities, at the address
set forth on the books and records of the Issuer.
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.
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SECTION 9.4 Benefit
This Series B Capital Securities Guarantee is solely for the benefit
of the Holders and, subject to Section 3.1(a), is not separately transferable
from the Series B Capital Securities.
SECTION 9.5 Governing Law
THIS SERIES B CAPITAL SECURITIES GUARANTEE SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK,
WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES THEREOF.
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THIS SERIES B CAPITAL SECURITIES GUARANTEE is executed as of the day
and year first above written.
FIRST KEYSTONE FINANCIAL, INC.,
as Guarantor
By:
---------------------------------------
Name: Thomas M. Kelly
Title: Executive Vice President and
Chief Financial Officer
THE BANK OF NEW YORK, as Capital
Securities Guarantee Trustee
By:
---------------------------------------
Name:
Title:
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Exhibit 4.7
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- --------------------------------------------------------------------------
REGISTRATION RIGHTS AGREEMENT
Dated August 26, 1997
among
FIRST KEYSTONE FINANCIAL, INC.
FIRST KEYSTONE CAPITAL TRUST I
and
SANDLER O'NEILL & PARTNERS, L.P.
as Initial Purchaser
- ---------------------------------------------------------------------------
- ---------------------------------------------------------------------------
<PAGE>
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (the "Agreement") is made and
entered into as of August 26, 1997 among First Keystone Financial, Inc., a
Pennsylvania corporation (the "Corporation"), First Keystone Capital Trust
I, a business trust created under the laws of the state of Delaware (the
"Trust"), and Sandler O'Neill & Partners, L.P. (the "Initial Purchaser").
This Agreement is made pursuant to the Purchase Agreement dated
August 21, 1997 (the "Purchase Agreement"), among the Corporation, as
issuer of the Series A 9.70% Junior Subordinated Deferrable Interest
Debentures due August 15, 2027 (the "Subordinated Debentures"), the Trust
and the Initial Purchaser, which provides for, among other things, the sale
by the Trust to the Initial Purchaser of 16,200 of the Trust's Series A
9.70% Capital Securities, liquidation amount $1,000 per Capital Security
(the "Capital Securities"), the proceeds of which will be used by the Trust
to purchase Subordinated Debentures. The Capital Securities, together with
the Subordinated Debentures and the Corporation's guarantee of the Capital
Securities (the "Capital Securities Guarantee"), are collectively referred
to as the "Securities". In order to induce the Initial Purchaser to enter
into the Purchase Agreement, the Corporation and the Trust have agreed to
provide to the Initial Purchaser and their direct and indirect transferees
the registration rights set forth in this Agreement. The execution and
delivery of this Agreement is a condition to the closing under the Purchase
Agreement.
In consideration of the foregoing, the parties hereto agree as
follows:
1. Definitions. As used in this Agreement, the following
capitalized defined terms shall have the following meanings:
"Additional Distributions" shall have the meaning set forth in Section
2(e) hereof.
"Advice" shall have the meaning set forth in the last paragraph of
Section 3 hereof.
"Affiliate" has the same meaning as given to that term in Rule 405
under the Securities Act or any successor rule thereunder.
"Applicable Period" shall have the meaning set forth in Section 3(t)
hereof.
"Business Day" means any day other than a Saturday, a Sunday, or a day
on which banking institutions in New York, New York or Media, Pennsylvania
are authorized or required by law or executive order to close.
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"Closing Time" shall mean the Closing Time as defined in the Purchase
Agreement.
"Corporation" shall have the meaning set forth in the preamble to this
Agreement and also includes the Corporation's successors and permitted
assigns.
"Declaration" or "Declaration of Trust" shall mean the Amended and
Restated Declaration of Trust of First Keystone Capital Trust I, dated as
of August 26, 1997, by the trustees named therein, the Corporation as
sponsor, and the holders from time to time of undivided beneficial
interests in the assets of the Trust.
"Depositary" shall mean The Depository Trust Company, or any other
depositary appointed by the Trust; provided, however, that such depositary
must have an address in the Borough of Manhattan, in The City of New York.
"Effectiveness Period" shall have the meaning set forth in Section
2(b) hereof.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended from time to time.
"Exchange Offer" shall mean the offer by the Corporation and the Trust
to the Holders to exchange all of the Registrable Securities (other than
Private Exchange Securities) for a like principal amount of Exchange
Securities pursuant to Section 2(a) hereof.
"Exchange Offer Registration" shall mean a registration under the
Securities Act effected pursuant to Section 2(a) hereof.
"Exchange Offer Registration Statement" shall mean an exchange offer
registration statement on Form S-4 (or, if applicable, on another
appropriate form), and all amendments and supplements to such registration
statement, in each case including the Prospectus contained therein, all
exhibits thereto and all material incorporated by reference therein.
"Exchange Period" shall have the meaning set forth in Section 2(a)
hereof.
"Exchange Securities" shall mean (i) with respect to the Subordinated
Debentures, the Series B 9.70% Junior Subordinated Deferrable Interest
Debentures due August 15, 2027 (the "Exchange Debentures") containing terms
substantially identical to the Subordinated Debentures (except that they
will not contain terms with respect to the transfer restrictions under the
Securities Act (other than requiring minimum transfers thereof to be in
blocks of $100,000 aggregate principal amount), and will not provide for
any Liquidated Damages thereon), (ii) with respect to the Capital
Securities, the Trust's Series B 9.70% Capital Securities, liquidation
amount $1,000 per Capital Security (the "Exchange Capital Securities")
which will have terms substantially identical to the Capital Securities
(except they will not contain terms with respect to transfer restrictions
under the Securities
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Act (other than requiring minimum transfers thereof to be in blocks of
$100,000 aggregate liquidation amount), and will not provide for any
increase in Additional Distributions thereon) and (iii) with respect to the
Capital Securities Guarantee, the Corporation's guarantee (the "Exchange
Capital Securities Guarantee") of the Exchange Capital Securities which
will have terms substantially identical to the Capital Securities
Guarantee.
"Holder" shall mean the Initial Purchaser, for so long as it owns any
Registrable Securities, and each of its respective successors, assigns and
direct and indirect transferees who become registered owners of Registrable
Securities under the Indenture or Declaration of Trust.
"Indenture" shall mean the Indenture relating to the Subordinated
Debentures and the Exchange Debentures dated as of August 26, 1997 between
the Corporation, as issuer, and The Bank of New York, as trustee, as the
same may be amended from time to time in accordance with the terms thereof.
"Initial Purchaser" shall have the meaning set forth in the preamble
to this Agreement.
"Inspectors" shall have the meaning set forth in Section 3(n) hereof.
"Issue Date" shall mean August 26, 1997, the date of original issuance
of the Securities.
"Liquidated Damages" shall have the meaning set forth in Section 2(e)
hereof.
"Majority Holders" shall mean the Holders of a majority of the
aggregate liquidation amount of outstanding Capital Securities.
"Participating Broker-Dealer" shall have the meaning set forth in
Section 3(t) hereof.
"Person" shall mean an individual, partnership, corporation, trust or
unincorporated organization, limited liability company, or a government or
agency or political subdivision thereof.
"Private Exchange" shall have the meaning set forth in Section 2(a)
hereof.
"Private Exchange Securities" shall have the meaning set forth in
Section 2(a) hereof.
"Prospectus" shall mean the prospectus included in a Registration
Statement, including any preliminary prospectus, and any such prospectus as
amended or supplemented by any prospectus supplement, including a
prospectus supplement with respect to the terms of the offering of any
portion of the Registrable Securities covered by a Shelf Registration
Statement, and by all other amendments and supplements to a prospectus,
including post-
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effective amendments, and in each case including all material incorporated
by reference therein.
"Purchase Agreement" shall have the meaning set forth in the preamble
to this Agreement.
"Records" shall have the meaning set forth in Section 3(n) hereof.
"Registrable Securities" shall mean the Securities and, if issued, the
Private Exchange Securities; provided, however, that Securities or Private
Exchange Securities, as the case may be, shall cease to be Registrable
Securities when (i) a Registration Statement with respect to such
Securities or Private Exchange Securities for the exchange or resale
thereof, as the case may be, shall have been declared effective under the
Securities Act and such Securities or Private Exchange Securities, as the
case may be, shall have been disposed of pursuant to such Registration
Statement, (ii) such Securities or Private Exchange Securities, as the case
may be, shall have been sold to the public pursuant to Rule 144(k) (or any
similar provision then in force, but not Rule 144A) under the Securities
Act or are eligible to be sold without restriction as contemplated by Rule
144(k), (iii) such Securities or Private Exchange Securities, as the case
may be, shall have ceased to be outstanding or (iv) with respect to the
Securities, such Securities shall have been exchanged for Exchange
Securities upon consummation of the Exchange Offer and are thereafter
freely tradeable by the holder thereof (other than an Affiliate of the
Corporation).
"Registration Expenses" shall mean any and all expenses incident to
performance of or compliance by the Corporation with this Agreement,
including without limitation: (i) all SEC or National Association of
Securities Dealers, Inc. (the "NASD") registration and filing fees,
including, if applicable, the fees and expenses of any "qualified
independent underwriter" (and its counsel) that is required to be retained
by any Holder of Registrable Securities in accordance with the rules and
regulations of the NASD, (ii) all fees and expenses incurred in connection
with compliance with state securities or blue sky laws (including
reasonable fees and disbursements of one counsel for all underwriters or
Holders as a group in connection with blue sky qualification of any of the
Exchange Securities or Registrable Securities) and compliance with the
rules of the NASD, (iii) all expenses of any Persons in preparing or
assisting in preparing, word processing, printing and distributing any
Registration Statement, any Prospectus and any amendments or supplements
thereto, and in preparing or assisting in preparing, printing and
distributing any underwriting agreements, securities sales agreements and
other documents relating to the performance of and compliance with this
Agreement, (iv) all rating agency fees, (v) the fees and disbursements of
counsel for the Corporation and of the independent certified public
accountants of the Corporation, including the expenses of any "cold
comfort" letters required by or incident to such performance and
compliance, (vi) the fees and expenses of the Trustee and its counsel and
any exchange agent or custodian, (vii) all fees and expenses incurred in
connection with the listing, if any, of any of the Exchange Securities or
the Registrable Securities on any
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securities exchange or exchanges, and (viii) the reasonable fees and
expenses of any special experts retained by the Corporation in connection
with any Registration Statement.
"Registration Statement" shall mean any registration statement of the
Corporation and the Trust which covers any of the Exchange Securities or
Registrable Securities pursuant to the provisions of this Agreement, and
all amendments and supplements to any such Registration Statement,
including post-effective amendments, in each case including the Prospectus
contained therein, all exhibits thereto and all material incorporated by
reference therein.
"Rule 144(k) Period" shall mean the period of two years (or such
shorter period as may hereafter be referred to in Rule 144(k) under the
Securities Act (or similar successor rule)) commencing on the Issue Date.
"SEC" shall mean the Securities and Exchange Commission.
"Securities" shall have the meaning set forth in the preamble to this
Agreement.
"Securities Act" shall mean the Securities Act of 1933, as amended
from time to time.
"Shelf Registration" shall mean a registration effected pursuant to
Section 2(b) hereof.
"Shelf Registration Event" shall have the meaning set forth in Section
2(b) hereof.
"Shelf Registration Event Date" shall have the meaning set forth in
Section 2(b) hereof.
"Shelf Registration Statement" shall mean a "shelf" registration
statement of the Corporation and the Trust pursuant to the provisions of
Section 2(b) hereof which covers all of the Registrable Securities or all
of the Private Exchange Securities, as the case may be, on an appropriate
form under Rule 415 under the Securities Act, or any similar rule that may
be adopted by the SEC, and all amendments and supplements to such
registration statement, including post-effective amendments, in each case
including the Prospectus contained therein, all exhibits thereto and all
material incorporated by reference therein.
"TIA" shall have the meaning set forth in Section 3(l) hereof.
"Trustees" shall mean any and all trustees with respect to (i) the
Capital Securities under the Declaration, (ii) the Subordinated Debentures
under the Indenture and (iii) the Capital Securities Guarantee.
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2. Registration Under the Securities Act.
(a) Exchange Offer. Except as set forth in Section 2(b) below,
the Corporation and the Trust shall, for the benefit of the Holders, use
their reasonable best efforts to (i) cause to be filed with the SEC within
150 days after the Issue Date an Exchange Offer Registration Statement on
an appropriate form under the Securities Act relating to the Exchange
Offer, (ii) cause such Exchange Offer Registration Statement to be declared
effective under the Securities Act by the SEC not later than the date which
is 180 days after the Issue Date, and (iii) keep such Exchange Offer
Registration Statement effective for not less than 30 calendar days (or
longer if required by applicable law) after the date notice of the Exchange
Offer is mailed to the Holders. Upon the effectiveness of the Exchange
Offer Registration Statement, the Corporation and the Trust shall promptly
commence the Exchange Offer, it being the objective of such Exchange Offer
to enable each Holder eligible and electing to exchange Registrable
Securities for a like principal amount of Exchange Debentures or a like
liquidation amount of Exchange Capital Securities, together with the
Exchange Guarantee, as applicable (assuming that such Holder (i) is not an
Affiliate of the Trust or the Corporation, (ii) is not a broker-dealer
tendering Registrable Securities acquired directly from the Corporation for
its own account, (iii) acquires the Exchange Securities in the ordinary
course of such Holder's business and (iv) has no arrangements or
understandings with any Person to participate in the Exchange Offer for the
purpose of distributing the Exchange Securities) to transfer such Exchange
Securities from and after their receipt without any limitations or
restrictions under the Securities Act and under state securities or blue
sky laws (other than requiring minimum transfers in blocks having an
aggregate principal or liquidation amount, as the case may be, of
$100,000).
In connection with the Exchange Offer, the Corporation and the
Trust shall:
(i) mail to each Holder a copy of the Prospectus forming part of the
Exchange Offer Registration Statement, together with an appropriate letter
of transmittal and related documents;
(ii) keep the Exchange Offer open for acceptance for a period of not
less than 30 days after the date notice thereof is mailed to the Holders
(or longer if required by applicable law) (such period referred to herein
as the "Exchange Period");
(iii) utilize the services of the Depositary for the Exchange Offer;
(iv) permit Holders to withdraw tendered Securities at any time prior
to the close of business, New York time, on the last Business Day of the
Exchange Period, by sending to the institution specified in the notice, a
telegram, telex, facsimile transmission or letter setting forth the name of
such Holder, the principal amount of Securities delivered for exchange, and
a statement that such Holder is withdrawing his election to have such
Securities exchanged;
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(v) notify each Holder that any Security not tendered by such Holder
in the Exchange Offer will remain outstanding and continue to accrue
interest or accumulate distributions, as the case may be, but will not
retain any rights under this Agreement (except in the case of the Initial
Purchaser and Participating Broker-Dealers as provided herein); and
(vi) otherwise comply in all respects with all applicable laws
relating to the Exchange Offer.
If the Initial Purchaser determines upon advice of its outside
counsel that it is not eligible to participate in the Exchange Offer with
respect to the exchange of Securities constituting any portion of an unsold
allotment in the initial distribution, as soon as practicable upon receipt
by the Corporation and the Trust of a written request from such Initial
Purchaser, the Corporation and the Trust, as applicable, shall issue and
deliver to such Initial Purchaser in exchange (the "Private Exchange") for
the Securities held by such Initial Purchaser, a like liquidation amount of
Capital Securities of the Trust or, in the event the Trust is liquidated
and Subordinated Debentures are distributed, a like principal amount of the
Subordinated Debentures of the Corporation, together with the Exchange
Guarantee, in each case that are identical (except that such securities may
bear a customary legend with respect to restrictions on transfer pursuant
to the Securities Act) to the Exchange Securities (the "Private Exchange
Securities") and which are issued pursuant to the Indenture, the
Declaration or the Guarantee (which provides that the Exchange Securities
will not be subject to the transfer restrictions set forth in the Indenture
or the Declaration, as applicable (other than requiring minimum transfers
in blocks having an aggregate principal or liquidation amount, as the case
may be, of $100,000), and that the Exchange Securities, the Private
Exchange Securities and the Securities will vote and consent together on
all matters as one class and that neither the Exchange Securities, the
Private Exchange Securities nor the Securities will have the right to vote
or consent as a separate class on any matter). The Private Exchange
Securities shall be of the same series as the Exchange Securities and the
Corporation and the Trust will seek to cause the CUSIP Service Bureau to
issue the same CUSIP Numbers for the Private Exchange Securities as for the
Exchange Securities issued pursuant to the Exchange Offer.
As soon as practicable after the close of the Exchange Offer and,
if applicable, the Private Exchange, the Corporation and the Trust, as the
case requires, shall:
(i) accept for exchange all Securities or portions thereof tendered
and not validly withdrawn pursuant to the Exchange Offer or the Private
Exchange;
(ii) deliver, or cause to be delivered, to the applicable Trustee for
cancellation all Securities or portions thereof so accepted for exchange by
the Corporation; and
(iii) issue, and cause the applicable Trustee under the Indenture,
the Declaration or the Guarantee, as applicable, to promptly authenticate
and deliver to each Holder, new
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Exchange Securities or Private Exchange Securities, as applicable, equal in
principal amount to the principal amount of the Subordinated Debentures or
equal in liquidation amount to the liquidation amount of the Capital
Securities (together with the guarantee thereof) as are surrendered by such
Holder.
Distributions on each Exchange Capital Security and interest on
each Exchange Debenture and Private Exchange Security issued pursuant to
the Exchange Offer and in the Private Exchange will accrue from the last
date on which a Distribution or interest was paid on the Capital Security
or the Subordinated Debenture surrendered in exchange therefor or, if no
Distribution or interest has been paid on such Capital Security or
Subordinated Debenture, from the Issue Date. To the extent not prohibited
by any law or applicable interpretation of the staff of the SEC, the
Corporation and the Trust shall use their reasonable best efforts to
complete the Exchange Offer as provided above, and shall comply with the
applicable requirements of the Securities Act, the Exchange Act and other
applicable laws in connection with the Exchange Offer. The Exchange Offer
shall not be subject to any conditions, other than that the Exchange Offer
does not violate applicable law or any applicable interpretation of the
staff of the SEC. Each Holder of Registrable Securities who wishes to
exchange such Registrable Securities for Exchange Securities in the
Exchange Offer will be required to make certain customary representations
in connection therewith, including, in the case of any Holder of Capital
Securities, representations that (i) it is not an Affiliate of the Trust or
the Corporation, (ii) the Exchange Securities to be received by it were
acquired in the ordinary course of its business and (iii) at the time of
the Exchange Offer, it has no arrangement with any person to participate in
the distribution (within the meaning of the Securities Act) of the Exchange
Capital Securities. The Corporation and the Trust shall inform the Initial
Purchaser, after consultation with the applicable Trustees, of the names
and addresses of the Holders to whom the Exchange Offer is made, and the
Initial Purchaser shall have the right to contact such Holders and
otherwise facilitate the tender of Registrable Securities in the Exchange
Offer.
Upon consummation of the Exchange Offer in accordance with this
Section 2(a), the provisions of this Agreement shall continue to apply,
mutatis mutandis, solely with respect to Registrable Securities that are
Private Exchange Securities and Exchange Securities held by Participating
Broker-Dealers, and the Corporation and the Trust shall have no further
obligation to register the Registrable Securities (other than Private
Exchange Securities) held by any Holder pursuant to Section 2(b) of this
Agreement.
(b) Shelf Registration. In the event that (i) the Corporation,
the Trust or the Majority Holders reasonably determine, after conferring
with counsel (which may be in-house counsel), that the Exchange Offer
Registration provided in Section 2(a) above is not available under
applicable law and regulations and currently prevailing interpretations of
the staff of the SEC, (ii) the Corporation shall determine in good faith
that there is a reasonable likelihood that, or a material uncertainty
exists as to whether, consummation of the Exchange Offer would result in
(x) the Trust becoming subject to federal income tax with respect to income
received or accrued on the Subordinated Debentures or the
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Exchange Debentures (collectively, the "Debentures"), (y) interest payable
by the Corporation on the Debentures not being deductible by the
Corporation for United States federal income tax purposes or (z) the Trust
becoming subject to more than a de minimus amount of other taxes, duties or
governmental charges, (iii) the Exchange Offer Registration Statement is
not declared effective within 180 days of the Issue Date or (iv) upon the
request of the Initial Purchaser with respect to any Registrable Securities
held by it, if such Initial Purchaser is not permitted, in the opinion of
Muldoon, Murphy & Faucette, pursuant to applicable law or applicable
interpretations of the staff of the SEC, to participate in the Exchange
Offer and thereby receive securities that are freely tradeable without
restriction under the Securities Act and applicable blue sky or state
securities laws (any of the events specified in (i)-(iv) being a "Shelf
Registration Event" and the date of occurrence thereof, the "Shelf
Registration Event Date"), then in addition to or in lieu of conducting the
Exchange Offer contemplated by Section 2(a), as the case may be, the
Corporation and the Trust shall use their reasonable best efforts to cause
to be filed as promptly as practicable after such Shelf Registration Event
Date, as the case may be, and, in any event, within 45 days after such
Shelf Registration Event Date (which shall be no earlier than 75 days after
the Closing Time), a Shelf Registration Statement providing for the sale by
the Holders of all of the Registrable Securities (except in the case of
clause (iv) above in which case the Shelf Registration Statement need cover
only the Registrable Securities held by the Initial Purchaser), and shall
use its reasonable best efforts to have such Shelf Registration Statement
declared effective by the SEC as soon as practicable. No Holder of
Registrable Securities shall be entitled to include any of its Registrable
Securities in any Shelf Registration pursuant to this Agreement unless and
until such Holder furnishes to the Corporation and the Trust in writing,
within 15 days after receipt of a request therefor, such information as the
Corporation and the Trust may, after conferring with counsel with regard to
information relating to Holders that would be required by the SEC to be
included in such Shelf Registration Statement or Prospectus included
therein, reasonably request for inclusion in any Shelf Registration
Statement or Prospectus included therein. Each Holder as to which any
Shelf Registration is being effected agrees to furnish to the Corporation
and the Trust all information with respect to such Holder necessary to make
the information previously furnished to the Corporation by such Holder not
materially misleading.
The Corporation and the Trust agree to use their reasonable best
efforts to keep the Shelf Registration Statement continuously effective and
usable for resales for (a) the Rule 144(k) Period in the case of a Shelf
Registration Statement filed pursuant to Section 2(b)(i), (ii) or (iii) or
(b) 180 days in the case of a Shelf Registration Statement filed pursuant
to Section 2(b)(iv) (subject in each case to extension pursuant to the last
paragraph of Section 3 hereof), or for such shorter period which will
terminate when all of the Registrable Securities covered by the Shelf
Registration Statement have been sold pursuant to the Shelf Registration
Statement or cease to be outstanding (the "Effectiveness Period"). The
Corporation and the Trust shall not permit any securities other than
Registrable Securities to be included in the Shelf Registration. The
Corporation and the Trust will, in the event a Shelf Registration Statement
is declared effective, provide to each Holder a reasonable number of copies
of the Prospectus which is a part of the Shelf Registration Statement and
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notify each such Holder when the Shelf Registration has become effective.
The Corporation and the Trust further agree, if necessary, to supplement or
amend the Shelf Registration Statement, if required by the rules,
regulations or instructions applicable to the registration form used by the
Corporation for such Shelf Registration Statement or by the Securities Act
or by any other rules and regulations thereunder for shelf registrations,
and the Corporation and the Trust agree to furnish to the Holders of
Registrable Securities copies of any such supplement or amendment promptly
after its being used or filed with the SEC.
(c) Expenses. The Corporation, as issuer of the Subordinated
Debentures, shall pay all Registration Expenses in connection with any
Registration Statement filed pursuant to Section 2(a) and/or 2(b) hereof
and will reimburse the Initial Purchaser for the reasonable fees and
disbursements of Muldoon, Murphy & Faucette, counsel for the Initial
Purchaser, incurred in connection with the Exchange Offer and, if
applicable, the Private Exchange, or any one other counsel designated in
writing by the Majority Holders to act as counsel for the Holders of the
Registrable Securities in connection with a Shelf Registration Statement,
which other counsel shall be reasonably satisfactory to the Corporation.
Except as provided herein, each Holder shall pay all expenses of its
counsel and any of its other advisors or experts, underwriting discounts
and commissions and transfer taxes, if any, relating to the sale or
disposition of such Holder's Registrable Securities pursuant to the Shelf
Registration Statement.
(d) Effective Registration Statement. An Exchange Offer
Registration Statement pursuant to Section 2(a) hereof or a Shelf
Registration Statement pursuant to Section 2(b) hereof will not be deemed
to have become effective unless it has been declared effective by the SEC;
provided, however, that if, after it has been declared effective, the
offering of Registrable Securities pursuant to such Exchange Offer
Registration Statement or Shelf Registration Statement is interfered with
by any stop order, injunction or other order or requirement of the SEC or
any other governmental agency or court, such Registration Statement will be
deemed not to have been effective during the period of such interference,
until the offering of Registrable Securities pursuant to such Registration
Statement may legally resume. The Corporation and the Trust will be deemed
not to have used their reasonable best efforts to cause the Exchange Offer
Registration Statement or the Shelf Registration Statement, as the case may
be, to become, or to remain, effective during the requisite period if
either of them voluntarily takes any action that would result in any such
Registration Statement not being declared effective or that would result in
the Holders of Registrable Securities covered thereby not being able to
exchange or offer and sell such Registrable Securities during that period
unless such action is required by applicable law.
(e) Liquidated Damages. In the event that:
(i) neither the Exchange Offer Registration Statement is
filed with the SEC on or prior to the 150th day after the Issue Date nor a
Shelf Registration Statement
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is filed with the SEC on or prior to the 45th day after the Shelf
Registration Event Date in respect of a Shelf Registration Event
attributable to any of the events set forth in Sections 2(b)(i), (ii) and
(iii) (provided that in no event shall such date be earlier than 75 days
after the Issue Date), then, commencing on the day after the applicable
required filing date, liquidated damages ("Liquidated Damages") shall
accrue on the principal amount of the Subordinated Debentures, and
additional distributions ("Additional Distributions") shall accumulate on
the liquidation amount of the Trust Securities (as such term is defined in
the Declaration), each at a rate of .25% per annum; or
(ii) neither the Exchange Offer Registration Statement nor a
Shelf Registration Statement is declared effective by the SEC on or prior
to the 180th day after the Issue Date (in the case of an Exchange Offer
Registration Statement) or on or prior to the later of (A) the 30th day
after the date such Shelf Registration Statement was required to be filed
and (B) the 180th day after the Issue Date (in the case of a Shelf
Registration Statement, in respect of a Shelf Registration Event
attributable to any of the events set forth in Sections 2(b)(i), (ii) and
(iii)), then, commencing on the 181st day after the Issue Date (in the case
of an Exchange Offer Registration Statement) or the later of (A) the 31st
day after the day such Shelf Registration Statement was required to be
filed and (B) the 181st day after the Issue Date (in the case of a Shelf
Registration Statement, in respect of a Shelf Registration Event
attributable to any of the events set forth in Sections 2(b)(i), (ii) and
(iii)), Liquidated Damages shall accrue on the principal amount of the
Subordinated Debentures, and Additional Distributions shall accumulate on
the liquidation amount of the Trust Securities, each at a rate of .25% per
annum;
(iii) (A) the Trust has not exchanged Exchange Capital
Securities or the Corporation has not exchanged Exchange Guarantees or
Exchange Subordinated Debentures for all Capital Securities, Guarantees or
Subordinated Debentures, as the case may be, validly tendered, in
accordance with the terms of the Exchange Offer on or prior to the 45th day
after the date on which the Exchange Offer Registration Statement was
declared effective or (B) if applicable, the Shelf Registration Statement
in respect of a Shelf Registration Event attributable to any of the events
set forth in Sections 2(b)(i), (ii) and (iii) has been declared effective
and such Shelf Registration Statement ceases to be effective or usable for
resales (whether as a result of an event contemplated by Section 3(e) or
otherwise) at any time prior to the expiration of the Rule 144(k) Period
(other than after such time as all Securities have been disposed of
thereunder or otherwise cease to be Registrable Securities), then
Liquidated Damages shall accrue on the principal amount of Subordinated
Debentures, and Additional Distributions shall accumulate on the
liquidation amount of the Trust Securities, each at a rate of .25% per
annum commencing on (x) the 46th day after such effective date, in the case
of (A) above, or (y) the day such Shelf Registration Statement ceases to be
effective or usable for resales in the case of (B) above;
provided, however, that neither the Liquidated Damages rate on the
Subordinated Debentures, nor the Additional Distribution rate on the
liquidation amount of the Trust Securities, may exceed in the aggregate
.25% per annum; provided, further, however, that (1) upon the
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filing of the Exchange Offer Registration Statement or a Shelf Registration
Statement (in the case of clause (i) above), (2) upon the effectiveness of
the Exchange Offer Registration Statement or a Shelf Registration Statement
(in the case of clause (ii) above), or (3) upon the exchange of Exchange
Capital Securities, Exchange Guarantees and Exchange Debentures for all
Capital Securities, Guarantees and Subordinated Debentures validly tendered
(in the case of clause (iii)(A) above), or at such time as the Shelf
Registration Statement which had ceased to remain effective or usable for
resales again becomes effective and usable for resales (in the case of
clause (iii)(B) above), Liquidated Damages on the principal amount of the
Subordinated Debentures and Additional Distributions on the liquidation
amount of the Trust Securities as a result of such clause (or the relevant
subclause thereof) shall cease to accrue and accumulate.
Any amounts of Liquidated Damages and Additional Distributions due
pursuant to Section 2(e)(i), (ii) or (iii) above will be payable in cash on
the next succeeding February 15 and August 15, as the case may be, to
Holders on the relevant record dates for the payment of interest and
distributions pursuant to the Indenture and the Declaration, respectively.
(f) Specific Enforcement. Without limiting the remedies
available to the Holders, the Corporation and the Trust acknowledge that
any failure by the Corporation or the Trust to comply with its obligations
under Section 2(a) and Section 2(b) hereof may result in material
irreparable injury to the Holders for which there is no adequate remedy at
law, that it would not be possible to measure damages for such injuries
precisely and that, in the event of any such failure, any Holder may obtain
such relief as may be required to specifically enforce the Corporation's
and the Trust's obligations under Section 2(a) and Section 2(b) hereof.
(g) Distribution of Subordinated Debentures. Notwithstanding any
other provisions of this Agreement, in the event that Subordinated
Debentures are distributed to holders of Capital Securities in liquidation
of the Trust pursuant to the Declaration, (i) all references in this
Section 2 and in Section 3 to Securities, Registrable Securities and
Exchange Securities shall not include the Capital Securities and Capital
Securities Guarantee or Exchange Capital Securities and Exchange Capital
Securities Guarantee issued or to be issued in exchange therefor in the
Exchange Offer and (ii) all requirements for action to be taken by the
Trust in this Section 2 and in Section 3 shall cease to apply and all
requirements for action to be taken by the Corporation in this Section 2
and in Section 3 shall apply to the Subordinated Debentures and Exchange
Debentures issued or to be issued in exchange therefor in the Exchange
Offer.
3. Registration Procedures. In connection with the obligations
of the Corporation and the Trust with respect to the Registration
Statements pursuant to Sections 2(a) and 2(b) hereof, the Corporation and
the Trust shall:
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(a) prepare and file with the SEC a Registration Statement or
Registration Statements as prescribed by Sections 2(a) and 2(b) hereof
within the relevant time period specified in Section 2 hereof on the
appropriate form under the Securities Act, which form (i) shall be
selected by the Corporation and the Trust, (ii) shall, in the case of
a Shelf Registration, be available for the sale of the Registrable
Securities by the selling Holders thereof and, in the case of an
Exchange Offer, be available for the exchange of Registrable
Securities, and (iii) shall comply as to form in all material respects
with the requirements of the applicable form and include all financial
statements required by the SEC to be filed therewith; and use its best
efforts to cause such Registration Statement to become effective and
remain effective (and, in the case of a Shelf Registration Statement,
usable for resales) in accordance with Section 2 hereof; provided,
however, that if (1) such filing is pursuant to Section 2(b), or (2) a
Prospectus contained in an Exchange Offer Registration Statement filed
pursuant to Section 2(a) is required to be delivered under the
Securities Act by any Participating Broker-Dealer who seeks to sell
Exchange Securities, before filing any Registration Statement or
Prospectus or any amendments or supplements thereto, the Corporation
and the Trust shall furnish to and afford the Holders of the
Registrable Securities and each such Participating Broker-Dealer, as
the case may be, covered by such Registration Statement, their counsel
and the managing underwriters, if any, a reasonable opportunity to
review copies of all such documents (including copies of any documents
to be incorporated by reference therein and all exhibits thereto)
proposed to be filed. The Corporation and the Trust shall not file
any Registration Statement or Prospectus or any amendments or
supplements thereto in respect of which the Holders must be afforded
an opportunity to review prior to the filing of such document if the
Majority Holders or such Participating Broker-Dealer, as the case may
be, their counsel or the managing underwriters, if any, shall
reasonably object;
(b) prepare and file with the SEC such amendments and
post-effective amendments to each Registration Statement as may be
necessary to keep such Registration Statement effective for the
Effectiveness Period or the Applicable Period, as the case may be; and
cause each Prospectus to be supplemented, if so determined by the
Corporation or the Trust or requested by the SEC, by any required
prospectus supplement and as so supplemented to be filed pursuant to
Rule 424 (or any similar provision then in force) under the Securities
Act, and comply with the provisions of the Securities Act, the
Exchange Act and the rules and regulations promulgated thereunder
applicable to it with respect to the disposition of all securities
covered by each Registration Statement during the Effectiveness Period
or the Applicable Period, as the case may be, in accordance with the
intended method or methods of distribution by the selling Holders
thereof described in this Agreement (including sales by any
Participating Broker-Dealer);
(c) in the case of a Shelf Registration, (i) notify each Holder
of Registrable Securities included in the Shelf Registration
Statement, at least three Business Days
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prior to filing, that a Shelf Registration Statement with respect to
the Registrable Securities is being filed and advising such Holder
that the distribution of Registrable Securities will be made in
accordance with the method selected by the Majority Holders; and (ii)
furnish to each Holder of Registrable Securities included in the Shelf
Registration Statement and to each underwriter of an underwritten
offering of Registrable Securities, if any, without charge, as many
copies of each Prospectus, including each preliminary Prospectus, and
any amendment or supplement thereto and such other documents as such
Holder or underwriter may reasonably request, in order to facilitate
the public sale or other disposition of the Registrable Securities;
and (iii) consent to the use of the Prospectus or any amendment or
supplement thereto by each of the selling Holders of Registrable
Securities included in the Shelf Registration Statement in connection
with the offering and sale of the Registrable Securities covered by
the Prospectus or any amendment or supplement thereto;
(d) in the case of a Shelf Registration, use its reasonable best
efforts to register or qualify the Registrable Securities under all
applicable state securities or "blue sky" laws of such jurisdictions
by the time the applicable Registration Statement is declared
effective by the SEC as any Holder of Registrable Securities covered
by a Registration Statement and each underwriter of an underwritten
offering of Registrable Securities shall reasonably request in writing
in advance of such date of effectiveness, and do any and all other
acts and things which may be reasonably necessary or advisable to
enable such Holder and underwriter to consummate the disposition in
each such jurisdiction of such Registrable Securities owned by such
Holder; provided, however, that the Corporation and the Trust shall
not be required to (i) qualify as a foreign corporation or as a dealer
in securities in any jurisdiction where it would not otherwise be
required to qualify but for this Section 3(d), (ii) file any general
consent to service of process in any jurisdiction where it would not
otherwise be subject to such service of process or (iii) subject
itself to taxation in any such jurisdiction if it is not then so
subject;
(e) (1) in the case of a Shelf Registration or (2) if
Participating Broker-Dealers from whom the Corporation or the Trust
has received prior written notice that they will be utilizing the
Prospectus contained in the Exchange Offer Registration Statement as
provided in Section 3(t) hereof, are seeking to sell Exchange
Securities and are required to deliver Prospectuses, promptly notify
each Holder of Registrable Securities, or such Participating
Broker-Dealers, as the case may be, their counsel and the managing
underwriters, if any, and promptly confirm such notice in writing (i)
when a Registration Statement has become effective and when any
post-effective amendments and supplements thereto become effective,
(ii) of any request by the SEC or any state securities authority for
amendments and supplements to a Registration Statement or Prospectus
or for additional information after the Registration Statement has
become effective, (iii) of the issuance by the SEC or any state
securities authority of any stop order suspending the effectiveness of
a Registration Statement or the qualification of the Registrable
Securities or the
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Exchange Securities to be offered or sold by any Participating
Broker-Dealer in any jurisdiction described in paragraph 3(d) hereof
or the initiation of any proceedings for that purpose, (iv) in the
case of a Shelf Registration, if, between the effective date of a
Registration Statement and the closing of any sale of Registrable
Securities covered thereby, the representations and warranties of the
Corporation and the Trust contained in any purchase agreement,
securities sales agreement or other similar agreement cease to be true
and correct in all material respects, (v) of the happening of any
event or the failure of any event to occur or the discovery of any
facts or otherwise, during the Effectiveness Period which makes any
statement made in such Registration Statement or the related
Prospectus untrue in any material respect or which causes such
Registration Statement or Prospectus to omit to state a material fact
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, and (vi) the
Corporation and the Trust's reasonable determination that a
post-effective amendment to the Registration Statement would be
appropriate;
(f) make every reasonable effort to obtain the withdrawal of any
order suspending the effectiveness of a Registration Statement at the
earliest possible moment;
(g) in the case of a Shelf Registration, furnish to each Holder
of Registrable Securities included within the coverage of such Shelf
Registration Statement, without charge, one conformed copy of each
Registration Statement relating to such Shelf Registration and any
post-effective amendment thereto (without documents incorporated
therein by reference or exhibits thereto, unless requested);
(h) in the case of a Shelf Registration, cooperate with the
selling Holders of Registrable Securities to facilitate the timely
preparation and delivery of certificates representing Registrable
Securities to be sold and not bearing any restrictive legends (other
than with respect to restrictions requiring minimum transfers in
blocks having an aggregate principal or liquidation amount, as the
case may be, of $100,000) and in such denominations (consistent with
the provisions of the Indenture and the Declaration) and registered in
such names as the selling Holders or the underwriters may reasonably
request at least two Business Days prior to the closing of any sale of
Registrable Securities pursuant to such Shelf Registration Statement;
(i) in the case of a Shelf Registration or an Exchange Offer
Registration, upon the occurrence of any circumstance contemplated by
Section 3(e)(ii), 3(e)(iii), 3(e)(v) or 3(e)(vi) hereof, use its
reasonable best efforts to prepare a supplement or post-effective
amendment to such Registration Statement or the related Prospectus or
any document incorporated therein by reference or file any other
required document so that, as thereafter delivered to the purchasers
of the Registrable Securities, such Prospectus will not contain any
untrue statement of a material fact or omit to state a material fact
necessary to make the statements therein, in the light of the
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circumstances under which they were made, not misleading; and to
notify each Holder to suspend use of the Prospectus as promptly as
practicable after the occurrence of such an event, and each Holder
hereby agrees to suspend use of the Prospectus until the Corporation
has amended or supplemented the Prospectus to correct such
misstatement or omission;
(j) obtain a CUSIP number for all Exchange Capital Securities
and the Capital Securities (and if the Trust has made a distribution
of the Subordinated Debentures to the Holders of the Capital
Securities, the Subordinated Debentures or the Exchange Debentures) as
the case may be, not later than the effective date of a Registration
Statement, and provide the Trustee with printed certificates for the
Exchange Securities or the Registrable Securities, as the case may be,
in a form eligible for deposit with the Depositary;
(k) cause the Indenture, the Declaration, the Guarantee and the
Exchange Guarantee to be qualified under the Trust Indenture Act of
1939 (the "TIA") in connection with the registration of the Exchange
Securities or Registrable Securities, as the case may be, and effect
such changes to such documents as may be required for them to be so
qualified in accordance with the terms of the TIA and execute, and use
its best efforts to cause the relevant trustee to execute, all
documents as may be required to effect such changes, and all other
forms and documents required to be filed with the SEC to enable such
documents to be so qualified in a timely manner;
(l) in the case of a Shelf Registration, enter into such
agreements (including underwriting agreements) as are customary in
underwritten offerings and take all such other appropriate actions in
connection therewith as are reasonably requested by the holders of at
least 25% in aggregate principal or liquidation amount, as the case
may be, of the Registrable Securities in order to expedite or
facilitate the registration or the disposition of the Registrable
Securities;
(m) in the case of a Shelf Registration, whether or not an
underwriting agreement is entered into and whether or not the
registration is an underwritten registration, if requested by (x) the
Initial Purchaser, in the case where such Initial Purchaser holds
Securities acquired by it as part of its initial allotment and (y)
Holders of at least 25% in aggregate principal or liquidation amount,
as the case may be, of the Registrable Securities covered thereby:
(i) make such representations and warranties to Holders of such
Registrable Securities and the underwriters (if any), with respect to
the business of the Trust, the Corporation and its subsidiaries as
then conducted and the Registration Statement, Prospectus and
documents, if any, incorporated or deemed to be incorporated by
reference therein, in each case, as are customarily made by issuers of
debt securities to underwriters in underwritten offerings, and confirm
the same if and when requested; (ii) obtain opinions of counsel to the
Corporation and the Trust and updates thereof (which may be in the
form of a reliance letter) in form and substance reasonably
satisfactory to the
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managing underwriters (if any) and the Holders of a majority in
principal amount of the Registrable Securities being sold, addressed
to each selling Holder and the underwriters (if any) covering the
matters customarily covered in opinions requested in underwritten
offerings and such other matters as may be reasonably requested by
such underwriters (it being agreed that the matters to be covered by
such opinion may be subject to customary qualifications and
exceptions); (iii) obtain "cold comfort" letters and updates thereof
in form and substance reasonably satisfactory to the managing
underwriters from the independent certified public accountants of the
Corporation and the Trust (and, if necessary, any other independent
certified public accountants of any subsidiary of the Corporation and
the Trust or of any business acquired by the Corporation and the Trust
for which financial statements and financial data are, or are required
to be, included in the Registration Statement), addressed to each of
the underwriters, such letters to be in customary form and covering
matters of the type customarily covered in "cold comfort" letters in
connection with underwritten offerings and such other matters as
reasonably requested by such underwriters in accordance with Statement
on Auditing Standards No. 72; and (iv) if an underwriting agreement is
entered into, the same shall contain indemnification provisions and
procedures no less favorable than those set forth in Section 4 hereof
(or such other provisions and procedures acceptable to Holders of a
majority in aggregate principal amount or liquidation amount, as the
case may be, of Registrable Securities covered by such Registration
Statement and the managing underwriters and agents) customary for such
agreements with respect to all parties to be indemnified pursuant to
said Section (including, without limitation, such underwriters and
selling Holders). The above shall be done at each closing under such
underwriting agreement, or as and to the extent required thereunder;
(n) if (1) a Shelf Registration is filed pursuant to
Section 2(b) or (2) a Prospectus contained in an Exchange Offer
Registration Statement filed pursuant to Section 2(a) is required to
be delivered under the Securities Act by any Participating
Broker-Dealer who seeks to sell Exchange Securities during the
Applicable Period, make reasonably available for inspection by any
selling Holder of such Registrable Securities or Participating
Broker-Dealer, as applicable, who certifies to the Corporation and the
Trust that it has a current intention to sell Registrable Securities
pursuant to the Shelf Registration, any underwriter participating in
any such disposition of Registrable Securities, if any, and any
attorney, accountant or other agent retained by any such selling
Holder or each such Participating Broker-Dealer, as the case may be,
or underwriter (collectively, the "Inspectors"), at the offices where
normally kept, during the Corporation's normal business hours, all
financial and other records, pertinent corporate documents and
properties of the Trust, the Corporation and its subsidiaries
(collectively, the "Records") as shall be reasonably necessary to
enable them to exercise any applicable due diligence responsibilities,
and cause the officers, directors and employees of the Trust, the
Corporation and its subsidiaries to supply all relevant information in
each case reasonably requested by any such Inspector in connection
with such Registration Statement. Records which the Corpo-
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ration and the Trust determine, in good faith, to be confidential and
any Records which it notifies the Inspectors are confidential shall
not be disclosed by the Inspectors unless (i) the disclosure of such
Records is necessary to avoid or correct a material misstatement or
omission in such Registration Statement, (ii) subject to the lost
sentence of this Section 3(n), the release of such Records is ordered
pursuant to a subpoena or other order from a court of competent
jurisdiction or is necessary in connection with any action, suit or
proceeding or (iii) the Information in such Records has been made
generally available to the public (other than by an Inspector or a
selling Holder in breach of its obligations hereunder). Each selling
Holder of such Registrable Securities and each such Participating
Broker-Dealer will be required to agree in writing that information
obtained by it as a result of such inspections shall be deemed
confidential and shall not be used by it as the basis for any market
transactions in the securities of the Trust or the Corporation unless
and until such is made generally available to the public through no
fault of an Inspector or a Selling Holder. Each selling Holder of
such Registrable Securities and each such Participating Broker-Dealer
will be required to further agree in writing that it will, upon
learning that disclosure of such Records is sought in a court of
competent jurisdiction, or in connection with any action, suit or
proceeding give notice to the Corporation and allow the Corporation at
its expense to undertake appropriate action to prevent disclosure of
the Records deemed confidential;
(o) comply with all applicable rules and regulations of the SEC
so long as any provision of this Agreement shall be applicable and
make generally available to its securityholders earning statements
satisfying the provisions of Section 11(a) of the Securities Act and
Rule 158 thereunder (or any similar rule promulgated under the
Securities Act) no later than 45 days after the end of any 12-month
period (or 90 days after the end of any 12-month period if such period
is a fiscal year) (i) commencing at the end of any fiscal quarter in
which Registrable Securities are sold to underwriters in a firm
commitment or best efforts underwritten offering and (ii) if not sold
to underwriters in such an offering, commencing on the first day of
the first fiscal quarter of the Corporation after the effective date
of a Registration Statement, which statements shall cover said
12-month periods;
(p) upon consummation of an Exchange Offer or a Private
Exchange, if requested by a Trustee, obtain an opinion of counsel to
the Corporation addressed to the Trustee for the benefit of all
Holders of Registrable Securities participating in the Exchange Offer
or the Private Exchange, as the case may be, substantially to the
effect that (i) the Corporation and the Trust, as the case requires,
has duly authorized, executed and delivered the Exchange Securities
and Private Exchange Securities, and (ii) each of the Exchange
Securities or the Private Exchange Securities, as the case may be,
constitutes a legal, valid and binding obligation of the Corporation
or the Trust, as the case requires, enforceable against the
Corporation or the Trust, as the case requires, in accordance with its
respective terms (in each case, with customary exceptions);
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(q) if an Exchange Offer or a Private Exchange is to be
consummated, upon delivery of the Registrable Securities by Holders to
the Corporation or the Trust, as applicable (or to such other Person
as directed by the Corporation or the Trust, respectively), in
exchange for the Exchange Securities or the Private Exchange
Securities, as the case may be, the Corporation or the Trust, as
applicable, shall mark, or cause to be marked, on such Registrable
Securities delivered by such Holders that such Registrable Securities
are being cancelled in exchange for the Exchange Securities or the
Private Exchange Securities, as the case may be; in no event shall
such Registrable Securities be marked as paid or otherwise satisfied;
(r) cooperate with each seller of Registrable Securities covered
by any Registration Statement and each underwriter, if any,
participating in the disposition of such Registrable Securities and
their respective counsel in connection with any filings required to be
made with the NASD;
(s) take all other steps necessary to effect the registration of
the Registrable Securities covered by a Registration Statement
contemplated hereby;
(t) (A) in the case of the Exchange Offer Registration
Statement (i) include in the Exchange Offer Registration Statement a
section entitled "Plan of Distribution," which section shall be
reasonably acceptable to the Initial Purchaser or another
representative of the Participating Broker-Dealers, and which shall
contain a summary statement of the positions taken or policies made by
the staff of the SEC with respect to the potential "underwriter"
status of any broker-dealer (a "Participating Broker-Dealer") that
holds Registrable Securities acquired for its own account as a result
of market-making activities or other trading activities and that will
be the beneficial owner (as defined in Rule 13d-3 under the Exchange
Act) of Exchange Securities to be received by such broker-dealer in
the Exchange Offer, whether such positions or policies have been
publicly disseminated by the staff of the SEC or such positions or
policies, in the reasonable judgment of the Initial Purchaser or such
other representative, represent the prevailing views of the staff of
the SEC, including a statement that any such broker-dealer who
receives Exchange Securities for Registrable Securities pursuant to
the Exchange Offer may be deemed a statutory underwriter and must
deliver a prospectus meeting the requirements of the Securities Act in
connection with any resale of such Exchange Securities, (ii) furnish
to each Participating Broker-Dealer who has delivered to the
Corporation the notice referred to in Section 3(e), without charge, as
many copies of each Prospectus included in the Exchange Offer
Registration Statement, including any preliminary prospectus, and any
amendment or supplement thereto, as such Participating Broker-Dealer
may reasonably request (each of the Corporation and the Trust hereby
consents to the use of the Prospectus forming part of the Exchange
Offer Registration Statement or any amendment or supplement thereto by
any Person subject to the prospectus delivery requirements of the
Securities Act, including all Participating Broker-Dealers, in
connection with the sale or transfer of the Exchange Securities
covered by the
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Prospectus or any amendment or supplement thereto), (iii) use its
reasonable best efforts to keep the Exchange Offer Registration
Statement effective and to amend and supplement the Prospectus
contained therein in order to permit such Prospectus to be lawfully
delivered by all Persons subject to the prospectus delivery
requirements of the Securities Act for such period of time as such
Persons must comply with such requirements under the Securities Act
and applicable rules and regulations in order to resell the Exchange
Securities; provided, however, that such period shall not be required
to exceed 90 days (or such longer period if extended pursuant to the
last sentence of Section 3 hereof) (the "Applicable Period"), and (iv)
include in the transmittal letter or similar documentation to be
executed by an exchange offeree in order to participate in the
Exchange Offer (x) the following provision:
"If the exchange offeree is a broker-dealer holding
Registrable Securities acquired for its own account as a
result of market-making activities or other trading
activities, it will deliver a prospectus meeting the
requirements of the Securities Act in connection with any
resale of Exchange Securities received in respect of such
Registrable Securities pursuant to the Exchange Offer";
and (y) a statement to the effect that by a broker-dealer making the
acknowledgment described in clause (x) and by delivering a Prospectus in
connection with the exchange of Registrable Securities, the broker-dealer
will not be deemed to admit that it is an underwriter within the meaning of
the Securities Act; and
(B) in the case of any Exchange Offer Registration Statement,
the Corporation and the Trust agree to deliver to the Initial
Purchaser or to another representative of the Participating
Broker-Dealers, if requested by the Initial Purchaser or such other
representative of Participating Broker-Dealers, on behalf of the
Participating Broker-Dealers upon consummation of the Exchange Offer
(i) an opinion of counsel in form and substance reasonably
satisfactory to the Initial Purchaser or such other representative of
the Participating Broker-Dealers, covering the matters customarily
covered in opinions requested in connection with Exchange Offer
Registration Statements and such other matters as may be reasonably
requested (it being agreed that the matters to be covered by such
opinion may be subject to customary qualifications and exceptions),
(ii) an officers' certificate containing certifications substantially
similar to those set forth in Section 5(f) of the Purchase Agreement
and such additional certifications as are customarily delivered in a
public offering of debt securities and (iii) as well as upon the
effectiveness of the Exchange Offer Registration Statement, a comfort
letter, in each case, in customary form if permitted by Statement on
Auditing Standards No. 72.
The Corporation or the Trust may require each seller of
Registrable Securities as to which any registration is being effected to
furnish to the Corporation or the Trust, as
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<PAGE>
applicable, such information regarding such seller as may be required by
the staff of the SEC to be included in a Registration Statement. The
Corporation or the Trust may exclude from such registration the Registrable
Securities of any seller who fails to furnish such information within a
reasonable time after receiving such request. The Corporation shall have
no obligation to register under the Securities Act the Registrable
Securities of a seller who so fails to furnish such information.
In the case of a Shelf Registration Statement, or if
Participating Broker-Dealers who have notified the Corporation and the
Trust that they will be utilizing the Prospectus contained in the Exchange
Offer Registration Statement as provided in Section 3(t) hereof, are
seeking to sell Exchange Securities and are required to deliver
Prospectuses, each Holder agrees that, upon receipt of any notice from the
Corporation or the Trust of the happening of any event of the kind
described in Section 3(e)(ii), 3(e)(iii), 3(e)(v) or 3(e)(vi) hereof, such
Holder will forthwith discontinue disposition of Registrable Securities
pursuant to a Registration Statement until such Holder's receipt of the
copies of the supplemented or amended Prospectus contemplated by Section
3(i) hereof or until it is advised in writing (the "Advice") by the
Corporation and the Trust that the use of the applicable Prospectus may be
resumed, and, if so directed by the Corporation and the Trust, such Holder
will deliver to the Corporation or the Trust (at the Corporation's or the
Trust's expense, as the case requires) all copies in such Holder's
possession, other than permanent file copies then in such Holder's
possession, of the Prospectus covering such Registrable Securities or
Exchange Securities, as the case may be, current at the time of receipt of
such notice. If the Corporation or the Trust shall give any such notice to
suspend the disposition of Registrable Securities or Exchange Securities,
as the case may be, pursuant to a Registration Statement, the Corporation
and the Trust shall use their reasonable best efforts to file and have
declared effective (if an amendment) as soon as practicable an amendment or
supplement to the Registration Statement and shall extend the period during
which such Registration Statement is required to be maintained effective
and usable for resales pursuant to this Agreement by the number of days in
the period from and including the date of the giving of such notice to and
including the date when the Corporation and the Trust shall have made
available to the Holders (x) copies of the supplemented or amended
Prospectus necessary to resume such dispositions or (y) the Advice.
4. Indemnification and Contribution. (a) In connection with any
Registration Statement, the Corporation and the Trust shall, jointly and
severally, indemnify and hold harmless the Initial Purchaser, each Holder,
each underwriter who participates in an offering of the Registrable
Securities, each Participating Broker-Dealer, each Person, if any, who
controls any of such parties within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act and each of their
respective partners, directors, officers, employees and agents, as follows:
(i) from and against any and all loss, liability, claim, damage
and expense whatsoever, joint or several, as incurred, arising out of
any untrue statement or alleged untrue statement of a material fact
contained in any Registration Statement
22
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(or any amendment thereto), covering Registrable Securities or
Exchange Securities, including all documents incorporated therein by
reference, or the omission or alleged omission therefrom of a material
fact required to be stated therein or necessary to make the statements
therein not misleading or arising out of any untrue statement or
alleged untrue statement of a material fact contained in any
Prospectus (or any amendment or supplement thereto) or the omission or
alleged omission therefrom of a material fact necessary in order to
make the statements therein, in the light of the circumstances under
which they were made, not misleading;
(ii) from and against any and all loss, liability, claim, damage
and expense whatsoever, joint or several, as incurred, to the extent
of the aggregate amount paid in settlement of any litigation, or any
investigation or proceeding by any court or governmental agency or
body, commenced or threatened, or of any claim whatsoever based upon
any such untrue statement or omission, or any such alleged untrue
statement or omission, if such settlement is effected with the prior
written consent of the Corporation; and
(iii) from and against any and all expenses whatsoever, as
incurred (including reasonable fees and disbursements of counsel
chosen by such Holder, such Participating Broker-Dealer, or any
underwriter (except to the extent otherwise expressly provided in
Section 4(c) hereof)), reasonably incurred in investigating, preparing
or defending against any litigation, or any investigation or
proceeding by any court or governmental agency or body, commenced or
threatened, or any claim whatsoever based upon any such untrue
statement or omission, or any such alleged untrue statement or
omission, to the extent that any such expense is not paid under
subparagraph (i) or (ii) of this Section 4(a);
provided, however, that (i) this indemnity does not apply to any loss,
liability, claim, damage or expense to the extent arising out of an untrue
statement or omission or alleged untrue statement or omission made in
reliance upon and in conformity with written information furnished in
writing to the Corporation or the Trust by such Holder, such Participating
Broker-Dealer or any underwriter with respect to such Holder, Participating
Broker-Dealer or any underwriter, as the case may be, expressly for use in
a Registration Statement (or any amendment thereto) or any Prospectus (or
any amendment or supplement thereto) and (ii) the Corporation and the Trust
shall not be liable to any such Holder, Participating Broker-Dealer, any
underwriter or controlling person, with respect to any untrue statement or
alleged untrue statement or omission or alleged omission in any preliminary
Prospectus to the extent that any such loss, liability, claim, damage or
expense of any Holder, Participating Broker-Dealer, any underwriter or
controlling person results from the fact that such Holder, any underwriter
or Participating Broker-Dealer sold Securities to a person to whom there
was not sent or given, at or prior to the written confirmation of such
sale, a copy of the final Prospectus as then amended or supplemented if the
Corporation had previously furnished copies thereof to such Holder,
underwriter or Participating Broker-Dealer and the loss, liability, claim,
damage or expense of such Holder, underwriter, Participating Broker-
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Dealer or controlling person results from an untrue statement or omission
of a material fact contained in the preliminary Prospectus which was
corrected in the final Prospectus. Any amounts advanced by the Corporation
or the Trust to an indemnified party pursuant to this Section 4 as a result
of such losses shall be returned to the Corporation or the Trust if it
shall be finally determined by such a court in a judgment not subject to
appeal or final review that such indemnified party was not entitled to
indemnification by the Corporation or the Trust.
(b) Each Holder agrees, severally and not jointly, to indemnify
and hold harmless the Corporation, the Trust, any underwriter and the other
selling Holders and each of their respective directors, officers (including
each officer of the Corporation and the Trust who signed the Registration
Statement), employees and agents and each Person, if any, who controls the
Corporation, the Trust, any underwriter or any other selling Holder within
the meaning of Section 15 of the Securities Act or Section 20 of the
Exchange Act, from and against any and all loss, liability, claim, damage
and expense whatsoever described in the indemnity contained in Section 4(a)
hereof, as incurred, but only with respect to untrue statements or
omissions, or alleged untrue statements or omissions, made in a
Registration Statement (or any amendment thereto) or any Prospectus (or any
amendment or supplement thereto) in reliance upon and in conformity with
written information furnished to the Corporation or the Trust by such
selling Holder with respect to such Holder expressly for use in such
Registration Statement (or any amendment thereto), or any such Prospectus
(or any amendment or supplement thereto); provided, however, that in the
case of a Shelf Registration Statement, no such Holder shall be liable for
any claims hereunder in excess of the amount of net proceeds received by
such Holder from the sale of Registrable Securities pursuant to such Shelf
Registration Statement.
(c) Each indemnified party shall give prompt notice to each
indemnifying party of any action commenced against it in respect of which
indemnity may be sought hereunder, enclosing a copy of all papers properly
served on such indemnified party, but failure to so notify an indemnifying
party shall not relieve such indemnifying party from any liability which it
may have under this Section 4, except to the extent that it is materially
prejudiced by such failure. An indemnifying party may participate at its
own expense in the defense of such action, or, if it so elects within a
reasonable time after receipt of such notice, assume the defense of any
suit brought to enforce any such claim; but if it so elects to assume the
defense, such defense shall be conducted by counsel chosen by it and
approved by the indemnified party or parties which approval shall not be
unreasonably withheld. In the event that an indemnifying party elects to
assume the defense of any such suit and retain such counsel, the
indemnified party or parties shall bear the fees and expenses of any
additional counsel thereafter retained by such indemnified party or
parties; provided, however, that the indemnified party or parties shall
have the right to employ counsel (in addition to local counsel) to
represent the indemnified party or parties who may be subject to liability
arising out of any action in respect of which indemnity may be sought
against the indemnifying party if, in the reasonable judgment of counsel
for the indemnified party or parties, there may be legal defenses available
to such indemnified party or parties which are
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<PAGE>
different from or in addition to those available to the indemnifying party,
in which event the fees and expenses of appropriate separate counsel shall
be borne by the indemnifying party. In no event shall the indemnifying
parties be liable for the fees and expenses of more than one counsel (in
addition to local counsel), separate from its own counsel, for all
indemnified parties in connection with any one action or separate but
similar or related actions in the same jurisdiction arising out of the same
general allegations or circumstances. No indemnifying party shall, without
the prior written consent of the indemnified parties, settle or compromise
or consent to the entry of any judgment with respect to any litigation, or
any investigation or proceeding by any governmental agency or body,
commenced or threatened, or any claim whatsoever in respect of which
indemnification or contribution could be sought under this Section 4
(whether or not the indemnified parties are actual or potential parties
thereto), unless such settlement, compromise or consent (i) includes an
unconditional written release in form and substance satisfactory to the
indemnified parties of each indemnified party from all liability arising
out of such litigation, investigation, proceeding or claim and (ii) does
not include a statement as to or an admission of fault, culpability or a
failure to act by or on behalf of any indemnified party.
(d) In order to provide for just and equitable contribution in
circumstances under which any of the indemnity provisions set forth in this
Section 4 is for any reason held to be unavailable to the indemnified
parties although applicable in accordance with its terms, the Corporation,
the Trust, and the Holders shall contribute to the aggregate losses,
liabilities, claims, damages and expenses of the nature contemplated by
such indemnity agreement incurred by the Corporation, the Trust, and the
Holders, as incurred; provided that no Person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the 1933 Act)
shall be entitled to contribution from any Person that was not guilty of
such fraudulent misrepresentation. As between the Corporation, the Trust,
and the Holders, such parties shall contribute to such aggregate losses,
liabilities, claims, damages and expenses of the nature contemplated by
such indemnity agreement in such proportion as shall be appropriate to
reflect the relative fault of the Corporation and Trust, on the one hand,
and the Holders, on the other hand, with respect to the statements or
omissions which resulted in such loss, liability, claim, damage or expense,
or action in respect thereof, as well as any other relevant equitable
considerations. The relative fault of the Corporation and the Trust, on
the one hand, and of the Holders, on the other hand, shall be determined by
reference to, among other things, whether the untrue or alleged untrue
statement of a material fact or the omission or alleged omission to state a
material fact relates to information supplied by the Corporation or the
Trust, on the one hand, or by or on behalf of the Holders, on the other,
and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission. The
Corporation, the Trust and the Holders of the Registrable Securities agree
that it would not be just and equitable if contribution pursuant to this
Section 4 were to be determined by pro rata allocation or by any other
method of allocation that does not take into account the relevant equitable
considerations. For purposes of this Section 4, each Affiliate of a
Holder, and each director, officer, employee, agent and Person, if any, who
controls a Holder or such Affiliate within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act shall have
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the same rights to contribution as such Holder, and each director of each
of the Corporation or the Trust, each officer of each of the Corporation or
the Trust who signed the Registration Statement, and each Person, if any,
who controls each of the Corporation and the Trust within the meaning of
Section 15 of the Securities Act or Section 20 of the Exchange Act shall
have the same rights to contribution as each of the Corporation or the
Trust.
5. Participation in an Underwritten Registration. No Holder
may participate in an underwritten registration hereunder unless such
Holder (a) agrees to sell such Holder's Registrable Securities on the basis
provided in the underwriting arrangement approved by the Persons entitled
hereunder to approve such arrangements and (b) completes and executes all
reasonable questionnaires, powers of attorney, indemnities, underwriting
agreements, lock-up letters and other documents reasonably required under
the terms of such underwriting arrangements.
6. Selection of Underwriters. The Holders of Registrable
Securities covered by the Shelf Registration Statement who desire to do so
may sell the securities covered by such Shelf Registration in an
underwritten offering, subject to the provisions of section 3(l) hereof. In
any such underwritten offering, the underwriter or underwriters and manager
or managers that will administer the offering will be selected by the
Holders of a majority in aggregate principal amount or liquidation amount,
as applicable, of the Registrable Securities included in such offering;
provided, however, that such underwriters and managers must be reasonably
satisfactory to the Corporation and the Trust.
7. Miscellaneous.
(a) Rule 144 and Rule 144A. For so long as the Corporation or
the Trust is subject to the reporting requirements of Section 13 or 15 of
the Exchange Act and any Registrable Securities remain outstanding, each of
the Corporation and the Trust, as the case may be, will file the reports
required to be filed by it under the Securities Act and Section 13(a) or
15(d) of the Exchange Act and the rules and regulations adopted by the SEC
thereunder, provided that if it ceases to be so required to file such
reports, it will, upon the request of any Holder of Registrable Securities
(a) make publicly available such information as is necessary to permit
sales of its securities pursuant to Rule 144 under the Securities Act, (b)
deliver such information to a prospective purchaser as is necessary to
permit sales of its securities pursuant to Rule 144A under the Securities
Act, and (c) take such further action that is reasonable in the
circumstances, in each case, to the extent required from time to time to
enable such Holder to sell its Registrable Securities without registration
under the Securities Act within the limitation of the exemptions provided
by (i) Rule 144 under the Securities Act, as such rule may be amended from
time to time, (ii) Rule 144A under the Securities Act, as such rule may be
amended from time to time, or (iii) any similar rules or regulations
hereafter adopted by the SEC. Upon the request of any Holder of
Registrable Securities, the Corporation and the Trust will deliver to such
Holder a written statement as to whether it has complied with such
requirements.
26
<PAGE>
(b) No Inconsistent Agreements. The Corporation or the Trust
has not entered into, nor will the Corporation or the Trust on or after the
date of this Agreement enter into, any agreement which is inconsistent with
the rights granted to the Holders of Registrable Securities in this
Agreement or otherwise conflicts with the provisions hereof. The rights
granted to the Holders hereunder do not in any way conflict with and are
not inconsistent with the rights granted to the holders of the
Corporation's or the Trust's other issued and outstanding securities under
any such agreements.
(c) Amendments and Waivers. The provisions of this Agreement,
including the provisions of this sentence, may not be amended, modified or
supplemented, and waivers or consents to departures from the provisions
hereof may not be given, unless the Corporation and the Trust has obtained
the written consent of Holders of at least a majority in aggregate
principal amount of the outstanding Registrable Securities affected by such
amendment, modification, supplement, waiver or departure; provided that no
amendment, modification or supplement or waiver or consent to the departure
with respect to the provisions of Section 4 hereof shall be effective as
against any Holder of Registrable Securities unless consented to in writing
by such Holder of Registrable Securities. Notwithstanding the foregoing
sentence, (i) this Agreement may be amended, without the consent of any
Holder of Registrable Securities, by written agreement signed by the
Corporation, the Trust and the Initial Purchaser, to cure any ambiguity,
correct or supplement any provision of this Agreement that may be
inconsistent with any other provision of this Agreement or to make any
other provisions with respect to matters or questions arising under this
Agreement which shall not be inconsistent with other provisions of this
Agreement, (ii) this Agreement may be amended, modified or supplemented,
and waivers and consents to departures from the provisions hereof may be
given by written agreement signed by the Corporation, the Trust and the
Initial Purchaser to the extent that any such amendment, modification,
supplement, waiver or consent is, in their reasonable judgment, necessary
or appropriate to comply with applicable law (including any interpretation
of the Staff of the SEC) or any change therein and (iii) to the extent any
provision of this Agreement relates to the Initial Purchaser, such
provision may be amended, modified or supplemented, and waivers or consents
to departures from such provisions may be given, by written agreement
signed by the Initial Purchaser, the Corporation and the Trust.
(d) Notices. All notices and other communications provided for
or permitted hereunder shall be made in writing by hand-delivery,
registered first-class mail, telex, telecopier, or any courier guaranteeing
overnight delivery (i) if to a Holder, at the most current address given by
such Holder to the Corporation or the Trust by means of a notice given in
accordance with the provisions of this Section 7(d), which address
initially is, with respect to the Initial Purchaser, the address set forth
in the Purchase Agreement; and (ii) if to the Corporation or the Trust,
initially at the Corporation's address set forth in the Purchase Agreement
and thereafter at such other address, notice of which is given in
accordance with the provisions of this Section 7(d).
27
<PAGE>
All such notices and communications shall be deemed to have been
duly given: at the time delivered by hand, if personally delivered; five
Business Days after being deposited in the mail, postage prepaid, if
mailed; when answered back, if telexed; when receipt is acknowledged, if
telecopied; and on the next Business Day, if timely delivered to an air
courier guaranteeing overnight delivery.
Copies of all such notices, demands, or other communications
shall be concurrently delivered by the Person giving the same to the
Trustee, at the address specified in the Indenture.
(e) Successors and Assigns. This Agreement shall inure to the
benefit of and be binding upon the successors, assigns and transferees of
the Initial Purchaser, including, without limitation and without the need
for an express assignment, subsequent Holders; provided, however, that
nothing herein shall be deemed to permit any assignment, transfer or other
disposition of Registrable Securities in violation of the terms of the
Purchase Agreement or the Indenture. If any transferee of any Holder shall
acquire Registrable Securities, in any manner, whether by operation of law
or otherwise, such Registrable Securities shall be held subject to all of
the terms of this Agreement, and by taking and holding such Registrable
Securities, such Person shall be conclusively deemed to have agreed to be
bound by and to perform all of the terms and provisions of this Agreement
and such Person shall be entitled to receive the benefits hereof.
(f) Third Party Beneficiary. The Initial Purchaser and any
Participating Broker-Dealer shall be a third party beneficiary of the
agreements made hereunder between the Corporation and the Trust, on the one
hand, and the Holders, on the other hand, and shall have the right to
enforce such agreements directly to the extent it deems such enforcement
necessary or advisable to protect its rights or the rights of Holders
hereunder.
(g) Counterparts. This Agreement may be executed in any number
of counterparts and by the parties hereto in separate counterparts, each of
which when so executed shall be deemed to be an original and all of which
taken together shall constitute one and the same agreement.
(h) Headings. The headings in this Agreement are for
convenience of reference only and shall not limit or otherwise affect the
meaning hereof.
(i) GOVERNING LAW. THIS AGREEMENT SHALL BE DEEMED TO HAVE BEEN
MADE IN THE STATE OF NEW YORK. THE VALIDITY AND INTERPRETATION OF THIS
AGREEMENT, AND THE TERMS AND CONDITIONS SET FORTH HEREIN, SHALL BE GOVERNED
BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK
WITHOUT GIVING EFFECT TO ANY PROVISIONS RELATING TO CONFLICTS OF LAWS.
EACH OF THE PARTIES HERETO AGREES TO SUBMIT TO THE JURISDICTION OF THE
COURTS OF THE STATE OF NEW YORK IN ANY ACTION OR PROCEEDING
28
<PAGE>
ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OF THE MATTERS
CONTEMPLATED HEREBY, IRREVOCABLY WAIVES ANY DEFENSE OF LACK OF PERSONAL
JURISDICTION AND IRREVOCABLY AGREES THAT ALL CLAIMS IN RESPECT OF ANY SUIT,
ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN ANY SUCH COURT. THE
CORPORATION, ON BEHALF OF ITSELF AND THE SUBSIDIARIES (INCLUDING, WITHOUT
LIMITATION, THE TRUST), IRREVOCABLY WAIVES, TO THE FULLEST EXTENT IT MAY
EFFECTIVELY DO SO UNDER APPLICABLE LAW, ANY OBJECTION WHICH IT MAY NOW OR
HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY SUCH SUIT, ACTION OR
PROCEEDING BROUGHT IN ANY SUCH COURT AND ANY CLAIM THAT ANY SUCH SUIT,
ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN
INCONVENIENT FORUM.
29
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Agreement as
of the date first written above.
FIRST KEYSTONE FINANCIAL, INC.
By: /s/ Thomas M. Kelly
----------------------------------
Name: Thomas M. Kelly
Title: Executive Vice President
and Chief Financial Officer
FIRST KEYSTONE CAPITAL TRUST I
By: /s/ Donald S. Guthrie
----------------------------------
Name: Donald S. Guthrie
Title: Administrative Trustee
By: /s/ Thomas M. Kelly
-----------------------------------
Name: Thomas M. Kelly
Title: Administrative Trustee
By: /s/ Donald A. Purdy
----------------------------------
Name: Donald A. Purdy
Title: Administrative Trustee
Confirmed and accepted as of
the date first above written:
SANDLER O'NEILL & PARTNERS, L.P.
By: SANDLER O'NEILL & PARTNERS CORP.,
the sole general partner
By: /s/ Thomas W. Killian
---------------------------------------
Name: Thomas W. Killian
Title: Vice President
30
<PAGE>
EXHIBIT 5.1
Law Offices
ELIAS, MATZ, TIERNAN & HERRICK L.L.P.
12th Floor
734 15th Street, N.W.
Washington, D.C. 20005
Telephone (202) 347-0300
January 15, 1998
Board of Directors
First Keystone Financial, Inc.
22 West State Street
Media, Pennsylvania 19063
Ladies and Gentlemen:
In connection with the registration under the Securities Act of 1933, as
amended (the "Act"), of $16,200,000 aggregate principal amount of Junior
Subordinated Deferrable Interest Debentures (the "Debt Securities") of First
Keystone Financial, Inc., a Pennsylvania corporation (the "Corporation"),
$16,200,000 aggregate liquidation amount of Capital Securities (the "Capital
Securities") of First Keystone Capital Trust I, a business trust created
under the laws of the State of Delaware (the "Issuer"), and the Guarantee
with respect to the Capital Securities (the "Guarantee") to be executed and
delivered by the Corporation for the benefit of the holders from time to time
of the Capital Securities, we, as your counsel, have examined such corporate
records, certificates and other documents, and such questions of law, as we
have considered necessary or appropriate for the purposes of this opinion.
Upon the basis of such examination, we advise you that, when:
(i) the Registration Statement relating to the Debt Securities,
the Capital Securities and the Guarantee has become effective under the
Act;
(ii) the Guarantee Agreement relating to the Guarantee with respect
to the Capital Securities of the Issuer has been duly executed and
delivered;
(iii) the Debt Securities have been duly executed and authenticated
in accordance with the Indenture and issued and delivered as
contemplated in the Registration Statement; and
(iv) the Capital Securities have been duly executed in accordance
with the Amended and Restated Declaration of Trust of the Issuer and
issued and delivered as contemplated in the Registration Statement,
<PAGE>
Board of Directors
January 15, 1998
Page 2
the Debt Securities and the Guarantee relating to the Capital Securities of
the Issuer will constitute valid and legally binding obligations of the
Corporation, 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.
We understand that you have received an opinion regarding the Capital
Securities from Richards, Layton & Finger, P.A., special Delaware counsel for
the Corporation and the Issuer. We are expressing no opinion with respect to
the matters contained in such opinion.
Also, we have relied as to certain matters on information obtained from
public officials, officers of the Corporation and other sources believed by
us to be responsible.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the references to us under the heading
"Validity of New Securities" in the Prospectus. In giving such consent, we
do not thereby admit that we are in the category of persons whose consent is
required under Section 7 of the Act.
Very truly yours,
ELIAS, MATZ, TIERNAN & HERRICK L.L.P
By: /s/Philip Ross Bevan
--------------------------------
Philip Ross Bevan, a Partner
<PAGE>
EXHIBIT 5.2
[Letterhead of Richards, Layton & Finger]
January 15, 1998
First Keystone Capital Trust I
c/o First Keystone Financial, Inc.
22 West State Street
Media, Pennsylvania 19063
Re: First Keystone Capital Trust I
------------------------------
Ladies and Gentlemen:
We have acted as special Delaware counsel for First Keystone Financial,
Inc., a Pennsylvania corporation (the "Company"), and First Keystone Capital
Trust I, a Delaware business trust (the "Trust"), in connection with the
matters set forth herein. At your request, this opinion is being furnished
to you.
For purposes of giving the opinions hereinafter set forth, our
examination of documents has been limited to the examination of originals or
copies of the following:
(a) The Certificate of Trust of the Trust, dated as of August 20, 1997
(the "Certificate"), as filed in the office of the Secretary of State of the
State of Delaware (the "Secretary of State") on August 20, 1997;
(b) The Declaration of Trust of the Trust, dated as of August 20, 1997
among the Company and the trustees of the Trust named therein
<PAGE>
First Keystone Capital Trust I
January 15, 1998
Page 2
(c) The Amended and Restated Declaration of Trust of the Trust, dated
as of August 26, 1997 (including Annex I and Exhibits A-1 and A-2) (the
"Declaration"), among the Company, as sponsor, the trustees of the Trust
named therein and the holders, from time to time, of undivided beneficial
interests in the assets of the Trust;
(d) The Registration Statement on Form S-4 (the "Registration
Statement"), including a preliminary prospectus (the "Prospectus") relating
to the 9.70% Series B Capital Securities of the Trust, representing undivided
beneficial interests in the assets of the Trust (each, a "Capital Security"
and collectively, the "Capital Securities"), as proposed to be filed by the
Company and the Trust with the Securities and Exchange Commission on or about
January 15, 1998; and
(e) A Certificate of Good Standing for the Trust, dated January 15,
1998, obtained from the Secretary of State.
Initially capitalized terms used herein and not otherwise defined are
used as defined in the Declaration.
For purposes of this opinion, we have not reviewed any documents other
than the documents listed in paragraphs (a) through (e) above. In
particular, we have not reviewed any document (other than the documents
listed in paragraphs (a) through (e) above) that is referred to in or
incorporated by reference into the documents reviewed by us. We have assumed
that there exists no provision in any document that we have not reviewed that
is inconsistent with the opinions stated herein. We have conducted no
independent factual investigation of our own but rather have relied solely
upon the foregoing documents, the statements and information set forth
therein and the additional matters recited or assumed herein, all of which we
have assumed to be true, complete and accurate in all material respects.
With respect to all documents examined by us, we have assumed (i) the
authenticity of all documents submitted to us as authentic originals, (ii)
the conformity with the originals of all documents submitted to us as copies
or forms, and (iii) the genuineness of all signatures.
For purposes of this opinion, we have assumed (i) that the Declaration
constitutes the entire agreement among the parties thereto with respect to
the subject matter thereof, including with respect to the creation, operation
and termination of the Trust, and that the Declaration and the Certificate
are in full force and effect and have not been amended, (ii) except to the
extent provided in paragraph 1 below, the due creation or due organization or
due formation, as the case may be, and valid existence in good standing of
each party to the documents examined by us under the laws of the jurisdiction
<PAGE>
First Keystone Capital Trust I
January 15, 1998
Page 3
governing its creation, organization or formation, (iii) the legal capacity
of natural persons who are parties to the documents examined by us, (iv) that
each of the parties to the documents examined by us has the power and
authority to execute and deliver, and to perform its obligations under, such
documents, (v) the due authorization, execution and delivery by all parties
thereto of all documents examined by us, (vi) the receipt by each Person to
whom a Capital Security is to be issued by the Trust (collectively, the
"Capital Security Holders") of a Certificate Evidencing Capital Securities of
the Trust and the consideration for the Capital Security acquired by it, in
accordance with the Declaration and the Registration Statement, and (vii)
that the Capital Securities are issued to the Capital Security Holders in
accordance with the Declaration and the Registration Statement. We have not
participated in the preparation of the Registration Statement and assume no
responsibility for its contents.
This opinion is limited to the laws of the State of Delaware (excluding
the securities laws of the State of Delaware), and we have not considered and
express no opinion on the laws of any other jurisdiction, including federal
laws and rules and regulations relating thereto. Our opinions are rendered
only with respect to Delaware laws and rules, regulations and orders
thereunder which are currently in effect.
Based upon the foregoing, and upon our examination of such questions of
law and statutes of the State of Delaware as we have considered necessary or
appropriate, and subject to the assumptions, qualifications, limitations and
exceptions set forth herein, we are of the opinion that:
1. The Trust has been duly created and is validly existing in good
standing as business trust under the Business Trust Act.
2. The Capital Securities will represent valid and, subject to the
qualifications set forth in paragraph 3 below, fully paid and nonassessable
undivided beneficial interests in the assets of the Trust.
3. The Capital Security Holders, as beneficial owners of the Trust,
will be entitled to the same limitation of personal liability extended to
stockholders of private corporations for profit organized under the General
Corporation Law of the State of Delaware. We note that Capital Security
Holders may be obligated to make payments under the Declaration.
We consent to the filing of this opinion with the Securities and
Exchange Commission as an exhibit to the Registration Statement. In
addition, we hereby consent to the use of our name under the heading
"Validity of New Securities" in the Prospectus. In giving the foregoing
consents, we do not thereby admit that we come within the category
<PAGE>
First Keystone Capital Trust I
January 15, 1998
Page 4
of Persons whose consent is required under Section 7 of the Securities Act of
1933, as amended, or the rules and regulations of the Securities and Exchange
Commission thereunder. Except as stated above, without our prior written
consent, this opinion may not be furnished or quoted to, or relied upon by,
any other Person for any purpose.
Very truly yours,
/s/ Richards, Layton & Finger
BJK/BJ/bj
<PAGE>
EXHIBIT 8
Law Offices
ELIAS, MATZ, TIERNAN & HERRICK L.L.P.
12th Floor
734 15th Street, N.W.
Washington, D.C. 20005
Telephone (202) 347-0300
January 15, 1998
Board of Directors
First Keystone Financial, Inc.
22 West State Street
Media, Pennsylvania 19063
Ladies and Gentlemen:
As special federal tax counsel to First Keystone Capital Trust I (the
"Issuer") and First Keystone Financial, Inc. in connection with the exchange
offer by the Issuer of $16,200,000 of its 9.70% Capital Securities pursuant to
the prospectus (the "Prospectus") contained in the Registration Statement for
the Exchange Offer, and assuming the operative documents described in the
Prospectus will be performed in accordance with the terms described therein, we
hereby confirm to you our opinion as set forth under the heading "Certain
Federal Income Tax Considerations" in the Prospectus, subject to the limitations
set forth therein.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the references to us under the heading "Certain
Federal Income Tax Consequences" in the Prospectus. In giving such consent, we
do not thereby admit that we are in the category of persons whose consent is
required under Section 7 of the Act.
Very truly yours,
ELIAS, MATZ, TIERNAN & HERRICK L.L.P
By: /s/Philip Ross Bevan
------------------------------
Philip Ross Bevan, a Partner
<PAGE>
EXHIBIT 12.1
COMPUTATION OF CONSOLIDATED RATIO OF EARNINGS TO FIXED CHARGES
(Excluding Interest on Deposits)
The Corporation's ratios of earnings to fixed charges (excluding interest
on deposits) for the periods indicated were as follows:
<TABLE>
<CAPTION>
YEAR ENDED SEPTEMBER 30,
-----------------------------------------------------
<S> <C> <C> <C> <C> <C>
1997 1996 1995 1994 1993
--------- --------- --------- --------- ---------
(DOLLARS IN THOUSANDS)
Net income................................................. $ 2,637 $ 885 $ 1,123 $ 416 $ 1,045
Extraordinary items, net of tax............................ -- -- -- -- 79
Cumulative effect of changes in accounting for income
taxes.................................................... -- -- -- 600 --
Income tax expense (benefit)............................... 1,664 (567) 504 (95) 127
--------- --------- --------- --------- ---------
Pretax earnings (loss)................................. $ 4,301 $ 318 $ 1,627 $ (279) $ 1,093
--------- --------- --------- --------- ---------
--------- --------- --------- --------- ---------
Fixed charges:
Interest on borrowed funds................................. $ 3,457 $ 1,569 $ 1,035 $ 41 $ 15
--------- --------- --------- --------- ---------
Total fixed charges.................................... $ 3,457 $ 1,569 $ 1,035 $ 41 $ 15
--------- --------- --------- --------- ---------
--------- --------- --------- --------- ---------
Earnings (for ratio calculation)........................... $ 16,940 $ 11,250 $ 12,394 $ 8,874 $ 11,141
--------- --------- --------- --------- ---------
--------- --------- --------- --------- ---------
Ratio of earnings to fixed charges......................... 4.90x 7.17x 11.97x 216.44x 742.73x
--------- --------- --------- --------- ---------
--------- --------- --------- --------- ---------
</TABLE>
For purposes of computing the consolidated ratio of earnings to fixed
charges, "earnings" represent net income (loss) before extraordinary items and
cumulative effect of changes in accounting principles plus applicable income
taxes and fixed charges. Fixed charges, excluding interest on deposits, include
gross interest expense (other than on deposits). Fixed charges, including gross
interest on deposits, include all interest expense.
<PAGE>
EXHIBIT 12.2
COMPUTATION OF CONSOLIDATED RATIO OF EARNINGS TO FIXED CHARGES
(Including Interest on Deposits)
The Corporation's ratios of earnings to fixed charges (including interest on
deposits) for the periods indicated were as follows:
<TABLE>
<CAPTION>
YEAR ENDED SEPTEMBER 30,
-----------------------------------------------------
<S> <C> <C> <C> <C> <C>
1997 1996 1995 1994 1993
--------- --------- --------- --------- ---------
(DOLLARS IN THOUSANDS)
Net income.................................................. $ 2,637 $ 885 $ 1,123 $ 416 $ 1,045
Extraordinary items, net of tax............................. -- -- -- -- 79
Cumulative effect of changes in accounting for income
taxes..................................................... -- -- -- 600 --
Income tax expense (benefit)................................ 1,664 (567) 504 (95) 127
--------- --------- --------- --------- ---------
Pretax earnings (loss).................................... $ 4,301 $ 318 $ 1,627 $ (279) $ 1,093
--------- --------- --------- --------- ---------
--------- --------- --------- --------- ---------
Fixed charges:
Interest on Deposits........................................ $ 9,182 $ 9,363 $ 9,732 $ 9,112 $ 10,033
Interest on borrowed funds.................................. 3,457 1,569 1,035 41 15
--------- --------- --------- --------- ---------
Total fixed charges....................................... $ 12,639 $ 10,932 $ 10,767 $ 9,153 $ 10,048
--------- --------- --------- --------- ---------
--------- --------- --------- --------- ---------
Earnings (for ratio calculation)............................ $ 16,940 $ 11,250 $ 12,394 $ 8,874 11,141
--------- --------- --------- --------- ---------
--------- --------- --------- --------- ---------
Ratio of earnings to fixed charges.......................... 1.34x 1.03x 1.15x 0.97x 1.11x
--------- --------- --------- --------- ---------
--------- --------- --------- --------- ---------
</TABLE>
For purposes of computing the consolidated ratio of earnings to fixed
charges, "earnings" represent net income (loss) before extraordinary items and
cumulative effect of changes in accounting principles plus applicable income
taxes and fixed charges. Fixed charges, excluding interest on deposits, include
gross interest expense (other than on deposits). Fixed charges, including gross
interest on deposits, include all interest expense.
<PAGE>
EXHIBIT 23.1
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration
Statement of First Keystone Financial, Inc. on Form S-4 of our report dated
November 7, 1997, incorporated by reference in the Annual Report on Form
10-KSB of First Keystone Financial, Inc. for the year ended September 30,
1997 and to the reference to us under the heading "Experts" in the
Prospectus, which is part of this Registration Statement.
/s/ DELOITTE & TOUCHE LLP
Philadelphia, Pennsylvania
January 15, 1998
<PAGE>
Exhibit 25.1
- -----------------------------------------------------------------------------
- -----------------------------------------------------------------------------
FORM T-1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE
ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(b)(2) / /
--------------------
THE BANK OF NEW YORK
(Exact name of trustee as specified in its charter)
New York 13-5160382
(State of incorporation (I.R.S. employer
if not a U.S. national bank) identification no.)
48 Wall Street, New York, N.Y. 10286
(Address of principal executive offices) (Zip code)
--------------------
FIRST KEYSTONE FINANCIAL, INC.
(Exact name of obligor as specified in its charter)
Pennsylvania 23-0469351
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
22 West State Street
Media, Pennsylvania 19063
(Address of principal executive offices) (Zip code)
--------------------
Series B Junior Subordinated Deferrable
Interest Debentures
(Title of the indenture securities)
- -----------------------------------------------------------------------------
- -----------------------------------------------------------------------------
<PAGE>
1. General information. Furnish the following information as to the Trustee:
(a) Name and address of each examining or supervising authority to which
it is subject.
Name Address
- -------------------------------------- ----------------------------
Superintendent of Banks of the State of 2 Rector Street, New York,
New York N.Y. 10006, and Albany,
N.Y. 12203
Federal Reserve Bank of New York 33 Liberty Plaza, New York,
N.Y. 10045
Federal Deposit Insurance Corporation Washington, D.C. 20429
New York Clearing House Association New York, New York 10005
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
2. Affiliations with Obligor.
If the obligor is an affiliate of the trustee, describe each such
affiliation.
None.
16. List of Exhibits.
Exhibits identified in parentheses below, on file with the Commission,
are incorporated herein by reference as an exhibit hereto, pursuant to
Rule 7a-29 under the Trust Indenture Act of 1939 (the "Act") and 17
C.F.R. 229.10(d).
1. A copy of the Organization Certificate of The Bank of New York
(formerly Irving Trust Company) as now in effect, which contains
the authority to commence business and a grant of powers to
exercise corporate trust powers. (Exhibit 1 to Amendment No. 1 to
Form T-1 filed with Registration Statement No. 33-6215, Exhibits 1a
and 1b to Form T-1 filed with Registration Statement No. 33-21672
and Exhibit 1 to Form T-1 filed with Registration Statement No.
33-29637.)
4. A copy of the existing By-laws of the Trustee. (Exhibit 4 to Form
T-1 filed with Registration Statement No. 33-31019.)
2
<PAGE>
6. The consent of the Trustee required by Section 321(b) of the Act.
(Exhibit 6 to Form T-1 filed with Registration Statement No.
33-44051.)
7. A copy of the latest report of condition of the Trustee published
pursuant to law or to the requirements of its supervising or
examining authority.
3
<PAGE>
SIGNATURE
Pursuant to the requirements of the Act, the Trustee, The Bank of New
York, a corporation organized and existing under the laws of the State of New
York, has duly caused this statement of eligibility to be signed on its
behalf by the undersigned, thereunto duly authorized, all in The City of New
York, and State of New York, on the 9th day of January, 1998.
THE BANK OF NEW YORK
By: /s/WALTER N. GITLIN
-----------------------------------
Name: WALTER N. GITLIN
Title: VICE PRESIDENT
4
<PAGE>
Exhibit 7
Consolidated Report of Condition of
THE BANK OF NEW YORK
of 48 Wall Street, New York, N.Y. 10286
And Foreign and Domestic Subsidiaries,
a member of the Federal Reserve System, at the close of business September
30, 1997, published in accordance with a call made by the Federal Reserve
Bank of this District pursuant to the provisions of the Federal Reserve Act.
Dollar Amounts
ASSETS in Thousands
Cash and balances due from depos-
itory institutions:
Noninterest-bearing balances and
currency and coin ................ $ 5,004,638
Interest-bearing balances .......... 1,271,514
Securities:
Held-to-maturity securities ........ 1,105,782
Available-for-sale securities ...... 3,164,271
Federal funds sold and Securities pur-
chased under agreements to resell... 5,723,829
Loans and lease financing
receivables:
Loans and leases, net of unearned
income ................. 34,916,196
LESS: Allowance for loan and
lease losses .............. 581,177
LESS: Allocated transfer risk
reserve........................ 429
Loans and leases, net of unearned
income, allowance, and reserve.... 34,334,590
Assets held in trading accounts ...... 2,035,284
Premises and fixed assets (including
capitalized leases) ................ 671,664
Other real estate owned .............. 13,306
Investments in unconsolidated
subsidiaries and associated
companies .......................... 210,685
Customers' liability to this bank on
acceptances outstanding ............ 1,463,446
Intangible assets .................... 753,190
Other assets ......................... 1,784,796
-----------
Total assets ......................... $57,536,995
-----------
-----------
LIABILITIES
Deposits:
In domestic offices ................ $27,270,824
Noninterest-bearing ...... 12,160,977
Interest-bearing ......... 15,109,847
In foreign offices, Edge and
Agreement subsidiaries, and IBFs ... 14,687,806
Noninterest-bearing ...... 657,479
Interest-bearing ......... 14,030,327
Federal funds purchased and Securities
sold under agreements to repurchase. 1,946,099
Demand notes issued to the U.S.
Treasury ........................... 283,793
Trading liabilities .................. 1,553,539
Other borrowed money:
With remaining maturity of one year
or less .......................... 2,245,014
With remaining maturity of more than
one year through three years...... 0
With remaining maturity of more than
three years ......................... 45,664
Bank's liability on acceptances exe-
cuted and outstanding .............. 1,473,588
Subordinated notes and debentures .... 1,018,940
Other liabilities .................... 2,193,031
------------
Total liabilities .................... 52,718,298
------------
EQUITY CAPITAL
Common stock ........................ 1,135,284
Surplus ............................. 731,319
Undivided profits and capital
reserves .......................... 2,943,008
Net unrealized holding gains
(losses) on available-for-sale
securities ........................ 25,428
Cumulative foreign currency transla-
tion adjustments .................. (16,342)
--------------
Total equity capital ................ 4,818,697
--------------
Total liabilities and equity
capital ........................... $57,536,995
--------------
--------------
I, Robert E. Keilman, Senior Vice President and Comptroller of the
above-named bank do hereby declare that this Report of Condition has been
prepared in conformance with the instructions issued by the Board of
Governors of the Federal Reserve System and is true to the best of my
knowledge and belief.
Robert E. Keilman
We, the undersigned directors, attest to the correctness of this Report
of Condition and declare that it has been examined by us and to the best of
our knowledge and belief has been prepared in conformance with the
instructions issued by the Board of Governors of the Federal Reserve System
and is true and correct.
J. Carter Bacot )
Thomas A. Renyi ) Directors
Alan R. Griffith)
<PAGE>
Exhibit 25.2
================================================================================
FORM T-1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE
ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(b)(2) |__|
______________________
THE BANK OF NEW YORK
(Exact name of trustee as specified in its charter)
New York 13-5160382
(State of incorporation (I.R.S. employer
if not a U.S. national bank) identification no.)
48 Wall Street, New York, N.Y. 10286
(Address of principal executive offices) (Zip code)
______________________
FIRST KEYSTONE CAPITAL TRUST I
(Exact name of obligor as specified in its charter)
Delaware Applied For
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
22 West State Street
Media, Pennsylvania 19063
(Address of principal executive offices) (Zip code)
______________________
Series B Capital Securites
(Title of the indenture securities)
================================================================================
<PAGE>
1. General information. Furnish the following information as to the Trustee:
(a) Name and address of each examining or supervising authority to which
it is subject.
- --------------------------------------------------------------------------------
Name Address
- --------------------------------------------------------------------------------
Superintendent of Banks of the State of 2 Rector Street, New York,
New York N.Y. 10006, and Albany, N.Y.
12203
Federal Reserve Bank of New York 33 Liberty Plaza, New York,
N.Y. 10045
Federal Deposit Insurance Corporation Washington, D.C. 20429
New York Clearing House Association New York, New York 10005
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
2. Affiliations with Obligor.
If the obligor is an affiliate of the trustee, describe each such
affiliation.
None.
16. List of Exhibits.
Exhibits identified in parentheses below, on file with the Commission, are
incorporated herein by reference as an exhibit hereto, pursuant to Rule
7a-29 under the Trust Indenture Act of 1939 (the "Act") and 17 C.F.R.
229.10(d).
1. A copy of the Organization Certificate of The Bank of New York
(formerly Irving Trust Company) as now in effect, which contains the
authority to commence business and a grant of powers to exercise
corporate trust powers. (Exhibit 1 to Amendment No. 1 to Form T-1
filed with Registration Statement No. 33-6215, Exhibits 1a and 1b to
Form T-1 filed with Registration Statement No. 33-21672 and Exhibit 1
to Form T-1 filed with Registration Statement No. 33-29637.)
4. A copy of the existing By-laws of the Trustee. (Exhibit 4 to Form T-1
filed with Registration Statement No. 33-31019.)
2
<PAGE>
6. The consent of the Trustee required by Section 321(b) of the Act.
(Exhibit 6 to Form T-1 filed with Registration Statement No.
33-44051.)
7. A copy of the latest report of condition of the Trustee published
pursuant to law or to the requirements of its supervising or examining
authority.
3
<PAGE>
SIGNATURE
Pursuant to the requirements of the Act, the Trustee, The Bank of New York,
a corporation organized and existing under the laws of the State of New York,
has duly caused this statement of eligibility to be signed on its behalf by the
undersigned, thereunto duly authorized, all in The City of New York, and State
of New York, on the 9th day of January, 1998.
THE BANK OF NEW YORK
By: /s/WALTER N. GITLIN
_______________________
Name: WALTER N. GITLIN
Title: VICE PRESIDENT
4
<PAGE>
EXHIBIT 7
_________
Consolidated Report of Condition of
THE BANK OF NEW YORK
of 48 Wall Street, New York, N.Y. 10286
And Foreign and Domestic Subsidiaries,
a member of the Federal Reserve System, at the close of business September 30,
1997, published in accordance with a call made by the Federal Reserve Bank of
this District pursuant to the provisions of the Federal Reserve Act.
Dollar Amounts
ASSETS in Thousands
Cash and balances due from depos-
itory institutions:
Noninterest-bearing balances and
currency and coin ................ $ 5,004,638
Interest-bearing balances .......... 1,271,514
Securities:
Held-to-maturity securities ........ 1,105,782
Available-for-sale securities ...... 3,164,271
Federal funds sold and Securities pur-
chased under agreements to resell... 5,723,829
Loans and lease financing
receivables:
Loans and leases, net of unearned
income ................ 34,916,196
LESS: Allowance for loan and
lease losses ............. 581,177
LESS: Allocated transfer risk
reserve....................... 429
Loans and leases, net of unearned
income, allowance, and reserve.... 34,334,590
Assets held in trading accounts ...... 2,035,284
Premises and fixed assets (including
capitalized leases) ................ 671,664
Other real estate owned .............. 13,306
Investments in unconsolidated
subsidiaries and associated
companies .......................... 210,685
Customers' liability to this bank on
acceptances outstanding ............ 1,463,446
Intangible assets .................... 753,190
Other assets ......................... 1,784,796
-----------
Total assets ......................... $57,536,995
-----------
-----------
LIABILITIES
Deposits:
In domestic offices ................ $27,270,824
Noninterest-bearing ..... 12,160,977
Interest-bearing ........ 15,109,847
In foreign offices, Edge and
Agreement subsidiaries, and IBFs ... 14,687,806
Noninterest-bearing ........ 657,479
Interest-bearing ........ 14,030,327
Federal funds purchased and Securities
sold under agreements to repurchase. 1,946,099
Demand notes issued to the U.S.
Treasury ........................... 283,793
Trading liabilities .................. 1,553,539
Other borrowed money:
With remaining maturity of one year
or less .......................... 2,245,014
With remaining maturity of more than
one year through three years...... 0
With remaining maturity of more than
three years ...................... 45,664
Bank's liability on acceptances exe-
cuted and outstanding .............. 1,473,588
Subordinated notes and debentures .... 1,018,940
Other liabilities .................... 2,193,031
-----------
Total liabilities .................... 52,718,298
-----------
EQUITY CAPITAL
Common stock ......................... 1,135,284
Surplus .............................. 731,319
Undivided profits and capital
reserves ........................... 2,943,008
Net unrealized holding gains
(losses) on available-for-sale
securities ......................... 25,428
Cumulative foreign currency transla-
tion adjustments ................... (16,342)
-----------
Total equity capital ................. 4,818,697
-----------
Total liabilities and equity
capital ........................... $57,536,995
-----------
-----------
I, Robert E. Keilman, Senior Vice President and
Comptroller of the above-named bank do hereby declare that
this Report of Condition has been prepared in conformance
with the instructions issued by the Board of Governors of
the Federal Reserve System and is true to the best of my
knowledge and belief.
Robert E. Keilman
We, the undersigned directors, attest to the
correctness of this Report of Condition and declare that
it has been examined by us and to the best of our
knowledge and belief has been prepared in conformance
with the instructions issued by the Board of Governors of
the Federal Reserve System and is true and correct.
J. Carter Bacot )
Thomas A. Renyi ) Directors
Alan R. Griffith )
<PAGE>
Exhibit 25.3
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
FORM T-1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE
ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(b)(2) | |
---------------------
THE BANK OF NEW YORK
(Exact name of trustee as specified in its charter)
New York 13-5160382
(State of incorporation (I.R.S. employer
if not a U.S. national bank) identification no.)
48 Wall Street, New York, N.Y. 10286
(Address of principal executive offices) (Zip code)
---------------------
FIRST KEYSTONE FINANCIAL, INC.
(Exact name of obligor as specified in its charter)
Pennsylvania 23-0469351
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
22 West State Street
Media, Pennsylvania 19063
(Address of principal executive offices) (Zip code)
---------------------
Guarantee of Series B Capital Securities
of First Keystone Capital Trust I
(Title of the indenture securities)
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<PAGE>
1. General information. Furnish the following information as to the Trustee:
(a) Name and address of each examining or supervising authority to which
it is subject.
- --------------------------------------------------------------------------------
Name Address
- --------------------------------------------------------------------------------
Superintendent of Banks of the State of 2 Rector Street, New York,
New York N.Y. 10006, and Albany, N.Y.
12203
Federal Reserve Bank of New York 33 Liberty Plaza, New York,
N.Y. 10045
Federal Deposit Insurance Corporation Washington, D.C. 20429
New York Clearing House Association New York, New York 10005
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
2. Affiliations with Obligor.
If the obligor is an affiliate of the trustee, describe each such
affiliation.
None.
16. List of Exhibits.
Exhibits identified in parentheses below, on file with the Commission, are
incorporated herein by reference as an exhibit hereto, pursuant to Rule
7a-29 under the Trust Indenture Act of 1939 (the "Act") and 17 C.F.R.
229.10(d).
1. A copy of the Organization Certificate of The Bank of New York
(formerly Irving Trust Company) as now in effect, which contains the
authority to commence business and a grant of powers to exercise
corporate trust powers. (Exhibit 1 to Amendment No. 1 to Form T-1
filed with Registration Statement No. 33-6215, Exhibits 1a and 1b to
Form T-1 filed with Registration Statement No. 33-21672 and Exhibit 1
to Form T-1 filed with Registration Statement No. 33-29637.)
4. A copy of the existing By-laws of the Trustee. (Exhibit 4 to Form T-1
filed with Registration Statement No. 33-31019.)
-2-
<PAGE>
6. The consent of the Trustee required by Section 321(b) of the Act.
(Exhibit 6 to Form T-1 filed with Registration Statement No.
33-44051.)
7. A copy of the latest report of condition of the Trustee published
pursuant to law or to the requirements of its supervising or examining
authority.
-3-
<PAGE>
SIGNATURE
Pursuant to the requirements of the Act, the Trustee, The Bank of New York,
a corporation organized and existing under the laws of the State of New York,
has duly caused this statement of eligibility to be signed on its behalf by the
undersigned, thereunto duly authorized, all in The City of New York, and State
of New York, on the 9th day of January, 1998.
THE BANK OF NEW YORK
By: /s/WALTER N. GITLIN
---------------------------
Name: WALTER N. GITLIN
Title: VICE PRESIDENT
-4-
<PAGE>
EXHIBIT 7
Consolidated Report of Condition of
THE BANK OF NEW YORK
of 48 Wall Street, New York, N.Y. 10286
And Foreign and Domestic Subsidiaries,
a member of the Federal Reserve System, at the close of business September 30,
1997, published in accordance with a call made by the Federal Reserve Bank of
this District pursuant to the provisions of the Federal Reserve Act.
Dollar Amounts
ASSETS in Thousands
Cash and balances due from depos-
itory institutions:
Noninterest-bearing balances and
currency and coin ................ $ 5,004,638
Interest-bearing balances .......... 1,271,514
Securities:
Held-to-maturity securities ........ 1,105,782
Available-for-sale securities ...... 3,164,271
Federal funds sold and Securities pur-
chased under agreements to resell... 5,723,829
Loans and lease financing
receivables:
Loans and leases, net of unearned
income ................ 34,916,196
LESS: Allowance for loan and
lease losses .......... 581,177
LESS: Allocated transfer risk
reserve................ 429
Loans and leases, net of unearned
income, allowance, and reserve.... 34,334,590
Assets held in trading accounts ...... 2,035,284
Premises and fixed assets (including
capitalized leases) ................ 671,664
Other real estate owned .............. 13,306
Investments in unconsolidated
subsidiaries and associated
companies .......................... 210,685
Customers' liability to this bank on
acceptances outstanding ............ 1,463,446
Intangible assets .................... 753,190
Other assets ......................... 1,784,796
-----------
Total assets ......................... $57,536,995
-----------
-----------
LIABILITIES
Deposits:
In domestic offices ................ $27,270,824
Noninterest-bearing ..... 12,160,977
Interest-bearing ........ 15,109,847
In foreign offices, Edge and
Agreement subsidiaries, and IBFs ... 14,687,806
Noninterest-bearing ..... 657,479
Interest-bearing ........ 14,030,327
Federal funds purchased and Securities
sold under agreements to repurchase. 1,946,099
Demand notes issued to the U.S.
Treasury ........................... 283,793
Trading liabilities .................. 1,553,539
Other borrowed money:
With remaining maturity of one year
or less .......................... 2,245,014
With remaining maturity of more than
one year through three years...... 0
With remaining maturity of more than
three years ...................... 45,664
Bank's liability on acceptances exe-
cuted and outstanding .............. 1,473,588
Subordinated notes and debentures .... 1,018,940
Other liabilities .................... 2,193,031
-----------
Total liabilities .................... 52,718,298
-----------
EQUITY CAPITAL
Common stock ........................ 1,135,284
Surplus ............................. 731,319
Undivided profits and capital
reserves .......................... 2,943,008
Net unrealized holding gains
(losses) on available-for-sale
securities ........................ 25,428
Cumulative foreign currency transla-
tion adjustments .................. (16,342)
-----------
Total equity capital ................ 4,818,697
-----------
Total liabilities and equity
capital ........................... $57,536,995
-----------
-----------
I, Robert E. Keilman, Senior Vice President and Comptroller of the
above-named bank do hereby declare that this Report of Condition has been
prepared in conformance with the instructions issued by the Board of
Governors of the Federal Reserve System and is true to the best of my
knowledge and belief.
Robert E. Keilman
We, the undersigned directors, attest to the correctness of this Report
of Condition and declare that it has been examined by us and to the best of
our knowledge and belief has been prepared in conformance with the
instructions issued by the Board of Governors of the Federal Reserve System
and is true and correct.
J. Carter Bacot)
Thomas A. Renyi) Directors
Alan R. Griffith)
<PAGE>
Exhibit 99.1
LETTER OF TRANSMITTAL
FIRST KEYSTONE CAPITAL TRUST I
Offer to Exchange its
9.70% Series B Capital Securities
(Liquidation Amount $1,000 per Capital Security)
which have been registered under the Securities Act of 1933
for any and all of its outstanding
9.70% Series A Capital Securities
(Liquidation Amount $1,000 per Capital Security)
Pursuant to the Prospectus
dated February __, 1998
---------------------
THE EXCHANGE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE
AT 5:00 P.M., NEW YORK CITY TIME, ON MARCH __, 1998,
UNLESS THE OFFER IS EXTENDED.
---------------------
The Exchange Agent for the Exchange Offer is:
The Bank of New York
By Registered or Certified Mail: By Hand or Overnight Delivery:
The Bank of New York The Bank of New York
101 Barclay Street, 7E 101 Barclay Street
New York, New York 10286 Corporate Trust Services Window
Attention: Reorganization Department Ground Level
Diana Torrez New York, New York 10286
Attention: Reorganization Department
Diana Torrez
Confirm by Telephone
or for Information call:
(212) 815-5942
Facsimile Transmissions:
(Eligible Institutions Only)
(212) 815-6339
DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS OTHER THAN AS SET
FORTH ABOVE OR TRANSMISSION OF THIS LETTER OF TRANSMITTAL VIA FACSIMILE TO A
NUMBER OTHER THAN AS SET FORTH ABOVE DOES NOT CONSTITUTE A VALID DELIVERY.
THE INSTRUCTIONS CONTAINED HEREIN SHOULD BE READ CAREFULLY BEFORE THIS
LETTER OF TRANSMITTAL IS COMPLETED.
Capitalized terms used but not defined herein shall have the same meaning
given them in the Prospectus (as defined below).
This Letter of Transmittal is to be completed by holders of Old Capital
Securities (as defined below) either if (i) Old Capital Securities are to be
forwarded herewith or (ii) tenders of Old Capital Securities are to be made by
book-entry transfer to an account maintained by The Bank of New York (the
"Exchange Agent") at The Depository Trust Company ("DTC") pursuant to the
procedures set forth in "The Exchange Offer--Procedures for Tendering Old
Capital Securities" in the Prospectus.
<PAGE>
Holders of Old Capital Securities whose certificates (the
"Certificates") for such Old Capital Securities are not immediately available
or who cannot deliver their Certificates and all other required documents to
the Exchange Agent on or prior to the Expiration Date (as defined in the
Prospectus) or who cannot complete the procedures for book-entry transfer on
or prior to the Expiration Date, must tender their Old Capital Securities
according to the guaranteed delivery procedures set forth in "The Exchange
Offer--Procedures for Tendering Old Capital Securities" in the Prospectus.
DELIVERY OF DOCUMENTS TO DTC DOES NOT CONSTITUTE DELIVERY TO THE
EXCHANGE AGENT.
NOTE: SIGNATURES MUST BE PROVIDED BELOW
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY
ALL TENDERING HOLDERS COMPLETE THIS BOX:
DESCRIPTION OF OLD CAPITAL SECURITIES TENDERED
(See Instruction 4)
<TABLE>
<CAPTION>
If blank, please print name and Old Capital Securities tendered
address of registered holder. (Attach additional list if necessary)
- -------------------------------- ---------------------------------------------------------
Liquidation Amount of
Aggregate Old Capital Securities
Liquidation Amount Tendered
Certificate of Old Capital (if less than all are
Number(s)* Securities tendered)**
----------- ------------------ ----------------------
<S> <C> <C> <C>
----------- ------------------ ----------------------
----------- ------------------ ----------------------
----------- ------------------ ----------------------
TOTAL
AMOUNT
TENDERED:
- -------------------------------- ----------- ------------------ ----------------------
</TABLE>
* Need not be completed by book-entry holders.
** Old Capital Securities may be tendered in whole or in part in
denominations of $100,000 and integral multiples of $1,000 in excess thereof,
provided that if any Old Capital Securities are tendered for exchange in
part, the untendered principal amount thereof must be $100,000 or any
integral multiple of $1,000 in excess thereof. All Old Capital Securities
held shall be deemed tendered unless a lesser number is specified in this
column.
2
<PAGE>
(BOXES BELOW TO BE CHECKED BY ELIGIBLE INSTITUTIONS ONLY)
/ / CHECK HERE IF TENDERED OLD CAPITAL SECURITIES ARE BEING DELIVERED BY
BOOK-ENTRY TRANSFER MADE TO THE ACCOUNT MAINTAINED BY THE EXCHANGE
AGENT WITH DTC AND COMPLETE THE FOLLOWING:
Name of Tendering Institution
--------------------------------------------
DTC Account Number
-------------------------------------------------------
Transaction Code Number
--------------------------------------------------
/ / CHECK HERE AND ENCLOSE A PHOTOCOPY OF THE NOTICE OF GUARANTEED
DELIVERY IF TENDERED OLD CAPITAL SECURITIES ARE BEING DELIVERED
PURSUANT TO A NOTICE OF GUARANTEED DELIVERY PREVIOUSLY SENT TO THE
EXCHANGE AGENT AND COMPLETE THE FOLLOWING:
Name of Registered Holder(s)
---------------------------------------------
Window Ticket Number (if any)
--------------------------------------------
Date of Execution of Notice of Guaranteed Delivery
-----------------------
Name of Institution which Guaranteed Delivery
If Guaranteed Delivered is to be made By Book-Entry Transfer:
Name of Tendering
----------------------------------------------
Institution
----------------------------------------------------
DTC Account Number
---------------------------------------------
Transaction Code Number
----------------------------------------
/ / CHECK HERE IF TENDERED BY BOOK-ENTRY TRANSFER AND NONEXCHANGED OR
NONTENDERED OLD CAPITAL SECURITIES ARE TO BE RETURNED BY CREDITING THE
DTC ACCOUNT NUMBER SET FORTH ABOVE.
/ / CHECK HERE IF YOU ARE A BROKER-DEALER WHO ACQUIRED THE OLD CAPITAL
SECURITIES FOR ITS OWN ACCOUNT AS A RESULT OF MARKET MAKING OR OTHER
TRADING ACTIVITIES (A "PARTICIPATING BROKER-DEALER") AND WISH TO
RECEIVE 10 ADDITIONAL COPIES OF THE PROSPECTUS AND 10 COPIES OF ANY
AMENDMENTS OR SUPPLEMENTS THERETO.
Name
---------------------------------------------------------------------
Address
------------------------------------------------------------------
------------------------------------------------------------------
Area Code and Telephone Number
-------------------------------------------
Contact Person
-----------------------------------------------------------
3
<PAGE>
Ladies and Gentlemen:
The undersigned hereby tenders to First Keystone Capital Trust I, a
trust created under the laws of Delaware (the "Trust") and First Keystone
Financial, Inc., a Pennsylvania corporation (the "Corporation"), the
above-described aggregate Liquidation Amount of the Trust's 9.70% Series A
Capital Securities (the "Old Capital Securities") in exchange for a like
aggregate Liquidation Amount of the Trust's 9.70% Series B Capital Securities
(the "New Capital Securities") which have been registered under the
Securities Act of 1933 (the "Securities Act"), upon the terms and subject to
the conditions set forth in the Prospectus, dated February __, 1998 (as the
same may be amended or supplemented from time to time, the "Prospectus"),
receipt of which is acknowledged, and in this Letter of Transmittal (which,
together with the Prospectus, constitute the "Exchange Offer").
Subject to and effective upon the acceptance for exchange of all or any
portion of the Old Capital Securities tendered herewith in accordance with
the terms and conditions of the Exchange Offer (including, if the Exchange
Offer is extended or amended, the terms and conditions of any such extension
or amendment), the undersigned hereby sells, assigns and transfers to or upon
the order of the Trust all right, title and interest in and to such Old
Capital Securities as are being tendered herewith. The undersigned hereby
irrevocably constitutes and appoints the Exchange Agent as its agent and
attorney-in-fact (with full knowledge that the Exchange Agent also is acting
as agent of the Corporation and the Trust in connection with the Exchange
Offer) with respect to the tendered Old Capital Securities, with full power
of substitution (such power of attorney being deemed to be an irrevocable
power coupled with an interest), subject only to the right of withdrawal
described in the Prospectus, to (i) deliver Certificates for Old Capital
Securities to the Corporation or the Trust together with all accompanying
evidences of transfer and authenticity to, or upon the order of, the Trust,
upon receipt by the Exchange Agent, as the undersigned's agent, of the New
Capital Securities to be issued in exchange for such Old Capital Securities,
(ii) present Certificates for such Old Capital Securities for transfer, and
to transfer the Old Capital Securities on the books of the Trust, and (iii)
receive for the account of the Trust all benefits and otherwise exercise all
rights of beneficial ownership of such Old Capital Securities, all in
accordance with the terms and conditions of the Exchange Offer.
The undersigned hereby represents and warrants that the undersigned has
full power and authority to tender, exchange, sell, assign and transfer the
Old Capital Securities tendered hereby and that, when the same are accepted
for exchange, the Trust will acquire good, marketable and unencumbered title
thereto, free and clear of all liens, restrictions, charges and encumbrances,
and that the Old Capital Securities tendered hereby are not subject to any
adverse claims or proxies. The undersigned will, upon request, execute and
deliver any additional documents deemed by the Corporation, the Trust or the
Exchange Agent to be necessary or desirable to complete the exchange,
assignment and transfer of the Old Capital Securities tendered hereby, and
the undersigned will comply with its obligations under the Registration
Rights Agreement. The undersigned has read and agrees to all of the terms of
the Exchange Offer.
The name(s) and address(es) of the registered holder(s) of the Old
Capital Securities tendered hereby should be printed above, if they are not
already set forth above, as they appear on the Certificates representing such
Old Capital Securities. The Certificate number(s) of the Old Capital
Securities that the undersigned wishes to tender should be indicated in the
appropriate boxes above.
If any tendered Old Capital Securities are not exchanged pursuant to the
Exchange Offer for any reason, or if Certificates are submitted for more Old
Capital Securities than are tendered or accepted for exchange, Certificates
for such nonexchanged or nontendered Old Capital Securities will be returned
(or, in the case of Old Capital Securities tendered by book-entry transfer,
such Old Capital Securities will be credited to an account maintained at
DTC), without expense to the tendering holder, promptly following the
expiration or termination of the Exchange Offer.
The undersigned understands that tenders of Old Capital Securities
pursuant to any one of the procedures described in "The Exchange
Offer--Procedures for Tendering Old Capital Securities" in the Prospectus and
in the Instructions herein will, upon the Corporation's and the Trust's
acceptance for exchange of such tendered Old Capital Securities, constitute a
binding agreement between the undersigned, the Corporation and the Trust upon
the terms and subject to the conditions of the Exchange Offer. The
undersigned
4
<PAGE>
recognizes that, under certain circumstances set forth in the Prospectus, the
Corporation and the Trust may not be required to accept for exchange any of
the Old Capital Securities tendered hereby.
Unless otherwise indicated herein in the box entitled "Special Issuance
Instructions" below, the undersigned hereby directs that the New Capital
Securities be issued in the name(s) of the undersigned or, in the case of a
book-entry transfer of Old Capital Securities, that such New Capital
Securities be credited to the account indicated above maintained at DTC. If
applicable, substitute Certificates representing Old Capital Securities not
exchanged or not accepted for exchange will be issued to the undersigned or,
in the case of a book-entry transfer of Old Capital Securities, will be
credited to the account indicated above maintained at DTC. Similarly, unless
otherwise indicated under "Special Delivery Instructions," please deliver New
Capital Securities to the undersigned at the address shown below the
undersigned's signature.
By tendering Old Capital Securities and executing this Letter of
Transmittal, the undersigned hereby represents and agrees that (i) the
undersigned is not an "affiliate" of the Corporation or the Trust within the
meaning of Rule 405 under the Securities Act, (ii) any New Capital Securities
to be received by the undersigned are being acquired in the ordinary course
of its business, (iii) the undersigned has no arrangement or understanding
with any person to participate in the distribution (within the meaning of the
Securities Act) of New Capital Securities to be received in the Exchange
Offer and (iv) if the undersigned is not a broker-dealer, the undersigned is
not engaged in, and does not intend to engage in, a distribution (within the
meaning of the Securities Act) of such New Capital Securities. By tendering
Old Capital Securities pursuant to the Exchange Offer and executing this
Letter of Transmittal, a holder of Old Capital Securities which is a
broker-dealer represents and agrees, consistent with certain interpretive
letters issued by the staff of the Division of Corporation Finance of the
Securities and Exchange Commission to third parties, that (a) such Old
Capital Securities held by the broker-dealer are held only as a nominee or
(b) such Old Capital Securities were acquired by such broker-dealer for its
own account as a result of market-making activities or other trading
activities and it will deliver the Prospectus (as amended or supplemented
from time to time) meeting the requirements of the Securities Act in
connection with any resale of such New Capital Securities (provided that, by
so acknowledging and by delivering a Prospectus, such broker-dealer will not
be deemed to admit that it is an "underwriter" within the meaning of the
Securities Act).
The Corporation and the Trust have agreed that, subject to the
provisions of the Registration Rights Agreement, the Prospectus, as it may be
amended or supplemented from time to time, may be used by a Participating
Broker-Dealer (as defined below) in connection with resales of New Capital
Securities received in exchange for Old Capital Securities, where such Old
Capital Securities were acquired by such Participating Broker-Dealer for its
own account as a result of market-making activities or other trading
activities, for a period ending 90 days after the Expiration Date (subject to
extension under certain limited circumstances described in the Prospectus)
or, if earlier, when all such New Capital Securities have been disposed of by
such Participating Broker-Dealer. In that regard, each broker-dealer who
acquired Old Capital Securities for its own account and as a result of
market-making or other trading activities (a "Participating Broker-Dealer"),
by tendering such Old Capital Securities and executing this Letter of
Transmittal, agrees that, upon receipt of notice from the Corporation or the
Trust of the occurrence of any event or the discovery of any fact which makes
any statement contained or incorporated by reference therein, in light of the
circumstances under which they were made, not misleading or of the occurrence
of certain other events specified in the Registration Rights Agreement, such
Participating Broker-Dealer will suspend the sale of New Capital Securities
pursuant to the Prospectus until the Corporation and the Trust have amended
or supplemented the Prospectus to correct such misstatement or omission and
has furnished copies of the amended or supplemented Prospectus to the
Participating Broker-Dealer or the Corporation or the Trust has given notice
that the sale of the New Capital Securities may be resumed, as the case may
be. If the Corporation or the Trust gives such Notice to suspend the sale of
the New Capital Securities, it shall extend the 90-day period referred to
above during which Participating Broker-Dealers are entitled to use the
Prospectus in connection with the resale of New Capital Securities by the
number of days during the period from and including the date of the giving of
such notice to and including the date when Participating Broker-Dealers shall
have received copies of the supplemented or amended Prospectus necessary to
permit resales of the New Capital Securities or to and including the date on
which the Corporation or the Trust has given notice that the sale of New
Capital Securities may be resumed, as the case may be.
5
<PAGE>
As a result, a Participating Broker-Dealer who intends to use the
Prospectus in connection with re-sales of New Capital Securities received in
exchange for Old Capital Securities pursuant to the Exchange Offer must
notify the Corporation and the Trust, or cause the Corporation and the Trust
to be notified, on or prior to the Expiration Date, that it is a
Participating Broker-Dealer. Such notice may be given in the space provided
above or may be delivered to the Exchange Agent at the address set forth in
the Prospectus under "The Exchange Offer--Exchange Agent."
Holders whose Old Capital Securities are accepted for exchange will not
receive Distributions on such Old Capital Securities and the undersigned
waives the right to receive any Distribution on such Old Capital Securities
following such acceptance. Holders of Old Capital Securities as of the
February 1, 1998 record date for the initial Distribution on February 15,
1998, including such holders who tender their Old Capital Securities pursuant
to the Exchange Offer, will be entitled to receive such Distribution.
All authority herein conferred or agreed to be conferred in this Letter
of Transmittal shall survive the death or incapacity of the undersigned and
any obligation of the undersigned hereunder shall be binding upon the heirs,
executors, administrators, personal representatives, trustees in bankruptcy,
legal representatives, successors and assigns of the undersigned. Except as
stated in the Prospectus, this tender is irrevocable.
6
<PAGE>
HOLDER(S) SIGN HERE
(See Instructions 2, 5 and 6)
(Please Complete Substitute Form W-9 Below)
(Note: Signature(s) must be guaranteed if required by Instruction 2)
Must be signed by registered holder(s) exactly as name(s) appear(s) on
Certificates(s) for the Old Capital Securities hereby tendered or on a
security position listing, or by any person(s) authorized to become the
registered holder(s) by endorsements and documents transmitted herewith
(including such opinions of counsel, certificates and other information as
may be required by the Corporation, the Trust or the Exchange Agent to comply
with the restrictions on transfer applicable to the Old Capital Securities).
If signature is by an attorney-in-fact, executor, administrator, trustee,
guardian, officer of a corporation or another acting in a fiduciary capacity
or representative capacity, please set forth the signer's full title. See
Instruction 5.
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
(Signature(s) of Holder(s))
Date , 1998
--------------
Name(s)
-----------------------------------------------------------------------
- ------------------------------------------------------------------------------
(Please Print)
Area Code(s) and Telephone Number
---------------------------------------------
- ------------------------------------------------------------------------------
(Tax Identification or Social Security Number(s))
GUARANTEE OF SIGNATURE(S)
(See Instructions 2 and 5)
Authorized Signature
----------------------------------------------------------
Name
--------------------------------------------------------------------------
(Please Print)
Date , 1998
--------------
Capacity or Title
-------------------------------------------------------------
Name of Firm
------------------------------------------------------------------
Address
-----------------------------------------------------------------------
(Include Zip Code)
Area Code and Telephone Number
-----------------------------------------------
7
<PAGE>
SPECIAL ISSUANCE INSTRUCTIONS
(See Instructions 1, 5 and 6)
To be completed ONLY if New
Capital Securities and/or any
Old Capital Securities that
are not tendered are to be
issued in the name of someone
other than the registered
holder of the Old Capital
Securities whose name(s)
appear(s) above.
Issue:
/ / New Capital Securities to:
/ / Old Capital Securities not
tendered to:
Name
--------------------------
(Please Print)
Address
-----------------------
- ------------------------------
- ------------------------------
(Include Zip Code)
- ------------------------------
(Taxpayer Identification or
Social Security No.)
SPECIAL DELIVERY INSTRUCTIONS
(See Instructions 1, 5 and 6)
To be completed ONLY if New
Capital Securities and/or any
Old Capital Securities that
are not tendered are to be
sent to someone other than the
registered holder of the Old
Capital Securities whose
name(s) appear(s) above, or to
the registered holder(s) at an
address other than that shown
above.
Mail:
/ / New Capital Securities to:
/ / Old Capital Securities not
tendered to:
Name
--------------------------
(Please Print)
Address
-----------------------
- ------------------------------
- ------------------------------
(Include Zip Code)
- ------------------------------
(Taxpayer Identification or
Social Security No.)
8
<PAGE>
INSTRUCTIONS
Forming Part of the Terms and Conditions of the Exchange Offer
1. Delivery of Letter of Transmittal and Certificates; Guaranteed
Delivery Procedures. This Letter of Transmittal is to be completed either if
(a) tenders are to be made pursuant to the procedures for tender by
book-entry transfer set forth under "The Exchange Offer--Procedures for
Tendering Old Capital Securities" in the Prospectus and an Agent's Message is
not delivered or (b) Certificates are to be forwarded herewith. Timely
confirmation of a book-entry transfer of such Old Capital Securities into the
Exchange Agent's account at DTC, or Certificates as well as this Letter of
Transmittal (or facsimile thereof), properly completed and duly executed,
with any required signature guarantees, and any other documents required by
this Letter of Transmittal, must be received by the Exchange Agent at its
addresses set forth herein on or prior to the Expiration Date. Tenders by
book-entry transfer also may be made by delivering an Agent's Message in lieu
of this Letter of Transmittal. The term "book-entry confirmation" means a
confirmation of book-entry transfer of Old Capital Securities into the
Exchange Agent's account at DTC. The term "Agent's Message" means a message
transmitted by DTC to and received by the Exchange Agent and forming a part
of a book-entry confirmation, which states that DTC has received an express
acknowledgement from the tendering participant, which acknowledgment states
that such participant has received and agrees to be bound by the Letter of
Transmittal (including the representations contained herein) and that the
Trust and the Corporation may enforce the Letter of Transmittal against such
participant. Old Capital Securities may be tendered in whole or in part in
the Liquidation Amount of $100,000 (100 Capital Securities) and integral
multiples of $1,000 in excess thereof, provided that, if any Old Capital
Securities are tended for exchange in part, the untendered Liquidation Amount
thereof must be $100,000 (100 Capital Securities) or any integral multiple of
$1,000 in excess thereof.
Holders who wish to tender their Old Capital Securities and (i) who
cannot complete the procedures for delivery by book-entry transfer on or
prior to the Expiration Date,(ii) who cannot deliver their Old Capital
Securities, this Letter of Transmittal and all other required documents to
the Exchange Agent on or prior to the Expiration Date or (iii) whose Old
Capital Securities are not immediately available, may tender their Old
Capital Securities by properly completing and duly executing a Notice of
Guaranteed Delivery pursuant to the guaranteed delivery procedures set forth
under "The Exchange Offer--Procedures for Tendering Old Capital Securities"
in the Prospectus. Pursuant to such procedures: (a) such tender must be made
by or through an Eligible Institution (as defined below); (b) a properly
completed and duly executed Notice of Guaranteed Delivery, substantially in
the form made available by the Corporation, must be received by the Exchange
Agent on or prior to the Expiration Date; and (c) the Certificates (or a
book-entry confirmation (as defined above and in the Prospectus))
representing all tendered Old Capital Securities, in proper form for
transfer, together with a Letter of Transmittal (or facsimile thereof),
properly completed and duly executed, with any required signature guarantees
and any other documents required by this Letter of Transmittal, must be
received by the Exchange Agent within three New York Stock Exchange, Inc.
trading days after the date of execution of such Notice of Guaranteed
Delivery, all as provided in "The Exchange Offer--Procedures for Tendering
Old Capital Securities" in the Prospectus.
The Notice of Guaranteed Delivery may be delivered by hand or
transmitted by facsimile or mail to the Exchange Agent, and must include a
guarantee by an Eligible Institution in the form set forth in such Notice.
For Old Capital Securities to be properly tendered pursuant to the guaranteed
delivery procedure, the Exchange Agent must receive a Notice of Guaranteed
Delivery on or prior to the Expiration Date. As used herein and in the
Prospectus, "Eligible Institution" means a firm or other entity identified in
Rule 17Ad-15 under the Exchange Act as "an eligible guarantor institution,"
including (as such terms are defined therein) (i) a bank; (ii) a broker,
dealer, municipal securities broker or dealer or government securities broker
or dealer; (iii) a credit union; (iv) a national securities exchange,
registered securities association or clearing agency; or (v) a savings
association that is a participant in a Securities Transfer Association.
THE METHOD OF DELIVERY OF CERTIFICATES, THIS LETTER OF TRANSMITTAL AND ALL
OTHER REQUIRED DOCUMENTS IS AT THE OPTION AND SOLE RISK OF THE TENDERING
HOLDER AND THE DELIVERY WILL BE DEEMED MADE ONLY WHEN ACTUALLY RECEIVED BY
THE EXCHANGE AGENT. IF DELIVERY IS BY MAIL, REGISTERED MAIL WITH RETURN
RECEIPT REQUESTED, PROPERLY INSURED, OR OVERNIGHT DELIVERY SERVICE IS
RECOMMENDED. IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO ENSURE
TIMELY DELIVERY.
9
<PAGE>
Neither the Corporation nor the Trust will accept any alternative,
conditional or contingent tenders. Each tendering holder, by execution of a
Letter of Transmittal (or facsimile thereof), waives any right to receive any
notice of the acceptance of such tender.
2. Guarantee of Signatures. No signature guarantee on this Letter of
Transmittal is required if:
(i) this Letter of Transmittal is signed by the registered holder (which
term, for purposes of this document, shall include any participant in DTC
whose name appears on a security position listing as the owner of the Old
Capital Securities) of Old Capital Securities tendered herewith, unless such
holder(s) has completed either the box entitled "Special Issuance
Instructions" or the box entitled "Special Delivery Instructions" above, or
(ii) such Old Capital Securities are tendered for the account of a
firm that is an Eligible Institution.
In all other cases, an Eligible Institution must guarantee the
signature(s) on this Letter of Transmittal. See Instruction 5.
3. Inadequate Space. If the space provided in the box captioned
"Description of Old Capital Securities" is inadequate, the Certificate
number(s) and/or the Liquidation Amount of Old Capital Securities and any
other required information should be listed on a separate signed schedule
which is attached to this Letter of Transmittal.
4. Partial Tenders and Withdrawal Rights. Tenders of Old Capital
Securities will be accepted only in the principal amount of $100,000 (100
Capital Securities) and integral multiples of $1,000 in excess thereof,
provided that if any Old Capital Securities are tendered for exchange in
part, the untendered principal amount thereof must be $100,000 (100 Capital
securities) or any integral multiple of $1,000 in excess thereof. If less
than all the Old Capital Securities evidenced by any Certificate submitted
are to be tendered, fill in the Liquidation Amount of Old Capital Securities
which are to be tendered in the box entitled "Liquidation Amount of Old
Capital Securities Tendered (if less than all are tendered)." In such case,
a new Certificate(s) for the remainder of the Old Capital Securities that
were evidenced by your old Certificate(s) will be sent to the holder of the
Old Capital Securities, promptly after the Expiration Date, unless the
appropriate boxes on this Letter of Transmittal are completed. All Old
Capital Securities represented by Certificates delivered to the Exchange
Agent will be deemed to have been tendered unless otherwise indicated.
Except as otherwise provided herein, tenders of Old Capital Securities
may be withdrawn at any time on or prior to the Expiration Date. In order
for a withdrawal to be effective on or prior to that time, a written or
facsimile transmission of such notice of withdrawal must be received by the
Exchange Agent at one of its addresses set forth above or in the Prospectus
on or prior to the Expiration Date. Any such notice of withdrawal must
specify the name of the person who tendered the Old Capital Securities to be
withdrawn, the aggregate Liquidation Amount of Old Capital Securities to be
withdrawn, and (if Certificates for Old Capital Securities have been
tendered) the name of the registered holder of the Old Capital Securities as
set forth on the Certificate for the Old Capital Securities, if different
from that of the person who tendered such Old Capital Securities. If
Certificates for the Old Capital Securities have been delivered or otherwise
identified to the Exchange Agent, then prior to the physical release of such
Certificates for the Old Capital Securities, the tendering holder must submit
the serial numbers shown on the particular Certificates for the Old Capital
Securities to be withdrawn and the signature on the notice of withdrawal must
be guaranteed by an Eligible Institution, except in the case of Old Capital
Securities tendered for the account of an Eligible Institution. If Old
Capital Securities have been tendered pursuant to the procedures for
book-entry transfer set forth under "The Exchange Offer--Procedures for
Tendering Old Capital Securities" in the Prospectus, the notice of withdrawal
must specify the name and number of the account at DTC to be credited with
the withdrawal of Old Capital Securities, in which case a notice of
withdrawal will be effective if delivered to the Exchange Agent by written or
facsimile transmission on or prior to the Expiration Date. Withdrawals of
tenders of Old Capital Securities may not be rescinded. Old Capital
Securities properly withdrawn will not be deemed validly tendered for
purposes of the Exchange Offer, but may be retendered at any subsequent time
on or prior to the Expiration Date by following any of the procedures
described in the Prospectus under "The Exchange Offer--Procedures for
Tendering Old Capital Securities."
All questions as to the validity, form and eligibility (including time
of receipt) of such withdrawal notices will be determined by the Corporation
and the Trust, in their sole discretion, whose determination shall be final
and binding on all parties. None of the Corporation, the Trust, any
affiliates or assigns of the Corporation and the Trust, the Exchange Agent
nor any other person shall be under any duty to give any notification of any
irregularities in any
10
<PAGE>
notice of withdrawal or incur any liability for failure to give any such
notification. Any Old Capital Securities which have been tendered but which
are withdrawn will be returned to the holder thereof without cost to such
holder promptly after withdrawal.
5. Signatures on Letter of Transmittal, Assignments and Endorsements.
If this Letter of Transmittal is signed by the registered holder(s) of the
Old Capital Securities tendered hereby, the signature(s) must correspond
exactly with the name(s) as written on the face of the Certificate(s) without
alteration, enlargement or any change whatsoever.
If any of the Old Capital Securities tendered hereby are owned of record
by two or more joint owners, all such owners must sign this Letter of
Transmittal.
If any tendered Old Capital Securities are registered in different
name(s) on several Certificates, it will be necessary to complete, sign and
submit as many separate Letters of Transmittal (or facsimiles thereof) as
there are different registrations of Certificates.
If this Letter of Transmittal or any Certificates or bond powers are
signed by trustees, executors, administrators, guardians, attorneys-in-fact,
officers of corporations or others acting in a fiduciary or representative
capacity, such persons should so indicate when signing and must submit proper
evidence satisfactory to the Corporation and the Trust, in their sole
discretion, of such persons' authority to so act.
When this Letter of Transmittal is signed by the registered holder(s) of
the Old Capital Securities listed and transmitted hereby, no endorsement(s)
of Certificate(s) or separate bond power(s) are required unless New Capital
Securities are to be issued in the name of a person other than the registered
holder(s). Signature(s) on such Certificate(s) or bond power(s) must be
guaranteed by an Eligible Institution.
If this Letter of Transmittal is signed by a person other than the
registered holder(s) of the Old Capital Securities listed, the Certificates
must be endorsed or accompanied by appropriate bond powers, signed exactly as
the name or names of the registered owner(s) appear(s) on the Certificates,
and also must be accompanied by such opinions of counsel, certifications and
other information as the Corporation, the Trust or the Exchange Agent may
require in accordance with the restrictions on transfer applicable to the Old
Capital Securities. Signatures on such Certificates or bond powers must be
guaranteed by an Eligible Institution.
6. Special Issuance and Delivery Instructions. If New Capital
Securities are to be issued in the name of a person other than the signer of
this Letter of Transmittal, or if New Capital Securities are to be sent to
someone other than the signer of this Letter of Transmittal or to an address
other than that shown above, the appropriate boxes on this Letter of
Transmittal should be completed. Certificates for Old Capital Securities not
exchanged will be returned by mail or, if tendered by book-entry transfer, by
crediting the account indicated above maintained at DTC. See Instruction 4.
7. Irregularities. The Corporation and the Trust will determine, in
their sole discretion, all questions as to the form of documents, validity,
eligibility (including time of receipt) and acceptance for exchange of any
tender of Old Capital Securities, which determination shall be final and
binding on all parties. The Corporation and the Trust reserve the absolute
right, in their sole and absolute discretion, to reject any and all tenders
determined by either of them not to be in proper form or the acceptance of
which, or exchange for, may, in the view of counsel to the Corporation and
the Trust, be unlawful. The Corporation and the Trust also reserve the
absolute right, subject to applicable law, to waive any of the conditions of
the Exchange Offer set forth in the Prospectus under "The Exchange
Offer--Certain Conditions to the Exchange Offer" or any conditions or
irregularity in any tender of Old Capital Securities of any particular holder
whether or not similar conditions or irregularities are waived in the case of
other holders. The Corporation's and the Trust's interpretation of the terms
and conditions of the Exchange Offer (including this Letter of Transmittal
and the instructions hereto) will be final and binding. No tender of Old
Capital Securities will be deemed to have been validly made until all
irregularities with respect to such tender have been cured or waived. None
of the Corporation, the Trust, any affiliates or assigns of the Corporation,
the Trust, the Exchange Agent, or any other person shall be under any duty to
give notification of any irregularities in tenders or incur any liability for
failure to give such notification.
11
<PAGE>
8. Questions, Requests for Assistance and Additional Copies. Questions
and requests for assistance may be directed to the Exchange Agent at its
address and telephone number set forth on the front of this Letter of
Transmittal. Additional copies of the Prospectus, this Letter of Transmittal
and the Notice of Guaranteed Delivery may be obtained from the Exchange Agent
or from your broker, dealer, commercial bank, trust company or other nominee.
9. 31% Backup Withholding; Substitute Form W-9. Under U.S. Federal
income tax law, a holder whose tendered Old Capital Securities are accepted
for exchange is required to provide the Exchange Agent with such holder's
correct taxpayer identification number ("TIN") on Substitute Form W-9 below.
If the Exchange Agent is not provided with the correct TIN, the Internal
Revenue Service (the "IRS") may subject the holder or other payee to a $50
penalty. In addition, payments to such holders or other payees with respect
to Old Capital Securities exchanged pursuant to the Exchange Offer may be
subject to 31% backup withholding.
The box in Part 2 of the Substitute Form W-9 may be checked if the
tendering holder has not been issued a TIN and has applied for a TIN or
intends to apply for a TIN in the near future. If the box in Part 2 is
checked, the holder or other payee must also complete the Certificate of
Awaiting Taxpayer Identification Number below in order to avoid backup
withholding. Notwithstanding that the box in Part 2 is checked and the
Certificate of Awaiting Taxpayer Identification Number is completed, the
Exchange Agent will withhold 31% of all payments made prior to the time a
properly certified TIN is provided to the Exchange Agent. The Exchange Agent
will retain such amounts withheld during the 60 day period following the date
of the Substitute Form W-9. If the holder furnishes the Exchange Agent with
its TIN within 60 days after the date of the Substitute Form W-9, the amounts
retained during the 60 day period will be remitted to the holder and no
further amounts shall be retained or withheld from payments made to the
holder thereafter. If, however, the holder has not provided the Exchange
Agent with its TIN within such 60 day period, amounts withheld will be
remitted to the IRS as backup withholding. In addition, 31% of all payments
made thereafter will be withheld and remitted to the IRS until a correct TIN
is provided.
The holder is required to give the Exchange Agent the TIN (e.g., social
security number or employer identification number) of the registered owner of
the Old Capital Securities or of the last transferee appearing on the
transfers attached to, or endorsed on, the Old Capital Securities. If the
Old Capital Securities are registered in more than one name or are not in the
name of the actual owner, consult the enclosed "Guidelines for Certification
of Taxpayer Identification Number on Substitute Form W-9" for additional
guidance on which number to report.
Certain holders (including, among others, corporations, financial
institutions and certain foreign persons) may not be subject to these backup
withholding and reporting requirements. Such holders should nevertheless
complete the attached Substitute Form W-9 below, and write "exempt" on the
face thereof, to avoid possible erroneous backup withholding. A foreign
person may qualify as an exempt recipient by submitting a properly completed
IRS Form W-8, signed under penalties of perjury, attesting to that holder's
exempt status. Please consult the enclosed "Guidelines for Certification of
Taxpayer Identification Number on Substitute Form W-9" for additional
guidance on which holders are exempt from backup withholding.
Backup withholding is not an additional U.S. Federal income tax. Rather,
the U.S. Federal income tax liability of a person subject to backup
withholding will be reduced by the amount of tax withheld. If withholding
results in an overpayment of taxes, a refund may be obtained.
10. Lost, Destroyed or Stolen Certificates. If any Certificate(s)
representing Old Capital Securities have been lost, destroyed or stolen, the
holder should promptly notify the Exchange Agent. The holder will then be
instructed as to the steps that must be taken in order to replace the
Certificate(s). This Letter of Transmittal and related documents cannot be
processed until the procedures for replacing lost, destroyed or stolen
Certificate(s) have been followed.
11. Security Transfer Taxes. Holders who tender their Old Capital
Securities for exchange will not be obligated to pay any transfer taxes in
connection therewith. If, however, New Capital Securities are to be
delivered to, or are to be issued in the name of, any person other than the
registered holder of the Old Capital Securities tendered, or if a transfer
tax is imposed for any reason other than the exchange of Old Capital
Securities in connection with the Exchange Offer, then the amount of any such
transfer tax (whether imposed on the registered holder or any other persons)
will be payable by the tendering holder. If satisfactory evidence of payment
of such taxes or exemption
12
<PAGE>
therefrom is not submitted with the Letter of Transmittal, the amount of such
transfer taxes will be billed directly to such tendering holder.
Important: This Letter of Transmittal (or facsimile thereof) and all
other required documents must be received by the Exchange Agent on or prior
to the Expiration Date.
13
<PAGE>
TO BE COMPLETED BY ALL
TENDERING SECURITYHOLDERS
(See Instruction 9)
PAYER'S NAME: THE BANK OF NEW YORK
SUBSTITUTE Part 1 - PLEASE PROVIDE TIN____________
Form W-9 YOUR TIN IN THE BOX AT Social Security Number or
RIGHT AND CERTIFY BY Employer Identification
SIGNING AND DATING BELOW Number
Department of the Treasury Part 2
Internal Revenue Service Awaiting TIN / /
CERTIFICATION - UNDER THE PENALTIES OF PERJURY, I
CERTIFY THAT (1) the number shown on this form is
my correct taxpayer identification number (or I am
waiting for a number to be issued to me), (2) I am
not subject to backup withholding either because
(i) I am exempt from backup withholding, (ii) I
have not been notified by the Internal Revenue
Service ("IRS") that I am subject to backup
withholding as a result of a failure to report all
interest or dividends, or (iii) the IRS has
notified me that I am no longer subject to backup
withholding, and (3) any other information provided
on this form is true and correct.
Payer's Request for Taxpayer
Identification Number (TIN) Signature
and Certification -------------------------
Date
------------------------------
You must cross out item (iii) in Part (2) above if
you have been notified by the IRS that you are
subject to backup withholding because of
underreporting interest or dividends on your tax
return and you have not been notified by the IRS
that you are no longer subject to backup
withholding.
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY IN CERTAIN
CIRCUMSTANCES RESULT IN BACKUP WITHHOLDING OF 31% OF ANY
AMOUNTS PAID TO YOU PURSUANT TO THE EXCHANGE OFFER. PLEASE
REVIEW THE ENCLOSED GUIDELINES FOR CERTIFICATION OF TAXPAYER
IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 FOR ADDITIONAL
DETAILS.
CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER
I certify under penalties of perjury that a taxpayer identification
number has not been issued to me, and either (1) I have mailed or delivered
an application to receive a taxpayer identification number to the appropriate
Internal Revenue Service Center or Social Security Administration Office or
(2) I intend to mail or deliver an application in the near future. I
understand that if I do not provide a taxpayer identification number by the
time of payment, 31% of all payments made to me on account of the New Capital
Securities shall be retained until I provide a taxpayer identification number
to the Exchange Agent and that, if I do not provide my taxpayer
identification number within 60 days, such retained amounts shall be remitted
to the Internal Revenue Service as backup withholding and 31% of all
reportable payments made to me thereafter will be withheld and remitted to
the Internal Revenue Service until I provide a taxpayer identification number.
Signature Date
-------------------------------------- -------------------------
14
<PAGE>
Exhibit 99.2
NOTICE OF GUARANTEED DELIVERY
FOR TENDER OF
9.70% Series A Capital Securities
(Liquidation Amount $1,000 per Capital Security)
OF
FIRST KEYSTONE CAPITAL TRUST I
Unconditionally Guaranteed By First Keystone Financial, Inc.
This Notice of Guaranteed Delivery, or one substantially equivalent to
this form, must be used to accept the Exchange Offer (as defined below) if
(i) the procedures for delivery by book-entry transfer cannot be completed on
or prior to the Expiration Date (as defined in the Prospectus referred to
below), (ii) certificates for the Trust's (as defined below) 9.70% Series A
Capital Securities (the "Old Capital Securities") are not immediately
available or (iii) Old Capital Securities, the Letter of Transmittal and all
other required documents cannot be delivered to The Bank of New York (the
"Exchange Agent") on or prior to the Expiration Date. This Notice of
Guaranteed Delivery may be delivered by hand, overnight courier or mail, or
transmitted by facsimile transmission, to the Exchange Agent. See "The
Exchange Offer--Procedures for Tendering Old Capital Securities" in the
Prospectus.
The Exchange Agent for the Exchange Offer is:
The Bank of New York
By Registered or Certified Mail: By Hand or Overnight Delivery:
------------------------------------- ------------------------------------
The Bank of New York The Bank of New York
101 Barclay Street, 7E 101 Barclay Street
New York, New York 10286 Corporate Trust Services Window
Attention: Reorganization Department Ground Level
Diana Torrez New York, New York 10286
Attention: Reorganization Department
Diana Torrez
Confirm by Telephone
or for Information call:
(212) 815-5942
Facsimile Transmissions:
(Eligible Institutions Only)
(212) 815-6339
Delivery of this Notice of Guaranteed Delivery to an address other than
as set forth above or transmission of this Notice of Guaranteed Delivery via
a facsimile to a number other than as set forth above will not constitute a
valid delivery.
This Notice of Guaranteed Delivery is not to be used to guarantee
signatures. If a signature on a Letter of Transmittal is required to be
guaranteed by an "Eligible Institution" under the instructions thereto, such
signature guarantee must appear in the applicable space provided in the
signature box on the Letter of Transmittal.
Ladies and Gentlemen:
The undersigned hereby tenders to First Keystone Capital Trust I, a trust
created under the laws of Delaware (the "Trust"), upon the terms and subject
to the conditions set forth in the Prospectus dated February __, 1998 (as the
same may be amended or supplemented from time to time, the "Prospectus"), and
the related Letter of Transmittal (which together constitute the "Exchange
Offer"), receipt of which is hereby acknowledged, the aggregate liquidation
amount of Old Capital Securities set forth below pursuant to the guaranteed
delivery procedures set forth in the Prospectus under the caption "The
Exchange Offer--Procedures for Tendering Old Capital Securities."
Aggregate Liquidation Amount Name(s) of Registered Holder(s):
Tendered: ________________________ ______________________________________
Certificate No(s). (if available): Address(es):
__________________________________ ______________________________________
______________________________________
If Old Capital Securities will be
tendered by book-entry transfer,
provide the following information: Area Code and Telephone Number(s):
DTC Account Number:_______________ ______________________________________
Date:_____________________________ Signature(s):_________________________
______________________________________
______________________________________
THE GUARANTEE ON THE REVERSE SIDE MUST BE COMPLETED
<PAGE>
GUARANTEE
(Not to be used for signature guarantee)
The undersigned, a firm or other entity identified in Rule 17Ad-15 under
the Securities Exchange Act of 1934, as amended, as an "eligible guarantor
institution," including (as such terms are defined therein): (i) bank; (ii) a
broker, dealer, municipal securities broker, municipal securities dealer,
government securities broker, government securities dealer; (iii) a credit
union; (iv) a national securities exchange, registered securities association
or clearing agency; or (v) a savings association that is a participant in a
Securities Transfer Association recognized program (each of the foregoing
being referred to as an "Eligible Institution"), hereby guarantees to deliver
to the Exchange Agent, at one of its addresses set forth above, either the
Old Capital Securities tendered hereby in proper form for transfer, or
confirmation of the book-entry transfer of such Old Capital Securities to the
Exchange Agent's account at The Depository Trust Company ("DTC"), pursuant to
the procedures for book-entry transfer set forth in the Prospectus, in either
case together with one or more properly completed and duly executed Letter(s)
of Transmittal (or facsimile thereof) and any other required documents within
three business days after the date of execution of this Notice of Guaranteed
Delivery.
The undersigned acknowledges that it must deliver the Letter(s) of
Transmittal and the Old Capital Securities tendered hereby to the Exchange
Agent within the time period set forth above and that failure to do so could
result in a financial loss to the undersigned.
Name of Firm:_____________________ ______________________________________
(Authorized Signature)
Address:__________________________ Title: _______________________________
__________________________________ Name: ________________________________
(Zip Code) (Please type or print)
Area Code and
Telephone Number: ________________ Date: ________________________________
NOTE: DO NOT SEND OLD CAPITAL SECURITIES WITH THIS NOTICE OF GUARANTEED
DELIVERY. ACTUAL SURRENDER OF OLD CAPITAL SECURITIES MUST BE MADE PURSUANT
TO, AND BE ACCOMPANIED BY, A PROPERLY COMPLETED AND DULY EXECUTED LETTER OF
TRANSMITTAL AND ANY OTHER REQUIRED DOCUMENTS.
